For Sale: America

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Even when U.S. managers are performing well, a foreign takeover can introduce new kinds of dynamism. In the case of last March's Hoechst-Celanese merger, for example, the West German company brought to the union an acknowledged excellence in pure research. The U.S. firm is expected to contribute American know-how in bringing new laboratory discoveries quickly to the marketplace. Moreover, the West German company expects the American addition to help loosen up the regimented corporate culture of its parent, where Hoechst engineers stiffly address one another as "Herr Doktor."

But along with opportunity, foreign owners have stirred plenty of fear. Some Americans react sharply to foreign overtures and invoke apocalyptic visions of the unwanted influence that outsiders may wield. Last May William Jovanovich, chairman of the Florida-based publishing firm of Harcourt Brace Jovanovich, made unabashed appeals to antiforeign sentiment while fending off British Press Lord Robert Maxwell's $1.7 billion takeover bid. Among other things, Jovanovich asserted that a foreigner would be unfit to publish books for American schoolchildren. That conveniently overlooked the dominant role of American publishers, Jovanovich's firm included, in Canada, where 59% of school textbooks are produced by foreign-owned companies.

The buyout binge has stirred bitter debate over fundamental issues. The biggest is jobs: Will the foreign investment wave bring more of them or wash them away? Some U.S. groups argue that overseas companies often come out second best to native ones in generating new employment. A 1986 study by the United Auto Workers contends that foreign auto-assembly plants in the U.S. eliminate three jobs for every one they create, since the facilities import so many of their components from abroad. The study implies that foreign-owned plants often fail to spread job opportunities beyond their factory gates.

Nor is foreign ownership always a guarantee of innovative management. Last month Robert Harp, founder of the California-based personal-computer maker Cordata Technologies, quit his chairmanship of the company after a quarrel with Daewoo, the South Korean industrial giant that spent $2.5 million in 1985 to buy 70% of Cordata's stock. The once profitable American firm lost $20 million last year, claims Harp. He blames that on the Korean parent's overpricing of Cordata products and on its slowness in making decisions.

Another frequently voiced concern is that foreign owners will monopolize a particular American industry, driving out U.S. capacity and somehow gaining the capability to extract exorbitant profits or disrupt the economy. One business that draws attention is cement. The biggest player in that industry, which is more than 50% foreign owned, is Switzerland's Holderbank, a financial concern that has bought two American cement companies (Dundee Cement and Ideal Basic Industries). Holderbank wants to combine the two with a Canadian company, St. Lawrence Cement, to form North America's largest firm.