A chart Dec. 2 overstated the number of General Electric Co. employes in South Africa. The company has 849 employes there.
William Broderick of the Ford Motor Co. has spent much of the past year flying to state capitals and testifying on a subject that makes most corporate executives cringe. His mission: to defend the role of U.S. corporations in the legally segregated state of South Africa.
"It's not exactly a motherhood issue," says Broderick, acknowledging that few corporations want to be publicly identified with his activities.
"All the surface pros and cons are running against us. . . But we're totally convinced that nothing good will come to black South Africa if we all get out."
As director of Ford's international operations, Broderick has served as the corporate general in a high-stakes battle over South Africa that is heating up in dozens of statehouses and city council chambers and creating new headaches for the approximately 300 U.S. corporations that have operations in that nation.
So far, 11 cities and five state governments -- Connecticut, Maryland, Massachusetts, Michigan and Nebraska -- have passed some form of divestment laws, which generally require that pension or other government funds be withdrawn from some or all of the U.S. companies that do business in South Africa.
Divestment advocates say their campaign is gaining momentum, drawing strength from public reaction to South Africa's current crackdown on dissidents and from protests at the South African Embassy in Washington, led by U.S. congressmen and civil rights leaders.
As many as 20 states are expected to consider such proposals in their 1985 legislative sessions and "four or five" will probably pass, say such pro-divestment lobby groups as the Washington Office on Africa and the American Committee on Africa.
"It's clear the whole campaign is growing all over the place," says Jennifer Davis, executive director of the New York-based American Committee.
"We're getting calls coming in from all over -- from Texas, from Vermont -- asking for copies of bills and information."
An even greater number of cities will probably pass divestment laws in 1985, Davis adds, joining New York, Philadelphia, Boston and the District of Columbia in the ranks of municipal governments that are unloading stocks and bonds in the targeted companies.
"I think companies looked at divestment as sort of a minimal do-gooder protest vote a couple of years ago," says Davis.
"Now they're beginning to see it as a serious national campaign that they can't just shrug off -- and it's not going to go away."
It is difficult to determine how much the campaign has hurt U.S. companies so far, but divestment advocates say they see signs it is beginning to work.
The U.S. Commerce Department reports that U.S. private investment in South Africa has dropped more than 10 percent -- down from $2.6 billion in 1981 to $2.3 billion last year -- although analysts say this may have more to do with the depressed state of the South Africa economy as a response to pressure from U.S. activists.
Last week, the U.S. corporate community in South Africa was jolted by a report in a South African newspaper that Ford was selling off its auto plants there to Amcar, the automotive division of a South African-owned Anglo-American conglomerate. The story was swiftly denied at company headquarters in Dearborn, Mich., but a Ford spokesman said that the company, which has been laying off workers at the plants, was engaged in talks of "mutual interest" with Amcar with an eye toward "rationalizing" its operations.
Meanwhile, state and city governments that have joined the divestment movement have been busy selling off their stock in Ford and other big U.S. companies in an effort to implement their divestment laws. Massachusetts, which passed a complete divestment law in January 1983, sold off the entire $90 million in corporate stocks and bonds affected by the act within a year.
The trustees of the D.C. pension system recently reported that, within the four-month period between April 30 and Sept. 30, they had sold off $34.9 million of the $46.9 million in corporate assets affected by the city's new law -- with no measurable impact on the solvency of the city pension system.
As a result, U.S. corporations have decided to fight back. An unnamed committee of about 25 major U.S. companies, including Ford, General Motors, Mobil and others, has been organized to oppose divestment proposals at the state level.
Another closely related group -- called the Corporate Committee for Change in South Africa -- was recently formed by about a dozen U.S. corporations to lobby against divestment proposals before cities and other local governments.
"We're organizing to fight this on every level we can," said one corporate executive involved in these efforts.
The new corporate committee, which is being chaired by Mobil executive Sal Marzullo, is making its first stand in New York City, where it has retained the lobbying firm of Peter Piscitelli, a former top aide to Mayor Edward Koch. A few months ago, the trustees of the the New York City Employes Retirement System became the largest pension fund to approve divestment to date, passing a resolution that will require the city to sell off more than $600 million in assets in U.S. companies doing business in South Africa.
Now, U.S. companies fear that the city pension systems for policemen, firemen and teachers will follow suit. In addition, Piscitelli has been asked to deflect a new weapon in the arsenal of anti-South Africa groups: a bill introduced in the New York City Council that would penalize companies with South Africa operations when they bid on city contracts.
"If they could get a bill like that through the City Council, it sends a message that could get picked up across the country," said Piscitelli.
One of the problems in this new corporate lobbying effort, however, is that the companies are so reluctant to be seen as standing up for apartheid that few want to be publicly associated with the campaign, its organizers said. Piscitelli and Marzullo, for example, both refuse to name the members of the corporate committee other than to say they are all signators of the Sullivan Principles -- a code propounded by civil rights leader Rev. Leon Sullivan that pledges U.S. companies operating in South Africa to eliminate segregation in the workplace, provide equal pay for equal work, and take steps to improve black workers' training and housing.
"These are the good companies in South Africa. . . . I've got the white hats on this one," says Piscitelli. "But it's a difficult issue. All these guys are interested in doing the right thing, but people think you're identifying with apartheid. None of them want to be identified even with a good bill."
At least one reason for this skittishness is that the companies fear their own efforts will become confused in the public mind with separate antidivestment lobbying activities that are financed by the South African government. The South Africans currently have two politically well-connected Washington law firms -- the firm of Sears, Hare, Kelley and Ward and the firm of Smathers, Symington and Herlong -- that receive annual retainers of $500,000 and $300,000, respectively, to represent their interests in the United States, including monitoring the status of divestment legislation, according to foreign agent registration records on file with the Justice Department.
In addition, the South African consulate in the United States has spent thousands of dollars financing the trips to South Africa by state legislators in key battleground states. At least 18 lawmakers in Nebraska, Maryland, Illinois, Wisconsin and Nevada have thus far been on such trips, according to records compiled by Dumisani Kumalo, a former South African journalist who supervises the divestment campaign for the American Committee on Africa.
The South African government shares information on the antidivestment effort with some American companies, according to a South African lobbyist. But representatives of the American companies say their opposition to divestment does not indicate support for the policies of the South African government. Broderick, for one, describes U.S. companies as agents for social change in South Africa. He says they are "chipping away" at the racist underpinnings of apartheid through their implementation of the Sullivan Principles.
"A lot of the support for divestment is based on a perfectly legitimate revulsion with the way that government treats black people," says Broderick. But, he also says, "I haven't found anybody who can give me a scenario that will get me from a) we pull out of South Africa to z) the end of apartheid. . . . All that would happen is that 70,000 to 80,000 black employes would lose their jobs."
As Broderick's comments suggest, divestment touches on a complex mix of moral, social and foreign policy issues. Underlying them all is economics: U.S. companies employ a total of about 120,000 people, most of them black, in South Africa and many of the companies' operations are significant.
Some 25 U.S. companies -- including such major firms as International Business Machines Corp., U.S. Steel Corp., General Electric Co., Union Carbide Corp. and Goodyear Tire and Rubber Co. -- have investments exceeding $20 million apiece in South Africa. Mobil Corp., with more than 3,300 employes in South Africa, owns or supplies about 1,300 service stations that hold an estimated 20 percent of the retail gasoline market, according to the company's figures.
A few companies have controversial contracts with the South African government. For example, General Motors, which has more than 4,300 workers, supplies cars and trucks to the government and police. Control Data Corp., with more than 300 employes, sells computers and computer parts to a variety of government agencies, including some that critics say are used in the maintenance of internal security. (A Control Data spokesman says that all its computer sales are regulated closely by the Commerce Department to ensure they are not used for the "perpetuation of apartheid.")
"These companies are there for one reason: to make money," says D.C. Council member John Ray, who sponsored the District's divestment law. "Ford is not operating in South Africa to stir up social unrest. . . . If you you look at this as an employment issue, we already have the answer -- its slavery. That's full employment. But this is not about jobs. Its about human rights."
In response to such charges, most of the major U.S. firms have signed onto the Sullivan Principles and currently spend a total of more than $20 million a year on housing, schools, health services and other programs designed to benefit South African blacks. The 128 signators are also required to pay annual fees, ranging up to $9,000 apiece this year, to finance a $285,000 contract to the Arthur D. Little Inc., a management consulting firm, which puts out an annual report grading each of the the firms on a sliding curve according to their diligence in implementing the principles.
But the Sullivan Principles themselves have been beset by controversy, with some companies objecting to the fee structure and others complaining about the need to submit to an outside monitoring system they feel is inherently arbitrary. "We're responsible to our shareholders -- and nobody at Sullivan is," says James F. Hill, vice president of corporate relations for Newmont Mining Corp., one of the U.S. firms that has refused to join.
"The companies basically feel it's corporate blackmail," adds Kathleen Teague, executive director of the American Legislative Exchange Council, a conservative group that distributes antidivestment bulletins to state legislators.
Meanwhile, Sullivan himself is stepping up his pressure on the companies. While issuing Arthur D. Little's latest report last month, Sullivan also said he was expanding his principles to include a requirement that U.S. companies support the abolition of apartheid laws within South Africa -- a provision that some U.S. firms fear would place them in the sensitive position of being forced to lobby a foreign government.
But pro-divestment groups still aren't satisfied. "We feel that the Sullivan Principles are a public relations exercise by these companies to justify their investments," says Kenneth Zinn, associate director of the Washington Office on Africa.