This InBev's for you

July 14, 2008
By: Tim Heston

Two recent news items give a great juxtaposition, at least in my mind. One shows the price of globalization; the other shows the benefits.

First, the price. The board of Anheuser-Busch Cos., a St. Louis institutionand a large employer of welders and other metal fabricators working in its breweries and subsidiaries (including can maker Metal Container Corp.)approved a $52 billion deal that would hand over ownership to Belgium brewer giant InBev NV by the end of the year. The deal would create the world"s largest brewer, owner not only of the King of Beers but also Canada"s Labatt, topping out SABMiller, the South African Brewer that, after a series of deals, now owns Miller and has a stake in Coors.

What I noticed was the company histories. The Anheuser-Busch Cos. has roots going back to the 1860s, when Eberhard Anheuser and his son-in-law Adolphus Busch got into the brewing business. Over the next century and a half, the family grew the company into a St. Louis icon and generous source of philanthropy. Its downtown brewery is an historic landmark.

InBev was formed four years ago through a merger.

OK, there"s more to the InBev story than that, with a predecessor company having roots back to 1366. But the mega-brewerformed in 2004 by the combination of Interbrew of Belgium and AmBev of Brazildoesn"t exude that same historical significance and sense of place as the brewer it"s about to acquire--at least to us Americans.

Corporations are losing that sense of place, and that's probably unavoidable in the global economy. Efficiency and the bottom line rule the day. In past decades the citizens of St. Louis could count on Anheuser-Busch to be there as both community benefactor and strong employer. While the philanthropy will probably continue, the strong-employer role may change. Though it"s too early to say for sure, reports out already tell about potential job losses, especially in administrative and marketing functions, though officials did pledge they wouldn"t close any North American breweries. Merged, the companies reportedly said they"ll save $1.5 billion annually by 2011.

Lifelong employment isn"t a guarantee. That"s the price of globalization. Decisions are made to improve profits, and what"s best for workers isn"t always best for profits. Workers must perfect old skills and learn new ones to keep themselves employable. Is this doable? Sure, but it"s understandable why many don"t like it. People want stable incomes to support their families. The more time they spend perfecting skills and finding jobs, the less time they have to be spouses and parents (the two jobs in life that really matter).

If you think about it, the economic conditions of the 1950swhen the idea of getting and keeping one job for life wasn"t a far-out commentspawned from unique circumstances that won"t likely be repeated. Bill Bryson, author of The Life and Times of the Thunderbolt Kid, his memoir about growing up the "50s, put it this way:

Americans owned 80 percent of the world"s electrical goods, controlled two-thirds of the world"s productive capacity, produced more than 40 percent of its electricity, 60 percent of its oil, and 66 percent of its steel. The 5 percent of people on earth who were Americans had more wealth than the other 95 percent combined.

"Remarkably, all this wealth was American made. Of the 7.5 million new cars sold in America in 1954, for instance, 99.93 percent were made in America by Americans. We became the richest country of the world without needing the rest of the world.

Today we need the rest of the world. A reader comment to a July 11 Wall Street Journal blog was especially poignant. Foreigners buying up our companies [and] the transfer of wealth to oil-producing nations remind me of the Company Store." Are we now just worker bees sending our diminishing paychecks overseas?

On the flip side, the rest of the world needs usand not just as consumers. On Friday the Commerce Department released numbers that May exports were up $23.9 billion from May 2007or almost 20 percent. U.S. manufacturers are stepping up to the plate and sending their products around the world, especially to Europe. That"s an undeniable benefit to a global economy.

Housing is now the American Nightmare" while trade is our salvation, Joel Naroff, president and chief economist of Naroff Economic Advisers, told Reuters.

True, the amount we imported rose to record highs too, and our trade deficit with China crept higher. Indeed, the statistics probably will never read like they did during the 1950s boom. But in 2008, if manufacturers can find the right markethere, Europe, or anywhere elsethere is still money to be made.

I"ll drink to that.

Tim Heston

Tim Heston

Senior Editor
FMA Communications Inc.
2135 Point Blvd
Elgin, IL 60123
Phone: 815-381-1314