criticism of exxon-mobil proposed merger

[Robert Weissman <rob@essential.org>]

For immediate release,		For more information, contact
December 1, 1998		James Love or Robert Weissman,
				202-387-8030


CONSUMER GROUPS CRITICIZE EXXON-MOBIL MERGER PROPOSAL

James Love, director of the Consumer Project on Technology, and Robert
Weissman, co-director of Essential Action, today released the following
statement:

The Teddy Roosevelt-era trustbusters had it right when they busted the
Standard Oil monopoly. Now it is time for the current Federal Trade
Commission to preserve what is left of their work and block the proposed
Exxon-Mobil merger.

If the antitrust authorities fail to block a merger between the number one
and number two U.S. oil companies, it will predictably lead to more
mergers and an even higher level of industry concentration.

The proposed merger will predictably raise consumer prices, especially in
the many areas where Exxon and Mobil compete directly. 

The purported "economies of scale" from the merger are fallacious. If
either or both of the companies have excess refining capacity, they can
sell and close their facilities without a merger. If they are
bureaucratically bloated, they can shrink their corporate offices without
merging. They can and do have numerous joint ventures in every aspect of
the business. The merger is completely unnecessary to achieve
efficiencies, and it is motivated entirely by a desire to limit
competition.

A combined Exxon-Mobil would be the largest industrial corporation in the
United States. A combined "Exx-bil" will be able to exert enormous
leverage over policymaking in Congress and the executive branch in a
myriad of areas, including the crucial issue of global warming. A more
deconcentrated industry is relatively less able to exert such power, and
more prone to internal division and conflict.

If the Exxon-Mobil merger is permitted to proceed, it will open the
floodgate for a rapid series of mergers not only in oil but in other
leading sectors of the economy. 

The Consumer Project on Technology and Essential Action are both Ralph
Nader-founded groups.