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Chapter 1

An approach by geographic areas of the diffusion processes of managerial practices

Chapter 2

An approach by point of interest: technique, branch, sector, company

Chapter 3

Disseminators of doctrine, authors and tenets of management

Partners

Advancing Chemistry Through Camaraderie: French Corporate Influence in the Origin of Du Pont Rayon and Cellophane

  • Jacqueline McGLADE

    College of Saint Elizabeth, New Jersey jmcglade@cse.edu

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In 1920, Du Pont negotiated patent rights with the French syndicate Comptoir des Textiles Artificiel (CTA) that led to its launch of new divisions producing rayon, nylon and cellophane products. While the DuPont business story has been extensively charted, the French side of the story has been extremely sketchy in detail.  This study traces the essential influence of the CTA in the origination and growth of the Du Pont Fiber Company. It highlights how French business approaches and expectations of partnership substantially shaped Du Pont decision-making and management behaviour, especially involving new approaches to multinational negotiations, scientific collaboration and world-wide markets development. 

The evolution of 20th c. French business has largely been chronicled through the lens of American managerial innovation as the predominant model for corporate modernization.  Notable works include those by Maurice Lévy-Leboyer on the rise of French multinationals, Youssef Cassis and Hubert Bonin on the growth of financial networks, Richard Kuisel and Matthias Kipping on changes in government relations, and business sector studies offered by Patrick Fridenson and Dominique Barjot. Recently, new studies have emerged that take into greater account the nature and development of indigenous French business models that account for national beliefs and identity, e.g. democratic ideal, meritocracy, social fraternity, etc., and influential intellectual thought and social trends.[Levy-Leboyer, Teichova and Nussbaum (eds.), Multinational Enterprise in Historical Perspective, Cambridge, UK: Cambridge University Press, 1986 ; Cassis and Battilossi (eds.), European banks and the American challenge: competition and cooperation in international banking under Bretton Woods, Oxford: Oxford University Press, 2002 ; Bonin, La Banque Et Les Banquiers En France: Du Moyen Age a Nos Jours (Paris: Larousse) ; Richard Kuisel. Capitalism and the State in Modern France: Renovation and Economic Management in the 20th Century, New York: Cambridge University Press, 1981 ; Kipping, La France et les origines de l’Union européenne, 1944-1952: Intégration économique et compétitivité internationale, Paris : CHEFF, 2002 ; Barjot (ed.), Catching up with America. Productivity Missions and the Diffusion of Amercian Economic and Technological Influence after the Second World War, Paris: Presse de l'Université de Paris-Sorbonne, 2002 ; Fridensen., Histoire des Usines Renault. Vol. 1. Naissance de la Grande Entreprise, 1898 à 1939, Paris: Editions du Seuil, 1972.]   

The early partnership between the Du Pont Company and the French syndicate,  Comptoir des Textiles Artificiels (CTA) presents an important case that showcases the distinct nature of franco-business culture and approaches. The case also demonstrates how French business influence shaped new industrial operations and management practices at a critical juncture in the evolution of a major American corporation. From 1919 to 1927, DuPont forged a subsidiary relationship with the CTA that subsequently led to its acquisition of new patents and equipment that proved critical in its launch of its transformational businesses in rayon and cellophane.  While scholars such as David Hounsell, John K. Smith, and Charles Cheape have extensively charted the DuPont side of the partnership, the CTA story has been sketchy in detail.[Hounshell and Smith, Science and Corporate Strategy, Du Pont R&D, 1902-1980, Cambridge, UK: Cambridge University Press, 1988 ; Charles W. Cheape, Strictly Business: Walter Carpenter at DuPont,Baltimore: Johns Hopkins University Press, 1995.] Utilizing Du Pont archival records and related monographs, this study traces the considerable influence that CTA managers, engineers and scientists had on the origination of Du Pont’s Fibersilk (later named Rayon) and Cellophane companies.   

In particular, the paper highlights how French business approaches, conduct of inter-firm relations, and expectations of partnership impacted Du Pont’s senior management decision-making, business culture, and strategic behaviour. This French influence was particularly evident in the efforts of Du Pont to develop its own fledgling model of “industrial diplomacy” involving multinational negotiations, contract talks, scientific and technology transfers, and ongoing intra-firm communications and relations.

This study also examines the arresting ways in which a shared cultural heritage emanating from France served as a platform for prolonged business affiliation and partnership between DuPont and the CTA, even when corporate trends and market conditions belied the need for continued association.  This paper argues that both firms enjoyed a business relationship more reflective of the French ideal of camaderie[Originating in 1840, the word camaraderie reflected goodwill and brotherly association that flowed from a group of “comrades” or equal partners engaged in a shared activity. http://www.merriam-webster.com/dictionary/camaraderie], in which DuPont and CTA executives interacted and communicated in a brotherly, almost familial manner – a congenial alternative to the considerably harder American business tradition of uncompromised competitive advantage.  It will highlight various points in the CTA-DuPont relationship when camaraderie certainly won out over competition, particularly as American technology and production began to seriously revise and outpace the earlier dominance of French viscose chemical and production processes.  

 

1. Relying on the French: DuPont enters the rayon business

    

After a century of developing chemicals and products for military and industrial explosives markets, the Du Pont Company embarked on an ambitious plan after World War I to diversify its R&D and production activities to embrace emerging consumer markets.  In part, DuPont moved into consumer products development, most notably artificial textile fibers and decorative paints, for political as well as business reasons.  The public vilification suffered by DuPont during post-WWI Congressional hearings in 1919-1920, which revealed exorbitant profits for military contracts extended to the company during the war, earned DuPont executives the less-than flattering reputation as “Merchants of Death.”[Cuff, The War Industries Board; business-government relations during World War I, Baltimore, Johns Hopkins University Press, 1973.]

By the 1950s, DuPont’s strategy to transform and align its profits base closer to commercial over military chemical markets resulted in a shift in popular attitudes, identifying with the company’s more favourable slogan, “Better Living Through Chemistry.”  The company’s entrance into the fledgling French industry of nitrocellulose textile fibers in the early 1920s, which after two decades and $100 million in investment, yielded three new consumer products, rayon, cellulose acetate textile fibers and cellophane films, contributed greatly to DuPont’s transformation, both in terms of public perception as well as market diversification and corporate profitability.

While historians David Hounshell and John K. Smith have lauded DuPont as “lead[ing] the synthetic fiber revolution that with nylon, Orlon and Dacron”[Hounshell and Smith, Science and Corporate Strategy, Du Pont R&D, 1902-1980, p. 161.], there is little doubt that the company struggled to build its artificial fibers division until entering into its partnership  the French rayon firm, Comptoir des Textiles Artificiels in January 1920.  This connection by Du Pont into the emerging French artificial fibers industry did not immediately take shape, however, and took four years to formalize.  When Du Pont first contacted the French firm, Chardonnet Company, founded by scientist Count Chardonnet who had invented nitrocellulose textile fibers in the 1890s leading to the development of several popular consumer products in the form of artificial silk by the 1910s, talks broke down quickly without resolution on a joint partnership.[Taylor and Sudnik, Du Pont and the International Chemical Industry, Boston, MA: Twayne Publishers, 1984, p. 61.] 

Du Pont then looked to Britain for a corporate connection, where Charles F., Cross and Edward F. Bevan had developed the alternative fiber called viscose that by 1908 became known as rayon.  After several failed attempts to buy from UK Courtaulds, Ltd. its American Viscose Company in 1916, Du Pont executives decided to re-consider nitrocellulose-based fibers as an entry point into the rapidly expanding international artificial textiles markets.[Du Pont consultant Fin Sparre to the Executive Committee, “Progress Report – Excess Plan Utilization,” September 15, 1916, Acc. 1850, Du Pont Archives, Hagley Museum and Library, D.C. Coleman, Courtaulds: An Economic and Social History, vol. 2 Rayon, Oxford: Clarendon Press, 1969, pp. 4-22, and Hounshell and Smith, Science and Corporate Strategy, Du Pont R&D, 1902-1980, Cambridge, UK: Cambridge University Press, 1988, p. 162.]  Other than its modest business in artificial leathers developed out of the purchase of British patents during World War I, Du Pont seemed unable to either leverage through offers of investment capital and plants formation, or more importantly invent its way into the critical new chemical field of synthetic fibers.[Taylor and Sudnik, Du Pont and the International Chemical Industry, Boston, MA: Twayne Publishers, 1984, p. 82.]  From its start in 1913, DuPont had spent over $100,000 in financing several failed R&D ventures based in Delaware and New Jersey that executives finally “abandoned” after they “deemed [it] expedient to purchase know-how for a completely worked out process” in viscose and cellulose acetate science and production.[Shultze, The Technical Division of the Rayon Department, 1920-1951, Wilmington, DE: E.I. DuPont Company, 1952, p. 27.]  

In 1919, the opportunity to acquire such wholesale operations came, not from American-based producers, but from a French syndicate of artificial silk manufacturers, the Comptoir des Textiles Artificiels (CTA).  In its position as first mover, the CTA “sought an interview with the DuPont Company to ascertain its interest in purchasing information in viscose [fibers] … manufacture.”[Ibid., p. 5.]  The pursuit by the French syndicate of a DuPont association demonstrated a managerial aggressiveness more often attributed to post-World War I American firms looking to establish markets in European consumer markets.  In this case, French producers through the CTA led a move toward transatlantic expansion by seeking a firm connection into the potentially lucrative American clothing markets through a partnership with DuPont.  

The 1919 CTA outreach eventually proved a monumental event in re-shaping DuPont’s corporate structure as well destiny.  There is no question that the partnership that Du Pont eventually forged with the CTA represented an all-important turning point in the company’s long struggle[Company President Irenee Du Pont, along with executives on the Development Committee, first targeted artificial fibers as a growth area for Du Pont in 1912 leading to several frustrating attempts over the next eight years to acquire from French, British and Belgian sources patents, companies, and plants as a rapid route to developing its own R&D and production activities. Taylor and Sudnik, Du Pont and the International Chemical Industry, Boston, MA: Twayne Publishers, 1984, pp. 61, 82.] to “meet and keep up with the [European] competition”[Hounsell and Smith, Science and Corporate Strategy: Du Pont R&D, 1902-1980, p. 164.] in rayon research and production.  In his 1952 study of the DuPont’s Rayon Technical Division, Ferdinand Schultze waxed admiringly over the deep influence and primacy of early French artificial fibers research and production in the origins of DuPont’s later success:

The fine filaments of this man-made yarn…stretched historically across the Atlantic to a great textile nation, France.  There resides the antecedents of the Rayon Department, just as those of the DuPont Company; for the process on which the Company’s first synthetic yarn plant was based had been developed in the French plants….[Shultze, The Technical Division of the Rayon Department, 1920-1951, Wilmington, DE: E.I. DuPont Company, 1952, p. 3.] 

Along with rayon, CTA scientists and engineers in a few short years would also greatly assist DuPont in its efforts to move into cellophane production – another pioneering area in which chemistry increasing intersected with the development of new consumer products and markets.[Hounsell and Smith, Science and Corporate Strategy: Du Pont R&D, 1902-1980, p. 164.]  

Beyond the transfer of scientific knowledge, however, another unanticipated yet equally important managerial development occurred as a consequence of the CTA-DuPont partnership.  The thirty year association with the CTA would lead Du Pont to establish of an international division capable of negotiating and maintaining European subsidiary relations, financial and shareholder arrangements, and patent acquisition agreements. While the Du Pont Company had achieved success in South America, it had repeatedly failed to solidify an European presence prior to its with partnership with CTA.

By joining with the CTA, DuPont rapidly gained a ready-made transatlantic network of plants and sales operations first in rayon and then in cellophane.  Enabled by the first CTA agreement, DuPont engineers, managers and scientists journeyed to Europe in 1922 to conduct “an investigation” of eight CTA facilities that spread out throughout France and in Switzerland.[Tuttle, “Report of Investigation of European Silk Plants”, EIPPDN&CO, Accession No. 678, Series II, Part 4, Yerkes Plant, Box 95, Reports of Foreign Trips, 1922-1926, Item 6, Hagley Museum and Library.] Prodigious reports emanating from yearly trips provided DuPont executives with exact details, blueprints, photo layouts and scientific analysis of the various spinning and dyeing processes carried out by CTA facilities.[Two collections chronicle the technical information and data collected by DuPont executives under the CTA partnership - EIPPDN&CO, Accession No. 678, Series II, Part 4, Du Pont Rayon Company, Yerkes Plant, Reports of Foreign Trips, 1922-1926 and EIDPDN&CO, Accession No. 678, Series II, Part 4, Du Pont Rayon Company, Yerkes Plant, Foreign Trip Reports, 1929-1938.]  These reports proved critical in DuPont’s later efforts to re-shape and expand the entirety of its artificial fibers production technology and output processes.  In the case of cellophane, DuPont’s association with the CTA broadened its European network even further to include plants in Germany, Belgium, and Italy.[“Itinerary – R.M. Pickens”,  EIDPDN&CO, Accession No. 678, Series II, Part 4, Box 102, Du Pont Rayon Company, Yerkes Plant, Foreign Trip Reports, 1929-1938.] Furthermore, Du Pont’s alliance with CTA cannot be underestimated as company executives regularly sought advice and guidance from their new French corporate partners on how to navigate successfully through unfamiliar and difficult European business environments. 

While the company’s own R&D breakthroughs in the 1930s finally propelled Du Pont to its paramount industry position by the 1940s, it nevertheless the relied heavily on the corporate knowledge and organizational culture it acquired from CTA.  A detailed picture of the partnership reveals how essential the CTA became to DuPont in its efforts to gain a corporate international profile and capabilities, especially in the areas of negotiating and maintaining successful overseas intra-firm and subsidiary relations.  Also, the French approach to conducting business in “a spirit of friendly good-fellowship”[http://www.merriam-webster.com/dictionary/camaraderie] or camaraderie over competition affected considerably DuPont’s corporate decisions and style with the CTA well into the late 1930s.  Shared French cultural heritage also strengthened the emerging camaraderie between DuPont and the CTA.        

 

2. Cultural affinity as well as chemistry: the CTA-DuPont partnership in rayon

 

When characterizing the Du Pont-CTA partnership, cultural affinity played a significant role as a framework for the working relations that would develop between the companies over the next twenty years.  Certainly, the French heritage of the Du Pont family resonated both inside the company as well as overseas with CTA executives as the two companies first approached each other in 1919.  The predominance in the CTA syndicate of Rhodiaseta, a family-owned firm established by the Lyon-based Gillet Brothers, Joseph, Edmond, Paul and Charles, reflected the origins and continuing familial management of Du Pont.  The commitment of both companies to advancing the science and business of chemical processing, in this case in artificial fibers, further connected Du Pont and the CTA together.  All told, the shared experiences of French heritage, family business ownership, and innovative achievement in the emerging field of synthetic chemical science, bonded the Gillets and the Du Pont executives in a very deep, personal way, best and appropriately described in French terms as a camaraderie.

The establishment of the CTA-Du Pont partnership initially rested in a desire on the part of both companies to replicate and expanded the employment of French technology to produce viscose-based products for growing American consumer markets. After the rejection of British-based Courtaulds, Du Pont president Irenee Du Pont, in an attempt to seek out European patents and processes in synthetic fibers, sent company liaison Colonel Leonard A. Yerkes, then Assistant Director of the Development Department, to set up an office in Paris.  In late 1919, Yerkes met with Edmond Gillet, who represented the CTA as well as his family firm, through an introduction arranged by Henry Blum, the executive director of the French firm, United Piece Dye Works.  Subsequently, Yerkes crafted a series of introductory communications and meetings between Gillet and DuPont executives, most notably Walter S. Carpenter, Jr., then Director of the Development Department and later company President.  After visiting a number of fledgling artificial textiles in Belgium, Switzerland, Germany along with France, Yerkes recommended shortly after the meeting that DuPont join in association with the CTA, which as a conglomerate of a number of firms located in the Rhone-Poulenc region, had incorporated viscose techniques in the manufacturing of its patented artificial silk textiles.[EIDPDN&CO, Accession No. 678, Series II, Part 4, Box 95, Du Pont Rayon Company, Yerkes Plant, Foreign Trip Reports, 1922-1926.] 

As a part of an affiliate agreement struck in January 1920, the CTA won a joint interest in DuPont’s synthetic fiber production in exchange for sharing its bobbin technology and textile drying processes.  As part of the agreement, Du Pont established a subsidiary, the Du Pont Fibersilk Company later to become Du Pont Rayon, which gave CTA a 40% stake in profits stemming from the development of a new production plant located in Buffalo, New York. The venture also garnered CTA another 24% for its initial transfer of patent and process knowledge as well as plant technology setups and provided for an option to take up to an additional 16% stake in Du Pont Fibersilk company stock.[EIDPDN&CO, Accession No. 678,  Series II Part 4, Du Pont Fibersilk Company, File of Wm C. Spruance, Memo on Fibersilk and Cellophane Companies, May 22, 1923, Agreements, Memos and Correspondence, 1920-1933. Also see, Taylor and Sudnik, Du Pont and the International Chemical Industry, Boston, MA: Twayne Publishers, 1984, p. 118.]

From the start in 1923, CTA demonstrated a strong position of parity alongside of Du Pont in making decisions and guiding the new company.  According to the Fibersilk agreement, five CTA executives sat with six Du Pont members on a combined board that oversaw “all [contracts and] activities, including production, sales, accounting, etc.”[EIDPDN&CO, Accession No. 678,  Series II Part 4, Du Pont Fibersilk Company, File of Wm C. Spruance, Memo on Fibersilk and Cellophane Companies, May 22, 1923, Agreements, Memos and Correspondence, 1920-1933.] This arrangement of joint management would continue well into the mid-1930s before the Du Pont Company began to patent its own technologies and processes that eventually lead to significant modifications to CTA’s position in the Fibersilk venture.

The predominance of French leadership in the transfer of technical and managerial production knowledge to DuPont, along with the company’s high reliance on CTA guidance, remains the most striking, if not outstanding aspects of the early partnership.  As chronicled in the DuPont technical reports of the time, just three short months after the 1920 agreement had been reached, French managers from the CTA-affiliated Izieux plant in Northern France journeyed to Buffalo, New York to help set up DuPont’s first viscose yarn production facility.  “Substantially copying” French production machinery, factory floor layouts and chemical processes, the new DuPont Fibersilk Company produced its first success batch of artificial textile yarn by May 1921 ending in less than one year a decade of frustrating attempts by DuPont to start-up rayon production.[EIDPDN&CO, Accession No. 678, Series II, Part 4, Du Pont Rayon Company, Box 95, Yerkes Plant, Foreign Trip Reports, 1922-1926. Shultze, The Technical Division of the Rayon Department, 1920-1951 (Wilmington, DE: E.I. DuPont Company, 1952), p. 5.]

Textile industry demand for the durable new cloth soon outstripped capacities at the Buffalo plant and, between 1925-1928, DuPont had set up two additional French-styled plants - “Old Hickory” outside of Nashville Tennessee and another facility in Richmond, Virginia, which produced cellophane as well as rayon.  Despite the fact that DuPont by 1930 far outpaced the CTA syndicate in terms of production volume, equal admiration and cooperation still marked the relationship.  As a tribute to the DuPont-French connection, company executives choose to name the Richmond factory, the “Spruance Plant” to mark the efforts of Colonel William C, Spruance, a Du Pont Vice President who had forged close ties with CTA representatives and had “only seven years before …  negotiate[d] with the French for the purchase of cellophane technology.”[Schultze, op. cit., p. 12.]

Spruance’s deal-making prowess, however, does not fully illuminate DuPont’s seemingly swift movement into cellophane.  Like the case of rayon, CTA aggressiveness and Du Pont’s overt dependency on French business guidance, scientific mentorship and technology transfer marked the start-up of cellophane production at the Nashville and Richmond plants.    

 

3. Camaraderie and cellophane: the DuPont-CTA ventures

 

As with rayon technology, the CTA held patents since 1912 under an agreement with Swiss scientist Jacques Brandenberger utilizing his processes for cellophane production.[Taylor and Sudnik, op. cit., p. 119.]  Confident in the successful tone and pace of the Dupont rayon partnership, Charles Gillet and CTA chief executive Alfred Bernheim, “directed the attention of the DuPont representative [in Paris] to their new cellulosic wrapping film.” An energetic and visionary executive, Bernheim had arranged for the patent relationship with Brandenberger and also set up the CTA-backed company, La Cellophane Société Anonyme complete with a Paris showroom featuring packaging displays that encased a wide range of products from convenience foods to perfumes in the new wrapping film.[Schultze, op. cit., p. 19.]

Intrigued by the potential of cellophane’s applications in American consumer goods packaging markets, Du Pont dispatched Fibersilk Chemical Director George Rocker and Sales Manager, C.F. Benz several times to France to survey CTA production facilities and sales operations starting in 1922 through 1925.  The Rocker and Benz reports revealed several astonishing aspects of the CTA-DuPont cellophane partnership, most notably the virtual total transfer of French technology and business practices again to jump start an entrance into American markets.[EIPPDN&CO, Accession No. 678, Series II, Part 4, Du Pont Rayon Company, Yerkes Plant, Box 95, Reports of Foreign Trips, 1922-1926.]

While again highly dependent on French science and production processes, DuPont entered into another subsidiary agreement with the CTA through the Spruance negotiations ending in the creation of the Du Pont Cellophane Company on June 9, 1923.  The cellophane deal, while more difficult to negotiate due to Du Pont’s doubts over the durability of the Brandenberger processes, nevertheless netted CTA a 48% share in profits in a new cellophane manufacturing facility built by Du Pont based largely again on CTA plant blueprints, designs and equipment.  As in rayon, CTA on-site technical leadership proved decisive in DuPont’s first efforts to produce cellophane as Dr. Brandenberger personally oversaw “the first sheet of cellophane to be produced in America from a casting machine” at the Buffalo, New York plant in April 1924. [Hounsell and Smith, op. cit., p. 172; Schultze, op. cit., pp. 19-20.] 

In addition to production, French pioneering efforts in cellophane sales also shaped DuPont marketing strategies.   In a 1925 report, C. J. Benz chronicled French innovations in cellophane usages and packaging as well as sales organization:

Their sales organization comprises of seven salesmen in Paris, four general agents in the whole of France outside of Paris, to whom thirty-six sub-agents report…All of the salesmen, agents and sub-agents are paid on a straight commission except beginners, who are given a nominal salary and commission until their learned the product.[Benz, « Trip to France and England, » EIPPDN&CO, Accession No. 678, Series II, Part 4, Du Pont Rayon Company, Yerkes Plant, Box 95, Reports of Foreign Trips, 1922-1926, Item 8, p. 1.]

DuPont executive interest proved so high on French sales organization that Benz was directed to send another report on “how much” agents received and other salary figures and considerations.[Benz, « Trip to France and England, », op. cit., pp. 2-3.]

Benz also detailed in his reports “substantial” cellophane wrapping of consumer convenience items, commenting in particular on baked products:

“[cakes and biscuits] not made in the States … and were very interesting and we brought a number of samples back with us.  The Cracker industry is a possible market for us and will add to our development of the baking business.”[Ibid., pp. 2-3.]

He also noted that:

“considerable cellophane was found on Dried Fruits [sic]….Whether or not this …packaging is done in the States, will have to be found out.  It will help materially to have the French experience as an aid to increase our present business…”[Ibid., pp. 3-4.]

Benz also singled out the vast potential tapped by the French in the sanitary products market taking particular notice of non-prescription drugs, soaps, toothbrushes wrapped in cellophane.  “We are making a special effort to get to that market,” Benz wrote, “using the background of the French success as a stepping stone.”  Overall, Benz calculated that the French cellophane business had permeated four industries with 31% of sales in 1924 associated with baked goods, 20% in perfume packaging, 12% in chocolate and confectionary products, 11% in pharmaceuticals, and another 15% in a variety of wrapping applications involved in the shipping and display of textiles and miscellaneous foodstuffs.[Ibid., p. 5.] 

Mimicking the French pioneering efforts, DuPont executives and agents went on to engage in the mid-1920s through the 1930s in company-changing marketing and sales forays intended to align consumer products industries with new forms of cellophane packaging, shipping, and display presentations.  Reports in 1926 advanced from the Spruance and Buffalo plants to DuPont Chemical Director Dr. E.B. Benger visiting CTA plants in France confirmed the rapid success of the second CTA-DuPont technical partnership as one executive wrote, “Cellophane is doing very well. Sales are running ahead of the forecast, quality is excellent and we have practically no complaints.”[Report from Old Hickory Plant to Ernest B. Benger, July 27, 1926, Accession No. 678, Series II, Part 4, Du Pont Rayon Company, Yerkes Plant, Box 96. Reports of Foreign Trips, 1926-1927.]

The intentionality by which CTA granted DuPont unfettered access into its rayon and cellophane businesses seems shocking in light of modern day no-holds barred tactics of companies to preserve technical and market advantages.  While antithetical today, open and frequent accommodation of DuPont needs and requests proved to be an extremely winning strategy, however, for the CTA in its push to maximize profits and markets related to its proprietary lead in viscose science and production.  Over and over in their reports, Du Pont executives, engineers and scientists remarked on the high level of cooperation exerted by CTA officials.  In his 1925 European trip report, C. F. Benz commented on the fact that lead CTA scientist Jacques Brandenberger had assigned the head sales manager for La Cellophane “to give us any information we might want” which included a four day inspection of a manufacturing plant outside of Paris “where we had the undivided attention of Mr. Ray [plant manager] and were supplied with valuable information and statistics.”[Benz, « Trip to France and England, », op. cit., p. 5.]

Acts of intentional sharing and overt transparency marked the extension of detailed technical information by CTA to inquiring DuPont plant managers, engineers and scientists as they attempted to replicate French rayon and cellophane processes in the United States.  As early as 1922, Du Pont chief scientist George Rocker began submitting back to Buffalo highly specific accounts of French artificial fibers production techniques facilitated by multiple visits and interviews with CTA officials located at plants throughout France and parts of Switzerland and Germany.  In one such report, Rocker marvelled at the superiority of CTA spinning techniques that clearly distanced French from British artificial fibers in terms of quality and strength and included “photographs …given to me by [CTA chief executive] Rene Bernheim showing cross sections of silk spun both by the bucket processes and the bobbin processes.”[Rocker, « Information Collected Abroad », EIPPDN&CO, Accession No. 678, Series II, Part 4, Du Pont Rayon Company, Yerkes Plant, Box 95, Reports of Foreign Trips, 1922-1926, Item 1.] 

Another DuPont manager, H.J. White, who accompanied Rocker a year later in a series of return visits to the CTA plants, commented that Rene Bernheim again had arranged meetings for the DuPont team with “official[s] similar to our plant manager or from the plant superintendent” who made it possible to receive information that “cover[ed] the essential points from a strictly operating viewpoint.” These meetings also enable the DuPont team to engage in comparison talks with the French plant managers over the compatibility of CTA-Buffalo plant operations.[White, “Report on Visit to Following Artificial Silk Plants in Europe,” EIPPDN&CO, Accession No. 678, Series II, Part 4, Du Pont Rayon Company, Yerkes Plant, Box 95, Reports of Foreign Trips, 1922-1926, Item 7, p. 1.] 

The communiqués between the two companies on the cellophane deal illustrate the extraordinary cordiality and sincere concern by which the executives took each other’s positions and recommendations into account, even when relations became overly strained.  In writing to Colonel William C. Spruance, Du Pont’s chief negotiator on the cellophane, to confirm the delivery of new machinery from Lyon to Wilmington, Delaware, Mr. Rene Bernheim of the CTA Paris office reflected the spirit of camaraderie that had gotten both companies over several major difficulties endangering their partnership:

It is a real satisfaction to us to see that our [CTA-Du Pont] hopes have been fully realized and no doubt it is a feeling which must be your own at the same moment….In Rayon, the result of our collaboration of 10 years have been most satisfactory also….When so you expect to visit Europe again? You know how glad we should be to have you amongst us after so many years of friendly and confident collaboration.[Letter from Rene Bernheim to William C. Spruance, September 11, 1930, EIDPDN&CO,  Accession No. 678, Series II, Part 4, Du Pont Fibersilk Company, File of William C. Spruance, Agreements, Memos and Correspondence, 1920-1933.]

Bernheim also alluded to the extraordinary level of technical cooperation that had been built between the Du Pont and CTA engineering and production teams, “In Rayon…the present position is not as bright as Cellophane but we are confident that with the improvements of qualities which are being steadily worked out in our different groups.”[Ibid.]

Detailed trip reports compiled by DuPont engineers and scientists from the 1920s and 1930s attest to Bernheim’s claim of the determined efforts on both sides of the Atlantic to integrate DuPont and CTA research and development findings along with production processes.  Again, constant cordiality and accommodation marked the CTA’s approach to working with the DuPont teams.  One DuPont executive emoted enthusiastically during his trip to CTA plants in 1933 that, “We received the finest kind of treatment everywhere and were freely supplied with all available information.  The members of the Comptoir organization gave us generously of their time, although they were obviously short-handed.”[« European Trip 1933, » EIDPDN&CO, Accession No. 678, Series II, Part 4, Du Pont Rayon Company, Yerkes Plant, Foreign Trip Reports, 1929-1938., Box 102, Item 12.]  “I am very much pleased,” he went on to declare, “I have never seen a group work together so well and so pleasantly, particularly when we are together practically 24 hours a day.”[« European Trip-1933, » EIPPDN&CO, Accession No. 678, DuPont Rayon Company, Yerkes Plant, Reports of European Trips, 1933-1937, Box 103, Item 2.] 

Du Pont appreciation over CTA’s courteous approaches extended to the area of language accommodation as well.  Since the start, the CTA made it a point to conduct as much of its business as possible with DuPont directly in English instead of relying on translated conversations and communiqués.  As DuPont executives also visited European plants outside of the CTA network, their trip reports often commented on the language difficulties they experienced, especially at German and Italian plants where few managers spoke English.[« European Directory – Plants and Personnel, » EIDPDN&CO, Accession No. 678, Series II, Part 4, Du Pont Rayon Company, Yerkes Plant, Foreign Trip Reports, 1929-1938, Box 102.] As a result, the DuPont executives greatly appreciated the efforts of the CTA to supply English guides and translators when teams visited the various plants.  While a bit stereotypical, the Gillet brothers went so far as to assign attractive women as guides for the DuPont teams at their Lyon and Roussillon plants – a show of French hospitality that the American executives did not encounter anywhere else.  “There is a woman-clerk …who interprets … for us when we need help,” one executive wrote back to Du Pont headquarters in 1926 and another executive also verified in 1931 that a woman “blonde and perfumed!” had led tours organized by the Gillet brothers.[Letters by Ernest Benger, « European Trip Reports, 1926, » EIPPDN&CO, Accession No. 678, DuPont Rayon Company, Yerkes Plant, Reports of European Trips, 1933-1937, Box 103, Item 11.]

Beyond the obvious charm of doing business in France, the DuPont executives also strongly recommended an even closer relationship with the CTA as its plant managers, engineers and scientists tended to document in detail all changes and improvements to their emerging rayon and cellophane operations. “Fortunately the Societé Chimique des Usines des Rhone (SCUR) is a very orderly organization and their records are in excellent shape,” Chemical Chief Ernest Benger exclaimed in a 1926 trip report, “[that] same spirit has found its way into Rhodiaseta [Gillet operation].” The accuracy and accessibility to a high level of engineering information and scientific data courtesy of the Gillet brothers led Benger to exclaim that “I have already figured most the of buildings”  to enable a wholesale transplant of CTA rayon and cellophane production into DuPont’s Buffalo, New York and Nashville, Tennessee plants.[Ibid.]

The value of sharing production knowledge and improvements in a concrete, ongoing fashion with the French over German and Italian rayon and cellophane producers also emerged as a strong recommendation back from the DuPont teams. “They have a number of very interesting and clever tricks about the operation,’ Ernest Benger noted in one of his reports, “[however] the patent situation will not be easy on account of the failure of Rhodiaseta to take patents as fast as ideas were conceived … [the French] are extremely active in this respect.”[Ibid.] Indeed, CTA and DuPont scientists and engineers organized and then regularly exchanged laboratory and production reports before the end of the 1920s.

In addition to collaborative R&D efforts, the firms went on to maintain a joint board composed of six Du Pont and five CTA executives to manage the new DuPont Cellophane Company modelled after their earlier DuPont Fibersilk Company venture.[EIDPDN&CO, Accession No. 678, Series II, Part 4, Du Pont Fibersilk Company, File of William C. Spruance, Agreements, Memos and Correspondence, 1920-1933.]

 

4. Competition over camaraderie: DuPont separates from the CTA

 

Like the case of Rayon, both companies would eventually benefit from unprecedented consumer demand for cellophane products and packaging with a 63% in the industry from 1928-1930 alone.  Despite the onset of the Great Depression, sales continued to rise up 100% in 1930 and by 200% in 1931, driving new cellophane competitors into the filed on both sides of the Atlantic, most notably Belgium’s Sidac against CTA and its subsidiary Sylvania against Du Pont in the United States.[Hounsell and Smith, op. cit., p. 176.]

As profits and markets grew rapidly in artificial fibers into the 1930s, so did the efforts of both CTA and Du Pont to meet business demand and competition challenges. Ironically, the greatest source of tension between the two companies on the issue of competition emerged not from external but from intra-firm forces.  As Du Pont expanded in the early 1930s to take advantage of its long-standing foothold in South America, CTA reacted negatively as such expansion efforts threatened operations and contracts it held in Argentina and the West Indies before the 1923 Fibersilk agreement.  Also, DuPont scientists by the early 1930s devised a waterproof form of cellophane, the chemical composition of which proved significantly different from the French method calling the arrangement of CTA-DuPont patent sharing into serious question.[Shultze, The Technical Division of the Rayon Department, 1920-1951, Wilmington, DE: E.I. DuPont Company, 1952, p. 3. ; Hounshell and Smith, op. cit.] Maintaining camaraderie seemed at first to outweigh pursuit of singular competitive advantage as the firms wrestled with the new challenges of global expansion and proprietary innovation.   

While negotiations between the two companies were extremely contentious on the issue of territorial domains, Du Pont’s new Finance Chairman, Walter S. Carpenter and CTA co-owner Charles Gillet, communicating through a series of increasingly gracious and accommodating letters, managed to strike a compromise which allowed both firms to pursue independent as well as joint business in the American hemisphere.  The warm, congenial tone of the letters between the two men was indeed genuine as it also was evidenced in a series of communiqués surrounding the death of Edmund Gillet in 1931.  Upon hearing the new of Edmund’s death, the usually undemonstrative Carpenter immediately sent a telegram to Charles Gillet expressing his “heartfelt sympathies for the lamentable loss of your splendid brother.” Carpenter also sent a follow-up letter within a few days inviting Charles to take Edmund’s place on the DuPont Rayon Company board:

You will recall that your good brother …was a member of the [Rayon] Board of Directors….It would please us very much to have you replace Mr. Edmond and we will be delighted to elect you a director if you will write to me that this arrangement is satisfactory to you….Awaiting your reply…with the very kindest of regards….[Telegram from Walter S. Carpenter to Charles Gillet, October 31, 1931 ; Letter from Carpenter to C. Gillet, November 20, 1931, EIPPDN&CO Series II, Part 2, Accession No. 542, Papers of Walter S. Carpenter, Jr.,  Box 818.]

 

In return, Charles wrote back warmly to “dear Mr. Carpenter”:

Please accept my sincere thanks for the expression of sympathy [on] the great loss we have to bear in the person of my brother Edmond. You knew him sufficiently well to keep the remembrance of him that he deserves.  All of my family and I myself are indeed grateful to you for having so expressed to us your sympathy, and I ask you, in the name of us all, to accept our profound gratitude.  At the same time, dear Mr. Carpenter, please believe in my personal thanks, in the expression of my best remembrance.[Letter from Charles Gillet to Walter S. Carpenter, November 2, 1931, EIPPDN&CO Series II, Part 2,  Accession No. 542, Papers of Walter S. Carpenter, Jr.,  Box 818.]

In his letters on the matter in the spring of 1935, Carpenter informed Du Pont board members that he had reached an agreement and that the CTA reply “we are now expecting from Paris is favorable.”  Carpenter also re-assured Charles Gillet in subsequent correspondence that Du Pont would take care of the problem mentioned previously by Gillet that CTA was not “receiving sufficient reports regarding [Du Pont] experimental work ….but that this would be corrected and they would go forward promptly hereafter.”[EIPPDN&CO Series II Accession No. 542, Box 820 Papers of Walter S. Carpenter, Jr., Cellophane Territorial Rights (C-6.3) File (1934-1935).]

These exchanges mirror the continuing efforts of the Du Pont Company to maintain its partnership with CTA, despite its growing position of technical independence and manufacturing dominance beyond the 1923 Fibersilk-Cellophane agreements.  In fact, CTA regularly succeeded in gaining concessions from Du Pont throughout the 1920s and 1930s related to sharing equally in R&D information and increased profits despite the growing imbalance between the two companies in terms of corporate size and reach.  The issue of greater profit sharing resulted in CTA pushing for and receiving a major adjustment in compensation stemming from a joint 1928 agreement set with Du Pont over its equity levels in U.S. based rayon and cellophane production. 

In his many exchanges with Rene Bernheim on deficit profits, Walter Carpenter again employed a conciliatory tone, trying to maintain a friendly balance in cross-company relations.  At one point, Du Pont executives seemed to have misinterpreted a letter from the Gillet brothers which seemed to state that they felt “deceived” as both companies corresponded on profit sharing and recovery issues.  In order to re-dress any schism generated by the misquote, now Du Pont Vice President Walter Carpenter shot off a memo and telegram to all parties that the “word DECEPTION is now interpreted by us as meaning DISAPPOINTMENT which is given as a secondary definition of the word DECEPTION in the French dictionary.”[Ibid., Memo by Walter S. Carpenter to Du Pont executive staff, September 21, 1936.] 

In a later letter informing Bernheim of some of the complicating factors between the two firms on profit sharing, Carpenter offered other olive branches such as his statement on any possibility of a revised agreement in favour of CTA’s position:

You will of course appreciate that this letter does not make any suggestions as to some new arrangement which we might make regarding this Acele development, but I have felt that it might be worth while to make this contribution by way of setting aside a misunderstanding which has apparently existed heretofore in the hopes that it may eliminate at least one barrier in our effort to reach a complete understanding regarding our situation.[Ibid., Letter from Carpenter to Bernheim, October 27, 1936.]

Indeed, CTA’s claims did lead to an amended agreement in which Du Pont recognized that “the reasonableness or fairness of a basis of adjusting the unsatisfactory situation existing under the present [CTA] – Du Pont agreement….[Ibid., Rhodiaceta Agreement, December 23, 1936.] Through the new agreement, Du Pont allowed CTA to re-coup over $3 million in addition compensation for past deficit profits and realize an increase to 15% up from 4% of all future profits stemming from rayon production carried out under the original CTA patents.[Ibid.]

Despite several such attempts to maintain a close partnership, Du Pont and CTA would eventually part ways as the change to French patent laws and the coming of World War II required CTA to increasingly secure its own independent markets and operations in France and other part of Western Europe.  Also, Du Pont’s gigantic strides in artificial fibers and cellophane science and technology continued to outpace the efforts of CTA.  As a result, Du Pont no longer needed to rely on CTA patents or equipment as it moved into its own production of branded artificial fibers such as DACRON and moisture-resistant cellophane packing past the end of the 1930s.

 

Conclusion

By the end of the 1920s then, the Du Pont-CTA partnership in rayon and cellophane had more than paid off for both organizations.  U.S. consumption of rayon products jumped from 8.2 million pounds in 1919, to over 130 million pounds in 1929 as Du Pont Fibersilk cut substantially into the monopoly in production held by Courtaulds’ American Viscose Company.  While disputes over the strength of CTA patents eventually led to a rupture with Du Pont over the continued joint development and production of cellophane for the American market, nonetheless, the both companies enjoyed a 50% return on investment within two years of their initial venture struck in 1921[Taylor and Sudnik, op. cit., pp. 118-119.]    

As scholars have noted, Du Pont’s strategy to acquire European patents and processes in rayon and cellophane production not only boosted production but also sparked its R&D efforts which gave the company “additional leverage…with its European counterparts….”[Ibid. p. 124.]  With deals developing between Du Pont and a growing number of British, Belgium and German chemical and processing companies, the company had clearly learned from its experiences with CTA to build in less than a decade a viable European arm for its overseas business interests. 

In the end, several callous conclusions could be drawn about the CTA-Du Pont partnership, most notably the inevitable, dispassionate pursuit of larger corporate profits by Du Pont over the maintenance of a more equitable arrangement of growth for both companies sustained through business camaraderie.  However, the initial dependence of Du Pont on the CTA has been underestimated in the entry of the firm into artificial fibers and cellophane production and markets.  CTA mentorship also assisted DuPont considerably in its efforts to connect and navigate in essential European business environments.  The CTA partnership then proved invaluable, if not historic in nature as it allowed DuPont in less than three decades to evolve from a firm largely confined producer to producer markets on the American continent to the world’s leading multinational in consumer synthetic products. 

While empowered by its meteoric rise, DuPont slowly, if not reluctantly disengaged from its partnership with the CTA – behaviour that belies modern-day competitive expectations and standards.  Cultural as well as professional affinity often endured then over business imperatives in inter-firm interactions.  The long-standing, courtly nature of Du Pont-CTA executive interactions consistently remained tinged with genuine concern for one another, an enduring commitment to maintaining a “fair share” arrangement as their rayon and cellophane ventures achieved astonishing success.  They also a shared sense of business pride rooted in pioneering achievements together in the revolutionary, new scientific field of synthetic chemical processing.   

In all, the CTA-Du Pont business relationship went beyond a profitable partnership, but instead took the fascinating form of a corporate camaraderie.  As a camaraderie or a band of individuals highly dependent on each other for survival and success in a pressure environment, the executives in the Du Pont-CTA partnership forged bonds of corporate trust, cooperation and exchange that allowed for the rapid transfer of essential cultural experience as well as technological knowledge and business acumen to the benefit of both firms.  For DuPont, the camaraderie with the CTA undeniably enabled its transformation into a multinational giant in the chemical industry.  Finally, the CTA in its role as first mover and model for DuPont industrial success presents scholars with an important case of a reverse flow of management influence that runs counter to Americanization trends in 20th c. European corporate development.    


Bibliography

 

Primary Sources

Hagley Museum and Library, Records of E.I. du Pont de Nemours &Company, Accession No. 542, Series II, Papers of Walter S. Carpenter, Boxes 818-819, Accession No. 678, Series II, Part 4, Boxes 95-96, 102-103; Accession No. 1850, Series II., Memos and Correspondence, 1920-1933.

 

Secondary Sources

Cheape, C. W., Strictly Business: Walter Carpenter at DuPont, Baltimore, Johns Hopkins University Press, 1995

Coleman, D.C., Courtaulds: An Economic and Social History, vol. 2 Rayon, Oxford, Clarendon Press, 196

Cuff, R., The War Industries Board; business-government relations during World War I, Baltimore, Johns Hopkins University Press, 1973

Hounshell, D. A. and Smith, J. K., Science and Corporate Strategy, Du Pont R&D, 1902-1980, Cambridge, UK, Cambridge University Press, 1988

Levy-Leboyer, M., Teichova, A. and Nussbaum, H. (eds.), Multinational Enterprise in Historical Perspective, Cambridge, UK, Cambridge University Press, 1986

Shultze, F.,  The Technical Division of the Rayon Department, 1920-1951, Wilmington, DE, E.I. DuPont Company, 1952

Taylor, G. D. and Sudnik, P. E., Du Pont and the International Chemical Industry, Boston, MA, Twayne Publishers, 1984

http://www.merriam-webster.com/dictionary/camaraderie