The Multinational Monitor


N E W S   R O U N D U P

Putting up a stink at Mellon Bank

In November the Pittsburgh coalition known as the Network to Save the Mon Valley placed dead carp in safety deposit boxes at eight branches of Mellon Bank and suggested that the name of the bank be changed to "Smellin."

This protest action was the labor/church group's latest effort to tarnish the bank's public image and draw attention to their claim that the bank has neglected local industry while making substantial investments in Japanese corporations. Several network members have been arrested in other protests staged at the bank, some of which have ended in shoving matches with local police and bank guards as protesters tried to disrupt bank activities with tedious requests for change.

Mellon Bank officials are steaming over the fish incident, but have not budged from their position that Renaissance III, the renewal project in Pittsburgh's corporate district, is proof that reinvestment in the Mon Valley is taking place. Network members, however, say that the deteriorating conditions in the small mill towns surrounding the city illustrate the limits of these investment policies.

The coalition's strategies may attract greater attention in the next few months because Ron Weisen, President of United Steelworkers of America (USWA) Local 1397 and an active member of the group, is running as a dissenting candidate for the national presidency of the USWA.

- Veta Christy

Australia's auto woes

Sir Laurence Harnett, a veteran Australian industrialist, is upset with General Motors. Years ago he headed General Motors' wholly owned Australian subsidiary that still produces the Holden car. Since that time, Sir Laurence has criticized General Motors headquarters in Detroit for prohibiting the Holden car from being exported to nations with sizeable markets such as the U.S., Canada, and Western Europe. This policy has kept GM Holden from tapping a much larger market, generating competition for other world auto companies and creating employment in Australia, according to the near legendary 85-year-old Australian.

"No car manufacturer could have survived if it had not sold its vehicle in the world's biggest market, U.S. and Canada," he stated during a recent interview with our reporter in Melbourne. Multinationals that do not allow their subsidiaries to expand into foreign markets are practicing a form of reverse protectionism that is not good for a country like Australia, he noted.

Sir Laurence, who wrote a book two decades ago on his experiences as a General Motors executive, has long been a friendly but persistent critic of the giant auto firm. One of his goals while with GM was to build a truly innovative Holden automobile that would capture markets throughout the world. However, GM did not go along with his ideas. Instead, there emerged, in his view, a hobbled domestic Australian auto industry, owned by restrictive U.S. auto companies like GM and Ford, and increasingly undercut in market share by Japanese auto imports.

Bribery scandal singes German government

Chancellor Helmut Kohl's coalition government in West Germany sustained a serious blow to its credibility in November when Economics Minister Otto Lambsdorff and four others were indicted for accepting bribes from the Flick Holding Company, one of Germany's largest multinationals. The company allegedly offered the payments in order to secure tax exemptions from the sale of stock in the auto company Daimler-Benz.

Lambsdorff and former economic minister Hans Frederichs approved a $175 million tax waiver for Flick while they were members of Chancellor Helmut Schmidt's government (see MM, February, 1983). The waiver was granted by invoking a law allowing tax exemptions in cases "beneficial to the national economy." Since the income generated by the sale was used to buy into W.R. Grace and Company of the U.S., however, many critics of the government rejected this claim.

- Mike Stone

3M Scales the Great Wall

After three years of negotiations, Minnesota Mining and Manufacturing (3M) has reached an agreement with China to open a production facility in Shanghai. The plant will be the first wholly-owned investment by a foreign company outside of the few "special economic zones" set up for export production near Hong Kong.

The new plant will make products for use in China's telecommunications and electrical power industries, and will initially employ 30 workers. The motivation behind China's arrangement with 3M, according to a spokesperson for the U.S. Department of Commerce, lies in its desire to obtain the benefits of advanced technology.

3M has been selling products to China for ten years. But the company decided that production, transportation, and labor costs would be lower if products were manufactured in China. 3M shied away from the more common joint venture form of investment, however, because the company wanted to maintain control over the plant's operation and to protect the technology they developed. According to 3M's Henry Owen, the company convinced Chinese officials that they were not a "fly-bynight" operation.

- Mike Stone

Interchangeable workers

"Free trade zones are like Hilton Hotels. When you're inside one, you don't know what country you're in, and the hassles of the country don't touch you. It's the businessman's dream. And the workers are polite and obedient and almost look alike-sometimes you wonder if they're Mexicans, Filipinos, Malays, or Arabs. "

- U.S. businessman in Seoul, South Korea, quoted in Consumer Currents, Penang, Malaysia

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