Sunday’s Washington Post had an article by one Anne Dumas that’s been blogged here and there, provocatively titled What’s American and Envied by France?. It starts with a rather shocking assertion that has, unsurprisingly, been quoted in a lot of the bloggage:
[N]ot a single enterprise founded here in the past 40 years has managed to break into the ranks of the 25 biggest French companies. By comparison, 19 of today’s 25 largest U.S. companies didn’t exist four decades ago. That’s why France is looking to the United States for lessons.
Alas, this quotable assertion is completely false.
I checked it out by comparing the top 25 firms in the Fortune 500 and the 25 largest firms in France by business (from Wikipedia). Then, I got the founding date for each using Wikipedia, or the company’s own webpage, or in a couple of cases I had to trawl the web for it.
Now, this isn’t quite as simple as all that. Many of the firms listed are conglomerates and holding companies which have come into their present form through buy-outs and mergers. Since Ms Dumas’ principal claim is that the US is a better climate for small businesses to grow, obviously the merger of two or more already giant businesses shouldn’t count. So, in each case, I tried to use either the founding date of the main component of the business, or the date the company’s own web page gives as its founding in some sense, or in the case of fairly equal mergers, I’ve tried to use the oldest of the pre-merger firms. In a few cases, I just took the earliest date that I could easily find.
For France, the list is as follows:
NAME FOUNDED 1 Total 1924 2 Axa 1816 3 Carrefour 1959 4 Vivendi Universal 1853 5 PSA Peugeot Citro?n 1810 6 EDF 1946 7 France T?l?com 1878 8 Suez 1858 9 Les Mousquetaires 1969 10 Renault 1899 11 Saint-Gobain 1665 12 Veolia Environnement 1853 13 Auchan 1961 14 Pinault-Printemps-Redoute 1960 15 Leclerc 1949 16 Publicis Groupe 1926 17 Rallye n/a 18 Casino Guichard Perrachon 1898 19 Bouygues 1956 20 SNCF 1938 21 Alstom 1928 (or earlier) 22 Aventis 1863 23 Airbus industrie 1970 24 CNP Assurances 1855 (approx) 25 VINCI 1899
At number 17, Rallye is a holding firm whose principle asset is number 18, Casino Guichard Perrachon, now known as Groupe Casino. So, I disqualified it because it had never been a small firm. Airbus was founded in 1970, but it was formed as a consortium of four large European aerospace firms that date back to the 1920s and earlier, so it shouldn’t count either. I couldn’t find a good date for Alstom either, but according to Wikipedia, it came into being in its current form in 1928 as a merger of two older firms, so it’s at least 77 years old. CNP Assurances also didn’t give a precise date, but their website says they’ve been serving the public for 150 years, so I took that as their age.
Les Mousquetaires is a more complex case, since it was founded in 1969 by a group of supermarkets splitting off from number 15, Groupe Leclerc. So, while it was never exactly a small business, it was certainly established after 1965.
So, Ms Dumas is almost right. Only one of the top 25 French firms was founded in the last 40 years. But, if 19 out of the 25 top US firms post-date 1965, then she’s still correct on the merits, right?
So, let’s take a look at the top 25 US firms, according to Fortune:
NAME FOUNDED 1 Wal-Mart 1962 2 Exxon Mobil 1863 3 General Motors 1908 4 Ford 1903 5 General Electric 1890 6 ChevronTexaco 1879 7 ConocoPhillips 1875 8 Citigroup 1812 9 IBM 1896 10 American International Group 1919 11 Hewlett-Packard 1939 12 Verizon 1926 13 Home Depot 1978 14 Berkshire Hathaway 1960? 15 Altria Group 1902 16 McKesson 1833 17 Cardinal Health 1971 18 State Farm Insurance 1922 19 Kroger 1883 20 Fannie Mae 1938 21 Boeing 1916 22 AmerisourceBergen 1907 23 Target 1902 24 Bank of America 1874 25 Pfizer 1849
I couldn’t get a good date for Berkshire-Hathaway’s founding. Originally, it was a failing textile firm that Warren Buffett took over and turned into a holding company. It got out of the textile business shortly afterwards, so it’s hard to assert that it’s a small business turned big.
So, of the 25 largest firms in the US according to Fortune, just two were founded after 1965. It’s possible that Ms Dumas has a different list of firms than I do, but that at least 16 of its members are different would be surprising.
One out of 25 to two out of 25 is just not that big a difference. In fact, if we pick the last 50 years instead of the last 40, we get exactly the same number of firms for each: 4. Same thing if we pick 25 years: 0.
This is why you can’t trust the anglophone press to report on the European economy.