The Multinational Monitor


N E W S   R O U N D   U P

China energy push draws U.S. MNCs

In the next twenty years, China must spend between $350 and S450 billion developing its energy resources, according to a recent World Bank study of the Chinese economy. This spending will mean huge contracts for multinational corporations. Among them:

  • Atlantic Richfield Oil Company (ARCO) and Santa Fe International Corporation, who are already drilling exploratory oil wells on China's south coast;
  • Fluor Corporation, Royal Dutch/Shell and a unit of Occidental Petroleum Corporation. These companies will help expand open pit coal mines;
  • Hughes Tool Company, which is building a plant to manufacture oil-rig drill bits;
  • Geosource Inc. and Parker Drilling Company, who will provide on-shore oil exploration services;
  • Westinghouse, which is expected to be a top contender for China's upcoming nuclear power plant purchases.

Source: Wall Street Journal, 12/20/82

Zimbabwe oil nationalism urged

In the wake of a fuel crisis caused by a sabotage attack, a pro-government newspaper in Zimbabwe has called for the nationalization of foreign oil companies.

The editorial in the Herald came several weeks after South African-backed saboteurs destroyed a fuel depot in Mozambique that supplied Zimbabwe with oil. The oil companies "knew all along the possibility of storage tanks being blown up," the editorial said. "Unless they are nationalized, shortage of fuel is bound to become a common feature in the future . . . If they had the capacity and means of bringing all the needed fuel for Ian Smith (the former Rhodesian Prime Minister), surely they can now do that for Prime Minister Mugabe."

Zimbabwe's principal foreign oil suppliers are Royal Dutch/Shell and British Petroleum. The companies would not comment on the crisis.

Source: Journal of Commerce 12/29/82

Arms for Japan

Recent increases in Japan's defense budget are helping to , boost U.S. arms sales, and may ' lead to increased tie-ups bet- ' ween Japanese and American ' firms. Two examples illustrate ' these trends.

  • In the early 1970s, when Lockheed Corporation was struggling and required a financial bail-out from the U.S. government, its sales to Japan accounted for only five percent of its total sales. But as the Reagan Administration has pressured Japan to step up its military spending, Lockheed's market share in Japan has mushroomed. In 1982 Japanese procurements accounted for 25% of Lockheed's sales. And the price of a share of its stock had skyrocketed to $54.75 from a low of $2.25 in 1973.
  • Nissan, along with other ailing auto companies in the world, is seeking a way to survive in the climate of severe competition caused by the recession. In August, Nissan announced that it had agreed to a tie-up with Martin Marietta, a leading U.S. defense contractor. The two firms will cooperate on missile production.

Meanwhile, the Japanese government recently announced a 6.5% increase in defense spending for 1983. The new defense budget will be $11.83 billion, up from $11.11 billion in 1982. This will bring the Japanese defense budget to 0.977% of the GNP - just below the 1% ceiling set in 1976.

Source: New Asia News; Wall Street Journal 12/30/82

Unions hit hard by recession

The recession has forced many unions in the U.S. to lay off employees and cut back on programs.

During the past six months AFL-CIO unions have lost more than 400,000 members due to layoffs. This has forced the labor confederation to cut its clerical and professional staff from 227 to 200.

One union hit hardest: the United Steelworkers of America. Reeling from a decline in membership from I 1.4 million in 1979 to 740,000 j in 1982, the union will soon cut its staff from 1,400 to 1,200.

The cutbacks are affecting unions' political campaigns and organizing efforts, raising concerns within the labor movement about confronting the recession. "We are still doing the basic job of representing our members," says William Winpisinger, President of the Machinists Union. "But what is suffering are all the allied pursuits with which we hope to create a climate in which our members will do better in the future."

Source: Wall Street Journal 12/23/82

Oh You Can't Scare Me...

Should robots pay union dues? This question came up recently among union members at Fujitsu Fanuc, one of Japan's leading robot manufacturing companies.

After losing many of its members to robots at a plant in central Japan, the union announced that it faced bankruptcy. Then management came up with a novel idea: it would pay union dues for each robot and keep the union on its financial feet. The union readily agreed.

The idea quickly spread to other unions in Japan. But soon the government nixed the idea on the grounds that the does amounted to corporate donations to unions - illegal in Japan. A Ministry of Labor spokesperson said, "robots are not considered to be human. As a result, if fees are paid into the union's funds on behalf of robots, this would be defined as financial assistance from management."

The government decision displeased the union. "There are now only 700 union members, and our finances are in trouble," the union chairperson said. "We would like to see parliament change the law. We want to see robots join the unions."

The story illustrates the potential problems faced by unions as workers are replaced by robots. In Japan there are important reasons to worry. One recent study by the Organization for Economic Cooperation and Development (OECD) stated that "the growing use of robots will result in a reduction of between 200,000 and 500,000 in the Japanese work force by 1985."

Source: Journal of Commerce 12121182; Business Asia 3/12/82

Plant Spending in the U.S. - Down Down

A year ago the Reagan Administration was saying that the big tax breaks for corporations would lead to an increase in plant investments. But it hasn't. In mid-December the Commerce Department released a study showing that capital spending for 1982 will decline 4.8% from 1981 levels, to $151.8 billion.

The drop in capital spending, the department said, is most marked in the steel and housing industries. But is has also affected profitable businesses like electronics and data processing, as well as business plans for 1983. Forecasters are predicting that 1983 will show the first two-year decline in capital spending since World War II.

Source: New York Times 12/14/82

Table of Contents