Audacity & Measure

Amid the pop of champagne corks and the hiss of sulfurous fire, the world's most highly automated aluminum plant was officially opened last week near Lacq in southwestern France. Nestled at the foot of the Pyrenees on once-sleepy pasture land, the $40 million plant is the showpiece of one of France's most aggressive and fastest-growing companies: the aluminum and chemical firm of Pechiney, Europe's biggest aluminum producer. While the plant increases France's aluminum capacity by one-third, it can be run by only 350 employees.

Pechiney moved in among the cows and centuries-old stone farmhouses of Lacq to take advantage of a huge natural-gas deposit which has attracted a whole complex of industry since it was discovered eight years ago. The company has grown so fast since the war that the amount of hydroelectric power available in Metropolitan France, of which it uses 6%, is no longer enough. Its search for additional sources of cheap power (and cheap raw materials) has also led it to Africa, where it joined an international consortium, including Olin-Mathieson, to build an aluminum plant in Cameroon, helped build an ore-processing plant in Guinea (with a housing development and community swimming pool), is planning still other plants in Guinea and the Republic of the Congo. Its Lacq plant will raise the company's aluminum capacity to 200,000 tons, about four times its 1949 capacity, but only half the company's 1965 goal.

Only Two Words. Pechiney was founded as a small chemical firm in 1855, named after an early director, A. R. Pechiney. Later it switched from chemicals, became one of the first manufacturers of aluminum, rapidly expanded. It was hard hit during World War II; its technology fell behind U.S. companies, and retreating German soldiers sabotaged its factories. But Pechiney poured all its money and effort into rebuilding, expansion, modernization, last year did $300 million worth of business through its French complex and 50 affiliates and subsidiaries around the world.

The corporate pieces are skillfully manipulated by an expert chess player named Count Raoul Joseph-Marie de Vitry d'Avaucourt, 64, Pechiney's chief since the end of World War II and the antithesis of the tradition-bound European businessman. De Vitry (he does not use his title) began at the bottom at Pechiney, was decorated for fighting in the Resistance during the war, has made Pechiney's headquarters at 23 Rue Balzac in Paris as modern as his views about industry. "My motto," he says, "consists of two words: audacity and measure."

Out with Tradition. De Vitry has been audacious in research, now spends more than 5% of Pechiney's gross on research, higher than other European companies. The company has done so well that it sells many of its processes abroad to Alcoa and other U.S. firms, has sent engineers to five continents to help construct aluminum and chemical plants. Raoul de Vitry has led Pechiney back into chemicals in force; the firm has built up a whole new range of products--plastics, fertilizers, petrochemicals, synthetic fibers. Last year it raised its exports 50%, to 33% of total sales.

To break up the rigid hierarchical structure that Pechiney shared with many European businesses, De Vitry gave the firm a divisional setup much like General Motors', streamlined administration, pruned departments that had only tradition to recommend them. He brought in young men, gave them a great deal of liberty. Says he: "I think that confidence produces far better results than surveillance." In addition to a productivity bonus that nets employees an average 30% over their base pay, Pechiney last Christmas gave employees nearly 32,000 shares worth $2,000,000 on the Paris Bourse.

De Vitry, who has ten children ranging from 16 to 35 (none of whom joined Pechiney), likes to ride horseback or listen to classical music with them and his wife at their ten-room apartment near the Etoile. Like many other executives, he scorns the head office as a "center of un-productivity," spends two or three months a year traveling over the world inspecting Pechiney's plants.

Into Position. Pechiney is busily moving into position to take advantage of the Common Market. As Europe's standard of living rises, demand for Pechiney's chemicals and aluminum is bound to rise apace. When exports slack off, the company can always intensify its efforts to sell at home, where aluminum consumption is still low (7 lbs. per person v. 21 lbs. in the U.S.). When the domestic market slackens, it need only expand its export market. There, it sells aluminum at about 8% lower than U.S. and Canadian competitors.

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