This was sent to asps today. Thought people here would be interested..It also gives
another picture then those who support globalization...
bob
The battle for Mannesmann: the background to Germany's first hostile
take-over
By Peter Schwarz
25 November 1999
World Socialist Web-Site http://wsws.org
The attempt by the British mobile telephone company Vodafone AirTouch to
take over the Düsseldorf-based Mannesmann concern against the wishes of the
company executive has provoked a big reaction in Germany.
Leading SPD politicians, including German Chancellor Schröder and the
Minister President of the state of North Rhine Westphalia, Wolfgang Clement,
spoke against the hostile take-over. Schröder stated that he was "very
disturbed" by the methods employed by Vodafone. With identifiable German
nationalist undertones, Clement declared that Mannesmann should not become
the "filial of a London company".
Similar statements came from politicians on the opposition bank. For the
liberal Free Democratic Party (FDP), Wolfgang Gerhardt warned against a
"dangerous concentration of power" at the expense of the consumer and
competitiveness. Jürgen Rüttgers, Clements CDU rival in forthcoming state
elections in North Rhine Westphalia, stated that it could not be tolerated
that "a company is broken up and thousands of jobs destroyed merely to
ensure short-term profits for international investors".
Even Hans Peter Stihl, the president of the German Chamber for Trade and
Industry, demanded a law to prevent "thoroughly fit, competitively
successful enterprises from being misappropriated with parts of the company
being disposed of to those who offer most".
Employees of Mannesmann demonstrated against the take-over on Monday. On
Tuesday over 1,000 union representatives from the concern in Düsseldorf met
to discuss further action. Klaus Zwickel, the chairman of the IG Metall
trade union who personally sits on the executive of Mannesmann, angrily
declared, "European business culture, characterised by joint consultation
[with the unions], must not be destroyed by hostile take-overs."
In Britain the German protests were seen as an expression of "nationalism,
populism and plain intimidation", according to the Times. On the fringes of
a meeting in Florence, British Prime Minister Tony Blair reportedly called
upon his German colleague Schröder to tone down his comments.
In fact, the public statements of anger on the part of politicians and trade
unionists contain a substantial dose of hypocrisy. The battle over
Mannesmann is not a struggle over "European business culture" and certainly
not about the defence of jobs. It is purely and simply a conflict over which
company will play the leading role in the European telephone market.
While Vodafone's attack on Mannesmannn is the biggest take-over battle in
industrial history, it is nevertheless part of a development which has been
actively supported and promoted by the very same politicians who are now
protesting so loudly. In this respect the behaviour of Vodafone in Germany
is no different from that of German companies abroad.
The deregulation of spheres of the economy, which up until now fell strictly
under either state control or constituted a state monopoly-such as
telecommunications, energy supply, etc.-has resulted in a veritable boom in
international take-overs and mergers. Since 1992 the volume of world-wide
mergers has increased almost six-fold. Alone in the third quarter of this
year the sum involved in company mergers amounted to $780 billion, nearly 50
percent more than at the beginning of the year.
In light of these figures the 242 billion DM ($129 billion) offered by
Vodafone for Mannesmann is a gigantic sum, but by no means out of the
ordinary. Last year the American telecommunications company MCI Worldcom
swallowed its competitor Sprint for nearly the same sum-$127 billion. The
offer by Vodafone is purely in the form of share compensation for
shareholders, no cash is on offer.
Because of its enormous rate of growth, telecommunications are regarded as a
particularly attractive option for take-overs. New technology-such as the
Internet and mobile telephones-have developed out of nothing into industries
with profits in the billions, and there appears to be no end in sight. In
this case the old adage seems especially applicable: size means power. The
bigger the company the greater the cost advantages.
Vodafone head Chris Gent, former chairman of the British Young
Conservatives, is striving to dominate the market in mobile communications.
In January, Vodafone bought AirTouch, the biggest mobile telephone supplier
in the United States, for $65 billion. This meant that the new company
possessed over 30 million customers in 23 countries. Following a successful
take-over of Mannesmann this figure will rise to 42 million customers. This,
according to chairman Gent, would be "a unique chance for Europe to take
over the leading role world-wide in a high technology branch of in