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Tuesday, January 20, 2004

Electrolux Redux.

Welcome to the firestorm!

A few points, before I get around to answering the comments. First, I am generally in favor of the free enterprise system, and I am doggedly opposed to socialism in all its forms--be it national, international, or the sclerotic European state/corporate hybrid.

The American economic system, for all its flaws, is probably the best thing currently going. Nor am I remotely opposed to a guy making a buck, or two, or even a billion, utilizing his God-given entrepreneurial skills within the boundaries of the law and morality.

Secondly, I vote Republican about 70% of the time--exclusively so in the upper state and federal races. On the primary social justice issue of our times (abortion), the national Dems are bent on doing everything possible to repel me, so I let them. You can't worry about housing, education, wages, etc. if you're dead. Other problems include the party's dissembling on marriage, goofiness on national defense, pandering to the balkanizing forces in American politics (e.g., Sharpton) and overall developing hatred of traditional religion (e.g., Schumer). Barring a Damascene conversion (the rise of a lot more Robert Caseys and Zell Millers), I can't see myself voting for a national Democratic candidate in my lifetime.

But that doesn't make me entirely comfortable with the Stupid Party, either. On economic issues, the libertarian line is disturbing--except, ironically, when the President does something like impose steel or textile tariffs, bails out airlines, or more generally, the idea of "compassionate conservatism." These things might freak out the libertarians, but it doesn't bother me particularly at all. Whatever else can be said for the works of Hayek, von Mises and Smith, they don't make for particularly good eating.

I imagine the fiber content's good, though.

In other words, I object to the bottom line as the bottom line. Especially where, as here, the bottom line before the closure of the plant was still profitable, and 2700 jobs are being tossed aside over $7 million--by a company that had $13.6 billion in sales last year. Something tells me the total compensation of every Electrolux exec whose job title involved a permutation of "vice-president" or better is on the order of several multiples of $7 million. Belt tightening by the higher echelon? Naah--the 2005 Volvos are going to be suh-weet.

I find it especially daunting to see Catholics chucking aside a worthy heritage of social teaching on this point, wondering aloud whether there is, indeed, any sort of problem with what Electrolux is doing here.

I'm tempted to let Jack do my fencing for me in the comment boxes, as we share the same perspective, and ditto to David Morrison, who rightly points the finger at, well, us. Likewise to IB Bill. But since at least some of it questions my emotional equilibrium and/or raise other rebuttal points, here goes.

PS to Peony Moss--if you are interested in a refrigerator, ask the salesman if Electrolux makes it--they don't make all Kenmores, Gibsons or Kelvinators. Many of these will not be made by Elux.

1. I'm so torn over this issue it makes me sick. Visit the poor in Mexico and you know they need jobs, too. our neighbors in chihuahua, mexico -- the poor villagers (unskilled laborers who can find work in factory jobs near Chihuahua, Mexico -- need to eat as much as our neighbors in Michigan.

I can empathize with this one, but I'm in agreement with Victor--The only reason the jobs are appearing in Mexico is because labor is cheaper. They'll be getting less money and benefits for the exact same work, with far fewer protections. And who's to say how long ELUX is going to be in Mexico, when China beckons?

2. No one has a right to be employed.

I've re-checked my post a few times, and I never said anyone did.

Nor, according to our faith, is the employer's sole obligation oriented only toward profit.

Not so by the way.

3. Or should we still be compensating buggy-whip makers?

I agree that no employer has to keep employees toiling at producing an obsolete/undesired product. But, since that isn't the case here--they'll be making the same stuff in Cuidad Juarez, and not, for example, Edwardian wooden ice boxes--the analogy doesn't fit.

4. And I must point out that Electrolux never made a vow to love, honor, and support the city of Greenville, or even its employees: all it set about to do was run a business. The gulpy New-Deal emotionalism that Americans invest in jobs and companies just sets up these feelings of betrayal. What Electrolux is doing may be morally wrong, but this sort of overheated rhetoric ("pulling a Michael Schiavo on an entire community!") is as destructive of useful debate as it is embarrassing to those who engage in it.

We agree on a couple of things here. First, what Electrolux did is (ignoring the "may be" waffling) morally wrong--my entire point. Second, I have to confess to bouts of gulpy New Deal attachment to such things. Even to the New Deal itself--my late grandfather credited the CCC jobs he and his brothers got with helping the family survive. I suppose I could call them deluded emotionalists and swat them with copies of The Wealth of Nations, but I'll pass since that would be a decidedly weird and one-sided dialogue, inasmuch as they have all passed on. That, and the fact I expect my grandpa's long memory to be enhanced in the hereafter.

I also think we should be especially indulgent toward the good people of Greenville for their "gulpy emotionalism," as well. After all, they were making refrigeration equipment more than a half century before the advent of the New Deal, and long before they ever met the profit-conscious Swedes at Electrolux (who bought the original Greenville employer).

That makes a nice bridge to where we part ways, namely the role of a business as a member of a community. True, the business doesn't swear marital oaths (As an aside, I question whether the Schiavo marriage is valid and sacramental, but that's for another time). At the very least, however, such employers do partake of the benefits of the community--schools, safety, houses of worship, cultural activities, commercial opportunities, the infrastructure, the favor of local government and government representatives and so forth. Moreover, the longer the association and the larger the employer is relative to the community, the more that relationship places a special responsibility upon the employer to behave responsibly. Such "company towns" deserve nothing less. A marriage? Maybe not. But there is something more than vaguely covenantal about it. A social contract, perhaps?

In other words, such an employer shouldn't be regarded as though it rode into town from heaven to the tune of Flight of the Valkyries; a sort of Randian colossus gracing the untermenschen and their piddling thorp with its wondrous presence. The reality is--especially after a century, and especially when the employees are still holding up their end of the enterprise--that it is much more akin to a marriage than Electrolux's defenders are willing to admit.

In light of such realities, it seems odd to give Electrolux the license to behave like a john leaving the cash on the night stand, or, perhaps more analogously, a cad husband who trades his 40 year old wife in for a couple of 20s.

We wouldn't be so sanguine about the hypothetical husband/john above. But, since "market forces" or "competitive factors" are at work, Electrolux gets a free pass to treat 2700 people this way? Afraid not.

Finally, re: the Schiavo reference. Got a couple of complaints on this one. First, if you think this is "overheated rhetoric"--Welcome! You're obviously new to these parts. "Overheated rhetoric" is a stock in trade at this heckler's stump. :) And no, I'm not embarrassed by it. The rare stuff that embarrasses me almost never gets published.

More seriously, I think it fits. Schiavo, too, is in a relationship that he deems is no longer sufficiently profitable to him, so he is ending it. And, as the formidable Michelle notes, devastation will be left in its wake.

Montcalm County has about 62,000 people. Moreover, the unemployment rate runs to the high side of the state--8.3% as of the end of August 2003, placing Montcalm in 65th place out of Michigan's 83 counties. In the past three years, it has gone over 10%

In 2005, the unemployment rate will soar. With a lousy job market, you can expect the employees to find it difficult to get replacement jobs, and just about impossible to find comparable wages and benefits. With mass unemployment and underemployment come the attendant ripple effects--all the retailers and other businesses who served Electrolux employees will be taking it in the shorts. The real estate market will plummet as ex-employees try to unload their homes to go to greener pastures. With the loss of business and real estate tax revenue, local government services and schools will suffer. Oh, wait--that's government employees. Well, screw 'em, then.

Then there are the social cascade effects--substance abuse, broken homes, crime, etc. All because we excuse corporations from breaches of the social contract in the name of free enterprise because, when it comes down to it, $660 million in profits are intolerable when you can have $670 million--2700 people and a community be damned. Maybe those who reject it have a point--the Schiavo reference may be unfair. But I'm not entirely sure anymore which party should find the comparison more offensive.

Still, if you prefer, change it to "pull a V. Gene Robinson." Similar idea, but I suppose that maybe since VGeR didn't make any effort to physically harm his wife, the analogy will go over better.

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