New York, Frankfurt, Paris, London, back to Frankfurt. No, it’s not a vacation itinerary. It’s the working life of Stephen Foels ’87, a quintessential representative of the brave new global village.
This year, two events are making a significant impact on the personal and professional lives of Foels: his late spring marriage to a young German woman, Steffi Wenzel, in the village of Dinkelsbühl, about 100 kilometers northwest of Munich, and the official introduction of the euro dollar on January 1, 1999. Foels is enjoying both adventures.
The blond-haired, blue-eyed intensely focused economics graduate is a vice president in charge of asset and liability advisory for German multinational companies at Commerzbank AG, one of the largest private banks in Germany. Among his clients are Bayer, the aspirin manufacturer; Coca-Cola Germany; IBM Germany; and SAP, a software company. He describes his duties as “balance sheet optimization.” It’s challenging: “My competitors are the Goldman Sachs and Morgan Stanleys of the world,” he says.
It was Commerzbank that gave Foels his first transcontinental job opportunity, after he worked two years in fixed-income sales in the bank’s New York office. The bank selected him as the first-eve U.S. delegate to its Frankfurt headquarters because of his competence in international lending practices. By 1993, he was a fixed-income sales officer, responsible for creating new business in deutsche marks fixed-income securities trading with North American and Belgium institutional central bank investors. He’s barely been home since, except to visit his parents in Southern California. “I wanted to discover the world,” he says. “I made two trips to Germany when I was 11 and 15, but I was too young to appreciate the experience.”
From Frankfurt, he sought new challenges. “I mastered credit work easily, but I wanted to do marketing and sales.” He was hired by Credit Lyonnais SA in Paris, where he established the bank’s multicurrency fixed-income securities sales activities with Austrian, Belgian, German and Luxembourg investors. He worked in seven different currencies, though mostly in German marks. On days off, he laced on in-line skates, cruising from museum to museum in the City of Lights. He also learned about wine and developed lasting friendships with young foreigners. Perhaps because there are so many young people working away from home, Foels says, “I think friendships are more profound in Europe.” Then the Japanese became interested in what he had done in France, and Daiwa Securities lured him to its London office. Foels learned he is more at home in a continental European business culture, so when Commerzbank offered him a chance to return to Germany, he said yes.
It is on Germany that eyes will be focused as the euro takes hold. The European Central Bank in Frankfurt will control euro monetary policy. Frankfurt am Main (translated: on the Main River) is to Europe what New York and Wall Street are to the United States. It has long been one of the most important commercial and economic centers in Europe. It is the home of Bundesbank, the German stock exchange. It is a key international junction for rail, air and highways. It is the site of numerous international trade fairs, luring buyers and sellers from throughout the world. And after having been virtually destroyed during World War II, today it is a skyscape of modern buildings.
“Comerzbank is in a good position for expertise in the euro. There’s going to be a lot going on,” says Foels. Confirmation of the first 11 monetary union member countries took place in May in Brussels. At the same time, permanent exchange rates for the “inside” currencies of member countries will be set but not implemented. “Companies that now have balance sheets in their own currencies, like the deutsche mark, will have to have them converted into euros,” says Foels, who will be in the eye of the storm.
But Foels shouldn’t find the experience too daunting, because he’s comfortable with different languages, difference places. He was born in America to immigrant parents. His father, Franz, came from Vienna, his mother, Sigrid, from Berlin. They met in Canada then came to the land of opportunity — America. When their children, a girl and a boy, were born, they were taught German as a first language. At Notre Dame, Foels also studied French. His new bride, whom he met in Paris, speaks at least four languages fluently: English, French, Portuguese and, of course, German. Like Foels, she is comfortable moving within different languages and customs.
Just a few months ago, Foels was living in the shadow of Kensington Palace in London. Wine he had purchased in France was stacked in a makeshift rack of boxes. A Corsican ham hung from a hook in his kitchen, a souvenir from a recent holiday. A weekday evening was filled with a concert at Royal Albert Hall, followed by some beers at a pub, where he was able to put his negotiating skills to work in another venue. Foels talked two women into moving to a smaller table so his party, which included a German couple and an American one, could have the larger one. Conversation shifted from English to German and back, so that everyone was included. Yet even the most intrepid world travelers get homesick for a little U.S. news. “Is the Clinton story still big news?” he asked in a recent telephone conversation.
Just as shipping and trade transformed the world centuries ago, Foels’s generation, like the group around the pub table, has grown up with technology and has watched the world shrink as a result. “Globalization is what it’s all about,” he says. A strong euro will boost trade with companies unhampered by sensitive foreign exchange rates. Companies will save by bypassing the commission now paid to banks for changing francs to marks, for instance. Businesses will be able to comparison shop across borders, resulting in savings from lower prices; stock market investors looking for a good company will now be able to look across Europe instead of within one country. The euro is also supposed to be a bonanza for corporate takeover speculators and investment bankers who put deals together. All this is supposed to make a united Europe more competitive against the United States.
Still, Europe is not the United States, and speculation on the European Monetary Union remains a hot topic for politicians, economists and people on the street. As Time magazine noted last summer, “The future that Europeans are prepare for very much depends on the past from which they came. Each E.U. country inevitably views the European Union through the prism of its own national interests and history. The result: There are as many Europes as there are Europeans.”
The Washington Post more recently suggested that while capital might cross borders to more profitable locations, workers may not necessarily follow. Differences in language and customs will make many reluctant to leave their homelands, which could result in regional unemployment and the ultimate downfall of the euro. Unlike America, where the Federal Reserve can reduce interest rates to titillate economic activity, the European Central Bank will be setting policy for 11 countries, even though individual economies may have different cycles. If one country suffers from a recession, the bank is unlikely to ease up if the other economies are growing. Mega-mergers like those announced recently between Citibank and Travelers Group also are likely to result in job losses.
If the euro succeeds, one reason will be because of couples like Foels and Wenzel. “Europeans who are under 35 are becoming more American in their thinking,” observes Foels. “They are more willing to move. But most of the population is not under 35.” With this new American thinking comes another common dilemma — long-distance marriage. Wenzel remains in London while her data consulting company contemplates opening a Frankfurt office. She wants to stay with the company, but the move is months in the future.
Such workforce mobility illustrates a strength as well as weakness for the euro. Foels points out that in his own Frankfurt office, at least 50 percent of the people are French. They have fled the French economy with its unemployment rate of 12 percent. Seven of the 11 E.U. countries have double-digit unemployment.
Foels says bluntly that he is not an expert on the euro. Still, there are few neutral observers. Foels, like many, looks to history — lessons he learned from his Notre Dame professors — for answers as to whether the euro will succeed. “There have been many attempts to unite Europe, and they’ve all failed.” Caesar, Napoleon and Hitler all tried. Still, this more peaceful attempt presents many opportunities, he says, and he is eager to watch the drama unfold — and be part of it.
The clock is ticking. Come January, the euro will be traded on international exchanges, replacing 11 predecessor currencies. Actual notes and coins will be introduced beginning in January 2002. To help people adjust, prices will be displayed in both old and new currencies for the next three years.
While Foels today seems at ease with his transcontinental lifestyle, there were times past when New World and Old World values went to war within the young man. The fact that he spoke German as a child made him an oddity in his California neighborhood in the 1960s. “I never played much with the neighborhood kids,” he says. His father, a watchmaker turned furniture manufacturer, was strict. There wasn’t a lot of time for boyhood fun. Foels’s first job came at age 8: He swept the floors in the factory while workers crafted oak and walnut furniture.
His sister, Susanna, whom he describes as an academic superstar, was his foremost competitor. He didn’t like school. “Like most boys, if the schoolhouse burned down, it would have been okay,” recalls his mother. He struggled to find his own niche in a family culture where the son is expected to take over the business. After high school, he tried for two years, but it didn’t work out. Although successful at working trade shows and building new accounts, it didn’t make him happy. Two events caused him to change his course and bury the rebellious outer shell. He was in a serious automobile accident. “I almost killed myself and the girl with me,” he says. Then he attended his sister’s graduation at Stanford. “I think I finally saw what an education could be,” he says. It was then he was accepted at Notre Dame. “I started to know what I liked and didn’t like,” he says. He joined the rowing team. As a member of the “lightweight eight,” he helped the team win a gold medal at the Heart of Texas Regatta in 1987.
Susanna Foels, whose own career track has taken her from Lehman Brothers to Microsoft to her own business, Richina Group, which raised investment capital for the People’s Republic of China, says, “I am so proud of him. He’s doing his thing and knows what he’s doing.” A childhood of separate interests has merged in adulthood, she adds. Foels calls his sister his most significant role model. They consult frequently by telephone. “We were raised in a multicultural environment. We had an early appreciation of other cultures, and we enjoy them.” Family vacations to East Germany, behind the Wall, taught them to appreciate America. Yet neither one of them, she says, is “attached to any one place.”
And some of those Old World values stuck. There are no flashy cars for Foels these days. “I put money away,” he says. And even though he deals in intangible products, the lessons he learned from his father’s furniture business still apply.
“There is nothing more satisfying than when clients call because they trust you,” he says. “Trust is the magic word in Germany. They are a suspicious people. Trust is earned, not given. The relationship is the most important thing. . . . The Japanese aren’t as good at developing and grooming relationships. I made a mistake going with a Japanese firm.”
He continues, “In the U.S., we grow up learning to adjust to adverse developments and change. Americans love challenges. Germans don’t like risk. They are not flexible thinkers. I am German in the way I see the world but American in how I work.”
With his recent marriage, thoughts turn to his own future family. In many ways he will raise his children much the way his parents raised him. That extra language he rebelled against as a child? Well, it is almost essential in today’s world. “Social intelligence, not just IQ, is so important,” he says. “And values of diligence. I think I would emphasize sports. It’s a good thing because it teaches diligence. And I would instill in them the importance of an education.”
In this brave new world, the more things change, the more they stay the same.