266 REFLECTIONS ON CHARACTER AND LEADERSHIP
Today, with a membership of twenty-seven states, and a combined gross
domestic product (GDP) that accounts for approximately 30% of the
world ’ s economic output, the sense of community and relative simplicity
of management in the original EU has been lost. Its growth has brought
baffl ing complexity. There are more candidates for membership waiting
in the wings, several post - communist nations, and Turkey, a culturally,
historically, and religiously very different country. The manageability
and viability of the European Union is an issue debated by many political
analysts. Business organizations wanting to navigate through this complex
network of relationships require extremely talented leadership.
To illustrate the complexity of navigating in the entity called Europe,
take the incident at the Perrier bottling plant, at a source near Verg è ze,
in France which occurred a number of years ago. It demonstrated some
of these complexities — the kinds of paradoxes executives have to deal
with. Returning to our example, Perrier bubbled away profi tably from
1898 through the roaring 1980s, when Perrier was the ‘ it ’ drink for the
scions of Wall Street and their transatlantic peers. Profi ts were shared
with Perrier workers, who had regular pay raises and generous holiday
leave, and were referred to as ‘ co - managers ’ of the plant. Then in 1990,
traces of benzene were found in a bottle bound for the USA, and by
1992 Per r ier ’ s US market had dried up.
The company was saved from bankruptcy by Nestl é , a Swiss organi-
zation with the global experience and clout to pull Perrier out of its
slump and reposition the iconic green bottle in the world ’ s classiest
watering holes. And yet, Nestl é has not made much of a profi t on the
Perrier brand. The Conf é deration G é n é rale du Travail (CGT), a staunchly
left - wing French union supported by nearly all of Perrier ’ s workers, dug
fi rmly into its entrenched position, determined to protect employees ’
perks. By late 2004, Nestl é was thinking seriously about selling the
company. In response, the CGT decided to begin the process of classify-
ing Perrier as an AOC ( Appellation d ’ Origine Control é e ); if awarded, this
classifi cation would mean that the Perrier brand name could only be used
for water bottled in Verg è ze — in other words, it would remain 100%
French. Nestl é executives believe that if the CGT would back down,
Perrier could be transformed into a robust global brand, bottled at several
international locations. This stalemate almost led to an outcome that
would be dismal for all concerned, with Nestl é dumping Perrier, and
the workers in Verg è ze left with nothing but their pride. It appeared
diffi cult to adapt Perrier ’ s ‘ time - warped proletarians ’ (as one journalist
labeled them) to twenty - fi rst - century market forces.
This pattern of distrust and passive aggression can arise in many
contexts. For example, near - mutiny occurred after the $25 billion
merger of Swiss Bank Corp and the British investment bank Warburg