Of postwar Europe's many economic miracles, one of the most notable has been wrought by a Paris-based firm improbably known as La Compagnie Françhise Thomson-Houston.* Within barely a decade, Thomson- Houston has not only risen from relative obscurity to the top rank of French industry, but also has succeeded in persuading Frenchmen that its name is as Gallic as De Gaulle. "Thomson sonne bien" (Thomson sounds good) is the company's slogan.
Thomson sounds not only good but loud in every phase of electrical and electronic production in France. Still outranked in the rest of Europe by such rival electrical giants as Holland's Philips and Germany's Siemens (and only one twenty-fifth the size of America's G.E.), Thomson-Houston has outstripped all domestic competition in France and is still growing. Today the company's 21 factories turn out 50% of France's telecommunications equipment, 20% of its television sets, produce everything from electric light bulbs to antiaircraft missiles. Thomson's sales have doubled since 1955. Last year they reached $161 million, and gross profits were a healthy $12.5 million.
"You Need Ponderation." Organized in 1893 to handle the installation of electric trolley cars in Le Havre, Thomson-Houston soon became primarily a holding company with a small staff quartered on Paris' Boulevard Haussmann. In 1952 its directors, looking ahead, decided that the future belonged to producing companies.
They bought up as many small electrical companies as they could, poured 10% of earnings into research and set out to sell to industry, the government, and to the French consumer — who is fondly referred to as "Monsieur Tout-le-monde" (Mr. Average Man). But its forced growth came close to being fatal. When the French government suddenly cut back military orders as a deflationary move, Thomson found itself overexpanded. Control of the new acquisitions was so loose that the result, recalls one Thomson executive, was "anarchy."
Into Thomson-Houston inner offices to rout out anarchy came new managers. Among them was Jacques Dontot, 46. a flexible but outspoken engineering graduate of France's prestigious Ecole Polytechnique, who had risen to technical director of the nationalized Saar coal mines, but was casting around for "a different working silhouette." Dontot, who became managing director of Thomson in 1960 after only four years with the company, is described by his colleagues as a "managerial genius." His rebuttal: "You don't need genius in top management. You need ponderation. You need to accept good news and bad with calm."