Shutting out Japan from Europe

Press, 12 April 1984, Page 21

Shutting out Japan from Europe

LINDSAY VINCENT,

in Eindhoven, on the

giant Dutch company Philips and its plans to withstand the Japanese onslaught on Europe.

In his baggy suit and steelrimmed glasses, the diminutive Dr Wisse Dekker is not readily identifiable as one of the world’s most powerful industrialists. But as chairman and president of Philips he is of necessity Dutch and they are not a people noted for flamboyance.

If he has been a little on edge, it is a reflection of the heavy workload he has to bear. The multinational Philips has assumed control of the German electrical group Grundig after a deal achieved by Dr Dekker in what was one of Europe’s best business thrillers in years. It represents a major step in a plan to withstand the Japanese onslaught on Europe. The Grundig acquisition brings increased market share and economies of scale. In the 59-year-old Dr Dekker, Philips is reckoned to have its most effective bossier decades. Tbugh and bluff, he’is only the

second non-family president that Philips has had during nearly a century of existence. He has been with the company all his working life, since 1948, and rose to the top job in 1982. Philips has for years been noted as a paternalistic employer, reluctant to make anyone jobless. Management attitudes to shareholders, it -"..’s said, took second place to the interests of the people who worked there.

Dr Dekker, too, dislikes unemployment, but he says: “Solutions must never be sought in measures that would affect industrial competitiveness. That would be equivalent to chopping the tree down at the root.” When he became boss the company employed 370,000 people worldwide; this figure is now down to 343,000. The fact is that he inherited something of a headless chicken with gross duplication in the company’s components. At one stage it

was discovered to be making nearly 300 different models of black and white television sets.

“We had too many factories,” says Dr Dekker. “My priority was to restore the profitability of the company. We had to sit down with the managers of all the national organisations, who have autonomy and must be an integral part of the economy of the countries in which they operate. It was a difficult plan to work out.”

The surgery has worked; the 1983 profit after tax rose by 49 per cent. The one thing the company has not cut back is its research, where expenditure last yjsr topped an astonishing $l2OO million — the

equivalent of 7.2 per cent of sales. The task remains, however, to turn that research into reward and not be overtaken in things such as the video cassette recorder, which Philips actually invented. Dr Dekker, who spent many years in the east before ending up in charge of the whole Far East region from Tokyo, has for nearly two years publicly urged measures to protect the European market from the Japanese. He has lobbied hard for import tariffs to be increased. He believes that Europe should temporarily shut out imports from Japan to allow E.E.C. companies to catch up and fight on equal terms.

“We need a homogeneous market here like they have in the United States and Japan. And if we don’t create one here we’ll be degraded to a second ranking industrial entity,” he says. Dr Dekker is a member of the informal group of influential businessmen known as the Round Table of European Industrialists. They have three visions — a European venture capital fund, a technology fund, and a radical transport scheme which, among other things, would link Scandinavia and Britain to the Continent by bridges. For such a committed European, therefore, there was understandable bemusement, surprise, and even anger — from the French Government at least — at Philips’ decision last year to link with the very American firm of AT and T to market their sophisticated telephone systems in Europe. right — London Observer Service.