FINDING NEVERLAND (via Robert Schwartz):

Report to German Ruling Party Faults Overseas Investors (MARK LANDLER,
May 5, 2005, NY Times)

Karl-Heinz Stiller might have felt entitled to a victory lap, right about now.

His company, Wincor Nixdorf, has completed a grueling five-year run during which it was sold to demanding American private equity investors, rebuilt from the ground up, and taken public in Germany's first major stock offering since 2001, after the Internet bubble burst.

Not only did Wincor Nixforf survive, but it thrived. The company, which makes automated teller machines and cash registers, has hired 3,200 employees since 1999. Its stock has risen 57 percent since the offering a year ago.

But last week, Mr. Stiller was startled to find that his company had won notoriety of a different sort, when its name - and those of its former investors, Kohlberg Kravis Roberts & Company, the leveraged buyout firm, and Goldman Sachs - turned up on a so-called locust list.

This internal report, prepared by Parliament researchers for Germany's governing Social Democratic Party and leaked to the press, named Kohlberg Kravis, Goldman Sachs, and other American and British firms as foreigners who have plundered German assets, laid off workers or been just plain greedy.

Earlier, the party's chairman, Franz Müntefering, told the German tabloid Bild that such investors "stay anonymous, have no face, fall upon companies like locusts, devour them and move on."

Deploring foreign investors as parasites or carpetbaggers is neither new nor limited to Germany. Russia has become chilly toward foreign firms with interests there, and Malaysia's former leader, Dr. Mahathir Mohamad, a few years ago blamed the financier George Soros for the Asian currency crisis.

In Germany, the antiforeign sentiment these days is stoked by the convergence of three trends: a flood of private equity money into the country; the extended weakness of the nation's economy, which feeds fear that German jobs are leaching out of the country; and the fading fortunes of the Social Democratic Party and its leader, Chancellor Gerhard Schröder.

"Equating financial investors with locusts is something that has a history in this country," said Jan Pieter Krahnen, director of the Center for Financial Studies at the University of Frankfurt. "It alludes to some deep sentiments, which may or may not be there, but which can be exploited."

German industrialists, academics and other politicians have roundly criticized Mr. Müntefering's attack, which seems calculated to shore up the leftist base of the Social Democrats before a crucial election on May 22 in North Rhine-Westphalia, a large and an economically troubled state.

A prominent German-Jewish historian, Michael Wolffsohn, even detected a whiff of anti-Jewish sentiment in the list, which also included Blackstone, the New York private equity investment group, and Saban Capital, which is controlled by the Israeli-American billionaire, Haim Saban.

Nothing goes together like socialism and anti-Semitism.

Posted by Orrin Judd at May 6, 2005 6:13 AM