Western Europe: New Track for Wagons-Lits

Long before the Iron Curtain slammed down, the Orient Express had won a reputation as Europe’s most exciting train for the countless fictional (and occasionally real) spy plots, love affairs, murders and desperate struggles that took place as it raced across Europe. All the action occurred in railway cars owned by a company with a title to match the grandeur of the Express: Compagnie Internationale des Wagons-Lits et des Grands Express Européens. Wagons-Lits is once again demonstrating its durability by restoring the full Paris-to-Bucharest run of the Orient Express, which has not operated in five years. The increasingly Western-minded Rumanians requested restoration of the run so that they could have a link with Paris, agreed to cover whatever losses Wagons-Lits incurred.*

Wagons-Lits itself has switched onto quite a different track. It still owns 1,020 dining and sleeping cars that it runs on trains throughout Europe, but it has sold 110 to the French government on the theory that there is more money to be made in operating cars than in owning them. The firm is now spending much of its energy on new ventures. Wagons-Lits last year had record sales of more than $171 million, more than double what they were ten years ago, though the company’s profit remained a remarkably low $950,000 because of government-regulated fares and airline competition.

Disaster, Disaster. Wagons-Lits feels the need of diversification more strongly than most companies: it has proved particularly vulnerable to wars, expropriations, deflations and other disasters. Founded in 1876 by a Belgian engineer who had admired the pioneering Pullman cars on a visit to the U.S., Wagons-Lits introduced sleeping and dining cars to Europe, devised Europe’s first truly through-train railroad system. World War I flattened the company, and it was just recovering when the Bolsheviks grabbed 600 of its cars in Russia. It prospered in the ’20s and ’30s, then in World War II lost 25% of its rolling stock. Later, Nasser confiscated the company’s branch in Egypt. Says Andre Widhoff, 62, Wagons-Lits director-general: “Every morning when I wake up, I look at the newspaper and wonder: What has happened now?”

Almost any news could be pertinent, since Wagons-Lits operates its rail business in 26 countries in Europe, the Middle East and Africa, and has other interests in 50 countries. To serve its 2,260,000 travelers a year, it has its own bakeries, laundries and wine cellars, provides 5,000,000 meals and a million sandwiches a year. From his elegant offices on Paris’ Boulevard Haussmann, Widhoff carefully picks the enterprises in which to invest, usually buys only a portion of each but insists on full management.

Into Le Drugstore. Wagons-Lits now runs and partly owns more than 40 hotels and restaurants in ten countries. Its 16,000 employees (specially trained in two Paris schools) staff restaurants or bars in most of Europe’s railway stations, also cater meals for 33 airlines. The firm also retains a 25% interest in Thos. Cook & Son travel agency, shares quarters and billing with it in many cities. Having built France’s first motel in 1955, Wagons-Lits feels that motels are the big business of the future in Europe, has already invested in eleven in seven countries, including one in the Italian Alps that is strategically located near the transalpine tunnels. The company has decided to go into le drugstore, a spreading phenomenon in Europe, by putting up half the $2,000,000 cost of a mammoth new one opposite the Paris Opera; unlike ordinary Parisian pharmacies, this establishment will sell everything from Scotch to Scotch tape.

* Two express trains bear the name Orient, but only one (the Direct-Orient) makes the 1,889-mile journey to Istanbul that links Paris and the West with the gateway to the East. Wagons-Lits still operates sleeping cars on this train, which goes along a southerly route that bypasses Bucharest.