Key Business to Be Germany’s?

In the largest-ever hostile takeover of an American company by a German corporation, New Jersey-based Engel-hard Corp. announced it was abandoning resistance and would succumb “to the inevitable,” and accept the Ger-man-owned BASF corporation’s offer (Financial Times Information, May 31).

The deal is “the biggest for BASF, the world’s largest chemicals maker by sales,” and is valued at $5.6 billion (Wall Street Journal, May 31).

Engelhard Corp. employs 7,000 people worldwide and is best known for inventing the catalytic converter used in cars, trucks and factories, as well as for its precious metals bars, which are traded worldwide. Engelhard is also a world-leading surface and materials science company.

The Engelhard takeover is a symptom of a major problem facing America.

Because of America’s massive and growing debts and trade deficits, the dollar is coming under pressure. As the value of the U.S. greenback erodes, American assets become worth less in dollar terms and more vulnerable to for-eign takeovers. Additionally, foreign nations like China, Japan and Germany hold piles of U.S. debt. If trends persist and the dollar keeps eroding, pressures upon foreign nations to spend those devaluating dollars will increase—and American companies will continue to be the target of choice. As more companies are bought out, America’s control over its strategic industries is bought out too.