Unions

U.S. Workers Face Chinese Employers

Much of the discussion of Hu Jintao’s visit to the United States is focused on China’s treatment of its dissidents and its workers, but another issue is becoming increasingly important: the treatment of U.S. workers by the Chinese companies that are rapidly expanding their presence in the United States.

Hu’s decision to include a stop in Chicago is not meant primarily as an homage to President Obama’s hometown. He wants to spotlight a Chinese-owned company called Wanxiang America, which from its suburban Chicago headquarters has built an auto parts and renewable energy conglomerate that has become the largest example of direct foreign investment in the U.S. from the People’s Republic.

Until recently, China accounted for a negligible portion of overseas money flowing into the American economy. But in the past two years there has been an enormous influx. The Washington Post cites a consulting company estimate that the Chinese stake has jumped to $12 billion since the beginning of 2009.

There’s every indication that number will continue to rise rapidly. The Chinese government is encouraging the trend to help protect its access to American markets, and the job-hungry U.S. seems to no longer have any of the objections that thwarted the efforts of Chinese companies to buy the oil company Unocal and the appliance firm Maytag a half dozen years ago.

Many U.S. observers are celebrating the arrival of Chinese capital, but this is actually a very dismaying state of affairs. The fact that companies from a country in which many workers are paid near-starvation wages find it economical to produce here says a lot about the dismal state of labor in the United States. The anti-union hostility of American employers has forced down pay rates in this country to the point that the U.S. is now considered a low-wage haven, at least among the countries of the developed world.

There’s no indication that investors coming from a dictatorship of the proletariat will do anything to reverse the decline of U.S. workers’ power. If anything, they will follow the pattern of companies from heavily unionized countries in Europe and Asia that eagerly embrace the culture of union-busting once they arrive on these shores.

Chinese investment in U.S. industry has already shown signs of anti-union animus. Not long after China International Trust and Investment Corp. (CITC) took over bankrupt Phoenix Steel in Delaware back in 1988 with the support of the United Steelworkers, the new operation, named CitiSteel, refused to recognize and bargain with the union, which had represented the Phoenix workforce for decades.

And when appliance-maker Haier Group became the first large Chinese company to build a factory from scratch in the United States, it chose South Carolina, one of the states most hostile to labor unions. In subsequent years, Chinese firms have continued to concentrate on right-to-work states. For example, Tianjin Pipe is planning to build a $1 billion production facility in Texas.

Today’s U.S. affiliates of Chinese companies are not entirely non-union. Wanxiang America has taken over unionized auto parts operations being shed by major U.S. companies, but many United Autoworkers members depart during the buyouts and other workforce reductions that accompany the change in ownership. The UAW has also survived GM’s sale of Nexteer Automotive to China’s Pacific Century Motors—a deal that went through after union members approved a contract that cut wage rates.

The ability of these companies to maintain good relations with their unions will depend in part on whether they engage in the kind of restructuring ploys favored by U.S. employers. It was not an encouraging sign when Neapco Components, an affiliate of Wanxiang America, announced last year that it was shutting down its manufacturing plant in Pottstown, Pennsylvania and transferring the operation to Nebraska, where state officials arranged for the company to get $1 million in federal stimulus funds to underwrite the move.

The larger labor relations challenge is the inevitable clash between Chinese and U.S. workplace cultures. Even in non-union companies, U.S. workers are used to a certain level of respect for individual rights. Many Chinese firms retain the remnants of a repressive collectivism. The Haier plant in South Carolina, for instance, is festooned with motivational banners exhorting workers to “make the impossible possible without an excuse.” The original Chinese managers there caused resentment by chastising individual workers for slip-ups in front of the entire workforce.

It remains to be seen how U.S. workers take to the pseudo-Maoism of contemporary Chinese business, but there’s no question that the rise of Chinese investment is another strong argument for the revival of an aggressive U.S. labor movement.

IKEA Knocks Down Labor Rights

When my colleagues and I at Good Jobs First introduced the Subsidy Tracker database recently, our hope was that the information would be helpful to a wide range of campaigns for economic and social justice. I can now offer one particular use.

By plugging the name Swedwood into the search engine, one finds that the company received a $1 million cash grant under the Virginia Investment Partnership program in connection with its vow to invest $281 million and create 740 jobs. Actually, this grant was just part of a series of subsidies worth a total of $12 million that Swedwood received from the state (the data in Subsidy Tracker are not yet comprehensive).

Swedwood is significant because the company, a unit of the retail giant IKEA, is at the center of a controversy over its labor practices at a furniture plant in Danville, Virginia for which it received the $1 million subsidy. Employees of the facility, fed up with dangerous working conditions and discriminatory employment practices, have been trying to organize with the help of the Machinists union, which produced a report concluding that the Danville operation may be the most hazardous furniture plant in the country. Swedwood and its parent have responded to the organizing drive by harassing union organizers and firing union supporters.

The Machinists and the Building and Wood Workers International labor federation have launched a campaign to pressure IKEA and Swedwood to respect the rights of the Danville workers. Among other things, the campaign is asking supporters to send a holiday card to IKEA Chief Executive Mikael Ohlsson with instructions on how to build a fair collective bargaining relationship with the workers (allen wrench not included).

The unions might also want to make an issue of the fact that a company that was generously subsidized with taxpayer funds is now flouting labor laws.

The financial assistance IKEA got in Virginia is not the only time it has played the subsidy game. In places such as Tempe, Arizona and Frisco and Round Rock in Texas, the retailer has received millions of dollars in sales tax rebates and infrastructure assistance to help finance new stores. It is expected to receive up to $18 million in subsidies for the store it is building in Centennial, Colorado.

In fact, tax avoidance is at the center of IKEA’s entire corporate structure, a complex arrangement that puts nominal control in the hands of a Dutch private foundation but allows founder Ingvar Kamprad and his family to dominate the company and grow wealthier from it (according to Forbes, Kamprad is the 11^th richest person in the world, with a net worth of $23 billion).

IKEA is a prime example of how companies that have reputations for being socially responsible somehow get away with exploiting the system of economic development subsidies and with being hostile to unions in the United States – while cooperating with them in countries (such as IKEA’s native Sweden) where they are well established and protected. In the past, IKEA has relied on paternalism – including better than average employee benefits – to discourage unionization at its U.S. operations. The events in Danville suggest a troubling turn toward heavy-handed union busting.

Perhaps this will begin to change the view of corporate social responsibility arbiters such as Ethisphere magazine, which lists IKEA as “one of the world’s most ethical companies.” While the idea of corporate ethics is an oxymoron, companies should not be singled out for praise of any kind if they deny the rights of their workers to organize.

Note: The Dirt Diggers Digest index of information sources featured or utilized in the blog has finally been brought up to date.

Tracking Corporate Traitors

Not too many years ago, America was up in arms about offshore outsourcing. The news media were filled with reports of the wholesale migration of both white collar and industrial jobs to low-wage havens in Asia. The mood of panic was reflected in articles such as the March 2004 Time magazine cover story Is Your Job Going Abroad?

For most people these days, the outsourcing controversy has largely been forgotten or recalled only in the context of the new NBC sitcom situated in an Indian call center. But for the folks at the AFL-CIO, offshoring is neither a laughing matter nor a thing of the past. The labor federation and its community affiliate Working America have just released both a report and a database showing that the corporate practice of shifting jobs from the United States to cheaper foreign locales is still a burning issue for American workers and the American economy.

The report cites evidence that the use of offshoring is expanding in corporate America, though many companies have learned to be more discreet about it. The true extent of the job migration is difficult to determine, the report notes, because federal statistical agencies such as the Bureau of Labor Statistics and the Bureau of Economic Analysis are not set up to measure this kind of phenomenon accurately.

For those less inclined toward policy briefs and more concerned about conditions in their community, the AFL and Working America also released a new version of their Job Tracker database. It allows one to plug in a Zip code and see a Google map with pushpins indicating workplaces that have experienced job flight, as indicated by WARN Act filings, Trade Adjustment Assistance certification and other data sources. Job Tracker also shows which workplaces have been hit with health and safety violations (from the OSHA database), labor law violations (from the NLRB database) and employment discrimination violations (from the database of the Office of Federal Contract Compliance Programs).

This is a great resource for researching bad employers, whether or not they are moving jobs offshore. The site also has a feature allowing a user to recommend a company that should be featured on Job Tracker. It would be great to see it expanded even more to cover other forms of regulatory violations as well as key data such as government contracts and subsidies.

The Job Tracker is handy for finding out how employers in specific locations export jobs, but it is also helpful to see aggregate figures for corporate behemoths. The AFL/Working America report mentions the case of IBM, whose U.S. workforce dropped from more than 40 percent of the company’s worldwide total in 2005 to just over a quarter in 2009.

IBM is far from unique. Based on figures from its 10-K SEC filings, the U.S. share of General Electric’s workforce dropped from 51 percent at the end of 2005 to 44 percent at the end of 2009. During the same period, the U.S. share at Caterpillar fell from 52 percent to 46 percent. Even at Wal-Mart, celebrated for creating American jobs (such as they are), the U.S. share declined from 72 percent to 67 percent. For many corporations it is not possible to measure the trend, given that they choose not to give a geographic breakdown of employment in their 10-K or annual report.

The tendency of large U.S.-based corporations to invest and create low-wage jobs abroad is not a new story. But the decision by such companies to expand employment overseas at the expense of U.S. jobs during a period of severe recession at home amounts to a form of economic treason. In this way, the Job Tracker is not just a database but also a corporate crime detector.

Tiananmen Square Inc.

Large corporations don’t depend on China only for cheap labor; they also seem to be adopting the practices of that country’s repressive government in the treatment of dissidents. It has just come to light that oil giant Chevron is working with Houston authorities in the prosecution of shareholder activist Antonia Juhasz, who berated executives and directors at the company’s annual meeting last May over environmental and human rights issues.

Juhasz, author of the book Tyranny of Oil and editor of an alternative annual report on Chevron, was removed from the May meeting and arrested. Rather than dropping the charges after the disruption was over, Chevron has pursued the matter. At a recent court hearing, the company pushed for Juhasz to get jail time for criminal trespass and other charges.

What happened to Juhasz was not the first time an activist was ejected from an annual meeting for speaking out. In 2004 veteran labor activist Ray Rogers was wrestled to the ground by security guards and forcibly removed from Coca-Cola’s meeting after he forcefully criticized the company for its ties to paramilitary groups involved in the murder of trade union leaders in Colombia. He was threatened with arrest but not taken into custody.

The criminal prosecution of Juhasz is a troubling turn of events. Annual meetings are the one occasion when corporations are supposed to give the semblance of being democratic institutions. CEOs and board members should endure the protests and not try to take revenge on their critics.

Some might say that the likes of Juhasz and Rogers are out to disrupt annual meetings and that they should instead work through proper channels to get their point of view across. But corporations are trying to close that avenue as well.

Corporate interests are up in arms about the Securities and Exchange Commission’s decision in August giving shareholders new powers to nominate directors to corporate boards. The move marks the beginning of the end of non-competitive board elections that have much in common with the selection of leaders in China and the old Soviet Union.

Corporations tried mightily to prevent this intrusion of democracy into their affairs. As I noted a year ago, the corporate comments submitted to the SEC about the proposal raised some ridiculous objections. The Business Roundtable claimed that the rules would violate a corporation’s First Amendment rights by forcing it to include comments by outside candidates in its proxy statement.

McDonald’s Corporation fretted that shareholders might nominate someone “who may not have even met the existing members of the Board.” Sara Lee Corporation claimed that the change would result in directors who represented a special interest rather than the interests of all shareholders – conveniently forgetting that many directors have been chosen because of their affiliation with a financial institution or other entity that has a significant relationship with the company—a suspicious practice known as corporate interlocks or interlocking directorates.

Having lost in the rulemaking process, business groups are now taking the matter to court. The U.S. Chamber of Commerce and the Business Roundtable have challenged the SEC decision in the federal court of appeals in Washington. The two groups – whose legal team is led by Eugene Scalia, son the Supreme Court Justice – depict activist shareholders as a special interest whose ability to nominate board candidates would violate the First and Fifth Amendment rights of corporations. Their brief implies that the whole idea of proxy access is a plot by unions.

Echoing the current Republican talking point, they claim that the new rules would create “uncertainty.” They even play the recession card, saying: “We respectfully submit that stewardship of the national economy during these difficult economic times counsels strongly in favor of a stay.” They conclude by saying that a failure of the appeals court to put a stop to the proxy reforms would cause “irreparable injury” to public traded corporations.

At one time, such arguments would be laughed out of court. But in the current climate, with business rights being treated as sacrosanct, the challenge has a reasonable chance of success. Democracy may not be coming to Corporate America after all.

European Companies Behaving Badly

Many American workers are irate these days about the jobs that are supposedly being taken away from them by undocumented foreign laborers. A new report from Human Rights Watch shows that the real threat to our living standards may come not from Mexican farmworkers, chambermaids or carwashers but from another group of “illegal” immigrants: European transnational corporations investing in the United States.

These companies – which include the likes of T-Mobile parent Deutsche Telekom, DHL Express parent Deutsche Post, French construction materials giant Saint-Gobain and Britain’s Wal-Mart rival Tesco – are illegal in the sense that they fail to comply with international labor norms when it comes to their U.S. operations.

Human Rights Watch, usually preoccupied with the mistreatment of dissidents and others in countries such as the Democratic Republic of Congo, Senegal and Kyrgyzstan, has not hesitated to point out that when it comes to the workplace, the United States is far from a paradigm of respect for individual rights. In 2000 it published a report called Unfair Advantage, which showed how workers’ freedom of association is routinely violated by employers.

Its new report, titled A Strange Case, shows how this pattern of abuse is practiced not only by domestic companies used to a climate of lax labor enforcement, but also by European companies that have much friendlier relations with unions in their home countries and that claim to abide by the principles regarding labor rights included in the declarations and conventions of the International Labor Organization, the Organization for Economic Cooperation and Development, and other global bodies.

Noting that these companies “exploit the loopholes and shortcomings in U.S. labor law” to engage in union avoidance and unionbusting practices, the report states: “The European Dr. Jekyll becomes an American Mr. Hyde.” Another way of putting it is that these companies behave like proper Westerners who indulge in sex with children when traveling to Southeast Asia: they are willing to do things abroad that they would never consider at home.

The Human Rights Watch report documents intimidation tactics used, for example, by T-Mobile in response to an organizing drive led by the Communications Workers of America and by DHL Express in response to a drive launched by the American Postal Workers Union. It also shows how European companies have tried to remove unions already organized, such as the decertification effort by Saint-Gobain against the United Auto Workers at a plant in Massachusetts. Other case studies show how companies such as Norway’s Kongsberg Automotive use tactics such as the lockout of union workers during contract negotiations that, as the report puts it, are “unheard of in Europe.”

The report points out that these European companies exploiting the lax U.S. labor rights environment are invariably ones that profess to be practitioners of corporate social responsibility (CSR) and that claim to have policies of cooperating with worker organizations throughout their operations. This, along with the fact that environmental criminals such as BP can claim to be CSR advocates, shows that the organizations that rate firms on corporate responsibility have to do a lot more than take company statements at face value.

Although the Human Rights Watch report doesn’t address it, another factor in the ability of European companies to behave badly in the United States is the unwillingness of the unions in their home countries to take aggressive action on this issue. Some of those unions have spoken out forcefully in support of their beleaguered American cousins, but that has not been enough to stop the abuses.

Yet the central problem is not CSR hypocrisy or inadequate labor solidarity, but rather the dismal condition of labor law in the United States. It would be nice if European companies decided on their own accord to treat American workers as they do employees at home, but even better would be if the federal government compelled both foreign and domestic companies to respect the collective bargaining rights of all U.S. workers.

Corporate Benevolence and Corporate Despotism

When we worry about the influence of big business on our existence these days, we generally think about a variety of companies: our employer, the financial institutions that handle our money, the drug companies that treat our ailments, the agribusiness firms that feed us, the telecoms that allow us to communicate, etc.

Yet there have been many situations in American history in which everyday life was dominated by a single corporation. This occurred when people found themselves residing in what were known as company towns.

The Company Town, an engaging new book by Hardy Green, is apparently the first general history of the efforts by a variety of capitalists in the United States to create communities in which they could control both the working life and the private life of their employees and their families. Green follows the evolution of this special form of urban planning from the textile towns of New England in the early 19^th Century to the communities hastily erected by military contractors at the onset of World War II. He also finds modern analogues in amenity-laden corporate campuses such as the Googleplex in California.

Along the way he looks at communities across the country involved in industries such as mining, steel, petroleum, railcars, shipbuilding, meatpacking and logging. The corporate sponsors of these towns included the likes of U.S. Steel, Cannon Mills, Phelps Dodge, Hormel, Maytag, Kaiser Industries and even the federal government (in connection with Oak Ridge, Tennessee, the site of the Manhattan Project).

Green is careful to distinguish between company towns such as Hershey, Pennsylvania that were experiments in corporate paternalism and the harsh communities set up by coal companies to house their miners. The first type represented a form of industrial utopianism, while Green dubs the latter model “exploitationville,” reflecting not only workplace conditions but also substandard housing and overpriced company stores.

Green does a great job in weaving together the biographies of the entrepreneurs responsible for creating many of the company towns with the histories of their firms and industries, putting it all in the context of the tumultuous labor relations of the past two centuries. (Full disclosure: Green is a friend of mine.)

While some of the company towns were created to put manufacturing operations close to the sources of raw materials (e.g. meatpacking plants sited near livestock producers), many were set up to isolate workers from the influences of union organizers and radical agitators. Yet, as Green shows in numerous cases, those influences managed to infiltrate both the paternalistic and the unabashedly exploitative company towns.

He recounts a series of labor disputes beginning with the work stoppages at the Lowell mills and continuing through to the Pullman railcar workers strike in 1894, the Phelps Dodge miners organizing drive in 1917, the Cannon Mills walkout in 1921, the Hershey workers strike in 1937, and the Hormel meatpackers strike in the 1980s.

The willingness of these workers to confront management was all the more amazing in that their employers were also their landlords, meaning that a decision to go out on strike could quickly lead to eviction from one’s home. The will to fight did not always translate into an ability to win, and Green points out that in most cases strikes and organizing drives were crushed by company-town employers – whether they were of the paternalistic or exploitative variety.

Given this oppressive history, it is surprising that when it comes time to analyze the overall lesson of company towns, Green adopts an approach that is far from condemnatory. He suggests that employers who chose the more exploitative approach may not have had a choice, given low profit margins, low skill requirements and other factors in their industries. And he argues that the more paternalistic company towns have something to teach today’s employers.

Some of the features of the best benevolent company towns – affordable housing, day care, good schools, impressive libraries and recreational facilities – certainly have their appeal, especially in today’s climate of cutbacks in public services. Yet those benefits came at a steep price: a loss of freedom, especially in connection with the right to organize for a voice at work.

I would have liked Green to provide more analysis of what the paternalistic and exploitative employers had in common and how the two approaches were simply different ways of achieving the same objective: dominating the workforce while maximizing productivity and profits.

More than the company towns themselves, the struggles of workers in those difficult circumstances provide lessons in dealing with excessive corporate power, whether it comes from one company or many.

Shaming the Corporate Cheapskates

Buried among the many features of the financial reform bill passed by Congress is a provision that could get you a raise. For this to happen, however, you have to work for a large company that is uncomfortable with having it made public how little it pays its workers.

Section 953 of the Dodd-Frank bill deals with disclosures relating to executive compensation, not only at banks but at all publicly traded companies. One of the ways it seeks to rein in out-of-control CEO pay is by requiring firms to reveal how the amount paid to the head of the company compares to that received by the typical employee. The theory is that having this information made public would give pause to grasping CEOs and soft-touch board compensation committees.

The total compensation of chief executives (along with that of the four other highest paid executives) is already disclosed through the annual proxy statements companies have to file with the Securities and Exchange Commission (which makes them public through the EDGAR online system, where the documents are designated as DEF 14A). Yet there have been no requirements relating to the disclosure of how much is paid to the CEO’s underlings.

Section 953 fills this gap by instructing companies to include in their future proxies the median of the annual total compensation paid to all employees apart from the CEO. They also have to calculate the ratio of that median to the CEO’s total bounty.

Those ratios will be fascinating to see, but just as interesting will be the figures on non-CEO pay themselves. For the first time, we will be able to make direct comparisons of the broad compensation practices of different companies within given industries or across sectors. Getting official data from the companies themselves will be an improvement on the selective information that now gets posted on websites such as Glass Door.

There will be limitations, of course. Congress should have required the disclosure of data specifically on hourly workers rather than lumping them in with higher-paid professionals and executives. It would also be preferable to have separate numbers on domestic and foreign employees. And it is likely that companies will exclude low-paid temps and (often misclassified) independent contractors in making their calculations.

Yet this information could still be put to good use. Having clear, company-specific data could help stimulate a much-needed movement to address the problem of wage stagnation in the United States. The reality of that stagnation is quite evident from overall labor market data collected by the U.S. Bureau of Labor Statistics, but it would be much more effective to point the finger at individual companies with low medians and seek to shame them for failing to provide adequate compensation to their workers.

The ability of employers to keep wages low stems from two classic sources: low unionization and high unemployment. We know all too well the story of how anti-union animus on the part of employers has pushed the percentage of private sector workers with collective bargaining protections to historic postwar lows. To the extent they are able, unions target individual companies such as Wal-Mart, T-Mobile and (until it was finally organized) Smithfield Foods for denying their workers the right to representation.

Unions and other advocacy groups also criticize specific companies that engage in mass layoffs, especially when they seem to be undertaken mainly to impress Wall Street.

Yet we rarely hear criticisms of particular companies for failing to hire new workers when conditions seem to warrant it. The “economy” is assumed to be to blame for the high levels of joblessness afflicting us, not deliberate decisions by corporations to keep their payrolls artificially lean. Recently, the U.S. Chamber of Commerce made the absurd argument that overregulation is responsible for the anemic hiring situation. The Obama Administration responded by saying that weak consumer demand is the cause. Absent is the idea that corporations are failing in their responsibilities.

The unwillingness to chastise corporations is all the more bewildering in the face of growing evidence that business is hoarding cash instead of investing in job-creating ways. A front-page story in the Washington Post headlined COMPANIES PILE UP CASH BUT REMAIN HESITANT TO ADD JOBS notes that U.S. nonfinancial companies, buoyed by rising profits, are now sitting on $1.8 trillion in liquid reserves.

Why is there not more of an outcry about this behavior? Here’s an idea: pick companies with the most egregious combinations of rising profits and falling payrolls and press them to justify their boycott of U.S. workers. Once the new disclosure requirement kicks in, they could also be pushed to explain their low compensation levels. Business needs a strong reminder that it also exists to provide opportunities for people to earn a living.

Refusing the Poisoned Apple

Strikes are rare these days (outside China), so the walkout by a group of some 300 workers at a Mott’s juice and applesauce plant in upstate New York takes on added significance: All the more so because the plant’s parent company has gone through a string of ownership changes involving a notorious corporate raider and a major transnational company whose machinations paved the way for the pressure on the Mott’s workers to reduce their standard of living.

The current dispute began earlier this year when contract renewal talks broke down between Mott’s and Local 220 of the Retail, Wholesale and Department Store Union, an affiliate of the United Food and Commercial Workers. According to the union, management refused to bargain in good faith and threatened to cut wages if its final offer was not accepted. The workers did not back down, the company made good on its threat, and a strike was called in May.

“Mott’s told us we were simply making too much,” said Local 220 President Mike Leberth. Most of the workers earn $19.92 an hour — a decent but hardly a princely rate.

The company’s move to cut labor costs was not born of necessity. Mott’s — the country’s number one brand for apple juice and applesauce — is owned by Dr. Pepper Snapple Group (DPS), one of the dominant companies in the U.S. non-alcoholic beverage market. Last year DPS reported profits of $555 million on sales of $5.5 billion. The company does not provide financial results for individual brands, but the segment of which Mott’s is a part (Packaged Beverages) enjoyed an increase in operating profit of more than 18 percent over the year before.

It is difficult to avoid the conclusion that the inclination of DPS management to squeeze workers comes out of its history of wheeling and dealing. The Dr. Pepper part of the company, which originated in the 1880s, went through a leveraged buyout in the 1980s and was then merged with another buyout victim, the Seven-Up Company, in 1988. Seven years later, the combined firm was acquired by British beverage and candy giant Cadbury Schweppes. In 2000 Cadbury purchased Snapple from Triarc Companies, the investment vehicle of corporate raider Nelson Peltz, and combined it with Dr. Pepper and Seven-Up. In 2007 Cadbury (now part of Kraft Foods) decided to exit from the American beverage business and spun off DPS the following year through a public offering.

The spinoff was instigated by Peltz, who had become one of Cadbury’s largest shareholders. Peltz then turned his sights on DPS. After accumulating a stake of more than 7 percent in the company through his Trian group, he began to pressure management to sell off its bottling operations.

Peltz appears to have given up on that effort (he has sold off about three quarters of his shares), but he must still be keeping DPS executives on edge. Peltz — a member of the Forbes 400 — has a history of squeezing corporations, to the detriment not only of management but also workers. One of his most notable “successes” was condiment maker Heinz, which Peltz pressured to close some 15 factories and eliminate thousands of jobs worldwide. In 2007 Britain’s Birmingham Post published an article on Peltz headlined “Billionaire Hated by Unions.”

Apart from the lingering effects of Peltz’s maneuvers, DPS may be facing some price pressure exerted by Wal-Mart, which, according to the DPS 10-K annual filing, is the company’s single largest customer, accounting for 13 percent of its sales.

All of this is not to take the management of DPS off the hook. DPS chief executive Larry Young apparently did not think there was anything wrong when he (presumably) authorized the management of Mott’s to seek wage and benefit reduction at around the same time that the company’s proxy statement was reporting that he received total compensation of $6.5 million last year.

DPS has also not been completely diligent about environmental matters. In 2005 one of its units in California paid the EPA more than $1 million in criminal and civil penalties for industrial stormwater and wastewater violations at two bottling plants. And this year, tests of children’s juice boxes done by Florida’s St. Petersburg Times found that Mott’s samples had arsenic concentrations above the “level of concern” set by the U.S. Food and Drug Administration and were the highest among those brands tested.

More than anything else, the situation at Mott’s illustrates that Corporate America no longer has any interest in permitting workers to be decently paid. Whereas certain companies once took pride in providing higher wages and better working conditions, that is now seen as a stigma — even when a firm is thriving. Whether to please Wall Street, Wal-Mart or the likes of Nelson Peltz, Mott’s and DPS are trying to force their employees to eat the poisoned apple of reduced living standards. It is encouraging that the members of Local 220, unlike Snow White, are not being lulled into oblivion.

Corporate Overkill

There is so much corporate misbehavior taking place around us that it is possible to lose one’s sense of outrage. But every so often a company comes along that is so brazen in its misdeeds that it quickly restores our indignation.

Massey Energy is one of those companies. Evidence is piling up suggesting that corporate negligence and an obsession with productivity above all else were responsible for the horrendous explosion at the Upper Big Branch mine in West Virginia that killed at least 25 workers.

This is not the first time Massey has been accused of such behavior. In 2008 a Massey subsidiary had to pay a record $4.2 million to settle federal criminal and civil charges of willful violation of mandatory safety standards in connection with a 2006 mine fire that caused the deaths of two workers in West Virginia.

Lax safety standards are far from Massey’s only sin. The unsafe conditions are made possible in part by the fact that Massey has managed to deprive nearly all its miners of union representation. That includes the workers at Upper Big Branch, who were pressured by management to vote against the United Mine Workers of America (UMWA) during organizing drives in 1995 and 1997. As of the end of 2009, only 76 out of the company’s 5,851 employees were members of the UMWA.

Massey CEO Don Blankenship (photo) flaunts his anti-union animus. It’s how he made his corporate bones. Back in 1984 Blankenship, then the head of a Massey subsidiary, convinced top management to end its practice of adhering to the industry-wide collective bargaining agreements that the major coal operators negotiated with the UMWA. After the union called a strike, the company prolonged the dispute by employing harsh tactics. The walkout, marked by violence on both sides, lasted 15 months.

In the years that followed, Massey phased out its unionized operations, got rid of union members when it took over new mines and fought hard against UMWA organizing drives. Without union work rules, Massey has had an easier time cutting corners on safety.

Massey has shown a similar disregard for the well-being of the communities in which it operates. The company’s environmental record is abysmal. In 2000 a poorly designed waste dam at a Massey facility in Martin County, Kentucky collapsed, releasing some 250 million gallons of toxic sludge. The spill, larger than the infamous Buffalo Creek flood of 1972, contaminated 100 miles of rivers and streams and forced the governor to declare a 10-county state of emergency.

This and a series of smaller spills in 2001 caused such resentment that the UMWA and environmental groups—not normally the closest of allies—came together to denounce the company. In 2002 UMWA President Cecil Roberts was arrested at a demonstration protesting the spills.

In 2008 Massey had to pay a record $20 million civil penalty to resolve federal charges that its operations in West Virginia and Kentucky had violated the Clean Water Act more than 4,000 times.

And to top it off, Blankenship is a global warming denier.

Massey is one of those corporations that has apparently concluded that it is far more profitable to defy the law and pay the price. What it gains from flouting safety standards, labor protections and environmental safeguards far outweighs even those record penalties that have been imposed. At the same time, Massey’s track record is so bad that it seems to be impervious to additional public disgrace.

Faced with an outlaw company such as Massey, perhaps it is time for us to resurrect the idea of a corporate death penalty, otherwise known as charter revocation. If corporations are to have rights, they should also have responsibilities—and should face serious consequences when they violate those responsibilities in an egregious way.

A “Poster Child for Corporate Malfeasance”

One of the cardinal criticisms of large corporations is that they put profits before people. That tendency has been on full display in the recent behavior of transnational mining giant Rio Tinto, which has shown little regard for the well-being not only of its unionized workers but also of a group of executives who found themselves on trial for their lives in China.

The China story began last July, when four company executives — including Stern Hu, a Chinese-born Australian citizen — were arrested and initially charged with bribery and stealing state secrets, the latter offense carrying a potential death penalty. The charges, which most Western observers saw as trumped up, were made during a time of increasing tension between Rio and the Chinese government, one of the company’s largest customers, especially for iron ore.

Earlier in the year, debt-ridden Rio had announced plans to sell an 18 percent stake in itself to Chinalco, the state-backed Chinese aluminum company, for about $20 billion. Faced with strong shareholder and political opposition, Rio abandoned the deal in June 2009. The arrests may have been retaliation by the Chinese for being denied easier access to Australia’s natural riches.

Although Rio claimed to be standing by its employees, the case did not curb the company’s appetite for doing business with the deep-pocketed Chinese. Rio continued to negotiate with Beijing on large-scale iron ore sales. It seems never to have occurred to the company to terminate those talks until its people were freed. In fact, only weeks after the arrests, Rio’s chief executive Tom Albanese was, as Canada’s Globe and Mail put it on August 21, “trying to repair his company’s troubled relationship with China.”

Before long, Rio was negotiating with Chinalco about participating in a copper and gold mining project in Mongolia. One thing apparently led to another. In March 2010 — after its still-imprisoned employees had been officially indicted and were about to go on trial — Rio announced that it and Chinalco would jointly develop an iron ore project in the West African country of Guinea.

When that trial began a couple of weeks later, the Rio managers admitted guilt, but not to the more serious charge of stealing trade secrets. Instead, they said they had engaged in bribery — but as recipients rather than payers. While the four defendants may have been guilty of some impropriety, it is likely that the admissions were a calculated move to gain a lighter sentence in a proceeding whose outcome was predetermined. And that was the case in large part because their employer decided that its business dealings were more important than demanding justice for its employees.

Rio is no more interested in justice when it comes to its operations outside China. It has been accused of human rights violations in countries such as Indonesia and Papua New Guinea. And it has a track record of exploiting mineworkers in poor countries such as Namibia and South Africa while busting unions in places such as Australia. Recently, Rio showed its anti-union colors again in the United States.

On January 31 its U.S. Borax subsidiary locked out more than 500 workers at its borate mine in Kern County, California. The workers, members of Local 30 of the International Longshore & Warehouse Union had the audacity of voting against company demands for extensive contract concessions. The company wasted no time busing in replacement workers.

In a press release blaming the union for the lockout, U.S. Borax complained that ILWU members earned much more than workers at the company’s main competitor Eti Maden. The release conveniently fails to mention that Eti Maden’s operations are in Turkey.

Also missing from the company’s statement is the fact that the biggest driver of demand for boron – a material used in products ranging from glass wool to LCD screens – is the Chinese market. If U.S. Borax busts the ILWU in a way that keeps down boron prices, then the ultimate beneficiary may be Rio Tinto’s friends in China.

It is no surprise that mining industry critic Danny Kennedy once wrote that Rio Tinto “could be a poster child for corporate malfeasance.”