Despite an uproar in West Germany over the potential loss of a key symbol of its economic miracle, France is pressing ahead to acquire a German partner to build a European electronics industry that can meet the high-technology challenge posed by the United States and Japan.
The state-owned French company Thomson-Brandt, rebuffed by the West German cartel office in its bid to buy controlling shares in Grundig, announced plans today to take over the radio and television unit of AEG Telefunken, the electrical giant that rode the crest of the postwar consumer boom here until nearly succumbing to bankruptcy last year.
The Socialist government of Francois Mitterrand has insisted that European electronics firms must pool resources to compete effectively with advanced U.S. and Japanese companies. But that argument has aroused suspicions among German politicians and trade union leaders who fear that French absorption of one of their leading employers will result in plant closures and a loss of business sovereignty.
Thomson-Brandt is regarded with particular distrust because it slashed employment at several German plants that it acquired earlier, arousing nationalistic outrage here at a time when West Germany is suffering from record unemployment.
When the French firm tried to buy Grundig three months ago, workers in Bavaria staged angry demonstrations after one of Thomson-Brandt's managers was quoted in a West German newspaper as saying "we will have to kill some jobs."
West Germany's cartel office, however, finally ruled today that the proposed merger was unnacceptable because its lopsided market share of color televisions and video recorders would inhibit fair competition.
The Dutch electronics giant, Phillips, owns a 24 1/2 percent share in Grundig and the cartel office believed that a fusion of three large companies in the video market would be tantamount to monopoly.
Unlike the outcry over Thomson-Brandt's involvement in German electronics firms, Phillips has found a welcome reception.
When Grundig became seriously endangered by acute competition from Japanese firms, Phillips stepped in to form a partnership that produced Video 2000, which became the only successful European video recorder.
Following Thomson-Brandt's failed bid to gain control over Grundig, Phillips may now try to buy out the company from its founding patriarch, Max Grundig.
The Dutch firm enjoys a solid reputation in West Germany for preserving employment at local sites of its foreign subsidiaries and has not incurred any of the enmity leveled against Thomson-Brandt.
After failing to persuade Phillips to give up its shares in Grundig in order to get the merger plan approved, Thomson-Brandt changed tactics and decided to go after AEG Telefunken.
The French apparently were convinced that the cartel office would be willing to approve a plan calling for Thomson-Brandt to acquire 75 percent share in AEG Telefunken's radio and television subsidiary.
Nonetheless, the new initiative is expected to revive consternation over a state-owned French company grabbing an important stake in a major German electronics firm at a time when Chancellor Helmut Kohl is advocating less government involvement in business affairs.
Kohl and Mitterrand share a close affinity on defense issues, a factor that contributed to the French Socialists spurning the Social Democrats and tacitly endorsing Kohl in the recent election campaign.
Unless some guarantees are provided over jobs, however, Thomson-Brandt's courtship of German companies could spell the end of the honeymoon between strange bedfellows in Paris and Bonn.