Monday, March 22, 2010

Luxembourg: Fiftieth Anniversary of the "Board of Industrial Development"


An attempt to correct an oversight


On October 29, 1958, Mr. Joe E. Gurley, a U.S. citizen residing in Luxembourg, sent a letter to the Luxembourg Government in which he urged the Minister of the Economy to consider a new economic policy. He proposed creating a task force, which he called "Board of Industrial Development" or "BID" with the goal of attracting U.S. investment and industrial corporations to Luxembourg. His argument was that a diversification of industrial activities in Luxembourg was probably desirable, even necessary, and that the U.S. industry, in the year 1958, swept into the emerging Common Market. Joe Gurley, who possessed the art of communication, brought up the argument that there was competition between the Benelux countries to bring U.S. investors into Europe. The score in this race was at that time: Netherlands 87, Belgium 38, Luxembourg 0.

His letter went unanswered. Every beginning is delicate. Joe Gurley, whom I knew well 20 years later, has always been of unfailing optimism. Colonel of the U.S. Air Force during the war and an officer of the venerable CIA, he was a member of management at "Luxembourg Airlines", which was founded in 1948. Optimistic as ever, he ignored the fact that his letter was ignored. He used his extensive contacts in Luxembourg and the United States to rally support for his concept. In a letter dated December 30, 1958 to Guill Konsbruck, Director General of Arbed, Joe Gurley mentions the interest that Prince Felix, the grandfather of the present Grand Duke, has expressed to have his son Charles play a role in the activities of the BID.

On January 14, 1959, Joe Gurley gave a written proposal for the implementation of the BID. The "Interministerial Committee for Economic Development," in place for years, reviewed the proposal for the creation of the BID favorably. The opinion of the Chamber of Commerce, however, was very reserved. Their review from early 1959 laid down a list of deficiencies in the organization of the country, energy costs and labor, the tax system, the geographic location and concluded that U.S. investors would react negatively when faced with such realities.

But the director of the same Chamber of Commerce, Paul Weber at the time had borrowed the term "monolithic" from geology to describe the dangerous preponderance of steel in the domestic economy, the equivalent of having "put all eggs in one basket. " It was an implicit recognition of the urgent need to diversify the economy. Consensus emerged within the Government in early 1959.

Joe Gurley visited New York in February to seek information and support, and solicit the help of Chase Manhattan Bank, First National City Bank of New York, the National Foreign Trade Council, Manufaturers of Trust Company, Bankers Trust and Belgian-American Bank. On his return from New York he contacted the new government elected earlier on 1 February 1959, including Paul Elvinger, Minister of Economic Affairs, to whom he sent a letter on March 2, 1959. On March 20, he delivered a speech to the Rotary Club of Luxembourg with the subject "American Investments in Luxembourg." The vision was to bring the debate to the public. Thus the political survival of the idea was sealed.

As of April 1959, an infinitesimally short lapse of time later, compared to the slowness of the previous months, the BID was created. The urgency dictated by the difficulties in the few other industrial areas, have certainly contributed to this sudden determination. The serious difficulties and ultimately closing of the last bastion of the leather industry, the company Ideal Wiltz (producing about 500,000 sqm of leather in 1958 and operating at only 40% capacity, with 350 jobs)was probably the shock that gave rise to the BID. Prince Charles of Luxembourg became President and Joe Gurley became the Director of the BID.

In the month of April 1959 Joe Gurley takes possession of an office at the Consulate General of the Grand Duchy of Luxembourg in New York, 200 East, 42nd Street. In Luxembourg, a number of personalities are formally part of the BID, but in reality are never solicited. The main responsibilities will lie with the Minister Paul Elvinger and Alphonse Schwinnen, Advisor at the Ministry of Economic Affairs.

From the beginning, a campaign was launched to make the existence of Luxembourg known. The brochure "Luxembourg, at the center of the Common Market for Your Industry", printed in 2,500 copies, was used to support this campaign. Prince Charles visited the U.S. for three trips, from September 13 to December 5, 1959, then in October 1960 and October 1961 for visits with Joe Gurley to Washington, Detroit, Chicago, Denver, San Francisco, Los Angeles, Kansas City and New York. The presence of a member of a European royal family in these years "after Grace Kelly and Walt Disney" seems to have been singularly effective in opening doors to the upper echelons of American industry and American press.

The action of the BID to publicize Luxembourg as a desirable place also had a boomerang effect: the desirable place had indeed to get some make-up and to beautify its support to investment. Municipalities, such as Steinsel have made great efforts to find industrial land to Bay State for example. And finally Luxembourg laid out its support to industry by passing the legislation framework on economic expansion on June 2, 1962.

But the story of the BID ends there, abruptly, on December 31, 1961. The BID, after three short years, became a victim of its success. The initiative by Joe Gurley marked a turning point in the economic history of Luxembourg. Its success, listed below gives the reason for this dissolution, which is summed up by a header in the New York Herald Tribune on February 12, 1964: "One unemployed worker in all the duchy." It was the issue raised, especially by Arbed, to shut down the BID, as there was too much pressure on the labor market. This decision, strongly contested by Joe Gurley in a speech to the Rotary December 8, 1961, however, was final. The monolith had spoken. Thirteen years later, ironically, the monolith was bursting into a thousand pieces, leaving us an "Anti-Crisis Division" or DAC funded by our taxes. It was also the cry for help to re-establish a "Board of Economic Development" or BED in 1975, chaired by then Crown Prince Henri. History repeats itself.

BID had immediate success, and even beyond its closing year. These are according to STATEC, major new foreign settlements by year of establishment: Yates, Wiltz (60), Eurofloor - American Biltrite, Wiltz (61), Alcuilux, Clervaux (61), Bay State Abrasives, Steinsel ( 61) No-Nail Boxes, Warken (61), Cleveland Crane & Engineering (62), Commercial Hydraulics, Diekirch (62), Texas Refinery, Echternach (62), Du Pont de Nemours Contern (62), Norton, Grevenmacher (63), Monsanto, Echternach (63), P. Lorillard, Ettelbruck (63) Uniroyal Steinfort (65), Eurocast, Grevenmacher (66), Morganite, Windhof (67), Continental Alloys, Dommeldange (69), GM, Grevenmacher (70). In all, several thousand jobs in 10 years. The BID budget was $ 45,000 for three years of operation, probably less than $ 15 per job created. The vision of Joe Gurley has permeated subsequent economic policies of all governments in Luxembourg. His methods are still applicable and probably universally applicable. Joe Gurley died at his home in Youngstown, Ohio State, January 9, 2003. He was a great friend and benefactor of Luxembourg. The fiftieth anniversary of the creation of the BID was last year.

Joe Gurley, awarded "Commander in the Order Adolf of Nassau", surrounded by his wife "Chirpie" Egide Thein, Paul Powers, CEO of Commercial Intertech Ambassador Berns and Ms. Powers. ca. 1994













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