The French Way (25 page)

The adventures of Mickey Mouse, Big Mac, and Coke began as soon as they landed in France. In retrospect all made costly errors. There was also arrogance that provoked anxiety and resentment about American corporate power. Of the three Disney faced the most perils.

Disney

The Euro Disney Resort, created at Marne-la-Vallee outside Paris, experienced a difficult start-up: it riled most everyone involved in its construction and operation; provoked aesthetic, political, and philosophical debates; and within two years almost went bankrupt. Yet it not only survived but led France toward becoming the principal European site for theme parks.

Michael Eisner, the CEO of the Walt Disney Company (WDC), wanted to replicate the successful theme parks in Orlando, Florida, and Tokyo while avoiding their mistakes.
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At Tokyo Disneyland, for example, Disney had assumed no equity and little control and ended up with meager revenue. In negotiating with the French in the mid-1980s the WDC sought a different contract. Eisner's team knew that they had the upper hand because the French government wanted the park to create jobs, stimulate tourism, and attract foreign spending, and because officials worried that Disney would select another site like Barcelona. Politicians did their best to lure Mickey Mouse to Paris. Prime Minister Laurent Fabius, a socialist, signed the letter of intent with the WDC in 1985 and Jacques Chirac, his conservative successor, completed the negotiations and endorsed the voluminous contract in 1987. Estimates of job creation ranged between ten and twenty thousand on-site positions, with tens of thousands more for related work
like construction and off-site services. Government officials spoke of tourists spending a billion dollars a year in France. The public was enthusiastic: in one survey four out of five polled supported the project,
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and the newspaper
Liberation
added mouse ears to its logo when the agreement was signed. Disney exploited its advantage to win generous concessions including tax breaks, a low-interest loan, an extension of the suburban railway, a rock-bottom price for land, a percentage of all revenues, and total control for only a tiny part of equity.

What Eisner's team had in mind was more than a new theme park. In the first stage, there were also plans for six hotels with 5,200 rooms as well as a campground, a golf course, and a shopping mall. In the second stage there would be another theme park modeled after the MGM Studios as well as additional hotels, apartments, office buildings, a major convention center, and more. In short Euro Disney was but the beginning of an enormous, and enormously expensive, real estate development sprawling over five thousand acres and costing over four billion dollars. Its aim was to transform European notions of leisure. The Disney project was going to offer a complete vacation resort rather than just a park devoted to day-trippers.

French entrepreneurs smelled opportunity. If Disney calculated that the country was ready for an expensive theme park, then there should be room for them. But they needed to hurry and beat the Magic Kingdom to the punch before the planned opening in 1992. There was also the appeal of millions of tourists coming to Europe for the Barcelona Olympics the same year. Six major parks opened while Euro Disney was under construction, as did several small ones, making France the European leader in the new leisure business. Of these Disney challengers, however, only two proved successful; the others either closed or barely survived from year to year. Mirapolis, based on Rabelaisian themes, opened in 1987 near Paris, but floundered when its attendance was less than half of what was expected. Big Bang Smurf, featuring Belgian cartoon characters, started two years later near Metz and had the same fate. Both faced bankruptcy after one or two summers. Others,
like Planete Magique, an indoor family fun center, and several aquatic parks, lasted but one season. What went wrong? There was a combination of exaggerated aims, misspent or inadequate capital, poor design or location, sparse attractions, neophyte managers, errors in marketing, and weak advertising.
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And French customers were hesitant about paying pricey one-day admissions.

Two other parks showed more potential. Parc Asterix, which was based on the famous French cartoon stories that featured the wily Gaul Asterix and his sidekick Obelix who outwit the bumbling Romans—opened to crowds of 20,000 per day in April 1989. It enjoyed a favorable location just north of Paris, solid financing from investors like Barclays Bank and the Accor hotel chain (although initial investment was only $200 million compared to $4.5 billion for Disney), some sound advice from California consultants, and smart marketing that utilized the media. It featured historical sites like a Roman city and tableaux with depictions of such events as the storming of the Bastille. In its initial two years the annual gate was $1.4 million. But management held its breath over the impact of the coming of the Magic Kingdom. The other new park, whose self-description was that of an “image park,” was Futuroscope, which began in 1987 and built its attendance to 1.2 million by 1991. While Parc Asterix was a private venture, Futuroscope was part of a technology, research, and educational complex built and owned by the regional government with the aim of reviving the economy of the area around Poitiers.
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A new high-speed rail connection made the area easily accessible. Public funds ($180 million in its first years) constructed and developed the complex while a private concessionaire operated it. Futuroscope featured attractions like 3-D cinema and an IMAX theater, futuristic architecture, and exhibits and shows on the “Enchanted Lake.”

The leisure industry in Europe anxiously awaited the arrival of Mickey Mouse in the spring of 1992. At a conference in Germany some theme park officials expressed their fear that Disney would set unaffordable standards for them and steal their customers.
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Others, like
Olivier de Bosredon, the director of Parc Asterix, believed Europeans could compete, but they must “fight back.” He pointed out the weaknesses of their Yankee competitor: high prices and long waits. “Europeans won't want to queue up for two and a half hours. They are not used to that.” A former Disney consultant was optimistic. He reminded his apprehensive listeners that Disney would help them in the long run by promoting greater public awareness of their industry: in the United States and in Japan, he pointed out, Disney had been a boon because it induced higher levels of investment, raised operating standards, and sparked product innovation. His advice to Bosredon and his colleagues was to reinvest and rejuvenate their enterprises.

Meanwhile, Eisner's team encountered trouble.
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If republican politicians paid a king's ransom for the park and the public seemed welcoming, there were some noisy dissenters from the outset. One union claimed the company had gouged the French government and won such privileges that the Magic Kingdom had become the “fifty-first state.” Nor was the entire political class on board. Environmentalists attacked the project for despoiling good farm land; communists disapproved of the squandering of taxpayers' money; radical rightists regretted the subversion of French culture, and even a few socialists like Jean-Pierre Chevenement stood against their own government.
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Eisner's managers provoked opposition by insisting on a comprehensive contract and then proceeding to enforce every detail—to the point of antagonizing government agencies, contractors, trade unions, local residents, and employees. Government officials and contractors grumbled about imperious treatment, and farmers about the low price paid for their land; and many of the newly hired employees, labeled “cast members” in “Disneyese,” complained about just everything: they objected to the stringent dress code that proscribed anything that detracted from the clean-cut Disney image—no beards, mustaches, or earrings for men.
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They disapproved of their training, pay, working conditions, and housing, and they carped about the strict surveillance from the company's monitors, who carried clipboards and wore head
sets. Cleaning women were among the first to protest because they could be made to work at night, sometimes every night. There were charges of racism because blacks and North Africans were confined to cleaning the park. Trade unions, including the communist connected Confederation Generale du Travail, joined in to try to force Disney to obey the French labor code, which required paying for overtime and granting sick leaves. Over a thousand trainees quit just after the park opened, and sporadic strikes including hotel workers, cleaners, and musicians interrupted the resort's operations. There is some evidence that the French, who made up about two-thirds of the hires, were more difficult to train than other Europeans.
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Disney retaliated with tighter surveillance of its employees and layoffs for troublemakers. One scholar, Marianne Debouzy, has concluded that Disney's “brutal methods” made “a clean break with French work culture.”
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A satirical journal inverted Disney magic: “Mickey invents the exploitation of man by mouse.”
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To many the Californians seemed not only aggressive but arrogant. One executive told a French newspaper, “There is a world of difference between Disney and the others….We are already the best.” Another likened the park's construction to the pharaohs building the pyramids: “We're building something immortal.”
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The communications manager for the project was only half joking when he said “Paris will be one of the attractions of Euro Disneyland.”
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Some journalists disparaged the project even before it opened with charges that the Americans wanted to industrialize leisure, murder fantasy, denigrate the French language, and lower cultural standards.
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Le Nouvel Observateur
ran articles like “Mickey's Long Teeth” and one of its editors, Jacques Julliard, noted that the last popular action hero for the French was D'Artagnan (from Alexandre Dumas's
The Three Musketeers)
and pleaded, “[W]here is our Rambo ?”
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When Eisner and other company officials appeared at the Paris Bourse to launch the sale of stock in 1989, signs called for “Uncle Scrooge” to go home and a handful of leftist protesters pelted the Americans with tomato sauce and eggs.

Figure 6. Farmers' tractors block the opening of Euro Disney, June 1992. Courtesy Yves Forestier/Corbis.

On opening day, April 12, 1992, Disney's quarrel with trade unions erupted in a transportation workers slowdown that disrupted access to the park. Contractors claiming unfair treatment threatened to picket. Local residents complained about traffic and the nightly fireworks. By June “Operation Mickey” found hundreds of tractors blocking roads, with farmers protesting the “colonization” of agricultural land. The new park's reputation was awful. And the early crowds, which management worried would be too large to accommodate, fell below expectations in spite of an extravagant media blitz. Worse was to follow. Robert Fitzpatrick, the first president of Euro Disney, would not live down his infamous prediction: “My biggest fear is that we will be too successful.”
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Disney managers compounded the problem with numerous business errors.
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They overestimated the need for overnight accommodations and set prices too high for admissions, hotel rooms, food, and
merchandise. They also underestimated the effects of nasty weather and, above all, they misjudged the state of the French—and the European—economy. The Americans expected booming prosperity in 1992 because of the big step forward by the European Union when in fact they faced Western Europe's worst postwar recession. And they made smaller mistakes like ignoring travel agents and restricting the sale of alcoholic beverages.
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There were complaints about prices, queues, and slow service. The first season was a major disappointment: admissions, expenditures on food and merchandise were all below expectations, and the hotels were only half full. The recession prevented the company from selling its real estate while, at the same time, it had to pay heavy financial charges on its debt. The resort was hemorrhaging money. It lost over $35 million in the first fiscal year and losses continued to mount into the next year. British tabloids ran articles like: “Hi ho, hi ho, it's off the cliff we go.” Fewer than eleven million entrants, which was at the low end of the target for admissions, had come by April 1993. Of these, 36 percent were French. The price of stock collapsed. Officials announced losses of $87 million for the first three months of the 1993 season, or almost a million dollars per day. By the summer it was imperative for the company to restructure its finances, cut prices, and reduce its payroll. Attendance slumped below nine million. Eisner threatened to close the park if his partners, a consortium of banks and investors, refused concessions.