Middle fingers: A case study

In her commencement speech at the Columbia Business School graduation ceremony this past May, PepsiCo president Indra Nooyi advised the audience that the United States was giving the middle finger to the rest of the world. She counselled respect for the feelings and perceptions of others.
Nooyi wasted no time on the dificult question of the proper response to the feelings of others that are irrationally hostile, racist, or lethal. What is the proper response when other countries give the United States — or even Pepsi itself — the middle finger?
Nooyi must have some experience in dealing with the latter question, but for some reason the presumption among those such as Nooyi is always that the United States is the malefactor guilty of insensitivity and worse. Major E.’s response to Nooyi’s speech said just about all that there is to say on the subject (see “The straight story”), as did Victor Davis Hanson’s NRO column (see “Our spoiled and unhappy global elites”).
Last week provided a case study involving Pepsi itself. When rumors swirled that Pepsi intended to launch a takeover bid on the pride of Gaul — yogurt-maker Danone — the French political establishment leapt into action. As Jo Wrighton wrote in the Wall Street Journal:

The French political establishment rallied behind Danone SA, the subject of speculation about an imminent takeover bid by PepsiCo Inc., setting a pattern of seeking to pre-empt foreign takeovers with early intimidation tactics.
Joining a chorus of French government officials and politicians, Prime Minister Dominique de Villepin yesterday called Danone a national “crown jewel” and warned that he would “defend the interests of France.” Earlier in the day, France’s labor minister, Jean-Louis Borloo, said in a radio interview the government would do “everything” to oppose a hostile takeover bid from the Purchase, N.Y., soft-drink company. Laurent Fabius, a former Socialist prime minister, called on French President Jacques Chirac to “act urgently” to keep Danone in French hands.

Pierre Briancon elaborated in the Wall Street Journal Europe:

Call it the yogurt test. You know a country is in the throes of a deep identity crisis when its elites unanimously decide that dairy products are of the highest strategic importance, calling for nationalist wagons to circle around a firm selling such high-technology products as chocolate cookies, mineral water and fruit yogurt…
Within a couple of days, the head of the French parliament’s finance committee, a senior member of the conservative government, union leaders, most socialist figureheads and a few columnists have taken up arms to save Danone from the Americans. Leave aside for a moment the simple fact that nothing has happened yet, and that all the furor stems from unconfirmed stock-market rumors and anonymous press leaks that both firms have been careful to deny. What remains is a traditional case of a national paranoia being manipulated by a cunning business establishment to protect its entrenched interests.
According to press reports, Danone Chairman and Chief Executive Frank Riboud himself orchestrated the protest, taking his concerns to French President Jacques Chirac, Prime Minister Dominique de Villepin and Finance Minister Thierry Breton. They obliged, ever ready to provide whatever cover they might improvise on the spot. Mr. Chirac fired the first warning salvo during his Bastille Day press event, and true to his Gallic self, Mr. de Villepin went on to talk about “defending France’s interests.” Mr. Riboud could then publicly “thank” France’s politicians for their concern — as he did this week in a press interview.

The Telegraph also covered the story in “France flouts the Pepsi challenge.” James Hall wrote:

The French view PepsiCo…as the ugly face of American capitalism. “I find it scandalous to see the jewels of French industry going overseas, especially under the banner of Pepsi-Cola, when we’re talking about Danone, the symbol of French dairy products and French quality,” says Patrick Ollier, the chairman of the French parliament’s economic affairs committee.

Unfortunately both for the French political establishment and for Danone stockholders, however, the rumors of a possible PepsiCo bid for Danone appear to be unfounded. Today Reuters reports: “Danone shars fall as Pepsi says no bid plan.” Messrs. Chirac and de Villepin have saved Danone stockholders from the perils of the nouveaux riches!
Saudi Arabia is another country that seems to specialize in showing the United States the middle finger. At Little Green Footballs, Charles Johnson reports: “Al Qaeda-connected prince will bridge the gap with US.”


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