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Gillette Plant Issue : U.S.-French Ties Take on a Hard Edge

November 29, 1988|RONE TEMPEST | Times Staff Writer

ANNECY, France — When the 400 workers of the Gillette razor blade factory in this picturesque lakeside city heard rumors early this fall that their American parent corporation planned to close the plant, they launched an energetic counterattack.

They dipped into union funds to take out full-page advertisements in Paris newspapers charging that Gillette planned to "shave" France of an important employer. They staged a highly publicized "reverse strike" in which they posed before television cameras toiling "harder, longer and better" than ever before.

Finally, on the eve of a crucial meeting between Gillette management and the French minister for industry in Paris, four plant workers climbed to the summit of nearby 15,771-foot Mt. Blanc, Western Europe's highest peak, to unfurl a banner protesting any closing of the plant. Television crews filmed the event from hovering helicopters.

A Fantastic Success

As media campaigns go, it was a fantastic success. No wonder Minister of Industry Roger Fauroux entered the meeting with Gillette officials last September charged with patriotic, protectionist zeal. Talking to reporters afterwards, Fauroux said he told Gillette Vice Chairman Derwyn Phillips, president of the company's European operations, that "if he closes the factory at Annecy, he will not enter into a conflict with the unions from the plant, but with France herself."

Then, in language that sounded to everyone around very much like the threat of a state-endorsed boycott, Fauroux, a former manager of one of France's largest industries who until this point had been considered a friend of American business, went on to say:

"The French market is very important to Gillette in Europe; it would be very irresponsible for the company directors to run the risk of losing it. . . ." He told Gillette officials not to come back until they had come up with a proposal to save the Annecy facility, which produces double-edged razor blades and a few other toiletry items.

Strong Talk

According to the American officials and business leaders in Paris, it was some of the strongest talk in years from a French government that has been increasingly open to foreign investment.

"Fauroux brandished the threat of a boycott weapon as though it would be condoned by the government itself," one American business leader said. "It was like using the atomic bomb to kill a mouse."

As a result, the relatively small matter of the closing of a medium-sized manufacturing plant in a remote city has escalated into a serious free-trade conflict between France and the United States. Fauroux elevated the issue into an affaire d'etat between the two countries.

At the heart of the conflict is the right of foreign businesses in France or any other country to close plants and operations when they wish. In this regard, the Gillette factory presents a rather intriguing case study of problems faced by American corporations doing business in Europe, where state control is still a lingering factor in the marketplace.

In the long term, it might be seen as a hint of things to come as Europe is scheduled to unify into a single economic entity by 1992. Protectionist forces then may expand to include the whole continent, not just France or other individual countries.

1992 Unified Market

"If France ever took steps that made it difficult to sell products here," said one source familiar with the American position, "it would be viewed very seriously by the American government. It was pointed out to the French government that if an investment position becomes too highly politicized, then when the unified market comes in 1992, American companies could decide to go somewhere else." The European Common Market is scheduled to eliminate trade barriers among member states in 1992.

Lost in all the posturing over state responsibility and corporate rights are the original claims involved in the debate over the plant's possible closing. Boston-based Gillette, which has never formally announced its intention to close the plant, insists that demand for the old-fashioned, double-edged razors made in Annecy is rapidly disappearing.

The workers of Annecy, whose most articulate spokesman is town Mayor Bernard Bosson, a minister in the former conservative government of Jacques Chirac, claim that Gillette, which also has factories in Spain, England and West Germany, owes France an industrial commitment in exchange for selling its products in the country.

U.S. Ambassador Joe M. Rodgers, a millionaire Tennessee building contractor who has spent much of the last three years promoting what he considers a positive investment climate in France, reacted to the Fauroux statements with anger and shock, according to aides. He dashed off a memo to Washington about a crack in U.S.-French relations, they said.

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