GM Halts Sales to South Africa Police, Military

In a major policy shift, General Motors said Friday that it is ending its sales of cars and trucks to the South African military and police, while continuing sales to other branches of South Africa’s white minority government.

At a press conference after the company’s annual meeting here, Chairman Roger B. Smith said the auto maker, which has major manufacturing operations in Port Elizabeth, South Africa, decided to stop such military and police sales in order to come into complete compliance with the Reagan Administration’s economic sanctions against the minority regime and its apartheid system of racial separation.

The sanctions, first imposed last fall, prohibit the export of any product, components or technology from the United States to the South African military or police forces, according to a U.S. Commerce Department spokeswoman. Smith said GM now believes that the prohibition extends to automotive components that GM produces in Europe or South Africa, but which were developed from American technology.

Backed by Sullivan

Shareholder groups have been trying for years to get GM to end its military and police sales in South Africa, and introduced another such proposal at GM’s annual meeting Friday. Those efforts have been supported by the Rev. Leon Sullivan, a member of GM’s board of directors and the author of the “Sullivan Principles,” a code of corporate conduct for American companies with operations in South Africa.

But GM’s management has always opposed such moves in the past, insisting that the South African government’s rules required it to sell to the security forces in order to sell cars and trucks to civilian agencies.

But Smith, who has just returned from visiting South Africa, said government officials there have now agreed to allow GM to sell cars and trucks only to civilian departments.

“I had discussions with the South African government on the problems we were having (with the U.S. sanctions) and they said we could work out a new system where we could bid just on non-military and police sales,” Smith said. “So for all practical purposes, we’ve already stopped selling to the police and military.”

Shareholder Initiative Defeated

Still, GM’s management opposed this year’s shareholder initiative calling on the company to do the same thing, and the motion was overwhelmingly defeated at the annual meeting just before Smith announced the firm’s plans to end military and police sales. Smith said he opposed the motion because he did not want the company to give up its flexibility on the matter. He said GM might resume military sales if apartheid is dismantled in the future.

GM’s decision will not place much hardship on the world’s largest industrial company. In its 1986 proxy statement, GM said it expected to sell less than 100 cars and trucks to the military and police this year, out of total sales of just 1,200 units to the South African government. In fact, GM’s sales are sliding throughout South Africa as a result of the turmoil there. It sold just 35,000 cars and trucks in the country in 1985, down 20.5% from 1984’s level of 44,000 units.

Meanwhile, a spokesman for Ford said Friday that the No. 2 auto maker still sells vehicles to the police and military in South Africa through its car-building joint venture there with Anglo-American, a large South African conglomerate. Chrysler, however, doesn’t have any manufacturing operations in the country and does not sell any vehicles in South Africa, a company spokesman said.