The Multinational Monitor

October 1988 - VOLUME 9 - NUMBER 10


C O R P O R A T E    P R O F I L E S

UNION CARBIDE

by John Summa
WHEN NEWS OF the Bhopal gas leak hit, Carbide wasted no time organizing for damage control. At its headquarters in Danbury, Connecticut, closed-circuit television monitors stationed on each floor delivered pronouncements by Carbide senior management as news of the disaster unfolded. The video-messages helped boost employee morale, as Carbide executives moved quickly to salvage what respect they could for a giant corporation under seige.

The senior management of this multinational would soon thwart a hostile takeover bid from GAF corporation. It would also undertake a vast restructuring of its operations, a process that had, in fact, already begun. Carbide sold off many unprofitable plants, cut its white-collar workforce, and even shed its consumer divisions, such as the Eveready battery business, in the wake of Bhopal. Its restructuring plan was described as "an ambitious, if belated, attempt by management to regain control of the sagging company."

Some of the sell-offs, however, appeared to be merely legal maneuvers to enable top management to free themselves from liability, but maintain profits. It was reported, for example, that Carbide's home and auto products division, which produced Glad wrap and Prestone anti- freeze, was sold to First Boston for $800 million. In press accounts in Connecticut, however, it was mentioned that a group of senior Carbide managers would buy the unit with First Boston. The new company, First Brands, will stay in Danbury, Connecticut, where Carbide has its headquarters. Senior Carbide managers will remain direct beneficiaries of the profits, but without the stigma of Carbide's reputation attached to the company's products.

By 1986, Carbide's new president, Robert D. Kennedy, was able to describe the changes as representing "one of the true comeback stories in the annals of business." The "successful restructuring" resulted in a "strong operating performance during the year," Kennedy stated in Carbide's 1986 annual report. There were also profit gains and good performance posted in 1987.

Behind the "comeback," however, is a trail of not yet resolved human and ecological disasters. Since its start as a carbon products company in 1917, Carbide has shown little regard for the environment or worker safety. It still defends its presence in South Africa and Namibia, and refuses to accept responsibility for the tragic gas leak in Bhopal, India in December 1984. There are also festering toxic waste problems in the United States that stem from Carbide's long history of involvement in the research and development of nuclear weapons, and in uranium milling and mining. In fact, Carbide is still mining uranium and exporting it for use in commercial nuclear reactors, although the company has abandoned other production aspects of the nuclear fuel and weapons cycle.

Carbide got its start in nuclear power during World War II. Indeed, it was one of the pioneers. Working under U.S. government contracts, Carbide ran the Oak Ridge National Laboratories for most of the lab's existence, losing the contract to Martin Marietta corporation in 1984. After World War II, Carbide consolidated all the contracts for Oak Ridge operations, replacing Monsanto, Eastman Kodak, and Dow Chemical.

For the next 41 years, Carbide produced nuclear weapons components, enriched uranium for Pentagon needs, as well as for fuelling commercial nuclear power plants and conducted other nuclear energy research. The Y-12 plant at Oak Ridge, built in 1943 as part of the Manhattan Project, is the main nuclear weapons factory for the U.S. government. In 1977, a declassified Department of Energy (DOE) report revealed that 2.4 million pounds of mercury had been released into the ground, water and air between 1950 and 1963, a time when the plant was still under Carbide management. The report found that the mercury had flowed into and is believed trapped within geologic formations under the plant site. The report also found that a total of 475,000 pounds of mercury may have moved by process drainage systems and surface movement to East Fork Poplar Creek. Some areas have been closed to swimming and fishing, but DOE maintains that the high concentration of mercury found in water and sediment in East Fork Poplar creek "pose no hazard to area residents." Steve Wyatt, a DOE spokesperson, acknowledges, however, the potential for groundwater contamination at the site. While the Justice Department considered prosecuting the Carbide officials responsible for the mercury leak, no charges were ever brought.

(balance of this article omitted here; unscannable)