Business roundtable; 13 Of 26

The following program is made possible through a grant from nation's business. This is a business roundtable a program of current common leading members of America's business community. Today Herbert Dawn president of the Dow Chemical Company will explore the topic the corporate conscience with a series host of The Graduate School of Business Administration at Michigan State University. The Dow Chemical Company has been the cause of considerable comment recently among some segments of our society. Some of those opposing the war in Vietnam have organized demonstrations protesting the manufacture by Dow Chemical Company of napalm. A highly inflammable jelly like substance used in bombs. This

product is used by our troops in Vietnam. Many of the protests and demonstrations have occurred on college and university campuses. At the time Dow Chemical companies recruiters have attempted to interview graduating seniors and graduate students as potential employees of the company. These occurrences raise several instinct questions with regard to the moral responsibilities of American business concerns. Today on Business Roundtable we're going to explore some of these issues. With Mr. Herbert d doand the president of the Dow Chemical Company. Mr. Dunn how did Dow get into the napalm business and just what is it. While being silly we manufactured napalm in its present form for about three years. Napalm. As I think you know I was older than 3 years it was used in World War 2 in

Korea. Very effective strategic weapon as we understand it. The formulation was changed three years ago and polystyrene became about half of the half of the formula. And as the largest manufacturer of polystyrene in the country I guess it was logical that the government should ask us to bid on their production which we did three years ago and manufactured it since that time. In 1966 we had. Demonstrations on the colleges with respect to our manufacture of napalm but nothing really. Happened this didn't catch the public attention. In one thousand the fall and I cleaned 67. Became a national issue and this is the one I guess you'd like to talk about today. Yes it is because I don't know why I'm here. Why did doe or take the contract to produce napalm.

Well we take a good many government contracts it's it's a small part of dollars business government business but nevertheless where we have the capabilities we're perfectly willing to. Willing and anxious to submit a bid we supply and a freeze. Landing mats various materials for the armed services. When this all started this was simply supplying another product I think when it really started that was the moral issue hadn't yet been raised. How do you see this this moral issue. Well there is it immorally and while it is it certainly is and I say that one of the things that I think has been been really beneficial to the country to industry and to dollar has been the fact that this is been raised as an issue it's a good thing that we have to think about these things. It is a moral issue. Should you

manufacture a product which is admittedly a nasty product it's not a nice thing it is a flame. Producing substance that sticks on clothing and skin. It's an oxygen consumer you can't live in a room with this at all. It can suffocate you immediately burn you. Should you produce such a product. Well. We feel that we can't. Judge these things ourselves. That we must. Our judgment must be in terms of our government and our position is precisely this is our government. Basically trying to do the right thing as an immoral government. Is it as opposed to a desk body. Maxie government something like this. Well we do we trust this government and if we do if we feel that they're trying to do to go in the right direction then we feel that we have to offer about what

support they ask for. These are difference as you see it between. Reducing napalm which does kill people in a ward and the manufacture of bullets or rifles or bombs dropped by planes which also kill people as well I think it's meant mainly things you hear that there is an emotional difference certainly because this is the this is a product that raises emotions where a bullet does not certainly a person is just as dead killed by a bullet as by name but. The difference is an emotional one in this case. There is. The the argument is made that this should be outlawed. It isn't. It isn't like a gas it isn't in this class a tall is just it's a it's a it's a messy kind of a weapon I. Think that the people who conduct the war they the Army folks make a good argument for its use. This product is used in

places where other. Other weapons will not work. And there just isn't any question about the lives of American servicemen that are saved by having this product available to them. Well how is important and how important is napalm to Tao's profit position is this a big part of your business. No it's as a matter fact are her defense business immense amounts to something less than 5 percent of our sales. This is all products with a difference because yeah only 5 percent of your total sales are sales Incidentally this year will run the bottom billion 400 million 5 percent of this is to the Defense Department less than a half a percent of our of our sales are in napalm and even less than a half than this of our profit so it's quite insignificant in terms to us economically. Completely and significant economically I might say.

One other products your company involved in today and producing well are getting across our. Main lines are chemicals and plastics bio products this kind of thing we make industrial chemicals a good many of them. And special chemicals we are concentrating in have very heavily on water and waste treatment for example. We think the country has a tremendous problem in controlling its air water waste. Pollution and we have a good many tools to help solve these problems we're working very hard on that kind of thing we produce a lot of plastics. Use for everything from toys to refrigerators. Bio products. And I think here of things like the measles vaccine. Which incidentally is. Saving the lives of. Many Americans at the moment and

also people all over the world this is going to eradicate measles as a disease and also agricultural chemicals which. Are. The reason we can do as well as we can with food and will be the reason that we all hope to be able to catch up with the food demands of the whole world. Well why is it then Mr. Doane that when you are as a very large international chemical company with a very diversified line of products and napalm being an insignificant portion of your. Output Why is it that dial. Has caused such a commotion on the campuses and with the anti-Vietnam War people seem and seemingly they've selected this. Cause to protest and picket. Well I think we're we're convenient in this regard Napalm is as we've already discussed as a an emotional issue. It's

produced by a single company Dow and tying these two together I think is is. Makes a good deal of sense. It's easier to keep attention on dolling name than it would be all weapons and all American industry this is a pretty hard thing to tackle but we can. Where we make a very convenient target I believe. In other words this is a good psychological move on the part of these people of Iran which ties the situation if they want to dramatize. Yes. Well you know another instinct statement that's been made by many of the people protesting the production and by your company. Is that there is a real moral issue here and that when you say for example that you think you should produce it. Because the United States government asks you to produce it they say well this is similar to the industrialists in Germany under the Nazis.

Many of the industrialists at the end of the war said yes they cooperated with the Nazis even though they were not in favor of their objectives because no other course really was open to all and many of these people at least in this segment of our society that take this position. Are strongly arguing. That the moral position is such that no business should make a product even if the government asked them to make it that in their judgment shouldn't be made. What's your reaction to this. This kind of a statement. Well of course this is the it is a matter of individual judgment. I. Have said before here in this discussion that. We put this on the basis of a moral judgment of our government and feel that we're not competent to. Judge of each product and each tactic used by our government. We must. We we have to fall back on this line that we judge

our government and therefore our are willing to. To supply this product to them. Now. We have to. And have to be ready to stand. Stand on that judgment be responsible for that judgment and we're willing to do this. This this question has been raised the dollars people are the same as the germinal industrialists supporting Hitler in World War 2. Well in a sense yes. We think they made the wrong judgment. If they were judging their government in this way. But now there are you know the thing is I think really different because the governments are dead other words you don't think this is a valid analogy. No that's that's right. Well why are you having all these troubles on the campus for. Why don't you discontinue these job interviews on the campus and simply say you hold them in a downtown office building there or where you rent space or something of this instead of continuing to go on the campus to recruit people for your company.

Well we for for I think two reasons really one is that we choose to support the placement services which are a real service to us a real help Das on the university campuses the placement officer and his group. We think we'd be undermining him. We went out and recruited in our hotel. More important to him than this to me is he. Is the right and. Responsibility. For Diao to be on these campuses and available to the students and the right of the students to talk to us. And it's and it really is beyond us how. People can have opinions whatever opinion they want how they think they can. Trample on the rights of others to make their points. Is it hard to see. In other words you think there's a moral issue involved here too. Oh absolutely. The other side of the coin is that these people have gone.

Too far when they when they engage in violence. And this is being recognized by the by the college administrations. In other words I assume and from what you said you would accept the position that universities should make available their facilities for talking to prospective employees from any company the federal government the armed services or any of the other places that are now causing some disturbances on our campus. If you perhaps if you know the CIA every time recently that they have been recruiting on campuses there been some protests and picketing. It's also been true of some branches of the armed services. And the allegation has been made that they shouldn't be doing this on the campus as long as they as a university believes in freedom and freedom to say what one will. Freedom of choice then to take any other position with respect to whoever wants to recruit there is is just beyond comprehension really

this. This is illogical. Doesn't fit. In other words when you intend to continue your present policies of sending your play certainly to on the campus to recruits too. Yes. His daughter been hurt by. These demonstrations and protests say we certainly couldn't show that we've been hurt statistically in any respect unfortunately none of our people have been physically hurt when they've been on the campuses. Where what worries us is the longer term. It may well be that we would be missed hiring some. Scientist who could invent a great product for a doll in the future who just chooses not to interview doll because of this napalm business so it's the intangible effects on down the future that really concern us. And certainly this is a real concern. We don't know whether we'll be heard or not about that model in other words in the short run you have been able to hire as many people as you have in the past and you think is as

many able people. Yes we're hiring. Yes I think that's largely true with the exception that we don't know about this one evil person and we don't deal in statistics we believe in individuals are all company is organized around individuals are individuals and it's this one individual we might miss that might hurt us. So the statistics don't really mean anything. I think. One can get a distorted image of this by concentrating too hard on napalm were interviewing a good many Ph.D. candidates more than last year but probably this is because the doll's publication record technical publications have been increasing for several years and these Ph.D. candidates keep a closer watch on who's publishing good scientific work than they do on napalm in other words they're interested in going with a company that has a record of good scientific research and want to be associated with those kinds of

people. I hope and believe this is the case yes. Will and sum up that view or do you think that in the short run then apparently you are getting as many able people as you have in the past. The numbers that you're interviewing have not declined your hiring about the same proportion but there is a real question as to the possible long run effects of this too. As you say the really bright genius it doesn't come down the road too often. That's right that conceivably he didn't show up for an interview with your company because of these demonstrations or protests that have been taking place. Another. QUESTION It seems to me has some potential moral implications to it. It's a question of trade with the Iron Curtain countries as to dawn. Am I correct that the Dow Chemical Company. Is now trading.

And selling goods abroad in many of the Iron Curtain countries. Yes the that it's an interesting. QUESTION We do trade with the Eastern countries as to do most of the industries in the western world as a matter of fact. And I might add with the full support of our State Department as matter of fact we wouldn't do this or over the objections of the State Department obviously but they. Want this is part of their foreign policy they believe this helps to develop the peaceful feeling the rapport between the east and the West. And we. Make our own judgments on each of these things we feel are right. We think this is a good thing this trade with the other conflict countries are you actually selling doll products in a thread while I in my Iron Curtain countries. I think you could say all of them all of Romania Yugoslavia shekels of Aki

Russia. It's I think the whole issue of international we're where we are an international company 25 percent of our sales are outside the United States. This makes us feel pretty good we feel in a way like industrial peace. Ambassadors we feel that doing international business is a positive force for peace and. That is why do you think that. Well for several reasons I think one of the important ones is simply people to people when you get to. Meeting people make friends with people in various parts of the world it's the old story it's a little harder to get mad at somebody you know than somebody you don't know and hence distrust and fear. Well we by doing business abroad promote a tremendous amount of intercourse between people. It's the same kind of thing as a student to student. Exchange of people or tourism all of these things help. I think

well together the world together rather than tear it apart. Now your company must've again had to make a moral. Choice. When the potentiality of selling goods and Iron Curtain countries came up. Would seem to me for example that some people in this country again some as some would argue that this is an immoral thing. That we shouldn't be selling goods brought to the Iron Curtain countries which. They would argue I think to state their thesis fairly they are opposed to our form of government really are looking at the long run to our downfall. And therefore by trading with them we are basically strengthening strengthening them in their economies and products many times which they are not very efficient in producing. And work. Isn't that a modern business concern confronted with with this kind of an evaluation and judgement.

Yes I think our State Department and we too personally feel that the development of these countries is really going to make the world a more peaceful thing than to keep them on undeveloped. Certainly the. The rapport with Russia since they have acquired a good deal of affluence themselves has been better than before when they were. In In In In economic difficulties. Now this doesn't necessarily say that we agree doesn't say at all that we agree with their form of government nor that they aren't out to bury us as crucial have said they may well be still. It's never the last true but that our State Department takes the position I think most business men and we take the position that the best. Way to foster peace is to. Promote. Trade of all sorts whether it's pleasure or economic trade. And I would apply this most certainly to the underdeveloped countries to we if we can manage to help develop these

underdeveloped countries we're going to. Be doing. A lot I feel towards the cause of world peace. Incidentally if you don't mind my. Getting a little more philosophical along that same subject this this business of underdeveloped nations the certainly the biggest problem the world faces today is the it. Is changed the population explosion the handling the technological explosion the explosion of technology. There isn't any question but what changes is so rapid today that it's very hard for people to get a hold of this. We're going to have to slow up this population growth or we won't have any problems other problems to handle. I feel this could this could be a great disaster. I'm sure we'll get it under control then we're going to have to. Provide these people with food develop their economies properly. Do you think

there's a role in this for the private business sector. Absolutely. Where we. Are. Very much. A part of the action as the students call it these days because we are right in the middle of all of these problems but you ask about moral judgments. You in industry today you're right in the middle of every moral judgment that's being made of all the problems and their possible solutions. I think just like education or government industry is in the middle of all of this. We're a pool of change just the way everybody else is today. And I'm I'm glad of it myself. I enjoy this business a change that's OUR business. Do you think that because we are living in such a technological. Period now the most technological and says more and more scientific breakthroughs faster than any time in the history of the world.

That. The really highly developed countries are going ahead by leaps and bounds and they're really the more underdeveloped. The gap is actually widening in many cases between these two countries is there some kind of again a moral obligation. On the part of both government and business or maybe one and not the other in your opinion to do something about this. I. I think there is a moral obligation to do something about this particularly on the part of governments and industry as in a wonderful position to help with this. Now that brings us right back to to be unarmed perhaps and some of this war business. I noticed a group of professors from universities have made a statement that they favor the war in Vietnam and incidentally I haven't said I favor or don't favor this war. But the reason. They. Favor it is that they're taking a little broader view of Asia. They see the the

great development in the stable government in our Southeast Asia outside of Vietnam. 200 million people doing very much better. Japan getting on its feet and doing a perfectly beautiful job. This is. Some of the thing that gets lost sight of when we focus too narrowly on Vietnam. Some of the other issues in the world I what I'm trying to say are are as great as Vietnam and we shouldn't lose sight of them. A population explosion that disaster in India if population gets out of control what happens if Southeast Asia is unstable rather than stable as it is today. Let's don't let's go back to something you mentioned a little while ago. You mentioned that in your opinion trade with the Iron Curtain countries might help build a bridge between Western and more free enterprise type economies and the close type of communist or Soviet type economy.

And at least there was a possible a potential to do this. And if you got to know each other better there was more chances for this type of thing and that therefore international business could be an important link in your actual experience selling and trading and working in these countries. Your opinion do you think this. Do you see any indications that would support this position. Or it's too early to say we are trade with the Eastern countries in the whole Western world is only really big on. Certainly. Any contact you make with another human being you have the feeling that there indeed is another human being you basically. Look at many things the same way even though your view or political philosophy is diametrically opposed so I would have to ask answer it optimistically even though I think it's too early to say that one could see any any helpful signs already.

Unless it's the fact that that the satellite countries of Russia have. Gone. Quite a long ways towards capitalistic form of operation profit incentives and so forth. They were on our way quite a long way broken away from their some of the old pure Marxist concepts acquired by a big margin in reason you think that part of this is the example that they see in the western civilization Western private or I'm sure of it. The difference between West Berlin and East Berlin. Startling. Another statement that I heard made by several people lately that's kind of interesting. Is that. Because of their publicist in connection with despite these protests movements of many of the universities has actually caused more students to go to be interviewed instead of less that they've published is actually those who don't favor these demonstrations or protests at all

are going to to to meet with your people because they want to show the others they don't agree with it. Well is there anything to that. I'm sure this happens I can and I can assure you $1 on the campus in a normal year you'd have a hard time knowing it. But this year this year the in nice times you do know where there. Had been other words and you think that possibly a number of students have come around to your interviews because of this. Oh why yes I'm sure that. We're almost done. Thank you very much for appearing on the Business Roundtable. We had a most interesting and informative discussion and some of the moral and social responsibilities of a modern corporation and our type of society. Participating in today's Business Roundtable was Herbert d down President down. Nickel company. Almost for the program was Alfred L. C. Lee Dean of the Graduate School of Business

Administration at Michigan State University. The topic for next week's Business Roundtable is the business executive in modern society. Guests on the program will be William Lazar professor of marketing at Michigan State University and botany McFarland chairman of the MSU Management Department. This program was produced by the Graduate School of Business Administration and the Broadcasting Services of Michigan State University under a grant from nation's business a publication of the Chamber of Commerce of the United States. Business Roundtable is distributed through the facilities of national educational radio. This is an E.R. the National Education over Radio Network.