Class warfare; plant closing

Charles Brown BrownBingb at
Sun May 11 13:05:42 MDT 2003


Class Warfare's Collateral Damage
By Stuart Appelbaum
Stuart Appelbaum is the president of the Retail, Wholesale and
Department Store Union. He is also a vice president of the AFL-CIO.

May 9, 2003
Since 1898, Fulton, N.Y., had been home to one of the Nestle Co.'s
most important chocolate factories.
The more than 450 workers at the Swiss company's plant were proud
that Fulton was where Nestle's Quik got its start. They took even
more pride that the paychecks they earned enabled them to own homes,
send their kids to college and plan for their retirement.
But last fall the lives of those workers, their families and everyone
else in town were thrown into turmoil when Nestle USA announced it
would close the Fulton factory forever.
Did the workers in Fulton lose their jobs because they weren't
productive enough to cut it in the global economy? Hardly. The Fulton
workers had the lowest absentee rate, the best safety record and the
highest efficiency rate within their division. The plant was a
money-maker for the company.
But the workers had something else too: an average age of 52.
Many of them were getting close to retirement and the pensions that
the Retail, Wholesale and Department Store Union had won for them
years before. The sooner the company could close the Fulton plant,
the less it would be required to pay into the workers' pension plan.
By avoiding these costs, Nestle could save millions of dollars.
"Corporate greed" may sound like one of those nasty "class warfare"
expressions, but it's the only explanation for why the workers in
Fulton lost their jobs.
Nestle today is the world's largest food company. Just one year
before it announced it was shutting down its Fulton plant, it posted
$47 billion in annual sales. In 2000 alone, Nestle stock climbed by
30% and, even with the uncertainties of the stock market, it was
still considered a solid investment.
Nestle's problem wasn't that it was struggling to survive or that the
Fulton plant was costing the company money. Instead it was that, to
its management, being successful and making a good profit simply
weren't enough: Management wanted more and wanted it fast.
It's a familiar story. Instead of generating new sales by offering
innovative products, Nestle opted to take the low road. The company
replaced skilled workers with machinery at some plants, closed others
and abandoned some of its areas of core competency. In 2000 alone,
Nestle closed 38 factories worldwide. But while the company was
divesting from some industries, it was also moving at breakneck pace
into others.
On the heels of its plant-closing binge in 2000, Nestle spent $11
billion to buy the pet-food maker Ralston Purina in January 2001.
Nestle's decision to claim a bigger stake of the pet-food trade was
motivated strictly by mathematics: The sales rate for the food that
people eat grows only as fast as the economy, while pet-food sales
are expanding twice as fast.
There is one thing Nestle didn't include in its equation: the effect
of its decisions on its workers, their families and the communities
where they live.
The most common measurements of the price of any factory closing are
the wages and valuable benefits that workers lose. But that's only
where the tally begins. Local hospitals are forced to care for more
uninsured patients, schools and local government suffer the cost of
an eroding tax base, and overextended human services are strained
even further.
There are other costs too - homes that are lost, increases in
domestic violence and the breakup of families, to name a few.
When companies close factories, corporate public relations flacks
usually say it was an unavoidable response to the demands of the
marketplace. In some instances that may be true. But the only demand
Nestle was responding to when it shut down the Fulton plant was its
own insatiable hunger for more profit, regardless of its human cost.
Rep. Cal Dooley of Visalia, a leading "New Democrat" in Congress,
recently remarked that Al Gore's language of "class warfare" made
voters "uncomfortable." Dooley's angst notwithstanding, discussing
the effect of corporate greed on the nation isn't promoting class
warfare. To the contrary, it is essential we speak out against it to
prevent more communities from becoming its casualties.
Would a presidential candidate who discusses that issue risk making
some voters "uncomfortable"? Probably. But the crisis facing working
families is one no real leader can be comfortable ignoring.

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