Mulinational companies transmit technological change around the world today with unprecedented speed.
The decision by one of these huge companies to introduce a new technology -- or not to -- can rapidly transform international trade patterns, affect jobs and alter life styles.
Americans are accustomed to believing that U.S. companies are the technological leaders in virtually every area.
But in the global tire and rubber industry, a French company led the way in the 1960s in perfecting a new generation of technology -- the steel-belted radial.
As michelin began introducing and selling this product around the world, American workers and the U.S. economy were the losers.
The steel-belted radial lasts longer, gives better fuel mileage, holds, the road better and probably is safer than conventional bias and bias-belted tires.
European motorists by the thousands drove on them before Americans did.
U.S. auto companies did not equip a single new car with these tires in the 1960s, and U.S. the companies did not even manufacture steel-belted radials in the United States in that decade.
In 1973, when the sudden rise in gas prices led to demands for fuel economy, U.S. auto companies and American motorists switched massively to radials -- and Michelin and other foreign companies rushed to fill the market.
Today, largely as a result of this, the United States is the world's leading tire importer. Americans spend $1 billion a year on foreign tires.
One passenger car tire out of two sold in the United States is a radial compared with one out of 25 in 1970.
Michelin, as a result, has moved into fourth position in tire sales in the United States, surging ahead of the U.S. majors Goodrich and Uniroyal.
Firestone's fortunes have been sinking. Firestone has lost millions of dollars, tarnished its good name and been forced into a merger with another company, Borg-Warner, in part because of trouble handling the new radial technology.
American workers have been adversely affected by Michelin's success. About 9,000 fewer Americans work in the U.S. tire industry today than in 1970, largely as a result of the massive imports and stagnating domestic tire output.
These developments are one example of the way a breakthrough in technology by one of the huge multinational companies affects nations and people around the world.
To understand the importance of a technological breakthrough like the development of radial tires, it is helpful to visit Goodyear's "international technical center" on a hilltop in Luxembourg.
Because the technical center is where tires are tested and new designs and technology are tried out, it holds a key to the very survival of the company in the strnggle for technical superiority that is now underway.
"This is not a static technology," says director Fred J. Kovac, as he leads a visitor through the laboratories and computer rooms.
In one part of the building, Good-year employes of different European nationalities design new tread configurations on cathode ray screens, test the strength of the tiny wires used in steel belts, and X-ray tires to make sure the components are correctly placed.
Elsewhere, newly designed tires are "torture-tested" against spinning 12-foot-high wheels while meters and gauges measure the wear, "roll resitance" and internal heat buildup that can cause belts to separate from treads.
At a nearby test track, European drivers trained to sense minute variations in a tire's handling ability road test tires, while underground cameras photograph a tire's performance on wet roads.
The men like to call their product "the most complicated piece of engineering on a car," and each stage of the production process poses challenges requiring a trickly marriage of chemistry and physics.
The inner "cords" of a passenger car tire (see drawing) are made of nylon, rayon or polyester that is coated with a rubber mixture. This mixture is itself a complex, formula-based blend of natural and synthetic rubber, car bon, sulphur, chemicals and acids, all mashed and cooked together in a mixing machine called a Banbury.
The belts of tiny steel wires which wrap around the tire in the direction of travel have to be dipped and laminated in brass or other coatings under pressure so that they will adhere to rubber. This dipping process is a closely guarded secret.
The outer "tread" has to be designed so that the lateral grooves pump or spray water from underneath a tire running over wet roads at the rate of at least a gallon a second at 60 miles an hour.
In a typical tire factory, the inner cords, belts and tread are rolled together on a revolving drum, or lathe, and finally sent off to be vulcanized in a mold that resembles a giant waffle iron.
Technical innovations and engineering coups have stamped the history of the industry almost from the time that Englishman Robert William Thompson built and patented a pneumatic tire in 1846. Sixteen years earlier, Charles Goodyear had invented vulcanization, which made rubber impervious to heat or cold, by mixing it with sulphur and heating it.
Patent wrangles and lawsuits over tire and rim designs were common as tire longevity moved steadily up from 2,000 miles at the turn of the century to 50,000 miles or more on today's high-performance radials.
In the years immediately after World War II, U.S. tire companies enjoyed immense advantages over their European competitors. The European auto industry was crippled, so dealers imported unassembled American cars equipped with suspension systems and wheel sizes suited to conventional U.S. tires.
As the European automobile industry revived, tire requirements changed. European motorists drove smaller European cars faster and harder over winding, rougher roads than Americans were accustomed to.
Michelin, the family-owned French company at Clermont-Ferrand, is credited with inventing the radically different radial tire in the 1940s.
In conventional U.S. "bias ply" tires, the inner cords are placed at an oblique angle of about 37 degrees to the line of travel. Michelin's radial cords were set exactly at right angles. Michelin initially added another new wrinkle -- a reinforcing, wrap-around belt of rubber-coated rayon.
Although costlier to produce, the belted radial withstood heavier loads. held the road better and lasted longer. Because of the configuration of the internal components, the radial also rolled over the road with less resistance, resulting in fuel savings of up to 85 percent -- an important factor for Europeans who paid two to three times as much for gas as Americans.
This long-wearing, economical tire was a hit with European car companies and motorists.
Michelin also had the advantage of being integrated into the European automobile industry. With a 53 percent interest in France's Citroen, it could see to it that Citroen used the tire and adjusted the car's suspension system to compensate for the radial's somewhat rougher ride at low speeds.
In the 1960s, Michelin added yet another new twist -- the steel belt, which gave the tire still more strength and durability.
In the 1960s, Goodyear and Michelin were following diametrically opposed strategies -- both closely linked to the broader geopolitical designs of their home nations.
As France dismantled its colonial empire in Indochina and North Africa, President Charles de Gaulle exhorted French industry to strive for greatness through technology.
At the same time, U.S. multinationals followed the postwar spread of American political influence through Asia, Africa and South America. Goodyear, Firestone, General, Goodrich and Uniroyal carved out sheres of influence in countries all over the world.
Moreover, developing countries, short on cash, were content to settle for plants that utilized less than the latest in advanced technology.
This also suited the U.S. multinationals. But the billions of dollars they invested in setting up tire manufacturing operations around the world drained surplus capital away from their research and development efforts.
As the U.S. companies created a network all over the world, Michelin poured hundreds of millions of dollars into radial tire development and into building new radial plants in its home territory of Europe.
Even today, Michelin makes tires in only two developing countries -- Neigeria and Algeria.
As the radial tire began in sweep Europe in the 1960s, the U.S. tire and automobile industry stuck with conventional tires.
The auto makers wanted a cheap tire that gave a soft ride, and the biasply tires produced in the ancient red brick factories of Akron filled the bill.
"The automobile companies had traditionally catered to soft ride and to purchase price, and neither of these was compatible with radials," recalls Goodyear Chairman Charles J. Pilliod, Jr.But the executives now acknowledge that their companies were not anxious to move into production of a product that took twice as long to wear out.
In 1966, Michelin began selling some of its X-series radials in the United States under a Sears label. Some European and Japanese radials also were entering the country on foreign cars.
But it was a trickle, as long as the U.S. tire companies were shielded from radial competition by the antiradial policy of the American auto companies.
Not until 1969 did General Motors alter the suspension systems of some models to accommodate radials. Ford quickly followed, putting foreignmade, steel-belted radials on its luxury Lincoln Continental.
In 1973, the oil price increases put a premium on fuel economy and set the stage for Michelin's invasion.
General Motors and Ford ordered radials for some 1974 models, and Michelin, which had waited patiently for its chance, poured radials into the United States to meet the demand.
It built a new tire plant in Greenville, S.C., and in an ultimate gesture of effrontery, erected a big Michelin advertising billboard in Akron.
That the U.S. tire companies were unprepared for the radial age is widely acknowledged. In 1973, only Uniroyal had a U.S. radial plant in operation.
Goodyear's radial research, centered at the Luxembourg technical facility, was hampered by lack of support from Akron. The company experimented with rayon-belted radials in the 1960s, but did not produce a steel-belted radial for passenger cars until it marketed its G800 Plus S in Europe in 1972.
Goodyear at that time still was having trouble with internal heat build-up and belt separation in its radial truck tires.
In the late 1960s, Goodyear began aggressively marketing a hybrid -- the bias-belted tire -- as a means of staving off any future radial deluge. The tire added strengthening belts without adopting the radial's structure -- or matching th radials' long-mileage performance. The strategy was costly in terms of new advertising and equipment, but it was not successful.
Pilliod, whose credentials to take over the Goodyear presidency in 1973 were strengthened by his early warnings about the radial challenge, has ordered massive investments in radial plants in the United States.
Company officials are pleased that the new Goodyear radial truck tire, the Unisteel, has been ordered by a large French trucking firm that switched from Michelin.
Nevertheless, the French conquest of America has served as a harsh reminder of the highly competitive world inhabited by the multinationals.
As a tire company executive remarked: "Americans like Perrier water -- and Michelin tires."
Next: America and the multinationals