Research goals

5There are two major goals:

61. First, to conduct a European study focused on building materials and their two specific sectors: the European cement industry and the distribution of building supplies. The European cement industry is, in and of itself, a typical example of advanced globalization. Today, there exists a global oligopoly made up of European dominant firms such as Lafarge (France), Holcim (Swiss), Heidelberg Cement (Germany), Italcementi (Italy) and Buzzi Unicem (Italy). However, Cemex, a world-class Mexican group with a strong foothold in the United Kingdom thanks to the RMC group, is challenging the leadership of these firms [5]. More recently, it is the case of the Brazilian conglomerate Votorantim, which became a strong competitor for European producers with the repurchase of Cimpor, an important Portuguese group. The research will also study the post-WWII formation and development of such a dominant oligopoly.

7Contrary to the cement industry, the distribution of building supplies is characterized by fierce but uneven competition that varies according to the geographic area. The French leading firm, Saint-Gobain, must, for example, face strong Anglo-Saxon competitors, namely the UK-based Wolseley, the Irish CRH and the Danish Rockwell. A historical perspective will also be favoured, even if documentation appears incomplete at first sight.

82. The second study will analyse the shift to services that was initiated by the European public buildings and works firms (“BTP” firms in French). Five types of models can be identified: British, French, German, Japanese and American. In opposition to these dominant models, it is worth analysing the specific cases of public buildings and works companies in two major Latin nations (Italy and Spain [6]), in Scandinavia, Holland and also China and South Korea. Similarly to the first, the second study will last no longer than four years and follow a methodology mostly drawn from industrial economics.

The Research Questions

9Three lines will direct our research.

101. The first concerns the shift from the international to the global firm. We hypothesize that there exists one (or several) process (es) leading from internationalization to globalization [7]. Firms seem to have gone go through four successive periods:

• an internationalization process: the firm operates abroad and devotes a significant part of its activities to exports and import operations.
• a multinationalization process: while preserving a nationality (national based-headquarters), the firm sets up subsidiaries in a certain number of foreign countries. Its domestic activity is no longer prevalent.
• a transnationalization process: the multinationalization process makes the firm less and less dependent on a national interest and consequently from local market conditions and national policies.
• a globalization process: the business enterprise becomes a globally integrated firm operating on the three largest world markets (European Union, North America, Western and Eastern Asia) and also in emerging countries.

11However, one may wonder whether there are alternative paths to the globalization strategy. Even some of the most powerful groups have favoured a regional (be it a European, a North-American, Nafta-scaled or Far Eastern Asian strategy) rather than a global strategy. Other firms have bet their all on a niche strategy while some have rather opted for a diversification strategy. Another research question may also come out of the analysis of variables explaining such a shift towards the global firm model. Part of the answer is undoubtedly to be found in the current development of the markets of goods and services whose growing share is devoted to global demand. The globalization of the financial market and the regular growth of the knowledge intensive market through R& D operations are also to be considered as key development factors.

122. The second line studies the passage from industry to services. The shift from industry to services is a structural orientation of developed economies. It was first brought to the forefront by economists such as Colin Clark or Jean Fourastié and thoroughly studied by Simon Kuznets; this trend appears as a twofold macro- and micro-economic phenomenon. The British and American economies exemplified this type of dramatic evolution, which is also found in France to a lesser extent. The study of firms, and more particularly industrial groups, is part and parcel of the same research question (cf. Dominique Barjot’s Vinci’ group [8]). The project intends to develop the research question at three distinct levels.

13Of course, the first concerns the construction industry. The construction industry has long been identified and characterized by economists (Christian Sautter, La fresque du système productif, INSEE) as a service industry. In the construction industry, the rising importance of services assumes mainly three forms: property development, public utilities and engineering. Concerning property development, the role of contractors appears clearly. Since at least the middle of the XIX^th century, there have been building contractor companies. Bouygues Immobilier, a property development company, is a case in point; in Spain, one thinks of Sacyr-Valhermoso. Public utilities constitute another important sector linked to the contractor’s activities [9]. Since the French July Monarchy and the early railways experience, a French concession model has emerged [10]. Gas and electricity utilities companies and, more particularly, water utilities companies are enduring ideal-types [11]. Today, granting privately financed concessions are practices that have been revived with highway and parking lot operators such as Albertis and Vinci, or with large building and civil engineering structures of a public services nature (Stade de France, Millau viaduct). Companies such as Veolia Environment are of such privately financed concession models, along with Suez, GDF or EDF, but to a lesser extent. Engineering is more and more attracting the contracting firms. In 1973, for example, Francis Bouygues argued that “concrete is grey matter” [12]. Engineering is a very large-scale activity that has given birth to many companies specialized in structure design, manufacturing techniques, process engineering and even new management methods. It is worth mentioning firms like Technip, Spie [13] or Cegelec, VSL, Freyssinet International and Entrepose Contracting in France.

14The second is the construction materials and products industry. Studying construction means analysing two industry segments, namely the building and public buildings and works industries, but also the construction material and product industry. As the concrete industry example shows, it has developed globally so as to avoid cyclical ups and downs, but also upstream and downstream of the sector in order to produce more and more added value. Products such as Ready-Mixed Concrete (RMC), High-Performance Concrete (HPC) and Ultra-High Performance Concrete (UHPC) testify to this trend development. Recent case studies centred on Lafarge or Holcim, its major competitor, have shown the relevance of such business policy. What is true for a capital-intensive activity such as the cement industry is all the truer when it comes to building-supplies distribution, a tug-of-war between Saint Gobain and Wolseley, its British competitor. The first company is a typical example of a firm developing downstream while the second, formerly active in the automobile sector, has radically changed its trade. It currently sells house building materials and products to end consumers. Groups such as CRH (Ireland) or Rockwell (Denmark) will offer interesting benchmarks as far as scale is concerned.

15The building and public buildings and works industries are also affected by such evolution. Joint-subcontracting or subcontracting practices have brought about a downstream readjustment of the upstream activities of large-scale firms. Such a move is stronger in the United Kingdom (Amec, Balfour Betty, and Bevis Land Lease) and in the US (Bechtel, Fluor and KBR, a subsidiary of the Halliburton Group) or in Canada [14]. It also concerns Spain (Ferrovial, Acciona, Sacyr-Valhermoso) and to a lesser extent, Germany (Hochtief, Bilfinger und Berger), Austria (Imbag), France (Bouygues, Eiffage, Vinci) and Sweden (Skanska, NCC). As a consequence, national models have emerged and live on despite an obvious convergence process.

163. The third line of our research project is focused on building a typology of national models. Consequently, it is necessary to be clear about the existence and limitations of national models. The research will draw a comparison between major world countries and use the examples of dominant firms mostly from Germany, Austria, Benelux (public buildings and works firms and property development), France, Italy, the United Kingdom and Sweden (public buildings and works firms). As a result, it seems possible to contrast very industrial-intensive countries (Germany, France, and even Italy) with predominantly service-intensive countries (the United Kingdom, Spain, Sweden, the Netherlands). But it is also very important to take the global environment into account and enlarge the perspective, for instance to North America (the US and Canada as regards engineering), Mexico for cement and the far East, namely Japan (public buildings and works sector, property development, engineering), South Korea (public buildings and works sector, engineering) and China (public buildings and works sector and property development).

Importance of the housing demand

19The main component of the demand of building consists in the production of housing. Gwenaëlle Legoullon, for instance, studies “the great working housing at the beginning of the French “Trente glorieuses” [15]. This period corresponded to that of thirty years of postwar economic quick growth. From 1953, the pace of housing construction escalated in France until the mid-1970s. Among the various factors of this evolution, there were the projects allocated via competitions organized by the Ministère de la Reconstruction et de l’Urbanisme or MRU (Ministry of Reconstruction and Urban Planning: the “chantiers expérimentaux” (experimental construction sites) between 1947 and 1957; the “secteur industrialisé” (industrialized sector) established in 1951, then completed in 1960. From a monographic of two important operations (Cogetravoc in Creil, from 1948 to 1952, then La Belle-Beille in Angers during the 1950s and 1960s, it is possible to consider that these sites were at the origin of large housing construction workings.

20Christel Palant-Frapier talks about “the lack of housings and the emergence of design offices in France during the 1950’s” [16]. With the French Operation of the “secteur industrialisé” launched in 1951 by Adrien Spinetta, there was a generalization of the technical Design Offices between architects and contractors. Intending to increase building productivity, this experimentation on a large scale opened original practices and new relationships between the main protagonists of constructions Office Technique de l’Habitat (OTH, 1947), Fernand Pouillon and the SET, Le Corbusier and At.bat. At this point of view, French productivity missions played a decisive role, particularly during the Marshall Plan.

21Pierre Jambard studied the case of OTH, in is paper “Banks and firms of construction: OTH, a Paribas bank subsidiary” [17]. Created by Paribas OTH made up the most French research consultancy dealing with building in the second half of the XX^th century. Because OTH fulfilled the administration desire to industrialize housing construction processes, this one established a respected model and became a key actor of the modernization of the French building industry during 1950s and 1960s. From the late sixties, Paribas group crossed a more difficult period. Indeed, the golden age of the social real estate development was finishing. At the same time, facing new rivals, OTH became less competitive. It was the beginning of a rapid decline. In 1973, after a direct intervention of Paribas, OTH became a holding supervising research consultancy firms, specialized in a particular market. More, in 1982, Paribas was nationalized. The policy was changing because Paribas new leaders must not to do anything which might compromise exports.

22The role of Paribas was more positive than this one of the Suez Group (Caroline Piquet, “Suez and the construction sector (1958-1990’s)” [18]. After the Egyptian nationalization of 1956, the new Compagnie Financière de Suez (Financial Company of Suez) choose a classic strategy consisting in having an instrument of investment in the expanding sectors of real estate and building. Interested by the adventure of the Channel Tunnel, Suez entered, in 1960, in the capital of the Compagnie Française d’Entreprises (CFE). Because it was a very costly experience, CFE was finally ceased to Bouygues, between 1973 and 1976. Suez developed real estate activities, with the purpose to compete with a big merchant bank as Paribas: it constituted a privileged sector of investment, with numerous specialized subsidiaries. Its strategy strengthened at the beginning of 1970s: Suez became allied with major builders (Toulouse family, Robert de Balkany, Jack Francès). A disengagement of the real estate sector intervened with the nationalization of the Company in 1982.

The role of public utilities

23But public utilities and facilities also constitute a leading sector for the construction industry. Ana Cardoso and Magda Pinheiro spoke about the construction of the railways network in Portugal from 1853 to 1950s [19]. Because investments were not very profitable, the state intervention was necessary for to attract both foreign capitals and technology. For these reasons, the construction was shortly dependent of the economic cycles and supposed a generalized appeal to foreign firms and technology imports, particularly of France, Britain and Germany. The intervention of foreign firms was centered on big public works and due to the weakness of the steel and iron industry. From 1976, a protectionist policy favored the development of specifically Portuguese firms (Empresa Industrial Portuguesa, A. Melo Gouveia, etc.). But, in order to realize the most difficult works, foreign forms remained always necessary (Eiffel, Krupp).

24Pascal Désabres was interested to “the civil engineering firms and the building of Paris’s “Metro” to 1946” [20]. After an area of projects and schemes from 1850 to 1890, began the construction of the Paris’s Métro, pursued of 1898 to 1946. The first step was the choice of some entrepreneurs able to build the metro. Because the 1900 Universal Fair, the works were financed by the financial market. But the Metro necessitated very special works, like the passages under the Seine River. These construction sites generated new methods, but the use of the shield was restricted to particular points (dredging under the Seine). Thanks to the Chief Engineer Fulgence Bienvenue (1852-1936), the city preferred to pay a little bit more than he could with hard negotiations, in order to keep a fruitful relation with entrepreneurs. Because the Metro implied important skills, public works firms remained for a long time partners with the City. Consequently, the schedule was respected.

25Martin Chick analyzed the retreat of the State in public utilities in “Entrepreneurs and Public Utilities: the less constructing state” [21]. After World War 2, in United Kingdom, the State was become entrepreneur, but its role was more and more discussed, because the success of the monetarism, growing budget deficit and growing national debt. Consequently, there was a change concerning public expenditure and public capital investment. In a first time, there were displacement effect of war, rise in public expenditure and in public income. From 1979, the situation was strongly changing, because cuts on local authorities and fall of government expenditures: indeed the total gross public expenditures passed of 8.9 % of GDP in 1975 to 1.7 % in 2000. Consequently privatization and Private Finance Initiative (PFI) were developing. A contrario, PFI remained unimportant, except as a sign of things to come.

The construction: big firms and small and medium sized enterprises

27In the building and the public works, the opposition between big firms on one hand, small and medium sized enterprises of the other one gave birth to specific forms of organization: subsidiarizing and subcontracting, but also cooperative practices. Dominique Barjot, for example, studied the spectacular ascent of Bouygues, in “Growth and constraints: the strategy of the Bouygues Group (1952-2007)” [22]. The adopted approach consists of a case study: the story of a leading group [23]. Indeed, in 2010, Bouygues was the fourth (and now the fifth) world group of building, civil engineering and associated services. It is not surprising the adopted perspective is the one of history business. Thus the study is organized in three parts: breakthrough of an outsider (1952-1973) ; access to world leadership (1974-1993) ; difficulties and renewal (1994-2007).

28The Bouygues Group was regularly reinforcing its position in the construction sector, from 1974 to 2007, not only by internal growth, but also external. The firm took over firms technologically very competitive as CFE, Boussiron, Dragages Travaux Publics, Losinger and VSL [24]. Nevertheless, the most important operation was the take control of the Société Chimique et Routière d’Entreprises Générales (SCREG), its main contemporary French competitor. It was the reason because Bouygues became World number 1. Subsequently, Bouygues inherited of Colas. This company was all the more interesting as it succeeded, between 1929 and 2007, in standing out as a World leader of the road construction, thanks a constant innovation effort. But the Bouygues Group was also engaged, since 1956, in the way of a significant diversification. These ways were diverse: real estate activities, off shore, food industry and, above all, water distribution (SAUR [25]). Nevertheless the most important successes were the acquisition of TF1, European leader TV channel, and the breakthrough of Bouygues Telecom, a successful outsider. The study ends in two important conclusions. Firstly, Bouygues was characterized by a specific trajectory, based on a choice in favor of technological advance and profitability on one side, on a priority on the other one, to respond to the market demand. From this point of view, the takeover in Alstom constituted a strategy turning point. If Alstom was characterized by a strong link between industry and politics, the strategic alliance with Bouygues boosted the Alstom’s activities.

29The French constructors, as Bouygues, were more and more challenged by powerful Spanish large construction companies, studied by Eugenio Torres (“The large Spanish Contractors (1950-2000)”) [26]. Spain’s large construction companies are currently part of the country’s great multinational enterprises. The companies benefitted of a great economic power and competitive ability, both inside and outside of Spain. This has given them a high profile as representatives of the national economy. The domestic market was a determinant factor of the success of these large companies: demand for civil works on the part of the State (public demand), demand for residential and non-residential building by private individuals and companies (private demand). During the period 1950-1975, the large Spanish contractors would extend their operations by horizontal diversification and would establish themselves in all of the national territory. During this period, these Spanish firms benefitted of organizational transfers from USA (US military basis in the 1950s and technical abilities of engineers trained in USA). Other important factors were the acquisition of technology from abroad (through the purchase of machinery and equipment, the acquisition of patents or creation of joint ventures with foreign firms) and the growing availability of capital for investment, stemming in part from the self-financing.

30Between 1975 and 1985, the domestic market leased to be a stimulus to the growth and the modernization: the decisive factor now became the impact of the oil crisis on the Spanish economy. The profound recession of national economy oblige the large Spanish contractors to compete abroad in international markets, generalizing a strategy than the more competitive firms (Dragados, Entrecanalaes) had begun at the end of the 1960s. If the experience straightened their role as increasingly important players in Spain’s business structure, Spanish contractor succeeded to reproduce, in markets of similar of inferior development (Latin America, North Africa and Middle East-Persian Gulf), the knowledge and abilities acquired in their own domestic market. In return, they learned much about the functioning of foreign markets. It could show itself very useful in later phases of their internationalization process, beginning in the 1990s.

31Indeed, the large Spanish contractors’ most spectacular advance took place between 1986 and 2003. During these years, they were transformed into great diversified groups, able to compete in international markets as well as at home. Tanks to the country’s entry into the European Union and the subsequent creation of a single market and currency (euro), the difference between domestic and international markets tended to blur. Consequently, the strategy of the large Spanish contractors was to increase their activity beyond the field of creation. The result was the constitution of six great construction groups (ACS, Ferrovial, FCC, Acciona, Sacyr-Vallehermoso, OHL), which have competed in the world market with other larger firms of similar characteristics both from developed (France, Germany, Sweden, but also USA and Japan) and emerging nations (South Korea, then China and Brazil).

32Javier Vidal Olivares revealed also “the crisis of the medium size construction enterprises in Spain and their internationalization between 1970 and 2010” [27]. These firms benefitted of two positive factors: the boom of the construction in Spain (modernization of infrastructures under the State impulse, boom of residential construction with population increase and tourists demand) ; the opportunities for a new type of firms, family business. Indeed, these family firms benefitted from a new cycle of construction (1996-2007). More, the specialization of these enterprises became assets, because big companies continued with their strategies of diversification. These family firms constituted a new type of emergent enterprises, because a boom demand coming from new regional governments with structural funds from European Community. The result was agreements with big companies at regional level. Now, internationalization is appearing as a way to growth. It was the consequence of the economic crisis since 2007. In this context, new mergers and acquisitions opened the way to the fact that the family firms become global payers on the construction market.

33The successive booms of the construction were profitable to manufactures of materials for public works. Lluis Viros Pujola studied the example of “Ausa, a Spanish manufacturer of materials for public works since WWII” [28]. This company was set up in an autarky context, because the policy of import substitution gave a chance for Spanish companies. The growth of the firm, during the 1960s, was boosted by the development of the Spanish construction sector and its progressive mechanization. In the 1970s, an internationalization process started. During this period, Spanish production industry was protected by the State. Surviving at the crisis of the 1980s, Ausa started a professionalization process which allowed it to compete until the 21^th century with a small range of products specialized in determined segments of the markets.

34The recent years were marked by the spectacular emergence of the Chinese construction industry. Zhou Xiaolan furnished some elements allowing an analysis of this phenomenon [29]. The turning point was the access to the power of Deng Xiaoping (1904-1997) in 1978. To this date, the Chinese construction industry was bad managed and remained underdeveloped: priority was given to infrastructures on housing and to employment on productivity gains. The reform began in Shanghai in 1980. It contained four elements; competition between enterprises for to obtain markets; reform of the management system (to separate management and shareholding) ; effort of training in order to reinforce technical skills; liberalization of the design and operating system. During the period 1980 to today, there was a change in the growth model. From 1980 to 1990, the construction sector was characterized by an irregular growth. On the contrary, since the beginning of the 1990s, the growth accelerated. The reasons of this change were the generalized separation between management and capital, the reform of the public market system, the opening of the capital market, firstly in Shanghai (1990), then in Shenzhen (1991) Stock Exchanges, and the retrocession of Hong Kong to China, in 1997. This last event constituted a chance for the newly privatized Chinese firms.

35Consequently, there was constitution of giant contractors associating constructing activities and operators of conceding activities. The most important firms were China Railway Group Ltd and China Railway Construction Corporation. The first was born in 1950 as a Works and Designs Office, become, in 1958, General Office of the Infrastructures of Railway Service. In 1989, this body was transformed in a company named China Railway Group Ltd, on the model of big US Corporations. The second company, China Railway Construction Corporation, was founded in 1971, this firm became the world number one contractor. At the same time, this firm was the eighth Chinese company any included sectors. China Railway Construction Corporation constituted also the first mover of the construction industry. Indeed, she was characterized by technological innovation (first high speed train produced by China) and strong managerial capacities, under the impulses of Meng Fengchao, the Chairman, and Zhao Guangfa, a big engineer.

Strategic effects: development of the civil engineering sector

36A consequence of the increase in importance of the firms of emerging countries on the international markets was the assertion, on the Anglo-American model, of the civil engineering sector in the developed countries [30]. The engineering activities were not a new sector, even in France, as Catherine Vuillermot proved it, in the case of the Schneider Group [31]. These activities are developed during the period 1954-1984. After the reorganization of the Schneider Group in the year 1949, Charles Schneider created ENSA, in 1954, in charge the produce studies for other entities of the Group. In 1970, the merger between the Société des Forges et Ateliers du Creusot (SFAC) and the Compagnie des Forges et Aciéries de la Loire (CFAL) was giving birth to Creusot-Loire Entreprises (CLE). This new company realized absorption of all activities of the Group in engineering, except nuclear power. But the firm preferred growth to profitability. It was the reason of its final failure (with this one of Creusot-Loire).

37On the contrary, Spie constitutes today an efficient actor of high technologies engineering. Park Rang-Ri and Dominique Barjot analyzed the passage of “Spie from the multidisciplinary contracting to the high technology engineering” [32]. Issued, in 1968, of a merger between Spie (Empain Group), Société de Construction des Batignolles (Goüin family) and Compagnie Industrielle de Tramway (CITRA, Schneider Group), Spie Batignolles gave birth to one of the European majors of the civil engineering sector (1968-1972). The new company became the most dynamic firm of the newly constituted Empain-Schneider Group, thanks spectacular successes to export. Then, facing to the fall of the Empain House and to a recessive world market, Spie Batignolles choose diversification. But, because a more and more massive indebtedness, the firm centered, between 1991 and 1995, its activities on electricity and construction.

38Of 1995 in today, Spie (formerly Spie Batignolles) opted in favor of European markets and high technology services. Between 1995 and 2002, the firm succeeded to part of Schneider, thanks to a Rachat d’Entreprises par ses Salariés (RES), a sort of Leverage Management Buy Out (LMBO), realized from 1995 till 1997, then a brilliant financial recovery, led from 1997 till 2002. During the years 2003-2005, Spie tried unsuccessfully an impossible merger with Amec, his widely dominating shareholder. It appeared to the failure of European company. After the disengagement of the latter, since 2005, Spie relaunched alone its activity, with excellent financial results.

39Another success of the French engineering had been studied by Julien Brault (“Technip or the emergence of a national champion of oil engineering”) [33]. Technip was on in 1958 as a product of the political will of De Gaulle to form a public “national champion” of the construction of energetic equipment’s from the engineering division of the Institut Français du Pétrole (French State chose to constitute a mixed capital company, based on an alliance between a French research institute and an American engineering company, the Catalytic, then Air Products). During this period, till 1974, the firm benefitted of the growing demand in refining equipment’s in Western Europe, in French West Africa, then in USSR.

40The oil shocks played a major role in the evolution of Technip, because requiring a diversification of the supply sources. Consequently, the second oil shock led to a crisis, then a deep restructuration. The crisis pushed Technip to favor internationalization of her technical research and to choose a vast reorganization. Four objectives drove the reorganization of the 1980s: marketing efficiency, flexibility of intervention on global scale, unicity of methods, operational speed. The results were satisficing: a better continuity was created between the phases of contracts acquisition, realization and payments; the marketing function was strengthened; the control function was centralized. As a consequence, the 1980s corresponded to a strengthening of multidivisional organization (as in Bechtel Corporation, on staff and lines model).

41As analyzed by Edy-Claude Okalla-Bana, SNC-Lavalin constitutes today a good example of the development of American consulting engineering (“The Quebec leader for consulting engineering SNC-Lavalin [1911-1991]” [34]). The current SNC-Lavalin company is the result of a merger between two important firms of engineering. These two companies were at the origin of the profession of consulting engineer in the Province of Quebec. The oldest was SNC. She was founded in 1911 by Arthur Surveyer (1878-1961). In 1923, he joined with two Swiss engineers, Emil Nenninger and Georges Chênevert within the company Arthur Surveyer & C^ie. During the year 1936, was created another consulting engineering firm, the cabinet Lalonde & Valois (L&V). Despite the outbreak of the Second World War, the company Arthur Surveyor & Company and the cabinet L&V obtained numerous contracts of engineering. It was the opportunity for Arthur Surveyer & C^ie to recruit, as an associate, John Turcke, a brilliant engineer issued of the Swiss Federal Institute of Technology of Zurich. This choice favored new biggest contracts, for Lavalin. Besides, both companies were exposed to the takeover by Bechtel (SNC) and Fluor (Lavalin). Consequently, supported by a consortium of banks, SNC and Lavalin concluded a definitive agreement on August 12, 1991: it was the birth of the greater consulting engineering company of Canada.

Saint-Gobain, a world leader

43Saint-Gobain Group was number 1, thanks to his domination in the glass and plaster industries and, also, the distribution of building raw materials (Catherine Vuillermot [35]). In fact, the Saint-Gobain Group results from a merger between the oldest Saint-Gobain, the French leader of the glass and mineral chemical industry, and Pont-à-Mousson, a steel and iron company specialized in cast iron pipe production [36]. Before the merger, until 1970, Saint-Gobain was already a transnational industrial group, which appeared as a world leader in the glass industry with the US PPG and Libsey-Owens, the British Pilkington and the Japanese Asahi. But Saint-Gobain was also developing its chemical activities, thanks to its partnership with both Shell France and Pechiney. During the 1950s, Pont-à-Mousson experienced success with pipe production and then had an impressive breakthrough of the housing market.

44After the merger in 1970, the firm chose to pursue its growth as a conglomerate [37]. From 1970 to 1986, during the chairmanships of Roger Martin then Roger Fauroux, the strategy was to concentrate on housing equipment and remain a big producer of glass and pipes but, because of the search for an immediate profitability, the Group also diversified into electro-technics, data processing and office automation. The consequences were a growing financial fragility and, in 1981-82, temporary nationalization.In 1986, because of the policy introduced by the new conservative majority, Saint-Gobain was successfully privatized. Under the impulse of Jean-Louis Beffa, the Saint-Gobain company concentrated its activities into its strongest sector: glass and raw materials distribution. External growth became more selective and coherent, there was the acquisition of Norton, specialized in abrasives production (1990), then a takeover of the Poliet group (1996), producer and distributor of raw material (with Point P and Lapeyre), then, finally, the repurchase of British Plaster Board (BPB), the world leader in plaster production. The consequence was a deep reorganization of the group, centering on consumer satisfaction.

45During its history, Saint-Gobain had also played an important role in the sector of the building and the public works. Dominique Barjot studied “Saint-Gobain and its activities of building and civil engineering: a contraries strategy of lines development ? [38] By contrast with Saint-Gobain, Pont-à-Mousson was characterized by a long tradition of development in the works of adduction and water treatment as well as in works of hydraulic, thanks to an important subsidiary, Eau et Assainissement (1918), to its interest in the Société des Entreprises Léon Ballot, specialized in the construction of dams, then, later, during the 1960s, the takeover of two big building firms (Grands Travaux en Béton Armé, then Balency et Schuhl). During these years of 1960 and 1970, the company of Pont-à-Mousson, then of Saint-Gobain-Pont-à-Mousson benefitted from a profitable investment for a long time: Maisons Phénix, company specialized in the construction of cheap knockdown houses. But, the most important chapter of the Saint-Gobain’s history in the building and public works sector was, in 1983, the acquisition of the Société Générale d’Entreprises, bought back to the Compagnie Générale d’Électricité. Not only it constituted an unexpected heritage of the nationalization, but also and above all, it was a poisoned gift. Indeed, SGE was the third French group of construction industry, but also was quickly in state of suspension of payments. After drastic restructuration, SGE Group was resold to the Compagnie Générale des Eaux in 1987, immediately after a successful privatization of Saint-Gobain.

The world cement oligopoly: a strong European domination

46The oligopoly of the cement doubtless illustrates best the European domination in the field of building materials. For a long time, the French group Lafarge is in competition with Holcim (ex Holderbank) for the world leadership. This prominent position was, in a first step, the result of “the ascent of a family firm (1830-1947)”, analyzed by Aurore Cartier [39]. The company was founded in 1830 by two brothers, Léon and Édouard Pavin de Lafarge. In 1847, the firm became Lafarge Frères (Lafarge Brothers) partnership, then, in 1864, Léon and Édouard Pavin de Lafarge, always in partnership. 1887 was marked by an important change, because the Lafarge House became a joint stock company, but remained a private company. During 1880s, the firm was equipped with an important central laboratory, created by Henry Le Châtelier and Jules Bied in 1887. The same year, this laboratory invented the “ciment blanc” (white cement), including aluminates. After the World War 1, the company was transformed in a public company, the Société Anonyme des Chaux et Ciments de Lafarge et du Teil. Under the impulse of Jean de Waubert, her new chairman of board of directions, the company established in United Kingdom, in 1923, thanks her subsidiary, Lafarge Aluminous Company. Between 1923 and 1932, she gets a foothold in the French colonial Empire (Algeria, Morocco, Tunisia and commercially only, Indochina). The firm consolidated her economic positions during the 1930s and 1940s, in spite of the economic crisis (thanks both national and international cartels), the German occupation and the sequestration of her big commentary of Le Teil (1944-1947).

47Become a managerial firm since 1947, Lafarge was characterized, during the fifties and sixties, by a quick growth [40]. Thanks to its conquest of the American market and to a series of external growth operations (Canada Cement, General Portland, Coppée, Compagnie des Sablières de la Seine), Lafarge surmounted without too many difficulties the uncertain situation of the 1974 to 1993 years. From 1993 to 2004, the Lafarge group became a world firm (Dominique Barjot [41]). 1993 is indeed the starting point of a sustained growth which led the group to be the world leader for cement and aggregates. Thanks to an excellent control of production costs and to high rates of investment, the group was able to maintain a high level of profitability. Important operations of external growth, the acquisitions of Redland in 1997 and Blue Circle in 2001 compelled the group to a growing debt, and to an increasing appeal to an ever more international shareholding. Submitted to stock exchange prices tyranny, the group nevertheless conciliated increasing dividends and substantial self-financing. This success is due to an efficient market strategy: a leader in Europe and North America, Lafarge compelled recognition in Africa, conquered good positions in Latin America, and made an outstanding breakthrough in the Far East, especially in China, South Korea and India. Its success is due to workforce policy, coherent strategy of sustained development and to an important effort of RD. It represents ultimate key for advance on competitors, particularly facing Holcim.

48The success of the Holcim Group is exemplar, according to the Swiss tradition of world firms: Nestlé or Brown Boveri for instance [42]. Holcim was founded in 1912, in the village of Holderbank (Canton of Aargau). From an early stage it became clear that the domestic market could offer only limited opportunities for expansion. By the early 1920’s, the company began investing in cement businesses in other European countries. This was the case in Belgium, with the 1925 purchase, and the trend was quickly followed by investments in Egypt, Lebanon and South Africa. In the years following World War II, and particularly in the 1950s and 1960s, a network of holdings began to develop in North and Latin America. In the 1970’s, ventures began in the emerging markets of Asia-Pacific. The company was reinforcing in Europe, too; particularly in France: In 1973, on the occasion of the merger between two French companies, the Ciments d’Origny-Desvroise and the Ciments du Haut-Rhin, Holderbank took a part in the new company of the Ciments d’Origny. Holderbank became the fourth French producer of cement after Lafarge, Ciments Français and Vicat. In the 1980’s, Holcim continued to expand into new markets, including Eastern Europe. A greater focus on aggregates and ready-mixed concrete production strengthened the company’s position as a vertically integrated market leader.

49A strong focus on core business activities in cement, concrete and aggregates characterized Holcim activities during the 1990’s. Company performance was enhanced. Most importantly was a quicker growth of cash flow from operating activities than net sales: the consequence was a clear increase of the operating profit margin. This resulted in labour productivity gains but, also and above all, in sustained sales growth, particularly of aggregates and ready-mix concrete. Continuing professional development programs for employees, coupled with a best practices policy, ensured challenges were met with creative solutions. Entry into new markets, particularly within Asia, expanded opportunities for the Group. In May 2001, the name of the Group was changed from Holderbank Financière Glaris Ltd to Holcim Ltd. Present in more than 70 countries, Holcim Group constitutes a symbol of the excellence of the Swiss construction industry, particularly in the large dams sector. A world leader since the sixties, the Holcim group must today face formidable competition. Met then exceeded by its great competitor Lafarge, it is also under the threat of Mexico’s Cemex which, since 1993, has grown rapidly. Nevertheless, one can see that its two main competitors have prevailed in terms of net sales.

50Holcim has lost some market share, but it particularly suffers from lower productivity. Holcim already lies in last place, but even still it has lost ground: based on 100, Holcim’s labour productivity index was at 103 for Lafarge in 1993. Without a doubt it is the consequence, for Holcim, of a strategy that focused more on emerging markets than on competitors. This strategy is without a doubt good because, in terms of operating profitability, Holcim outstrips all its competitors. Moreover, its progression had been stronger than that of its competitors. Holcim draws actual benefit from the global implementation of its cement activities. Certainly Lafarge still dominates the cement industry by the amount of its sales but, ultimately, Holcim should take advantage of the above production capacity. Rather than challenging Lafarge’s leadership in Europe and North America, Holcim prefers a clear prevalence in Latin America and Asia as well as maintaining contact with Africa and the Middle East. Today, the danger may be coming from Cemex, which is very interested in the Australian market, or from Heidelberg Cement, after its merges with the British Hanson [43].

51This last operation particularly risks weakening Holcim’s relative position in the field of aggregates, where Lafarge clearly dominates. However, the main threat to Holcim is to lose the battle over ready-mix concrete. Indeed, in 2004, Cemex had taken control of the world’s number one, the British RMC Group [44], outclassing both Holcim and Lafarge. The oligopoly of the cement companies, despite recurring predilections from cartel agreements, has not lost its competitive nature [45]. Holcim is today in competition with Lafarge for world leadership of the cement industry. But, in terms of cash flow, it is Holcim that dominates. As the most European cement group (Lafarge, Heidelberg Cement, Italcementi, Buzzi Unicem, Dyckerhoff, Vicat), Holcim took its origin from the spirit of the Schmidheiny family’s entrepreneurship. Born from the initiative of a Swiss manufacturer’s family ingrained in protestant ethic and based on three intimately related trades, Holcim experienced sustained growth characterized by a good control of production costs, but extensive and supported by a massive and continued investment effort. This growth found itself in efficient management, but also strategy founded on emerging countries and sustainable development.

52In front of these two world leaders, the Italcementi Group was become the fifth world cement producer, thanks to a merger with Ciments Français in 1992. Historically, Ciments Français was (and remains today in France) one of the most important competitors of Lafarge, with Poliet and Vicat. Poliet et Chausson was studied by Cécile Coursiéras (“Poliet et Chausson: growth, consolidation and decline of a French cement firm 1901-1971”) [46]. Three periods followed one another in the history of this company. The first, “start and consolidation”, from 1901 till 1919, was marked by the progressive constitution of a cement market, the emergence of a market of building raw materials, then a consolidation during the 1910’s. The second period, between 1920 and 1932 was characterized by a spectacular take-off during the 1920’s, but the prosperity remained fragile, otherwise imaginary, because of an excessive and increasing indebtedness and, finally, the bank take over by Lazard Brothers in 1933. The last period knew a long, but relative decline, which saw following the stronghold of financial groups, from 1933 till 1954, the shadows of the competitors between 1954 and 1969, then, in fine, the BPPB (Banque de Paris et des Pays-Bas) takeover. Indeed, banks constituted frequently a necessary partnership of the firms, but also a competitor of industrial groups [47]. Finally, in 1971, because a strategic choice of Paribas, Poliet et Chausson merged with Ciment Français its activities of cement worker with those of Ciments Français. From now on, Poliet gave up the production of cement. Ciments Français pursued only a strengthened activity.

53According to the Vera Zamani’s book [48] and the study of Marco Bertilorenzi [49], Italcementi offered the example of an atypical firm. The Italcementi’s story is this one of “the passage from regional enterprise to a transnational group”. After a phase of the foundation of a regional business, between 1864 and the 1910’s, corresponding to the time of the Pesenti brothers, the partnership became a national cement affair under the impulse of Antonio Pesenti, during both the 1920’s and 1930’s. From the 1940’s to the 1970’s, the time of Carlo Pesenti corresponded to the entrance within the Italian Gotha of the business. After a period of growth based on a diversification, Giampiero Pesenti committed, between the 1980’s and the 2000’s, a policy of return towards the fundamental business of the firm and of internationalization to the world ambitious. This orientation confirmed in the recent years under supervision of Carlo Pesenti II.

An oligopoly confronted with new challenges

54The European oligopoly of the cement was confronted with new challenges. The first one of these ones resulted from new competitors stemming from emerging countries as Cemex. Indeed, Cemex constitutes today the most important challenger of the European cement industry [Dominique Barjot, “Cement: the ascent of a global firm in emerging countries (1906-2009 [50])”]. Founded in 1906, the Mexican group is the third world cement producer, but the number one for ready mix concrete and in Latin America. He is revealing the success of a big firm in an emergent country, Mexico. It was the result of a progressive ascent. From 1906 till 1992, the firm was characterized by a quick growth pulled by the market. If the Cemex’s take-off was delayed by the revolution until 1930, the company adopted, from 1931 till 1975, a strategy associating both internal and external growth, then, during the years 1976 to 1989, made a commitment in the conquest of the national leadership. The period 1992-2006 corresponded to the passage from the multinational to the global firm: in the term of a breakthrough realized from 1992 till 1996, Cemex Group asserted himself as a leader, and then exerted his leadership.

55What where thus the factory of this “miracle” ? The first reason held the made breakthrough between 1940 and 1982. That this resulted: firstly of a change of scale, from local to multiregional; secondly of a process of restructuration and vertical integration, thirdly of a new economic policy in favor of the cement industry, from 19476 till 1989. Then Cemex entered on the world market: the firm succeeded in its conquest of the absolute supremacy in Mexico, before committing, between 1997 and 2000, a successful process of multinationalization based on a global strategy associating investments in technology and trading. Today, Cemex Group is characterized by an ambitious strategy, defined in 2004: to increase the part of market, to improve the knowledge circulation, to prepare the future leadership, thanks to the take control of the British RMC (Ready Mix Concrete), to define an efficient financial strategy. But, since 2007 and the world economic crisis, Cemex operated a strategic adaptation, by developing in particular an original strategy of sustainable development: “building the future” in favor of the personnel, the human environment and, finally, the world.

56Indeed, the world oligopoly of the cement industry hesitated between competition and cooperation (Dominique Barjot, “The majors of the cement industry and the birth of the policies of sustainable development in Europe” [51]). Today, the cement industry remains an industry dominated by European, but also characterized by a recent, but powerful movement in favor of the sustainable development. Since 1993, in this domain, Lafarge is exerting the responsibilities of a world leader. In 2008, Lafarge decided on an ambitious and complete planning of sustainable development. This priority also corresponded to the choices of three leading players of the cement world market: Holcim, the world reference, because a strategy very early directed to the sustainable development; Cemex, an emerging multinational facing the same challenge, but having adopted, from 1993, a coherent strategy on the subject; Heidelberg Cement, a latecomer, but higher ambitious, and giving the priority to environment and biodiversity since 2003. Their most important European outsiders are also attentive to the problem of the sustainable development: Italcementi, characterized by a tardive (only since 2000), but very effective action; Buzzi Unicem, the first in Italy, during the 1990s; Vicat, a family group favoring productivity, but leading a pragmatic action in favor of the environmental protection.

Technological innovation

59Europe constituted a place of technological innovation [54]. This was the consequence of competition (or cooperation, according to the successive periods) between two efficient systems of technology training. In Germany, a first system was founded on the idea of “pure science”, which came from the successful reputations of national universities. In France, there was an opposite system based on high-level engineering schools (Polytechnique, Centrale Paris, Arts et Métiers) or scientific schools (École Normale Supérieure). But, even in Germany and largely under the influence of the French system, excellent engineering schools were created during the XIX^th century. The most important difference was found between Germany’s Ingenieur Doktor and France’s engineers.

60Consequently, engineers played a major role in the development of the construction industry sector. These engineers became founders of firms (Edmond Coignet, Simon Boussiron [55], Wayss und Freytag) or were associated with the top management (within Boussiron, Campenon Bernard or Dywidag, for example). Moreover, there existed in these firms strong technical traditions: Freyssinet and its trainees, both students and apprentices, offer a good example within both the Entreprises Campenon Bernard (ECB) and its subsidiary, the Société Technique pour l’Utilisation de la Précontrainte (STUP) [56]. More largely, engineers developed a logic of technical networks: this was clear in the United Kingdom’s railway sector, Belgium’s tramway construction (Empain Group) and France’s electricity sector, with a strong development of electrical networks engineering (Société Parisienne d’Installations Électriques or SPIE [57], Compagnie Générale d’Entreprises Électriques or CGEE, Compagnie d’Entreprises Électriques et Électromécaniques or CEEM-TP).

Control of technological progress

61European supremacy was founded on controlling technological progress. This happened because German and French firms took advantage of British, and then US, firms. Indeed, there existed two systems:

1. Anglo-Saxon, founded upon the superiority of engineering offices over suppliers (contractors) and buyers (public administrations). Consequently, to cover the responsibilities of the engineering office, the same engineering offices tended to overvalue the work’s cost;
2. Continental (German or French), based on the superiority both of public administrations as buyers and contractors as suppliers, as well as on engineering offices. Subsequently, both administrative and contracting firms internalized research and development (contrary to Anglo-Saxons). This appears particularly clearly in the road construction sector: Colas, the European leader (and likely world leader) of this sector benefitted for a long time from the most important private laboratory in the world concerning road construction technologies.

62This technological advance was the major reason for the European cement industry’s conquest of the American market. Lafarge, for instance, invested massively in R&D (research & development), as did Holcim, Vicat, Heidelberg Cement, and Ciments Français and later Italcementi and Buzzi Unicem. At the same time, this technological advance remained a necessity for Europe. When the technological advance did not exist, Europe practiced an efficient use of technological transfers. This existed between Europeans [58]. For example, France imported the Dywidag system of prestressing concrete (as in the case of Grands Travaux de Marseille immediately after WWII) or the German process for building bridges after WWII (Compagnie Industrielle de Travaux or CITRA [59], of the Schneider Group, Société Générale d’Entreprises and even Campenon Bernard, etc.). Another case of technological transfer, from the United Kingdom, was the Société Routière Colas (now Colas), born from Société Générale d’Entreprises’ adoption of the British Cold Asphalt Process [60]. But Europe exported, too. France, for instance, sold directly or granted exploitation of its patents concerning reinforced (Monnier, Hennebique, Coignet, Boussiron) or prestressed (Freyssinet to Wayss und Freytag) concrete.

Better risk management ?

64To a large extent, Europe’s biggest firms benefitted from better risk management [62]. Thanks in particular to their vast colonial experience, these firms were able to efficiently combine both works and public utilities exploitation; this was clear in the UK (Balfour Beatty), Belgium (Chemins de Fer et Entreprises or CFE) and France (Société Générale d’Entreprises, Société Anonyme Hersent, Société de Construction des Batignolles [63]). More recently, this model was successfully applied by Spanish firms (Ferrovial or FCC) [64]. European firms frequently gave priority to their self-financing. We can observe a similar policy in the United Kingdom, France and Belgium. Thanks to the holding system, it was possible also to preserve family interests, as in Belgium (Ackermans Van Haaren), in France (Fougerolle [65], Goüin and Hersent [66] families) or in England (Nuttal). But self-financing and constitution of holding have also been adopted by managerial firms (Grands Travaux de Marseille, Hochtief, Bilfinger und Berger), but not always (Philipp Holzmann).

65In fine, European firms preferred to give priority to profitability rather than growth: this was the case with SGE, then Bouygues or Dumez. This was not a specificity of family firms, but was also practiced by managerial firms (GTM through 1973, Hochtief, Conrad Zschokke). Nevertheless, the priority of high profitability rates was more imperative in the cement industry because of this sector’s high level of capitalistic intensity: Lafarge and Holcim exchanges began before WWI, with a strong interest in the American system (mechanization), and then in industrial rationalization (Taylorism) [67]. However, success occurred only after WWII, thanks notably to productivity missions [68]. During the 1960s, European firms progressively adopted the model of the multidivisional and managerial firm. We can clearly observe this process in contracting, for instance in Spie Batignolles [69] (Bechtel model) and in Bouygues (PERT planification method marketing). Above all, the process of Americanization [70] was most spectacular in the raw materials industry: after an important audit of the Mac Kinsey office (1965), it adopted the staff and line system (1968).

External organization

66In raw materials, because activities are very capitalistic, there were precocious constitutions of cartels [71]. In the cement industry, these cartels were firstly regional and then national. A systematic organization appeared during the twenties, but it was completely constituted during the thirties. International cartels came later, with the constitution of Intercement (1937). This structure remained because of growing international competition. In the glass industry, international cartels developed early: for circumstantial reasons, during the cyclical economic crisis of the second part of the XIX^th century; in the most stable form with the Convention International des Glaceries (1906), between Saint-Gobain, Pilkington and Belgian industrialists. During the twenties, international cartels held strong against American competition (Libsey Owens, PPG) and, later, notably against Japanese competition (Asahi Group).

Advantage in terms of commercial know-how and the support of banks

67Europe benefitted from the strongest firms both in terms of commercial knowledge and support from banks [72]. Commercial know-how was particularly developed in the case of British, German, Dutch, Swedish and French (Bouygues, Lafarge, and Saint-Gobain) firms. If innovative processes classically characterized German contractors (particularly in bridge construction), then innovative products frequently constituted a good argument for French firms, for instance in the road construction industry (Colas, which was also creative concerning the innovative processes). But these enterprises did not refuse to advertise, like Bouygues, Colas, Entreprises Jean Lefebvre, Skanska and, above all, British contractors (Tarmac, Carillion, Wimpey, etc.).

68Support from banks was decisive. In spite of a strategy of financial independence, French and British firms were usually associated with banks. Before WWI, their role consisted essentially to furnish short-term funds. This did not exclude strong alliances, particularly in order to export. This was the case for France in Russia or in the Ottoman Empire, between the Banque Française de Crédit Industriel (BFCI), the Etablissements Daydé, Fougerolle Brothers, the Société des Grands Travaux de Marseille and the Société Générale d’Entreprises; in Morocco, where strong competition opposed Schneider et C^ie [73], Hersent Brothers, the Banque de l’Union Européenne and, on the other side, the Banque de Paris et des Pays-Bas, Daydé, Fougerolle, GTM and SGE.

69Banking intervention developed in the interwar period. In French Black Africa, for example, fierce competition pit a new group constituted of the Banque de l’Indochine, Dragages Travaux Publics, Entreprises de Grands Travaux Hydrauliques and the Régie des Chemins de Fer et de Travaux Publics against the former: on one side, Schneider et C^ie [74], Hersent and, sometimes, the Société de Construction des Batignolles [75], and on the other side, the Compagnie Générale des Colonies group (Paribas, Fougerolle, GTM and SGE). After WWII, banking intervention was at its strongest, but with unequal success: generally speaking, Paribas adopted a more efficient strategy (a durable alliance with Fougerolle, today Eiffage, Spie Batignolles and Campenon Bernard), than Suez. Indeed, the Compagnie Française d’Entreprises and its subsidiaries went through bankruptcy in 1974, to the exclusive profit of Francis Bouygues, which obtained unilateral profit of his alliance with the Compagnie Financière de Suez.

70In comparison with the French case, banking intervention was probably less developed in the UK, but not in Belgium, Germany or Italy. In the first nation, the Société Générale de Belgique controlled, during the first third of the XX^th century, the most important Belgian contractor, Chemin de Fer et Entreprises and its French subsidiaries (Société Nationale des Travaux Publics and, in partnership with Paribas, Société Nouvelle de Constructions et de Travaux). In Germany, Philipp Holzmann was durably allied with the Deutsche Bank, its strongest shareholder; at the same time, Hochtief was controlled by the Hugo Stinnes Konzern, the electrical group RWE. In Italy, the leading contractors, Impresit, were funded by banks up to its takeover of Fiat during the 1930s, sustained by the Italian State.

Skilled engineers and workers

72Indeed, Europe benefitted from very skilled engineers and workers [77]. The role of French and German engineers is well known, but there were many good engineers in Belgium, Switzerland (Polytechnicum of Zurich and Lausanne) and even in Italy (Polytechnium of Torino). Where workers are concerned, the better example is probably Italian. During a long time, Italy exported skilled workers, particularly in France, and then used these workers on the export markets, notably since the end of the 1950s. From this point of view, Europe benefitted from the colonial experience. This was specifically clear concerning the United Kingdom. British contractors completed massive works within the formal Empire: as in India and East Africa, where British engineers and enterprises such as Cleveland Bridge built a number of railway lines and large public works. The same contractors worked massively in the informal Empire: this was the case in Argentina, which benefitted, before WWI, of an exceptional network of railways and where Walker, a big contractor, built the Buenos Aires harbor. But they preferred to work in the dominions: steam power stations in the South Africa Union or bridges in Australia (the famous Sydney iron bridge, conceived by French engineer Georges Imbault and built by his firm, Dorman Long, at the eve of the 1930s.

The colonial experience: a decisive role

73France also completed a large number of public works and buildings in its own colonial empire [78]. French contractors built the biggest railways, an unequaled success: if the Dakar-Saint-Louis and then the Bône-Guelma offered profitable public utilities, a number of projects, such as the Yunnan, constituted costly failures using forced labor [79]. A contrario, working in the empire furnished real opportunities for testing innovation, like in Morocco where the Chemins de Fer du Maroc network were systematically electrified before the metropolitan one. French contractors completed a number of important and innovative dams (Algeria, Morocco) and bridges (Eiffel and its mobile bridges in Indochina, Boussiron in North Africa [80]). It was the same with harbors (Tunis, Dakar, Casablanca, Alger, Haiphong, etc.), plants (the steam power station of Afourer in Morocco or Edea in Cameroun) or dredging works (Dragages Travaux Publics in Indochina). France and the United Kingdom were not exceptions. Belgian firms worked actively in the Congo (Leopoldville-Matadi railway, Matadi Harbourg), as did Dutch contractors in Indonesia for hydraulic and agricultural works or Italian companies for hydraulic works, particularly in Libya.

74European firms were in an excellent position, after the WWII, to satisfy the requirements of developing countries that were progressively moving toward independence [81]. This created an opportunity for Scandinavian (Skanska) and Swiss (Zschokke) contractors. But their French and Italian competitors succeeded in conquering these new markets: also, Dumez in Egypt, Kenya, Uganda, and later South Africa, Indonesia and Impregilo, resulting from a merger between three Italian firms (Impresit + Girola + Lodigiani), in British or French speaking Black African countries. Thanks to systematic competition to obtain works financed by the World Bank, Italian firms completed an impressive international breakthrough, particularly in the oil engineering sector with Snamprojetti, then Saipem. But the success of European firms, including German, Dutch and later Spanish contractors, largely resulted in some technological transfers of Anglo-Saxon financial practices: build operations transfers (BOT) or public private partnerships (PPP). This constituted the most important reason European firms’ success in the US market (Skanska, Hochtief, but also Lafarge, Holderbank) and in Latin America (French, then Italian and lastly Spanish contractors).

The decisive role of state economic support

75European contractors largely benefitted from state economic support. Indeed, a number of state policies played in the favor of construction firms: housing policies of course [82], but also public market policies (in France, Italy and the United Kingdom particularly), support to exports (export subsidies practiced by Italy) and technological support (building industrialization in France during the 1950s and 1960s, cooperation between public and private research, as in France around the Laboratoire central des Ponts et Chaussées). The Marshall Plan offered, after WWII, a good example of this technological support [83]: technology imports were favored by the Marshall Plan counterpart [84].

76European firms also benefitted of narrow relations between professional and political organizations. In all European countries, contractors are organized into powerful organizations that lobby constantly: in France, this was the case with the Syndicat Professionnel des Entrepreneurs de Travaux Publics de France, constituted in 1882 with the launching of the Freycinet Plan and very active during and after WWI [85]. Frequently, contractors became politicians: in France, we can mention Louis Loucheur, who played a major role during WWI, 1920s senator Léon Chagnaud, or Jean-Marie Louvel, member of the resistance and then Minister from 1940 to 1969. Besides this, a number of European contractors financed political forces in favor of the right (Louis Loucheur and Le Petit Journal), the left (François Mercier), the Radical Party (André Borie), or the extreme-left (Vicat family).

A historical leadership

78It resulted from an old economic and technical leadership, largely born before WWI. It was clear in civil engineering, thanks to the precocious world role of UK contractors and the ascent of other European competitors: Belgian and French, then Dutch, German, Italian, Swiss and Swedish. In spite of the relative decline of the European firms during the twenties, European contractors, particularly French, Italian and German, became competitive during the 1950s and 1960s; then, in a second phase, due to the large demand generated by two petrol booms, during the seventies. The same situation can be observed in the cement industry. After WWII, Europeans progressively refunded their pre-WWII hegemony. More recently, thanks to massive restructuring, European firms have accessed world leadership in raw materials production and distribution.

But a fragile leadership

79But this leadership remained fragile. Indeed, since WWI, the US dominated in technical engineering, the most profitable sector of the construction industry. This was especially evident in the oil industry, with a lot of giant engineering firms: Halliburton, Schlumberger, KBR (Kellogg, Brown & Roots), Fluor, Mc Dermott and Foster Wheeler. In this sector, European competition was limited to a narrow group of competitive firms: after a strong process of concentration, there were only two groups, Saipem (Italy) and Technip (France). Moreover, European contractors were faced with growing competition from emergent contractors: Japanese (Kajima, Shimizu, Taisei, Obayashi and Takanaka Corp.), then, from the 1970s, Korean (Hyundai Engineering and Contracting, Samsung Engineering, Posco) and Chinese (China Railway Construction Group, China Railway Group Ltd, China Communications Group and China State Construction Engineering Group). A similar evolution characterized raw materials production and distribution with the ascent of Mexico’s Cemex and Brazil’s Cimpor (bought by Votorantim from Holcim and Lafarge) and building raw materials was becoming a preferential zone for the emergence of the new multinational happening in emergent countries.