L'Affaire Lip

The commander of the special task force of the Gendarmerie Nationale looked at his watch (probably made by the famous old French firm of Lip S.A.), then gave the order to move. In the predawn, 30 busloads of police surrounded the Lip factory at Besancon, 25 miles from the Swiss border. They quickly overwhelmed the 50 worker guards and shooed them out. Law and order and the sacred rights of private property had been restored. Thus ended the first act of a drama that had enthralled Frenchmen for months and raised political passions on both right and left. The question was: What acts were to follow?

The Lip enterprise, one of France's proudest, made fine quality watches that commanded 20% or more of the national market until 1969. Then, with competition from cheaper American and Japanese watches, Lip's share of sales fell to 5%. Meanwhile, Fred Lip sold his controlling interest to a Swiss conglomerate. By last April, Lip was headed for bankruptcy. Amid rumors of a shutdown that would lay off 1,300 employees, the workers decided to teach the owners a lesson in management. On June 12 they seized the factory. A week later they began turning out watches from materials already stockpiled. Partly because they were offered at wholesale prices, 40% below retail, the watches enjoyed bargain-basement popularity, and became a fashionable symbol of leftist protest.

Limelight. To the government and the financial establishment the Lip commune was a threat: the workers were challenging basic laws of a capitalist society. Gleefully, the political left whipped up L'Affaire Lip into a cause celebre.

Jean Charbonnel, Minister of Industrial and Scientific Development, worked out a compromise by which the watchmaking plant would get $7,250,000 in new capital, half from its parent company and half in government funds. This meant laying off only 400 workers. But the workers, enjoying the limelight as well as widespread public support, summarily rejected the plan. They even stepped up their rebellion by making the first wage payments from the proceeds of their sales. Then they refused to accept service of a court order requiring them to shut down the plant.

The government decided to use the police. Its timing was perfect. At least half of France was away on its relentless August holiday. Even so, 5,000 people demonstrated outside the Lip plant after the raid, and 20 were injured. Socialist Leader Francois Mitterrand and others were determined to make political capital out of L'Affaire Lip, even if they had to await la rentree, Frenchmen's mass return from vacation. On any brand of watch, it was a tense time in France.

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