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Honeywell Joins Exodus of American Companies

December 4, 1986

JOHANNESBURG, South Africa (AP) _ Honeywell Inc. will sell its small operation here to a local firm and join the exodus of American companies from South Africa, a company executive said Thursday.

The sale to South African owners follows a pattern set by General Motors Corp., IBM and dozens of other U.S. companies which bowed to disinvestment pressure from the anti-apartheid movement and to poor economic conditions.

A major South African industrial group, Murray and Roberts, is to purchase the Honeywell operation for an undisclosed amount and all 175 employees probably will keep their jobs, said Markos Tambakeras, Honeywell’s local managing director.

At Honeywell’s Minneapolis headquarters, spokeswoman Susan Eich said: ″I think it’s generally acknowledged that the business environment in South Africa is volatile.

″We took into account the total business environment in that country and came to the conclusion it’s in our best interest to sell the affiliate to Murray and Roberts.″

The Honeywell affiliate, which sells and services electronic control systems for buildings and industries, accounts for less than 1 percent of Honeywell’s revenues, which totaled $6.6 billion last year, Ms. Eich said.

Such systems manage equipment, monitor industrial and other processes and collect data.

More than 60 American companies have left South Africa since January 1985, including at least 24 this year.

Last month, Eastman Kodak Co. announced not only that it would leave, eliminating the jobs of its 466 employees, but also that it would bar the sale of its products in South Africa.

The American companies remaining in South Africa - including Mobil Corp. and Caltex, a joint operation of Texaco Inc. and Chevron Corp. - have investments totaling an estimated $1.3 billion.

While most departing companies are American, the Bata shoe company of Canada and Barclays Bank, Britain’s second largest, also have announced they will sell their interests to local owners.

Britain is by far the largest foreign investor in South Africa, with investments estimated at $8.5 billion. Thus far, speculation that the large Barclays disinvestment would trigger a flood of other British withdrawals has not been borne out.

The initial report that Honeywell might withdraw came in October, when the company’s board of directors was said to have approved negotiations with an undisclosed potential buyer.

Board member Elizabeth Bailey, a dean at Carnegie-Mellon University in Pittsburgh, told The Minneapolis Star and Tribune at that time that Honeywell’s South African operation has been less profitable in recent years than in the past.

Tambakeras said the major objective in negotiations on the sale was to find a buyer who would continue to supply Honeywell’s customers here.

He said the new firm also will continue community development work and ″further educational opportunities for non-whites in their own country, as well as in the United States.″

The U.S. corporate withdrawals has provoked some bitterness among South Africans, particularly whites who back the government.

Said The Citizen, a pro-government Johannesburg newspaper, in an editorial after Kodak’s announcement: ″We haven’t heard of one American who has sacrificed anything to save the blacks in South Africa.

″All they do is make life more miserable for many, particularly those who were employed by American companies that were bettering their employment, housing and education but are now withdrawing.″

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