Overseas Expansion and Government Contracting: The Story of Kaiser's Global Empire
Locker, Michael
Most Americans are still in the dark about the basic causes for this countrys increasing world-wide involvement. During the late forties and the fifties, liberals pleaded with...
...The expanding Japanese steel industry needs ore and the Haerasley range will supply 150 million tons of iron ore and pellets, worth almost $1.3 billion, by 1980...
...Lacking a large bauxite deposit, a primary requirement for profitable manufacture of finished aluminum, Kaiser purchased a large property in Jamaica in the late forties...
...During the late forties and the fifties, liberals pleaded with isolationist-minded Americans to back overseas arms and assistance program as the best defense against Conmunism...
...1 The International Poor Peoples' March to New Delhi - UNCTAD II................................................6 Suggested Readings...
...Kaiser's post-war activities including construction of military bases ($132 million's worth in 1967), building of U.S...
...By buying up Willys-Overland Motors, the leading manufacturer of eeps with established South American operations and military contracts, Kaiser entered a non-competitive domestic market and transported the unused auto production machinery to new plants in Brazil and Argentina...
...In the engineering and construction field, Kaiser went the same overseas route as all the other firms in that industry which grew up on federal contracting during the Depression (e.g., rown and Root, Morrison-Knudsen, Utah Mining and Construction and Bechtel Corporation...
...He converted the latter into an auto manufacturing outfit (Kaiser-Frazer) in 1946, but found it extremely difficult to compete with the Big Three without defense contracts...
...Since that time, there has been a shift in emphasis to investment in manufacturing...
...To get in on the action, Kaiser joined with Englandts Rio Tinto Zinc Corporation, Ltd., to develop the huge, newly discovered iron-ore deposits in the Hamersley range of Western Australia...
...10-43...
...At the same time, domestic employment has narrowed and urban development has lagged while foreign "economic development" is prodded with heavy outlays of U.S...
...firms (including Standard Oil of N.J., Colgate-Palmolive, Singer, National Cash Register, Texaco and Bzrrougha) are deriving more than half of their profits from foreign sales, much of it produced overseas...
...overseas production has significantly contributed to balance of payments difficulties by reducing our net trade surplus and generating large-scale foreign military expenditures for investment protection...
...Kaiser's steel operations have entered the international market on a grand scale with lucrative returns...
...He was thus able to create an intograted operation capable of competing domestically with the other large aluminum companies (ACOA, Reynolds and Harvey...
...commercial bank...
...For U.S...
...When the Democrats were defeated in 1952 and Kaiser's political connections dried up, he lost the military contracts and was forced to sell the auto plant to General Motors...
...Upon the outbreak of World War II, many of these same companies went into shipbuilding...
...During the Depression, Kaiser went on to construct 1,000 projects totaling $383 million, including Bonneville and Grand Coulee Dems and the San Francisco Bay Bridge...
...a long list of other giants (e.g., Eastman Kodak, Pfiser, Caterpillar Tractor, Corn Products, St...
...economy--the balance of payments deficit and urban deterioration-are in part direct consequences of this situation...
...Thus at the heart of U.S...
...foreign investment focused mainly on raw material production for export to the United States...
...interests from the marketplace...
...Since World War II, the dependence of the U.S...
...The firm got its first big break in the late twenties with a large road and bridge building project in Cuba...
...most of the other directors are inside-company officers...
...they have failed to offer a coherent, epirically-grounded explanation for our increasing world-wide, counter-revolutionary entanglement...
...Imperialia," Monthly Review, November 1966, pp...
...corporate development naturally leads to foreign expansion...
...The initial contacts which laid the base for their current powerful influence over U.S...
...firms provide another indicator of increasing U.S...
...By the early sixties, low-priced Japanese imports were flooding the Western market and Kaiser was unable to secure import restrictions from Washington...
...By 1964, foreign sales had climbed to $110 bill4on (18 percent of GNP), with only one-fifth supplied through exports...
...corporate facilities overseas (i.e., electric stations, steel plants and oil refineries) and erection of its own cement plants in Guam, okinawa and India...
...Joseph Lead, Minnesota Mining and Manufacturing, Goodyear and Coca-Cola) The NACLA NEWSLETTER is published ten times a year by the North American Congress on Latin America...
...corporate and financial interests and the goverment they con- trol, revolution and independent national development are equated with exclusion of U.S...
...Reprinted by permission of FCRBES Magazine Most of the documentation for this article was taken from the following sources: "Kaiser's Global anpire," Forbes, April 15, 1968, pp...
...expansion begins with an analysis of our economy...
...Increasing reliance on foreign markets served by U.S...
...policy and administration were made during the Depression when they secured public works contracts and wartime subsidy programs that culminated in Cold War "defense" contracting...
...With the warts end, Kaiser pulled out of ship buldin g and obtained ontrol of goverament-built aluminum plants (in ouisiana and Washington) and a bomber plant (in Willow Run, Michigan...
...With the New Frontier, the Vietnam fiasco and the balance of payments crisis, liberal rhetoric shifted to warnings about the "arrogance of power" and "over commitment...
...Several leading U.S...
...capital...
...goods produced abroad, combined with the traditional need for strategic minerals and cheap agricultural products, is the central thrust behind our foreign (and domestic) policies-private and public...
...9-2derive between 30 and 50 percent from these sales...
...Currently, foreign aluminum operations are underway in 18 countries, including Argentina, rail, Ghana, South Africa, Spain and Thailand (see accompanying map...
...For example, in 1950, foreign sales totaled approximately $37 billion (13 percent of GNP...
...In addition, Kaiser will soon start exporting more than 45 million tons of high-grade coking coal (a key ingredient in steel production) to Japan from a new coal mine in British Columbia...
...Things went better in the aluminum industry...
...Minimum contribution for 1-yr...
...The two major crises which plague the U.S...
...As private and government demand increased, Kaiser naturally wanted to expand production...
...Direct investments (outright U.S...
...The outsidb directors represent the Bank of America (because of its financial position in the firm and because of its national political power), the large San Francisco law firm of Thelen, Marrin, Johnson and ridges (legal counsel for Kaiser interests-as well as another large international construction firm, Bechtel Corporation-and a source of political power on the local and national scene) and Rookefeller-Mellon financial interests (represented by George D. Woods of First Boston Corporation and formerly president of the World Bank, who was the crucial link to the Eisenhower administration for contracts and to the East Coast banking community for capital...
...All of this feverish federally-subsidized activity was predicated on political connections within the Dmocratio Party and close financial ties to the West Coast's allpowerful Bank of America (largest U.S...
...Although U.S...
...Kaiser got us into were, by their very nature, global businesses...
...economy on overseas investments has steadily increased...
...dependence on overseas operations...
...Magdoff, Harry, "Economic Aspects of U.S...
...The present extent of Kaiser operations, which started out as a very mall West Coast road-building firm, is graphically illustrated in the accompanying map (page 3...
...subscription: $5 In This Issue: Overseas Expansion and Goverment Contracting: The Story of Kaiser's Global Empire...
...Furthermore, the expanding geographic scope makes foreign-ariented corporations multinational in character and thus immune to anti-trust legislation...
...subsidiaries abroad accounted for the other two-thirds...
...29-37...
...Both of these were sold recently to Ford and Renault when these two giants moved into the South American market...
...Kaiser then put together a consortium of six companies to build the federally-financed Hoover Dam in 1931...
...The industrial complex created by the famous late entrepreneur, Henry J. Kaiser, serves as an excellent example of how U.S...
...Barber, Richard, "Big, Bigger, Biggests American Business Goes Global," The New Republic, April 30, 1966, pp...
...holdings in plant and equipment) have skyrocketed from $5 billion to $55 billion between 1945 and the present...
...investment in manufacturing is most concentrated in Canada and Western Europe, it is increasing at a rapid rate in the underdeveloped world...
...These firms are still American in ownership and control and they identify their interests and objectives with those of our society and government...
...Thus, U.S...
...firms, instead of importing raw materials and then exporting the finished product, now produce and sell the finished goods abroad...
...Since World War II, this policy has defined our national priorities, given rise to and justification for anti-communist (i.e., counter-revolutionary) programs, organized the function and structure of our institutions and dominated our political life...
...Not only the extent bat the nature of U.S...
...U.S...
...counter-revolutionary involvement throughout the world...
...For most radicals (i.e., people seeking root causes), any explanation of U.S...
...Giannini, were instrumental in delivering the West Coast intoFDR's hands...
...The Kaiser family remains active through Henry's sons...
...corporate structure is increasingly worldwide in scope and this, more than any other single factor, accounts for U.S...
...foreign investment has changed in the last two decades...
...Statistics for foreign sales by U.S...
...14-18...
...goods produced by U.S...
...Twenty-two percent of total profits are presently derived from foreign sales-as compared with 10 percent in 1950...
...Kaiser's yards produced nearly one-third (1,490 vessels) of the entire merchant shipping fleet as well as 0 small aircraft carriers...
...Between 1960 and 1965 alone, nearly 2,200 companies engaged in about 6,000 separate foreign activities-primarily construction of new plants and the expansion of existing operations...
...Liberals, however, while fascinated by the effects of any phenomenon, remain blind to the causes...
...Whatever inhibits control over markets must be eliminated, peacefully at first, militarily if necessary...
...Prior to World War II, U.S...
...With $145 million in military contracts (in 1967), the U.S...
...Both Kaiser and the Bank of America's head, A.P...
...Kaiser also built the huge Volta River Dam in Ghana (getting mixed up in that country's internal politics in the process) and is now cooking up a deal to build "low-cost" homes (under $4,000 apiece) in Mexieo...
...To supply the needed steel, Mr...
...At present, Kaiser derives over 30 percent of its earnings from foreign sales, but operations remain within tight control of the Kaiser family and related interests (see accompanying chart, page 5...
...By not coming to grips with the nature and direction of U.S...
...Domestically produced exports accounted for one-third of these sales...
...During the Kennedy administration, ickman Price, Jr., who was in the top management of Kaiser's auto operations from 194 5 to 1959 (head of their Brazilian subsidiary, 1956-59), was the Assistant Secretary for Domestic-5Affairs in the Department of Commerce, a convenient position for government influence on behalf of Kaiser...
...In a recent interview (Forbes, April 15, 1968), the current president of Kaiser In- dustries, Eugene Trefethen, made it clear that "The main reason we became a global company was that the businesses Mr...
...This industrial epire now produces 300 products from 180 plants and projects in 32 states and 40 foreign countries (current assets: $2.7 billion...
...Kaiser proceeded to build the Pacific Coast's first completely integrated iron and steel plant--with a $112 million loan from the government...
...Such exclusion is, for them, a threat to their very survival...
...foreign involvement lies private corporate expansion...
...corporate expansion, the liberal dooms this country to many Vietnams...
...The larger corporations in several key industries are especially dependent on overseas markets and profits...
...eep plants are thereby preserved and Kaiser assembles autos in 34 foreign nations where competition is slack...
Vol. 2 • April 1968 • No. 2
