Synthetics For The Shah DuPont and The Challenges To Multinationals in 1970s Iran

Synthetics for the Shah: DuPont and
the Challenges to Multinationals in

1970s Iran
REGINA LEE BLASZCZYK
In the 1960s and 1970s, the largest U.S. chemical firm, E. I.

du Pont de Nemours & Company, established an international
presence in synthetic fibers by building plants to make nylon,
polyester, and acrylic in Latin America and Europe. DuPont man-
agers also looked to the Middle East, specifically to Iran, which
was fast industrializing under Shah Mohammad Reza Pahlavi. The

C The Author 2008. Published by Oxford University Press on behalf of the
Business History Conference. All rights reserved. For permissions, please
e-mail: journals.permissions@oxfordjournals.org.
doi: 10.1093/es/khn055
Advance Access publication July 10, 2008
REGINA LEE BLASZCZYK is a visiting scholar in the Department of the His-

tory and Sociology of Science at the University of Pennsylvania. In 2008, she
received the Harold F. Williamson Prize for mid-career achievement in teach-
ing and research in business history from the Business History Conference.
Her recent publications include “Designing Synthetics, Promoting Brands:
Dorothy Liebes, DuPont Fibres and Post-war American Interiors,” in Journal
of Design History 21, no. 1 (March 2008): 75–99; the edited volume, Producing
Fashion: Commerce, Culture and Consumers (Philadelphia: University of
Pennsylvania Press, 2008); and American Consumer Society, 1865–2005: From
Hearth to HDTV (Wheeling, Ill., Harlan Davidson, 2009). Contact information:
Reggie.Blaszczyk@gmail.com; Website: http://www.imaginingconsumers.com
I thank Andrew Godley and Relli Schechter for inviting me to present an

early version of this paper to Middle Eastern scholars in Montecatini, Italy;
Mira Wilkins and the reviewers for Enterprise & Society for their insightful
comments; and Ruth Schwartz Cowan for providing me with access to the
University of Pennsylvania’s wonderful resources. For primary sources, I am
indebted to Lynn Catanese, Marge McNinch, Ben Blake, and Jon Williams
at the Hagley Museum and Library; Elsa Atson, Ashley Augustyniak, and
Rasheedah Cremer at the Chemical Heritage Foundation; and Bertha F.
Wilson at the World Bank Group Archives. Costume and textile historian
Phyllis Dillon shared her expertise on Iran, developed while doing fieldwork
there in the early 1970s. Finally, I thank Habib Ladjevardi, the founding
director of the Harvard Iranian Oral History Project, who graciously put
me in touch with his uncle, Akbar Ladjevardian, and DuPont retirees who
contributed their expertise in countless ways.
670
DuPont and the Challenges to Multinationals in 1970s Iran 671
Shah’s pro-Western stance and his country’s rich oil fields made
Iran appealing to a petrochemical giant like DuPont, which used
petroleum feed stocks to make fibers and other products. In the
1970s, DuPont partnered with the Behshahr Industrial Group, a
conglomerate run by the Ledjavardi clan, one of Iran’s leading
families, to build a high-tech fiber facility that would help mod-
ernize the Iranian textile industry. The story of this short-lived
joint venture, a victim of the Islamic Revolution, demonstrates the
challenges to multinationals operating in imperial Iran, and shows
how the daily experience of dealing with cultural differences often
masked larger political and economic troubles.
“How on earth did we get involved in Iran?” Millard G. Gamble asked

fellow DuPont executives in February 1978. For the past few years,
E. I. du Pont de Nemours & Company, the world’s largest producer
of synthetic fibers, had partnered with the Behshahr Industrial Group
of Tehran in a major Iranian–American joint venture. The Polyacryl
Iran Corporation (PIC), formed in August 1974 to make polyester and
acrylic, was the largest private industrial venture undertaken in Iran
with foreign capital.1 For DuPont, PIC seemed like a promising in-
vestment, given Shah Mohammad Reza Pahlavi’s commitment to in-
dustrialization and his close ties with the United States government.
As the most powerful country in the Persian Gulf, oil-rich Iran was an
especially attractive site for the production of synthetic fibers, which
depended on feed stocks derived from natural gas and petroleum.
Geographically, the locale also promised ready access to new cus-
tomers, that is, textile, carpet, and knitting mills in Iran and other
emerging markets of East Asia, Eastern Europe, the Middle East, and
North Africa. Yet when Gamble, a general manager in DuPont’s Textile
Fibers Department, asked his pointed question, this once-promising
joint venture foundered. By the year’s end, DuPont would begin the
retreat from Iran along with other U.S. corporations, victims of the
Islamic Revolution.2
This paper examines the history of DuPont’s Iranian joint venture
from its conception in 1972 through the final departure of U.S. person-
nel in 1979. An analysis of one American multinational in imperial
Iran, it complements research in comparative politics, international
1. William M. McCabe Jr., “Advantages of a Modern Textile Industry for Iran,”

Nov. 18, 1977, E. I. du Pont de Nemours & Company, Polyacryl Iran Corporation
(PIC) Records, acc. 2370, Hagley Museum and Library, Wilmington, DE.
2. Millard G. Gamble, “Annual Report Review, Polyacryl Iran Corporation,”
Feb. 16, 1978, PIC.
672 BLASZCZYK
economics, and Middle East studies that presents biographies of key

political figures, focuses on central planning or the arms buildup, and
considers business–government relations during the Shah’s reign.3
This study also contributes to business history scholarship on multi-
nationals and political risk. As Christopher Kobrak, Per H. Hansen,
and Christopher Kopper explain, political risk is a tricky subject for
economists, who are wedded to aggregate quantitative methods; the
topic is best explored by historians, who combine archival research
with the judicious analysis of the broader context. To date, histo-
rians of multinationals and political risk have examined the chal-
lenges created in the “home,” rather than the “host,” country. Some
have focused on interwar Europe, the Nazi regime, and the chemi-
cal giants I.G. Farben and Degussa. This paper draws on an untapped
body of historical evidence—internal PIC documents and the business
press—to examine political risk in another time and place.4
During the 1960s, the equity joint venture became the domi-
nant form of foreign investment in developing countries, involving
American, British, Canadian, Dutch, French, German, Italian,
Swedish, and Swiss firms, as well as a smaller number of African,
Asian, and Latin American companies. From the developing nation’s
vantage point, a joint venture with a Western firm served multiple
purposes: it attracted foreign capital, channeled local money into pro-
ductive enterprise, developed native managerial talent, and provided
local workers with technical training. For Western companies, a joint
venture often provided the only point of access to markets and re-
sources in developing economies, where local laws mandated that
foreign businesses share ownership with local citizens, governments,
or companies.5 The U.S. Department of State and the Agency for In-
ternational Development advocated the joint venture as a mechanism
3. The substantial body of scholarship on the Shah, the Iranian economy, and
the events leading up to the revolution includes Pollack, The Persian Puzzle;
Keddie, Modern Iran; Parsa, Social Origins of the Iranian Revolution; Milani, The
Making of Iran’s Islamic Revolution; Amuzegar, Iran’s Economy under the Islamic
Republic, 1–12; Gasiorowski, U.S. Foreign Policy and the Shah; Mofid, Devel-
opment Planning in Iran; Looney, Economic Origins of the Iranian Revolution;
Ledeen and Lewis, Debacle; Rubin, Paved with Good Intentions; Lenczowski, ed.,
Iran Under the Pahlavis; and Looney, A Development Strategy for Iran through the
1980s.
4. Christopher Kobrak et al., “Business, Political Risk, and Historians in the
Twentieth Century,” in Kobrak and Hansen, eds., European Business, Dictatorship,
and Political Risk, 1920–1945, 3–6. For the 1970s perspective, see, for example,
Charles P. Kindleberger, “The Multinational Corporation in a World of Militant De-
veloping Countries,” in Ball, ed., Global Companies, 70–84; and Herbert Salzman,
“How to Reduce and Manage the Political Risks of Investment in Less Developed
Countries,” idem, 85–110.
5. Friedmann and Béguin, Joint International Business Ventures in Developing
Countries, vi, 1–29.
that would strengthen the free enterprise system at home and abroad,
expand the market for American goods, and create an entrepreneurial
class in developing nations.6 Joint ventures waned in popularity
among American firms after Ronald Reagan’s Tax Reform Act of 1986
made them less advantageous financially.7
As American managers felt their way around the international
arena, they approached the joint venture as a learning experience.
One U.S. chemical executive told The Conference Board: “Pre-1970
ventures mostly came over the transom. We assessed them on an in-
dividual basis as either a good or bad business proposition.” In the
late 1960s, few experienced multinationals had contingency plans,
dealing with crisis on an ad hoc basis. By the mid-1970s, U.S. com-
panies recognized that investment disputes, which transpired as the
governments in India, Zambia, and Pakistan nationalized domestic
industries, were part of the price of doing business in less-developed
countries. The Islamic Revolution, however, was different in scope,
tone, and impact, and it sideswiped American investors.8
This snapshot of DuPont’s joint venture in Iran is framed within
the context of the firm’s growing international presence, and, more
specifically, the seedtime for the global synthetic fibers business.
The stories told here raise provocative cultural questions for business
historians: How much did the managers who laid the foundations for
the late twentieth-century global economy know about the cultural
differences between the West and the newly developing countries?
How much could they absorb from the Middle Eastern environment,
where unfamiliar religious beliefs and cultural practices, including
the deferential system of ritual courtesy known as ta’ārof, affected
business relations? How appropriate was the joint venture format to
mediating political risk and to bridging cultural distance between
partners? How did DuPont managers hope to apply knowledge and
skills honed in North America and Europe to the Middle Eastern
market? What types of knowledge were readily transferred, and what
not? How did differences and complementarities in American and
Iranian culture play out in day-to-day operations, and what impact
did they have on corporate and personal memory?9
6. Business International, Management Monograph No. 18: “The Pros and Cons
of Joint Ventures Abroad,” 1964, typescript, Lippincott Library, University of Penn-
sylvania [hereafter cited as LL-Penn].
7. Caves, Multinational Enterprise and Economic Analysis, 97; Desai and
Hines, “‘Basket Cases.’”
8. Janger, Organization of International Joint Ventures, 9; “The Problem: How
to Protect Your Firm from Political Crisis by Contingency Planning,” in Business
International, Solving International Business Problems, 23–24.
9. Jones, Multinationals and Global Capitalism, 155–62; Caves, Multinational
Enterprise and Economic Analysis, 91–100.
674 BLASZCZYK
Pioneering Synthetic Fibers
In the postwar era, DuPont led a synthetic fibers revolution that recast
the global textile, fiber, and fashion industries. There are two major
types of man-made textile fibers: cellulosic fibers such as rayon and ac-
etate, which are made from wood pulp or cotton, and synthetic fibers,
such as nylon and polyester, which are synthesized from chemical
mixtures in high-temperature settings. Synthetic fibers offered a world
of easy-care mothproof fabrics that promised better performance than
natural materials. As nylon’s inventor, DuPont had first-mover ad-
vantages, which managers exploited as they developed the American
industry and sought to build a presence abroad.
DuPont entered the textile fibers business before World War II, rid-
ing on the global rayon boom. In the 1890s, French chemist Hilaire
de Chardonnet invented cellulosic fiber as a silk substitute, laying the
foundation for the rayon industry, which by 1918 was dominated by
the British firm, Courtaulds. As rayon became the favorite for ladies’
hosiery, undergarments, suits, blouses, and dresses—it had the look
and feel of silk at about one-third of the price—world production grew
nearly a hundredfold, from 29 million pounds in 1919 to more than
2.2 billion pounds in 1939. In the United States, rayon production be-
gan in 1910–1911 when a Courtaulds’ subsidiary, the American Vis-
cose Company, opened a plant in Marcus Hook, Pennsylvania. Rayon
appealed to DuPont managers, who sought new applications for the
firm’s expertise in nitrocellulose chemistry, developed through the ex-
plosives business. In 1921, DuPont started producing rayon yarns at a
plant in Buffalo, New York, collaborating with Comptoir des Textiles
Artificiels (CTA), a French manufacturer that provided the technical
knowledge. By 1929, DuPont broke away from this joint venture, but
continued to make rayon through a cross-licensing arrangement with
CTA. DuPont eventually became the second largest U.S. producer of
rayon after Courtaulds’ American Viscose, introducing rayon tire cord
in 1936.10
DuPont’s rayon experience led to its major fiber innovations during
the thirties: Wallace Carothers’s breakthrough with nylon in 1935, and
its commercialization in 1939. During World War II, DuPont diverted
its entire nylon output to military uses, including parachutes, tire
cord, and rope.11 Afterwards, DuPont stayed on top by licensing its
nylon patents; inventing, developing, and manufacturing new fibers;
improving processes and equipment through chemical engineering;
10. Hounshell and Smith, Science and Corporate Strategy, chap. 8; Read, “The
Synthetic Fibre Industry;” Cerrentano, “The ‘Benefits of Modern Inflation.’”
11. Hounshell and Smith, Science and Corporate Strategy, 249–51, 257–73.
and aggressively marketing its brands. DuPont made other chemicals,

including coatings, dyes, plastics, and intermediates, but synthetic
fibers dominated its balance sheets and generated a significant per-
centage of the profits. The Textile Fibers Department, created from
the old Rayon Department in 1952, focused on the American market,
where the economic boom meshed with the ideology of abundance to
democratize consumption. Easy-clean carpets, puncture-proof tires,
and wash-and-wear pants made from DuPont miracle fibers fit post-
war cultural expectations for comfort and convenience.12
Along with industrial research and chemical engineering, mar-
keting was one of DuPont’s strengths, especially in the Textile
Fibers Department. By the 1960s, there was no “universal fiber” that
could be used in all applications. DuPont produced seven different
“families” of man-made fibers—rayon, acetate, nylon, acrylic, poly-
ester, fluorocarbon, and spandex—that set the industry standards.
Technical marketers collaborated with customers to develop some
three thousand variations of these fibers, each suited to a particular
application, from apparel to carpets to insulation.13 The firm also tried
to instill Americans with a DuPont brand consciousness, creating sug-
gestive advertisements based on the advice of motivational researcher
Ernest Dichter. Marketers collaborated with the Chambre Syndicale
de la Couture Parisienne to place synthetic fabrics in the French col-
lections, and publicists circulated photographs of the new designs to
magazines and newspapers. DuPont’s home-furnishings experts de-
veloped a longstanding relationship with New York weaver Dorothy
Liebes, who designed curtain, rug, and upholstery prototypes as inspi-
ration pieces for architects, industrial designers, and interior decora-
tors. This investment in end-use marketing—targeting Mrs. Consumer
and Mr. Interior Designer—set DuPont apart from most other U.S. fiber
makers.14
DuPont and the Wider World
In the 1950s, DuPont managers, aware that “there would be a blood-

bath in fibers,” evolved a three-pronged strategy to safeguard the firm’s
future. At home, they explored new markets for DuPont’s traditional
12. Blaszczyk, “Styling Synthetics.”

13. Ibid.; Handley, Nylon; Hounshell and Smith, Science and Corporate Strat-
egy; and Donald F. Holmes, “The History of the Textile Fibers Department,” rev.
ed., 1982, in box 81, acc. 1771, Records of the Textile Fibers Department, E. I. du
Pont de Nemours & Company, Hagley Museum and Library, Wilmington, DE.
14. Blaszczyk, “Styling Synthetics”; idem, “Ernest Dichter and the Peacock
Revolution”; idem, “Designing Synthetics, Promoting Brands.”
676 BLASZCZYK
product lines, while pouring capital into engineering, process de-

sign, and product improvement, so as to lower costs and weed out
unpromising businesses. In fibers, they pushed into carpets and in-
dustrial products, while accelerating the switch from cellulose to
synthetic materials. They also looked for investment opportunities
outside the United States.15
While DuPont had small-scale operations in Canada, Mexico, and
elsewhere in Latin America since the early 1900s, the firm was mo-
tivated to further its international presence by the antitrust envi-
ronment of the postwar era.16 In 1954, a U.S. Justice Department
action against DuPont and Britain’s Imperial Chemical Industries
(ICI)—which for decades had divided markets, shared patents, and
co-managed some foreign businesses—forced the companies to part
ways.17 In 1957, the U.S. Supreme Court ordered DuPont to sell its
General Motors stock—the firm held 23 percent equity in GM, and re-
lated companies such as Christiana Securities owned more—creating
a cash surplus. These developments, combined with the retirement
of executives opposed to overseas expansion and rising competition
in fibers, made foreign direct investment necessary, attractive, and
possible.18
With its broadening international focus, DuPont followed in the
footsteps of American chemical companies like Monsanto and Dow,
which had expanded their foreign investments since the 1950s.19 By
the late 1960s, trade liberalization by Kennedy Round of the Gen-
eral Agreement of Tariffs and Trades (GATT) further encouraged U.S.
chemical manufacturers to look abroad after a series of tariff cuts low-
ered the duties on chemicals. Anticipating imports of cheap dyestuffs,
Monsanto responded by discontinuing its domestic production of the
15. “E. I. du Pont de Nemours & Co.,” Chemical and Engineering News [here-
after cited as C&EN] 49 (Aug. 16, 1971): 20; “This Engineer Has a Wife Who Un-
derstands,” Chemical Week [hereafter cited as CW] 125 (July 18, 1979): 60 (“blood-
bath”).
16. Edward R. Kane, “DuPont in the World Economy,” DuPont Context 3 (1973):
8–13; John Kenly Smith, Jr., “The American Chemical Industry Since the Petro-
chemical Revolution,” in Galambos et al., eds., The Global Chemical Industry in
the Age of the Petrochemical Revolution, 183.
17. “Managing No. 1 Company Is a Two-Man Job,” CW 113 (Aug. 27, 1973):
27–28; Reader, Imperial Chemical Industries, vol. 2, chap. 24.
18. Taylor and Sudnik, DuPont and the International Chemical Industry, 177–
95.
19. For the international chemical industry, Galambos et al., eds., The Global
Chemical Industry in the Age of the Petrochemical Revolution; Chandler, Shap-
ing the Industrial Century; Spitz, ed., The Chemical Industry at the Millennium;
Aftalion, A History of the International Chemical Industry; and Arora et al., eds.,
Chemicals and Long-Term Economic Growth. On American firms abroad, see
Wilkins, The Emergence of Multinational Enterprise, and idem, The Maturing of
Multinational Enterprise.
dye intermediate HAcid. Dow expected a 4 percent drop in U.S. sales,

but hoped to recoup the loss by gaining foreign market shares through
plants under construction overseas.20 By 1970, the top four U.S. chem-
ical companies—Dow, DuPont, Monsanto, and Union Carbide—were
aggressively developing their foreign businesses.21
For DuPont, changes in the global fiber scene compounded the
antitrust and tariff woes faced by the American chemical industry
writ large. By the 1960s, the world textile and clothing industries
were highly competitive, partially from new technologies, such as
the shuttle-less loom, and partially from the rise of low-cost man-
ufacturers in newly industrializing countries. Multilateral textile
treaties—the Short Term (1961–1963), Long Term (1962–1974), and
Multi Fiber Arrangements (1974–1994) negotiated under the GATT’s
auspices—set quotas on imports and exports of textiles, clothing, and,
ultimately, synthetic fibers, as part of a broader effort to stave the dis-
ruptive effects of deindustrialization and to regulate growth in emerg-
ing nations. While the U.S. remained the largest maker of synthetic
fibers, new plants appeared in and around countries with low labor
costs, where the fiber could be converted into finished goods. Some
simple percentages illustrate this major shift. In 1955, world produc-
tion of synthetic fibers was: U.S. and Canada 67 percent; Western
and Eastern Europe 27 percent; and Japan 6 percent. By 1979, U.S.–
Canada accounted for 34 percent; Western and Eastern Europe 33
percent; Japan 13 percent; and other economies 20 percent.22
The Japanese, with some aid from the Ministry of International
Trade and Industry (MITI), launched their synthetic fiber industry
after World War II. Following the pattern of other Japanese industries,
fiber makers imported the latest Western technology and improved on
it, using licensing agreements from DuPont to make Nylon 6–6 and
unprotected I.G. Farben patents to copy Nylon 6. By 1958, two major
Japanese producers, Toyo Rayon Co., Ltd., and Teijin, Ltd., started 东纺
polyester production under an ICI license. Acrylic soon followed. By
the mid- to late 1960s, Toyo and Teijin had textile mills in Taiwan
20. “Tariff Facts—Worse Is to Come,” CW 104 (Jan. 11, 1969): 24–27.

21. “Overseas: Where the Action Is,” CW 108 (May 5, 1971): 58–59.
22. Edwards, “Four Sectors,” 85–99; Read, “The Synthetic Fibre Industry,”
200. In 1971, the Nixon Administration negotiated bilateral trade agreements with
four Asian countries, limiting imports of man-made textile products from Hong
Kong, Japan, South Korea, and Taiwan. [“Textiles: Import Quota Agreement,”
C&EN 49 (Oct. 25, 1971): 10–11; “Anger Abroad, Acceptance in the U.S.,” CW 109
(Oct. 27, 1971): 15–16; “Stroke of Pen Brightens Fiber Makers’ Outlook,” CW 110
(Jan. 12, 1972): 15–16] As the world’s synthetic fibers capacity grew, Western na-
tions lobbied for tight quotas on imported yarns and fabrics; the result was the
Multi-Fiber Arrangement. [Cohen, Marketing Textiles, 323–44; Edwards, op. cit.,
98–99.]
678 BLASZCZYK
and Thailand. By the next decade, they had joint ventures to make in-
termediates, fibers, and textiles scattered throughout Southeast Asia,
in Indonesia, South Korea, Malaysia, the Philippines, Singapore, and
Sri Lanka.23 In 1970, Teijin negotiated with the Turkish government
to start a joint-venture plant in Turkey, with plans to sell some of the
output in Europe. By 1972, Asahi Chemical Industry had fibers plants
on the drawing board for Indonesia and the Middle East.24
Besides Japan, by the late 1960s manufacturers in nearly two dozen
lesser-developed countries in Africa, Asia, and Latin America had
started to make synthetics, which their textile mills substituted for
cellulosic and natural fibers. Most of these new plants aimed to sat-
isfy the home demand, but some saw a promising future as global
players. Taiwan, which had built its first rayon factory in 1957, had
eleven synthetic fiber plants that aimed to produce 97 million pounds
of fiber by 1968, nearly one-third for export, mostly to Japan. A mod-
est effort was underway in South Korea, where the first synthetic fiber
plant went up in 1959. Eight years later, eleven Korean plants pro-
duced 5 million pounds of man-made fibers, 6 percent of the coun-
try’s total supply; the government’s goal was to produce 127 mil-
lion pounds by 1971, with the objective of eventually building an
export market. In 1966, India was the largest producer among the
lesser-developed countries, with thirty-five plants that manufactured
204 million pounds of cellulosic and synthetic fibers. In India, where
population pressures dictated that most arable land be devoted to
92532.843 t growing food, test-tube fibers seemed like a miracle. Further, Indian
women loved rayon saris because of their silk-like texture, color fast-
ness, easy care, and light weight.25
The greatest challenge to these upstart fiber makers was how to
secure the financing for capital-intensive plants and the technical
expertise to run them. Earlier in the century, European rayon man-
ufacturers dominated the world market through a complex web of
23. Read, “The Synthetic Fiber Industry,” 217–23; Takashi Hikino, “The De-
velopment and Struggle of Japanese Chemical Enterprises since the Petrochem-
ical Revolution,” in Galambos et al., eds., The Global Chemical Industry in the
Age of the Petrochemical Revolution, 312–25. The U.S. trade journal Chemical
Week kept tabs on the Japanese threat; see, for example, “New Plants: Polyester
Fiber/Thailand,” CW 104 (Feb. 1, 1969): 37; and “How Japan Fights Fibers Slump,”
CW 111 (Nov. 1, 1972): 39–41.
24. “Far East Roundup,” CW 107 (Oct. 7, 1970): 43; “Japan’s Teijin Plans to
Triple Fiber and Textile Capacity Overseas,” CW 113 (Oct. 3, 1973): 34; “Japanese
Chemical Firms Are Investing More Overseas,” CW 111 (July 5, 1972): 22.
25. Jack H. Morris, “Synthetic Fiber Output, Demand Climbs in World’s Less
Developed Countries,” Wall Street Journal [hereafter cited as WSJ], Oct. 30, 1967.
By 1974, the Korean government was well on its way to achieving a self-sufficient
fiber industry, second in Asia after Japan; see “Korea Starts New Round of Chemical
Building,” CW 112 (June 27, 1973): 39.
cartels, joint ventures, and licensing agreements. In synthetic fibers,

much of the money and expertise also came from Western compa-
nies, either through wholly owned subsidiaries or joint ventures. By
the late 1960s, most U.S. fiber makers had plants in Latin America:
Celanese had five facilities; Esso Chemical Company one; Owens-
Corning Fiberglass one; and United Merchants and Manufacturers
one. Monsanto was in Columbia, Uruguay, and Israel, and considered
expanding elsewhere. In other parts of the world, Allied Chemical
Company co-owned a nylon plant in Iran; American Cyanamid, Dow,
and Esso Chemical had facilities in Spain; and Rohm and Haas had
a joint venture in India with Modipon, a major textile manufacturer.
European fiber makers also contributed their know-how to the inter-
national mix.26
By 1970, synthetics accounted for 58 percent of the 9.5 billion
pounds of fiber used by U.S. textile mills. Garment makers used
40 percent of these fibers; home furnishings 28 percent and indus-
trial uses, mostly tires, 18 percent.27 American firms such as Allied,
American Cyanamid, American Enka, Celanese, Dow, Eastman Ko-
dak, Monsanto, and Union Carbide now competed in DuPont’s home
market. These domestic threats were exacerbated by imports from
low-wage economies like Hong Kong, Japan, Korea, and Taiwan.28 In
April, Chemical Week quipped about the problems of overcapacity,
imports, and sliding consumer demand, woes compounded by the
great hemline debate: would women choose the mini, the maxi, or the
midi?29 DuPont stayed on top with low prices, high quality, extensive
marketing, and volume production at home, and by searching for new
fiber markets overseas.
Learning by Doing Abroad
The lure of the European Economic Community (EEC), formed in

1957–1958, proved irresistible for DuPont and other U.S. chemical
26. European fiber makers that invested in other countries included Algemene
Kunstzijde Unie N.V. of the Netherlands (five plants); Badische-Anilin und Soda
Fabrik A.G. [BASF] of Germany (one); Fiberglass Ltd. of the Great Britain (one);
Glanzstoff A.G. of West Germany (one); ICI of the U.K. (two); Rhône Poulenc S.A.
of France (three); Snia Viscosa S.A. of Italy (five); Chatillon S.A. of Italy (one); and
Farbwerke Hoescht of West Germany (two). See Morris, “Synthetic Fiber Output.”
27. “On Top of Everything Else, a Hemline Hassle,” CW 106 (April 29, 1970):
16–18.
28. Blaszczyk, “Styling Synthetics”; “Fibers Makers See Recovery on the Way,”
C&EN 46 (Jan. 22, 1968): 22–24.
29. “On Top of Everything Else, a Hemline Hassle.”
680 BLASZCZYK
companies.30 Two years after opening their first European subsidiary,

DuPont Co. (U.K.) Ltd., in London in 1956, executives reorganized
and expanded the firm’s small Wilmington-based Foreign Relations
Department, empowering the new International Department to es-
tablish and manage its foreign subsidiaries, coordinate exports and
intrafirm trade, and seek “new manufacturing opportunities outside
the United States.”31 In 1959, they established DuPont International
S.A. (DISA) in Geneva, a trading subsidiary charged with the task of
marketing DuPont products made in the U.S., Canada, and Europe to
customers in the Eastern hemisphere. The Swiss office also oversaw
technical service, market research, advertising, and public relations
outside the Western hemisphere.32 As Benjamin F. Schlimme, the
vice president in charge of the International Department from 1967 to
1975, told Chemical and Engineering News, “We looked at Europe as
one market from the start.”33
In 1971, another DuPont vice president, Edward E. Kane, explained
the rationale behind the big European initiative. Right after the war,
DuPont followed the conventional practice of exporting U.S.-made
products to Europe, relying on local distributors to build the market.
After prying open the trade, DuPont invested in regional manufactur-
ing facilities. During the early to mid-1960s, the company built large-
scale plants—in Northern Ireland, West Germany, Luxembourg, and
the Netherlands—and set up corporations to sell the output, mostly
within Europe. By 1969, with the bulk of startup expenses and or-
ganizational problems behind them, DuPont managers expected to
generate “rapid earnings growth” from products made in Europe. Bet-
ting on sophisticated European tastes, they imagined a bright future
for high-tech consumer goods make from DuPont’s colorful plastics
and easy-care fabrics.34 Indeed, from 1960 to 1979, DuPont’s Euro-
pean sales grew from a paltry $60 million to $2 billion, accounting for
half of the firm’s foreign business.
In the United States, DuPont operated the world’s largest fiber
plants, built to achieve economies of scale and meet the demands
of hungry American textile mills, carpet factories, and apparel man-
ufacturers, which had not yet moved offshore. In 1973, DuPont
had major fiber plants in Seaford, Delaware; Waynesboro, Virginia;
30. “Chemical Firms Weight Investment Curb Effects,” C&EN 46 (Jan. 22, 1968):
24–26; Sudworth, “The Chemical Industry,” 207. In 1968, 25 percent of U.S. chem-
ical companies’ foreign investment went to the EEC.
31. E. I. du Pont de Nemours & Company [hereafter cited as DuPont], Annual
Report, 1958, 10.
32. DuPont, Annual Report, 1959, 15.
33. “E. I. du Pont de Nemours & Co.”; “U.S. Chemical Firms Do Well in Europe,”
C&EN 47 (July 28, 1969): 28–30.
34. “Overseas: Where the Action Is.”
Kinston and Wilmington, North Carolina; Chattanooga, Tennessee;

and Camden, South Carolina. In comparison to India’s entire fiber
capacity of 204 million pounds per year, a DuPont polyester plant
under construction outside Charleston, South Carolina, would start
up at 250 million pounds!35
Overseas, DuPont sized its plants to accommodate national or re-
gional markets for fibers in apparel, sheeting, mattresses, carpets, tires,
and insulation, and set them up with the objective of eventually
turning operations over to local managers. In 1972, the gargantuan
fiber facilities in Uentrop, West Germany, run by DuPont de Nemours
(Deutschland) GmbH, employed two thousand workers to produce
nylon and polyester for the European, Australian, and South African
markets.36 After the Uentrop site was selected in 1966, DuPont dis-
covered that the path was not strewn with roses for an American firm
with a French name in this town close to the Ruhr River valley, heav-
ily bombed by the Allies in World War II. Besides the dirty looks
from townspeople, DuPont expatriates contended with jibes from the
local chemical companies, Bayer and Hoescht, perturbed over the tax
breaks given to Americans. On stream by May 1968, the giant Uentrop
plant was managed by three hundred and fifty white-collar workers,
including twenty-one Americans, and was headed by the 50-year-old
John R. Wheaton, an engineer who had directed DuPont’s Argentine
operations. Fluent in German, Jack Wheaton functioned as a goodwill
ambassador, using his language skills to quell competitors’ concerns
about taxes and labor-market competition, instill confidence among
the local community, and prepare European trainees for leadership
positions.37
As DuPont expanded in Europe, DISA played a vital role in devel-
oping new business opportunities in the Eastern hemisphere. The
success of the Paris–USA couture program led DISA to launch a
similar Geneva–Milan effort, aided by Italian fashion entrepreneur
Beppe Modenese who connected DuPont marketers to jet-set design-
ers like Irene Galitzine (1916–2006), the inventor of silk lounge
pajamas. Within two years after Galitzine used DuPont synthetics in
her designs, 25 percent of Italian couture garments on the Milan run-
ways were made from Orlon acrylic fiber, and DISA received millions
of dollars in free press. In France, Phillip Delos, whose family ran the
Audroset Spinning Mills for more than a century, introduced Orlon
35. DuPont, Annual Report, 1974, 43.

36. Kinnane, DuPont, 179.
37. “DuPont Finds Germany Gemütlich,” CW 104 (March 8, 1969): 17–21; “Ma-
jor Foreign Projects in West Germany,” CW 107 (Sept. 23, 1970): 29–36. For an
overview of the European fiber industry at a later date, see Shaw and Shaw, “Ex-
cess Capacity and Rationalisation in the West European Synthetic Fibres Industry.”
682 BLASZCZYK
to French knitting mills that made it into heavy sweaters, fittingly

dubbed Le Chunky. In the late 1960s, DISA oversaw the European
introduction of Qiana, a luxury nylon that imitated silk.38
The Uentrop and DISA experiences taught DuPont that it could
readily adjust to a “foreign” business environment. Jack Wheaton had
finessed difficult situations in Argentina and did it again in West
Germany. DISA marketers figured out the slippery slopes of European
tastes, aided by fashion intermediaries like Beppe Modense and Philip
Delos. Modense showed how high-society connections could open
the doors to high style. Delos used his textile-mill ties to build an
Orlon market among the fastidious French, whose discerning tastes
were known around the world. The liabilities associated with being an
American in Europe—a foreigner—were overcome with the right help.
With Western Europe under wraps, DuPont’s International Depart-
ment acknowledged that Eastern Europe, Latin America, and other
lesser developed regions held promise. A brief description of the Mex-
ican business—established in 1925 with the acquisition of an explo-
sives plant and the creation of the flagship subsidiary DuPont, S.A.
(Dupsa)—shows how DuPont operated in Latin America. By 1975,
DuPont had eleven wholly or partially owned Mexican subsidiaries
that produced textile fibers, finishes, pigments, dyes, gasoline addi-
tives, explosives, and industrial chemicals. Between 1962 and 1976,
the Mexican government passed laws that limited foreign ownership
in the downstream petrochemical industry to minority shares. Among
DuPont’s seven major Mexican businesses, four were joint ventures:
Pigmentos y Productos Quimicos [PPQ], S.A. de C.V. (49 percent own-
ership); Tetraetilo de Mexico, S.A. (49 percent); Quimica Fluor, S.A.
de C.V. (33 percent); and Nylon de Mexico, S.A. (40 percent). Es-
tablished in 1959, PPQ, a joint venture with Mexico’s largest private
bank, made titanium dioxide, an opacifier in paints. Accepting a mi-
nority share in this joint venture predated the 1962 law; the deci-
sion had nothing to do with Mexican nationalism, but made good
business sense for DuPont. Nylon de Mexico, formed in 1962, made
nylon and polyester and was building a new plant to manufacture
Lycra spandex.39 In 1975, chairman Irving S. Shapiro announced that
DuPont’s $200 million investment in Mexico would be increased by
25 percent over the next few years.40
38. Blaszczyk, “DuPont de Nemours.”

39. “A Multinational in Mexico,” DuPont Context 4 (Dec. 1975): verso front
cover-5; DuPont, Annual Report, 1975, 35; DuPont, Annual Report, 1976, 40;
“Mexico: Ownership Limited, Profits Are Not,” CW 122 (June 7, 1978): 45–53.
40. “DuPont Plans a Major Expansion of Its Mexican Operation,” C&EN 53
(Aug. 4, 1975): 10.
By the early 1970s, DuPont managers, aided by staff economists,

clearly understood that foreign investments were more profitable
than the U.S. business. In 1973, DuPont had thirty-nine major sub-
sidiaries and fifteen joint ventures operating facilities in twenty-seven
locales outside the United States. With twenty-seven thousand and
four hundred employees, these subsidiaries and affiliates had ninety-
four chemical plants in operation or under construction.41 In 1975,
DuPont’s foreign sales represented 27 percent of the company’s busi-
ness, and a substantial portion of its $1 billion capital budget was
earmarked for international projects. In Europe, a significant part of
sales growth came from fibers, up by 50 percent from 1968 and 1969,
with no slack in sight.42
“Renaissance of Modern Iran” and American

Business
In this context, the Middle East came on DuPont’s radar screen as a

region brimming with opportunities. Iran had special appeal, given
the swift pace of industrialization under the constitutional monar-
chy of Shah Mohammad Reza Pahlavi.43 Before World War II, Shah
Reza Pahlavi had used the state as an instrument of modernization,
but the “big push” came from his son, who applied western develop-
ment theories to the Iranian economy. After 1953 when a Cold War
Anglo-American coup d’etat ousted a nationalist prime minister who
opposed foreigners, the Shah embraced a linear development model
that emphasized modernization through large-scale, technologically
advanced, capital-intensive projects. A series of Development Plans,
each five to seven years long, channeled foreign income from the oil
industry, nationalized in 1951, into projects designed to bring Iran
in step with the West. From the early 1960s, a separate pet project
of the Shah, the “White Revolution,” focused on social and political
reform: the redistribution of land, nationalization of forests, expan-
sion of the electorate, privatization of major industries, profit sharing
for factory workers, and improvement of the literacy rate. The De-
velopment Plans—designed to advance the Shah’s vision of Iran as
an unabashedly modern “Great Civilization”—stimulated a period of
stunning economic growth. Between 1963 and 1978, Iran’s per capita
41. Kane, “DuPont in the World Economy.”

42. “Firms’ Investment Policy for 1975,” Business International [hereafter cited
as BI] (Jan. 3, 1975): 3, 8; “DuPont’s European Sales in ‘69 Soared about 40%, to
$370 Million,” CW 106 (Jan. 21, 1970): 36.
43. Carl W. Borden to Gamble, “Telephone Interview with James Flanagan,
London Bureau Chief, Forbes magazine, 12/18/75,” Dec. 23, 1975, PIC.
684 BLASZCZYK
income rose from about $176 to $2,160, while its gross domestic prod-
uct grew by approximately 9.3 percent annually.44
As the Shah made clear, the central tenet of modernization was
the rapid expansion of Iran’s industrial sector and export capabili-
ties, fearing that oil resources would be depleted in 30 years. In 1957,
Iran had a mere one thousand private industrial establishments; by
1974, there were six thousand and two hundred.45 During the Second
Plan (1956–1962), the government laid the groundwork for industrial
growth by directing substantial sums to agriculture, electrification,
and transportation, building large hydroelectric dams, highways, and
railroads. The Third Plan (1963–1967) continued to invest in agri-
culture and infrastructure, but put more emphasis on industry. The
sixties witnessed dramatic changes in the industrial landscape, with
new facilities for making automobiles, bricks, detergents, leather, oil
heaters, and rubber footwear. The government itself invested in a
large aluminum smelting works, a chemical company, and smaller
petrochemical plants. For the most part, however, the state encour-
aged the private sector to grow by offering incentive packages: inex-
pensive raw materials, licenses for monopolies, and tax breaks. The
private sector expanded its investment in manufacturing, aided by
loans from two new state banks, the Industrial Mining and Develop-
ment Bank of Iran (IMDBI) and the Industrial Credit Bank (ICB). The
highly successful Fourth Plan (1968–1972) benefited from economet-
ric techniques that better enabled government agencies to monitor
economic change and encourage private investment. It broke away
from “import substitution”—the practice of opening factories to make
consumer goods that had been imported—in favor of producing in-
termediates and capital goods; it also stressed the export of resource-
based products such as natural gas, shoes, and textiles. During this
era, agriculture grew at an annual rate of 3.9 percent, while indus-
try and services expanded at about 14 percent. The most ambitious
plan, the Fifth (1973–1977), nearly doubled government allocations
for industry and infrastructure.46
44. On the early development plans, see Frances Bostock and Geoffrey Jones,
“British Business in Iran, 1860s-1970s,” 31–67, in Davenport-Hines and Jones, eds.,
British Business in Asia since 1860; Bostock and Jones, Planning and Power in Iran;
and Pesaran, “The System of Dependent Capitalism in Pre- and Post-Revolutionary
Iran.”
45. Shambayati, “The Rentier State,” 320–21.
46. Razavi and Vakil, The Political Environment of Economic Planning in Iran,
1971–1983, 19–36, 61; Amid and Hadjkhani, Trade, Industrialization and the Firm
in Iran; International Bank for Reconstruction and Development, “Report on Tex-
tiles and Man-Made Fibers, Iran, vol. 2: The Textile Industry,” 215 [hereafter cited
as World Bank, “The Textile Industry”].
Oil revenues paid the bills. Between 1960 and 1969, the state’s an-
nual income in foreign currency from oil grew from $500 million to
$1 billion.47 In 1960, oil contributed 41 percent of government rev-
enues; in 1970, more than 45 percent.48 By 1971, the Shah was us-
ing 85 percent of these oil rents to enlarge government services, ex-
pand overseas trade, develop the infrastructure, and encourage foreign
investment.49 Although Iran declined to join fellow OPEC members
in the Arab Oil Embargo, the Shah in December 1973 shocked his
Western allies by announcing a hike in the price of Iranian oil.50 As
Americans struggled with rising prices at the pump, inflows from
the nationalized oil industry flooded Iran’s treasury. In 1972–1973,
Iranian oil revenues totaled $2.8 billion; in 1974–1975, $17.8 billion.
Anticipating this influx, the Shah ordered his ministers to revise the
Fifth Plan, so as to redistribute the wealth by creating more jobs
and products in high-tech industries. These hasty decisions initi-
ated an era of runaway inflation, feeding widespread social dissat-
isfaction, which ultimately led to the Shah’s toppling by the Islamic
Revolution.51
Military might was an important component of modernization, and
this policy inexorably linked Iran to the United States. In 1968, the
British had announced their plans to withdraw military forces from
the Persian Gulf by late 1971. Wary of Soviet expansion, the Nixon
Administration rushed to fill the void, but exerted caution, given the
public outcry against the Vietnam War. President Richard M. Nixon
and Secretary of State Henry A. Kissinger developed a “twin pillars”
policy to prevent Soviet expansion in to the Middle East. The United
States would rely on Iran and Saudi Arabia as security guards, a dual
bulwark guarding the Persian Gulf. In exchange, the U.S. State De-
partment arranged for American companies to sell the Shah the latest
high-tech weapons, including aircraft, submarines, tanks, missiles,
bombs, and artillery.52 By 1974, Iran was the world’s largest arms
importer with an impressive arsenal: an army of one hundred and
sixty thousand men, air force of forty thousand men, and a navy with
eleven thousand and five hundred, equipped with weapons such as
47. Alfred Friendly, “Iran Shows Progress under Direction of Shah,” Los Ange-
les Times [hereafter cited as LAT], June 22, 1969.
48. Shambayati, “The Rentier State,” 307–31 (figures, 316–17).
49. Pesaran, “The System of Dependent Capitalism in Pre- and Post-
Revolutionary Iran.”
50. “Shah of Iran. Visions, Wives, Oil Curse,” New York Times [hereafter cited
as NYT], Dec. 30, 1973.
51. Razavi and Vakil, The Political Environment of Economic Planning in Iran,
61–99; Kaikati, “Doing Business in Iran,” 14; Brendan Jones, “Mideast’s Develop-
ment Plans Growing as U.S. Companies Vie for Contracts,” NYT, July 21, 1975.
52. Alexander and Nanes, ed., The United States and Iran, 375–76.
686 BLASZCZYK
F-4 Phantom jets from the U.S., Chieftain tanks from the UK, and
various types of destroyers, helicopters, and transport planes. In early
1974, the Shah ordered eighty F–14 fighter planes from Long Island’s
Grumman Aerospace Corporation, with a price tag of almost
$1.5 billion.53
With strong ties to the United States, the Shah also encouraged
American companies to consider direct investment in Iranian indus-
try. Institutions such as the Iran–American Chamber of Commerce
of New York and the U.S.–Iran Joint Business Council supported
this agenda, but the government had an aggressive public-relations
bureaucracy.54 As the Fourth Plan wrapped up, the government
launched an impressive promotional campaign, touting the “renais-
sance of modern Iran” to potential U.S. investors.55 In January 1972,
a multipage advertisement in New York Times depicted the Great
Civilization, showing the Shahanshah and Empress Farrah flanked
by symbols of ancient Persia and modern Iran, gilded mosques ver-
sus up-to-date schoolrooms. The tagline boldly suggested that Iran
was the best place for foreign investors in the Middle East: “Mod-
ern, Exciting Iran Offers Great Profits in Great Ventures.” The text
described “increasing openings for new industries in so many intact
or little developed fields, including agro-industry and food process-
ing, mining, electrical and electronic equipment, chemicals (includ-
ing petrochemicals, man-made fibers and dyestuffs), metal products,
machinery and parts, and automotive parts.”56 In January 1973, an-
other lavish ad in the New York Times equated the Fourth Plan with
“the industrial expansion of Iran.”57 By May, a Times journalist de-
scribed Tehran as a capital city brimming with “gleaming hotels,” bou-
tiques, restaurants, and foreign executives who were making deals.58
Chemical Week noted the likely emergence of a petrochemical colos-
sus in the Middle East, as oil-rich Muslim states modernized in Iran’s
footsteps.59
By 1975, the United States was Iran’s number one trading part-
ner, with bilateral trade between the two countries amounting to
$4.8 billion. That year, Secretary of State Kissinger and Iran’s Minis-
ter of Economic Affairs and Finance, H. E. Hushang Ansary, working
53. “Oil, Grandeur, and a Challenge to the West,” Time, Nov. 4, 1974; Kaikati,
“Doing Business in Iran,” 15.
54. Iranian-American Economic Survey.
55. George Melloan, “The Renaissance of Modern Iran,” NYT, May 8, 1973.
56. Advertisement, NYT, Jan. 21, 1972.
57. Advertisement, NYT, Jan. 14, 1973.
58. Melloan, “The Renaissance of Modern Iran.”
59. John M. Winton, “Mideast Pulls Chemical Crowd,” CW 115 (July 24, 1974):
31–44.
under the auspices of the United States-Iran Joint Commission, signed

an agreement that in part committed Iran to spending $15 billion on
American goods and services over the next five years. With more
than 33 million people, a large domestic market, and an impressive
growth record, Iran seemed like a golden opportunity for American
companies. Between the First and Fourth Plans, foreign direct invest-
ment in Iran grew from $68 million to $7.7 billion, with projections
of $30 billion for the Fifth Plan. From 1956 to 1970, 138 multina-
tionals invested there, including ten companies from France, twenty
from the UK, twenty-five from Germany, and thirty-seven from the
United States. The Iranian government encouraged joint ventures, li-
censing agreements, and private technical service contracts, seeing
these as the most efficient instruments for fostering entrepreneurial
collaboration and transferring Western technology and risk capital
into the country.60 Iran’s statutory assurances as to fair compensa-
tion if the enterprise were to be nationalized and its cross-investment
policies—a willingness to invest in the West—helped to mitigate fears
among potential corporate investors.61
With the Fifth Plan, the Shah targeted the petrochemical industry
for development. By 1972, Japan’s Mitsui group and the National Ira-
nian Petrochemical Company, an agent of the Iranian state, planned to
build primary chemical facilities to make olefins and aromatics as well
as downstream plants for polyethylene, ethylene dichloride, ethylene
glycol, ethyl benzene, and cumene.62 Two years later, a Chemical
Week survey of twelve Middle Eastern countries reported that Iran
had the most advanced petrochemical industry, with $400 million
invested; it alone was making synthetic fibers.63
60. “Iran Will Spend $15 Billion in U.S. over Five Years,” NYT, Mar. 5, 1975.
The firm count is from Iranian-American Economic Survey, 42–43, 65, 131. In
January 1973, the Iranian Ministry of the Economy reported similar figures; there
were 134 concerns, besides banks, operating with some foreign participation. Of
these, 108 were in manufacturing, 10 in mining, 7 in agriculture, and 9 in services.
See Franko, “Multinational Enterprises in the Middle East,” 109.
61. “Mideast Pulls Chemical Crowd.”
62. “Oil-Rich Nations,” CW 111 (Oct. 18, 1972): 11–12; “World Roundup,” CW
109 (Oct. 27, 1971): 19.
63. “Mideast Pulls Chemical Crowd.” BI urged foreign investors to prearrange
for arbitration by third parties, e.g., the International Chamber of Commerce in
Paris, when setting up a Middle Eastern business; see “New Patterns Emerge in
Doing Business in the Middle East,” BI (July 16, 1976): 230–31. Political risk insur-
ance was offered by the U.S. Overseas Private Investment Corporation, but many
American firms in Iran believed the Shah would “stay forever” and did not pur-
chase it; see “Political Risk Coverage in Iran Only $514 Million,” CW 125 (Dec. 5,
1979): 21.
688 BLASZCZYK
From Cotton to Polyester: Behshahr Seeks

a Fiber Partner
Against this backdrop, the Behshahr Industrial Group, an Iranian

conglomerate with substantial interests in the textile industry, began
exploring the possibility of manufacturing synthetic fibers at home.
Behshahr was controlled by the prominent Ladjevardi family, who
entered commercial life as bazaari merchants in the nineteenth cen-
tury and expanded into other businesses in the late-twentieth cen-
tury. From 1944, the Ladjevardis operated the Arien Trading Com-
pany, which imported consumer goods, raw materials, and textiles;
in 1951, the firm, renamed the Behshahr Industrial Group, diversi-
fied into manufacturing with a cotton-ginning facility in Behshahr,
a city in northern Iran. In the 1960s, Mahmoud Ladjevardi headed
the firm, assisted by his three sons, Ghassem, Ahmed, and Habib
Ladjevardi, and his younger brother Akbar Ladjevardian. (The pa-
triarch Mahommad and his youngest son, Akbar, used the name
Ladjevardian, while the older son, Mahmoud, chose Ladjevardi; both
names were based on the Persian word for indigo, the dye used in
blue jeans.) Riding on the Shah’s big push, Behshahr became one of the
largest private enterprises in the Middle East. In 1968, Behshahr was a
$35 million company, which, among other things, exported glycerine
to the United States, Europe, and Japan and was negotiating a busi-
ness deal with the Soviet Union. By 1976, it would have twenty-two
wholly owned subsidiaries, twenty-six joint ventures, and nine thou-
sand employees, with business interests in agriculture, banking, con-
sumer products, construction, cotton, insurance, international trade,
land development, packaging, shipping, vegetable oil, and textiles.64
In 1955, the 32-year-old Akbar Ladjevardian assumed responsi-
bility for Behshahr’s investments in the textile industry. Backward
integration into textile manufacturing had been logical for a trading
company that sold cotton, fabrics, and indigo. By the 1960s, Behshahr
was Iran’s major textile producer, owning some of the largest, best-
equipped mills: Iran Knitting, Kashan Industries, Kashan Velvet, and
Iraq Industries. In keeping with the Shah’s economic objectives, the
firm sought to update the textile and garment industries with mod-
ern equipment, high-tech materials, and fashion fabrics. Introduced
to Iran by the international textile trade, rayon had long been used
by local textile mills to produce cotton–rayon blends, which con-
sumers appreciated for their bright colors, silk-like “hand” or feel,
64. Ladjevardian interview; Iranian-American Economic Survey, 152–53;

Vaghefi, Entrepreneurs of Iran, 49–55; “Iran: The Superstar of a Booming Econ-
omy,” Business Week (June 29, 1974): 38–39.
and low price. By 1968, 45 percent of the fiber consumed in Iran

consisted of man-made imports, mostly rayon but some synthetics.
Iran’s Ministry of the Economy calculated that in 1969 the 64,000
tons of imports divided as follows: cellulose (73 percent), nylon
(17 percent), acrylic (5 percent), and polyester (5 percent). West
Germany and Japan were the dominant suppliers, but Italy, Austria,
Taiwan, UK, the Netherlands, Sweden, Norway, France, Israel, South
Korea, Czechoslovakia, France, Spain, and Switzerland also sold cel-
lulosic and synthetic fibers to Iran. Around this time, Behshahr’s mills
made knitted cloth, machine-woven Persian carpets, and velvet fab-
rics using synthetics imported from Teijin, Ltd., the second largest
fiber maker in Japan after Toyo Rayon Co., Ltd. (renamed Toray In-
dustries in 1970).65
By 1970, Behshahr began to think seriously about establishing
synthetic fibers capabilities in Iran. The growing world demand for
synthetics, combined with Japanese national economic policy, had
a negative impact on Behshahr. Created during the 1964 recession,
Japan’s Chemical Fiber Industry Cooperative Council—comprised
of Japanese fiber makers, economists, bankers, and MITI represen-
tatives—restricted the expansion of fiber plants as a measure to up-
hold prices and control the market. Five years later, these production
quotas remained, despite the rising Japanese standard-of-living, West-
ernizing tastes, and the lively domestic demand for fibers. Because of
the Council’s restrictions, Japanese fiber makers could not increase
capacity and were forced to import polyester from their subsidiaries
in Taiwan and South Korea. During this crunch, Behshahr found it
impossible to secure adequate supplies at any price, even from Teijin
which channeled its fibers to hungry Japanese textile mills.66
With oversight for Behshahr textiles, Akbar Ladjevardian launched
an initiative to locate a suitable venture partner to help build an
Iranian synthetic fibers plant. Major global fiber companies, including
Teijin, Bayer, Hoescht, and DuPont, were invited to submit bids.67
65. Ladjevardian interview; International Bank for Reconstruction and Devel-

opment, “Report on Textiles and Man-Made Fibers, Iran, vol. 3: Man-Made Fibers,”
1–4, 24, 26 [hereafter cited as World Bank, “Man-Made Fibers.”]; “Japan Faces a
Decade of Decision,” CW 107 (May 31, 1970): 31–38.
66. Ibid.; “Faster Expansion Is Ahead for Japan’s Fiber Capacity,” C&EN
47 (Aug. 25, 1969): 21; “Japanese Polyester Makers Feel Pressure,” C&EN 47
(Sept. 8, 1969): 24–25. In late 1970, the Japan Chemical Fibers Association ap-
proved expansion that would boost capacity by mid-1971; see “More Fiber Capacity
for Japan,” CW 107 (Sept. 2, 1970): 85.
67. Ladjevardian interview. Around this time, Asahi Chemical Industry was do-
ing market research on a plant in the Middle East, possibly Iran, to make polyester
and rayon fibers; “Japanese Chemical Firms Are Investing More Overseas,” CW 111
(July 5, 1972): 22.
690 BLASZCZYK
During the 1970s, the Iranian government encouraged joint ventures

as mechanisms for acquiring Western technology while benefiting
local firms; with few exceptions, majority ownership was reserved
for the Iranian partner.68 An Iranian PhD chemical engineer from
MIT, Mostafa Benjamali, headed a five-person team that evaluated
the proposals, visiting plants around the world to examine production
setups. In the end, Behshahr thought DuPont was the best bet, a virtual
one-shot deal. If Behshahr were to go German, for example, it would
have to develop a relationship with two firms: Bayer only made nylon;
Hoescht, acrylic. Among the world’s fiber makers, DuPont alone had
the know-how to make all the types of synthetics needed in Iran.69
Polyester filament was required for woven and knitted fabrics for
apparel. Polyester staple would be woven with rayon, cotton, and
wool to produce fabric blends that had greater durability and easy-
care characteristics. Finally, acrylic, a type of artificial wool, would
be spun into yarns that could be knitted into sweaters, socks, and
women’s suits or woven into blankets and carpets.70
In August 1972, Akbar Ladjevardian met with DuPont execu-
tives at DISA’s Geneva office to explain Behshahr’s rationale for
seeking a fibers partner. As members of Iran’s business elite, the
Ladjevardi family moved in the right circles, possessing the “know
who” [sic] for getting things done within industry and government.
Akbar Ladjevardian was close friends with Minister of the Economy,
Hushang Ansari, whom he had known since 1950 when both did busi-
ness in Japan. He also served as Secretary General of the Iran Textile
Syndicate, a “chamber of commerce” that represented the industry’s
interests with the government. Such connections promised to be an
asset to the joint venture. As a high-tech industry, the synthetic fibers
business sat squarely between two sectors the Shah had targeted for
rapid modernization: textiles and petrochemicals. As the nation mod-
ernized, Iranians were buying more clothing and textiles, and the pace
of consumption grew at double the world average.71
DuPont managers learned something about Iran’s textile indus-
try and fiber market from a 1970–1971 World Bank study that
advocated the construction of high-tech plants to make nylon,
polyester, and acrylic. The report pointed to the Aliaf Nylon Com-
pany near Tehran as a success story. Created as an Iranian–American
joint venture between Mahloudji and Allied Chemical, this plant
68. Jones, Multinationals and Global Capitalism, 160.

69. Ladjevardian interview.
70. Borden to J. R. Wheaton, “Text for Tehran Journal,” Nov. 22, 1976, PIC. On
these types of fibers, see Moncrieff, Man-Made Fibres.
71. Ladjevardian interview; Borden to Gamble, “Telephone Interview with Mr.
James Flanagan”; idem to Wheaton, “Text for Tehran Journal.”
commenced operation in July 1969 under a government license to pro-

duce 2,500 tons of nylon annually. In early 1970, Allied, which spe-
cialized in tire cord and industrial yarn, withdrew from the venture,
and the German firm Farbenfabriken Bayer AG, which had exported
nylon yarn to Iran, purchased its interest. Managed by Bayer, the
$12.6 million Aliaf plant employed 428 men, principally Iranians,
who worked three shifts. Aliaf sold nylon directly to filament textur-
izers and knitting mills, serving about one hundred customers primar-
ily in Tehran and Isfahan. The firm had secured a license to expand
its output to 10,000 tons per year, much less than the average U.S.
plant at 16,600 tons. Comparing Iran to other developing nations, the
World Bank predicted a declining market for rayon and a rising de-
mand for nylon, acrylic, and polyester in the 1970s. Iran’s neighbors,
Pakistan and Turkey, had already invested in their own rayon, nylon,
and polyester plants. Additional capacity was needed to make these
countries less dependent on imports from outside the Middle East.
With regional economic growth in mind, Iran’s development banks,
the IMDBI and ICB, had recently explored proposals for joint ventures
in synthetic fibers by Hoescht, ICI, and Mitsubishi.72
For DuPont, a joint venture in Iran presented the opportunity to
grow internationally by applying its engineering and marketing ex-
pertise to a part of the world with little fiber-making capacity.73 The
expectation was that Behshahr would open doors in Iran, facilitat-
ing the relationship with cabinet ministers, government bureaucrats,
and textile mills. In turn, the Americans were to concentrate on engi-
neering, technology transfer, technical assistance, and marketing. A
Behshahr subsidiary, the Man-Made Yarns Corporation (MMYC), was
created as a “study company” to manage the research, planning, and
feasibility reports; it dissolved when Polyacryl was formed. Through
his contacts with government ministers, Akbar Ladjevardian secured
the Iranian licenses to manufacture polyester and acrylic.74
Behshahr and DuPont understood that a Middle Eastern fibers
enterprise would take at least a decade to get off the ground and
72. World Bank, “Man-Made Fibers,” 10–13, 30–31, 38, 41–42, Appendix 3,
2–3. DuPont managers may have obtained this confidential report from their Ira-
nian partners. For DuPont’s use of the report, see A. D. Irving to K. G. Clarke,
“Iran—Marketing,” Feb. 8, 1973, PIC.
73. Kinnane, DuPont, 204; Gamble interview by author.
74. T. A. Casadevall to Borden, “Polyacryl—Compensation Behshahr,”
Aug. 23, 1976, PIC. Iran’s Ministry of Economy, Industrial Section, granted in-
dustrial licenses to proposed enterprises that met certain criteria for added value,
the use of domestic raw materials, and export quotas. An industrial license was
needed to secure municipal permission to build a facility, secure water and power,
import machinery and raw materials, get bank loans, and allow foreign technicians.
See World Bank, “The Textile Industry,” 220.
692 BLASZCZYK
Figure 1 DuPont trained Iranian engineers at its high-tech fiber facilities in the
United States. Here, Asghar Dehdashti-Zadeh gets a manufacturing lesson
from senior engineer R. F. Cavanaugh at the DuPont plant in Kinston, N.C.
DuPont News 6, no. 11 (Nov. 1977), in Polyacryl Iran Corporation Papers;
courtesy, Hagley Museum and Library.
turn a profit.75 The planners created a blueprint that divided the

project into three phases: construction, startup, and full operation.
In Phase I, DuPont and its American subcontractors would oversee
the design and construction of the facility between 1974 and 1978.
Running a fibers plant using DuPont technology required familiarity
with sophisticated equipment, delicate instrumentation, continuous
operation, and high-speed handling devices, as well as the ability
to make on-the-spot decisions. Therefore, DuPont had to send more
than two hundred university-educated Iranian men—engineers, tech-
nicians, and marketers—to its facilities in North America and Europe
for intensive training (figure 1). Due to the shortage of skilled labor in
Iran, it also had to train four thousand construction workers and one
thousand plant operators at the Polyacryl site, a formidable task given
the language barrier. Technical marketers would work closely with
Iranian textile mills, training them to use DuPont fibers in their equip-
ment and designs. During Phase II from 1978 to 1983, the Polyacryl
plants would make fibers using intermediates imported from Europe,
while marketers continued to build the demand for DuPont synthetics
among local textile manufacturers. DuPont would still oversee some
aspects of production, while working to turn over the plant to Ira-
nians. In Phase III during the 1980s, Iranians would gradually take
charge and run the plant. By this time, the government-owned Na-
tional Petrochemical Company would be making chemical intermedi-
ates, which Polyacryl would use in fiber production. This three-phase
process was needed due to the complexity of constructing high-tech
75. S. Danby to L. E. McCune et al., “Iranian Venture,” Apr. 18, 1973, PIC.
facilities; training Iranians as skilled maintenance engineers, process

controllers, and plant operatives; developing the domestic chemical
sector; creating a demand among textile mills; teaching those cus-
tomers how to use Polyacryl fibers; and educating consumers on the
advantages of synthetics.76
Over the next few years, DuPont and Behshahr negotiated the
terms of the joint venture, with the Iranians securing financial and
administrative support from government agencies and development
banks. In May 1973, DuPont had its first exposure to the Iranian
bureaucracy and the “bigger is better” approach that characterized
the Shah’s modernization programs. After reviewing the preliminary
feasibility study, the Ministry of the Economy proposed a larger
manufacturing facility, so that Polyacryl could serve all of Iran’s
synthetic fiber needs and begin to build a regional export market.
In the final proposal of March 1974, DuPont and MMYC clearly stated
that the project’s success depended on “significant assistance from
the Iranian Government.” The aid included laws prohibiting rival
enterprises in synthetic fibers; protectionist tariffs designed to up-
hold prices of polyester and acrylic; guarantees of sufficient water
and electricity; and a five-year holiday on corporate taxes and duties
for imported equipment and chemicals. Given this assistance, Poly-
acryl would be able to earn a reasonable return on investment and
sufficient cash flow to allow for expansion, as required by the growth
of the Iranian textile industry.77
That month, New York Times reported DuPont’s investment in
the joint venture, the largest Iranian–American collaboration. Formed
in August 1974, Polyacryl committed DuPont to its Iranian partners
and the development banks that provided much of the financing.
DuPont had 40 percent equity in PIC; the Behshahr Industrial Group
24 percent; the IMDBI, 18 percent; the ICB, 4 percent; and other share-
holders, including textile mills, 14 percent.78 Initially, DuPont put
$43.4 million in capital into Polyacryl, and helped to secure nearly
$200 million in loans from banks around the world.79 Besides the
76. Man-Made Yarns Corporation and E. I. du Pont de Nemours & Company,

“Feasibility Report: Acrylic and Polyester Fiber Project for Iran,” Mar. 1974, PIC
[hereafter cited as 1974 Feasibility Report]; Gamble, “Annual Report Review”;
Borden to Gamble, “Telephone Interview with James Flanagan.”
77. 1974 Feasibility Report.
78. Gerd Wilcke, “DuPont Announces an Iranian Venture to Produce Fibers,”
NYT, Mar. 16, 1974; “DuPont Will Take a 40% Share in a $250 Million Fiber Plant
in Iran,” CW 114 (March 27, 1974): 25; clipping from Mideast Markets (Aug. 29,
1977), PIC.
79. Telegram, “Exim Financing for DuPont-Behshahr Industrial Group Joint
Venture (Iran Polyacryl),” Ambassador [Richard] Helms, U.S. Embassy, Tehran, to
U.S. Secretary of State, Dec. 31, 1975, aad.archives.gov <accessed July 6, 2007>.
694 BLASZCZYK
fiber plant, a small subsidiary, DuPont Iran Company, was set up in

1975 to import and resell DuPont products in the Middle East.80
With the help of Behshahr, DuPont engineers surveyed nine po-
tential manufacturing sites at Shiraz, Isfahan, Karaj, and Ahwaz be-
fore landing on a spot in the desert 24 miles south of Isfahan, a ma-
jor textile manufacturing center with five hundred thousand people
(figure 2). Nicknamed “The Pearl of Iran,” Isfahan was the second
largest city in Iran, filled with ancient wonders that made it the
“Shah’s personal showcase.” Its many “Persian architectural attrac-
tions” included tourist destinations such the Shah Mosque, the lux-
urious Shah Abbas Hotel, and “restaurants, modern shops, tree-lined
streets, etc., which one does not find but occasionally outside of
Tehran.” Another American multinational, Textron’s Bell Helicopter
division, was bringing in “between 200–300 U.S. families” who were
rapidly “soaking up” Isfahan’s available rental apartments. Grumman,
the major contractor supplying the Shah with F–14 fighter planes,
housed expatriate families at the air force bases near Tehran and
Isfahan. DuPont planners reported on Isfahan’s distinctive ameni-
ties: “The bazaar is also quite a fascinating place and for inveterate
shoppers who love to bargain, could provide some amusement and
enjoyment.”81
DuPont spared no expense on designing and building the three
Polyacryl plants, constructed with Brown & Root. Although these
plants were smaller than fiber-making facilities in Europe and the
Americas, Polyacryl employed the most up-to-date technology appro-
priate to the context.82 Designed to run 24 hours every day of the year,
PIC would have the annual capacity to generate 8,700 metric tons
of polyester staple; 19,100 metric tons of acrylic; and 8,000 metric
tons of polyester filament.83 The Polyacryl operation employed two
thousand and two hundred Iranians and approximately ninety Amer-
ican expatriates. The polyester filament plant started up in April
1978, slightly ahead of time. The acrylic plant began production on
schedule in August 1978, while the polyester staple plant was com-
pleted by December 1978. The latter was never run by DuPont due to
the Islamic Revolution.84
80. “A New DuPont Unit to Sell Items in Iran,” NYT, Aug. 29, 1975.
81. S. Danby, “Status Report–Iranian Venture Site Survey–May 11, 1973,” and
idem to L. E. McCune et al., “Iranian Venture,” Apr. 18, 1973, both in PIC; “How
Grumman Manages Expatriate Staffing for Major Iranian Projects,” BI (Dec. 3, 1976):
387–88.
82. Newhart, “Polyacryl Iran Corporation Meeting.”
83. R. D. Emmick to McCabe, “DuPont Warranties in Polyacryl Iran Agree-
ments,” draft, Apr. 29, 1977; Borden to Wheaton, “Text for Tehran Journal.”
84. Newhart, “Polyacryl Iran Corporation Meeting.”
Figure 2 DuPont and its major Iranian partners, the Behshahr Industrial Group,
selected the desert outside Isfahan as the site for the polyester and acrylic
plants of the Polyacryl Iran Corporation. Map of Iran showing Isfahan, 1983,
in Polyacryl Iran Corporation Papers; courtesy, Hagley Museum and Library.
“A Night in a Harem”: Fibers, Fabrics,

and Fashions
Equipped with a sophisticated marketing organization, DuPont was

well positioned to evaluate Iran’s textile and clothing markets, and
to help Behshahr implement Western alternatives that would re-
duce costs, provide high-tech products, and augment the standard
of living. DuPont marketers in Wilmington and Geneva helped de-
termine if Iran was a suitable investment and monitored the local
scene as the Polyacryl plants were under construction. Marketing
reports described the distinctive nature of Iran’s textile and gar-
ment businesses, highlighting the need to modernize fabric distribu-
tion and clothing production. The Ladjevardis, along with five other
696 BLASZCZYK
prominent families—the Barkhordars, the Irvanis, the Khaymis, the

Rezais, and the Sabets—controlled Iran’s distribution system, and
were well placed to reorganize the textile and clothing industries.85
By 1973, the Iranian textile industry divided into two segments:
a fragmented, traditional sector dominated by small-scale mills, and
a new sector with large, mechanized factories. The modern textile
sector employed one hundred and sixty-four thousand people and
constituted the second largest industry in Iran after oil. During the
Fourth Plan, the government channeled more than $600 million into
this industry, mainly through the country’s development banks; the
Fifth Plan set aside additional funds.86 In 1973, only 20 percent of
the fibers used by Iranian mills were synthetic, but forecasters pre-
dicted this would grow to 30 percent by 1978, to 39 percent by 1983.
Forecasters equated the Iranian demand with that of Latin America,
where DuPont had fiber plants. In Iran as in India, synthetic fiber con-
sumption was seen as a mark of modernity, growing in tandem with
the standard of living. DISA marketer J. J. Noble believed that the Ira-
nian textile industry had sufficient production capacity to handle the
forecast, as enough mills had installed new equipment or planned to
do so.87
In the eyes of DuPont marketers, the real problem lay in textile
distribution and garment manufacturing, which remained much as
they had been since time immemorial. By one account, the vast ma-
jority of fabric and yarn—more than 90 percent—traveled through the
Tehran Bazaar, a rambling importer–wholesaler operation, a sprawl-
ing rabbit’s warren of shops and dealers.88 In this great urban market,
five main groups dominated trading: import merchants, export mer-
chants, purchasing agents, wholesalers, and retailers. Ancillary busi-
nesses included brokers, private money lenders, and retailers. For
the most part, merchants imported goods which they sold to whole-
salers at high markup, granting liberal credit terms. Importers tended
to be wealthy and influential, eventually branching into manufac-
turing while keeping one hand in the bazaar. Brokers or middlemen
宜⼭
facilitated sales between manufacturers and wholesalers, charging a
commission to both parties. The bazaar was the heart of commercial
activity, where prices were set.89
Within the bazaar, powerful wholesalers controlled the flow
of goods between manufacturers and customers, selling to street
85. Kaikati, “Doing Business in Iran,” 17.

86. “TIBA Staple Marketing Plan,” Nov. 1976, PIC.
87. J. J. Noble, DISA, “Iran Marketing Requirements,” Nov. 21, 1974, PIC.
88. A. D. Irving to K. G. Clarke, “Iran Marketing,” Feb. 8, 1973, PIC. On the
bazaar, see Keshavarzian, Bazaar and State in Iran; and Weiss, The Bazaar.
89. McCabe to Borden, “Iran Fiber Consumption,” June 28, 1976, PIC.
peddlers, small shopkeepers, specialty shops, department stores, re-

tailers from distant cities, and other purchasing agents. These whole-
salers had enormous influence in the textile and garment industries.
At the Tehran Bazaar, some two hundred wholesalers orchestrated the
flow of materials and ideas from retailers to textile mills. They gath-
ered orders for fabrics from sub-wholesalers, who had direct contact
with Iran’s twenty-eight thousand rural retailers, and subsequently
told the textile “mill how much of what to make at what price.” Even
a mechanized worsted mill like Moghaddam took its cues from whole-
salers, making more than two thousand fabric styles in one year for
a total production run of 1.7 million meters. On a typical day, every
Moghaddam loom wove a different fabric, which went back through
the bazaar’s countless middlemen en route to retailers. By one DuPont
marketer’s account, the layers of haggling middlemen made “A Night
in a Harem” pale by comparison.90
The ready-made clothing industry and mass retailing were virtually
nonexistent. Popular opinion held that foreign apparel was superior
to Iranian products, and many well-off consumers did their personal
shopping in Europe. The Shah hoped to modernize distribution by
introducing department stores, but most consumers still bought lo-
cally made clothing from small shops, which used fabrics purchased
through the bazaar. Assisted by a few helpers, a local tailor sewed
the “dress, shirt, or what have you in the back of his store with the
fabric of your choice.”91 Depending on one’s viewpoint, the system
was either remarkably efficient or horribly antiquated. One DISA mar-
keter reported that it did an “excellent job of interpreting consumer
requirements” and conveying them to the mills.92 Yet, this complex
marketing chain added substantially to the retail price and, hence,
did little to improve the standard-of-living for ordinary consumers.
The Behshahr Industrial Group had positioned itself to overcome
these obstacles and help modernize the textile and garment industries.
Its mills—Iran Knitting, Kashan Velvet, and Kashan Industries—were
among the best-equipped in the country. Based in Tehran, Iran Knit-
ting was set up for texturing, circular and warp knitting, dyeing, and
finishing. One of its divisions, Bepoosh Company, was run by Akbar
Ladjevardian’s daughter, Lily. A modest cutting-and-sewing opera-
tion focused on women’s blouses, Bepoosh planned to expand into
skirts and men’s sport shirts and slacks.93 Apparel manufacturing
90. Irving to Clarke, “Iran Marketing.”

91. Ibid.; Ninety-nine percent of Iran’s eighty-two thousand stores were small
and privately owned; see Kaikati, “Doing Business in Iran,” 18.
92. Irving to Clarke, “Iran Marketing.”
93. McCabe, “Visitor’s Notice,” and “Background,” July 16, 1978, PIC.
698 BLASZCZYK
would give Behshahr an integrated market position.94 Having a re-

liable domestic supply of synthetic fibers would be a major step in
industrializing the textile and garment industries, and improving the
performance of Behshahr’s mills and workshops.
Given their success in Europe, DuPont executives may have felt
that DISA marketers, who worked closely with the Iranian joint ven-
ture, might collaborate with Lily Ladjevardian, much as they had
with Beppe Modense and Phillip Delos. Back in Wilmington, mar-
keting specialists welcomed the Iranian apparel entrepreneur and her
entourage, which included an American-trained fashion designer, to
the United States, where they toured DuPont’s Chestnut Run fiber de-
velopment facility in Delaware and New York’s world-class garment
district. The aim of this “scouting mission” was to “determine what
cutter expertise and technology is available from U.S. concerns that
they may pursue in establishing modern cutter operations in Iran.”
In New York, Lily Ladjevardian saw DuPont’s sales office in the Em-
pire State Building, and visited Seventh Avenue in search of venture
partners, savvy garment manufacturers who could introduce Amer-
ican quantity production techniques and attractive New York styles
to Iran’s old-fashioned sewing industry. She left impressed with two
major U.S. apparel manufacturers, Phillips-Van Heusen Company and
the Kellwood Company.95 Introductions like these fulfilled the terms
of the PIC joint venture, which committed DuPont to sharing its many
varieties of “know-how” with the Iranian partners.
Danger Signals: Stockpiles of Imported Fabrics
With the Polyacryl facilities under construction, DuPont managers

at PIC headquarters in Tehran and the home office in Wilmington
heard stories about major Iranian imports of low-priced fabrics and
fibers. Learning about business conditions through the rumor mill
did not sit well with DuPont folks. Accustomed to operating in
countries where the government published trade statistics or con-
sultants privately disseminated figures on the industry, they were
frustrated by the fact that, in Iran, data on industrial output and
commerce were treated confidentially by the controlling agency, the
Central Bank. Learning about imports through the grapevine, DuPont
94. T. H. McNeill Jr. to G. H. Ward and J. H. Foght, “Assistance to DuPont

Iranian Venture,” June 4, 1976, PIC.
95. McCabe to G. H. Ward and J. L. Foght, “Assistance to Polyacryl Iran,” June
21, 1976; McCabe to V. L. Bremberg, “Bepoosh Co. Visit,” Aug. 11, 1978; McCabe
to Bremberg and J. R. Lauer, “Bepoosh Co.—Status Report,” 31 Aug. 1976, PIC.
managers had to rely on Akbar Ladjevardian for verification. Frus-

trated by this modus operandi, DuPont managers sought counsel from
Americans more versed in local customs, only to have one Navy offi-
cer, who had substantial experience with Iranian businessmen, warn
them that the Iranians had an “aversion to writing.”96 Doing business
by word-of-mouth contrasted sharply with procedures set at DuPont
headquarters.
DuPont’s corporate culture valued hard data, as shown by the firm’s
commitment to financial analysis and market forecasting initiated
back in the 1920s. The emphasis on documentation was buttressed
by a code of ethics that stressed transparency in business operations.
At every level, DuPont employees reported their accomplishments
to superiors in detailed memos, reminded by notepads printed with
the slogan “Don’t Say It, Write It.” In Wilmington, Carl W. Borden,
Director of DuPont Support Activities for Polyacryl, served as a li-
aison between Polyacryl managers in Tehran and top executives in
Textile Fibers, including Millard G. Gamble. Dating from 1975 to
1979, Borden’s office files provide a window on to Polyacryl’s man-
agement practices, including DuPont’s interactions with Behshahr
executives and Iranian cabinet officials. For American organization
men, the opaque discussions about fabric and fiber imports proved to
be exasperating and confusing.
The Polyacryl deal was negotiated against the backdrop of the
1973–1974 oil crisis, precipitated by Arab outrage against Western
suppliers of Israel during the Yom Kippur War. Skyrocketing oil
costs were disastrous for DuPont and other chemical companies in
the United States and Europe. Unable to secure key ingredients at
reasonable prices, fiber makers like Rohm and Haas, an American
specialty chemical company that was a Johnny-come-lately to syn-
thetics, lost its shirt in this territory.97 By 1974, 70 percent of DuPont’s
products were made from petroleum-based feed stocks. The com-
pany’s net profits fell 31 percent between 1973 and 1974, as its
manufacturing operations absorbed a $1 billion increase in energy
and raw-materials costs. Record-high sales figures, up 16 percent
from 1973, did not come from increased volume, but from higher
prices.98
96. Borden, “Interview, 3/24/76. Capt. Donald M. Metzler,” Mar. 25, 1976, PIC;
“Europe’s Synthetic Fibers Glut,” CW 116 (Feb. 19, 1975): 23; “European Fiber
Market Is Still Sagging,” CW 116 (April 2, 1975): 31; “Fiber Recovery,” CW 117
(Dec. 10, 1975): 15–16.
97. Hochheiser, Rohm and Haas, 153–83.
98. Kinnane, DuPont, 204.
700 BLASZCZYK
In 1974–1975, Iran’s oil revenues more than quadrupled, con-

tributing 84 percent of the government’s budget.99 With the influx
of foreign exchange, the Iranian Commerce Department in mid-1975
opened the country’s borders to international trade, welcoming low-
cost consumer goods in an effort to dampen inflation. Imports of syn-
thetic fabrics and fibers flooded the market. Between August 1975 and
May 1976 alone, merchants ordered 30 million tons of inexpensive
fabrics, approximately 80 percent of which was made from polyester.
This constituted a three- to four-year supply, which when added to
existing inventories, totaled a four- to five-year fabric stockpile.100
Long protected by tariffs, the Iranian textile industry—the principal
future customer for Polyacryl synthetics—now had to contend with a
flood of cheap fabrics from India, China, and Japan.
For the manufacturers of cheap textiles, Iran was a “safe” dumping
ground because it did not re-export fabrics to industrialized countries,
hence worsening the glut in the global market.101 Iran was an espe-
cially attractive market for Asian textile mills, which make synthetic
fabrics at rock-bottom prices. A Japanese export drive added to the
woes of American and European fiber makers.102 Some Third World
textile factories used synthetic fibers willy-nilly—simply substitut-
ing man-made materials for natural ones without modifying their
equipment, designs, or dyes—with horrendous results. Fabrics that
pilled, colors that ran when washed, poorly conceived designs, and
other cost-cutting measures combined to give some East European
and Asian textiles a bad reputation in the West. But these inexpen-
sive fabrics found a ready market in an industrializing country like
Iran, where many consumers still struggled to get by.
The Middle East also appealed to the Eastern Bloc and Asian
fiber manufacturers, which followed a different business model than
American producers. Generally, U.S. fiber makers built plants based
on demand in the host country or region, with export markets con-
stituting an opportunistic “relief value” accounting for a scant 5–
10 percent of sales. These fiber makers did well in a rising home
market—as DuPont had in the 1950s and 1960s—but reacted slowly
in a falling world market. The Eastern European and Asian synthetic
99. Shambayati, “The Rentier State, Interest Groups, and the Paradox of Au-
tonomy,” 318.
100. Borden, “Meeting of 6/29/76 in Tehran Hilton,” n.d., PIC.
101. Gamble, “Annual Report Review.”
102. In 1977, 4 percent of Japan’s textile exports went to Iran, amounting to
$158 million in sales. “Iran: Exposure of Foreign Suppliers to Import Cutbacks,”
Feb. 16, 1979, 15–17, [printed report from U.S. Embassy, Tehran], in Asnād-i
Iānah-’i jāsūsı̄-i Āmrikā, vol. 6, n.p.; “Fiber Makers Trim Output to Ride Out Textile
Slump,” CW 115 (Dec. 4, 1974): 31–32; “Europe’s Synthetic Fibers Glut”; “Fiber
Recovery.”
fiber industries were developed nearly two decades later with global
markets in mind. These manufacturers built large-scale plants that
could accommodate falling prices in the global market, anticipating
that 25–50 percent of their sales would be made overseas.103 Despite
rising oil costs, they undersold American firms like DuPont before the
lumbering giant had a chance to react.
These market conditions threatened Polyacryl, which needed a pro-
tected market and a price structure that would permit profits after the
1978 startup. Based on their experience in Latin America, DuPont ex-
ecutives suspected the Middle East might become a dumping ground
for textile products. In mid 1960s Mexico, rumors of price increases
associated with the opening of DuPont’s high-tech plant led specu-
lators to import and stockpile cheap fibers. Although the Mexican
government closed the border to synthetics in June 1965, the DuPont
plant, which went online in September 1965, was hurt by the im-
ported inventory through 1967.104 To circumvent a similar fiasco in
the Middle East, the venture partners had asked the Iranian govern-
ment to provide trade protection “during the period of 3 years prior
to startup [1975–78] and for periods when plant capacity cannot com-
pletely supply the market.” By the 1970s, this strategy was typical
in developing countries, where new fiber plants were dwarfs com-
pared to those in the United States, Germany, and Japan. In Brazil,
Argentina, and Mexico, the government erected tariff barriers and
controlled the influx of foreign textiles by judiciously granting import
permits.105
Without government intervention, it was impossible for new fiber
plants in developing countries to survive. During the euphoria of the
late 1960s and early 1970s, the global fiber industry had expanded
in anticipation of steady growth. As dozens of players jumped into
fibers, Western manufacturers, straddled with high costs for mate-
rials and labor, struggled to compete against plants in newly in-
dustrializing countries like Korea. As the reliable volume producer,
DuPont survived by reducing prices. The 1973–1974 global recession,
spurred by the Arab Oil Embargo, rippled into 1975–1976. With less
money in their pockets, consumers cut back on purchases of apparel
and furnishings; in turn, flagging sales discouraged changes in fash-
ion. Sales forecasters had not predicted the severe downturn of late
1974, and retailers, anxious to not be caught short, overstocked. Mer-
chandise piled up in stores and warehouses, and fiber plants idled
at partial capacity. By 1975, overcapacity characterized the fiber,
103. McCabe, “PIC Availability, Quantity, and Price,” Apr. 21, 1976, PIC.
104. Borden, “Presentation to Minister Najmabadi,” June 25, 1976, PIC.
105. McCabe to Borden, “Protection from Textile Imports,” June 14, 1976, PIC.
702 BLASZCZYK
textile, and apparel markets, particularly as Eastern Bloc and devel-

oping countries increased their market share.106 In the seven years
between 1974 and 1980, the average fiber plant in Western Europe
ran at a mere 68 percent capacity.107
After groundbreaking at Isfahan, DuPont’s import worries were
compounded by other headaches. At the moment when Iran opened
the border to foreign fabrics and fibers, DuPont construction engineers
began to predict cost overruns due to inadequacies in the country’s in-
frastructure. In January 1976, managers agreed to spend $30 million on
a new port at Bandar Shapur on the Persian Gulf—an expense not in-
cluded in their original budget—because Iran lacked the proper docks
to unload, handle, and store intermediates imported from DuPont
plants in Europe.108 As construction at Isfahan proceeded, DuPont
incurred a longer list of unanticipated expenses. Polyacryl had to
build its own 6-kilometer access road, collect its own water supply,
and install turbines to generate its own electricity—all because the
Iranian government could not fulfill its promises or obligations. One
of DuPont’s GE turbines sat in port for a year after the Iranian gov-
ernment commandeered every available dolly in the country to bring
in its own generating equipment as part of the effort to beef up the
national grid.109 Cost overruns would translate into higher prices for
polyester and acrylic, as Polyacryl tried to recover its expenses. Mean-
while, as imports piled up in port, DuPont managers wondered how
their high-priced fibers would be able to compete.
DuPont entered the joint venture believing its Iranian partners
would broker deals with the “right” government ministers and bureau-
crats, and they grew alarmed by the tidal wave of imported textiles.
DuPont managers confided their worries to their Iranian partners. In
Tehran, Borden met with Akbar Ladjevardian and deputy managing
director Mohsen Sheidnay, describing DuPont’s concern over “dump-
ing” and the “need to provide for a gradual increase in fiber prices
to the Iranian textile industry” so as to prepare the market for PIC’s
products. Ladjevardian cautioned that the government would not look
favorably on a price hike two years prior to start up. The DuPont men
were disappointed with his response. Now assigned to Iran, DuPont’s
106. Borden, “Meeting with Reza Amin, 9/13,” Sept. 19, 1977, PIC; “Fiber
Recovery”; “Fiber Makers Look for Way Out of Valley,” CW 118 (Feb. 18, 1976):
65–66; Meyer Lurie, “Learning the Hard Way to Cope with Hard Times,” CW 118
(April 21, 1976): 50–57.
107. Shaw and Shaw, “Excess Capacity,” 151.
108. Borden to M. H. Bobzien, “Port Facilities-Iran,” Jan. 29, 1976, PIC.
109. “Polyacryl: Between Petrochemicals and Textiles,” Mideast Markets, Aug.
29, 1977, clipping, PIC.
Jack Wheaton, who had cut his teeth in Argentina and West Germany,
reported that he felt “very uneasy,” as if he was “sitting on a bomb.”110
DuPont managers also grew frustrated when discussing imports
with Farrukh Najmabadi, the Minister of Industry and Mines in Prime
Minister Amir Abbas Hoveida’s cabinet.111 In early 1976, they en-
thusiastically told Najmabadi about the plant’s timely construction,
noting that PIC’s fibers would be available to Iranian textile mills
on schedule by summer 1978. They described “excessive invento-
ries” that would result “in no sales of Polyacryl products for the first
two years,” imploring the minister to step in and “issue import li-
censes based on the inventory and consumption of the mills.”112 Six
months later, no action had been taken, and DuPont again sought in-
tervention. Visiting Tehran from Wilmington, fiber manager Millard
Gamble opened the discussions by explaining the need to tighten up
the border.113 He turned up the heat by suggesting that DuPont was
not the only American multinational experiencing hardship. Gamble
knew that B. F. Goodrich and Reynolds Metal were “disillusioned
with Iran, were losing money, and planned no further investment.”
In fact, Goodrich had divested its share of an Iranian tire company.
Najmabadi retorted that Goodrich was simply inefficient. DuPont
managers got hot under the collar, but kept their cool when the min-
ister urged them to “concentrate on building the plant on time” and
assured them “he would take care of where and how the product
would be used.”114 After visiting the Isfahan site in July 1976, Na-
jmabadi wrote to Polyacryl, commenting favorably on the “progress
of construction work” and “other facets of . . . planning especially in
respect of [sic] training and the transfer of technology.” “Everything
we saw on the site,” he wrote, “was the living evidence of a high stan-
dard of workmanship coupled with a truly impressive atmosphere of
cooperation.”115 Borden concluded: “It appears we must continue to
operate largely on the basis of faith [emphasis added] that the Gov-
ernment of Iran will live up to their promise to make PIC a profitable
venture if operated efficiently without defining how required help
will be provided.”116
110. Borden, “Iranian Trip, Jan. 14–23, 1976,” Jan. 26, 1976, PIC.
111. Najmabadi joined the Ministry of Industry and Mines in 1967 as a deputy,
but was promoted to head under Prime Minister Hoveida; see Nasr, “Politics within
the Late-Pahlavi State.”
112. “Partial Chronology of Polyacryl-Government Discussions.”
113. Borden, “Meeting with Minister Najmabadi,” June 30, 1976,” PIC.
114. Gamble, “Annual Report Review.” Established in 1961, B. F. Goodrich’s
Iranian plant sold more than half of all the car and truck tires in Iran by 1968; see
“Plants Abroad Find Aid to Areas Helps Profits,” NYT, Apr. 21, 1968.
115. Farrukh Najmabadi to PIC, Tehran, July 3, 1976, PIC.
116. Borden, “Meeting with Minister Najmabadi,” June 30, 1976.
704 BLASZCZYK
By January 1977, the import crisis so alarmed top executives in the

United States that they took up the matter with Ambassador Ardeshir
Zahedi in Washington, who delivered a letter from DuPont chairman
Irving S. Shapiro to the Shah, urging the government to close the
border and implement price controls.117 Within a month, the Iranian
bureaucracy went into high gear, and DuPont people were hopeful.
The Ministry of Industry and Mines requested data on PIC’s capacity
and output from Akbar Ladjevardian, while its textile experts met with
Polyacryl Marketing to discuss the “magnitude and complexity of the
problem.”118 On the Iranian New Year in March 1977, the govern-
ment directed banks to deny credit applications from merchants who
wanted to import fibers, yarns, or fabrics containing “predominately
man-made fibers.”119 Still, DuPont was dismayed because textile mills
could still get import licenses! Due to the world fiber glut, polyester
and acrylic came into Iran at prices below those needed to secure a
return on investment at Polyacryl. The Iranian price of polyester fila-
ment, which was $2.53 per kilo in October 1976, had fallen to $2.22
by June 1977. However, the price had to be $4.43 if Polyacryl were to
turn a profit.120 Noting the textile scene, Polyacryl marketers grimly
described the “high level of stocks in the country,” as seen in the
“bazaars in Tehran, Isfahan, and Shiraz.”121
The August–September 1977 “cabinet shakeup” resulted in
Jamshid Amouzegar’s appointment as Iran’s new Prime Minister and
introduced Mohammad Reza Amin, Najmabodi’s successor as Min-
ister of Industry and Mines, to the PIC fray. At first, DuPont man-
agers hoped the new administration would take action, as Akbar
Ladjevardian was Amin’s friend.122 However, when DuPont managers
consulted the new minister, they received “no . . . unequivocal as-
surance.” In October and December, DuPont managers told him that
nearly 40 percent of the fabrics purchased in Iran were imported; the
textile industry was devastated, its output was below that of 1974.
The “import problem” was not unique to fabrics and fibers; multina-
tionals in tires, tractors, and metals also complained about the flood
117. Borden, “Visit to Iranian Embassy, Washington, D.C., [by] E. R. Kane, C.

W. Borden, 1/14/77”; Irving S. Shapiro to His Imperial Majesty The Shahanshah,
Jan. 18, 1977; both in PIC.
118. McCabe to Borden, “Iranian Government Controls for Textile Imports,”
Feb. 22, 1977, PIC.
119. Borden, “Summary of Contacts with Iranian Government on Market Re-
lated Matters,” June 13, 1977, PIC.
120. McCabe, “Inventories, Import Controls, Prices, and Duties,” June 15, 1977,
PIC.
121. “Memorandum: Board Meeting, 4/19/77,” May 9, 1977, PIC.
122. “Telephone Conversation, J. R. Wheaton, 8/10/77,” Aug. 10, 1977, PIC;
“Iranian Prime Minister Announces Resignation,” NYT, Aug. 7, 1977.
of foreign goods.123 For example, the Hepco Company, a joint venture

between the Rezai family and an American capital goods manufac-
turer, had no customers, due to imports of less-expensive construction
equipment.124
In December 1977, DuPont managers implored Amin to make good
on his predecessor’s promises for protectionism and duty-free im-
ports of supplies—and to grant an additional government subsidy
of $142 million.125 The global fiber market had changed dramati-
cally since August 1973, when the joint venture was launched. Es-
tablished to help the textile industry, Polyacryl watched the mills
shrivel up, “wounded fatally” by imported fabrics.126 In this light,
Polyacryl reassessed its marketing plan, proposing to introduce PIC
fibers at world prices and gradually raising them through 1982. This
strategy, the partners argued, would help Iran develop a self-sufficient
textile industry, while increasing corporate tax income and reducing
cash flows out of the country.127 This approach would work only
if Polyacryl received the subsidies “promised verbally” by the Ira-
nian government during the planning stage.128 Amin acknowledged
the serious problems with the textile industry, and instructed the
Central Bank to stop issuing credit to merchants who wanted to
import fabrics made from cotton–synthetic blends. “This is a real
breakthrough,” Borden happily explained to DuPont senior vice pres-
ident Edwin A. Gee, “on which we have been working for a year.”129
Still, the more difficult task of securing government money remained
open.
In early 1978, Gamble patiently explained the situation to DuPont
executives in Wilmington. In the import battle, managers believed
they had received only “token support” from Behshahr. Just as
frustrating, DuPont found that “Irani generally” had “no regard for
organizational structures as we know them.”130 Deals were made ver-
bally, and managers tip-toed around difficult issues. DuPont expatri-
ates grew frustrated with the slow response of the Iranian government,
and language barriers and cultural traditions that translated into mis-
understandings with their partners. These troubles were compounded
123. Gamble, “Annual Report Review”; “Cash Flow Reviews,” Nov. 9, 1977,
PIC.
124. Borden, “Telephone Conversation, J. R. Kelley, 6/29/77,” June 29, 1977,
PIC.
126. “Cash Flow Reviews,” Nov. 9, 1977, PIC.
127. Akbar Ladjevardian to M. Reza Amin, Dec. 12, 1977, PIC.
128. “Cash Flow Reviews,” Nov. 9, 1977, PIC.
129. Borden to E. A Gee, “Monthly Report: Polyacryl Iran Corporation, Dec.
1977,” PIC.
706 BLASZCZYK
as the winter turned to spring, and the Shah’s government buckled

under militant attack.
“Don’t Have an Elephant for a Pet”: Rethinking

“The Follies of 1973”
While American executives worked to put Polyacryl on solid foot-

ing, the Shah struggled to retain political control, as Islamic fun-
damentalists challenged his regime during an economic down-
town. Among the urban population, the rapid growth since 1974
fueled rising expectations and stirred the demand for imports, which
often went unfulfilled. Accusations of corruption abounded, aimed
against the Shah; his family, ministers, military, and friends; and his
“billion dollar industrial syndrome.”131 Starting in early 1977, the
opposition mounted demonstrations and protests, coincident with
President Jimmy Carter’s visit to Iran and his statements on human
rights.132 By May 1978, news of riots by “far right-wing elements
. . . opposed to modernization” reached Wilmington, despite scant
news coverage by Iranian TV, radio, and newspapers.133 As rural
people migrated to the cities at the rate of five hundred thousand
annually, agricultural productivity stagnated and the urban infras-
tructure became overburdened. The maldistribution of wealth and
runaway inflation stirred anti-Western sentiments among workers,
students, and fundamentalists.134 In August, Isfahan witnessed rioting
and firebombing that targeted symbols of Westernization: supermar-
kets, movie houses, bars, night clubs, banks, and liquor stores. Armed
soldiers stood on “every street corner,” and the Shah appeared on
network television, promising a series of reforms. Initially, the U.S.
Consulate in Isfahan told DuPont managers that Yankees were not the
target in this “Church Government” matter, but after martial law was
declared for the city in mid-August, officials cautioned expatriates
against “persons in Iran and in Isfahan who do not care for foreigners,
Westerners, or Americans.”135
The revolutionary fervor exacerbated Polyacryl’s problems with the
Iranian government, especially as it tried to combat imports once two
131. [U.S. Embassy, Tehran], “Notes on [?], Iran Update, July 25–26, 1979,” in
Asnād-i Iānah-’i jāsūsı̄-i Āmrikā, vol. 6, n.p.
132. Borden, “Behshahr Office, 10/30/78,” Nov. 6, 1978, PIC.
133. Borden, “Telephone Conversation, W. R. Galloway Jr., 5/16/78,” May 17,
1978, PIC.
134. “Iran: Prospects for Profits,” BI (July 14, 1978): 220–22.
135. McCabe, “Telephone Conversation—Bill Bears—8/7/78,” Aug. 7, 1978;
David C. McGaffey, Consulate of the United States of America, Isfahan, “Security
Advisory Number Two,” Aug. 20, 1978, both in PIC.
of the plants were up and running (figure 3). In July 1978, DuPont se-
nior vice president Edward G. Jefferson visited Iran to solicit cabinet-
level support for PIC, meeting with Amin and Khosrowshahi, the
Minister of Commerce. In turn, Amin outlined Polyacryl’s needs to
Prime Minister Jamshid Amouzegar and the Shah, who approved the
request that the Central Bank loan cash to PIC at a preferential rate
for 10 years. The paperwork got tied up in the bureaucracy. During
the initial review by the Supreme Economic Council on August 6, the
head of the Organization for the Protection of Manufacturers and Con-
sumers (OPMC) declined to sign the contract until it was approved
by the Central Bank and the plan organization, which would guar-
antee the funds. Meetings continued, with the final presentation to
the Supreme Economic Council scheduled for August 20. DuPont’s
luck ran out. The meeting occurred in the midst of riots that forced
the Shah to undertake major reforms, including the appointment of
a new Prime Minister, Jafar Sharif-Emami. Approval was delayed, as
the Council deliberated “other affairs that command a higher priority
than Polyacryl.”136
In wake of civil unrest, it became difficult, if not impossible, for
DuPont to communicate with ministers and other government rep-
resentatives, who put Polyacryl at the bottom of their to-do lists.
With the delay of major subsidies, in September Akbar Ladjevar-
dian secured bridge loans from the government’s Bank Melli to keep
PIC going.137 DuPont’s William M. McCabe Jr.—another mid-level
manager whose office files have survived—told his superiors in the
Textile Fibers Department about meetings with “the new Minister
of Commerce, Vishkai, to inform him of PIC’s current situation and
specifically to get action on the elimination of duties of raw materi-
als, which was promised by his predecessor Minister Khosroshahi.”
Everyday, DuPont managers in Tehran met with newcomers at the
Ministry of Industry and Mines “to educate them on the magnitude
of acrylic imports, the consequence to the PIC venture, and to get
effective controls.”138
By late September, Polyacryl stood on the brink of shutdown, as
Jefferson patiently explained in a letter to Amin. Imports contin-
ued to flow into Iran at “an alarming rate,” duty exemptions on raw
materials were about to expire, and the company would soon run
136. McCabe, “Objectives, Strategies, and Suggested Topics for Mr. Jefferson’s
Meeting with Ambassador Zahedi,” [Oct. 1978]; idem to E. G. Jefferson, “Sta-
tus Report—Polyacryl Iran Corp., July 1978,” Aug. 15, 1978; Gamble, “Borden
& Casadevall Trip to Polyacryl Iran Corp.,” July 20, 1978, all in PIC.
137. McCabe, “Weekly Report—Polyacryl Iran Corp.,” Sept. 7, 1978.
138. McCabe, “Weekly Report—Polyacryl Iran Corp.,” Sept. 21, 1978, PIC.
708 BLASZCZYK
Figure 3 As the Islamic Revolution fomented, Polyacryl Iran Corporation

proudly announced the first acrylic fiber made in Iran. Advertisement from
Kayhan International, 3 Sept. 1978, in Polyacryl Iran Corporation Papers;
courtesy, Hagley Museum and Library.
out of money.139 Jefferson’s entreaty greased the government gears,

leading to a meeting with the new Prime Minister, Sharif-Emami,
who promised to bring PIC again before the Supreme Economic
139. Jefferson to Mohammad Reza Amin, Sept. 29, 1978, PIC.

Council.140 In meetings with Polyacryl managers, Amin was “shocked

and angry at the import data,” ordering Deputy Minister Jourabchi to
collaborate with Polyacryl and “immediately develop an effective sys-
tem to control imports.”141
DuPont’s hopes for a bailout were squashed on October 22, when
the Supreme Economic Council refused to grant PIC long-term finan-
cial subsidies, disclaiming the government’s original verbal guaran-
tees of a 25.8 percent return on the risk capital. The Council feared the
repercussions of giving money to “so-called fat cats,” but promised to
allow Polyacryl to import intermediates duty-free and to set quotas
that limited fiber imports. Still, PIC was out of funds, facing eminent
shutdown—a breach of contract that could seriously damage DuPont’s
reputation among international banks. The PIC board met with gov-
ernment officials, Iranian banks, and the U.S. Embassy in Tehran
to explore alternatives, riding on short-term loans from Bank Melli.
Major Iranian lenders claimed that Polyacryl was “not commercially
viable,” refusing long-term loans without “some form of government
backing.”142
Abolghasem Kheradjou, managing director of the IMDBI, was most
straightforward, calling “the present situation a revolution” and ven-
tures like Polyacryl reminders of “The Follies of 1973.” The Shah’s
plate was full, coping with “Khomeini who has a hypnotic power
over the radical church elements who blindly do his bidding.” Al-
though the IMDBI held stock in PIC, the government had “no time
to concern itself with economic policies or long term investments.”
Workers at the National Iranian Oil Company (NIOC) were in the mid-
dle of a two-week strike, in which the country lost $68 million per
day in revenues. From late December 1978 through early March 1979,
petroleum exports stop entirely because of a 69-day strike, amounting
to nearly $7 billion of lost income. Clearly, the government had bigger
worries than Polyacryl. Kheradjou explained that other joint ventures
were in the same boat; bailing out all these “fat cats” would cost the
government $1.5 billion that it did not have. The banker’s final words
to PIC: “Don’t have an elephant for a pet.”143
140. McCabe, “Objectives, Strategies, and Suggested Topics for Mr. Jefferson’s
Meeting with Ambassador Zahedi,” [Oct. 1978]; idem, “Weekly Report—Polyacryl
Iran Corp.,” Oct. 5, 1978, both in PIC.
141. McCabe, “Weekly Report—Polyarcyl Iran Corp.,” Sept. 28, 1978, PIC.
142. McCabe, “Weekly Report—Polyacryl Iran Corp.,” Nov. 2, 1978; Borden,
“Current Analysis—Polyacryl Iran Corp.,” Nov. 4, 1978, both in PIC.
143. Borden, “Meeting with Kheradjou, 10/31/78,” Nov. 6, 1978, PIC; Lynne
Lambert, Department of State, Washington, D.C., to Robert Day et al., “FY 80
CAP [Commercial Action Plan] for Iran,” June 3, 1979, in Asnād-i Iānah-’i jāsūsı̄-i
Āmrikā, vol. 6, n.p.; U.S. House of Representatives, Committee on Foreign Affairs,
The Iran Hostage Crisis, 4–18.
710 BLASZCZYK
How did the revolutionary uprising affect production and morale

at the Isfahan facility? In early September, McCabe noted “polyester
filament performance” was “outstanding,” while the acrylic plant
was “starting well,” with Iranian operators “responding more rapidly
than they did at the polyester yarn start-up.”144 Yet, the relation-
ship between the Americans and Iranians grew tense, as more Iranian
engineers announced plans to leave PIC when then their contracts
expired. “Preliminary indications,” McCabe wrote, “are that cultural
differences [emphasis added] between Iranians and expates need to
be better understood.”145
By the fall, chaos abounded as firms tried to do business amidst
revolution. On the bright side, the Japanese moved along with con-
struction of the Iran–Japan Petrochemical Company, bringing in three
hundred engineers and technicians. On the dark side, Germany’s
Merck recalled its staff from Iran after a company administrator,
Hans Joachim Leib, was assassinated in Tehran.146 At Polyacryl, one
hundred workers and fourteen supervisors staged a sympathy walk-
out during a local steel strike. DuPont men identified “basic reli-
gious beliefs” as the motivating force, documenting the employees’
“unawareness of the effect on PIC” and their “surprise at manage-
ment’s interest and concern,” which was unusual in Iran.147 By De-
cember, most American families had been evacuated; the Polyacryl
workforce was “98 Percent anti-Shah,” and several Iranian supervi-
sors adamantly refused to enter the plant.148 Reminiscing while look-
ing through his 1978 log, one American engineer reported absenteeism
and tardiness in September; strikes, gas shortages, and arson threats
in October; and the decision to send American expatriates home in
November.149
In December 1978, fuel shortages for the Polyacryl powerhouse
necessitated shutting down the plants. After most Americans were
evacuated, a handful of DuPont engineers stayed behind to watch over
the facility. In December and January, the facilities were closed in an
orderly fashion to avoid damage to the equipment and to facilitate
144. McCabe, “Weekly Report—Polyacryl Iran Cop.” Sept. 7, 1978, PIC.

145. McCabe, “Telephone Conversation—Bill Bears—8/7/78.”
146. “Iranian Business Climate Improves for Japan, Turns Cold for Germans,”
CW 125 (Oct. 24, 1979): 31.
147. McCabe, “Weekly Report—Polyacryl Iran Corp.,” Sept. 28, Oct 5, 1978,
PIC; “Strife in Iran Unlikely to Cause Significant Oil Shortages in U.S.,” CW 123
(Nov. 15, 1978): 23.
148. J. S. Black, “Committee on Iran, Meeting No. 10, Dec. 8, 1978,” Dec. 12,
1978; idem, “Committee on Iran, Meeting No. 11, Dec. 12, 1978,” Dec. 14, 1978,
both in PIC.
149. B. Pasler to C. V. Burdick, “Safety/Security at PIC, August 1978-January
1979,” June 7, 1982, PIC.
subsequent startup. By early January, DuPont ordered the remaining

engineers to leave Iran.150
The End of “Corporate America’s Iranian Festival”
In January 1979, the New York Times reported on the Shah’s flight
from his kingdom in somber tones, noting “the curtain has dropped
on corporate America’s Iranian festival.” Since 1970, Iran had become
an important trading partner with the United States; exports to this
Middle Eastern country grew ten-fold to $3.3 billion in goods and
services by 1978. Major U.S. companies had joined local investors to
build factories to make American-style goods. The list sounded like
the roster of the Fortune 500: AT&T, Colgate-Palmolive, DuPont, Gen-
eral Motors, General Tire, Gillette, Johnson & Johnson, Pepsi-Cola,
Pfizer, Shell Oil, Squibb, and Warner-Lambert. Major contractors of
the U.S. armed forces—Boeing, General Dynamics, Grumman, and
McDonnell Douglas, and Textron’s Bell Helicopter division—were
slated to supply advanced military equipment. America’s largest
construction firms—Fluor, Bechtel, Morrison-Knudsen, and Brown
& Root—were to build “an ultramodern infrastructure” of bridges
and roads, pipelines and refineries, hospitals, and ports, high-rise
condos and housing developments, and a telecommunications
system.151 Major architectural firms like I. M. Pei & Partners also
found themselves in the lurch, as initiatives to make Tehran into
a modern-world city collapsed.152
DuPont’s Iranian story did not end with the political and
religious upheavals in winter 1978–1979. Having committed
$118 million and seven years to Polyacryl, DuPont expected to resume
operations, keeping tabs on the Isfahan site from a distance and com-
municating with sympathetic Iranians by phone. Although the situa-
tion looked promising in early 1979, the growing power of the radical
factions put a different spin on things. In the spring, the new Islamic
government appointed several Komitehs—committees of blue-collar
and low-level white-collar workers, headed by fundamentalists—to
control and manage PIC, effectively expropriating DuPont’s equity
and voiding its shareholder rights. DuPont’s John A. Klacsmann,
the vice president who now oversaw international operations, no-
tified Akbar Ladjevardian of his firm’s willingness to stick with the
150. “Trying to Cope with Chaos in Iran,” CW 124 (Jan. 10, 1979): 31–32.
151. Peter T. Kilborn, “Iranian Festival Is Over for American Business,” NYT,
Jan. 17, 1979; “Iran Revisited,” BI (Aug. 8, 1980): 249–50.
152. Paul Goldberger, “Iran Plans Big Project to Make Tehran a Major World
Capital,” NYT, Jan. 29, 1975; James Barron, “American Architects in Iran Saw
Gigantic Projects Fade Away,” NYT, Sept. 9, 1979.
712 BLASZCZYK
joint venture despite contract violations, if Iran’s political climate

improved.153 DuPont managers visited Tehran to explore the possi-
bility of resuming business. The Ladjevardi family, they learned, had
been targeted by the fundamentalists as industrialist-profiteers, ac-
cused of benefiting from “illegal relations with the Shah’s regime.”154
After the regime executed Habib Elghanian, a prominent Jewish busi-
nessman, and assassins tried to kill Ahmed Ladjevardi, who had re-
turned from abroad to deal with Behshahr business, Iran’s leading
entrepreneurs had no choice but to flee.155
In July 1979, the Islamic Republic exercised its sovereign power
and nationalized most of the industries that were still privately held.
The textile industry, including PIC and DuPont’s 40 percent equity,
was seized.156 Following the nationalization of banks and insurance
companies, this takeover wave dispossessed fifty-one of Iran’s top
industrialists, many with connections to the Shah, of their assets.
Radio Iran described the measure as “another gift from the revolution
to the barefoot of Iran.”157
Well into the fall, DuPont executives remained steadfast in their
determination to operate Polyacryl. However, in early November, they
were forced to give up. Mounting tensions between the Islamic gov-
ernment and the West culminated in the Iranian hostage crisis, with
fifty-two Americans imprisoned by radical Islamic students at the
U.S. Embassy in Tehran for 15 months, from November 4, 1979 until
January 20, 1981. Prime Minister Mehdi Barzagan, head of the moder-
ate but weak provisional government, stepped down, and his succes-
sors vied with Khomeini’s fundamentalist faction for control. In the
United States, the government froze Iranian assets in American banks,
which in turn filed suit in federal court against Iranian banks that had
guaranteed loans to development projects like Polyacryl.158 DuPont
filed suit against PIC and the Iranian government in U.S. courts to re-
cover the initial capital investment, plus interest, cost overruns, and
future earnings.
153. John A. Klacsmann, Wilmington, to Akbar Ladjevardian, Tehran, March

2, 1979, PIC; “Crisis in Iran,” CW 125 (Nov. 21, 1979): 17.
154. Borden, “Conversation with Akbar, 7/6,” July 11, 1979, PIC.
155. “A Personal Perspective on Iran’s Internal State,” BI (Aug. 24, 1979): 267.
156. Borden, “Meeting with Committee, 7/7,” July 11, 1979; idem, “Conversa-
tion with Barbara Schell, Commercial Officer, U.S. Embassy, Tehran, 7/7,” July 11,
1979; Klacsmann to Ladjevardian and M. J. Rezaie (draft), Aug. 15, 1979, all in PIC;
Richards and Waterbury, A Political Economy of the Middle East, 200.
157. “Latest from Tehran,” BI (July 13, 1979): 224; Barbara Slavin and Milt
Freudenhelm, “Iran Nationalizes Most Large Industry,” NYT, July 8, 1979 (“gift”).
158. “New York Banks Charge Default by Iran and Move to Attach Its Assets
Held in U.S.,” WSJ, Nov. 27, 1979.
These crises signaled that the Islamic Revolution was far from
over. Sizeable industrial projects, mostly financed and built by foreign
firms, remained in limbo, their future uncertain. Iran’s resentment of
the U.S. aroused xenophobia elsewhere in the Middle East, and some
countries slowed down their modernization programs to forestall so-
cial unrest. While some American firms hoped for the resumption
of U.S.–Iran relations over the long term, others, including DuPont,
decided to write off Iran and recoup whatever they could through
litigation. The prospects of widespread state involvement and sus-
tained political instability held little appeal.159
An outgrowth of the Carter Administration’s hostage negotiations,
the Algiers Accords established the Iran–U.S. Claims Tribunal at The
Hague, the Netherlands, a unique international arbitration body in-
vested with the power to evaluate and negotiate the claims of Iranian
and foreign nationals against the Islamic Republic of Iran, and vice
versa.160 Legal deliberations over DuPont’s rights and responsibilities,
and those of the Islamic Republic, took place at Palace of Justice
during the early 1980s, along with those of other investors who
sought to recover their assets.161 Ultimately, the international court,
which reviewed claims by thousands of corporations, persons, and
banks, directed the Islamic Republic of Iran to reimburse DuPont for
$42 million. The DuPont award was made in 1984.162 As DuPont
tended to its wounds, Iranian engineers put the PIC plants back
on line. As nationalized industry, Polyacryl continues to operate
today.163
159. “The Trouble in Iran,” BI (Nov. 16, 1979): 361–62; “Middle Eastern
Changes Are Signaling New Approaches by MNCs,” BI (Dec. 7, 1979): 385–86;
“Countdown on Iran,” BI (Feb. 22, 1980): 57–58; “Middle East,” BI (May 23, 1980):
168; “EEC and Japanese Sanctions Will Not Hurt Iran But Could Affect the West,”
BI (May 30, 1980): 69–70; “Iran: Prospects for Profits,” BI (June 6, 1980): 180–82.
160. Crook, “Applicable Law in International Arbitration”; Aldrich, “What
Constitutes a Compensable Taking of Property?” The terms of the Algiers Ac-
cords required all U.S. claimants to drop their lawsuits in American courts and
settle disputes through the Tribunal. By 1982, claims soared from $3 to $8 billion,
with somewhere between three hundred and fifty and nine hundred claimants; see
“Iranians Whittle While U.S. Claims Mount,” BI (June 29, 1982): 34.
161. P. L. Newhart, “Polyacryl Iran Corporation (PIC) Meeting,” Sept. 25, 1981,
PIC.
162. James. K. Higgins, “Polyacryl Iran Corporation,” and E. I. du Pont de
Nemours & Company, “Statement of Claim to the Iran-United States Claims Tri-
bunal,” draft, both Oct. 14, 1981, PIC. E. I. du Pont de Nemours & Company and
The Islamic Republic of Iran, et al., Award on Agreed Terms No. 91–3-3; “DuPont
Co. Claim Against Iran Yields $42 M Award,” WSJ, Jan. 6, 1984. The tribunal con-
vened in July 1981; by late 2006, it had ordered the Islamic Republic of Iran to pay
$2.5 billion to U.S. nationals.
163. Ladjevardian interview; Polyacryl Iran Corporation, website.
714 BLASZCZYK
What Lessons from Persian Polyester?
Why did DuPont collaborate with Behshahr in 1973–1974 and stay in

Iran as the revolution heated up in 1977–1978? According to politi-
cal scientists, few observers in the West—policymakers, academics,
and intelligence agencies—recognized that a revolution was foment-
ing. This myopia stemmed from unfamiliarity with Iran’s culture and
social structure, incomprehension that religion could unite dissat-
isfied groups into a powerful coalition that might topple a regime,
and incomplete intelligence efforts by the CIA and the U.S. Embassy
in Tehran. Further, Pahlavi propaganda portrayed Iran as a stable,
modernizing nation, as a country with Western-educated leaders,
skyscrapers, a well-armed military, and high-tech factories. From John
F. Kennedy through Jimmy Carter, many U.S. policymakers, if not a
majority, embraced this view, which stressed the Shah’s benevolence,
the White Revolution’s accomplishments, and Persia’s heritage as a
cradle of ancient civilization. Iranian public relations depicted the
country in ways that the West could understand, so as to solidify its
role as policeman of the Persian Gulf, augment the Shah’s power, and
advance modernization. If the White House, the State Department,
and the American press officially accepted this picture, it is not sur-
prising that multinationals like DuPont did not look much farther.164
Second, DuPont was bound by contracts with its venture partners,
the Iranian government, and development banks to see the Polyacryl
enterprise through. The American firm did not calculate that the
Ladjevardians, and other pro-Western capitalists, would soon be “out”
rather than “in.” As the monarchy crumbled and the economic sit-
uation deteriorated, DuPont managers searched for ways to repair
the damage and make the joint venture work. The firm had sim-
ply invested too much money and manpower to turn away. With-
drawal would not only result in economic losses, but might also dam-
age DuPont’s reputation in the international business community.
In November 1978, DuPont managers acknowledged their awkward
position: “Considering our present condition and contractual obliga-
tions, . . . we feel we must continue to operate PIC until an equitable
financial arrangement [is found] . . . or until developments permit us
to withdraw from the venture legally and honestly.”165 This position
coalesced with the U.S. State Department’s commercial objective in
Iran, both before and immediately after the revolution, of helping
164. Milani, The Making of Iran’s Islamic Revolution, 10–15; Moens, “President
Carter’s Advisors and the Fall of the Shah.”
165. Borden, “Meeting with Kheradjou, 10/31/78,” Nov. 6, 1978; idem, “Cur-
rent Analysis—Polyacryl Iran Corp.,” Nov. 4, 1978, both in PIC.
“American firms rebuild a strong market position and tap the oppor-
tunities which are expected to emerge.”166
Third, DuPont’s experience with other troubled joint ventures had
turned out for the best. In 1975, the Brazilian state played a major
role in restructuring Salgema Indústrias Quı́micas, in which DuPont
held 45 percent equity. In 1966, Brazilian entrepreneur Euvaldo Luz
obtained approval for this $70 million caustic soda and chlorine
venture from GEIQUIM (Grupo Executivo da Indústria Quı́mica),
the government steering committee on the chemical industry and
from SUDENE (Superintendência do Desenvolvimento Econômico do
Nordeste), the regional development agency for the northeastern state
of Alagoas. After ill-fated deliberations with Union Carbide, Luz ne-
gotiated a joint venture with DuPont between 1969 and 1971, to build
a plant that would go on-stream in 1974. When the partners failed
to see “eye to eye on many matters,” Brazil’s National Economic De-
velopment Bank (BNDES), a 10 percent founding shareholder, bought
Luz’s 45 percent holdings and sought another private Brazilian part-
ner. In this case, an interventionist government played a positive
role, reorganizing a joint venture to get the facility on stream by
1976.167
Finally, DuPont was not alone in its frustrations with Iran; other
multinationals complained about the endless snafus. “We rushed to
Iran, following the oil price increase in 1973, expecting to find the
streets paved with profits,” one anonymous executive confided to
Business International, “and like a lot of others found more potholes
than pavement.” What turned dozens of “ostensibly viable joint ven-
ture agreements into corporate nightmares” sounded like a recap of
DuPont’s experience: “delays, skyrocketing costs, poor infrastructure,
more delays, vacillating government policies and attitudes, manpower
shortages plus a host of other operational headaches.”168 Companies
learned to endure snarled communications, widespread corruption,
and bureaucratic hassles. Business International reported that before
1973 the Shah had his “top people out trying to drum up new invest-
ment,” but two years later, there was “an informal rule that cabinet
level officials should keep them waiting at least a month.” Multina-
tionals that could not tolerate the hassles left Iran before committing
166. U.S. Department of State, “Commercial Action Plan for Iran,” June 3, 1979,
2, in Asnād-i Iānah-’i jāsūsı̄-i Āmrikā, vol. 6, n.p.
167. Business International, Management Monograph No. 54: “Recent Experi-
ences in Establishing Joint Ventures” 1972, 11–13, LL-Penn; “DuPont Target: $2
Billion in Overseas Sales,” CW 112 (April 4, 1973): 43–44; “Latest from Brasilia,”
BI (May 9, 1975): 152.
168. “Kaleidoscopic Laws Give Firms Headaches in Alluring Iran,” BI
(Nov. 14, 1975): 363, 366.
716 BLASZCZYK
themselves to substantial equity positions or after incurring large

losses. For others, retrenching to an export base was impractical since
sales and service required proximity to markets. The companies that
slogged it out looked to the future. With luck, Iran would be trans-
formed from a desperately poor country into a modern economic
power with fifty million clamoring consumers. “If we want a piece
of that market,” one executive explained, “we have to put up with the
problems.”169
Throughout the 1970s, different cultural styles played out in the
desert near Isfahan and in the office buildings of Tehran. Three
decades later, Akbar Ladjevardian—who has lived in the United States
since July 1980 when he was forced to leave Iran as the Islamic regime
took hold—and Millard Gamble reflected on Polyacryl, offering very
different memories. Ladjevardian spoke highly of the project, prais-
ing DuPont’s sustained professionalism despite backlogs in port and
the unstable political scene of the late 1970s. In his view, Polyacryl
was testimony to the remarkable promise of modernization, to the
potential of the American partnership, and to Iran’s future as the ma-
jor industrial power of the Middle East. He remained upbeat about the
joint venture, sorry about losing the facility to the Islamic Republic of
Iran.170
Gamble was more circumspect, suggesting that Polyacryl may have
been doomed from the onset. From his perspective, Polyacryl was a
failure among dozens of successful foreign investments, a bitter ex-
perience in a stellar portfolio. DuPont’s fiber plants in Europe tar-
geted larger markets, lasted longer, and turned a profit. In Iran, the
difficulty of coping with the unstable economy was exacerbated by
the continuous struggle to decipher unfamiliar social and business
customs. Patience was a virtue in the Middle East. Small talk gave
the Iranian a chance to weigh and consider, to get acquainted, and
to build a relationship with the foreigner. The Americans, accus-
tomed to getting down to business, chomped at the bit. Back in the
1970s, the French wife of one of the Iranians took Gamble aside at
a dinner party in Tehran, giving him a stack of books that would
help him to “understand her husband.” Some 30 years later, Gam-
ble remembered his homework assignment, readings that described
ta’ārof, the system of ritual politeness so important in Iranian soci-
ety. Despite his on-the-job training, Gamble was left with a sour taste
for the Middle East. He came to believe that Iranians took pride in
169. “Firms in Iran Wonder Whether the Hustle Is Worth the Hassle,” BI
(Nov. 21, 1975): 370–371; “Investing Abroad By Staying at Home,” BI (May 21,
1976): 163.
170. Ladjevardian interview.
keeping secrets, a practice that stood at odds in a firm that valued

transparency.171
What should historians make of this bifurcated story? Whose mem-
ory is right? Today, business schools, management theorists, and cor-
porate executives acknowledge that multiculturalism is an expected
part of operating in the global economy. This case study has shown
that understanding another national culture was not an obvious part
of DuPont’s modus operandi during the 1970s. For this American
firm, doing business within the ethical and organizational frameworks
created back in the United States was the “one best way,” whether
the site was Ireland or Iran. When Jeffrey Agate, the British man-
ager of DuPont’s fiber plant in Londonderry, Northern Ireland, was
killed by Irish nationalists, his murder was interpreted as a symbol
of rising anti-American sentiment, rather than sign of disjuncture be-
tween the multinational and its host culture.172 In the Middle East,
the joint-venture format—with DuPont owning 40 percent, Iranians
60 percent—was adopted as a vehicle to help reduce political risk
and cultural uncertainty. Along with training Iranian engineers to
manage the plant, this tactic was supposed to mediate the “liability
of foreignness.”173
Regardless of who owned what, divergent agendas motivated each
of the major partners in Polyarcyl. DuPont’s goal was to apply its
engineering prowess, marketing expertise, and proprietary technol-
ogy to expand overseas, while targeting Iran as a potential market for
fibers and reliable source of petrochemical feed stocks. After Poly-
acryl was nationalized, DuPont played out its feed-stock objectives in
1981 by acquiring the Connecticut-based Continental Oil Company, or
Conoco.174 As Iran’s major textile manufacturer, Behshahr had other
types of goals. For Iranian textile mills, the driving force was high
profits, which mattered more than substantial sales or establishing a
leadership position in their industry.175 These very different agendas
and ways of understanding affected the partnership and the mem-
ory of whether or not the joint venture was successful, regardless of
the Islamic Revolution. In this respect, William McCabe’s remark on
the importance of dealing with cultural differences, written as the
171. Gamble interview by author; Gamble interview by Thackray.

172. Taylor and Sudnik, DuPont and the International Chemical Industry, 193;
“Ulster Burns but Fiber Plants Stay Cool,” CW 120 (Jan. 5, 1977): 42–43; “Murder
in Londonderry,” CW 120 (Feb. 9, 1977): 21; “Business Is the Target,” CW 120 (Feb.
23, 1977): 23.
173. On the “liability of foreignness,” see Jones, Multinationals and Global
Capitalism, 154–55.
174. Woolard interview.
175. Vaghefi, Entrepreneurs of Iran, 91–114.
718 BLASZCZYK
revolutionary tidal wave swept across Iran, was both insightful and
prescient.
Looking back on the 1970s, DuPont chairman Irving S. Shapiro
reminded managers that the Islamic Revolution was not unique to
Iran but reflected broader changes in the Middle East. Most inter-
pretations available to Americans leading up to the revolution were
based on Western values, and did not expose them to the Iranian
perspective. Although he perceived cultural differences at the time,
William McCabe was a voice in the DuPont wilderness; he did not
have enough influence to initiate change or instill new attitudes. As
Khomeini consolidated his power, U.S. nationals were unwelcome
in Iran because they had not adjusted to Muslim customs and fun-
damentalist ways of life. Afterwards, American executives admitted
that many forces can shape social and political change and have an
impact on companies and the world.176
Perhaps the most important lesson that DuPont and other multi-
nationals took from Iran was, as Business International wrote, “to
rethink conventional strategies for operating in high areas of political
risk.” A legitimate government that could make and keep agreements
was just as vital as a safe operating environment. It was also necessary
to have local personnel that understood and could interpret the host
culture for the company. Jack Wheaton did well in Latin America
and Europe, but, like many American expatriates, seemed to be cul-
turally adrift in the Middle East. When DuPont withdrew American
personnel, the Komitehs rushed to fill the void. Multinationals that
survived the revolution passed their batons onto the Iranian managers
who they had fully trained; others had reliable third-country nation-
als who they could trust. Running a foreign firm with local personnel
could substantially lower the threshold of risk.177
In the end, the Polyarcyl Iran Corporation was a noble ambition
that fell victim to a lack of “trust” on two levels: between the firm and
the state, and among the partners. Outside the firm, the Americans
grew frustrated by the government’s rules and regulations, the satu-
rated fiber market, and the difficulty of obtaining supplies. Inside the
partnership, they puzzled over the opaque transactions with Iranian
ministers, their venture partners, and the local workforce. The mis-
trust that developed in day-to-day operations ripened in the context
of a revolution. Like many businesspeople, the DuPont expatriates in
charge of Polyacryl spend their days coping with the next immediate
crisis, and few had time to reflect on the big picture. It was only in
176. Harris and Moran, Managing Cultural Difference, 332; “Shapiro Wary But
Optimistic about 1980s,” C&EN 57 (Mar. 12, 1979): 10–11.
177. “Lessons of Iran,” BI (Jan. 23, 1981): 26.
retrospect that the issue of political risk came into full view, and in
Irving S. Shapiro’s words, “raised the question of how alert we were
to what was going on.”178
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Synthetics for the Shah: DuPont and

the Challenges to Multinationals in

REGINA LEE BLASZCZYK

In the 1960s and 1970s, the largest U.S. chemical firm, E. I.

Advance Access publication July 10, 2008

REGINA LEE BLASZCZYK is a visiting scholar in the Department of the His-

I thank Andrew Godley and Relli Schechter for inviting me to present an

“How on earth did we get involved in Iran?” Millard G. Gamble asked

1. William M. McCabe Jr., “Advantages of a Modern Textile Industry for Iran,”

economics, and Middle East studies that presents biographies of key

Pioneering Synthetic Fibers

and aggressively marketing its brands. DuPont made other chemicals,

DuPont and the Wider World

In the 1950s, DuPont managers, aware that “there would be a blood-

12. Blaszczyk, “Styling Synthetics.”

product lines, while pouring capital into engineering, process de-

dye intermediate HAcid. Dow expected a 4 percent drop in U.S. sales,

20. “Tariff Facts—Worse Is to Come,” CW 104 (Jan. 11, 1969): 24–27.

cartels, joint ventures, and licensing agreements. In synthetic fibers,

Learning by Doing Abroad

The lure of the European Economic Community (EEC), formed in

companies.30 Two years after opening their first European subsidiary,

Kinston and Wilmington, North Carolina; Chattanooga, Tennessee;

35. DuPont, Annual Report, 1974, 43.

to French knitting mills that made it into heavy sweaters, fittingly

38. Blaszczyk, “DuPont de Nemours.”

By the early 1970s, DuPont managers, aided by staff economists,

“Renaissance of Modern Iran” and American

In this context, the Middle East came on DuPont’s radar screen as a

41. Kane, “DuPont in the World Economy.”

under the auspices of the United States-Iran Joint Commission, signed

From Cotton to Polyester: Behshahr Seeks

Against this backdrop, the Behshahr Industrial Group, an Iranian

64. Ladjevardian interview; Iranian-American Economic Survey, 152–53;

and low price. By 1968, 45 percent of the fiber consumed in Iran

65. Ladjevardian interview; International Bank for Reconstruction and Devel-

During the 1970s, the Iranian government encouraged joint ventures

68. Jones, Multinationals and Global Capitalism, 160.

commenced operation in July 1969 under a government license to pro-

turn a profit.75 The planners created a blueprint that divided the

facilities; training Iranians as skilled maintenance engineers, process

76. Man-Made Yarns Corporation and E. I. du Pont de Nemours & Company,

fiber plant, a small subsidiary, DuPont Iran Company, was set up in

“A Night in a Harem”: Fibers, Fabrics,

Equipped with a sophisticated marketing organization, DuPont was

prominent families—the Barkhordars, the Irvanis, the Khaymis, the

85. Kaikati, “Doing Business in Iran,” 17.

peddlers, small shopkeepers, specialty shops, department stores, re-

90. Irving to Clarke, “Iran Marketing.”

would give Behshahr an integrated market position.94 Having a re-

Danger Signals: Stockpiles of Imported Fabrics

With the Polyacryl facilities under construction, DuPont managers

94. T. H. McNeill Jr. to G. H. Ward and J. H. Foght, “Assistance to DuPont

managers had to rely on Akbar Ladjevardian for verification. Frus-

In 1974–1975, Iran’s oil revenues more than quadrupled, con-

textile, and apparel markets, particularly as Eastern Bloc and devel-

By January 1977, the import crisis so alarmed top executives in the

117. Borden, “Visit to Iranian Embassy, Washington, D.C., [by] E. R. Kane, C.

of foreign goods.123 For example, the Hepco Company, a joint venture