Ford Motor Co. is preparing to sell its South African interests in a complex deal that will give a large share of the business to a mostly black workforce, but its products will continue to be sold in South Africa.
The company has been under intense pressure to exit the area in protest of the government's apartheid policies. General Motors announced in October that it would sell the business to an investor group led by local GM executives and exit the area. Under GM's plan, the company will continue to sell auto parts to its former subsidiary.
A Ford spokesman in Detroit confirmed today that the company has been in discussions for several months with South African unions and community leaders about a change in ownership of its subsidiary, the South African Automotive Company, known here as Samcor, which was merged in 1985.
Like GM, Ford has been manufacturing vehicles in South Africa for many years. In 1985, Ford merged a subsidiary of the Ford Motor Company of Canada with Amcor Motor Holdings, a division of the mining and industrial conglomerate Anglo American Corporation. As a result of the merger, Ford held a 42% stake in Samcor, with Anglo American holding the remainder.
Samcor is one of South Africa's largest car manufacturers. At the time of the merger in 1985, Ford was producing about 40,000 cars a year in South Africa, but numbers have declined since then.
More than 100 U.S. companies withdrew from South Africa after black resistance to white rule sparked unprecedented social unrest in the country's black townships in October 1984.
More than 2,500 people have died since then and a national state of emergency that has been in place for 12 months was re-imposed last week. Leslie Boyd, Samcor chairman and Anglo American director, confirmed reports here today that Ford is negotiating with employees to transfer the majority of Samcor's shares into a trust for the benefit of black workers.
But Ford has agreed to continue supplying Samcor with car parts and to allow the company to use the Ford logo that has been seen on South African roads for 61 years, he said. Samcor makes cars and trucks in Pretoria and engines and other parts in Port Elizabeth. Ford has two seats on the company's board of directors.
Boyd said the talks were still in the “formational stage” and declined to provide further details about the proposed exit, but industry sources said discussions with union leaders had focused on selling Ford's 57 percent stake in Samcor to employees and the remaining 43 percent to Anglo American Corp. In addition, US reports have said Samcor employees would get two seats on the company's board of directors.
Chrysler, the last of the Big Three American automakers, never had any significant operations in South Africa.
News reports said unions are concerned about the proposed deal because they fear they will be at risk of being fired without protection from Ford.
When Ford and Anglo American set up Samcor and moved its headquarters to Pretoria about two years ago, thousands of jobs were lost at Ford's factory near the Indian Ocean port city of Port Elizabeth.
Ford's move, which has apparently been planned for months, came as a surprise to the business community after Ford Chairman Donald E. Petersen made clear in Detroit just a month earlier that the company intended to remain in South Africa.
In an interview this evening, Adrian Botha, executive director of the American Chamber of Commerce, said he did not believe Ford's move portended a major flight of US capital from South Africa.
Botha said he saw no connection between Ford's move and the decision of the Rev. Leon H. Sullivan, a black Baptist minister from Philadelphia, author of the Sullivan Principles, a non-racist code of conduct for corporations, and a member of GM's board of directors, to call for the complete withdrawal of American companies from South Africa.
More than 100 companies have left South Africa in the past 18 months.