The transatlantic business community faced with US direct investment in Western Europe, 1958–1968

Abstract

This article examines the position of US and European business in the debate about American direct investment in Western Europe in a historical perspective, from the establishment of the Common Market to the introduction of US regulation of foreign direct investment (FDI) a decade later. Based on abundant and diverse archival documents, it sheds new light on the process of Americanisation and contributes to existing research on transnational networks, by revealing the active role industrial leaders on both sides of the Atlantic played in shaping the political responses to problems raised by the American firms’ massive presence in the Common Market.

Keywords:

• Foreign direct investment (FDI)
• US
• Americanisation
• transatlantic community
• multinationals
• common market

Acknowledgments

I would like to thank Neil Rollings, Patrick Fridenson, Richard Kuisel, Geoffrey G. Jones and Walter A. Friedman for their precious advice, as well as two anonymous referees, whose remarks greatly improved this article.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1. On the presence of US firms in Western Europe before World War II, see especially Wilkins, The Emergence; Bonin and de Goey, “American Companies.”

2. See especially Kuisel, Seducing; Barjot and Réveillard, L’américanisation; Servan-Schreiber, Le défi.

3. Djelic and Quack, Transnational; Kentor and Yong Suk, “Yes, There is”; Kauppi and Madsen, Transnational; Tarrow, The New.

4. The cases made by Van der Pijl and Sklair seem to imply a somewhat steady conception of this transnational ruling class. Van der Pijl, The Making; Sklair; The Transnational.

5. See Barjot, Catching Up; Berghahn, American Big Business, or his earlier work The Americanisation; Bonin and de Goey, American Firms; Djelic, Exporting; Kipping and Bjarnar, The Americanisation; Schröter, Americanization and Winners; Zeitlin and Herrigel, Americanization.

6. See Djelic, Exporting, 1–14; Bonin and Goey, “American Companies,” 16.

7. Mira Wilkins is the precursor in this field of research, see especially The Maturing and “U.S. Multinationals.” See also the important work of Jones, notably Entrepreneurship, and Multinationals; Bonin and de Goey, American Firms.

8. Ramirez Pérez, “Transnational Business Networks” and “Antitrust ou Anti-US?”; Bussière and Warlouzet, Histoire, Bührer and Warlouzet, "Regulating,” Segreto, “L’UNICE.”

9. Bossuat, La France, 374–375.

10. Figures adapted from United States Department of Commerce, Statistical Abstract of the United States, various issues, deflated using the US consumer price index.

11. The US firms’ general interest in European integration is notably discussed by Hellman, Amerika; or Hilger, “Coping,” 342.

12. In general, it must be taken into account that the Department of Commerce figures do not show the true value of US direct investment abroad. They show only the ‘net capital movement’ between the US and any other area plus undistributed profits. They do not take into account increased assets and new capital indirectly obtained. The American Chamber of Commerce in France estimates that the figures are in reality 2 to 4 times higher. See Phillip W. Whitcomb, “Today’s U.S. Foreign Investments are Made chiefly on Economic Grounds,” American Chamber of Commerce in France (AACCF), Commerce in France, 15 Jun. 1964.

14. Schenk, The Decline, 18; Wilkins, “US Business,” 51. On US FDI in Britain, see Dunning, American; Kenney, “American”; Bostock and Jones, “Foreign.”

15. From Jan. 1958 to Aug. 1963, $1.5 billion in new investment was made in the EEC market, compared to $267 million in the UK. See The Chase Manhattan Bank, The European Markets. A Guide for American Businessmen, Jan. 1964, Library of Congress, 40.

16. See Wilkins, The Maturing, 343.

17. John H. Dunning is cited by Kenney, “American,” 151.

19. Although the role of tax advantages is not a point she emphasizes, see, on American FDI in Switzerland, Müller, “The Case.”

20. Hagley Museum and Library (HML), DuPont Files 2226, 1, Report by International Department to the Executive Committee, “Organizing for European Business,” 8 September 1958.

21. See Giauque, “The United States”; Gillingham and Heller, The United States; Lundestad, The United States; Mahan, Kennedy; Paxton and Wahl, De Gaulle; Vaicbourdt, “Les ambitions.”

22. See Coppolardo, The Making; Zeiler, American Trade, 21–46.

23. HML, National Foreign Trade Council (NFTC), Corporate Records, vol. 3., Minutes of the meeting of the Board of Directors of the NFTC, 5 Jun. 1957; this was also the general conclusion of the Committee for Economic Development (CED)’s lengthy report on the subject, see Mudd Library Princeton University (ML), George W. Ball files, MC 031, Committee for Economic Development, The European Common Market and its Meaning to the United States, 1959.

24. HML, Conference Board Records, 1057, Series I, 77, Proceedings, 386^th meeting of the Conference Board, “Prospects for Economic Growth. The Common Market. Threat or Opportunity?,” 16 May 1958, 28.

25. ML, George Ball Papers, MC 031, Series 1, Randall Hinshaw, Professor of Economy, Working Paper No. 2 “Economic Aspects of Western European Regionalism,” Council on Foreign Relations, Study Group on the Common Market and the United States, for meeting of 24 Nov. 1959, 39.

26. ML, George Ball Papers, MC 031, Series 1, 39, Council on Foreign Relations, Study Group on the Common Market and the United States, Digest of Discussion of the second meeting of 24 Nov. 1959, 9.

27. On George Ball’s role in the United States’ European politics, see for example Winand, Eisenhower.

28. IBM Archives, Fishkill NY (IBMA), RG 6, WTC, Office of the Secretary, vol. 5, Minutes of the World Trade Corporation (WTC)’s Board of Directors meeting, 26 Mar. 1957.

29. This was for instance the assessment made by Ford International planners who expected the EFTA and the EEC to have merged by 1962. See Bonin, Lung, and Tolliday, Ford, 178, 182–184.

30. ABdF, 1489200402/57, Centre d’études de politique étrangère, presentation by M. Paul Farish, Director of the American Chamber of Commerce in France, “Veut-on créer un climat favorable aux investissements privés américains en France?,” 20 Mar. 1956.

31. Colli, “Investing,” 145.

32. Adapted from the Harvard Multinational Database, which takes into account the 187 largest US companies: Vaupel and Curhan, The Making, 11.

33. Shown in a survey amongst CEOs having invested in the CEE in 1958 and 1959; see David J. Ashton, “New England Manufactures and European Investments,” Research Report of the Federal Reserve Bank of Boston, no. 23 (1963), 24–26.

34. See answers given by CEOs and directors of subsidiaries of Warner Bros. Co., Bridgeport CT; Armco Steel Corp., Middleton OH; Goodyear Tire and Rubber Co., Akron OH; and AMP Inc., Harrisburg PA, Commerce in France, issues Nov. 1961 to Apr. 1962.

35. All social charges are included. See Edwards, Investment, 44.

36. IBMA, RG 6, WTC, Office of the Secretary, Report of Mr. A. K. Watson to the joint meeting of the Boards of Directors of IBM, 19 Dec. 1961, 6.

37. Harvey Williams, President of Philco International Corporation, “Why Philco Came to France,” Commerce in France, 15 Apr. 1961, AACCF.

38. Bonin et al., Ford, 184–190; see also Grosbois, “La stratégie”.

39. HML, National Association of Manufacturers (NAM) papers, 1411, Series I, 77, ‘Are industrial investments in Belgium Profitable? 12 reasons in favor of a positive answer’, Mar. 1955.

40. Archives of the European Commission, Bruxelles (AECB), Bac 42/1988, 1445, Confederazione Generale Dell’Industria Italiana, Foreign Investments in Italy. A Businessman’s Guide to Current Legislation, 20 Nov. 1956.

41. Centre des archives du monde du travail, Roubaix (CAMT), Papers of the Conseil national du patronat français (CNPF), Minutes of the meeting of 20 Jan. 1958 of the Commission des Relations économiques internationales (CREI) of the CNPF.

42. See Warlouzet, “Le Marché commun,” 1329.

43. ABdF, 1489200402/57, Letter of Jean Cottier, Financial attaché of the French Embassy in Washington to Jean Sandrin, Director of Foreign Finances, 19 Jun. 1958.

44. Except in the fields of transportation, communications, electric power, banking and defense. Cf. Lyndon B. Johnson Library, Austin TX (LBJL), Papers of Francis M. Bator, Subject File, 14, Report sent by John T. Connor to several White House officials, “Attitudes in Developed Countries Toward U.S. Investment,” 8 Jul. 1966.

45. Comité Franc-Dollar, Business Operations in France: a Guide for American Investors, Washington, 1959.

46. For investments over a certain amount (500’000 NF), the approval of the Direction of Foreign Finances as well as of a special governmental Committee on Investment was required. The members of the Committee represented the Ministries of Finance, Industry and Commerce, Economic Affairs, the Governor of the Bank of France and the Commissariat du Plan. Balekjian, Legal Aspects, 47–49.

47. See Gillespie, “The Policies,” 414–415; on US direct investment in the FRG also see Kiesewetter, “Beasts or Beagles?” and Kiesewetter, “Amerikanische Unternehmen”.

48. For a description of these events, see Kuisel, Seducing, 154–184; Johnstone, United States, 13–26; Gillespie, “The Policies,” 404–406; Bailey, Harte, and Sudgen, Transnationals, 47–48.

49. The different criticisms being voiced in France were mentioned in a paper prepared in: National Archives and Records Administration, College Park (NARA), RG 84, UD/2453A, 290, Chase Manhattan Bank, Mar. 1963.

50. See Bonin and de Goey, American Firms, 581.

51. Archives diplomatiques, Courneuve (ArchDipl.), Amérique – Etats-Unis, 510, Ministry of Foreign Affairs, Note on American investments, 31 Jan. 1963.

52. AECB, BAC 478/1995, 2, European Parliamentary Assembly, Written interpellation by André Armengaud to the EEC Commission, 2 Mar. 1962.

53. AECB, BAC 478/1995, 3, European Parliamentary Assembly, Written interpellation by René Pleven to the EEC Commission, 12 Fev. 1963.

54. Centre des archives économiques et financières, Savigny-le-Temple (CAEF), Direction du Trésor, B-0062164/2, Statement by Giscard d’Estaing at the twelfth meeting of the Community’s ministers of finance in Echternach, 9 Jul. 1962. AECB, BAC 375/1999, 14, Direction Générale des Affaires économiques et financières, “Note à l’attention de M. Marjolin,” 31.2.1963.

55. AECB, BAC 375/1999, 14, Direction Générale des Affaires économiques et financières, supervised by Robert Marjolin, Les investissements privés des Etats-Unis dans le Marché commun, 19 Mar. 1963. The conclusions of the confidential report were passed on to the State Department; see NARA, RG 84, UD/2453A, 290, telegram of the US Embassy in Paris, 26 Apr. 1963.

56. NARA, RG 59, 5303, 7, “Memorandum of Conversation with Karl-Heinz Narjes, Chef de Cabinet to EEC President Hallstein, and Russell Fessenden, USEC,” 11 Jun. 1964; on the Netherlands, also see De Goey and Wubs, “US Multinationals,” 159.

57. AECB, BAC 118/1983, 814, European Commission, “Attitudes des gouvernements et de l’opinion dans la CEE et certains pays industrialisés,” Jun. 1965, 3–4.

58. McCreary, The Americanization and Die Dollar Invasion.

59. Kurt Blauhorn, “Wir kaufen die ganze deutsche Industrie. Report über amerikanische Investitionen in der Bundesrepublik,” Der Spiegel 41/1965, 49–64.

60. Bailey et al., Transnationals, 85.

61. Archives of the Bundesverband der deutschen Industrie, Berlin (BDIA), HGF-Protokolle, 12; 775, Minutes of the Steering Committee meeting of 22 Jul. 1965, 18 Aug. 1965.

62. See Canadian Department of Industry, Trade and Commerce, Foreign Trade, volume 125, 29, 1966, and Blauhorn, “Wir kaufen,” Der Spiegel.

63. AECB, BAC 375/1999, 288, Speech Otto Schoeppler, 11 May 1965, transmitted to the Commission of the European Community, 31 May 1965, 2.

64. See Balekjian, Legal Aspects, 48.

65. HBL, NAM papers, 1411, Series I, 197, The Climate for American Business in Europe, Survey by the Atlantic Council of the United States, Mar.–Nov. 1965, 76.

66. AECB, BAC, BAC 74/1985, 509, Minutes of the meeting of the European Commission, 16 Dec. 1964.

67. AECB, BAC 478/1995, 2, European Commission, Direction générale du marché intérieur, Rapport sur les investissements américains dans la communauté économique européenne, 18 Jun. 1965, 34–35.

68. 'Memorandum by the Chairman of the Council of Economic Advisers (Ackley)', 11 Jan. 1965, Foreign Relations of the United States (FRUS), volume VIII 1964–1968, doc. 27.

69. IBMA, T.J. Watson Jr. Administrative Records, 265, Memorandum: “Highlights of Presentation to Board January 25 on Economic Outlook for 1965,” 26 Jan. 1965.

70. Lyndon B. Johnson, “Special Message to the Congress on International Balance of Payments,” 10 Feb. 1965, John T. Woolley and Gerhard Peters, The American Presidency Project, http://www.presidency.ucsb.edu (Accessed 20 Jan. 2015).

71. See for instance: HML, National Foreign Trade Council papers, Minutes of the meeting of the Board of Directors, 22 Mar.1965.

72. For a discussion of the UNICE’s role in the CEE see Bührer, Warlouzet, “Regulating” and Segreto “L’UNICE.”

73. Archives générales du Royaume, Dépôt Joseph Cuvelier (AGR), Fédération des Industries belges papers, FEB-VBO, 99, UNICE, Certains aspects des disparités dans les dimensions des plus grandes entreprises de la CEE, comparées avec leurs principaux concurrents des pays tiers », 26 Feb. 1965.

74. AGR, FEB-VBO, 101, Minutes of the meeting of the Management of the Fédération des Industries Belges of 8 Nov. 1966.

75. NAM, “International Competition. Declaration of General Economic Assumptions of the Widely Representative General Assembly of the CNPF,” Excerpted from France Actuelle, 1 Mar. 1965.

76. See the debate between different fractions of the Patronat, from 1963 to 1965, leading to the adoption, in 1965, of the “charte libérale” by the CNPF; Brizay, Le patronat, 103-115; Weber, Le parti des patrons, 132–151.

77. See Moguen-Toursel, L’ouverture des frontières, 248–251; Fridenson, “Etendue et limites,” 98-99; Ehrmann, La Politique, 337-351; Warlouzet, “Le Marché commun,” 1329–1330.

78. Cf. LBJL, Papers of Francis M. Bator, Subject File, Report sent by John T. Connor to several White House officials, “Attitudes in Developed Countries toward U.S. investment,” 8 Jul. 1966, 14.

79. BDIA, HGF-Protokolle, 12; 775, Minutes of the Steering Committee meeting of 22 Jul. 1965, 18 Aug. 1965.

80. BDIA, A266, Erwin Lemmé, Note in preparation of a discussion with Chancellor Erhard, 21 September 1965.

81. Cassis, Big Business, 63–64, 112–118; on the European firms’ strategies, also see Amatori and Colli, “European Corporations” and Schröter, The European.

82. Schröter, Americanization, 62.

83. See Fridenson, “Etendue et limites,” 98.

84. Chaveau, “Entre mondialisation,” 82. In 1974, Hoechst took control over Roussel-UCLAF in a situation of conflict. See Bussière “L’Europe,” 1230.

85. On these two associations, see Weisbrode, The Atlantic Century, 168–169.

86. Small, The Atlantic Council, 1998.

87. HML, NAM papers, 1411, Series I, 97, The Climate for American Business in Europe, Survey by the Atlantic Council of the US, Mar.–Nov. 1965, 47–48.

88. HML, NAM papers, 1411, Series I, 97, Report of the Conference at Crotonville, NY, 12–15 Dec. 1965, on the Subject of “The Atlantic Community and Economic Growth,” sponsored by the Atlantic Council of the United States, 13–14, highlighted in the original.

89. On the Atlantic Institute, see Aubourg, “Organizing.”

90. The Rockefeller Archive Center, Sleepy Hollow (RAC), Ford Foundation papers, PA 65–262, Summary of the meeting of the Advisory Committee of Studies of the Atlantic Institute, 23–24 Jun. 1965, and Minutes of the meeting of the Policy Committee of the Atlantic Institute, 13 Oct. 1965.

91. See AACCF, American Chamber of Commerce in France, Minutes of the Board of Directors, 28 Oct. 1965; HBL, NAM papers, 1411, series I, 97, Walter Dowling, Director General, The Atlantic Institute, “European Business Views and the Atlantic Community,” no date; The Atlantic Institute, Committee No. 2, “Atlantic Cooperation and Economic Growth – Planning for the 1970’s. Summary Statement: Attitude toward United States investments in Europe,” 31 May 1966.

92. HML, NAM papers, Series I, 97, The Atlantic Institute, “Atlantic Cooperation and Economic Growth. Planning for the 1970s. Summary Statement,” Geneva, 29 May to 1 Jun. 1966, 3.

93. HML, National Foreign Trade Council papers, Minutes of meeting of the Board of Directors, 7 Jun. 1966.

94. NARA, RG 306, 198, 5, United States Information Agency (USIA), Business Council for International Understanding, Circular, 15 Jun. 1965.

95. AACCF, Board meetings, 1966-68, Round table held at the Hotel George V on 18 Sept. 1966, “The Effect of U.S. economic power on the economy of France and Europe.”

96. CAMT, CNPF papers, Minutes of the meeting of the CNPF Commission des Relations économiques internationales meeting of 11 May 1970.

97. ABDI, RA Rechtsabteilung, 41, 865, Minutes of the German-American industrial discussions held at the Hotel Petersberg, 18, 19 Jun. 1967, 3 Aug. 1967.

98. LBJL, Papers of Henry Fowler, 39, “French soften Position on Investments by U.S.,” The Journal of Commerce, 7 Oct. 1966.

99. See on this subject Moguen-Toursel, L’ouverture des frontières, 61-62.

100. On the 1968 balance of payments program see especially Rollings, “Multinational”; Lancaster, “The Foreign.”

101. CAMT, CNPF papers, Minutes of the meeting of the Commission des Relations économiques internationales of the CNPF, 8 Apr. 1968.

102. Tarrow, The New, 29 and 43.

103. See Van Dongen, Roulin, and Scott-Smith, Transnational; Wilford, The CIA; Berghahn, America; Aubourg, Organizing; Sklar, Trilateralism.

104. See Djelic and Quack, Transnational, 18.

13. Figures adapted from: United States Department of Commerce, Statistical Abstract, 14–20.

18. Figures adapted from: United States Department of Commerce, Statistical Abstract, 14–20, deflated using the US Consumer price index.