Archive for the ‘Unions’ Category

Comcast’s Other Sins

Thursday, April 10th, 2014

comcast centerComcast’s audacious proposal to acquire Time Warner Cable and thereby become a cable behemoth has been met with an appropriate degree of skepticism.

Both Republicans and Democrats on the Senate Judiciary Committee grilled a company executive at a hearing on the $45 billion acquisition.

There are good reasons to worry about the impact the merger would have on customers in an industry that already imposes inflated prices for what is often substandard service. As consumer advocate Gene Kimmelman put it in his prepared testimony for the hearing:

The merger will even more firmly entrench Comcast as the gatekeeper at the crossroads of Internet, television, and communications innovation. Because the merged company will have both the incentive and ability to thwart development of innovative Internet services that threaten Comcast’s excessively priced offerings across a much broader swath of the market than is true today, this merger must be rejected.

The impact on consumers is not the only cause for concern. The merger would give considerably more power to a company that has a long history of using its clout to mistreat workers and fight unions. Comcast has been forced to moderate its labor practices somewhat, but there is no evidence that it has changed its fundamental stance.

It’s significant that Comcast’s worst union-busting behavior emerged after its last giant cable acquisition — the purchase of AT&T Broadband in 2001. As Jonathan Tasini, then head of American Rights at Work, put it in an op-ed in the Los Angeles Times:

Comcast promised to abide by union contracts and bargain in good faith. Instead, it embarked on a carefully orchestrated campaign to destroy the unions. In Detroit, Comcast chopped off more than half the unionized workforce, moving dozens of jobs to a nonunion facility. During organizing drives, Comcast has shelled out large sums to high-priced union-busting law firms and has harshly disciplined union supporters — firing some outright. Numerous charges have been filed against Comcast before the National Labor Relations Board.

This track record prompted the Communications Workers of America to oppose Comcast’s 2004 (ultimately unsuccessful) effort to take over Walt Disney. In a press release the CWA wrote: “Comcast has earned a designation by the AFL-CIO as one of the most aggressively anti-union companies in America, for its intimidation and threats against workers who want union representation. A Comcast vice president in Beaverton, Ore., stated publicly that Comcast is ‘at war to decertify the CWA’ and the company has followed that strategy since it bought AT&T Broadband in 2002.”

That strategy led to decertification votes in more than a dozen cities. An April 2004 article in the Philadelphia Inquirer reported that the unionized portion of Comcast’s workforce had fallen to less than five percent. The paper quoted CWA official George Kohl as saying: “We believe Comcast is out to crush unions. It has to do with control and paternalism run amok.”

Also in 2004, American Rights at Work (which later merged with Jobs with Justice) published a report entitled No Bargain: Comcast and the Future of Workers’ Rights in Telecommunications. After documenting how Comcast abused workers and fought unions, the report called on the company to change its ways.

Under pressure from CWA, Comcast apparently did change a bit. The union was able to negotiate decent contracts in places such as Pittsburgh and Detroit. Nonetheless, the union was critical of Comcast’s 2010 move to take over NBC Universal. So far, the CWA has taken a cautious public stance on the Time Warner Cable deal, saying it should be scrutinized but not explicitly opposing or endorsing it.

As an outsider, I am not familiar with the details of Comcast’s current dealings with the CWA or its other major union, the International Brotherhood of Electrical Workers. Yet the company’s history on labor relations, especially in light of what happened after the AT&T Broadband acquisition, makes me worry about how it would behave after gaining control over an even larger portion of the cable industry.

It is telling that the Comcast official who represented the company in the recent Judiciary Committee hearing, Executive Vice President David L. Cohen, is the same person who led the anti-union campaign a decade ago. ”We take pride in providing a safe, enjoyable and productive work environment,” Cohen told the New York Times in 2005, adding that workers ”do not need to be represented by a union to gain all of the advantages.” Earlier, Cohen was quoted as dismissing critics of the company as “a few disgruntled employees that the union trots out.”

Many companies use the section on employees in their 10-K filings with the SEC to proclaim that they have good relations with their workers. Comcast does not bother to even address the issue in its 10-K. I suspect that Comcast is still at heart a unionbuster and worry that after swallowing Time Warner Cable it would feel freer to let that impulse come to the fore once again.

Conservatives Discover the Wisdom of Workers

Thursday, February 20th, 2014

vw-westmorelandThe United Auto Workers defeat in the Volkswagen representation election has conservatives gloating, even though their victory came only after they abandoned many of their core principles in favor of political expediency. Elected officials who typically denounce government interference in the market used their pulpits to meddle in a private business matter. Editorialists at the Wall Street Journal, who normally sing the praises of large corporations, declared that the vote showed that “workers are smarter than management.”

Such bogus industrial populism is easy to bandy about when the workers in question were pressured into voting against their own best interests. Typically, it is management and anti-union consultants who are responsible for defeating an organizing drive. In Tennessee, the company remained neutral and the intimidation campaign was carried out by politicians and out-of-state conservative ideologues. Leading the assault was U.S. Sen. Bob Corker, who brazenly promoted the apparent lie that a vote for the union would mean that a new VW assembly line for SUVs would be sited in Mexico instead of Chattanooga.

The Journal admitted that Corker may have been “impolitic” but it defended his “right to free speech.” State politicians also did damage, raising the prospect that VW, which got a $554 million subsidy package when it opened the plant, should not expect future financial assistance if the workers dared to choose the union.

The enthusiasm for the wisdom of the rank and file on the part of the Journal stands in stark contrast to its reaction when workers at VW’s original U.S. plant in Westmoreland, Pennsylvania asserted themselves. Frustrated at the low pay rates they were receiving in comparison to their counterparts at the Big Three plants in Detroit, the unionized VW workers staged a wildcat strike in 1978. Stopping production of VW’s Rabbit, the workers rallied under the slogan “No Money, No Bunny.”

A front-page story in the Journal about the strike (10/13/1978) included the following subheadline: “Pennsylvania Walkout Stirs Doubts on Cost, Stability of American Work Force.” The article quoted a Nissan official as saying: “The Volkswagen strike is quite upsetting to us.”

It was also quite upsetting to VW. Even after the walkout ended, labor-management relations remained hostile at the plant. VW, which was also confronted with a lawsuit charging that it discriminated against black employees, shut down the operation in 1988.

It is likely that VW managers had that experience in mind when they decided not to fight the UAW. Southern U.S. conservatives, like other pro-business types, push the notion that American workers need to accept the realities of a globalized market. What those conservatives refuse to recognize is that one of those realities, at least as far as VW is concerned, is an acceptance of unions and a cooperative approach to labor relations through works councils of the kind that the company wants to adopt in Tennessee. In fact, VW, like other German companies, has a supervisory board with labor representatives.

The latest irony in this situation is that Bernd Osterloh, a labor member of VW’s supervisory board and the head of its works council in Germany, reacted to the election results in Tennessee by saying he might block any future investments by VW in the Southern United States because of the hostility to unions. That would demolish the pernicious conventional wisdom that disempowered workers are always an essential ingredient for economic growth.

Osterloh’s statement helps to bring into focus the truth about the progressive deunionization of U.S. business. Rather than being part of an alignment with the realities of globalization, it is making the United States more of an outlier compared to other wealthy nations. Like this country’s refusal to accept the kind of single payer health insurance that is the norm in the developed world, the ongoing attack on unions puts us out of step with the way a modern economy is supposed to operate and reinforces the dangerous growth of economic inequality.

Worker Freedom in Tennessee

Thursday, February 6th, 2014

vw_uaw2Major employers facing a union organizing drive, particularly in the South, have long relied on small-business owners, elected officials and other conservative voices to mount a counter-attack.

An interesting variation on this theme is taking place in Tennessee, where Volkswagen seems to be welcoming a United Auto Workers organizing effort at its plant in Chattanooga, yet local as well as national anti-union ideologues are on the warpath nonetheless. They are frantically trying to persuade VW workers to reject the union in a secret-ballot vote scheduled later this month. The company reportedly decided not to simply recognize the UAW, which has gotten a majority of the workers to sign membership cards, because of intense pressure from figures such as Tennessee Senator Bob Corker, who gained notoriety for opposing the federal rescue of the auto industry.

(Full disclosure: I am a member of the United Auto Workers via the National Writers Union/UAW Local 1981.)

VW has rejected the usual practice of foreign automakers, which despite any cooperative relationships with unions at home, have embraced American-style anti-union animus in their U.S. transplants. For many years, the UAW has sought to overcome this intransigence, as seen most recently in the ongoing effort to organize the Nissan plant in Canton, Mississippi.

VW wants to import the works council system of labor-management relations it has in Germany, but in the absence of a certified collective bargaining representative, that would amount to an illegal company-dominated union under U.S. labor law.

We thus end up with a situation in which a major corporation wanting to employ a set of practices designed to improve productivity and reduce turnover is being vilified by those who regard union avoidance as one of the grand traditions of the South.

Last month, Stephen Moore, who was recently named chief economist of the Heritage Foundation, told a business meeting in Chattanooga that the union effort at VW is “like inserting a cancer cell into a body. That one cancer cell is going to multiply and kill the body.” Anti-tax crusader Grover Norquist is helping to bankroll the opposition, apparently out of a concern that a union advance in Tennessee would impede his fiscal agenda. The National Right to Work Foundation and the Center for Worker Freedom are also involved, though their efforts fell flat when the National Labor Relations Board concluded that neither the UAW nor VW had violated labor law in any way.

Figures such as Moore and Norquist came into prominence as a result of a conservative backlash that big business set into motion three decades ago in response to advances of the labor, environmental and consumer movements. That Frankenstein monster took on a life of its own, and now rightwing groups pursue purist goals even when they conflict with corporate pragmatism — as seen, for example in the tea party push for a government shutdown over the objection of major companies.

These groups operate on the assumption that Americans are inherently conservative and that organizations such as the UAW will lead them astray. Foreign automakers such as Nissan and Toyota have gone along with this notion.

VW seems to have a different view, but for reasons that are generally not acknowledged. It tends to be forgotten that VW was the first foreign automaker to establish an assembly plant in the United States, back in 1978 in Pennsylvania.

After being welcomed by public officials with a subsidy package worth about $100 million — an astounding sum at the time — Volkswagen found that many of the people it hired were unhappy about being paid less than their counterparts at the  Big Three plants. A wildcat strike ensued, catching even the UAW off guard. Stopping production of VW’s Rabbit, the workers chanted “No Money, No Bunny.” The plant, which never recovered from the worker unrest, shut down in 1988.

As opposed to the rightwing caricature of unions as the shock troops for a socialist takeover, VW regards the UAW as a partner that can help ensure the smooth functioning of the plant. If that’s done by giving workers more control over their working life, so much the better.

After years of being at the totally at the mercy of management, Southern autoworkers finally have a chance to play a greater role in controlling their destiny. That’s real worker freedom.

The 2013 Corporate Rap Sheet

Thursday, December 19th, 2013

Monopoly_Go_Directly_To_Jail-T-linkThe ongoing corporate crime wave showed no signs of abating in 2013. Large companies continued to break the law, violate regulations and otherwise misbehave at a high rate. Whatever lip service the business world gives to corporate social responsibility tends to be overwhelmed by bad acts.

Continuing the trend of recent years, 2013 saw an escalation of the amounts that companies have to pay, especially in the United States, to get themselves out of their legal entanglements. In November JPMorgan Chase set a record with its $13 billion settlement with the U.S. Department of Justice and other state and local agencies on charges relating to the sale of toxic mortgage-backed securities. JPMorgan’s legal problems are not over. There have recently been reports that it may face criminal charges and pay $2 billion in penalties in connection with charges that it turned a blind eye to the Ponzi scheme being run by Bernard Madoff while it was serving as his primary bank.

Other banks have also been shelling out large sums to resolve disputes over the sale of toxic securities in the run-up to the financial crisis. Much of the money has gone to settlements with mortgage agencies Fannie Mae and Freddie Mac. Bank of America alone agreed to pay out $10.3 billion ($3.6 billion in cash and $6.75 billion in mortgage repurchases) to Fannie.

Here are some of the year’s other highlights (or lowlights):

FORECLOSURE ABUSES. In January, ten mortgage servicing companies–including Bank of America, Citibank and JPMorgan Chase–agreed to an $8.5 billion settlement to resolve allegations by federal regulators relating to foreclosure abuses.

LIBOR MANIPULATION. In February, U.S. and UK regulators announced that the Royal Bank of Scotland would pay a total of $612 million to resolve allegations relating to rigging of the LIBOR interest rate index. In December, the European Union fined RBS and five other banks a total of $2.3 billion in connection with LIBOR manipulation.

ILLEGAL MARKETING. In November, the Justice Department announced that Johnson & Johnson would pay more than $2.2 billion to settle criminal and civil allegations that it improperly marketed the anti-psychotic drug Risperdal for unapproved use by older adults, children and people with development disabilities.

SALE OF DEFECTIVE MEDICAL IMPLANTS. Also in November, Johnson & Johnson agreed to pay more than $2 billion to settle thousands of lawsuits charging that the company sold defective hip implants, causing many individuals to suffer severe pain and injury from metallic debris generated by the faulty devices.

INSIDER TRADING. In March, the SEC announced that an affiliate of hedge fund giant SAC Capital Advisors had agreed to pay $602 million to settle SEC charges that it participated in an insider trading scheme involving a clinical trial for an Alzheimer’s drug being jointly developed by two pharmaceutical companies. At the same time, a second SAC affiliate agreed to pay $14 million to settle another insider trading case. Later, SAC agreed to pay $1.2 billion to settle related criminal and civil insider trading charges.

PRICE-FIXING. In July, German officials fined steelmaker ThyssenKrupp the equivalent of about $115 million for its role in a price-fixing cartel. In September, the U.S. Justice Department announced that nine Japanese automotive suppliers had agreed to plead guilty to price-fixing conspiracy charges and pay more than $740 million in criminal fines, with the largest amount ($195 million) to be paid by Hitachi Automotive Systems.

MANIPULATION OF ENERGY PRICES. In July, the Federal Energy Regulatory Commission ordered Barclays and four of its traders to pay $453 million in civil penalties for manipulating electricity prices in California and other western U.S. markets during a two-year period beginning in late 2006.

BRIBERY. In May, the Justice Department announced that the French oil company Total had agreed to pay $398 million to settle charges that it violated the Foreign Corrupt Practices Act by paying bribes to officials in Iran.

VIOLATION OF DRUG SAFETY RULES. In May, DOJ announced that generic drug maker Ranbaxy USA Inc., a subsidiary of the Indian company Ranbaxy Laboratories, had pleaded guilty to felony charges relating to the manufacture and distribution of adulterated drugs and would pay $500 million in fines.

VIOLATION OF RULES ON THE SALE OF NARCOTICS. In June, the U.S. Drug Enforcement Administration announced that the giant Walgreen pharmacy chain would pay a record $80 million in civil penalties to resolve charges that it failed to properly control the sales of narcotic painkillers at some of its stores.

DEALINGS WITH ENTITIES SUBJECT TO SANCTIONS. In June, New York officials announced that Bank of Tokyo Mitsubishi-UFJ had agreed to pay $250 million to settle allegations that it violated state banking laws by engaging in transactions with entities from countries such as Iran subject to sanctions.

LABOR LAW VIOLATIONS. In November, the National Labor Relations Board found that Wal-Mart had illegally disciplined and fired workers involved in protests over the company’s labor practices. A Wal-Mart spokesperson was found to have unlawfully threatened employees who were considering taking part in the actions.

CLEAN WATER ACT VIOLATIONS. In May, the Environmental Protection Agency announced that Wal-Mart had pleaded guilty to charges that it illegally disposed of hazardous materials at its stores across the country. The company had to pay $81.6 million in civil and criminal fines.

HEALTH AND SAFETY CODE VIOLATIONS. In August, Chevron pleaded no contest and agreed to pay $2 million to settle charges that it violated state health and safety regulations in connection with a fire at its refinery in Richmond, California that sent thousands of people to hospital for treatment of respiratory problems.

DELAYS IN RECALLING UNSAFE VEHICLES. In August, Ford Motor was fined $17.4 million by the National Highway Traffic Safety Administration for taking too long to recall unsafe sport utility vehicles.

PRIVACY VIOLATIONS. In November, Google agreed to pay $17 million to 37 states and the District of Columbia to settle allegations that the company violated privacy laws by tracking online activity of individuals without their knowledge.

Note: For fuller dossiers on many of the companies listed here, see my Corporate Rap Sheets.

Challenging Wal-Mart’s Freeloading Ways

Thursday, November 21st, 2013
from Cleveland.com

from Cleveland.com

Countless words have been published about the retrograde labor practices of Wal-Mart, but none of that writing conveyed as much as the short message recently reported to have been taped to a bin in an employees-only area at one of the company’s stores in Ohio: “Please donate food items here so Associates in Need can enjoy Thanksgiving Dinner.”

My first reaction was that this was a stunt staged by the Yes Men to embarrass the giant retailer. Yet it was all too real. In fact, a corporate spokesperson saw nothing amiss, saying it showed how much the company’s employees care about each other. No doubt they do, but the problem is that Wal-Mart is so deliberately obtuse about its obligation to provide a decent living to those on its payroll.

Leaving it to hard-pressed workers to support their colleagues is just one of the ways Wal-Mart shifts its costs to others. The company puts a much bigger burden on taxpayers, who end up paying for the healthcare coverage that so many of its employees must get from public programs such as Medicaid.

In the early 2000s some states began to disclose which employers accounted for the most low-wage workers and their dependents in these programs. Wal-Mart was invariably at or near the top of these lists. (See the Good Jobs First compilation here.)

Unfortunately, fewer of these lists are being released (and the Affordable Care Act will apparently do nothing to help). Yet the few recent disclosures show Wal-Mart is still creating more of these hidden taxpayer costs than any other company. For example, in July the Dayton Daily News obtained data from the Ohio Department of Job and Family Services indicating that Wal-Mart had more employees or household members on Medicaid or food stamps than any other employer in the state. The most recent compilation of employers accounting for the largest number of recipients in Connecticut’s Husky program (its version of Medicaid) also had Wal-Mart as number one.

Another approach was taken in a recent report by the Democratic staff of the U.S. House Committee on Education and the Workforce, which estimates that the workforce of a typical Wal-Mart Supercenter costs taxpayers some $250,000 a year for Medicaid services (as part of at least $904,000 a year in overall federal safety net costs per store).

These hidden costs are not the only way Wal-Mart sticks taxpayers with the bill. The company has traditionally also been shameless in demanding special tax breaks and other forms of financial assistance when it opens a new store or distribution center. My colleagues and I at Good Jobs First have been tracking this practice since 2004, when we published a report estimating that the company had collected some $1 billion in such subsidies. We later updated the report, finding that the total had risen to $1.2 billion, and we assembled all the data in a website called Walmart Subsidy Watch.

In many of its more controversial urban siting efforts in recent years, Wal-Mart has put less emphasis on special subsidies, which we like to think is because we made the practice more radioactive. Yet the company cannot resist its giveaway demands entirely.

Recently, for example, the company sought tax breaks totaling some $5.4 million for a Supercenter and Sam’s Club it is proposing to build in the Chicago suburb of Tinley Park. Thankfully, the plan was shot down by the board of the Summit Hill School District, which took its vote after a hearing in which one resident described Wal-Mart as a “corporate monster.”

In Texas, however, Wal-Mart seems to be on track to receive a property tax abatement worth $3 million in connection with its plan to build an e-commerce distribution center near Fort Worth Alliance Airport. (For other recent awards, see the company’s entries in the Good Jobs First Subsidy Tracker database, which covers all companies; be sure to search under the official corporate name Wal-Mart as well as the brand name Walmart).

The spirit of the Summit Hill School District is reflected in the activism of rank and file workers, who with the assistance of OUR Walmart are planning to resume protests at company stores on Black Friday. Their efforts will help replace food drives with a living wage and eventually get Wal-Mart to change all its freeloading ways.

Standing Up to the Boeing Bully

Thursday, November 14th, 2013
Boeing_IAM

photo from Seattle Times

Large corporations are generally not bashful about throwing their weight around, but Boeing is in a class by itself. While other companies may at various times make demands on their workers or on the communities in which they operate, the aerospace giant is willing to exert both forms of pressure at the same time and in a big way. In recent days it has been doing exactly that in Washington State, though not everything has gone according to its plan.

Boeing let it be known that it would build its new 777X airliner and its carbon fiber wing in the Puget Sound area, its traditional manufacturing home, only if it got major concessions from the taxpayers of the state and from its unionized workers.

The first consisted of a 16-year extension of a lucrative aerospace industry corporate tax break estimated to be worth $8.7 billion to Boeing (mostly) and its suppliers. This is the largest state subsidy package in U.S. history. Gov. Jay Inslee hurriedly called a special session of the state legislature to ratify the deal. Although some legislators grumbled, they voted overwhelmingly to give Boeing what it wanted.

This was a replay of what happened a decade ago, when Boeing got Inslee’s predecessor Gary Locke to push through the original aerospace industry giveaway at a price tag of $3.2 billion.  Those lawmakers apparently thought that Boeing, having gotten what it wanted, would stay put.

Yet Boeing’s concerns did not end at tax avoidance. The company has long sought to neutralize the power of its unionized employees, who in the Puget Sound area have been a lot less willing than the state legislature to give in to all of Boeing’s demands.

In 2009 the company took the brazenly anti-union step of announcing that it would locate a new assembly line for its Dreamliner in South Carolina, where it would in all likelihood be able to use non-union labor.  In addition to a more pliant workforce, Boeing took advantage of a state and local subsidy package estimated to be worth more than $900 million. This year it was awarded another $120 million for an expansion of the facility.

Getting massive subsidies has been so easy for Boeing that in Kansas it  walked away from a $200 million deal and sold off its Wichita operations. Citizens for Tax Justice just pointed out that over the past decade Boeing has paid aggregate state corporate income taxes of less than zero (it got net rebates of $96 million).

Boeing apparently assumed that the threat of more runaway production would enable it to steamroll its Puget Sound unionized employees, the largest portion of whom are members of the Machinists union (IAM). Along with the tax deal, the company made its siting decision on the 777X contingent on the willingness of IAM members to give up some of the most important gains they have made through decades of difficult collective bargaining.

Those proposed concessions included a freezing of the contract’s traditional defined-benefit pension plan and its replacement with a defined-contribution, 401(k)-type plan as well as substantial increases in deductibles, co-pays and other employee health insurance costs. In an attempt to make those givebacks more palatable, Boeing offered a one-time $10,000 signing bonus.

Boeing seriously misjudged the mood of the rank and file. Rather than succumbing to the company’s pressure tactics, IAM members just voted overwhelmingly to reject the contract concessions. Press reports suggested that union members were most angered by the way in which the company tried to impose its will.

The next step is unclear. Boeing says that it will now hold a competition for the 777X work, and there are no doubt numerous states and localities that will make extravagant subsidy offers. Yet it turns out that shifting production to a new workforce is not as easy as the company implies. Boeing’s operations in South Carolina have reportedly not met output projections.

Boeing may very well come back to IAM members with less draconian contract terms that workers may decide to accept. But for now the vote stands as a strong rebuke to corporate imperiousness.

 

New in Corporate Rap Sheets: critical profiles of two more giants of mismanaged care—WellPoint and Humana.

GE Dumps Workers as It Dredges the Hudson

Thursday, October 17th, 2013

DUMP_YRD_SIGNFor 30 years, General Electric resisted calls to remove the toxic substances it had dumped into New York’s Hudson River over several decades. Now that the process is well under way, the company is striking back at the state by shutting its cleaned-up plant along the river and moving some 200 jobs to Florida. The workers slated to be laid off feel that they are now being dumped.

The site of the dispute is Fort Edward (about 200 miles north of New York City), where from the late 1940s to the mid-1970s GE produced electric capacitors using insulating material containing polychlorinated biphenyls (PCBs). Vast quantities of PCB-contaminated waste ended up in the river’s waters and riverbed.

By the 1970s PCBs were recognized to be a human carcinogen and their manufacture was banned in the United States.  In 1975 the New York State Department of Environmental Conservation ordered GE to cease its PCB dumping and negotiated a path-breaking settlement under which the company would help pay the cost of cleaning up the pollution that had closed the river to commercial fishing and become a national symbol of corporate irresponsibility.

As the projected cost of the clean-up escalated, GE resisted dredging the river’s sediment, which was estimated to contain more than 130 metric tons of PCBs, and instead proposed dubious alternatives such as using bacteria to try to break down the toxic wastes. The company continued this obstruction for years, even after the EPA ordered it in 2001 to pay an estimated $460 million to remove 2.65 million cubic yards of sediment. The legal battle finally ended in 2005, but it took until 2009 for GE to actually begin the dredging. The process is now in its fifth year.

The workers at the Fort Edward plant may not be around to celebrate the completion of the clean-up. A few weeks ago, GE announced that it planned to close the plant and move the operation to Clearwater, Florida. The Fort Edward workers have been represented by the United Electrical (UE) union for the past 70 years, while the Clearwater plant—as you might expect—is non-union.

The Fort Edward move is just the latest of a long series of actions by GE that have weakened the economy of upstate New York. The city of Schenectady, where Thomas Edison moved his electrical equipment operation in 1886, has alone lost tens of thousands of jobs through waves of GE downsizing.

GE also seems to feel no sense of obligation in connection with the economic development subsidies it has received from state and local government agencies in New York. The biggest giveaways have come downstate. In 1987, a year after it was acquired by GE, NBC pressured New York City to give it $98 million in tax breaks under the threat of moving its operations to New Jersey.  In 1999 investment house Kidder Peabody, then owned by GE, got its own $31 million package to stay in the city.

There have also been subsidies upstate. For example, in 2009 GE got a $5 million grant and a $2 million tax abatement for its operations in Schenectady. The company’s research center in Niskayuna, New York has received millions of dollars in local tax breaks.

When GE has not received enough subsidies for its satisfaction, the company sometimes tries to reduce its local tax bills by challenging the assessed value of its property. In 2002, for example, it sued to get the value of its turbine plant in Rotterdam, New York reduced from $159 million to $41 million. A compromise ruling gave GE some of what it wanted and forced the town to reimburse the company about $6 million. Not satisfied, the company later brought a new challenge and got the town to negotiate a payment-in-lieu-of-taxes deal.

And, of course, GE is notorious for its dodging in other states and at the federal level, where it also gets subsidized through agencies such as the Export-Import Bank and got TARP-related assistance for its GE Capital unit.

Members of UE Local 332 are vowing to fight the plant shutdown, but they are up against a company that has shown it is  willing to go to great lengths to get its way on environmental, labor and tax issues.

McDonald’s and the Road to the Fast Food Strike Wave

Thursday, August 29th, 2013

fast-food-strike-AP46472623_620x350As this is being written on August 29th, there are reports that fast-food workers are staging walkouts and protests in some 60 cities. Many of the actions are directed at McDonald’s, which makes sense, given that it is the largest and best-known player in the industry.

Yet what makes a focus on McDonald’s even more appropriate is the company’s history. More than any other restaurant operator, it has worked to suppress pay rates, enforce harsh work procedures and prevent unionization. In other words, it epitomizes everything that the current strikes are trying to change. The following is an overview of that disgraceful history.

From its earliest days in the late 1950s, McDonald’s went to great lengths to maintain total control of its underpaid work force, using techniques such as lie detector tests and rap sessions that supposedly were meant to give workers a chance to air grievances but were mainly designed to give managers a sense of who the troublemakers were.

This non-union philosophy did not go unchallenged. When McDonald’s sought to open its first stores in San Francisco in the early 1970s, the company was confronted by unions and local politicians who opposed city approval because of the labor policies of the company. It took a long court battle before McDonald’s prevailed. In the late 1970s the fast-food chains faced an intensive campaign in Detroit by an independent group called the Fastfood Workers’ Union.

In 1990 a group called the Campaign for Fair Wages staged protests at McDonald’s outlets in the Philadelphia area to protest the fact that workers at inner-city locations were being paid less than those in the suburbs.  In 1998 a group of workers at a McDonald’s outlet in Macedonia, Ohio went on strike and sought representation by the Teamsters union, but the effort fizzled out.

Apart from resisting unions, McDonald’s long lobbied in the United States for a lower minimum wage for teenagers, who made up the large majority of the company’s labor force. When the Nixon Administration came out in support of the idea, Sen. Harrison Williams of New Jersey charged that it was a quid pro quo for a $255,000 campaign contribution that McDonald’s chairman Ray Kroc had made to Nixon’s re-election campaign.  After years of debate, the “teenwage” concept was finally adopted by Congress when the minimum wage was revised in 1989 (the two-tier system expired in 1993).

Unions have been a bit more evident among McDonald’s operations in other countries. In Ireland, Sweden and a few other countries, unions were successful in negotiating working conditions, but the company and its franchisees still sought to keep unions out wherever possible. This policy became a target of a militant labor campaign when the company opened its first outlet in Mexico in 1985. The restaurant workers union laid siege to the facility and forced it to shut down until a successful representation election was held.

Unions in Denmark launched a boycott of the company in 1988 after franchisees refused to sign a collective bargaining contract. After about eight months the company relented and agreed to join the employers’ group that negotiated with the Danish hotel and restaurant union. In the 1990s McDonald’s resisted union drive in countries such as Canada, Russia and Indonesia. Like Wal-Mart, it later agreed to cooperate with state-controlled unions in China.

McDonald’s has also faced pressures about working conditions in its supply chain. In 2000 the company was rocked by reports that a Chinese sweatshop employing under-aged workers forced to toil up to 16 hours a day was producing toys for its Happy Meals. McDonald’s and its U.S. supplier announced that they were cutting ties with the Chinese subcontractor involved. In 2005 thousands of Vietnamese workers who produced Happy Meal toys staged a two-day strike to protest abusive conditions on the job, and the following year a violent protest occurred at a Happy Meal toy supplier in China.

Actions such as these prompted McDonald’s to join with Walt Disney and a group of NGOs in what was called Project Kaleidoscope to promote better working conditions in the Chinese plants producing goods linked to the two companies. A 2008 report by the initiative spelled out some broad principles and claimed that a group of 10 target facilities had succeeded in improving working conditions.

Back in the United States, the Coalition of Immokalee Workers, which had just successfully pressured the Taco Bell chain to take responsibility for ensuring that farmworkers who picked the tomatoes used in its outlets were treated decently by suppliers, issued a call in 2005 for McDonald’s to do the same. After two years of campaign pressure, McDonald’s gave in and signed a three-way agreement with the Coalition and the growers under which the restaurant chain agreed to pay one cent more per pound for tomatoes to boost farmworker pay.

McDonald’s response to the farmworker campaign shows that, when put under enough pressure, it will make concessions. Let’s hope that the strikers can raise the heat to that level.

Note: This post is drawn from my new Corporate Rap Sheet on McDonald’s, which can be found here.

Cadillacs versus Corollas in the Healthcare Debate

Thursday, August 8th, 2013

solidgoldcadillacOver the past couple of years it has appeared that critics of the Affordable Care Act were virtually all die-hard Tea Party types who couldn’t accept reality, including a ruling of the U.S. Supreme Court.

We are now seeing reminders that those who have misgivings about the ACA are not only those misguided souls who believe it amounts to a government takeover of healthcare.

One group that had raised objections to at least part of the plan are now finding that a compromise they made is coming back to haunt them. That group is the labor movement, particularly public sector unions, which had questioned the dubious decision of Senate Democrats and the Obama Administration to include an excise tax on higher-cost health plans when drafting the ACA; the provision was designed to help fund the costs of subsidizing new coverage for the uninsured.

That decision was particularly galling because Obama had strongly opposed John McCain’s proposal for health plan taxation during the 2008 Presidential campaign. Unions denounced the provision, but in early 2010 they agreed to support a modified version of it. The modifications included a delay in its effective date (until 2018 for plans covering state and local government employees or ones covered by collective bargaining agreements) and an increase in the threshold levels above which the tax would apply.

The issue has been little discussed during the past three years, but now there are reports that local governments across the country are using the coming excise tax to pressure public employee unions to accept less expensive coverage—i.e., plans in which the worker pays more and gets less—or face the prospect of other contract concessions or layoffs.

What the proponents of the excise tax chose to ignore is that unions, especially in the public sector, have often focused on negotiating better benefits because significant wage increases were not possible, either for political or fiscal reasons. In other words, better benefits were not a giveaway to public unions, as anti-government types like to claim, but rather a form of compensation for insufficient pay rates.

When the excise tax was being debated in 2009, proponents misleadingly referred to it as applying only to “Cadillac” plans. It was meant to give the impression that only luxurious coverage of the type offered to corporate executives would be affected. Now it appears that those who drive Corollas may get hurt most by the provision.

The labor movement is also worried that the ACA will weaken the multiemployer benefit plans that some unions negotiate for their members. The concern is that unionized small employers participating in those plans will be end up in a competitive disadvantage compared to non-union competitors which will be able to purchase lower-cost group coverage through the Exchanges being created by the ACA.

Last month the Wall Street Journal reported that the heads of three major unions—the Teamsters, the Food and Commercial Workers and Unite Here—were trying to get the Administration to do something about ACA’s impact on multiemployer plans but were being “stonewalled.” The unions are also concerned that the law prevents low-wage workers in group plans from gaining access to the premium and cost-sharing subsidies that will be available to those who purchase individual coverage through the Exchanges.

The lack of action in response to labor concerns contrasts with the surprise announcement last month by the Administration that it was delaying the implementation of the ACA provisions imposing financial penalties on certain employers that fail to provide affordable group coverage to their workers. The post on the White House website was entitled WE’RE LISTENING TO BUSINESSES ABOUT THE HEALTH CARE LAW.

Despite the scare-mongering that has been going on in parts of the media, the penalties for failing to provide group coverage (or for providing unaffordable coverage) are far from onerous. To begin with, they don’t apply to employers with fewer than 50 full-time workers, and the penalties don’t actually kick in unless there are more than 80 full-timers. Penalties are calculated according to the number of full-timers only, ignoring part-timers and seasonal workers.

And the penalties don’t apply at all unless one of the workers denied affordable group coverage on the job qualifies for a premium or cost-sharing subsidy when purchasing individual coverage through an Exchange. Those subsidies will not be available to anyone with household income above 400 percent of the federal poverty line. This means that even larger employers that fail to provide decent coverage but whose pay rates are somewhat above poverty levels may be able to skirt the penalties entirely.

Perhaps the Obama Administration should be listening a bit less to business and more to workers and their unions.

Job Actions Have Wal-Mart Running Scared

Thursday, June 27th, 2013

Walmart_strikeIt’s déjà vu all over again at Wal-Mart. Returning to its customary practice of using intimidation to respond to demands for improved working conditions, the company recently began firing some of the “associates” who participated in strikes at its stores. Other workers are being disciplined under the pretext of violating Wal-Mart’s attendance policy.

While this is bad news for the workers affected, the use of heavy-handed tactics is a sign that the company is worried about the historic job actions that have been spreading through its U.S. operations. If Wal-Mart really believed its claims that the OUR Walmart group spearheading the protests has limited support among the company’s massive workforce, then it would be ignoring the movement rather than desperately trying to squelch it.

The current wave of firings is actually an escalation of repressive policies that the company has been implementing since OUR Walmart began ramping up its campaign in 2011. A report released in May by American Rights at Work found that the company has been responding to the activism by disguising acts of retaliation as legitimate discipline or routine enforcement of company policy. Accusing Wal-Mart of fostering a “climate of fear,” the report also documented ways in which the company violated federal labor law by denying OUR Walmart members and organizers access for protected concerted activity.

Such actions continue a tradition of anti-union animus that has characterized Wal-Mart since its earliest years. While some have sought to romanticize founder Sam Walton and pin the blame for the company’s notorious labor policies on his successors, it was Sam himself who first brought in union-busting consultants when some members of his then much smaller workforce began to talk about organizing in the 1970s. The investment paid off for management. For example, after about half of the workers at a Wal-Mart warehouse in Searcy, Arkansas signed cards in support of Teamsters representation in the early 1980s, the consultants used the run-up to the election to scare the workforce into ultimately voting more than three-to-one against the union.

This scenario would play out again and again, both in the United States and Canada. For example, in 1997 the Ontario Labor Relations Board ruled that Wal-Mart had violated Canadian law by intimidating workers in the period preceding a representation election involving the United Steelworkers union. As a result, the board certified the Steelworkers, even though a majority of workers had voted against the union. The company, however, simply refused to bargain with the union.

In 2000 a small group of courageous meatcutters at a Wal-Mart Supercenter in Jacksonville, Texas voted for representation by the United Food and Commercial Workers (UFCW). Within two weeks, the company announced that it was shutting down the meatcutting operations at that store and at more than 175 more in six states. The NLRB later ruled that the company had violated federal labor law by refusing to discuss the closing with the workers who had chosen union representation, but the issue was by then moot.

In 2001 the UFCW said it was launching a national organizing drive at Wal-Mart, but it focused on a few areas such as Las Vegas, where it engaged in a fierce battle with a slew of anti-union specialists flown in from corporate headquarters in Bentonville, Arkansas. Years later, the NLRB found that the company had engaged in various unfair labor practices, but by then the organizing effort had fizzled out. Looking back on the situation, the Las Vegas Sun published an article headlined WAL-MART BREAKS THE LAW, GETS PUNISHED, WINS ANYWAY.

Wal-Mart’s labor relations practices have been so egregious that they go beyond regulatory infractions and enter the realm of human rights abuses. It’s thus no surprise that Human Rights Watch, which typically analyzes atrocities in dictatorial governments, once published a report concluding Wal-Mart violated the right of its workers to freedom of association.

The problem for current Wal-Mart management is that its workers are more difficult to intimidate than they were in the past. Organizing efforts used to be limited to single locations; now OUR Walmart, using non-traditional tactics, is operating in many places and can mobilize large numbers of people, as seen in last year’s Black Friday job actions as well as the recent strikes and the protests at the company’s annual meeting.

One way Wal-Mart management is responding to the growing solidarity is by increasing its use of a category of worker it believes it can more readily control: temps. The company traditionally used such contingent workers only during the holiday season. Recently there have been reports that some Wal-Mart stores are hiring only temps.

So much for those TV ads that sought to portray a job at Wal-Mart as the stepping-stone to a career.