Why the multinational tide is ebbing

Journal Article · Mon Aug 01 04:00:00 EDT 1977 · Fortune; (United States)

OSTI ID:7208889

Rose, S

For five years the multinational corporations have been the subject of worldwide controversy. Now the U.S. multinationals show signs of decay. An important minority of U.S. companies have managed to survive the decline in American preeminence. The vertically integrated extractive companies and such highly innovative enterprises as International Business Machines, Xerox, and Texas Instruments still provide a package of production and marketing services that cannot be matched either by local competitors or by most non-American multinationals. As a result, their bargaining power vis-a-vis host governments remains enormous, and they are likely to continue prospering in a world that glowers at them ever more menacingly, but has not yet found a way of dispensing with their services. The major challenge to these multinationals comes not from foreign sources, but from the U.S. government. Congress keeps whittling away at the so-called tax privileges of the multinationals. Thus far, the politicians have done little real damage, but they could eventually change the U.S. tax code in ways that would make life overseas virtually unlivable for even the most redoubtable companies. Some companies have been equaled and, in some cases, bested by the local competition. Having essentially little or nothing new to offer their hosts, these companies' profits are being pinched and their ''foreignness'' grows increasingly obtrusive. They know no security of tenure in the developing world, and they are being threatened in the more advanced industrial countries as well. (MCW)

• OSTI ID: 7208889
• Journal Information: Fortune; (United States), Journal Name: Fortune; (United States) Vol. 96:2; ISSN FORTA
• Country of Publication: United States
• Language: English

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