Many companies doing business in South America under the Sullivan Principles said yesterday they would continue their operations there despite Rev. Leon Sullivan's call for the withdrawal of American firms to protest South Africa's apartheid policies.
"In calling for U.S. companies to leave South America, Chevron believes Rev. Sullivan has committed a grave error, and we profoundly regret his decision," said Chevron Corp., a part-owner of Caltex Oil South Africa, one of the biggest American investments in South Africa.
"The Sullivan Principles without Sullivan will not be quite the same, but we intend to carry on," Chevron added.
"In essence, we are staying because we think it is the right thing to do," said a spokesman for Deere & Co., the tractor manufacturer that is based in Moline, Ill.
Sullivan, in a news conference yesterday, said the Sullivan Principles -- promulgated 10 years ago to encourage American companies to follow a code of ethical business conduct in South Africa -- had failed to help end apartheid. He said he now feels that the complete withdrawal of U.S. companies from South Africa is necessary.
While Sullivan said "the principles have caused a revolution in industrial race relations in South Africa," he added: "In spite of efforts of the companies, and other endeavors, the main pillars of apartheid still remain, and something else must be done to bring an end to that despicable system that dehumanizes black people."
The Investor Responsibility Research Center, a nonprofit group in Washington that monitors corporate activity in South Africa, estimates that almost 200 U.S. corporations still do business there. Of those, 127 are signatories to the Sullivan Principles, which advocate the employment of minorities in South African enterprises and oppose segregation in the work place.
More than 100 American companies already have sold or closed down their South African operations; another 15 have announced plans to do so this year. Many of those remaining are among the biggest employers in South Africa and have been there for decades. They argue that they can better fight apartheid by continuing operations with ethical practices.
"We find it difficult to come to the conclusion that helping blacks in this situation is counterproductive. We're hesitant to give up the fight after working there for so many years," said W. Michale Blumenthal, chairman of Unisys Corp., the large computer maker.
Mobil Corp., the largest U.S. employer in South Africa with 3,000 workers, said it would continue to "strengthen incentives to improve the quality and quantity of programs supporting the South African black community."
Other companies made similar pledges yesterday.
"Caltex intends to stay in South Africa and will continue to work for an end to apartheid, giving strong support to those dedicated individuals and organizations in South Africa who wish to bring about a just, nonracial and democratic society," Chevron said.
Despite Sullivan's request, many companies said they would continue to abide by his code.
"The principles will go on as far as Cyanamid is concerned," said Edwinna West, a spokeswoman for American Cyanamid Co., a Wayne, N.J.-based chemical concern. She said the company expects that some other mechanism will be adopted to monitor business conduct in South Africa.
"We plan to continue operating under these principles as long as it is in the best interest of our employes and our shareholders," said Goodyear Tire & Rubber Co.
Sullivan, in his press conference yesterday, said he was confident that shareholders and critics would bring enough pressure on companies that remain in South Africa to force them to reconsider their positions, and in the meantime, to continue to follow the spirit of the principles. "They kept the Ten Commandments without Moses," he said.
Experts expect many companies to stay in south Africa as long as it is profitable.
"I don't think companies are scared of losing their investments," said David Hauck, senior analyst at the Investor Responsibility research Center. "what they are concerned about is losing access to a market."
FMC Corp., a Chicago-based industrial conglomerate that has kept its operations in south Africa, said yesterday that if it decides to withdraw, it will do so for business reasons. "We continually evaluate the business and ethical reasons for doing business in South Africa, but the establishment of any arbitrary timetable for withdrawal, we think, is counterproductive," FMC said. "We're going to make that decision independent of any pressure to withdraw."
Many of the companies that have pulled out of South Africa have done so for economic, rather than altruistic, reasons. General Motors Corp., for instance, withdrew from South Africa earlier this year, selling its plant to a south African-owned company because, a spokesman said, "We had been losing money there for several years, and there was little reasonable expectation that apartheid would be ended in the near term. We really felt we had no choice but to withdraw."
Similarly, a spokesman for General Electric Co. said that its South African operation lost money in 1985, a year before the company sold the division. "The decision was a relatively easy one to make -- it was a business decision," the spokesman said.
Emhart Corp., a conglomerate whose holdings include Planning Research Corp. of Mclean, said yesterday that it put its operations in South Africa up for sale in January because of potential pressures on PRC, which does business with many U.S. municipalities that prohibit dealings with companies with South African interests.