The French Way (31 page)

By then Ivester was on the ropes. In the two years following his appointment as CEO in 1997 the company had been fined for market abuses, defeated in its effort at buying Orangina, forced by EU regulators to scale back plans for acquiring brands from Cadbury Schweppes,
and bungled its response to the health scare in Belgium and France. In addition, Italian authorities were investigating Coca-Cola and EU regulators had raided company offices in Germany, Denmark, and Austria searching for evidence of possible violations of community rules on competition. After more than a decade of stunning growth in volume and profits under Roberto Goizueta, the Coca-Cola Company seemed to have run out of fizz. In 1999 global profits slumped, shareholder returns were paltry, and sales of its concentrate fell. Global economic conditions were not Ivester's fault, but his abrasive and arrogant ways, compared to the more genteel Goizueta, antagonized associates, regulators, and consumers.
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In December 1999 he was forced out of office and his successor promised to pay more attention to local conditions and to “play by the rules” in marketing.

In France, Coca-Cola's spending, restructuring, and rough tactics boosted per-capita consumption to ninety or more servings by the end of the 1990s, gave it a 55 percent share of the market for carbonated drinks, and prevented Pepsi from winning even a 15 percent share. But the French still drank less Coke than most Europeans; the Germans, for example, gulped twice as much.
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And in France bottled water still trumped Coca-Cola, forcing the company to concede to national taste and introduce Chaudfontaine, its own line of mineral water. Coca-Cola, like McDonald's and Disney in the 1990s, inched toward adapting to local taste and loudly proclaimed the local identity of its products rather than extolling its American or transnational character. But for its successes the Americans paid a price in fines, boycotts, law suits, adverse government rulings, and a damaged reputation. Coke's adventure in the land of the Gauls had brought it treasure, but its journey had been fraught with misfortunes.

It seems appropriate, after these three company narratives, to revisit the questions raised at the outset of this chapter: Did these Americans adapt to their environment? How did their host's culture affect their reception? And what impact did they have on France ?

Together these questions address a fundamental debate about Americanization or American-led globalization. A benign interpretation of the phenomenon would assume that these American businesses adapted to local tastes and traditions and that their wares and ways blended with that of their hosts, merely adding options to consumers, without either unsettling markets or tastes, or bringing globalized uniformity.
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A more aggressive view would expect these intruders to impose themselves on the locals, disrupt local economies, societies, and cultures, and Americanize them. These narratives tend to confirm the latter interpretation.

The conceptual issue here is not whether these Americans adapted to French ways—of course they did, to an extent. The real question is, Were these modifications significant? Contrary to some other scholars who have gone a long way in stressing the appropriation thesis—that local cultures have prevailed in transforming American imports—I am more skeptical. In the case of this American trio historical evidence runs against the appropriation thesis.

These companies directly exported across the Atlantic the techniques and products that had brought them success at home, and they did so with little modification. Moreover, they turned their associations with America to their commercial advantage and they even converted many domestic firms to American ways. Their basic strategy was, what worked for Americans would work for the French and the Europeans. Whatever alterations were made—in, say, the attractions at Euro Disney, the menu at McDonald's, or the advertising for Coca-Cola—were largely cosmetic. The essence—and the appeal—remained unaltered, remained American.

Direct transatlantic exports, however, do not mean that these American adventurers were inattentive to the natives. They tried to take into their calculations the presumed tastes, habits, and rules of the French. There was some adaptation. All three corporations, for example, allowed some measure of local control and made small adjustments in their products and their presentation. And when the natives
became restless, these intruders knew how to defend themselves: they attempted to conceal their foreignness and emphasize that, in many respects, they were French enterprises. They would parry attacks by stressing they were really local companies and by parading the benefits they brought to France: innovation, jobs, and tourists. A manager of McDonald's in Europe said the hamburger chain was not a multinational company: “It's a multi-domestic company. The goal is to localize it as much as possible.”
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But this defense rang false to French ears since these corporations routinely played the “Star Spangled Banner” so loudly, wielded their corporate power so blatantly, and made so few concessions to the locals. These American interlopers did not “go native.” The Walt Disney Company's deference to the Europeans in its Magic Kingdom was slight: the park was intended to be a fantasized version of America. McDonald's diversified its menu and remodeled restaurants to blend with the locale, but the food, the setting, the operations, and the basic appeal of the Golden Arches were copied from the U.S. version; eating at McDonald's was an American experience. Nor did Coca-Cola do much to adapt to France. A cafe on the Avenue de l'Opera might serve the soft drink in a small glass with lemon as an aperitif and the company might sponsor national sporting events like the Tour de France, but nothing was altered by this—neither the product nor its meaning.

Even the much touted autonomy of the French subsidiaries seems exaggerated. All three companies were notorious for running a “tight ship” and strict monitoring standards. McDonald's claim that its outlets were controlled by local retailers seems dubious since the company picked sites and franchisees, provided suppliers, managed advertising, and rigorously enforced its highly detailed operating procedures. Coca-Cola also claimed its bottlers were independent, but the corporate offices monitored foreign operations to make sure its beverage was absolutely uniform. And in 1989 the Coca-Cola Company bought out most of its French bottlers and assumed control of them from across the Atlantic. Similarly, the WDC ran Euro Disney from California.

According to the founding contract the company put up a small fraction of equity yet it secured total managerial control.
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The U.S. offices of these giants closely supervised their subsidiaries, making sure they stayed true to the original.

All three companies also played by the American, rather than the French, rule book. McDonald's tried its best to avoid the French labor code. Coca-Cola's violations of French rules for marketing and competition earned it fines and official censure. Disney ignored norms of business behavior, dictated to its fellow French investors, imposed its dress code, and skirted customary labor standards. It ran the Paris park the way it did its parks in Orlando, Florida and Anaheim, California. All three companies imported the rough-and-ready ways of American free enterprise rather than submitting meekly to French rules. They acted in ways that confirmed Gallic stereotypes about the sharp competitive habits of American business. At one point the banks, who were Disney's partners, accused the Californians of “fraud and theft.”
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And the way McDonald's cornered the fast food market honored Ray Kroc's reputation for wanting not just to outsell his rivals but to destroy them. Such behavior only heightened French apprehension about the ruthless ways of Yankee capitalism.

There was neither much adaptation nor much autonomy. As McDonald's boldly expressed it, the natives would learn to like its hamburgers. These corporations repeated what they had learned in the United States and they celebrated, and profited from, an intrinsic market advantage—offering others what Americans enjoyed. They were intruders.

A second question posed in this chapter asks whether or not culture was important in determining how the French responded to these businesses and thus to how they performed. These three narratives demonstrate that the Americans ignored culture at their peril. But the story also shows how an open, diverse, and changing culture allowed the Americans eventually to have their way.

Insensitive
is a fair description of how these three companies acted toward French cultural anxieties. All were widely regarded as cultural
invaders and this reputation harmed them in their setup stage and hampered them afterward.

American managers underestimated both the cultural meaning of their products and Gallic conventions about merchandising; they then compounded their troubles with obtuseness. In the early 1950s Coca-Cola flaunted its challenge to traditional drinking habits with a marketing blitz that used the Tour de France as an advertising venue. When the French objected, a company spokesperson recalled America's role in the liberation and reconstruction of the country and denounced the French for their ingratitude. Four decades later William Hoffman thought Southern grits would sell Cokes in Bordeaux. In 1993, McDonald's made the mistake of planning to float the Golden Arches on a barge at the base of the Eiffel Tower after they had already been made conspicuous on the Champs-Elysees. An outcry in the press and intervention from the office of the mayor of Paris scuttled the barge. Similarly, Michael Eisner's management team misperceived how Europeans might react to an American-style theme park twenty miles from Paris and to Disney's appropriation of French national cultural icons like Cinderella (Cendrillon). One executive who arrived after the park opened acknowledged massive, if unintended, cultural insensitivity during the setup phase on the part of “older Disney people.”
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Disney managers became defensive, and sometimes truculent, when attacked. One spokeswoman said, “Who are these Frenchmen anyway? We offer them the dream of a lifetime and lots of jobs. They treat us like invaders.”
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Instead of defusing the cultural war, Disney waged it. When the new park had trouble training employees to act like “cast members,” one official ungraciously observed that “the French are not known for their hospitality.”
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These companies unintentionally raised phobias about Coca-Colonization and McDonaldization because they misjudged how the French infused commercial products with cultural meaning. Intellectual gatekeepers, political activists, the media, and certain interest groups escalated the Franco-American competition over food, drink,
and entertainment into grand cultural issues such as endangered national identity. McDonald's was accused of crowding out traditional restaurants, disrupting the family meal, undermining cuisine, and ruining
bon gout.
Coca-Cola supposedly threatened a revered marker of French identity, wine. Walt Disney, according to Marc Fumaroli, was a “cultural engineer” who threatened to “industrialize” leisure.
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Such attacks provoked sarcastic responses in the American press about the French. The transatlantic cultural wars from time to time engulfed these companies.

Culture was an obstacle to this trio, especially during their setup stages. But in all three cases the setbacks were minor or temporary and French culture proved to be malleable, or so diverse, that it was a marginal problem for the Americans. Millions of French consumers learned to love the Big Mac, Disneyland Paris, and Coca-Cola. All three firms managed in time to thwart, or at least weaken, Gallic cultural opposition.
French culture
, whether the term refers to the taste for wine, bon goiit, reflective leisure, refined sensibility, or stereotypes about national identity, did not matter much. It may have ignited intellectual fireworks, inspired some popular grumbling, and provoked a small measure of political resistance but, at most, it only slowed down the Americans. Moreover, resistance faded. For example, the Communist Party, which had tried to stop the entrance of the sugary invader during the early days of the Cold War, was by the 1980s serving Coke at its annual outdoor Fete de l'Humanite. And if the guardians of tradition once condemned the drink's merchandizing tactics, the shopping center at the Louvre in 1996 hosted an exhibition titled
Art oupublicite?
(Art or Advertising?) featuring a vintage Coca-Cola ad. Another museum in Paris, a decade later, hosted an exhibition of Walt Disney's early designs and the European art that inspired him and his animators. When in the late 1990s the most visited tourist attraction in the Paris region turned out to be Disneyland Paris rather than Notre Dame or the Louvre, these Americans icons seem to have become part of French popular culture.