188 / GLOBAL DREAMS primary product. On the stubs 0f payroll checks appears the legend: THIS IS TOBACCO MONEY. Although Philip Morris manufactures more than 160 other cigarette brands in some 170 countries, Marlboros have been the key tO its glObal success. A succession Of marketing entrepreneurs steered the company's phenomenal expansion. But the most valuable figure in the company by far is the mythic billboard idol, the Marlboro man. Fo お magazine once estrmated that the Marlboro man by himself 11 had a 、、 goodw Ⅲ ' ' value of $ 10 billion. Each pack 0f Marlboros is emblazoned with the corporation's coat of arms and the slogan 。。梔ⅲⅥ市Ⅵは " came, I saw, I con- quered. '' But for years the company was far from the Julius Caesar of the cigarette industry. ln fact, as former chairman Hamish Maxwell recalls, 、 'when Marlboro was reintroduced [with the cowboy] in 1954 , Philip Morris was the smallest of the six major tobacco com- ” 12 But it had been around for more than a hundred years. pames. ln 1847 a young man by the name of Philip Morris set up a tobac- conist shop on Bond Street in London and a few years later began making his own cigarettes, but the company remained small even by mneteenth-century standards. ln 1902 the company set up a subsidiary in New York. At that time the American Tobacco Company, under the command of James Buchanan Duke and his brother Benjamin, was in the mopping-up phase Of a fierce cigarette war. " American Tobacco tOOk over rival companies, established a near stranglehold on the American market, invaded the British market, and divided up the rest of the world with lmperial Tobacco Company, the British trust that was organized to fight them. ln 1911 the U. S. Supreme Court broke up American Tobacco. Four American and tWO BritiSh firms emerged from the litigation, and these dominated the industry until the 1950S. Amid these giants PhiIip Morris was a pygmy. lt had entered the American market trumpeting the royal warrant appolnting the firm "Tobacconist to His MaJesty King Edward VII," hoping that more American smokers would be impressed than proved tO be the case. ln 1919 a group of American investors decided to buy out the struggling company with the intention Of concentrating on exports tO the Ori- ent and 0f developing a promising new "specialty" market in the

268 / GLOBAL DREAMS many Japanese techniques tO itS North American plants, and these are almost as productive as the average Japanese plant. One Ford factory in Mexico, according to the MIT study, had the best assembly-plant quality of the entire global sample, better than the 21 best of the Japanese auto plants. ln 1985 Donald E. Petersen became chairman of the Ford Motor Company, the first englneer tO head it since the founder. lt was a difficult period for the U. S. auto industry, but Ford surged ahead of its American competitors and for several years lt was the most prof- itable American automaker. Understanding the extent and chronic nature 0f the global overcapacity of the industry more quickly than itS competitors, Ford cut payrolls, closed factories, and figured out hOW tO make attractive and reliable cars more cheaply. Ford had already carried out a major retooling of its production facilities all over the world, investing $ 28 billion t0 automate pro- duction and t0 eliminate excess capacity. The company's global work force was cut from 506 , 500 to 390 , 000. Most of the cuts were in the United States. Over a nine-year periOd, the number Of robots in the North American plants rose from 236 to 1 , 300 , and more than 80 , 000 hourly workers and 16 000 salaried white-collar workers were discharged. 22 The number of hourly workers fell by 47 percent and productivity increased by 57 percent; labor costs per car were 23 now $ 800 less than at GM. Computer-driven machines tO weld, stamp out parts, and sched- ule, control, and monitor production were introduced intO Ford plants in Europe as well as in North America. Ford also adopted "just ln tlme" production, enabling the company tO reduce itS inventorres from three weeks tO one week; in just one englne plant this innova- tion resulted in a $30-million saving. ln Spain, a complete production line for EscortS was lnstalled in a space previously used tO store parts. III. The question was whether Ford had the time to catch up with its Jap- anese teachers. Much depended upon whether the company could once again become a globally integrated business enterprise. Ford'S president Philip Benton points out that the company began as a glob 引 company, exporting the same cars everywhere. Soon thereafter, hOW- ever, 、Ⅵ℃ became a multinational company with separate operatlons

224 / GLOBAL DREAMS used saleswomen dressed up as 、 'milk nurses" in Third rld coun- tries wh0 would give away free samples to nursing mothers. This had the intended effect of discouraging breast-feeding as well as the un- intended but predictable effect Of increasing infant diarrhea, S1nce rn many countries the packaged product was almost certain tO be mixed with contamlnated water. A Nestlé lawsuit cooled the rhetoric of the glob 引 campaign to force the giant company tO change these practices but not the activ- ists' determination. After several years Of a worldwide boycott 0f NeStlé products, the company agreed tO most of the activists' de- mands. Although the company's compliance with the agreement has been far from perfect, the NestIé boycott was probably the most successful transnational consumer effort tO hOld glObal corporations accountable tO ethical and health standards. The humanitarian im- pulses on which Henri Nestlé started the company had been long forgotten, and the "Boycott Nestlé!" campaign failed to note the rrony. ln 1987 the company that had been started to save babies was caught selling adulterated apple juice for infants through its baby- food subsidiary, Beech-Nut. Nestlé was embarrassed and unloaded Beech-Nut two years later. ln the business world Nestlé has had a reputation over the years as an easygomg company, even cowlike. Over a century ago it bought a milk factory in the United States and tried tO edge its way into the American market then dominated by Borden. But the original con- densed milk company, despite the sweet, maternal image pro)ected a generatlon ago by ElSie the Borden COW ()n advertising character as successful in its day as the Marlboro man), ran Nestlé out Of the country by putting out price-slashed 、 'fighting brands. " ln 1985 , just as Philip Morris was gearing up for its European invasion, Nestlé paid $ 3 billion for Carnation, which included its Friskies pet-food line. But in the 1990S American dogs were eating more Purina and less Friskies; indeed, Nestlé's performance in the United States was ummpresslve, revealing a lack Of the organization and drive that characterized the U. S. fOOd giants. The top executives at Vevey were accustomed t0 operating in the underdeveloped world, where they had little competition, and in the more genteel climate Of Europe, where competing giants specialized and divided the market, using their market power against weaker and smaller family food busi- nesses more than against each Other. But the entry Of one Of the most aggressive American compames accelerated changes in the competi- tive climate Of Europe.

THE TECHNOLOGY OF PLEASURE / 67 most critical and the most risky. ln the late 1980S , the company acquired CBS Records and Columbia Pictures. Sony had suddenly become a major player in global entertainment software. The United States had surpassed Japan as Sony's largest market. More and more, as we describe in a subsequent chapter, the fate of the company hung on its American holdings and the American market.

A SMALL TOWN GLOBAL GIANT / 85 strongly influenced by the philosophical precepts he developed over four decades. ln 1960 the company adopted a set 0f corporate prin- ciples based on his ideas, and in 1973 they were enshrined in a company constltution that is amended from tlme tO tlme. ・ When we asked one Bertelsmann executlve what aspect Of the media business Mohn really cares about, he was momentarily stumped. Then came this answer: He is not much interested in publishing or printmg or recorded music. He could just as happily sell anything that wasn't disreputable. HiS paSSIOn IS tO create a SUcceSSfUl C()rP()rate structure. On a visit to the United states in the 1960S 、 'lohn was strongly influenced by the ideas 0f Alfred p. the General M0tors genius WhO popularized the concept that great corporations must decentral- ize their management, and 、 iS committed tO the idea Of ership from within. " AS woessner puts try tO provide management with working conditions that are as close as possible tO those Of an independent entrepreneur. "11 There are inevitable limits tO decentralization ln a company in which all the ultimate decision- making power iS still concentrated in one pair Of hands. the decentralization idea is company gospel. M0hn tells the story 研 hiS conversation years ago with a manager Of one Of Bertelsmann s operations in ltaly. He was growing increasingly annoyed that the ltalian wasn't paymg more attentlon tO hiS recommendations and the owner, then 引 so the CEO, reminded this middle-level employee that he would do wellto listen t0 the boss. The manager smiled and said, 、、 Tonight you go back t0 Germany, and l'm the boss. " 、 [Ohn writes that family money is no longer an acceptable basis for exercrsing leadership in a and he has arranged affairs such that he will be the last of the Bertelsmann clan t0 run the company. But the culture 0f the family business still pervades the organizatlon. Mark brother Frank runs one Of Bertels- mann S seven divisions. ln a media company it is especially important that managers at the operating level have free rein. Middle-level employees are con- siderable latitude and paid extremely well• But a t0P 0 伍 ci 引 in Güt- ersloh complained that decentralization leads tO the creation Of baronies. lt iS not possible for him tO call someone in New York 、 'without that person running tO MiChael (the Bertelsmann executive in the United States). There iS lntense rivalry in the company at the top among M0hn's protégés. Schulte-Hille11' a cosmopolitan sort WhO lives in Hamburg, a great European has his loyalists, and they tend t0 regard Woessner' wh0 has spent most

44 / GLOBAL DREAMS Morita and lbuka decided t0 start a new company together. On May 7 , 1946 , the Tokyo Telecommunications Research Laboratories was incorporated. With $ 500 in capital, Morita and lbuka opened for business in a small room on the third floor Of a bombed-out blackened department store in a section Of downtown TOkYO that had been subjected t0 massive fire-bombing all during the prevrous sprmg and summer. A few months later renovatlons Of the depart- ment store began, and they were forced tO move intO a dilapidated wooden shack with g 叩 ing holes in the roof. 。、 We literally had t0 open umbrellas over our desks sometimes," Morita recalls. The American occupation authorities WhO had oversight responsibility for the electronics industry were appalled by the makeshift little company and considered closing it down. when Akio had asked his father for release from the family busi- ness, the elder Morita, though deeply skeptical about his son's deci- Sion tO abandon sake and SOY sauce, graciously advanced him money, taking stock as payment. ln a few years he was one 0f Sony's largest stockholders. Today the Morita family owns about 10 percent of the stock. lbuka, t00 , had useful family connections. His father-in-law had been the right-hand man 0f Prince Konoe, a former prrme mm- ister, and the old-boy network was helpful in persuading Japanese Broadcasting,National Railways, and Other government agencies tO buy the electronic testing eqmpment the fledgling company was pro- ducing. By the end 0f 1946 Morita had twenty employees at work producing thirty or SO voltmeters a month. From the first Morita believed that the survival of the company could be assured only by inventing and marketing new products. TO com- pete with Matsushita Electric ln established products seemed out Of the question. Matsushita, already a giant, had most 0f the Japanese consumer electromcs market in 1tS POCket. Japan S premler consumer- electronics company was founded in 1918 by a grade-school drop- out, Konosuke Matsushita, who, legend has it, pawned his wife's kimonos tO raise the capital tO get started. He believed in planning ahead, and in May 1932 he announced his 250-year plan for the corporation. Although Matsushita died in 1989 leaving an estate 0f $ 1.5 billion, his spirit lives on in the company "creed," a mantra

THE TRANSFORMED WORKPLACE / 331 indication Of the downward pressure on wages in the United States iS the clientele now being served by soup kitchens. ln Washington, D. C. , a city with a large minority and refugee populati011' Martha's TabIe serves thousands of free meals each week; 62 percent 0f those wh0 stand in line for a cup 0f soup are part 0f the growing army 0f the working poor. ln 1993 , 18 percent 0f the U. S. work force was working forty hours a week or more for wages that put them below the poverty line, as defined by the federal government. The number-one garment company in the world iS Levi Strauss. lt built up a reputation not only for treating its workers decently but for its generous support Of CiViC and charitable mostly in the san FranC1sco area. The company devotes 2.5 percent Of pretax profits tO charitable contributions, much higher than the av- erage among U. S. corporations. ln 1990 the 140-year-01d company became a family-owned enterprise once again, thanks tO junk bonds and the miracle of the leveraged buyout. Levi's products are sold in 70 countrles; the brand name iS almost as well known as COke or ル larlboro. About a third Of Levi Strauss's sales revenue comes from outside the United States. But thanks tO glObal competition, the com- pany has C01 e tO feel pressures tO cut COStS. ln the 1980S the company closed thirty-two 0f its sixty-six pro- duction facilities in the United States, and corporate plans call for accelerating the shift from what its annual report calls "owned-and- operated production" tO 、、 fast, flexible, and responsive" production facilities. The company owns 0 司 y fifteen plants outside the United states, more than half 研 which are in Europe. ln 1992 it opened a $20-million jeans factory in Plock, P01and, a depressed industrial city 32 eager for the 1 , 000 jobs the factory will generate. But the investment in poland with its vast labor P00 ー and prom- ising domestIC market for jeans IS an exception. For the most part the company IS not acquiring factories but is moving rapidly tO imple- ment a double-edged global strategy. ln its remaining factories i い s introducing lean production, in effect adapting the approach 0f high- skills industry to low-skill j0bs.Workers in the reorganized plants no longer wait for a bundle Of shirts tO arrive at the work Stat10n SO they can sew on the pockets. NOW a team Of thirty tO fifty workers makes the WhOle garment, and they, rather than supervisors, decide hOW tO eliminate bottlenecks in the line. The result is that plants that used tO take six days tO make a bundle Of thirty jeans now can dO it in seven 33 hours. At the same time, the company iS expanding its network Of

MASS PRODUCTION IN POSTMODERN TIMES / 261 wages," the inventor announced tO incredulous reporters. you cut wages, you Just cut the number 0f your customers. " (The Ⅳ 4 〃 & / 04r れ 4 / denounced Ford'S high-wage SCheme as an 、、 economic cnme. ")5 For almost seventy years a SOCial system flourished in the United states, thanks in large part tO the labor movement, that was based on high-volume assembly-line production employing well-paid workers WhO could afford tO drive FordS tO work. Ford'S viSIOn eventually led to big factories, big cars, and big unions. Henry Ford didn't like un10ns or bankers or a good many Other aspects Of con- temporary life in the United States, but he was glad t0 take the credit for the transformation of small-town America. When J0hn Dahl- inger, reputed tO be his illegitimate once reminded the aging entrepreneur that this was the modern age' Henry Ford stopped him short: 、、 Young man, I invented the modern age. By 1914 , the year 、 vor 旧 War I broke out, Henry Ford had become the premier automaker in Britain. His highly publicized efforts t0 keep American boys out Of the trenches aroused such anger that he had tO take in British minority shareholders tO C00 ー nationalist feel- ings. By the mid-1920s Fords or Ford parts were coming 0 幵 the line ln nlneteen foreign countries. 6 The company had assembly opera- tlons in Argentina, Brazil, lndia, South Africa, Mexico, Malaya' Aus- tralia, and Japan. lts Y0k0hama plant established in 1925 soon t00k the largest share Of the Japanese market. 、 'FordO" became a generic term for car in Japanese. Militarists and nationalists kept squeezing the company and calling for Ford's expulsion, but Henry Ford's OP- eration in Japan was still managing t0 produce 12 400 cars a year when it was shut down tWO years before Pearl Harbor. Unlike GM, a public corporation run by mostly anonymous bu- reaucrats, the Ford M0tor Company has always been a family busi- ness. Though the company's stock is publicly traded, the Ford family retains 40 percent 0f the voting shares. According t0 former CEO HaroId A. poling, two great-grandsons of the founder, Edsel B. Ford Ⅱ and William C. Ford, Jr. ,"aspire to run the company at some time. "8 lrritation with the 、 'Ford boys" for demanding titles tO match their VOting power rather than their expenence or responsibilities helped push Poling's predecessor as chairman intO early retirement. Tension between owners and managers iS an 01d story at Ford. For almost eighty years tWO quirky owners, each in his own way an unforgettable character, ran the company. As David Halberstam puts it in his examination Of the autO industry, T わ R ビた 0 れ / 〃 g , the creator of the Ford Motor Company became its destroyer. 9 The inventor Of

THE GLOBAL GROCER / 219 お 0 お magazine called the world's largest f00d merger one 0f the ” 25 fastest consolidations Of t 、 V() huge compames ever seen. A few months after the Kraft merger Maxwell was dropping hints that he was about tO move again on another fOOd company. 、、 You never get t0 where you can just sit back and say' 、 OkaY' l've , ” 26 Nestlé was still the world's now created the world, I'II rest. largest f00d company, and in Europe Unilever was also bigger. 、、 TO strengthen our fOOd business internationally—and Ⅵ℃ are that we should dO it sooner rather than later—," Maxwell mused aloud, 。。Ⅵ℃ need acqLlISIt10ns. ・ we cannot dO it in one big acq111Sl- ” 27 . SO it's more a matter Of picking up bits and pieces. む on. 1989 , philip Morris paid less than $ 100 million for Fini, an ltalian pasta and cold-cuts company. The next year, long before most industry analysts thought PhiliP Morris would be finished digesting its last multibillion-dollar acqui- sition, Maxwell was ready for another. TO be a truly global 応 0d giant, Maxwell and Miles realized, PhiliP Morris had t0 have a maJ0r European f00d company. The European CommunitY appeared t0 be movmg rapidly toward economic integration. MOSt European na- tions west 0f poland had agreed t0 form a single market embracing 340 million customers by the beginning of 1993. lt was important t0 hedge against the possibility that the EC would erect tariff barriers against the outside world even as they lowered them within Europe. Jacobs Suchard would give Philip Morris a place inside 、 'Fortress Europe," if that iS what it were tO become. The year philip Morris bid to take it over, Jacobs Suchard was selling about 13 percent 0f all the candy sold in Europe and about 20 percent Of the coffee. lt was especially strong in Europe's prenuer national market, west Germany. the acquisition Of the SWiSS chocolate-maker, Philip Morris became the world's number-one consumer-products company. By the same stroke it became the third- largest f00d company in Europe, a $7()()-billion-a-year market that was once the exclusive domain Of NeStlé, Unilever, and a hOSt Of 28 other smaller Old World companies ・ One motive behind philip Morris's transformation intO a fOOd company was the hope 0f becoming recession-proof. As Maxwell puts it, no matter how bad things get you can bet your life they'll keep on eating. '' As f00d companies merged and expanded in the 1980S and the prices of their stock surged, they 100ked impervious t0 fluctuations in the economy. ln the recession that began in 1989 a relatively small number 0f people in the United States went t0 bed

78 / GLOBAL DREAMS 行 0 〃 4 / E 〃 9 〃 / 尾 listed him as the seventh best-looking man in West Germany. ) As chief 0f a large, cash-rich company with neither seri- ous labor problems nor riSkS Of a hOStile takeover, ・ Woessner IS en- viably free of many of the problems facing his competitors in the industry. He is one Of Germany's highest-paid executives, and his salary in 1990 approached $ 3 million a year. But he serves at the pleasure Of one man. Manfred Fischer, the first chief executive M0hn appointed when he reached 60 , the mandatory retirement age the owner himself wrote intO the corporate by-laws, lasted barely eighteen months. His basic mistake was his failure tO grasp the fact that Bertelsmann, though a global giant, was still a family company. But Woessner, a long-time protégé 0f M0hn, has been careful not tO make the same mistake. ・ When he retired as top manager, Reinhard 、 10hn drew up elaborate plans for the continu- atlOn Of Bertelsmann as a private company. He created a self- perpetuating board that included Woessner and Schulte-Hillen t0 manage the operation. The board members have ℃ nty-year con- tracts beyond retirement, in effect posltlons for life. But everyone knows that the entire scheme could be revoked at any time 0f the day or night by the 、、 annual shareholders' meeting. '' lt would cost mil- lions tO buy up the contracts, but that has never been an obstacle tO sudden dismissals at Bertelsmann. Mohn has been scrupulous in withdrawing from day-to-day deci- SIOns since his retlrement, but his interest in the quarterly reports are, if anything, greater than ever. Thus the urge tO ShOW the owner 、 'beautiful figures" is alSO greater. Several top Bertelsmann executlves t0 旧 us that the big advantage 0f being a private company was its liberation from the tyranny 0f the quarterly statement and from the prying eyes 0f Wall Street analysts, but they acknowledged that one pair 0f eyes can be more intimidating than all the rest. Yet M0hn encourages the successful technocrats WhO manage the company tO 。、 feel like nineteenth-century entrepreneurs. '' Manfred Harnischfeger, the executive vice-president for public relations, explains: 、 'ThiS is a company run from the middle. " Each manager of the 200 profit centers around the world is not only urged tO innovate and thus tO take risks, but he is liberally supplied with cash. Until he is perceived t0 have failed. 、、 Anyone wh0 doesn't perform gets the boot," as one of Mohn's industrialist colleagues puts it. A favorite theme in Mohn's memos on company philosophy is the call for "dialogue and creative unrest. " (The test Of management, he mamtams, iS tO this energy. ) TOP executives have some