Going Continental

The march of American companies to Europe has broken into a run. Hardly a week passes without another U.S. company announcing plans to buy into a European firm, set up a subsidiary or build a plant in Europe. With company coffers bulging and home markets well saturated, U.S. businessmen are more attracted than ever by Western Eu rope's fast-expanding consumer economy and often higher profit margins. U.S. direct investment in Europe rose 40% to an estimated $1.25 billion in 1964, and nearly every large U.S. company made some sort of European move during the year. Last week General Motors, already firmly entrenched on the Continent, stood ready to launch one of the biggest single U.S. plant investments to date: a $100 million auto-assembly plant in Belgium.

Once the deal goes through--and negotiations with the Belgian government are well into their "final phase"--G.M. will begin building its new plant along the Antwerp waterfront, not far from the site of a Ford tractor plant. Taking advantage of Belgium's low duties on imported auto parts, G.M. will assemble its Opels from parts imported from West Germany and its Vauxhalls from parts made in its British plants. Eventually, G.M. may shift its Antwerp plant to full-scale manufacturing.

Fierce Competition. The G.M. move is sure to have widespread repercussions in Europe, where many businessmen and politicians feel that industry is being threatened by U.S. domination. European businessmen are especially unnerved by the fact that many U.S. companies active in Europe are bigger than the biggest European corporations and have vastly more money to invest in equipment and marketing. Demands have been growing, especially on the part of the French, that local industry be protected from U.S. competition. At their meeting last week in France, Charles de Gaulle and Ludwig Erhard agreed that they must work together to persuade more French and German companies to merge so that they will prove a better match for the Americans. The Continent's 50-odd auto companies, beset by fierce competition and overproduction, are especially worried: Ford and G.M. together now sell about 1,500,000 cars and trucks a year in Europe.

G.M.'s thrust into Europe has been engineered by its expansion-minded Executive Vice President James M. Roche, 58. One of four G.M. executive veeps, Roche is the boss of all overseas operations, has allocated $400 million of the company's two-year, $2 billion capital-spending program to European ventures. From Detroit, he has also directed Opel in its challenge to Volkswagen's leadership in West Germany. Even without the proposed Antwerp plant, G.M.'s Opel and Vauxhall models have cornered 13% of Europe's 7,000,000-car market.

The Next 10 Million. Opel increased production last year by 20%, but to keep up the pace it recently bought land in Kaiserslautern for a new plant, its fourth in Germany. This month G.M. rolled out its 10 millionth vehicle produced in 41 years of operations overseas; at the rate it is going now, it will turn out the next 10 million in only seven years. For Roche, one personal result of G.M.'s spectacular European gains has been his rise to serious contention for the G.M. presidency, from which John Gordon retires in May.

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