An epic piece I just read on the closure of a large lighting factory in Sparta Tennessee. Basically, the Sparta plant was among the most productive factories in the US. It was unionised so the workforce was enthusiastic, and it was close to the end user (being in Tennessee). People were willing to take pay cuts to work at the plant, because it was so effective.
It was also very innovative. Productivity was way up, due to automation and other efficiencies. Wages were stagnant or in decline, so corporate profits kept increasing permanently, year on year. The highly conservative workforce was willing to sacrifice in the interests of their corporation.
Unfortunately, the quality of their employees was not matched by the quality of management. They were bought out by a Dutch company which is run by people who cannot read spreadsheets. Obviously, management knew better than the mere serfs so it was offshored to Mexico. It only made the company one hundred million dollars a year less profitable, reducing their market share by 66%, which is good.
"As I combed through the Team Sparta business plan, I became skeptical about whether this kind of granular analysis was ever performed by the Philips executives who decided to move the plant to Monterrey. Norris was in regular contact with Philips’s North American headquarters, and she certainly saw no evidence of it. This begged a larger question: How many of those 70,000 American plants offshored in recent decades, those millions of American jobs lost, had been the result not of a ruthless commitment to the bottom line, but of a colossal failure of due diligence?
Even after Team Sparta ran the numbers for them, Philips executives barely reviewed the proposal. “Yeah, the plan got in front of him,” Sullivan said of Eftekhar, the head of North American operations. “They just never did try to get it to work. They never even considered it much, I don’t think.”"
They did have the satisfaction of knowing that their employees were straight-up slaves, though (the Mexican factory is very much outside the labour laws of Mexico).
The other part of the story, I think, is watching the very conservative get beaten around the head by their own ideology.
"She and Bo, fifty-eight, had recently split up. He was still out of work when we caught up, though now and again he found a temporary placement—he’d just done a few weeks at Unipres, a car-parts plant 100 miles away in Portland, for less than $9 an hour, minus the $100 a week he paid into a carpool to get there and back. At one point a temp agency said it had a permanent placement for him at the S&S Screw factory in Sparta, but before his start date they called to cancel. He and almost everyone else I spoke with from the Philips plant were sure it was because of the union. Bo was serving as president at the time of the plant closing, so he was interviewed on local television and in the Expositor, making him an easy target. Word was S&S hadn’t hired on a single union member from the plant, same as over at THK Rhythm, an auto-parts maker, afraid they’d try to organize the place. Ten years earlier, someone they knew had tried to organize S&S, Bo said, “and they fired his ass on the spot.” (Neither firm returned calls for comment.) He couldn’t seem to figure out how to get a job. When he was younger, he said, you got a job through a friend or relative or neighbor at a plant; now you have to apply through a computer, if you can find someone who has one, or drive twenty minutes to a temp agency in Cookeville. “I probably couldn’t get a job at Walmart as a door greeter,” he told me, defeated. Not only out of work but uninsured, he had to take out a $9,000 bank loan in May to pay for an operation on his herniated discs, what he called “a deal with the devil,” leaving him to pay out $80 a month pretty much forever."
This is actually illegal. That's white collar crime.
"Like Phifer, she was surviving without healthcare—Tennessee is one of twenty-four states that have rejected Medicaid expansion to cover the working poor—and she had put off a stress test to monitor a chronic heart condition because the $1,000 price tag wasn’t even within reach. She’d been instructed to avoid caffeine, but said she couldn’t make it through the day anymore without a steady stream of coffee and tea."
And my favourite part of the story.
She tried hard to be upbeat, saying of her impending move, “I guess everybody needs a change and it may do me good.” But times were tough. She was out of work for almost a year after the Philips plant closed down, and she’d been building alternators at the LTD plant for about ten months. Once a union shop, LTD now depended heavily on temp workers. Phifer got hired through an agency in Cookeville called Trustaff, and after Trustaff took its cut, she got only $8.50 an hour, barely north of minimum wage, with no benefits, not even sick days. She had to beg the plant manager not to fire her for taking a day off—unpaid—to attend her son’s graduation. She said she works tired and she works sick; she was long overdue for a mammogram but couldn’t afford to pay out of pocket for the test, and couldn’t risk taking the time off to get one anyway. “I’m human just like everybody else,” she said. “I have problems just like anybody else has ’em. But where if you take off to do your problem, you’re going to lose your job, you know?” As we parted ways, she expressed a small flash of anger. “I don’t think the government should let temp services hire people out,” she said. “It’s like being a slave.”
Ah, so big daddy government should step in? Maybe you're just a taker, not working hard enough. For the corporation that can't even count, but receives billions in government welfare.
http://www.vqronline.org/reporting-articles/2014/06/losing-sparta
