VOLUME 12, NUMBER 4, APRIL 1991 LABOR'S CHALLENGE Founder Ralph Nader Editor Robert Weissman Editor-at-Large Ellen Hosmer Associate Editor Amy Allina Managing Editor John Richard Contributing Writers Alexandra Allen, Diane Bartz, Katherine Isaac, William Jackson David Lapp, Russell Mokhiber, Allan Nairn, Sandy Smith, Samantha Sparks, Jim Sugarman, William Steif and Cathy Watson Staff Researchers Jim Donahue, Holley Knaus, Jennifer Kassan Production and Design Kathy Cashel Business Manager Bryan Penas Multinational Monitor [ISSN 0197-4637] is published monthly by Essential Information, Inc., P.O. Box 19405, Washington, DC 20036. Telephone: (202) 387-8030. Contents: Behind the Lines Editorial Fight for the Living The Front Work Crimes Features Replacing the Union: Business's Labor Offensive By Robert Weissman Crime Without Punishment: Lax Enforcement at OSHA By Jim Donahue Interview Building the Union An Interview with Amy Newell Economics "American" Home Products Moves Abroad By David Lapp Labor An Uncertain Future for Labor in Hong Kong By Derek Hall Corporate Profile USX: A Heart of Steel By Holley Knaus & Nadav Savio Names In the News Book Review Working Women & Transnational Transgressions Resources BEHIND THE LINES (omitted here; unscannable) ------------------------------------------------------------------------------ [] MULTINATIONAL MONITOR VOLUME 12, NUMBER 4, APRIL 1991 E D I T O R I A L FIGHT FOR THE LIVING An unpublicized epidemic has taken hold in the United States. Each year, according to the Labor Department, approximately 10,000 workers are killed in industrial accidents and 70,000 suffer permanent injuries. Tens of thousands more--the National Safe Workplace Institute estimates 50,000 to 70,000--die from workplace induced disease. What is perhaps most horrifying about this carnage is that much of it is avoidable. But corporate indifference and weak government enforcement of workplace safety laws allow thousands of workers to die needlessly each year. Under the Reagan and Bush administrations, the Occupational Safety and Health Administration (OSHA) has been dramatically weakened. Its budget and its inspector staff have been cut, and it has pursued "cooperation" rather than confrontation with employers. Even this weakened agency has found the 10 largest U.S. corporations to be guilty of over 3,800 violations of workplace safety regulations since 1982 (see "Crime Without Punishment" in this issue). Yet these corporations are subject to insignificant penalties for their criminal acts, and have been fined for only approximately one-third of their violations. They face an average fine of $437 per violation. Corporations are almost always able to avoid serious penalties for the worst workplace disasters. Though approximately 200,000 workers have died on the job during OSHA's 20-year existence, it has referred only 74 cases to the Justice Department for criminal prosecution. Of these referrals, the Justice Department won only 15 convictions. And only one individual was sent to jail--for 45 days--for an occupational-safety crime. Addressing the scandalous national rate of workplace-related death, disease and injury will require fundamental changes in workplace regulation and the balance of power on the shop floor. The government must make a commitment to forcing corporations to protect their employees from job-related accidents and illness and must turn OSHA into a tough law-enforcement agency. Harsh criminal penalties for companies which kill their workers through negligence--coupled with a willingness by OSHA to use them--would heighten corporate concern with workplace health and safety. Most companies are able to write off the current monetary sanctions as "a cost of doing business"--and not a very significant one at that. The OSHA Criminal Penalty Reform Act, introduced in the U.S. Senate by Howard Metzenbaum, D-OH, and in the House of Representatives by Tom Lantos, D-CA, would help rectify this shortcoming in law and performance. The legislation would increase the maximum criminal sanction for a wilful violation of the OSH Act that results in the death of a person from six months to 10 years and would create a new criminal sanction, with a maximum penalty of 5 years imprisonment, for a wilful violation of the OSH Act that results in "serious bodily injury" to a person. But harsh penalties along with a revamped OSHA will not be sufficient to eliminate preventable accidents and toxic exposures, especially with a presidential administration that displays so little concern for worker health and safety. Workers must also have some role in creating a safer workplace. Labor unions must aggressively resist speed-ups in the pace of work which foster accidents. And individual workers must be given the right to refuse unsafe work without endangering their jobs. A "right-to-act" law, which would grant workers this right, is a necessary complement to workers' "right to know," guaranteed by the federal Emergency Planning and Community Right-to-Know Act of 1986, which requires corporations to publicly report information regarding hazardous chemicals used in or resulting from their operations. Knowing that certain substances are dangerous may intensify workers' precautionary measures, but some situations may be fundamentally unsafe--and workers should not be faced with a choice of performing unsafe tasks or losing their jobs. Efforts to implement such basic changes in occupational safety and health regulation will encounter immense corporate opposition. OSHA has long confronted employer hostility; business associations have lined up against Senator Metzenbaum's bill; companies have made line speed-ups essential components of their efforts to improve productivity; and, in the few states where right-to-act legislation has been seriously considered, corporations have responded with outraged disbelief. Safety regulations interfere with corporations' control of the workplace, which they view as their most fundamental prerogative. Overcoming the corporate lobby against workplace safety improvements--as well as the corporate-allied Bush administration--will require a concerted effort on the part of organized labor, which has not sufficiently emphasized the issue. Doing so might improve labor's negative public image of being concerned only with wages, but it will also require a willingness to confront corporate power that few unions have demonstrated in the last decade. ------------------------------------------------------------------------------ [] MULTINATIONAL MONITOR VOLUME 12, NUMBER 4, APRIL 1991 THE FRONT Work Crimes IN NOVEMBER 1988, S.A. Healy, a national construction contractor based in McCook, Illinois, was excavating a 10-foot wide, 40- foot deep sewage tunnel beneath Milwaukee as part of a $2 billion water pollution abatement project for the Milwaukee Metropolitan Sewage District (MMSD). The tunnel contained methane, an extremely volatile, naturally occurring gas. Because the contractor failed to take appropriate preventive measures, the methane was ignited, producing a blast that killed three Healy workers. In an extremely rare action, federal and state law enforcement agencies prosecuted Healy for criminal acts. But workplace- safety experts say the penalties meted out to Healy are insufficient to deter other construction companies from endangering workers by placing profits before safety. After the blast, the Occupational Safety and Health Administration (OSHA) cited Healy for 68 wilful violations of federal workplace safety regulations and proposed that the company pay fines totalling $68,000. OSHA then recommended that the Justice Department bring criminal charges against the company--an action OSHA has taken in very few cases. In June 1990, U.S. Attorney John Fryatt and Milwaukee District Attorney Michael McCann announced indictments of the construction company. A state jury subsequently convicted Healy in December 1990 on two counts of reckless homicide. "We're hopeful that the conviction may stimulate those employers who may be lax on safety issues to adopt a more aggressive posture on safety," McCann told Multinational Monitor. "Our motivation definitely leans more toward prevention than punishment." For the state conviction, Healy was fined $15,000. In February 1991, a federal jury followed suit, convicting Healy of three wilful violations of safety standards that led to the deaths of the three workers. The federal jury ruled that Healy was responsible for the deaths because it failed to instruct the tunnel employees in the recognition, avoidance and nature of the hazards when working in confined spaces; failed to shut off electric power in the area of the tunnel after high levels of methane gas were detected; and failed to install explosion deterrent electrical equipment in hazardous tunnel locations. The company was fined $750,000, half of the possible fines for the statutes under which it was convicted. David Cannon, Healy's attorney, said the company is considering an appeal, but he refused to comment on the convictions. In court, Cannon called the explosion a "tragic accident" that "nobody, under any circumstances, could tell was going to happen." In his closing arguments, Assistant U.S. Attorney Eric Klumb countered that the accident could have been prevented if Healy had not displayed "corporate arrogance" by placing profits and work schedules ahead of worker safety, according to a Milwaukee Journal report. "This case is significant not just to attain justice for the three people who died, but to gain the attention of an industry whose attention needs to be gotten," Klumb said. But critics say the penalties against Healy were minor for a company convicted of wilfully killing three workers. The $15,000 in state and $750,000 in federal fines which Healy was sentenced to pay constitute a paltry sum compared with the company's annual earnings of $200 million. And the charges against the only company official originally indicted were dismissed. "It's awful that no one has gone to jail," says Joseph Kinney, executive director of the National Safe Workplace Institute. Kinney contends that unless the threat of jail time becomes a reality for employers, workers will continue to die needlessly. He said employers like Healy typically treat fines as a cost of doing business. Although Healy may write the criminal fines off as a cost of doing business, it faces other sanctions that may be more significant. Many government agencies are refusing to award the company contracts because of its safety record. In December 1989, despite Healy's submission of the lowest bid for another Milwaukee sewage contract, this one worth $40 million, the city declined to award the company the contract, citing its weak safety record. In February 1991, Los Angeles county officials voided all bids for a contract to build a section of the city's Metro Rail. Healy had submitted the lowest bid for the contract, $46.4 million. While they declined to say why the contracts were voided, the county officials said they planned to draft new regulations governing tunnel projects which would most likely bar Healy and companies with similar criminal histories from winning the job. Debarment (government prohibitions against awarding contracts to deviant corporations) may be an important tool to force the construction industry to pay greater attention to safety. "The construction industry is the most hazardous industry in the country by way of deaths and serious injuries," says John Moran, executive director of the Laborers Health and Safety Fund. Moran estimates that while construction workers make up between 5 and 6 percent of the U.S. workforce, they suffer about 25 percent of the on-the-job fatalities. "OSHA's enforcement in the construction industry is severely lacking," he charges. But Moran says state and local jurisdictions are increasingly holding construction companies criminally liable for seriously injuring or killing their employees. -David Lapp ------------------------------------------------------------------------------ [] MULTINATIONAL MONITOR VOLUME 12, NUMBER 4, APRIL 1991 LABOR'S CHALLENGE REPLACING THE UNION: Business's Labor Offensive By Robert Weissman AS THEIR CONTRACT APPROACHED expiration in the beginning of 1989, the members of United Autoworkers (UAW) Local 486 in Cleveland, Ohio became suspicious. Their employer, Midland Steel, a maker of truck frames, did not seem to be negotiating in good faith. According to Don McGee, president of the local, there were more than 40 points of contention when the union and the company started bargaining in January; about 28 remained when the contract expired on March 1. Meanwhile, Midland was hiring new workers. The UAW determined that Midland was trying to force it out on strike. Refusing to fall into the company's trap, the Midland workers continued working. But the company was determined to get rid of them. On May 28, bypassing established disciplinary procedures, it fired more than 250 union members for holding a safety meeting during working hours. On June 2, it fired several dozen more. The remainder of the 330 union workers at the plant went out on strike that day. Midland never closed down. It had continued to bring new workers into the plant after the March 1 contract expiration, and when the union finally went out on strike in June, the company "had a workforce ready to go," says McGee. Within two hours of the strike, the company had obtained a temporary restraining order limiting the number of pickets the union could post outside the plant to two, prohibiting picketing strikers from standing still or talking to their replacements and prohibiting groups of union members from gathering within 500 feet of the plant. According to McGee, the company asked the judge who issued the order to shut down the union hall, which falls within the 500-foot radius. The judge declined, but ordered the union hall windows facing the plant welded shut. McGee says the company had substantial economic incentives to force the strike. Midland pays its new workers $4 an hour less than its unionized employees received and does not provide them with benefits such as health insurance. Equally important, it discarded an older workforce. The new, younger workers do not have built-up vacation time or a vested right to the company pension. Still, the company's maneuver may ultimately backfire. It lost two of its three major customers, Ford and Navastar (formerly International Harvester), retaining only General Motors. A year and a half after the strike began, the workforce has shrunk to approximately 80. The company's demise is little consolation to its former employees, who have little chance of regaining their jobs. Their only hope is a favorable ruling from the pro-employer National Labor Relations Board on one of the several unfair labor practices suits launched by the UAW. For now, says McGee, the striking workers, especially the older ones, are "stuck in limbo." They can't find new jobs and they are not eligible for their company pensions until they reach age 65. Several hundred miles south, workers at the Ravenswood Aluminum Company (RAC) in Ravenswood, West Virginia have had a similar experience. RAC bought the Ravenswood facility from the Kaiser Aluminum and Chemical Company in 1989 and immediately adopted an antagonistic stance towards the workers and their union, Local 5668 of the United Steelworkers of America (USWA). Approaching a November 1, 1990 contract expiration, RAC refused to bargain seriously, making its first full contract proposal only seven days before the contract expired. The USWA rejected RAC's offer and its two subsequent ones, offering to continue to work under the old contract. The company refused the union's offer and told workers coming to 11 and 12 p.m. shifts on October 31 to go home. Dan Stidham, president of Local 5668, says RAC "intended [to initiate] a lockout from the beginning." It never bargained in good faith, he says, and quickly brought "busloads of scabs into the plant." The company also installed an elaborate security system at the plant. In spring 1990, it cleared shrubbery from the plant's property and installed security cameras. In the fall, it placed a 10-foot barbed-wire fence around the plant and tripled its security forces. RAC is currently operating the plant with more than 900 replacement workers and salaried personnel. Stidham says strikers have been subjected to harassment from RAC's security forces. RAC and the USWA have held several rounds of negotiations under federal mediation since the lockout, but their positions appear irreconcilable. RAC has announced that it considers its replacement workers permanent, and that strikers will only be taken back to fill jobs that remain open. Stidham says there is "no way [strikers] will ever go back" and work with replacement workers. Moreover, RAC is demanding an unlimited right to contract out work and the right to restructure the plant to eliminate jobs. The union estimates that each of these demands will cost hundreds of jobs; combined with the company's commitment to the replacement workers, few jobs would remain for the strikers. "If the company can drive the [unionized] workers out of there, cut personnel and have people run from one job to another, cut benefits drastically ... [and pay] the replacement workers $5 or $6 an hour," it will clearly save a lot of money, says Stidham, though there are questions about whether RAC can produce a sufficiently high-quality product to retain its customers. The replacement workers will certainly suffer at RAC's hands. Stidham says the replacement workers' wages have already been cut two or three times from their starting rate. They also face significant safety threats; four union workers died in the plant in the year after RAC took it over. Only two had died in the previous 18 years. The new and untrained replacement workers stand to have an even higher casualty rate. But the biggest losers, of course, are the locked out workers. "If justice is ever done, it should be done in this case," says Stidham. But the USWA now must rely on the National Labor Relations Board to rule that RAC locked the unionized workers out and engaged in unfair labor practices. The evidence in the union's favor is strong, but the Board's hostility to workers is very likely stronger. The situations at Midland Steel and RAC are not exceptional. They exemplify the state of U.S. labor-management relations in the Reagan-Bush era. ------------------------------------------------------------------------------ [] MULTINATIONAL MONITOR VOLUME 12, NUMBER 4, APRIL 1991 LABOR'S CHALLENGE 2 Percent Justice for Workers FROM 1982 TO 1990, the National Labor Relations Board (NLRB) ruled that unfair labor practices took place in only 2 percent of the cases brought before it involving the largest 50 U.S. corporations, according to documents obtained by Multinational Monitor. The NLRB is the agency charged with investigating and prosecuting unfair labor practices arising from union disputes and elections. The vast majority of unfair labor practice charges involve claims of illegal firings due to union activity. Multinational Monitor obtained the records in response to a Freedom of Information Act request. They contain all charges of unfair labor practices against the top 50 Fortune 500 companies from 1982 to September 1990. More than 4,000 charges of unfair labor practices were filed against these 50 companies in the 8- year period. The NLRB found that an unfair labor practice occurred in only 80 cases. In these "formal settlements," the accused company usually admits to a violation of the law and agrees to provide some sort of compensation to the petitioning worker, such as back pay. Most charges filed with the Board are never even investigated. Of the approximately 4,000 cases released to the Monitor, 1,497, or 37 percent, were dismissed without investigation by regional directors. An additional 1,027, or 25 percent, were withdrawn. Petitioners usually withdraw cases because they have been advised by the Board that no complaint will be issued. A complaint is issued when a regional director decides there is sufficient evidence to investigate a case. If the regional director refuses to issue a complaint, parties can appeal to the NLRB's general counsel, though almost all appeals have been denied in the last decade. The counsel's decision is final. In addition to the 80 cases where the NLRB ruled in favor of workers, 874 of the cases examined by Multinational Monitor reached some sort of settlement. The petitioner and the charged company arrived at an independent settlement in 718 of the cases (75 percent of the settled cases). "Informal settlements," which are approved by the regional director but do not involve an admission of guilt by the company charged, accounted for 156 of the cases. The NLRB took further action on an additional 519 cases which are still pending either because of appeals or heavy case loads. Some cases have been pending for as long as three years. Labor commentators say that drawn-out unfair-firing cases deter workers from organizing as much as the actual firings of union supporters. Greg LeRoy, research director of the Midwest Center for Labor Studies, says, "it is cost-effective [for companies] to fire people today and maybe have to pay them tomorrow." Unfairly fired workers are not entitled to pay or benefits until the Board decides in their favor. Union representatives say the Board no longer fulfils its intended function: to guarantee and enforce the rights of workers to organize and maintain unions. The NLRB was established by the Wagner Act (National Labor Relations Act) of 1935, which guarantees workers the right to form unions and bargain collectively and bans unfair labor practices such as the formation of "company unions" and discrimination in hiring and firing due to union affiliation. The Wagner Act established the National Labor Relations Board as an agency with jurisdiction over labor disputes and violations of the Act. The Board is also charged with running elections for union certification. The documents obtained by Multinational Monitor lend support to unions' claims that they can no longer depend on the NLRB to enforce the laws protecting union supporters. Candace Johnson, a spokesperson for the AFL-CIO, says the NLRB's refusal to enforce labor laws has made the firing of union supporters "a fact of life," even though such action is strictly illegal. LeRoy characterizes the NLRB as "increasingly irrelevant because [it] has become so corrupted." Johnson attributes the NLRB's inaction to Board members appointed by the Reagan and Bush administrations. (The NLRB is run by five presidentially appointed Board members and a general counsel. The general counsel appoints directors for the Board's 39 regional offices, which handle the majority of the cases.) "Starting with Donald Dodson [the first Reagan appointee], we have had a pro-employer Board," Johnson asserts. NLRB spokespeople refused to comment on this charge. The co-optation of the NLRB has significantly affected unions' ability to organize and wage effective actions, according to union officials. Union organizers believe employers' ability to defy U.S. labor law with impunity has contributed to the tremendous decrease in union representation. They say they can no longer rely on interested workers openly attempting to convince their co-workers that they need a union because of the likelihood that these workers will be fired. -Jim Sugarman ------------------------------------------------------------------------------ [] MULTINATIONAL MONITOR VOLUME 12, NUMBER 4, APRIL 1991 Replacing the right to strike The use of permanent replacement workers--commonly known as "scabs"--has skyrocketed in the United States since 1980. In most of the defining strikes of the last decade--the air traffic controllers, Phelps Dodge, Magic Chef, TWA, International Paper, Eastern, Greyhound, the Daily News--management brought in permanent replacement workers when workers went out on strike. A January 1991 General Accounting Office (GAO) study determined that employers hired permanent replacement workers in 17 percent of strikes in 1985 and 1989. Corporations and business associations, attempting to forestall legislation banning the use of permanent replacement workers, argue that their use has remained consistent over the last 50 years. Peter Eide, manager of labor law at the Chamber of Commerce, argues that the "threat to use permanent replacements was common prior to 1980" and that the general perception that their use has increased is a "labor-created, media-created" fiction. The GAO study, however, found that "about 45 percent of the employers and about 77 percent of the union representatives involved in strikes ... in 1985 and 1989 believe permanent strike replacements were hired in proportionately fewer strikes in the late 1970s than in the late 1980s." Most commentators trace the rise in permanent replacement workers to the 1981 PATCO strike, when then-President Ronald Reagan fired striking air traffic controllers and brought in permanent replacements. Labor commentators argue Reagan's action sent a message to U.S. employers that the ground rules of labor- management conflict had changed, and that more aggressive and ruthless behavior was acceptable. The consequence of the shift in employer attitudes and strategies has been profound. "By basically pressuring groups to go out on strike by remaining totally rigid [in negotiations]," charges Cindy Yeast, spokesperson for the Association of Flight Attendants, companies can "get rid of an older, more senior workforce" and replace it with a younger, non-unionized and less expensive one. Yeast's assertion is echoed by labor leaders across the country, including union representatives of the workers at Midland Steel, Ravenswood, Eastern and the Daily News. More significant than the number of cases in which corporations actually hire permanent replacements is the extent to which they threaten to do so. The GAO study estimated that companies involved in strikes announced they would hire permanent replacements in about 31 percent of 1985 strikes and 35 percent of 1989 strikes. Labor leaders say the numbers are even higher. Warren Davis, regional director of the Northeast Ohio region of the UAW, says locals in his region are "threatened with scabs" in about 60 percent of their contract negotiations. Lynn Williams, president of the USWA, told a March 12 hearing of the Senate Subcommittee on Labor that "in a recent informal survey of Steelworker-represented locations where strikes have occurred in the last decade, three-fourths of the respondents reported the use of permanent replacements." The effect of these threats is to undercut labor's bargaining power by drastically curtailing its ability to make use of its most potent weapon, the strike. Yeast says that when negotiations "start to get down to the wire" and the flight attendants tell airlines they maybe forced to go out on strike, the employers' respond: "'Fine. Go out. We'll replace you."' This sort of employer intransigence, she says, "cripples our ability to come to a deal." Even when the threat is not overt, workers' knowledge that employers are willing to use permanent replacements severely cuts into their negotiating strength. Williams told the Senate Subcommittee: "Increasingly, we have had to advise our members that they dare not strike because of the risk of permanent replacement. And, what is crucial is this: the employers knew as well as we that we were left without any meaningful strike weapon, and therefore felt no compulsion to negotiate seriously toward a mutually acceptable agreement. In this way, the use of permanent replacements by only a few employers has been sufficient to alter the balance of collective bargaining with many others." Companies' legal license The right of employers to use permanent replacement workers in instances where their workforce strikes for economic reasons was established by the Supreme Court's 1938 decision in Labor Board v. Mackay Radio Co. Companies are not allowed to hire permanent replacement workers in lockouts or strikes over unfair labor practices. The "Mackay doctrine" coexists uneasily with the National Labor Relations Act of the 1935, which guarantees workers the right to strike without fear of being fired. Section 7 of the Act says, "Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection." Section 8 states that "it shall be an unfair labor practice for an employer to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in [section 7]." Unions and labor law experts argue that the right of employers to use permanent replacement workers overturns the right of workers to strike without fear of being fired. Paul Weiler, a professor at Harvard Law School, told the Senate subcommittee that "for the last several decades, labor law classes around this country have annually broken out in laughter at the thought that lawyers and judges would draw such a spurious distinction between discharging workers and permanently replacing an employee in his job." But the Supreme Court has upheld the Mackay doctrine, writing in a 1985 decision concerning TWA's use of permanent replacement workers that workers' right to strike amounted to a "gamble" with their jobs. The unions' response Confronted with the Supreme Court's affirmation of employers' right to use permanent replacements and corporations' increasing willingness to exercise that right, the labor movement has turned to Congress for a legislative remedy. Senator Howard Metzenbaum, DOH, and Representative William Clay, D-MO, introduced legislation in 1990 which would have banned the use of permanent strike replacements and have reintroduced their bills in 1991. The legislation would permit companies to hire temporary replacements during strikes. Metzenbaum has been particularly forceful in pushing the legislation. In his statement opening a March 12, 1991 hearing before the Senate Subcommittee on Labor, he said, "We are here today because the scourge of permanent replacements threatens our very system of collective bargaining. The right to strike has been reduced to the right to quit." Metzenbaum called employers like Frank Lorenzo of Eastern Airlines, the Greyhound Bus Company and the New York Daily News "scofflaws [who] have become role models for far too many American businesses." Noting that the March 12 hearing was the fifth on the topic of permanent replacements in less than 10 months, he said "It is now time for Congress to act." Passage of the bill is "a top priority of every labor union," according to Ernie Dubester, legislative counsel of the AFL-CIO. Congressional failure to enact the striker replacement legislation, says George O'Bea, vice president of the United Paperworkers International Union, "will kill collective bargaining." In addition to lobbying, the labor movement hopes to express its concern with the bill at an August 31 Solidarity Day rally in Washington, D.C., where it hopes to mobilize tens of thousands of workers, primarily to demonstrate support for the striker replacement legislation. Labor faces significant obstacles in achieving passage of the bill, however. Secretary of Labor Lynn Martin, testifying before the House Labor-Management Subcommittee on March 6, said that the Bush administration opposes the Metzenbaum-Clay legislation. "If the bill were presented to the president," she said, "his senior advisers would recommend a veto." Given the active lobbying of business groups to prevent Congress from even passing the bill, labor will have a hard time mustering the two-thirds majority it would need in both the House and Senate to override a veto. Led by the Chamber of Commerce, business has formed an "Alliance to Keep America Working" to oppose the striker replacement legislation. It includes the National Association of Manufacturers, the Associated General Contractors of America, Associated Builders and Contractors, the National Federation of Independent Business, General Dynamics, International Paper, 3M, USX and dozens of other companies. Business lobbyists describe the effects of passage of the bill in apocalyptic terms. "Were the bill to become law," says the Chamber of Commerce's Eide, "it would completely upset the economic balance in collective bargaining situations, giving unions all power.... Employers would have to agree to what unions wanted or shut down." The business community argues that the fact that the bill would allow employers to use temporary replacements during a strike is irrelevant, a claim hotly disputed by labor. "It is virtually impossible to hire temporary replacements for anything above the most unskilled job," Eide says. But labor representatives dismiss this claim as groundless. At the March 6 House hearing, Owen Bieber, president of the UAW, cited evidence that roughly 25 percent of the total civilian workforce is made up of temporary workers and stated that "with one in four workers already employed on a less than permanent basis, the claim that employers will not be able to hire temporaries is specious." Weiler told the Senate Subcommittee on Labor that "the available evidence is all to the contrary" of the business claim. He pointed out that many U.S. businesses choose to use temporary rather than permanent replacements during strikes, and have no difficulty attracting them. He also noted that Canada has banned the use of permanent strike replacements for the last two years, without causing any difficulty for employers who want to operate during a strike with temporary replacements. The limits of legislative reform In responding to business arguments about the potential effect of passage of the striker replacement bill, labor leaders have argued that even though the bill is critical to re-establishing the right to strike, it will not give unions the power to dictate contract terms to corporations. For example, in his testimony to the House Subcommittee, Lane Kirkland, president of the AFL-CIO, stated that the bill "does not come close to creating an imbalance in favor of working people. The reason for this is simple: all of the evidence demonstrates that employers have always had effective options in response to a strike other than the hiring of permanent replacements." Unfortunately for U.S. workers, Kirkland was not arguing just for the sake of expediency. Employers have alternative ways to respond to strikes; they can use temporary replacements or wait out workers who themselves suffer tremendous economic hardship from work stoppages. Moreover, as employers became more aggressive in the last decade, their bargaining power was heightened by a number of factors. With ever-greater frequency, they employ union-busting consultants and "security firms" to intimidate workers [see "Confessions of a Union Buster" sidebar - omitted here]. When they have legal conflicts with workers, they know they can rely on a pro-employer National Labor Relations Board to adjudicate their case [see "Two Percent Justice for Workers" sidebar]. And they can threaten--and carry out the threat-to close factories in the United States and open up new ones in low-wage countries abroad. Responding to all of these problems will require labor to dramatically increase its political power, primarily by reversing the trend of declining membership in unions and by organizing new workers. But there are steps unions can take in the short term to respond to the new bargaining climate. Strikes can only be used in limited situations where employees have significant leverage over their employer; unions must experiment with other protest tools. Davis of the UAW says he encourages workers in his region to "resort to in-plant strategies to try to keep from striking or to use them first to weaken companies before a strike." These include tactics like work-to-rule, where workers do exactly what their job description requires, but no more. Passage of striker replacement legislation is of extreme importance to labor, but labor should also search for creative alternatives to it. Unions and their allies in Congress will have a hard time assembling the two-thirds majority they will need to override a Bush veto of the striker replacement bill, and carrying out successful strikes will be difficult even with passage of the bill. At a time when labor's strength is declining, there is a grave danger in relying only on legislative avenues to remedy inequities in the relationship between workers and corporations. ------------------------------------------------------------------------------ [] MULTINATIONAL MONITOR VOLUME 12, NUMBER 4, APRIL 1991 CRIME WITHOUT PUNISHMENT: Lax Enforcement at OSHA By Jim Donahue A MULTINATIONAL MONITOR SURVEY OF Occupational Safety and Health Administration (OSHA) enforcement data reveals that the largest U.S. corporations violate workplace safety laws on a massive scale, while confirming that the agency deserves its reputation of having a weak enforcement record. Each of the country's 10 largest corporations were cited for repeated violations of workplace safety regulations [see table - omitted here]. General Electric, by far the most cited company, received more than 1,400 citations. GE also leads in the number of citations issued per 1,000 employees. IBM, the least cited company, received 15. Despite its incredible record, General Electric spokesperson Jack Batty denies the company's health and safety program needs substantial improvement. "We are always trying to do better," Batty says. "As long as there are any accidents, we'll be out there trying to do better." Multinational Monitor analyzed completed OSHA inspection reports from 1982 through 1990 for the 10 largest U.S. corporations as listed in the 1990 Fortune 500. Those corporations are Chrysler, Dupont, Exxon, Ford Motor Company, General Electric, General Motors, International Business Machines (IBM), Mobil, Philip Morris and Texaco. The OSHA reports were obtained by a Freedom of Information Act request. The Monitor also examined records dating back to 1982 from most of the states that conduct workplace safety enforcement operations separate from OSHA. California, Michigan and Washington are among the states with autonomous enforcement power and did not begin reporting complete enforcement information to OSHA until very recently. Despite this limitation, the survey offers insight into the enforcement record of OSHA and 20 of the 23 states that conduct enforcement separate from OSHA. The data demonstrate the sluggish enforcement strategy of the state and federal agencies. OSHA and the state agencies together declined to levy penalties for 67 percent of the violations found. In addition, penalties totalled $1,000 or less in 86 percent of OSHA's inspections. General Electric paid a meager $151,003 in penalties on only 382, or 25 percent, of the total citations issued. In the nine years surveyed, GE paid an average of $46 each day for violating worker safety laws. Until recently, OSHA's maximum penalty was $10,000 for a wilful violation of the Occupational Safety and Health Act. But OSHA and states with autonomous enforcement power levied total penalties of $10,000 or greater in only 14 of the 795 inspections of the top 10 corporations in which a citation was issued. (This figure does not include 11 cases that were still open at the time of the survey in which the assessed penalty was $10,000 or more.) The federal and state agencies imposed total penalties between $5,000 and $10,000 in only 12 inspections. (This figure does not include two cases still open at the time of the survey.) In March 1991, the maximum penalty for a wilful violation of the OSH Act increased from $10,000 to $70,000. Wilful violations are those committed with an intentional disregard of, or plain indifference to, the requirements of the act. The maximum penalty for serious violations increased from $1,000 to $7,000. Serious violations are those in which a company should have known of a substantial probability of an accident resulting in death or serious injury, such as a crushed arm or liver failure. Of the 1,238 penalties issued against the 10 corporations collectively, only 5 percent were imposed for wilful violations. Eighty-four percent were imposed for serious, 6 percent for repeated, and 5 percent for other violations. Under the Reagan and Bush administrations, OSHA's budget has declined in real terms (the agency now has approximately 1,200 inspectors to monitor the nation's 7 million workplaces) and it has emphasized a regulatory philosophy that calls for a more cooperative relationship with corporations to promote "voluntary compliance" with worker safety standards. Critics charge that the policy is nothing more than a pretext to drastically reduce penalties. Joseph Kinney of the National Safe Workplace Institute calls OSHA's voluntary compliance strategy a "farce." Kinney argues that a true voluntary compliance system requires verification. He points out that IRS auditors are permanently stationed at many corporations to verify compliance with tax laws and that Pentagon officials monitor defense contractors every day for compliance with procurement laws. "All the major companies are audited every year by the IRS, and their audits are so big that they have IRS teams that are actually permanently based at those companies," Kinney says. "Theoretically, our internal revenue tax system is a voluntary compliance system. So, I think we ought to have the same kind of compliance strategy with OSHA that we have with IRS. I think we ought to have OSHA inspectors at these companies on a daily basis from moment to moment. And that's voluntary compliance." Kinney also rejects corporate complaints that OSHA inspections and regulations are intrusive. "The National Association of Manufacturers finds all these problems with OSHA," he said. "Yet, the reality is that in other areas [corporations] deal with government on a daily basis. There is a double standard here. Somehow, when it comes to employee safety, government is intrusive, but they sure don't raise any complaints about the fact that the IRS is there. One kind of intrusiveness is taken for granted because we value tax collection, but ... employee safety and health, is not valued." As part of its "voluntary compliance" strategy, OSHA frequently reduces penalties after negotiating with a violator. A 1989 study by Kinney's National Safe Workplace Institute found that between 1986 and 1989, OSHA reduced the total amount of fines (involving multiple violations) exceeding $100,000 by 67 percent. Collectively, the 10 largest U.S. corporations paid only 54 percent of the initial penalties assessed in the nine- year period surveyed by the Monitor. Since the Occupational Safety and Health Act of 1970 was passed, hundreds of thousands of people have died due to occupational hazards. Each year, roughly 10,000 people are killed in industrial accidents, 70,000 become afflicted with permanent disabilities and 9 million are injured. Tens of thousands more die from workplace-induced disease. Even OSHA's current enforcement strategy reveals a consistent pattern of corporate violations of occupational health and safety laws. As long as the current climate prevails, with the agency understaffed and unable and unwilling to levy harsh penalties on corporate lawbreakers, a continued epidemic of occupational tragedies is virtually guaranteed. ------------------------------------------------------------------------------ [] MULTINATIONAL MONITOR VOLUME 12, NUMBER 4, APRIL 1991 INTERVIEW BUILDING THE UNION An Interview with Amy Newell Amy Newell is secretary-treasurer of the United Electrical, Radio and Machine Workers of America (UE), which represents approximately 80,000 workers in the electrical equipment, machine and plastics industries. Now serving her fifth term, Newell was the first woman elected to national office in a U.S. basic manufacturing union. Since 1982, she has served as a member of the Coalition of Labor Union Women National Executive Board. Multinational Monitor: What are the main reasons that union membership in the United States is declining? Amy Newell: Well, there are structural questions having to do with changes in the economy. The mass production industries in this country were organized in the big CIO tidal wave in the 30s and 40s. A lot of newer industries that have developed since that time have not been organized in a mass way. Also, the difficulties in organizing are really a tremendous obstacle not only to unions, but to workers who would like to organize to join unions. MM: What sort of difficulties do you specifically mean? Newell: The way the National Labor Relations law and enforcement is structured, it really pays for most bosses to break the law. That is the simple fact of the matter. There are no meaningful penalties for those who violate the law, and the procedures for enforcing it are incredibly time-consuming and slow. For example, we organized a shop in Chicago in October 1987. The workers voted by a 2 to 1 margin to join the union. The employer filed objections to the conduct of the election. Those objections were investigated by the [National Labor Relations] Board and dismissed. The employer appealed to the full Board in Washington, D.C., which certified the UE as the collective bargaining agent. [Still], the boss refused to bargain. The company simply said, "Make us; make us bargain." So it dragged on. It took three years before the Seventh Circuit Court of Appeals finally ordered the company to sit down and bargain with the union under threat of some sort of penalty, a fine. And after three years of stalling, that was all the employer had to do--sit down and bargain--even though they had been in violation of the law for almost three years. It is the same thing when workers are fired because of their union activities. It is difficult to present a case--you practically need a smoking gun to have the Board agree that someone was fired because of union activities. But even when it is crystal clear, it can take years and years, and all the employer is obligated to do then is offer reinstatement and, at most, pay back wages minus any interim earnings of the worker. Most working people, when they are fired, have to get another job or somehow support themselves and their families. And if they should luck out, let's say, and actually get a better paying job than the one they were illegally fired from, the employer faces absolutely no penalty even though they clearly broke the law. I heard Richard Trumka, [president of the United Mine Workers], give a speech a few years ago. He said, here we have these tomes, these thick, thick books of labor laws and the last rule is: the union loses. The workers lose because of the way the whole thing is set up. MM: How can the labor movement and individual unions overcome these legal impediments? Newell: Well, I can tell you one thing we have been trying to implement in our organizing work. At least as long as I have been with the union, the UE has organized on the basis that we aren't just going to win a Labor Board election, we are going to build a union among the workers in a given plant with a Labor Board election at some point to ratify that, to prove it, to win legal bargaining rights in that shop. But we have taken that to a whole other stage in trying to bypass the procedures of the Labor Board to the extent possible. It is very difficult to just completely bypass the Board because the bottom line is that it is the mechanism which governs labor relations in the United States. But our experiences petitioning for Labor Board elections [have shown] the very extensive ability of companies to delay the elections, to use that time to intimidate people and fire people and to try to [destroy] the unity of workers. We have been trying to set up a community-based alternative to the Labor Board. We organize fair election committees of community leaders--people from the religious community, elected public officials, people of stature in whatever community we are trying to organize--who will conduct a fair, secret-ballot election. They are non-partisan people with a voting list, with observers and all the normal mechanisms of the Labor Board. After the community election is held, they certify that a majority of workers have designated the union as their representative. And that can be accomplished in a week, with a fair and secret ballot and a monitored election. Then when the company proceeds to make a mockery of the Labor Board procedure, stalling it for months and months, it really drives home to people how biased the govemment set-up is. We try to work to make these community labor boards monitor other aspects of what is going on at that particular plant, such as firings because of union activity and unilateral changes that companies might make to discourage union activity, even though it is unlawful. The idea is to use the mechanisms of public support and public denunciations to demystify the process from the Labor Board election down to the real life of the plant and the community in which it is located. We also try to install the union in the plant. They have had their community-held election. If the majority of the plant has voted for the union, then we try to go ahead and put the union in that plant: elect a grievance committee, elect shop stewards. We try to develop a functioning local union even though we do not have legal certification from the Labor Board as the collective bargaining representative at that point. Then people can see that they have their union. They have voted, people of stature in the community have said, "The majority has decided, you have a union now," they elect their stewards and shop officers and so forth and proceed to function as a union. Then when we have to go to a Labor Board election to get official legal bargaining rights, it is really demystified a lot for people. They have already had the experience of building the union in their shop. MM: When you do that--hold an election and build a union--how have the companies you have organized responded? Newell: It is really interesting. These employers come back and they say, "Go to the Labor Board." They know that that is the arena where the advantages accrue to them in terms of very cumbersome bureaucratic procedures. I can't recall an employer yet who said, "The mayor has certified the election. Well, then we will bargain with the union." I don't think we have had one case like that. They always say go to the Labor Board. And they hire their high-priced consultants, their union-busters, to bring in their dog-and-pony show to scare people and buy them and deceive them and fire them and intimidate them and hope that the 6 or 8 or 12 or 15 weeks of delay that they get under Labor Board procedures will give them the time they need to wreck [our organizing efforts].... The union-busters try to create a feeling of hysteria in the plant on election day. [They say], "The plant may close and move overseas. You are signing a blank check. You are turning your future over to outsiders...." But if people have been through a fair and honestly run community-held election and have begun trying to have a local union function in that shop, it is harder for the union-busters to create that kind of hysteria. It is easier for the workers to keep their perspective. MM: How successful have the strategies you have been pursuing been? Newell: It is not like we have found the magic answer here. But certainly I think it has been a tremendous advance over just petitioning the Labor Board for an election and waiting for election day. People are generally so demoralized and frustrated by the waiting that you are sometimes at your weakest point right when you are, at least hopefully, facing bargaining with the company. The procedure that I laid out leaves you in a much stronger position when you do finally get to the bargaining table. You have more to bargain with than just a piece of paper from the Labor Board that says you are certified as a union. You have built up a lot more in the shop, people have developed a lot more strength, fighting out their grievances in the shop, conducting concerted activity. Generally speaking, you are in a much stronger position for facing the company over the bargaining table than, for instance, that shop I mentioned to you where we won the Labor Board election in October of 1987. There, when the boss said, "I ain't going to bargain. Make me," we weren't able to bring that company to the bargaining table until three years later, when the Circuit Court of Appeals finally handed down its ruling. In a number of cases, people have actually been strong enough and militant enough to engage in recognition strikes and stoppages and other activities in the shop to try to force their demands in the shop for union recognition or at least to expedite the Labor Board election and win certain concessions around, perhaps, the question of the appropriate bargaining unit or election tactics by the employer. It is certainly something we are going to experiment with and pursue. MM: An article by David Cohen, a UE international representative, says you have won 11 of 11 elections using the community election tactic. Newell: I think that was in our last year. It has been quite successful. MM: How have your organizing efforts and unions in plants you have already organized been affected by threats of companies to close plants and move overseas? Newell: Like all unions in basic industry, we have certainly been very much affected by that. We staked out a position in the very early 1980s opposing concessions [in response to threats to move plants abroad] as being a futile attempt to save jobs. Basically what you end up doing is giving the company moving expenses, so to speak. If they are going to go, they are going to go. We really can't compete with the kind of wage rates that are paid in Mexico or Taiwan or South Korea. I know of some instances where, through a lot of coalition work and community work and public pressure, we have been able to prevent some plants from closing and moving away. But they are certainly the exceptions. It is especially difficult with the really large transnational corporations that are so insulated from any kind of public or community pressure--if they are bound and determined to move, they are going to do it. So we fight them tooth and nail, and we use the opportunity to educate people and build consciousness about the way the system is set up--the total lack of accountability these corporations have, not only to their workers but to communities that in many ways over many years supported those ventures. The other end of it is to try to fight for an international labor rights standard that would reduce the incentive for corporations to move our jobs overseas to areas where wages are very depressed because labor rights are nonexistent. If they were not able to import those goods back into this country, with the kind of trade benefits that they normally enjoy, [they would lose the incentive to move]. So whether it would be GSP [the Generalized System of Preferences] or the 1986 Trade Act or OPIC [the Overseas Private Investment Corporation] or other forms of legislation governing international trade, we have pressed very hard for an international labor rights standard that would in effect penalize companies that operate in countries where workers don't have the right to organize to raise their wages. And we have tried to develop a much more concrete sister union program with our counterparts in other countries. For instance, in El Salvador, we have a longstanding relationship with ATCEL, the Union of Electrical Workers of El Salvador, giving concrete assistance, money, messages of support, exchange of delegations, that kind of thing, and have done that with other unions in other countries. But it is difficult. I hate to say it, but I think the labor movement is probably light years behind the transnational corporations in terms of building global unity--in our case, unity of the working class. MM: Is protectionism a second-best, but more attainable, way to confront capital's mobility? Newell: UE traditionally has not tagged along on the "Buy America" route. First of all, because there has never been any quid pro quo with corporations for what they have to give in exchange for that kind of break. In exchange for buying American or limiting imports, are they then restricted from moving jobs elsewhere? Are they then committed to invest in the country and create jobs and produce quality products at a reasonable price? I hate to say it, but in many respects, it has been foreign competition that has brought many of these profiteering corporations down on their knees, so to speak. I don't know if we would want to let the American public be held hostage as a captive market for U.S. suppliers. Besides which, just because a product has an American name on it doesn't mean anymore that it was even made in this country. It is practically impossible to sort out a car with the Chrysler name on it and what [parts were] made here and what was made over there. It is a real maze. Additionally, many workers in our union and throughout the country produce for export. We couldn't expect to cut off imports without seeing retaliation in the opposite direction. So we have traditionally concentrated a lot more on the labor rights standards. The problem is that the Bush administration and before it the Reagan administration have enforced these provisions through a Cold War lens, so to speak. They simply refused to acknowledge the fact that labor rights violations were going on in countries ruled by right-wing dictators if they were our buddies against the "Soviet menace" or the "Communist menace." Conversely, countries allied with the Eastern bloc have consistently been stricken down for violating labor rights. We have petitioned year after year for a cutoff of trade preferences, for instance, for El Salvador. Year after year we have been turned down. This is the first year they are going to be forced to give it a serious examination. We pressed for a similar cutoff for Chile year after year, and finally, about three years ago, we succeeded in forcing a real, impartial examination of the status of labor rights in that country. MM: Why aren't there more women in leadership positions in national labor organizations? Newell: Sexism is a fact in our society, probably more so in the past than today. We are seeing more and more women coming into national leadership of their unions, and I think to some extent in the AFL-CIO. Certainly there are more women in individual unions than say 20 or 30 years ago, and I think that trend is definitely going to continue. I think the Department Store Union is headed by a woman, the National Education Association was headed by a woman and so are a number of unions in the airline industry . .. Progress is being made, [but] we have a long way to go. MM: Do you think women leadership makes any difference? Newell: I wouldn't say, obviously, that women are necessarily smarter or better leaders. But I think it is important that the leadership of any mass, democratic organization, as our unions should be, reflect the membership. There is something very wrong when the membership may be 30 or 50 or even 70 percent women and the national executive board is overwhelmingly male, or overwhelmingly white when there is a large minority membership. I think in a democratic institution, it is a lot more inspiring to the membership to see themselves reflected in the leadership of an institution. It makes for greater unity and probably, on balance, better leadership, because you will have the points of view of important segments of the membership represented in the institution. ------------------------------------------------------------------------------ [] MULTINATIONAL MONITOR VOLUME 12, NUMBER 4, APRIL 1991 ECONOMICS "AMERICAN" HOME PRODUCTS MOVES ABROAD By David Lapp "THE FIRST THING WE DO MONDAY morning is go to the bulletin board to see if a list [of workers to be laid off] has been posted," says Jim Sharp, a third-shift worker at American Home Products' Whitehall Division's pharmaceutical plant in Elkhart, Indiana. "For the workers that are still working, there's a lot of tension because they don't know from one day to the next if or when they're going to be laid off." Every day after he completes his shift, Sharp heads for the office of Local 7-515 of the Oil, Chemical and Atomic Workers Union (OCAW) to stuff envelopes, keep the fax machine running and answer the phones. Local 7-515 is in the midst of a what it calls a "watershed struggle" to keep open the Whitehall plant, which American Home Products (AHP) has scheduled to close by this year's end. Sharp, who sleeps two hours a day in between volunteering at the union office and his work shift, this month received an award for 25 years of service at the Whitehall facility. He is also fighting to keep a job he's had for over half of his life. In November 1990, American Home Products (AHP), one of the world's largest pharmaceutical companies, announced that it would close its 775-employee Indiana plant and shift part of its production to a new plant in Guayama, Puerto Rico. Within weeks of the announcement, the company began a series of layoffs. Whitehall's workforce in Elkhart is now down to about 600 employees, most of whom are members of OCAW. More than half of the workers are women over 40 years old, and many of them have been employed at the Elkhart plant for more than 20 years. Last year OCAW launched a massive campaign called "Keep Whitehall Open: Hometowns Against Shutdowns" to prevent the plant's closure. The campaign has consisted of appeals to the press, marches and rallies, and numerous lawsuits against AHP, including a $100 million racketeering suit. Additionally, the National Labor Relations Board has charged the company with numerous labor-law violations. "The closure of Whitehall looms like a death sentence over our members," says Connie Malloy, president of OCAW Local 7-515. Malloy charges that "American Home Products has displayed a total lack of respect for the law [and] a total lack of respect for their long-term employees." A taxing move OCAW's central complaint against AHP is the company's transfer of production from the Elkhart facility to the one in Guayama. AHP is one of many U.S. based corporations to shift production facilities to Puerto Rico in order to reap the benefits of Internal Revenue Service Code 936, known as the Possessions Tax Credit, and generous Puerto Rican tax breaks. Although these tax laws provide incentives for U.S. companies to set up plants in Puerto Rico, they stipulate that the new factories cannot siphon away existing U.S. jobs. In practice, however, corporate profiteering in Puerto Rico is conducted at the expense of U.S. workers like those in Elkhart. OCAW estimates that thousands of U.S. workers have been dislocated because their employers chose to boost profits by setting up 936 plants in Puerto Rico. AHP is a conglomeration of almost 200 companies which market hundreds of products ranging from heart medicine to spaghetti. The company is one of the leading manufacturers of prescription pharmaceuticals, over-the-counter medications and various other health care products. Some of its brand name products include Advil, Anacin, Premarin (estrogen), Preparation H, Robitussin, the Today contraceptive sponge, Jiffy Pop popcorn and Chef Boyardee prepared foods. In 1989, AHP earned $1.1 billion on $6.7 billion in sales, and CEO John Stafford received total compensation of $3,709,137. AHP began its abandonment of its Elkhart facility in January 1990, when it laid off 56 workers, claiming a downturn in sales and demand. Six months later, when the company laid off 41 more employees, it blamed the layoffs on a "seasonal downturn" in business. By this time, AHP had constructed one of the largest pharmaceutical complexes in Puerto Rico, with a total employment of 1,250. In July 1990, AHP laid off 187 workers at Whitehall's non- unionized plant in Hammonton, New Jersey. The same month, Whitehall vice president Richard Hill met with officials at the Elkhart facility to announce that an AHP study found 500,000 square feet of "excess capacity" within the Whitehall Division and that the "excess capacity" was the exact size of the Elkhart facility. On October 1, AHP officially announced plans to close the Elkhart facility. In a news release announcing the planned closure, AHP said its decision was "principally the result" of its 1989 acquisition of A.H. Robins Company and reflected the need to rationalize production between its Whitehall Division and Robins' facilities. The company estimated the "gradual phase-down process" would be completed by the end of 1991. Another statement said the "production activities currently performed at Elkhart will be re-allocated to the remaining Whitehall-Robins facilities in Hammonton, New Jersey; Richmond, Virginia; and Guayama, Puerto Rico." The ripple effect of the closing of the Elkhart plant will result in 2,900 layoffs and will cost the government $37 million, according to a study by the Midwest Center for Labor Research (MCLR), a Chicago-based consulting firm. The MCLR's analysis projected that, two years after the closure, dislocated workers will be earning less than 75 percent of their former incomes. Unemployment benefits will cost the government a total of $5.7 million, and an estimated 472 new welfare cases will cost an additional $1.4 million, the MCLR concluded. AHP claims that its decision to close the Elkhart plant is "not unique in today's economic environment." Like other companies, a company statement explains, "AHP needs to operate its business in the most efficient manner in order to remain competitive." The company further denies that it decided to reassign most of Elkhart's production capabilities to Puerto Rico in order to exploit IRS Code 936. Asserting that the tax benefits associated with the move were only "minor," AHP claims, "The company's plans for product reassignment were based on its assessment of the best use of available capacity and staffing." OCAW has filed a $100 million lawsuit seeking punitive damages under federal racketeering laws against AHP. A number of Puerto Rican officials are also named as defendants, including Governor Rafael Hernandez Colon, Secretary of State Antonio Colorado and Silvia Matos, the director of the territory's Industrial Tax Exemption Office. At its core, the lawsuit alleges that AHP has violated, and the Puerto Rican authorities have neglected to enforce, several U.S. and Puerto Rican laws. The violations have enabled the company to acquire millions of dollars in U.S. and Puerto Rican tax subsidies and to illegally obtain economic development and job training funds, the suit charges. Ayerst-Wyeth Pharmaceuticals, Inc., an AHP subsidiary, is also named in the lawsuit. According to the lawsuit, AHP illegally sought to shelter the movement of equipment and millions of dollars in profits by appending a Whitehall Division plant it built in Puerto Rico in 1987 to the already-existing Ayerst- Wyeth plant. Incentives to flee AHP is one of many pharmaceutical companies to glean profits from the investment benefits granted to U.S. corporations which shift production to Puerto Rico. The Possessions Tax Credit exempts the profits of wholly owned U.S. corporate subsidiaries in Puerto Rico from all U.S. corporate income tax. The Puerto Rican laws, arranged under the umbrella of FOMENTO, the Puerto Rican Economic Development Agency, provide a host of tax exemptions which are utilized by virtually all of the 936 plants on the island. The investment incentives are unique in that they encourage capital-intensive industries to locate in Puerto Rico. This is in direct contrast to the advantages sought by multinational corporations in other Latin American countries, where cheap labor and a low regulatory environment provide the primary investment incentives. "It's the exact reverse of what you would find in a stereotypical Third World/First World producing relationship," says Richard Leonard, director of the OCAW's special projects program. The highly profitable, capital-intensive pharmaceutical industry is well-suited for Puerto Rico's investment structure. Pharmaceutical companies account for over half of the $2 billion the U.S. Treasury Department loses each year through 936- sheltered profits. Other major pharmaceutical conglomerates benefiting from IRS Code 936 include Abbott Laboratories, Bolar Pharmaceutical, Johnson & Johnson, Eli Lilly, Mylan Laboratories and Upjohn. To take advantage of the 936 shelter, corporations have their Puerto Rican facilities perform only the most profitable elements of their operations. For example, Leonard explains, AHP's Guayama facility produces Advil, Anacin, Dristan, Primatene, Denorex and other products--all which were once produced at the Whitehall plant--with largely automated production lines. Defective products coming off the line, however, are thrown into boxes and shipped back to the United States, because fixing the defects--containers with missing or altered labels, for example--has to be done manually. This "reworking" is one of the most labor-intensive production facets for pharmaceutical companies. "The companies want to have nothing on the Puerto Rican books but pure profit with the lowest cost possible because the difference between the cost and the revenues can be sheltered," Leonard says. IRS Code 936 is intended to assist Puerto Rico obtain employment-producing industries, according to a 1989 U.S. Treasury Department report. The report estimates that 936 corporations employ 88,579 persons in Puerto Rico, about 12 percent of the country's wage workers. Pharmaceutical companies, however, employ only 17,000 persons, while raking in over half the profits of the 936 companies. 936 corporations' tax benefits also differ substantially depending on the industry; in 1983, tax benefits per employee averaged $3,000 to $4,000 in low technology and labor-intensive industries, while the capital- intensive pharmaceutical companies average was an extraordinary $57,761 per employee per year, according to the Treasury Department report. Augmenting the impact of 936 are a number of local tax exemptions which shield up to 95 percent of a qualifying U.S.- based company's income. The Puerto Rican Tax Incentives Act of 1987, for example, negates or greatly reduces local property taxes, municipal taxes and excise taxes. Companies utilizing these tax breaks, however, are prohibited by law from engaging in any business practice in Puerto Rico which would "substantially and adversely effect employees of an enterprise under related control operating in any state of the United States." The view from Puerto Rico The Puerto Rican economy, its workers and its environment are also victims of the various investment inducements. While IRS Code 936 remains in effect for companies throughout their stay in Puerto Rico, the investment incentives granted under Puerto Rican law are only temporary. Typically, the Puerto Rican government grants the tax exemptions and other benefits for 15 to 20 years. After these benefits expire, many companies leave the island, leaving behind toxic waste sites, empty plants and unemployed Puerto Rican workers. "The only thing the companies do contribute are the wages," says Grey LeRoy of the MCLR. "But if they leave behind a toxic dumpsite and a bunch of dislocated workers when they close, then their balance sheet looks different." Puerto Rico is "littered with empty plants." LeRoy says. The General Council of Workers (CGT), a federation of three major Puerto Rican unions, supports OCAW's lawsuit. "We believe that these corporations that come to the island with many tax privileges cause losses both in Puerto Rico and in the United States," says Luis Suarez, secretary general of the CGT. "The companies come and they go and they change their names to come again to get their privileges for another 20 years," Suarez states. "The corporations are capital-intensive so they don't create many jobs. We have the pharmaceutical industry and it pollutes the island.... Whenever there is the possibility of making more money in another place, they move, so there is no stability." Suarez also objects to the fact that the Puerto Rican government guarantees investing companies that workers will not unionize. The reach of 936 The problem of corporations abandoning U.S. plants for Puerto Rico is broad and severe enough that the AFL-CIO has made amending IRS Code 936 one of its legislative priorities for 1991. Calling 936 a "backdoor gimmick," the AFL-CIO Executive Council said in a February statement that Code 936 "has become an incentive for corporations to shut down production lines or whole factories on the U.S. mainland and relocate jobs to the territories and the Commonwealth of Puerto Rico." American Home Product's production shift to Puerto Rico and the resulting loss of U.S. jobs in Elkhart represent only "the tip of the iceberg," says OCAW's Leonard. Pharmaceutical companies employ a variety of techniques to conceal and obscure any direct correlation between a plant closure in the U.S. and an opening in Puerto Rico, Leonard says. OCAW has commissioned a study to determine which companies have illegally shifted production practices and how many American workers have been displaced. OCAW has already compiled information on the transfer of jobs by Bristol-Meyers Squibb, Warner Lambert, Sterling Drug, Anaquest, Johnson & Johnson and Merck. Thomas Dooley, the coordinator of OCAW's Drug and Cosmetic Industry Council, says the union has been aware of a "steady migration" of the pharmaceutical industry to Puerto Rico for 15 years. Several thousand pharmaceutical workers have lost their jobs as a result of this trend, he estimates. Dooley says that the OCAW's suit against AHP "may not be the last of its kind ... [since] American Home Products' actions are not isolated but are part of a much wider pattern of abuse." AHP vs. Workers OVER THE PAST DECADE, American Home Products has steadily de- unionized its overall workforce by selling off and closing unionized facilities, or de-certifying unions at existing facilities. In 1975, 12,000 AHP workers were represented by 14 unions. By 1990, the number had declined to 4,800 union workers and seven unions. AHP's anti-union activities have been in evidence as it tries to close down its Elkhart, Indiana Whitehall Division plant. In December 1990, officials of the National Labor Relations Board (NLRB) concluded that AHP had attempted to intimidate union leaders at the Whitehall plant from demanding negotiations to bargain over the plant's closure. Based on this incident, the NLRB is currently pursuing a case against the company for seven alleged unfair labor practices. NLRB regional director William Little charged AHP, and particularly assistant vice president Alfred Jablonski, with blacklisting union leaders and other employees, threatening "an early shutdown of operations" if employees didn't end demands for a bargaining session, accelerating layoffs unless the union stopped demanding negotiating sessions on the plant's closure and making "other unspecified threats." A hearing before a NLRB administrative judge is set for March 1991. OCAW anticipates bringing additional unfair labor practice charges against the company. ------------------------------------------------------------------------------ [] MULTINATIONAL MONITOR VOLUME 12, NUMBER 4, APRIL 1991 LABOR AN UNCERTAIN FUTURE FOR LABOR IN HONG KONG By Derek Hall Derek Hall researches and writes on labor issues in Asia for the Hong Kong-based Asia Monitor Resource Center, a non-profit research and labor education organization. HONG KONG--HONG KONG's LABOR movement entered a new phase with the official inauguration of the independent, non-aligned Hong Kong Confederation of Trade Unions (HKCTU) in August 1990. The creation of the HKCTU reflects the growing influence of independent unions in the British colony and may signal the emergence of a democratic union movement able to play a significant role in Hong Kong's economy. The unionization rate in Hong Kong is rising rapidly. It currently stands at just over 15 percent, up from 6 percent in 1982. Although there are no closed shops and legal protections for unions are limited, Hong Kong does allow trade unions to register with the government without excessive obstacles. In 1990, 19 new unions registered, bringing the colony's total to 481 unions with a combined membership of 416,000. Unionization rates are much lower in multinational companies operating in Hong Kong than in locally owned and operated businesses, according to local union leaders. Exceptions include Coca-Cola and Britain's Cable and Wireless. Japanese and U.S. electronics and light manufacturing companies tend not to be unionized, though one Japanese multinational, Seiko Electronics, does have a union. Significant obstacles have inhibited unionization in Hong Kong. Many Hong Kong families have clear, negative memories and first- hand experience of the Chinese Revolution, and, partially in reaction, have internalized the individualistic work ethic of the colony. Additionally, Hong Kong's poor welfare provisions mean that risking one's job in union activities threatens the survival of the worker and his or her family. Although Hong Kong's recent prosperity has resulted in improvements in workers' living conditions, making the need for unions seem less compelling, an increasingly liberal political climate and growing income disparities have contributed to Hong Kong unions' growth. Political upheavals--such as anti- government riots initiated by pro-Beijing forces that included unions, during China's Cultural Revolution in the 1960s-- resulted in strict controls over political activity, including trade union activism and demonstrations. But political restrictions gradually loosened, fostered in part by stable economic growth. Given the political space to organize and spurred by a growing polarization of wealth, workers are beginning to look to unions to defend their economic interests. The hand-over Dominating the agenda of unions and all other political actors in the colony is the impending hand-over of Hong Kong from the United Kingdom to the People's Republic of China (PRC). On June 30, 1997, Hong Kong will become a semi-autonomous region (SAR) of the PRC. While many of Hong Kong's wealthier citizens, business owners and professionals in particular, are emigrating or arranging to do so later, most working people have no such option. They have little choice but to wait and see how Hong Kong will be administered as a semi-autonomous region. Under a 1984 agreement reached between the British and Chinese governments, Hong Kong is "guaranteed" its present capitalist economy and "way of life" for at least 50 years after the transition, and will be administered by its own SAR government with only matters of foreign affairs and national security being decided in Beijing. But many Hong Kong citizens, including trade unionists, are not comforted by these assurances. Legislative Councillor Szeto Wah, former president and now vice president of the Professional Teachers' Union, says China will be able to interfere with and manipulate Hong Kong legislation since it will hold the power to interpret Hong Kong's post-1997 "Basic Law." Szeto Wah believes that "It will not be a political system which safeguards human rights or trade union rights." As June 1997 draws closer, the Chinese government has done little to make Hong Kong workers feel secure about their future. The June 1989 massacre that crushed China's democracy movement as well as hundreds of smaller events and statements from Beijing have only served to heighten feelings of anxiety and mistrust. As recently as February 1991, aging leader Deng Xiaoping announced that certain organizations in Hong Kong that advocate democracy would become illegal. One civil service unionist, requesting anonymity, says, "[On paper], China's constitution and laws allow for the formation of trade unions, which simply have to register [with the government]. But look what happened to the leaders of the [Chinese workers'] independent federations. How can we trust a government which shoots or imprisons workers even when they are acting within the laws and constitution? It's not a good sign. We don't know what they might do, which is why Hong Kong people feel insecure. We just don't know." Union leaders fear that the severity of China's crackdown on Workers' Autonomous Federations may signal that independent unions will not be allowed to survive in a post-1997 Hong Kong. Split allegiances Unions are trying to use the period preceding the hand-over to enlarge their bases and establish fundamental ground rules and union rights. Three factions of the labor movement are competing to attract workers. The Hong Kong Federation of Trade Unions (FTU), the colony's largest, is a pro-Beijing alliance, claiming an official membership of about 174,000 workers from 81 affiliated unions. Most of its members are blue-collar workers, concentrated in shipyards, textile mills, transport, public utilities, printing and construction. The FTU appeals to Chinese nationalists and anti-colonialists. The second major grouping is the more than 100,000-strong, independent HKCTU, whose 26 member unions predominantly represent workers in the public service sector, such as teachers and social workers, and in service industries such as hotels, catering and transport. A third and much smaller group is the pro-Taiwan Council of Labour Unions (CLU), whose roughly 18,000 members are predominantly blue- collar workers in catering and building. CLU members tend to be from families which supported the Kuomingtang during the Chinese revolutionary and post-revolutionary periods. While the HKCTU is growing in size and strength, both the FTU and the CLU are experiencing a drop in numbers as more workers appear to want to avoid groups aligned with either the Chinese or Taiwanese governments. With the gradual withering of the pro-Taiwan CLU, effectively there remain two rival federations in Hong Kong. Their rivalry resembles that which existed between the Chinese government and the Communist Party-dominated All China Federation of Trade Unions on the one hand and the Workers' Autonomous Federation on the other in China's 1989 democracy movement. The two federations are competing to win the allegiance of non- affiliated unions, which had a total membership of nearly 150,000 at the end of 1989, as well as international recognition from overseas federations and international labor organizations. The HKCTU seems to be having more success in courting non- affiliated unions. The federations offer substantially different options to workers. The FTU's policies echo those of the PRC government,and the federation is widely held to receive financial and logistical support from Beijing. And, while no part of the Hong Kong labor movement is militant by international standards, the FTU is particularly docile. In 1989, during a period of concern over the high rate of fatal accidents in the construction industry, for example, Poon To-chuen, chairman of the Construction Industry Employees General Union, an FTU affiliate, said he would not name companies with bad health and safety records because "it would embarrass the companies." He continued, "I really don't want to tell you which are the worst companies; they wouldn't like that." When asked what his union was doing, he replied, "We have an annual picnic to encourage safety and we give an annual award of Maple Leaf gold coins to the best three workers in the safety field." By comparison, the HKCTU is aggressive. It places great importance on establishing fundamental union rights and conditions in Hong Kong and is willing to mount protests on labor issues as well as broader social questions. HKCTU chair Lau Chin-shek, speaking at the federation's inauguration ceremony, said, "As an alliance formed by independent unions, the HKCTU's primary task is to assist workers in organizing unions. We firmly believe that in a capitalist society, workers must exercise their collective strength and bargaining in order to achieve better rewards, fairer distribution of wealth and more democratic labor relations." Union action The government follows a principle it describes as "positive non-intervention" which, loosely defined, means actively avoiding interference in private corporate matters and adopting a low profile in labor disputes. Thus, there is little direct government interference in union activities, but little government enforcement of laws to protect unionists either. Unions also complain that there are numerous shortcomings in legal protections for workers. Among the most serious grievances are those relating to the lack of any central retirement fund; poor legal protection for unfair dismissals, part-time workers and subcontracted workers; and inadequate, outdated health and safety legislation. Strikes and other forms of union action are not common in Hong Kong, as the government is keen to boast when luring investors. In 1989, there were only seven "work stoppages," according to government reports, with Labor Department conciliation resolving 130 trade union disputes. Strikes are as frequently aimed at the government as they are at corporations, especially since the HKCTU-affiliated civil- service unions have taken more actions than private-sector unions. Until recently, most grievances expressed by large civil-service unions related to wages and conditions of service. In 1990, for example, firefighters belonging to the Fire Service Employees General Union threatened industrial action after negotiations, which began in 1983, failed to reduce working hours from a 60- to a 48-hour week. The government refused to make concessions, however, until a three-day hunger strike won an agreement to progressively reduce working hours, with an initial reduction to 54. In 1990, some labor protests took on greater political overtones after the government threatened to invoke the Letters Patent, an old colonial statute which confers enormous power on the governor, and dismiss employees in response to proposed strikes by four postal unions. The threatened use of the Letters Patent sparked international as well as local outrage. The 750,000-member British National and Local Government Officers' Association (NALGO) described the antiquated law as "violating civil liberties." The chairman of the Union of Hong Kong Postal Employees said in October 1990 that the union was "offended and angry that the Government would resort to such authoritarian and uncivilized action against the union." Importing labor, exporting capital Along with the sometimes overbearing weight of issues related to the 1997 transfer of sovereignty, Hong Kong unions have plenty of immediate problems to deal with. Efforts by businesses to bring workers into the colony and to ship capital out pose a dual threat to the Hong Kong labor force. Over the past two years, employers have complained of a lack of labor in some sectors and the government has subsequently permitted the importation of 3,000 technical workers in 1989 and 2,700 skilled and 12,000 semi-skilled workers in 1990. Unionists, who contest both the labor-shortage claims of employers and the rationale for importing labor adopted by the government, began holding protests outside the legislative chamber and petitioning the government in July 1990. Trade unions argue that the labor importation moves are motivated by companies' desire to push wages down. The colony has no minimum-wage law, and workers object to business efforts to undercut the wage levels they have attained as a by-product of Hong Kong's prosperity. Unionists say that the importation of workers has contributed to increases in Hong Kong's unemployment rate, under-employment rate and inflation rate and a fall in the rate of real wage increases. To protect the viability of Hong Kong's economy, a HKCTU statement argues, "It is necessary to extend the shift from low-skilled to technologically advanced production in order to compete effectively with neighboring Asian countries which manufacture light consumer products requiring unskilled labor-intensive processes." The effect of the imported labor is felt at a time when Hong Kong's economy is growing weaker. Hong Kong unionists are particularly concerned by a continuing fall in business associated with the June 1989 massacre in Beijing (tourism, a multi-billion dollar business, is Hong Kong's third largest sector after textiles and electronics), and the general global recession, which is significantly affecting the colony's economy because of its high dependence on international trade and finance. Economists predict that Hong Kong's unemployment rate, which has historically hovered between 1 and 3 percent, will rise 1 or 2 percentage points in 1991. The vulnerability of Hong Kong's economy is further aggravated by a drift of capital out of the colony. The primary cause of this capital flight is the uncertain political climate of post-1997 Hong Kong. By abandoning Hong Kong in spirit, two corporate giants, Jardine Matheson Holdins, Ltd. and the Hongkong Bank (along with scores of smaller companies), reveal grave doubts about Hong Kong's economic survival under mainland rule. The former, in Hong Kong since 1841, has applied for a primary listing on the London stock exchange, after changing its place of incorporation to Bermuda in 1984. The Hongkong bank has become a subsidiary of a British-based holding company. Additionally, many manufacturers say that improving economic conditions in Hong Kong have caught up with them and that they must find cheaper labor, often just across the border in China. Some factories have also moved to China to avoid new health and safety and environmental laws in Hong Kong. Plant closings have been particularly prevalent in the textile industry. In 1989, for example, a major weaving and dyeing factory moved its operations over the border to Guangszhou in southern China after Hong Kong pollution laws were strengthened and government fines imposed. A survey carried out by the Clothing Workers' General Union in March and April 1990 showed that "over 50 percent of respondents were underemployed because production had been relocated to China." Fearing complete job loss, the workers expressed demands for amendments to laws governing severance pay. Complex challenges The next several years will be an important testing ground for the development of democratic unionism in a society that is less than democratic. It will also be a challenge to non-aligned unions to show vision and political maturity in confronting a myriad of complex challenges. ------------------------------------------------------------------------------ [] MULTINATIONAL MONITOR VOLUME 12, NUMBER 4, APRIL 1991 CORPORATE PROFILE USX: A HEART OF STEEL By Holley Knaus & Nadav Savio THE UNITED STATES STEEL CORPORATION faded into history in the summer of 1986, leaving former employees and their families with little but bitter resentment and memories of past prosperity. That year, U.S. Steel executives changed the company's name to USX, displaying their indifference to the steel industry and the steelworkers who had built the empire which paid for the company's lucrative move into oil and gas. While the steel industry remained strong, the company and its workers thrived. But when competition and plant obsolescence forced an industry- wide collapse, it was the steelworkers who shouldered the burden, while U.S. Steel fled to the more profitable oil business, abandoning the communities that had made it rich for almost a century. The United States Steel Corporation was formed by J.P. Morgan in 1901 as a steel trust to protect the investments of Wall Street financiers who were concerned that price competition in the steel industry was reducing profits. Morgan bought Carnegie steel for $480 million, combined it with other firms and created the world's first $1 billion company, controlling 65 percent of the U.S. Steel industry. From its earliest days, U.S. Steel showed little concern for its workers. Steel industry wages were notoriously low, and at least half of U.S. Steel's employees worked a 12-hour day, six days a week. The company ousted the Amalgamated Association of Iron, Steel & Tin Workers from its plants in 1909 and U.S. Steel workers went unrepresented until the formation of the United Steelworkers of America (USWA) in 1942. The years after World War II brought prosperity to the U.S. steel industry, which faced almost no foreign competition. In the 1950s, U.S. Steel produced 25 million tons of steel a year, with back orders totalling over 6 million tons. Towns grew up around the mills along rivers in Western Pennsylvania and the Midwest, with the plants supporting four or five generations of steelworkers, as well as the small businesses that sprang up to service them. At its peak, U.S. Steel employed 201,000 workers. However, even in these prosperous times, U.S. Steel gave little back to its workers and their communities. Wages, which had jumped during World War II, plunged an average of $52 per month after the war, and the company refused demands for increases until the government lifted price controls on steel. The latter- day steel industry tradition of high wages was established only through a series of strikes during the 1940s and 1950s. Strikes were particularly painful for the families of steelworkers in the early days of the USWA, since the union was not yet paying out regular strike benefits to its members. The company did nothing to protect the environment in which its workers lived. In fact, U.S. Steel was a strong leader in pushing for special exemptions for the steel industry under the original Clean Air Act of 1970. Since then, the powerful steel lobby has been successful in pushing back deadlines for steel companies to have coke ovens, which spew out a variety of carcinogens, meet government-mandated standards. Chairman Edgar Speer, who headed U.S. Steel from 1973 to 1976, constantly battled the Environmental Protection Agency (EPA), repeatedly threatening to close plants or lay off workers if the company was required to meet environmental regulations. In a 1979 letter to the New York Times, Joseph Odorcich, then vice president of the USWA, condemned the corporation for engaging in "environmental blackmail" and enlisting workers' support "by frightening them about the possible closure of plants." But Speer's threats were not empty. In 1974, the EPA imposed a $2,300 a day fine on U.S. Steel for failing to comply with a 1965 agreement to gradually close down 53 open hearth furnaces and replace them with "bop-shops," a cleaner steelmaking method involving a basic oxygen process. The company had closed 43 of the furnaces and was required to phase out the remaining 10 by 1973. Rather than pay the fine or replace the furnaces, U.S. Steel closed down operations in the hearths completely, throwing 500 employees out of work. Walking away from steel By the time David Roderick became chairman of U.S. Steel in 1979, the company's strength had withered. U.S. Steel's share of the U.S. market had fallen to 23 percent and that year the company reported losses of $363 million. By 1983, the corporation was losing $154 per ton of steel shipped, $60 more than the industry average. In 1982 and 1983, U.S. Steel lost a total of $1.52 billion. The U.S. steel industry as a whole had grown "big and fat and stupid," in the words of a USWA spokesperson, having failed to anticipate or prepare for an onslaught of foreign competition. State-subsidized companies with modern plants in Japan, South Korea and Latin America were making better quality steel more cheaply. To protect the domestic industry, in 1978 the Treasury Department introduced a "trigger-price controls" system which imposed higher import duties on quantities of imported steel which fell below certain price levels. The system failed to stem the tide of imports. In 1984, the Reagan administration negotiated "voluntary" restraint agreements with 29 countries limiting imports of finished steel to the United States. By 1984, imports had captured 26.4 percent of the U.S. market. U.S. Steel in particular suffered from poor management, bloated employment ranks and antiquated steel mills. The company employed a huge executive and managerial bureaucracy that bred inefficiency. Plants were "vastly overmanned" as well, according to former New York Times labor reporter William Serrin. No major investment in modernization had been made in any of the plants since the 1940s. U.S. Steel had never been a "paragon of creative thinking and reinvestment and new kinds of processes and new technologies and R & D," says Serrin. "So suddenly everything hit the fan, and no one knew what to do about it." The company's devastating experience in the early 1980s made it clear that it was going to have to make some changes. What should be done to revive the ailing steelmaker was a point of great dispute. The steelworkers and the union were willing to experiment with several new measures designed to keep plants running. Union members were willing to accept wage and benefit concessions if the company invested to upgrade technology in mills. When it became apparent that U.S. Steel was going to close plants, communities proposed innovative strategies, including plans for employee ownership, to keep them operating at some level in order to salvage steel jobs. Wall Street analysts advised steel companies to take a different path, however, one that emphasized profits over all other considerations. Prudential-Bache researcher David Fleischer says, "The proper strategy for running a steel mill in this country was to invest nothing in it, to strip as much cash out of it as you could and just walk away from the goddamn thing." That this advice failed to take into account the thousands of steel industry employees who would lose their livelihoods did not deter U.S. Steel from following it to the letter. The corporation made its first move into its new industry of choice when it bought Marathon Oil for $6.4 billion in March 1982. This huge purchase, which infuriated steelworkers, was justified by company officials who argued that profits from Marathon would keep U.S. Steel solvent during the downturn in steel. However, soon after U.S. Steel concluded the Marathon deal, oil prices dropped precipitously, and, by 1983, the company had been forced to sell off $1 billion in assets, including coal mines and its corporate headquarters. The purchase of Marathon was a watershed event for U.S. Steel. It signalled complete corporate indifference to steel and the steelworkers who made money for U.S. Steel for 80 years. Roderick said in a 1982 interview, "Our primary objective is not to make steel but to make steel profitably." Those affected by the decision that stemmed from this principle understandably criticize it. Judy Ruszkowski of the Pittsburgh Tri-State Conference on Steel, a non-profit advocacy group that is working to reopen steel facilities with employee ownership, argues that concern with profits does not negate "a corporate responsibility to deal with the resources, basically the human resources, that enabled the company to reach a position where it could diversify." The concessions treadmill Setting the standard for its behavior for the rest of the decade, U.S. Steel demanded worker concessions even as it paid more than $6 billion for Marathon Oil in 1982. Since then, the company has incessantly threatened to close plants unless workers grant concessions, and then demanded further concessions, all the while refusing to invest in its aging facilities. During July 1982 negotiations, only a few months after the company had announced its purchase of Marathon Oil, U.S. Steel insisted that workers make concessions on wage and cost-of- living increases over the coming years to offset the losses the company had experienced and expected in the near future. Negotiations lasted for nearly a year, breaking down in November 1982, before the company finally accepted a concessionary proposal by union negotiators on February 28, 1983. While workers were willing to accept some wage lowering, it was U.S. Steel's lack of commitment to steel that made concessions so hard for workers to swallow. In fact, a union-conducted poll showed that workers would have accepted the company's November 1982 proposal with the sole addition of a company commitment to using the money saved to re-invest in domestic steel plants. The workers' mistrust, based on the company's past conduct, was soon borne out. In 1982, U.S. Steel agreed to invest in modernizing furnaces and building a mill to manufacture train rails at its Chicago-based South Works if it received union concessions and government tax breaks. The modernized facilities would produce one million tons of raw steel each year, much of which would be processed into rails at the new mill. By 1983, the company's conditions were met. The union ratified an agreement that called for fewer crew members than conventional rail mills and the Illinois legislature exempted the company from specific sales taxes on its products. But U.S. Steel wanted more. That same year, the company insisted that it be released from fines and requirements to clean up Lake Michigan that would cost a total of $33 million. The company had secretly negotiated with state officials as early as 1982 to be released from the fine, which was imposed by a 1977 court decree in response to the plant's inadequate water pollution control equipment and the subsequent fouling of Lake Michigan. Again the corporation's wishes were fulfilled, as the union convinced the legislature that shouldering the cleanup cost was the only way to save the 1,156 jobs that would be lost if the company did not invest in South Works and turn it into a profitable operation. But U.S. Steel was still not satisfied. Late in 1983, the company demanded further worker concessions, including $1.40 per hour in wage and benefit cuts. Company executives said they needed the money to go forward with the promised modernizations. They threatened to close the entire mill if their demands were not met. "Without the rail mill, South Works will cease to exist," said Vice Chairman Thomas Graham, who joined U.S. Steel in 1983 from J&L Steel with a reputation for imposing workforce reductions. The union refused to accept this second wave of concessions without a guarantee of the company's commitment to build the rail mill. On December 27, 1983, Roderick announced that U.S. Steel would close most of the steelmaking facilities at South Works. Citing inflated labor costs, Roderick insisted that "organized labor must recognize and adjust to this competitive reality to protect our other markets from a similar fate." Roderick's statement, in which he announced several other closings, resulting in a total of 15,430 workers laid off, implied that the sole responsibility for making the plants competitive lay with workers. But the company's demands had become impossible for the steelworkers to meet, and the steelworkers had come to believe the company never intended to build the rail mill. The union sued U.S. Steel for breaking its commitment but eventually dropped the suit as part of its 1987 contract concessions. They cycle of concessionary demands and broken promises was repeated in the next round of contract negotiations. U.S. Steel (now called USX) demanded $3.50 an hour wage concessions and sought to protect its right to hire non-union, low-cost subcontractors. The union refused the wage concessions and attempted to negotiate the same sort of limits on contracting out that it had reached with several of USX's competitors, but the company held firm. On July 31, 1986, after a month and a half of bargaining, the union offered to work under the 1983-86 contract. USX rejected the offer and locked out its workers, beginning what was to be the longest work stoppage in company history. Six months later, in January 1987, the two sides finally reached an agreement. The new contract contained yet another set of union concessions, again designed to save union jobs. The hope that employment levels might be stabilized was quickly dashed when David Roderick announced, three days after the contract was signed, that 3,700 additional workers would be laid off. Roderick displayed little sympathy for the company's former employees. "Now the economic hammer has dropped," he declared. "And it's unfortunate, but that's the way it is." Overall, the company slashed the number of USWA members it employed from 108,000 in 1978 to 28,300 in 1987. The white collar workforce also declined, from more than 20,000 in 1980 to less than 8,000 in 1987. These statistics do not begin to convey the degree of despair and suffering that the closings brought to mill towns. In his book on the decline of the U.S. steel industry, And the Wolf Finally Came, labor reporter John Hoerr describes the effect the closings had on the Monongahela Valley, an area southeast of Pittsburgh where many U.S. Steel mills were located: "A vibrant forty-six-mile stretch of river valley, providing primary jobs for over thirty-five thousand steel employees, and subsidiary jobs for nearly three times as many people, would be devastated and expunged from economic memory in less than five years....The degree of suffering caused by lost jobs, mortgage foreclosures, suicides, broken marriages, and alcoholism was beyond calculation." Worker and union attempts to save some of these communities were ignored by the company. In 1980, for example, a group of workers in Youngstown, Ohio formed the Community Steel Corporation which attempted to use federal loans to buy the shuttered McDonald steel mill whose closing resulted in the loss of 3,500 jobs. U.S. Steel refused to deal with the group. Contempt for workers, contempt for the environment The USX plants that stayed opened continued to pollute the environment and endanger workers. In the last decade, the company has racked up enormous fines and penalties for environmental and occupational safety and health abuses. Safety standards at USX reached abysmally low levels, as the company cut back on programs to protect workers. In 1989, the Occupational Safety and Health Administration (OSHA) fined the company a record $7.3 million for wilful health and safety violations at two Pennsylvania plants. In issuing the penalty, Labor Secretary Elizabeth Dole commented, "the magnitude of these penalties and citations is matched only by the magnitude of the hazards to workers which resulted from corporate indifference to worker safety and health, including severe cutbacks in the maintenance and repair programs needed to remove those hazards." The company has also maintained its ruinous environmental record. In 1985, U.S. Steel was required to pay the city of Cincinnati $77,000 in damages for a benzene spill from the company's Clairton, Pennsylvania plant. Benzene, which can cause cancer, had leaked into the Monongahela River and flowed down the Ohio River, eventually reaching Cincinnati. More recently, in a July 1990 consent decree filed in U.S. District Court in Hammond, Indiana, USX agreed to a $34.1 million cleanup program for its Gary, Indiana steel mill and the adjacent Grand Calumet River. The EPA had charged that the plant illegally bypassed wastewater treatment systems and directed its discharge into the river and Lake Michigan, failed to submit reports on discharges and spills and violated pretreatment standards. USX has continued to lobby Congress to grant the steel industry special consideration under the Clean Air Act, according to Deborah Sheiman of the Natural Resources Defense Council. Under the air toxics section of the 1990 reauthorization of the Act, steel companies were given another 30 years to meet maximum achievable technological control (MATC) standards for coke ovens. The story continues Since David Roderick stepped down in 1989, the ruthless management of USX's steel assets has continued under its new chairman and chief executive officer, Charles Corry. Corry has moved the company further away from steel, dividing its stock, and therefore assets and debts, into separate steel and energy categories. Though it remains the largest U.S. steel producer, USX is widely expected to soon leave the industry altogether. The USWA has been reduced to attempting to secure the futures of the company's current steelworkers. A USWA spokesperson says the union was pleased that its 1991 contract offers "protections for members in just about any eventuality," including guarantees of employee pensions in the event that USX sells its steel subsidiary. A way of life has passed for workers and their communities, but not for the executives of the company once known as "Big Steel." They still run a mighty corporation, searching for profits without regard to the social or environmental effects of their operations. NAMES IN THE NEWS (omitted here; unscannable) ------------------------------------------------------------------------------ [] MULTINATIONAL MONITOR VOLUME 12, NUMBER 4, APRIL 1991 BOOK REVIEW WORKING WOMEN & TRANSNATIONAL TRANSGRESSIONS Women Workers and Global Restructuring Edited by Kathryn Ward Cornell University ILR Press, 1990. 258 pp., $14.95 Reviewed by Holley Knaus WOMEN WORKERS AND GLOBAL RESTRUCTURING, a collection of sociological and economic essays, explores the effect that laboring for multinational corporations has on the lives of women workers in developed countries and in the Third World. The authors examine the role of paid work in women's lives, the ways in which it enhances or marginalizes their socio-economic position within the household, and the methods used by women to gain a measure of control over their lives at home and in the workplace as they move from under the authority of fathers and families into industrial plants that have male managers and limited advancement opportunities for female laborers. Ultimately, the book challenges arguments that multinational corporate-led development increases economic opportunities for women and frees them from patriarchal constraints of the household and local community. While multinationals do sometimes create new work opportunities for women, these jobs do not provide women with the means for long-term empowerment. Multinationals are attracted to countries with low operating costs, where the bargaining power and earning potential of laborers is restricted. In order to minimize wages and the threat of unionization, many of these corporations bring costs down further by subcontracting work to informal factories or home-based laborers. It is usually women who labor in unregulated factories or at home-based production. The essays argue that informal labor does not enhance the position of women economically or socially. Women are paid up to 50 percent less than male counterparts and are usually expected to remit their wages to their husbands or families. Corporations justify paying women below-subsistence wages by claiming that they are only secondary wage earners, adding to the primary income earned by the men of the household . That rationalization is buttressed, the essays show, by many women all over the world who define themselves as secondary wage earners, even if their husbands or fathers are unemployed and theirs is the sole family income. In an essay on the garment industry in Greece, Joanna Hadjicostandi disputes claims about the empowering potential of home-based production work. She finds that the picture of a home-based laborer with the autonomy to acquire resources and maintain control over her profits while staying at home and caring for her children is a rarely realized ideal. Home-based laborers usually have to bear much of the infrastructure costs for their work, including machines and electricity. The work isolates them from other workers and demands a tremendous amount of their time. Many women reported having to work 10 to 14 hours a day in order to make a living from their labor. The inflexibility of the traditional family structure also limits women's ability to achieve a measure of autonomy. Home- based work is often considered by the husband to be just an extension of other home duties, so the additional responsibilities taken on by the woman do not change the household division of labor. For the most part, women do not control their earnings, and their wages are again considered supplemental to those of their husbands. Women workers in many of the countries studied are also constrained from realizing economic and social independence by the state. Larry S. Carney and Charlotte O'Kelley report that opportunities for women in Japan are restricted by forced early retirement, limited education and training and a legal system that does not enforce (newly enacted) laws against discrimination. Jean Pyle shows that the Irish government, responding to constitutional mandates that ensure women's primary roles as wives and mothers, seeks to attract multinational corporations to Ireland that agree to hire a predominately male work force. While none of the women studied were involved in unions or any other formal organizations to improve their socio-economic position, they did engage in various, more subtle means of resistance to their employers. Resistance among women workers in California's Silicon Valley offers a striking example. Karen Hossfeld found that the division of labor within California's microelectronic-based industry is dramatically skewed according to gender and race: the lower the skill and pay of the job, the higher the percentage of Third World women employed. Management justifies this segregation by resorting to "traditional popular stereotypes about the presumed lack of status and limited abilities of women, minorities, and immigrants." Women workers, however, use these stereotypes to their own advantage: playing off male managers' misconceptions about "female troubles," workers take several "hormone breaks" a day; when members of the same language group were forbidden to sit together in order to keep them from talking and presumably to speed up work, Chinese women laborers told the supervisor that if they were not "chaperoned" by other Chinese women, their families would not permit them to work; for a short period of time, one woman was able to avoid working with chemicals that made her sick by claiming that they would ruin a manicure for her sister's wedding; many women admit to feigning a language barrier in order to avoid taking instructions. Hossfeld argues, however, that these tactics are double-edged. In "using the prejudices of the powerful to the advantage of the weak," they "play up feminine frailty [to] achieve short-term individual goals at the risk of reinforcing damaging stereotypes about women, including the stereotype that women workers are not as productive as men." Most of these women are too concerned with their daily struggle to make ends meet and to care for their families to worry about the long term implications of their resistance strategy: "For women and minority workers, the need for short-term gains and benefits and for long-term equal treatment is a constant contradiction," Hossfeld concludes. Women Workers and Global Restructuring is both a useful introductory overview of different ways women are brought into the industrial sector and a substantive addition to a growing body of research and analysis on the effect of the global economy on the lives of women laboring to serve multinational corporate interests. ------------------------------------------------------------------------------ [] MULTINATIONAL MONITOR VOLUME 12, NUMBER 4, APRIL 1991 RESOURCES Organizations National Safe Workplace Institute 122 S. Michigan Ave., Suite 1450 Chicago, IL 60603 AFL-CIO 815 16th St., NW Washington, D.C. 20006 United Electrical, Radio and Machine Workers of America P.O. Box 545 Parkersburg, WV 26102 Oil, Chemical and Atomic Workers International Union P.O. Box 2812 Denver,CO 80201 United Automobile Workers of America 8000 E. Jefferson Ave. Detroit, MI 48214 United Steelworkers of America Five Gateway Center Pittsburgh,PA 15222 Association of Flight Attendants 1625 Massachussettes Ave., NW Washington, DC 20036 United Paperworkers International Union 3340 Perimeter Hill Dr. P.O. Box 1475 Nashville, TN 37202 Asia Monitor Resource Center 444 Nathan Rd. 8-B Kowloon Hong Kong Hong Kong Trade Union Education Center 57 Peking Road, 3rd Floor Kowloon Hong Kong Midwest Center for Labor Research 3411 West Diversy, Room 10 Chicago, IL 60647 Government Accountability Project 25 E St., NW, Suite 700 Washington, DC 20001 Books, Reports & Periodicals Labor Notes P.O. Box 20001 Detroit, MI 48220 LRA's Economic Notes Labor Research Association 80 East 11th St. New York, NY 10003 An Injury to All: The American Unionism By Kim Moody New York: Verso, 1988 Decline of The Global Factory: Analysis and Action for a New Economic Era By Rachel Kamel Philadelphia: American Friends Service Committee, 1990 Grounded: Frank Lorenzo and the Destruction of Eastern Airlines By Aaron Bernstein New York: Simon and Schuster,1990 On Strike At Hormel: The Struggle For A Democratic Labor Movement By Hardy Green Philadelphia: Temple University Press, 1990 Labor and Monopoly Capital: The Degradation of Work in the Twentieth Century By Harry Braverman New York: Monthly Review Press,1974 Plant Closures: Myths, Realities and Responses By Gilda Haas Boston: South End Press, 1985 Worker Empowerment in A Changing Economy: Jobs, Military Production and the Environment By Lucinda Wykle, Ward Morehouse and David Dembo New York: The Apex Press,1991 And the Wolf Finally Came: The Decline of the American Steel Industry By John Hoerr Pittsburgh: University of Pittsburgh Press,1988 The State of Working America, 1990-91 By Lawrence Mishel and David Frankel Armonk, N.Y.: M.E. Sharpe, Inc., 1991 Dangerous Premises: An Insider's View of OSHA Enforcement By Don Lofgren Ithaca: Cornell University ILR Press, 1989 Faces: The Toll of Workplace Deaths on American Families By Joseph A. Kinney Chicago: National Safe Workplace Institute Press, 1989 Inhuman Relations: Quality Circles and Anti-Unionism in American Industry By Guillermo J. Grenier Philadelphia: Temple University Press, 1988 Wage Justice: Comparable Worth and the Paradox of Technocratic Reform By Sara M. Evans and Barbara J. Nelson Chicago: University of Chicago Press,1989 .