Like the Ewing and Barnes families on Dallas, the quarrelsome clan that is the OPEC cartel serves as a comforting reminder that the rich have troubles too. OPEC's bench-mark oil price of $28 per bbl. has lately been undercut by non-OPEC producers like Mexico, which last week slashed prices on its best light crude by $1.25 per bbl., to an average of $26.50. Several OPEC members have been cheating on the cartel's production quotas, thus contributing to an oil glut and sliding prices on the world market.
In an attempt to stabilize prices, delegates from OPEC's 13 member nations gathered in Vienna, where they munched pastries, quarreled with one another for three days and then jetted home last week in a huff. Their only agreement was to hold more talks on July 22 in Geneva. Oil Minister Sheik Ahmed Zaki Yamani of Saudi Arabia, which has OPEC's richest reserves of both oil and cash, has reportedly threatened that if there is no progress in Geneva, his country will double its current production of crude, which could send the price below $20 per bbl., its lowest level since 1979. The oil producers' loss would be a big gain for the U.S. and other industrial economies.
CLOTHING All in the FamilyDescendants of Levi Strauss, the California gold-rush jeansmaker who founded the world's largest apparel manufacturer, announced in San Francisco last week that they are "exploring" a move to recapture full family ownership of the company, by taking it private in a $1 billion-plus leveraged buyout. The move is led by Robert D. Haas, 43, the Levi Strauss president and a great-great-grandnephew of the firm's founder. Haas claims the backing of other family members who own some 40% of the outstanding Levi common stock. They wish to purchase the rest, which has been issued since the company went public in 1971. A company spokesman explained that the move is being made in part so that the family can escape the "sacrifice of long-term interests" inherent in publicly held companies.
Industry analysts believe the buyout makes sound business sense. Faced with a slump in jeans sales in recent years, Levi in the past 20 months has ruthlessly slashed costs, closing 14 domestic plants and an additional nine abroad while laying off some 5,500 workers. Net profits are up for the leaner Levi, and prospects are improving. Meanwhile, lower interest rates make it cheaper for the family to borrow money to finance the buyout.
LEGISLATION Taking On TakeoversWall Street is gearing up for another takeover battle. The target this time is not a company but a bill passed by the New York legislature that would severely restrict takeovers of firms registered in the state, particularly those bids that do not involve cash payments. The legislation would require that such offers win the approval of two-thirds of a company's shareholders, including a majority not directly involved in the transaction.
The measure passed last month with near unanimous approval, but the debate continues. Some major corporations, including Sperry and International Paper, are jittery about their own futures and strongly support it. Several big Wall Street investment banking firms, which have reaped huge fees from the takeover business, are active opponents.