May 9, 2004

War and Abuse Do Little to Harm U.S. Brands


New York Times

FRANKFURT, May 8 — When American troops moved into Iraq last year, European executives at the Ford Motor Company braced for an adverse consumer reaction.

"Our sales and image and market share are things we monitor extremely closely," said Niel Golightly, a Ford spokesman in Cologne, Germany. "So the potential fallout risk from Ford being perceived as a symbol of America's foreign policy is something we're always looking at."

But aside from a single incident at a dealership in Italy last year, the company has seen no evidence that widespread anti-Americanism abroad has been aimed at the well-known Ford brand. In Europe, Mr. Golightly said, Ford's market share has remained steady, and sales are expected to improve slightly this quarter. And the business outlook remains upbeat despite recent developments in Iraq, including the revelation of photographs depicting the humiliation of Iraqi prisoners by American soldiers.

For a variety of reasons, American companies that sell globally say that they have so far experienced little if any disruption from discontent over the war in Iraq. For the most part, consumers around the world seem as likely to be influenced by economic conditions as by politics. And, in a display of the growing sophistication in marketing big American brands in global markets, many people see products originating from the United States as firmly rooted in their own home nations.

Even Muslims in the Middle East and Southeast Asia do not seem to translate their anger into a boycott of American products. For example, as Hidayat bin Ismail, 19, emerged Friday from midday prayers at the Sultan Mosque in Singapore, he acknowledged that he was still patronizing places like McDonald's and KFC even after seeing the pictures of American soldiers abusing Iraqi prisoners.

"When Americans do these things, I don't think all Americans are bad," he said. "And if one Muslim is bad, it doesn't mean all Muslims are bad either."

Still, while there are few signs that goods and services clearly identified with the United States are being shunned overseas, that has not prevented American companies from worrying that their products might eventually become a bigger target for dissatisfaction with the Bush administration's conduct in Iraq.

"We're more concerned at the moment with higher taxes than with anti-Americanism," said Fred Irwin, president of the American Chamber of Commerce here in Frankfurt. "That said, there's always a cloud over industry if political issues are left unattended. You have to remain vigilant about reminding people that politics is different from business."

That message sometimes falls on deaf ears. When Heiko Müller sought a way to display his opposition to the United States occupation of Iraq, he decided there was only one way to show he meant business. He canceled his orders with Americans.

As an owner of Riese und Müller, a bicycle manufacturer near here, Mr. Müller responded last year to the invasion of Iraq by canceling orders to American suppliers for brakes and gears worth nearly $400,000.

"The only thing we could do as a company was to hit the Americans where it hurt, in their pocketbook," Mr. Müller said. "Everything that is happening in Iraq tells me our decision was justified."

Some places are more prone to outbursts. In Argentina, Quebracho, a small nationalist organization, has temporarily taken over a few branches operated by some American banks. Quebracho members demonstrated in March on the first anniversary of the invasion of Iraq; a Citibank branch in downtown Buenos Aires was vandalized in the protest.

In Indonesia, the world's most populous Muslim nation, Remy Sjahdeini, a prominent lawyer in Jakarta, expressed surprise that there had been no response to what he called the "disgusting" behavior toward Iraqi prisoners. He said the public, particularly the politically vocal student population, was preoccupied with the nation's election campaign.

Companies that have been operating internationally for decades seem relatively immune to anti-American attitudes, in part perhaps because they avoid being perceived as particularly American.

At many longtime multinational companies, executives say they always try to give their products, marketing and image the unique flavor of the locality where they operate. Other companies try to blend in by maintaining a geographically generic image, so they are not associated with any one country or culture.

Eastman Kodak is a prime example of the first approach. Kodak's sales in Europe, Africa and the Middle East, a region it treats as one entity for reporting purposes, have been rising lately, gaining 14 percent in the first quarter of this year over the corresponding quarter in 2003.

"I'm not aware of any effect on our business from current attitudes towards America," said Gerard Muechner, a Kodak spokesman.

Kodak attributes the marked lack of hostility to the pains it has taken to cater to local tastes and sensibilities. Its self-service kiosks in the United States are generally tall and boxy; in China, they are much smaller and shaped almost like arched parabolas, a shape that fits more easily into Chinese stores, and is more aesthetically pleasing to the Chinese eye.

Even McDonald's, one of the most vivid symbols of the United States abroad, has sought to emphasize how locally integrated it has become. McDonald's, one of the largest private-sector employers in Brazil, is sometimes the target of taunts in left-wing demonstrations on Avenida Paulista, one of São Paulo's main streets, but it is also common to see demonstrators eating at McDonald's after the rallies.

Such feelings about McDonald's were echoed in Asia and Europe. "We've been in Japan more than 30 years and all of our employees are Japanese," said Tatsuyuki Kanari, a McDonald's Japan spokesman.

Similarly, Ricarda Ruecker, a spokeswoman for McDonald's Germany in Munich, noted, "Two-thirds of our stores are owned and operated by German entrepreneurs so we try to remind people that hurting McDonald's is like hurting fellow citizens in Germany."

For the most part, boycotts announced against American products last year have fizzled out.

When the United States was preparing to invade Iraq last year, the Muslim Consumer Association of Malaysia called for a boycott of Coca-Cola, and there was a flurry of news media reports on the sudden popularity of local brands of cola.

But Marimuthu Nadason, secretary general of the Federation of Malaysian Consumers Associations, said that boycott was ignored by most of the public. The latest news from Iraq had done little to diminish Malaysian's taste for American imports. "Anyone can call for a boycott," he said, "but it won't work."

Claudia Deutsch, in New York; Wayne Arnold, in Singapore; and Todd Zaun, in Tokyo, contributed reporting for this article.