Merger dhre
NEW YORK (AP) - A merger between Exxon Corp.
Exxon and Mobil could prompt government two biggest oi
antitrust watchdogs to insist the new company week they were
sell off numerous gas stations and refineries, which would p
putting thousands of jobs in jeopardy. Exxon purchase
"Everyone is kind of scared," Richard lion-plus range,
lidalgo, a 26-year veteran of Mobil's 1,200- time.
employee refinery in Beaumont, Texas, said Still, a combi
yesterday. "No one really knows what's going sent just 4 per
'to happen." capacity. The
Even without a divestiture order from the could, however,
govemment, analysts predict thousands of job total share of U
-cuts, with estimates reaching as high as 20,000 about 20 perce
- or about 16 percent of the combined work trade publicatior
force. Analysts said
"What you're talking about here is a classic reducing the co
.cost-cutting scenario ... You merge two compa- stations in the N
.nies together and you basically gut one or both York and New
them,' said Michael Young, an analyst with Standard Oil of
utsche Bank Securities in Boston. what was onc
But even though the merger would form the monopoly, Stan
-world's largest oil company, most analysts said former Standard
yesterday they don't expect worries about Other region:
industry dominance to be strong enough to kill Southwest and ti
'the deal. panies may have
"When the final analysis is made, it will be Regulators al
%determined that the industry remains highly some stations i
fragmented and highly competitive," Young already involved
aid. Petroleum, analy
Russia. takes s
at vodka sales
Los Angeles Tunes of the government, the i
PUSHKINO, Russia -With evident ization is already ferme
tisfaction, Alexander Vartanov That's not surprising:
'strained to be heard over the din of ed as much as 30 percen
;clanking bottles. ment revenue under th
"There are three things a man can Soviet regime; now it e
watch forever without growing bored," than 5 percent.
said the factory foreman with the air of Since the Soviet s
someone unburdening 'himself of an seven years ago, Russia
.'ancient Russian proverb. "A fire burn- tic product has shrunk b
ing, water flowing ... and other people Acres upon acres of 1
:working." once-bustling, if woefu
a&On display behind him was a living collective farms operat
',bleau of the last-mentioned - sever- low while imported fo(
al dozen women tending two serpentine shops. According to a re
production lines on which thousands of the journal Foreign Al
bottles were being filled with a crys- capital investment in R
talline liquid, then capped, labeled and agriculture, transportatio
packed in cases. nications was no more t
This is the Topaz plant, about 25 of investment in the sam
miles north of Moscow, one of the few years earlier.
factories in this country manufacturing The exception to this 1
a product that people are willing to buy. the vodka industry. It is
at product is vodka, which is once hear the directors of vo
Main -as it often has been throughout about how much they
Russian history - the gold standard by taxes - this in a land w
which all other Russian industry is ance is a national sport
measured, and a favored instrument of companies pay as much
state fiscal control. their taxes by barter. Eve
Today the vodka industry, only priva- natural gas company tha
tized six years ago, is under an assault vatized heavyweigi
engendered both by the product's obvi- announced that it will p
ous value and its sheer ubiquitousness. its $790 million tax bill
The government, desperate for a way "There are perhaps 20
t of the fiscal and economic crisis ours in the whole countr
ipping this land, announced on Sept. Antonov, the Topaz plan
29 a plan to bring alcohol production tor for production and q
under greater state "control." to fully private enterpr
Most observers interpreted the term turning a consistent prof
as meaning, at the very least, an Topaz maintains a
increase in licensing fees and taxes on about 500 people on
alcohol producers. Others heard a sug- noted, and boasts somn
gestive hint of "nationalization." modern distilling equip
Although Prime Minister Yevgeny The company paid 12
Primakov said there would be no re- in taxes last year, or ab
establishment of Russia's traditional at 1997 exchange rates,
vernment alcohol monopoly, one pay 200 million rubles t
oscow magazine quoted a vodka about $13 million, de
executive as remarking: "In the brains devaluation of the ruble

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The Michigan Daily - Tuesday, December 1, 1998 -- 7

atens job cuts at filling stations

,

and Mobil Corp., the nation's
i companies, announced last
in merger negotiations. A deal,
probably be structured as an
would likely be in the $60 bil-
making it the richest of all
ned Exxon-Mobil would repre-
rent of global oil production
Federal Trade Commission
be troubled by the companies'
.S. gasoline sales, which was
nt last year, according to the
n National Petroleum News.
regulators will surely aim at
rmpanies' concentration of gas
Northeast, particularly in New
Jersey. Mobil is the former
'New York, a major piece of
e John D. Rockefeller's oil
dard Oil Trust. Exxon is the
Oil of New Jersey.
s of concern could be the
he West Coast, where the com-
to sell stations and refineries.
so will likely seek sales of
in Europe, where Mobil is
in a joint venture with British
ysts said.

The companies have about 47,000 gas sta-
tions worldwide, roughly a third in the United
States. They could also be forced to trim their
strong businesses in motor oil and other lubri-
cants.
A merger proposal reportedly was to be pre-
sented to the companies' boards as early as today.
Karen Steffaro, a spokesperson for Irving, Texas-
based Exxon, said only that talks were continu-
ing. A spokesperson for Fairfax, Va.-based Mobil
did not return a call seeking comment.
Industry watchers said antitrust concerns
will not come as a surprise to Exxon and
Mobil.
"We wouldn't have come this far and would-
n't be on the verge of a deal if Exxon and
Mobil didn't think they had solutions to any of
those potential problems," said securities ana-
lyst Alvin Silber of Herzog, Heine, Geduld.
If the deal comes off, it would be the latest
chapter in a rapid consolidation trend, as com-
panies seek to slash expenses due to a deep
slump in world oil prices that is not expected to
ease for years.
The Exxon-Mobil talks come as British
Petroleum and Amoco are already merging,
several smaller players are combining and
major rivals including Chevron and Texaco are
expected to find partners.

:
t _f
., _.; ,, a: _ ,. _

AP PHOu

Mobil employees enter and leave the Beaumont, Texas, refinery during a shift change yesterday.
Negotiations are underway for Exxon to merge with Mobil.


hot Changing of the deer


dea of national-
nting."
Vodka provid-
nt of all govern-
e czars and the
contributes less
tate crumbled
is gross domes-
,y well over half.
land on which
Ully inefficient,
ed now lie fal-
odstuffs fill the
'cent analysis in
fairs, in 1997,
ussian industry,
on and commu-
than 17 percent
ne sectors seven
baleful record is
not unusual to
dka plants boast
already pay in
where tax avoid-
and many large
as 90 percent of
en Gazprom, the
t is Russia's pri-
ht, recently
ay 25 percent of
in food.
companies like
y'," said Vladimir
t's deputy direc-
quality, referring
ises capable of
it.
work force of
full wages, he
ne of the most
rment in Russia.
20 billion rubles
out $20 million
he said; it will
his year - still
spite the sharp
last August.

f
"k
PI
T ~
" 9
A metal reindeer strung wIth Christmas lights shares a small traffic island with a killed deer at a checking station on the fis
day of hunting yesterday in Barre, Mass.
010
blzzr forsveawek

"
Pmochet
looking
for a new
doicile:
The Washington Post
LONDON - He may be wanted in
three countries for trial on criminal
charges, but Augusto Pinochet is, no
longer wanted in the luxurious private
clinic where he has been waiting out
his period of house arrest pending
extradition proceedings.
As diplomats from Britain, Chile and
Spain continued looking for a compro-
mise to end the impasse surrounding
the former Chilean president, the
Grovelands Priory hospital said yester-
day it told Pinochet that he must give
up his suite there and "find altern ive
accommodation as soon as possible"
The hospital said Pinochet no lodger
needs medical attention, having complet-
ed recovery from the back surger' he
underwent last month. Another, although
unstated, reason for the eviction 411der
may well be that the exclusive atiios-
phere of the clinic has been sullied bthe
band of Chilean exiles who gather ,ut-
side its wrought-iron fence each '1ay
chanting "Murderer!" and "Genocide!"
A group of conservative political
activists here reportedly has rented a
suburban apartment for Pinochet. If is
expected to leave the hospital today
Pinochet is under arrest in Briain
pending extradition proceedmgs.
Spain, France and Switzerland have
asked Britain to extradite Pinocheifor
criminal trials, charging that he ordired
the. torture and murder of their naton-
als during his years as Chile's military
ruler from 1973 to 1990.
Pinochet argued that he was immune
from extradition because he is a former
head of state. In a precedent-setting deci-
sion last week, Britain's highest cdurt
ruled that a former sovereign cannot
claim legal immunity for crimes such as
torture and hostage-taking that are out-
lawed by international convention.
While legal proceedings on the
extradition motion move ahead slowly,
the main activity on the case no is
politicl. Chilean Foreign Minister Jose
Miguel Insulza is in Europe - he was
in London over the weekend and
moved on to Madrid yesterday -Iy-
ing to work out a compromise plan that
would bring Pinochet back to Chile
without serious loss of face for the
Spanish or British governments.
British law gives Home Secretary
Jack Straw wide discretion to cut: off
extradition proceedings at any point
and let the accused go free. The ques-
tion is what Britain - and Spain -
would demand from v
Chile in return for agreeing to cut the
criminal case short.
Insulza pledged repeatedly over the
weekend that Chile could indeed iur-
sue charges against Pinochef if he were
sent home. Britain and Spain probably
would want more than just promises,
however. They may ask for a written
commitment from Chilean President
Eduardo Frei that a criminal investiga-
tion would begin within a stated period
of time if Pinochet were allowe to
leave Britain.
From the British point of view, the
best approach would be for Chile to
make a formal request for Pinocht's
extradition from Britain for the purpose
of a criminal trial. If that were to ap-
nn_ Britain' eonvernent culd reese

49 comics
a 49 comics.
Tues., 11:15-1,
regational Church,
98.

The Washington Post
TOKYO - In a cold hut on a remote
Russian island above the Arctic Circle,
three men filming polar bears have
been marooned in a blizzard for a
month and a half, keeping in contact
with colleagues in Tokyo and New
Zealand by e-mail even as they are
down to their last rations of food.
At least three helicopters are stand-
ing by in a port about 70 miles from
Wrangel Island in the East Siberian
Sea, but 21 hours of darkness each day
and white-out blizzard conditions dur-
ing the faint light has prevented rescue
of the three - a Japanese producer and
Australian cameraperson and their
Russian guide.
Yesterday in Moscow, diplomats
from the nations involved were dis-
cussing the possibility of U.S. Coast
Guard aircraft from Alaska, some 600
miles to the east, dropping food near the
hut because the men's supplies are near-
ly exhausted, according to their col-
leagues. The situation was described as
"politically sensitive" because of con-
cerns that Russia would be uncomfort-
able asking the United States for help
with a rescue in Russian territory.
"The Russians don't want the
Americans rescuing a Russian in
Russia," said someone familiar with the
negotiations.
"We are begging the Russians to res-
cue them," said Yasuhiro Nagasaki, a
Moscow-based correspondent for NHK,
a Japanese television network whose pro-
lit-a i nn.. thne +lracn

#399 ;99 ;y5

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Present:
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On Thursday, December 3rd from
7:00-9:00 P.M.
On the 4th floor terrace of East Hall:
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"The Russians don't want the
Americans rescuing a Russian in
Russia."
-- Someone familiar with negotiations to rescue the researchers

documentary on Asian wildlife co-pro-
duced by a New Zealand film company
and NHK. The stranded men are pro-
ducer Tatsuhiko Kobayashi, cameraper-
son Rory McGuinness and a guide,
Nikita Ovfyanikov. They are huddled
together in a small research hut at Point
Blossom, an incongruously named spit
of iced-over tundra on the southwestern
tip of the desolate island northwest of
the Bering Strait.
The three men arrived on Wrangel in
mid-September and were scheduled to
stay until mid-October.
But weather severe even by the stan-
dards of the harsh arctic north has pre-
vented the men from moving. Michael
Stedman, managing director of Natural
History New Zealand Ltd., the compa-
ny producing the documentary, said
outside temperatures have been around
minus 22 degrees Fahrenheit, while
temperatures inside the hut are hovering
just above freezing.
Stedman said the men's condition is "as
good as you would expect for anybody
marooned for 50 days ... The conditions
are appalling. We are interested in their

immediately life threatening but when
they run out of food in a few days, it
becomes pretty life threatening,"
Rebecca Scott, a friend of McGuinness,
told the Australian Associated Press.
"The weather has been absolutely
appalling - blizzards and the polar
night came in on the 21st of November
so the sun doesn't rise any more. They
have some twilight;' Scott said. "They
were there for an autumn shoot, they
haven't got enough winter (equip-
ment)."
Scott, who has talked to McGuinness
regularly by satellite telephone, said the
hut they are living in is fairly well-built
and the men were attempting to add a
snow wall to lessen the wind chill
inside the building.
Robert Headland, archivist of the
Scott Polar Research Institute at
Cambridge University in England, said
the island on which the men are strand-
ed is a rugged, mountainous "moon-
scape" with barely enough vegetation
to support a few reindeer that live there.
Headland, who has visited the island
several times, said the island is one of
the wonrld's richest homes of walrus.~

# w v- r vzwi. r ..I