Sullivan Warns Withdrawal of U.S. Firms in S. Africa Could Snowball

The Rev. Leon H. Sullivan, a member of the General Motors board of directors, warned here Friday that recent announcements by large U.S. firms to leave South Africa this year are but “a prelude to an avalanche of withdrawals if apartheid is not ended by May 31, 1987.”

Sullivan, a Philadelphia Baptist minister and author of the “Sullivan principles,” a code of ethics used by U.S. companies doing business in South Africa, said that if apartheid is not dismantled by that date, he will call for a total withdrawal.

As leverage, Sullivan said that he has lined up commitments totaling $50 billion from managers of pension funds, school funds and other sources. He said he will recommend that those funds’ investment portfolios be divested of U.S. companies that stay on in South Africa.

The warning came at an informal press conference held at an annual meeting of the Inland Area chapter of Opportunities Industrialization Centers, a nationwide network of 150 vocational training centers that Sullivan established in 1964 for the poor.

Consumer Boycotts

Sullivan, who organized consumer boycotts in the 1960s with the Rev. Martin Luther King Jr., also said he was “concerned” that his company has used police guard dogs and whips to suppress a strike at a GM plant in South Africa and about company plans to sell its interests in that country next year to local investors headed by white GM managers.

In carefully measured words, he said: “I’m looking into the matter. I’m hopeful that future developments bode much better for the GM workers.”

On Oct. 20, acknowledging that its efforts to promote change had failed, GM said it would pull out of South Africa by year’s end and sell its auto assembly operations there to local managers.

GM said last May that it would stop selling cars and trucks to South Africa’s military and police. Shareholder groups, with Sullivan’s support, had been trying for years to end the company’s military and police sales, but GM’s management had always opposed such a move in the past.

GM is among a growing list of U.S. firms that recently announced plans to pull out of South Africa, including Coca-Cola, IBM and Eastman Kodak.

Monitors Investment

As it stands, there are 244 U.S. firms in South Africa, not counting six that pulled out this year, according to the Investor Responsibility Research Center, a Washington-based group that monitors American investment in the African nation.

But in marked contrast to GM’s plans for withdrawal, Coca-Cola, IBM and Eastman Kodak intend to leave their assets in some measure of multiracial control or to give severance payments to black workers.

Coca-Cola plans to sell its interests to black South Africans. Eastman Kodak plans to terminate all of its South African operations and provide severance payments to its 466 South African workers. IBM plans to leave its assets in control of a new entity that gives proportionate ownership to black employees.

In 1971, Sullivan joined GM’s board and immediately startled corporate officials by calling for U.S. companies, including the automotive giant, to withdraw from the strife-torn African nation.

He softened that stance, however, after a visit to South Africa in 1975 when black leaders urged that he persuade U.S. companies to stay in the country and actively fight against discrimination in the workplace.

Forged Principles

The idea led Sullivan to forge the “Sullivan principles,” which are designed to promote racial equality in employment practices, job training and improved living conditions for all black Africans.

When the principles were adopted in 1977, there were 12 corporate signatories. Currently, there are more than 187.