MIDDLE EAST
The Arab world's 15-year-old boy cott of Israel — and of foreign companies that do more than just sell finished goods to Israel — has up to now produced a lot of political smoke but not much economic fire. Unevenly applied and quixotically enforced, the blacklist has up to now proved mostly a nuisance to Israel, while many corporations abroad have found ways to dodge it.
Last week, in their most ambitious step yet to force foreign firms to stop operating in Israel, the Arabs took aim at three U.S. corporate giants, Coca-Cola Co., Radio Corp. of America and Ford Motor Co.
Widespread Repercussions. At its semiannual meeting in Kuwait, the Boy cott Office of the 13-nation Arab League (Algeria, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Saudi Arabia, Sudan, Syria, the United Arab Republic and Yemen) voted for a ban by all Arab countries on doing business with all three companies. The action against Coca-Cola came in retaliation for the granting of an Israeli bottling franchise to Manhattan Banker Abraham Feinberg, who is also president of the Israel Development Corp., which promotes Bonds for Israel. RCA angered the Arabs by allowing phonograph records to be pressed in Israel. The move against Ford resulted from a licensing agreement allowing an Israeli firm, Palestine Automobile Corp. Ltd., to assemble British and American Ford trucks and tractors for the Israeli market.
If the ban is actually put into effect by the 13 countries (the Boycott Office has no enforcement powers of its own), the repercussions could be widespread. Coca-Cola, the most popular soft drink among teetotaling Arabs, has 29 bottling plants, 139,000 dealers and a $50 million investment in the Arab world. Egypt immediately prepared to shift nine bottling plants from Coke to something called "Nasr (for victory) Cola." When Iraqui-born Mohammed Mahdi, head of the Manhattan-based American-Arab Action Committee, got word of the boycott in Beirut, he ceremoniously emptied his Coke into a carton.
RCA has big television and record sales in Arab countries, and its NBC subsidiary runs Saudi Arabia's state-owned TV network. Ford, with a thin sales lead over Chevrolet in the area, has a $60 million stake in assembly plants at Casablanca and Alexandria, and facilities to sell and service the 60,000 Ford cars and trucks already on Arab roads and desert tracks. Its Philco subsidiary, also blacklisted, is a major supplier of television sets, refrigerators and air conditioners to Arab countries.
Ford's Alexandria assembly plant has been virtually idle for 18 months because Egypt refuses to free hard currency to pay for imported components. Last week Egyptian authorities seized not only that $3,000,000 plant but all other Ford assets in Egypt on the disputed grounds that the company owes $1.8 million in customs duties on cars previously assembled there for the Egyptian market.
The Arabs themselves stand to become the chief victims of both the boycott and the seizure. Most of the money invested in the region's Ford, Coca-Cola and RCA facilities is Arab capital, paid to buy franchises or set up dealerships. On top of that, 33,000 Arab employees of Coca-Cola and 6,000 workers in Ford enterprises, (350 of them at Alexandria) face the loss of their jobs.