Exits by GM, IBM Spur No S. Africa Stampede
The move by General Motors and International Business Machines--two of the bluest of America’s blue-chip companies--to leave South Africa failed to trigger a stampede of imitators Wednesday as some U.S. firms continue to insist that they do more good than harm by staying.
“We continue to believe our staying there is serving the interest of all South Africans” was a common view, voiced in this case by a spokesman for Chevron in San Francisco. Chevron, through a joint venture with Texaco known as Caltex Petroleum, owns a refinery and nearly 300 gasoline stations in South Africa.
GM and IBM revealed their plans in back-to-back announcements Monday and Tuesday. It was a surprising and painful double punch for the white-dominated Pretoria government and its widely condemned policies of apartheid.
Honeywell ‘Considering’
At least one other large American firm, Honeywell, the Minneapolis-based conglomerate, hinted Wednesday that it will soon follow the lead of GM and IBM. The company is “considering certain options for the sale of its South African affiliate,” it said in a statement. “No final action has been taken.”
Honeywell employs 159 people in South Africa, mainly in the marketing of its building-control systems and products related to security and temperature control, a spokesman said.
Meanwhile, Warner Communications in New York reiterated its decision, disclosed with little fanfare a few weeks ago, to divest itself of its record-distribution operation in South Africa. A Warner spokesman said the firm is negotiating to sell the business to local employees.
Warner said it is also considering the sale of its film-distribution operation, which it owns in partnership with Universal Studios and Paramount Pictures. Warner’s spokesman, Geoffrey Holmes, said the planned withdrawals have nothing to do with the money-making ability of those operations.
Warner Displeased
“We’re very unhappy about the way the South African government is handling their apartheid policies,” Holmes said.
Advocates of U.S. corporate withdrawal from South Africa maintain that the number of U.S. firms leaving South Africa will accelerate markedly by the end of the year, particularly in light o1713402984say.
“We think it will become a flood, but it will be scheduled over the next three months,” said Timothy Smith, executive director of the Interfaith Center on Corporate Responsibility, a coalition of church groups. “There’s a saying,” Smith added. “ ‘Don’t panic, but if you do, be sure to be the first out the door.’ ”
In all, 22 U.S. firms have pulled out of South Africa this year, while another seven--including GM, IBM and Coca-Cola--have said that they will leave. There are 244 companies that have not disclosed what they plan to do.
Not Apartheid Defenders
Though the firms remaining in South Africa do not defend apartheid, they do say that leaving only hurts workers of all colors. Many U.S. companies employ large numbers of nonwhites.
The largest U.S. employer there is Mobil Corp., with more than 3,100 workers, more even than GM (about 2,800) and IBM (fewer than 1,500). A spokesman for Mobil had no comment.
Some other major employers there include Goodyear Tire & Rubber (2,471 employees), Johnson & Johnson (1,389), Colgate Palmolive (1,234), Eastman Kodak (654), Pepsico (688), 3M (1,174) and Xerox (790), according to the Investors Responsibility Resource Center in Washington.
One well-known firm planning to stay put for now in South Africa is R. J. Reynolds, whose operations there include 2,479 employees, a Del Monte canned-fruit processing plant near Cape Town and a confectionery and bakery-products plant in Johannesburg. A spokeswoman said the company still believes that withdrawal would be harmful to its nonwhite employees.
