The Multinational Monitor


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CIA orders study of global auto industry

Japanese automakers should beware: big brother is probably watching them.

The CIA has contracted a secret study of the auto industry in certain unnamed foreign countries. "We have a contract we're going to be letting out to look at the automobile sector in some specific countries," says CIA spokesperson Kate Hall. "The study is for our own concerns and our own look at the problem." Hall refused to identify the targeted countries.

According to an official history of the CIA, the agency began investigating allied countries' economies during the 1960s because "the growing economic strength of Japan and the countries of western Europe produced a related decline in the U.S. competitive posture and reflected the growing inadequacy of the dollar-dominated international monetary system. Economic (CIA) analysts found themselves called upon for detailed research on these countries as trading partners and rivals of the United States." By 1967, the CIA had established an entire department, the Office of Economic Research, to conduct these studies.

It remains to be seen whether the CIA plans to activate its operations branch to undermine foreign auto industries in the interests of U.S. national security - with which the U.S. auto industry has been equated in the past. - John Kelly

"Big Cheats" in Ghana

The government of Ghana has reopened negotiations with the country's largest foreign company, the Volta Aluminum Company (VALCO). The government hopes to redefine the terms of a 1962 agreement governing VALCO's operations.

VALCO, which is owned entirely by two U.S. corporations, Kaiser Aluminum and Reynolds Metals, has been granted liberal benefits since its opening: a ten year tax holiday; no restrictions of the import and export of materials; and guaranteed electric power at a prefixed rate. In fact, VALCO consumes about 60 per cent of Ghana's domestic energy resources at one-fifth the cost Kaiser pays for power in the United States.

Last year, just three months after a coup led by Flight Lt. Jerry Rawlings, Ghana charged that the company was harboring three American and German spies. The men were accused of engaging in "interference and destabilization" of the new government and deported. Since then, Ghana's revolutionary government has turned increasing attention to multinational "big cheats," in Rawlings' words.

VALCO threatened twice last year to close down all or part of their operations but failed to carry through with their threat. Adopting a more conciliatory attitude, W.B. Saunders, Managing Director of VALCO, stated at the opening session of negotiations, "It is important that we understand any concern which may exist in the minds of the government and people of Ghana."

SEC moves to stifle shareholder's voice

Since 1969, when an owner of Dow Chemical Company stock filed a shareholder resolution to protest the company's production of napalm, shareholder activists have filed hundreds of resolutions on issues from investment in South Africa to plant closings.

Now the Securities and Exchange Commission (SEC) wants to change the rules governing shareholder resolution. It has proposed three different plans for revising the process, each designed to cut costs and simplify the present system.

The first proposal would require that a stockholder own $1,000 worth, or one percent, of stock for one year before filing; under current rules, ownership of only one share can qualify a person to submit a resolution to be included in a company proxy form and mailed to all shareholders for a vote.

The second proposal would basically allow a company to adopt its own set of rules. The third would remove 11 of the 13 current SEC restrictions on resolution content, but would limit the total number of resolutions on the ballot issued to shareholders; resolutions would be selected at random through a lottery system.

The SEC contends that the changes are necessary to reduce "exorbitant costs" to government and industry in the present system. The Council on Economic Priorities, however, claims that these costs are insignificant, and charges that the SEC changes are really aimed at the corporate responsibility movement. "All three plans could potentially inflict deep wounds in the shareholder activist movement," Steven Lyndenberg of the Council recently wrote.

The SEC has closed the period of public comment on the proposals, and expects to rule on the matter by late 1983.

Right to strike? Or to strike out?

If you want to form an independent labor union in Mexico you might have to look for new work.

At least that's what 208 former employees of the SOLIDEV plant in Tijuana, Mexico found out. A subsidiary of the Florida semiconductor manufacturer Solitron, SOLIDEV shut down its Mexican operation last December, three years after its employees had organized the only independent labor union among the many assembly plants that line the Mexican border ("maquiladoras"). The union had won a 40-hour work week at a salary that most Mexican workers receive for 56 hours of work.

The Mexican government and labor authorities apparently cooperated with the company, letting SOLIDEV remove machinery without making the compensation payment required by law. The government views independent unionism with suspicion, and reportedly had pushed to align the renegade union with the ruling party, Partido Revolucionario Institutional.

- Source: Global Electronics Information Newsletter, February 1983

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