Unions, firms, Congress struggle with problem of plant closings
Chicago — After a 15-hour bus ride, John Solt propped his bare elbows on the table and answered a question. ``The corporation isn't losing any money,'' he says. ``They just want to break everybody up.''
``That's it,'' says Tommy Christman, sitting across from Mr. Solt in the District 11 union hall of the United Electrical, Radio, and Machine Workers of America. ``Eliminate the union.''
For a combined total of 42 years, these men have worked in Allentown, Pa., making toaster ovens and other kitchen appliances for General Electric Company. Now Black & Decker Manufacturing Company, which bought the GE housewares division a year ago, wants to close the Allentown plant.
``Everybody's affected,'' says Sandra Beltz. She is one of the 40 or so Allentown workers who traveled to Chicago's national housewares show last week to demonstrate against Black & Decker. Nearly 900 jobs are at stake.
Factory closings are not new in America, but they have been increasing in recent years. Such closings affect whole communities. And they hit especially hard in economically troubled areas like Allentown, where few new employers come in to take up the slack. So far, attempts to cushion the blow have had limited impact.
One roadblock to addressing the problem is that no one knows how big the problem is.
``There's no question that in the last four years, the rate [of closings] has been higher than what we were used to seeing,'' says Ross Eisenbrey, legislative assistant to Rep. William D. Ford (D) of Michigan. But whether the problem is getting better or getting worse now is unknown.
Although the overall rate of business failures has fallen since 1983, plant closures may remain high, says Reid Gearhart, editor of a Dun & Bradstreet publication. A flood of imports and high interest rates during a low-inflation period are forcing manufacturing companies to slash costs dramatically.
Eight states -- Alabama, Arizona, Arkansas, Massachusetts, Michigan, Washington, and Wisconsin -- are running pilot programs to find statewide totals of plant closings. A Bureau of Labor Statistics effort to collect national data is on hold because the Labor Department has asked Congress not to fund it.
How can the blow of plant closures be cushioned?
For its part, the United Electrical Workers are trying to embarrass Black & Decker into keeping the Allentown plant open. The union's Chicago demonstration was aimed at publicizing the coming closure just at the time Black &Decker is spending heavily to convince consumers to buy its new line of housewares products.
``Nobody likes plant closings,'' says Leonard Strom, vice-president of human resources for the company's US household products group. But the action is necessary, he adds, because the company has too much plant capacity and prefers outside suppliers to the Allentown plant, which makes most of its own parts.
Like many unions these days, the United Electrical Workers feel besieged by what they call anti-union tactics.
``The company arguments about overcapacity and vertical integration are just a smokescreen to conceal their desire to eliminate the union,'' says James Kane, union international president. The Allentown facility is Black & Decker's only remaining unionized plant in the US.
In some cases, corporations are trying to step in to help workers in plants slated to close.
``I have sensed a greater awareness of [social] responsibilities among American chief executive officers,'' says Sven B. Lundstedt, professor of public policy and administration at Ohio State University. But whether the new thinking is translated into tangible worker benefits is difficult to assess, observers say.
In the Allentown case, Black &Decker is offering workers an average of $18,000 to $20,000 in severance pay along with $1,800 for job retraining. For some workers, at least, that is not enough.
``There really aren't decent-paying jobs,'' says Pat Herschman, who has worked in the plant for 28 years. ``Even if I would get, say, $10 an hour, that's less than I'm making now.''
According to a US Labor Department survey released last fall, some 40 percent of the 5.1 million workers displaced between 1979 and 1984 did not find new jobs. Of the 60 percent who did, only about half of those jobs were at equal or better pay.
A few states have passed laws setting standards for plant closings.
Federal legislation has been stymied so far. Recently, a watered-down version of previous plant closing bills was introduced in the House by Reps. Ford, Silvio O. Conte (R) of Massachusetts, and William Clay (D) of Missouri. Its most stringent requirement would be that employers give workers at least three months' notice before closing a plant. Black & Decker gave Allentown workers 15 months. In a highly publicized closing two years ago, Atari gave California workers three days.
Some observers are not optimistic the bill will pass. It already has drawn fire from some business groups. ``This bill is being billed as a compromise,'' says Renee Reymond, associate director of labor relations for the National Association of Manufacturers. ``But it still is a piece of legislation that is going to tie the hands of business.''
Standards on plant closure are increasingly a part of collective-bargaining agreements between US companies and their unions, says an expert in employment benefit plans.