The Magic Meeting Place

Europe's corporate chiefs go to Davos for play--and work

Idyllic Davos, Switzerland, hardly looks like a place for a somber meeting of Europe's business leaders. Although it was the setting for Thomas Mann's moody masterpiece The Magic Mountain, Davos is better known as one of Europe's most fashionable ski resorts. Yet every year top executives trek off to Davos for the European Management Forum, perhaps the world's most high-powered business convention. Last week 450 Europeans, including Heinz Duerr, president of the West German electrical firm AEG-Telefunken, Corp.; Gordon Stevens, a director of Unilever Ltd.; and John Raisman, Deputy Chairman of Shell U.K., Ltd., gathered in Davos to listen to lectures, talk business and do some skiing.

The Davos forum was started in 1971 by Klaus Schwab, a Harvard-educated management expert.

Schwab's goal was to teach American management methods to Europeans. Now the forum mainly brings business and political leaders together to discuss the key issues of the day in a relaxed atmosphere.

Says he: "The question is how the manager and his company relate to the political, social and economic environment."

Schwab has been able to get luminaries to go to Davos, for which they receive generous speaking fees plus expenses. Last year former U.S. Secretary of State Henry Kissinger used the Davos podium to warn against a Soviet arms buildup, and in 1979 French Premier Raymond Barre gloomily predicted that Western Europe's lack of energy and raw materials would condemn it to dangerous dependence on the Middle East and other areas.

Had it not been for the blanket of powder snow and the blue skies, the problems under discussion this year might have seemed weighty enough to send Mann's hero Hans Castorp back to the sanitarium for another seven years. Europe's most influential men were deeply upset over the turmoil in international financial markets. In a session chaired by former British Prime Minister Edward Heath, Karl Otto Pohl, president of the West German Bundesbank, expressed concern over the disparate rates of inflation throughout Europe and the West, calling for "effective measures for coordinating economic policy." Guido Carli, former governor of the Bank of Italy, pleaded for new approaches to the problem of world raw materials shortages. The two principal American speakers, Zbigniew Brzezinski and John Connally, said little that was surprising, but still elicited warm applause. Brzezinski rehashed a speech that he had made two weeks earlier in Paris on the importance of confronting aggressive Soviet foreign policy around the world, while Connally lavishly praised his old friends who are now in the White House.

But neither the length of the sessions (8:30 a.m. to 7 p.m. daily) nor the tedium of some speakers dampened the playful mood of most participants. Observed one executive: "Among other things, the forum offers a delightful vacation on the expense account." Many came to the meetings wearing ski togs instead of business suits and parked the rest of their sports gear at the door. Said one who attended: "You'd feel naked here without your skis." At night the almost exclusively male executives and their female companions dressed in the finest evening wear and quaffed magnums of champagne, while Pepe Lienhard's band at Davos' Kongresshaus played tangos, cha cha chas and Glenn Miller favorites. The business and financial situation in Europe cannot be all that bad. qed

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