COLUMN ONE : ‘Japaning’ of Europe at Full Tilt : Companies rush for a foothold before the 1992 integration of the European Community. Alsace is a case in point.


The story begins with life falling to pieces for an expatriate Japanese businessman in Dusseldorf. His small trading company goes kaput. His wife abandons him, taking their 10-year-old daughter back to Tokyo and leaving him and the family dog behind.

The man then ventures off on an aimless drive through the German countryside and strays across the border into France, where the heavy hand of fate intervenes. He crashes his car into a haystack in a tiny Alsatian village with the imponderable name of Niedermorschwihr.

There, amid the half-timbered medieval houses, this fugitive from Japan’s economic front lines falls in love with a pretty Japanese art student, who happens to be staying in the village.

So goes the plot of “The Blue Skies of Alsace,” a television series that aired in Japan in late 1985. Ratings were lackluster, but the show marked the beginning of a Japanese infatuation with this picturesque region in northeastern France. The tourists started coming, followed by a rapid and remarkable influx of Japanese capital into the industrial base of Alsace.


Sony made the first move. Lured here by a local development agency chief with a Japan vision, Sony chose the vineyard town of Ribeauville to construct a sprawling high-tech factory that makes videocassette recorders, compact disc players and 8-millimeter camcorders, and now employs more than 1,000 Alsatians.

Other big manufacturers like Yamaha and Ricoh, and even some small electronic-component makers, have since arrived. Japanese restaurants cropped up in the cities of Colmar and Strasbourg. A Japan-Alsace Friendship Society was born. And an idle local convent was resurrected as a Japanese boarding school, its chapel converted into a kendo martial arts hall.

The sudden “Japaning” of Alsace is part of a process being repeated in one fashion or another in regions scattered all across Europe these days, from the rust pockets of England to resurgent and soon-to-be-reunified Berlin. Direct investment is booming as Japanese companies scramble to get into position by 1992, when the 12 nations belonging to the European Community will integrate themselves into a single market of 320 million consumers.

The fear is that the new Common Market has the potential to become a “fortress Europe” that might make a habit of imposing anti-dumping duties or otherwise crimping imports from Japan. To get around that, the basic Japanese strategy is to establish a foothold inside the ramparts in the next two years and enjoy the EC’s privileges of free trade.


Last year alone, the number of Japanese manufacturers with operations in Europe leaped by 22% to a total of 529 companies, according to a survey by the Japan External Trade Organization. Statistics from the Finance Ministry in Tokyo show that during the fiscal year that ended March 31, Japan invested $14.8 billion in Europe--representing about one-third the cumulative total of all of its investment in the region since 1951.

The scale is still relatively small compared to investment from the United States, which has been pumping capital into Europe for decades. In Britain, target of more than a third of Japan’s European investment to date, Americans own about 3,000 manufacturing enterprises. The Japanese have 130.

But the intensity of Japan’s pre-1992 stampede to Europe appears to be arousing suspicions that a scheme of economic conquest is in the works--much in the same terms that the specter of U.S. economic domination was viewed from this side of the Atlantic some 25 years ago.

The French have been the most vitriolic in sounding the alarm, even though France ranks second among Common Market countries (after Britain) in hosting Japanese plants, and even though local development agencies--like the one in Alsace--are bending over backward to woo further investment.

Echoing nervous industrialists, the French news media are making statements such as “The Japanese Are Killers.” That was the headline of a Jan. 12 cover story in the reputable journal Le Nouvel Economiste, which went on to characterize Japan’s corporations as predators bent on destroying Occidental industry.

Another French publication, Challenges, which bills itself as “the most European of economic magazines,” published a special issue in June titled: “Japan: The Secrets of the New Masters of the World.”

French officialdom has helped stain the atmosphere with a little hyperbole of its own, particularly where the automobile industry is concerned and especially when Edith Cresson, the razor-tongued Cabinet minister in charge of European affairs, is speaking. In an interview with a Los Angeles Times reporter last year, for example, she compared the Japanese to “ants.”

In Alsace, however, outright Japan-bashing has not been conspicuous--yet. Perhaps the strongest sign of tension so far was when the regional newspaper L’Alsace reported earlier this year that “the Japanese” had bought the Haut-Landsberg castle, a government-protected historic landmark. The article was published on April Fool’s Day, and most readers are assumed to have gotten the joke.


Lest any suspicions linger, though, Sony has faithfully carried out its policy of “localizing” operations at the Ribeauville plant, its third manufacturing facility in France and now its second-largest in Europe after a television factory in Wales. The plant manager here is a Frenchman--hired away from Motorola--and he vaguely outranks the sole Japanese executive at the site.

“We are not invaders,” said Yasuya Takaura, the so-called No. 2 man who also carries the title of “senior general manager in charge of audio-video manufacturing” for Sony Europa GmbH, the parent company of Sony France SA. “This is a French factory, a European factory. That is our policy.”

For Takaura, who supervised the team of technicians that invented the Sony Walkman in the late 1970s, the assignment in Ribeauville is a bittersweet one. Like the hero of the “Blue Skies” television drama, he is separated--but amicably--from his wife, who remains in Japan with his children.

Still, he confesses to enjoying the good life here. In a corner of his office sits a hefty set of golf clubs, which he lugs along on business trips to Switzerland and Germany. The portly engineer also has acquired a taste for Alsatian cuisine.

“My middle name is foie gras, " he said.

Claude Tournet, Sony France SA’s plant manager, said he is struck with deja vu whenever he hears complaints about Japan’s threat to French industry.

Tournet recalled that he was just out of college and job hunting 21 years ago when “The American Challenge,” by French journalist Jean Jacques Servan-Schreiber, became a best seller. The controversial book warned of a U.S. “assault on Europe” and reasoned that America’s competitive advantage was in its system of business management, not in superior technology. Tournet started his career with an American multinational.

Now he does things the Japanese way, right down to the gasoline station-style uniform jacket he wears over his executive dress shirt and tie. He takes great pride in the factory’s quality performance, one of those American management concepts the Japanese perfected. His plant currently stamps out CD players at a rate of more than 1.1 million units a year, and it is expanding. By the end of 1990 Sony will have made a cumulative investment of $90 million in Ribeauville and have 1,200 workers on Tournet’s payroll.


Sales are roughly doubling annually, Tournet noted, while pointing to a map of greater Europe with Alsace at its exact center.

“We are right on the spot, at the heart, especially now with the opening of Eastern Europe,” Tournet said. “We have 200 million potential customers within a 500-kilometer (310-mile) radius, and our aim is to be as close as possible to them so we know what their needs are.”

Sony’s venture in Alsace--called a “greenfield” investment in the jargon because the company acquired a patch of ground and built from scratch instead of buying an up-and-running concern--represents a recent trend that was oddly allegorized in the “Blue Skies of Alsace” story.

More and more companies are choosing to venture off into uncharted territory in Europe, as opposed to clustering in well-established Japanese enclaves. Dusseldorf, from whence the fictional bankrupt trader came, is one such enclave, as are London and Wales.

But it should be noted that the “Blue Skies” scriptwriter’s choice of Niedermorschwihr as a site for the crash into the haystack was no accident. That was engineered by the same man who brought Sony to Ribeauville: Andre Klein, director of the Alsace Development Agency, who might be described as the impresario of most Alsace-Japan connections.

Klein opened a branch office in Tokyo in 1982--an aggressive move that provoked the ire of Datar, the central government’s commercial service, because Alsace was not classified as underdeveloped or having high unemployment.

There were no tax incentives to dole out. All Alsace had to offer was a diligent work force, the “Germans among the French.” (Alsace and neighboring Lorraine have been hotly contested in modern wars and forced to switch sovereignty several times, leading to another Alsatian virtue: adaptability.)

“We have a traditional relationship to the Germans and the Swiss--it shows in work well done, our social consensus and reliability,” Klein said. “Our wages are also 20% to 25% lower than in Germany.”

Klein’s logic eventually worked on Sony, whose European operations have their headquarters in Cologne and are run by a Swiss chief executive. Klein did a few other smart things, too. He sent his son to Japan for the summer, and the Japanese consultant who runs the agency’s Tokyo office placed the younger Klein in an internship with Fuji Television--which happened to be looking for a European location for its new adventure-drama series.

Klein also invited a reporter from Nihon Keizai Shimbun, Japan’s top economic newspaper, to visit Alsace and persuaded him to write a story about an empty convent in the medieval village of Kientzheim that might make an ideal campus for a Japanese prep school. A dozen schools saw the article and contacted Klein.

In 1986, Tokyo’s prestigious Seijo Gakuen, an institution that educates free-thinking Japanese from kindergarten through university, opened its first overseas branch at the site, Lycee Seijo d’Alsace. Enrolled are 180 junior high and high school students, about two-thirds of whom are children of Japanese expatriates in the vicinity or in Europe, Africa, Australia or the Soviet Union. The rest come from Japan for an “international experience.”

The curriculum is all in Japanese and exactly the same as at Seijo’s head campus in Tokyo, and that’s the point, said headmaster Jokichi Moroga.

The deepest anxiety of overseas Japanese is the vexing problem of how to properly educate their children so that they can pass the highly competitive entrance examinations at elite Japanese universities. Seijo gets around that by offering a feeder system to its distinguished college. Similar programs are operated by private Japanese schools in London and New York.

“This is a little Japan, like a desert island,” Moroga said. “There’s no problem as long as they’re here. But culture shock sets in during vacations, when they go to be with their parents in Africa.”

Lycee Seijo students have some exposure to French children during sports exchanges, but on the whole they remain isolated at the former convent.

“It’s a lot of fun, but there are some drawbacks,” said Gosuke Kubo, 18, son of a steel merchant from Kobe. “Like, I’ve been here for four years and I can’t speak any French.”