Ford Leaving South Africa But Not Abandoning Samcor
DETROIT (AP) _ Ford Motor Co. is withdrawing from South Africa but leaving its investment behind to continue providing jobs for employees of South African Motor Co., Ford said.
Ford also will continue selling components to SAMCOR, allowing the South African company to use Ford’s name and providing technical assistance, Ford said Tuesday in announcing the decision that could cost it $52 million.
Ford owns 42 percent of SAMCOR, which was formed 2 1/2 years ago when Ford and Anglo American Corp. merged their South African auto operations. Ford plans to finish disposing of its SAMCOR interest by year’s end, said Ford Chairman Donald Petersen.
The second-largest U.S. automaker decided to divest its SAMCOR interest because ″just balancing all the priorities and all of the shareholders’ interests, we found that we can’t justify retaining financial interest in the company,″ said Ford spokesman Ken Brown.
″But equally we are committed to supporting its continued operation and the employment of its people,″ Brown said.
Ford will donate a 24 percent SAMCOR interest to a trust controlled by employees and sell its remaining 18 percent to Anglo American. SAMCOR employees also will have three seats on the board of directors.
″We believe the equity we plan to donate to employees constitutes the largest ownership block by a broadly based employee group in any South African company,″ Petersen said.
″Under the arrangement, all SAMCOR employees ... will own SAMCOR shares through the trust. All dividends will be distributed by the trust for development projects in the communities where employees live,″ he said.
Ford also will contribute $10 million to various programs, including training of black managers, a black educational trust, community development trusts for black townships near Pretoria and Port Elizabeth and a group that provides free legal services to black South Africans.
″We won’t hold any equity in South Africa,″ Brown said. ″We will continue to supply components and technology so SAMCOR can continue to manufacture our products,″ Brown said. ″That way the company can continue to operate and the employees can stay employed.
″If we pulled out more, SAMCOR would fail.″
Brown said the arrangement was agreed on by Ford, Anglo American and representatives of workers. Ford has set aside about $52 million to pay for the divestiture, he said.
SAMCOR, a private corporation, assembles various Ford products, two Mazda cars, a Mazda truck and a Mitsubishi truck. It employs 4,900 workers and serves a network of 146 dealers.
The Ford equity in SAMCOR is legally held by Ford of Canada, a publicly traded company that is 97 percent owned by Ford Motor Co. Ford’s departure arrangement includes no provisions for buying back into SAMCOR, Ford said.
General Motors Corp., the world’s largest manufacturer, announced in October 1986 it was pulling out of South Africa. GM sold General Motors South Africa Ltd. to an employee investor group.
Chrysler Corp., the No. 3 U.S. automaker, has no holdings in South Africa.