8 Policy responses

The transmission process can finally be traced to possible secondary policy responses. The mandate of the WARN Act (1988) is unlikely to satisfy all demands for improved corporate disclosures and stringent advance notification requirements at the local level where the impacts of plant closures are most pronounced.

Many other questions related to mandated corporate disclosures and other stakeholder related legislation remain open. There is also the question of whether the threat of stakeholder oriented legislation will promote voluntary disclosures? The answers are likely to be influenced, for example, by (a) the extent of businessmen's continuing preference for making concessions in collective bargaining agreements rather than by losing privileges through legislative fiat; and (b) by the extent to which workers, unions and other stakeholders develop alternative internal and external reconnaissance capabilities which would make their early warning systems less dependent on corporate disclosures (Bluestone and Harrison, 1982). The relatively mild nature of the 1988 federal bill has not ended efforts at the state level to e act tougher measures. In Washington State, for example, the House of Representatives recently passed a bill requiring 100 days notice for firms as small as 25 employees (State of Washington, 1989). Thus the fear of many business lobbyists may indeed be justified, namely that the legislation would be precedent setting and open the door for other restrictions of corporate reorganization involving employment changes (OTA, 1986, p.3).

For good reasons, arguments as to which governmental level should be responsible for disclosure legislation have been inconsistent. Business lobbyists successfully prevented national legislation for a long time, in part by suggesting that this kind of legislation should be left to the local or state level. The same business interests would then, at the state level, appeal to the inter-territorial competitive spirit arguing that firms would be "forced" to shift their plants to states which do not have notification requirements (Table 3).

What company would want to move into an area that had substantial economic penalties for moving out? What entrepreneur would want to start a business in a community or state that had penalties for changing locations? Companies interested in profits will always try to settle in those areas that leave them free to make the basic decisions on when to shift among products, when to close, and when to move. States and Communities that do not impose restrictions will obviously have a competitive advantage over those that do..." (McKenzie, 1984, pp.26f).

Interestingly, the American Chamber of Commerce, well experienced in such interregional gamesmanship, exported this argumentation to Europe in their (so far successful) opposition to the Community level "Vredeling proposal" for the regulation of disclosures by multinational firms (Trowbridge, 1982; Blanpain, 1983).

Approx. location of Table 3