Honeywell, Revlon Join Exodus of American Companies With PM-District Six, Bjt
Dec. 05, 1986
JOHANNESBURG, South Africa (AP) _ Two huge American corporations, citing poor economic conditions and pressure from the anti-apartheid movement, joined the growing list of U.S. firms withdrawing from South Africa,
Honeywell Inc. and Revlon Group Inc., with almost 500 employees, announced Thursday they were pulling out, following a pattern set by General Motors Corp., IBM and dozens of other U.S. companies.
At Honeywell's Minneapolis headquarters, spokeswoman Susan Eich said: ''I think it's generally acknowledged that the business environment in South Africa is volatile.''
In New York, Revlon said it was leaving South Africa because of ''the uncertainty in the economic and political situation ... created by the government's lack of progress in dismantling its system of apartheid and its failure to achieve racial equality.''
A major South African industrial group, Murray and Roberts, is to purchase the Honeywell operation in Johannesburg for an undisclosed amount and all 175 employees probably will keep their jobs, said Markos Tambakeras, Honeywell's local managing director.
Ms. Eich said, ''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.
Revlon said the beauty products firm ''will be terminating its involvement in South Africa through the sale of its subsidiary there'' by the end of 1987.
By law and custom, South Africa's apartheid system establishes a racially segregated society in which the 24 million black majority has no vote in national affairs. The 5 million white minority controls the economy and maintains separate districts, schools and health services.
Revlon operates a manufacturing plant in Johannesburg that employs about 300 people. The company, which posted total revenue of $1.24 billion in the nine months ended Sept. 30, does not break out the results from its South African operations, but the unit's annual sales are believed to be less than $20 million.
It was not known whether there is a prospective buyer of Revlon's South African operations.
More than 60 American companies have left South Africa since January 1985, including at least 24 this year.
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.