Chilly Welcome

Europe looks upon the scores of U.S. companies that are setting up shop in its Common Market as a decidedly mixed blessing. Europeans welcome the influx of investment dollars, but they dislike what comes with it: companies with resources powerful enough to give rough competition to European industries, profits that ultimately flow back to the U.S., policy control from abroad. If a recession set in, most Europeans are all too aware, the big U.S. firms would be able to outlast the smaller local industries. De Gaulle's France, which is wearing its chip on the shoulder with a defiant tilt these days, is the leader in the new wave of Common Market protectionism.

Last week, no sooner had the Chrysler Corp. announced that it had acquired control of Simca, France's third largest automaker (after state-owned Renault, and privately owned Citroen) than France's Ministry of Finance issued a chilling communique. Chrysler's move, it said, was "an intervention in a particularly important branch of European industry in which participation from the outside is already considerable." and the government viewed it as "a new example of the problems posed by foreign investment."

The French press also disapproved, and was equally censorious of Libby, McNeill & Libby, which plans to set up a $65 million canning factory in grape-growing Languedoc. Though Libby is going into partnership with the Bas-Rhone-Languedoc Regional Development Authority and plans to tin locally grown fruits and vegetables, the French suspect that sooner or later Libby will be importing American foodstuffs.

Autocratic Tycoon. Chrysler was able to complete its takeover before the French could stop it. It bought 25% of Simca in 1958, picked up an additional 38% from Swiss banks for an estimated $60 million, bringing the market value of its investment in Simca to about $102 million. For its money, Chrysler gained control of the Common Market's seventh largest automaker, which has a highly efficient plant, a network of 3,000 dealers in France alone, and as its boss Europe's most autocratic auto tycoon. Italian-born Henri Theodore Pigozzi, 64, who will not tolerate national unions among his 17,000 workers and has boosted Simca production from 69,000 to 250,000 cars in ten years. Pigozzi will stay in charge.

Chrysler should be able to remedy Simca's one major failing--a lack of funds for new-model development. Simca has introduced only four basically new models in twelve years, but despite its handicap it has become France's second largest auto exporter and has cut heavily into the sales of Renault's Dauphine with its most recent model, the rear-engined Mille. With Chrysler's backing, Simca may blossom with such an array of handsome new models that the French might have to endure the spectacle of a U.S.-controlled company challenging state-owned Renault for first place in the French auto industry.

Barbed Wire on Top. French Finance Minister Giscard d'Estaing this week will try to persuade his fellow Common Market Finance Ministers in Baden-Baden that the Common Market should limit direct foreign investments to an agreed percentage (to be determined by studies) of each sector of Common Market indus try. "It is not desirable that important sectors of the Common Market's economy depend on outside decisions." he said. France, he made clear, not only wants to build an economic wall around Europe, but to put up some protectionist barbed wire on top against anyone tempted to leap over the wall.

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