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Lyon uncaged.

As political borders dissolve and EC transforms itself into a network of regions, Lyon is sauntering out from the shadow of Paris and repositioning itself as a manufacturing and distribution hub. Leading the charge is a new generation of younger, more cosmopolitan CEOs.

Le Passage is Old Lyon. A gastronomic Mecca nestled among 18th and 19th century buildings in the city's stately Presqu'ile section, it is a lunchtime rendezvous for CEOs of established businesses and established families. Here over quenelles lyonnaises, Michel Brochier, president and general director of chemical products manufacturer TMB, discusses Lyon's attempt to position itself as a regional manufacturing and distribution center.

"Lyon is still a very little town in some ways," Brochier says. "Nonetheless, it is exploding."

As Europe takes faltering steps toward unification, and the continent is transformed into an agglomeration of economic regions, the capital of France's Rhone province is comparing itself not with Paris, but with such other ambitious "second cities" as Stuttgart, Milan, and Barcelona--even Chicago, Atlanta, and Philadelphia. At the center of a tract comprising northern Italy and Spain, southern Germany, part of Switzerland, and south-central France, Lyon already is flexing its muscles, having recently bested Munich and Valencia in the quest to land the headquarters of Euronews, Europe's response to CNN. Home to the French Stock Exchange's Second Market and such U.S. corporate giants as Beatrice, Hewlett-Packard, and International Paper, the city is also in a footrace with Frankfurt and Amsterdam to become the headquarters of Eurofed, the European Community's central bank.

Not bad--even for a city that was once the capital of Gaul and a key outpost of the Roman Empire. Nonetheless, for some, the acceleration from a provincial pace to urban urgency proceeds far too slowly.

"Every day we must say: 'It's not enough! It's not enough!'" The speaker is Michel Rivoire, an urban planning expert and president of the French arm of development concern Partners for Livable Places. Rivoire is standing before a huge scale model of Lyon in the Hotel-de-Ville. He points to new industrial areas, new housing and schools, and new research centers. The model reflects the dramatic contours of this city of 1.2 million people, from Vieux Lyon, with its narrow medieval streets on the west bank of the Saone River; to the Presqu'ile section, between the Saone and the Rhone Rivers; to the sprawl of modern Lyon east of the Rhone.

Underpinning the city is a first-rate infrastructure that includes a new airport (Lyon-Satolas International), and efficient barge, rail, and truck links. These are soon to be augmented by superfast TGV rail lines to Geneva, Turin, and Barcelona. Lyon is already linked to Paris and Marseille by TGV; the two-hour, 266-mile trip to the capital is almost a regular commute for many executives. Unfortunately, some major corporations never made the return trip: Credit Lyonnais and Rhone-Poulenc got their start in Lyon before moving north to Paris.

Despite its scenic beauty, the Rhone-Alps region has long been the most industrialized in France, accounting for 10 percent of the nation's GDP. Mostly atomic power plants here generate 40 percent of France's electricity. A total of 38 million consumers live within a 300-mile radius of Lyon--more than 10 percent of the EC's population.

"The city does not exist on the map anymore," says Olivier Lepine, director of the Bureau des Congres de Lyon, the city's tourist relations bureau. "Now we have to concentrate on the area."

"Ten years from now, Europe will be a network of economic regions like this, not competing nations," adds Jacques Ferdane, manager of Hewlett-Packard's plant at l'Isle d'Abeau, one of three industrial parks on the outskirts of Lyon. "This region is not a political reality; it is an economic, social reality."

Lyon has mounted a drive to attract American and other foreign corporations. The number of large U.S. companies in the Lyon area is 35 and climbing: Besides H-P, Beatrice, and International Paper, American Cyanamid, Carrier, Union Carbide, Monsanto, and Pfizer also operate in or near Lyon. To recruit such operations, Lyon has a development agency called Aderly (Association pour le Developpement Economique de la Region Lyonnaise). Aderly's task is to persuade foreign businesses that Lyon is the ideal location for their European operations, preferably for both their headquarters and manufacturing/distribution operations. In doing this, the agency must reconcile Lyon's international attractions with its provincial limitations. It also must confront the mixed feelings many citizens have about this new role for their beloved city.

"There's a feeling of ambiguity about growth here," says Brochier of TMB--the acronym for Techniques Michel Brochier--which produces polyvinyl chlorides and other chemical compounds. "Some people do not want to abandon the old ways of doing things."

Such things as closing many shops and offices between 12 p.m. and 2 p.m. on weekdays--and not opening at all on Saturday and Sunday. Nevertheless, Brochier points out, this is changing, if not as quickly as he would like. In the vanguard of change is a new generation of younger, more cosmopolitan chief executives. Growing in influence in Lyon, they even have their own club on the Quai Saraille.

"To join the Prisme, you must be the CEO or owner of a business; there are no politicians," says Brochier, a club member who doesn't count himself as a wheelhorse despite a stint as a substitute delegate to the French National Assembly.

If the Prisme's 80 members represent Lyon's business avant-garde, the Cercle de l'Union embodies the derriere-garde. Its average member is 70 years old. The Cercle is situated in appropriate splendor on the Place Bellecour, the city's main square. This is the social and political stronghold of Lyon's oligarchy, the families who for many generations have owned and managed the city's famous silk industry and its older manufacturing companies. In the past, they did not welcome new businesses.

"Now we welcome strangers," says a government official. "Our mayor, Michel Noir, has opened an office at the Hotel-de-Ville to greet foreign executives."

Another global-minded Lyonnais is banker Henri Moulard, a former chairman and CEO of Lyonnaise de Banque, the biggest bank headquartered in Lyon and the 10th biggest in France with total assets of $11 billion. Moulard is a strong supporter of his native city's international thrust. For him, it's a matter of tradition.

"French banking started with Italian bankers in Lyon in the 15th and 16th centuries," Moulard says. "There are now 80 banks in Lyon, and 20 percent of them are foreign."

These days, Moulard believes, it is essential for the smaller, provincial banks to become international. "There is a new wave of regional bank affiliations in order to compete on a Europewide level," he observes. "We're studying affiliations with British and German banks."

After a century of dominating the local economy, the bank--now run by Denis Samuel-Lajeunesse--must look to these affiliations in order to survive in the European free-for-all. However, along with the international opportunities has come local competition. Enter Louis Thannberger.

A native of Alsace, not Lyon, Thannberger runs Lyon Finance et Industrie (LFI), an investment company with offices in Lyon's spectacular belle epoque stock exchange. The address is not accidental.

Until recently, stock issues for new and growing companies have been less common in Europe than in America. Local companies seeking development money traditionally have gone to the local banks, not to the stock market. But with the recent expansion of the national stock markets in Europe, that situation has changed. Financiers such as Thannberger have worked aggressively to bring new stock issues to Lyon, competing directly with the banks for investment business. LFI alone has introduced over 40 midsized Lyon area companies on the French Stock Exchange's Second Market, roughly equivalent to the Over-The-Counter market in the U.S.

Thannberger worked for Lyonnaise de Banque 10 years ago, but now a business rivalry has developed between the two. "The bourse opened the door for everyone," says a local journalist. "Thannberger is popular with small and medium-sized companies because he gets them less expensive capital."

Lyon's business leaders realize that with the door to competition thrown wide open, Thannberger won't be the last hungry entrepreneur to hit town. But they also believe that foreigners will never bother them quite as much as Paris has done for generations.

"The only obstacle to the speed of Lyon's development is the self-limitation of political and economic leaders in a country that is heavily stamped by the centralization of government in Paris, says Christian Boiron, CEO of Lyon-based Boiron, the world's largest producer of homeopathic medicines. "But Lyon's entrepreneurs will enable the region to assert its identity clearly and strongly."

"Geneva, Turin, Milan, Lyon--they are all oppressed by their capital cities," adds planner Michel Rivoire. "We get no money, no encouragement from Paris. That is why Aderly was created--it is an exceptional creature, even in France."

Aderly's general manager, Robert Maury, takes pride in his agency's "human touch" in dealing with businesses locating in Lyon. "We keep in contact with them, help them to find schools and houses, as well as factory sites," he says. In matters involving the EC bureaucracy, there is another benefit to working with the agency: It deals directly with Brussels, Maury says, rather than going through Paris.

Some of the newcomers are perhaps more aware of Lyon's newfound independence than the average Lyonnaise. "The people from Lyon should realize they're not competing with Paris anymore," says Hewlett-Packard's Ferdane, who supervises an operation that is integral to the company's new strategy of headquartering its personal computer operations in Europe. Seated in his open cubicle in H-P offices on l'Isle d'Abeau, Ferdane explains why H-P France (of which he is a director) chose Lyon. The landscaped business area outside looks like countless others around the world, but just a few miles to the north are the undulating vineyards of Beaujolais, and a few more miles to the east lies Albertville, the Alpine village where the Winter Olympic Games were held last February. On the isle itself, Belgian cranes are everywhere, raising buildings for light industry.

H-P has 145 acres on the isle, with lots of room for expansion. But "this site will be saturated by the end of the century," Ferdane predicts. "When we select a site, we look for three critical variables: universities, good transportation, and quality of life." Lyon measures up in all areas, he says.

It was from Paris that Lyon captured its first important world headquarters operation: Interpol. The international criminal police organization is now situated in a ferociously guarded modern building on the east bank of the Rhone, adjacent to the future site of a large real estate development project called the Cite Internationale.

In his office on the top floor, Raymond E. Kendall, Interpol's secretary general, ponders the pluses and minuses of the move he initiated. A friendly, but cautious, Englishman, Kendall needs more protection than most other executives. Some people would like to kill him; a few have actually tried (there were two terrorist attacks on the headquarters in Paris). But the new site, he says, is more secure and congenial: "I like Lyon very much--I'm a provincial myself."

Gazing out of his office window at the still-undeveloped site of the Palais des Congres, he remarks that the campaign to internationalize Lyon has a way to go. "The city now has a European sense," he says. "But it doesn't yet have a global view."

That will come in time, says the tourist bureau's Lepine, who is working to put his city on the convention map. "There have been many improvements. You should have seen the taxis here a few years ago--the old Paris taxis came here to die.

"The Cite Internationale, with the Palais des Congres, will be completed in 1994. We're moving ahead, and the business community has taken the lead. The politicians like to talk about development, but they want votes, and we are moving too fast for them. The old businesses of Lyon were always international."


Lyon sits at the confluence of the Saone and Rhone Rivers. But some people say a third river flows through the city, the Beaujolais, a mythical torrent of wine that symbolizes the city's most famous feature: its unrivaled gastronomy. Paul Bocuse and other great Lyon chefs have forged worldwide reputations by satisfying the local penchant for dining well. But these days, the city's fine restaurants also are magnets, drawing in chief executives and other deal makers on the prowl.

In the hushed precincts of Bocuse's restaurant at Collonges, outside Lyon, visiting American CEOs and their wives pay homage to France's most famous chef. For approximately $200 each, they dine on such signature dishes as the soupe aux truffes noires (soup with black truffles) and the loup en croute a la mousse de homard (lobster mousse in puff pastry). They also await the benediction of their host. Sure enough, about halfway through the evening, out comes Bocuse in full chef's regalia. Wearing a bored but supremely self-confident expression, he receives the expected compliments and returns to his kitchen. Everyone is satisfied, and the faithful resume a very good--if very expensive--meal.

"Bocuse is for tourists," scoffs a French CEO. "No one from Lyon goes there." Where, then, do Lyonnais executives dine? Inside the city, try such restaurants as le Passage, la Tour Rose, Pierre Orsi (mostly for lunch), and la Mere Brazier. In the bistro category, Chez Sylvain and Bistrot de Lyon are solid bets. The owner of the latter, Jean-Paul Lacombe, also presides over the highly rated Michelin two-star restaurant Leon de Lyon.
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Copyright 1993, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Native Know-how; includes related article; Lyons, France
Author:Lacey, Peter
Publication:Chief Executive (U.S.)
Date:May 1, 1993
Previous Article:Information, power, and control of the distribution channel.
Next Article:Dodging the litigation explosion.

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