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Saturday, January 17, 2004

Let us all praise the free market!

Or, The Invisible Hand As Clenched Fist.

Electrolux, the company that probably made the refrigerator in your home (think Frigidaire, White-Westinghouse, Gibson, Kenmore, Kelvinator) just rewarded 2700 workers in central Michigan for their productivity, loyalty and decades of hard work.

With a pink slip.

What was the problem--rapacious union contract? Lazy workers? Unprofitable, outdated factory? Local/state government unwilling to make concessions?

Ixnay on all four. As it turns out, you can just make even more money by employing lower-wage workers outside the U.S. to do the same work.


Don Oetman, a UAW regional director, said the company rejected a union offer to make changes to their labor agreement that would have saved the appliance maker $31.6 million annually had it chosen to keep the plant open.

"Electrolux never claimed they weren't making money here," said Don Oetman, a UAW regional director. "They just told us they weren't making enough money to suit their corporate strategy."

All but 200 of the factory's 2,700 employees are production workers represented by UAW Local 137. They officially learned Friday morning that Electrolux will close the 1.7 million-square-foot plant.

The factory, Montcalm County's largest employer, will continue operating into 2005. Company officials declined to provide a more specific closing date.


Everyone but Electrolux made a wrenching effort to keep the facility open:

The Stockholm, Sweden-based appliance maker said Oct. 21 it was considering shuttering the Greenville plant and moving production because it would save the company $81 million annually. Almost immediately, a task force of local, state and federal officials was assembled to look at ways to persuade Electrolux to remain.

This month, the task force presented officials at Electrolux Home Products North America in Augusta, Ga., a package of proposed incentives it said was worth $42.8 million per year. The package featured tax breaks, money for job training and an offer to help develop a new plant in Greenville.

Meanwhile, the union local was developing its own proposal.

As calculated by their proponents, the incentives and labor concessions offered to Electrolux would have saved it a total of $74.4 million annually -- less than $7 million [below] the amount the company said it could save by closing the factory.


Electrolux's response? Sorry, but everyone else is doing it:

Keith McLoughlin, president and chief executive officer of Electrolux North America, said his company has been at a competitive disadvantage because all of its major competitors have production facilities -- or plans to establish them -- in Mexico.

Do I sound like I'm taking this a tad personally? Good--you've picked up on the subtle vibe.

I grew up in Gratiot County, immediately to the east of Montcalm, and one of my best friends was involved in the herculean state/local efforts to keep Electrolux in Greenville. This sort of thing has been happening for a good long time in the region for the past twenty five years.

Central Michigan has been Republican country since the birth of the GOP. The area sent her willing sons by the trainload to fight for the Union in the Civil War (50% of Michigan men of fighting age donned the blue), and being anti-Democratic is an article of faith in those parts. People whose beliefs would otherwise incline them to be Dems run for the Republican nomination, recognizing that the Democratic side of the ballot is a surer ticket to defeat than campaigning in the buff. Trust me--I know two examples personally.

All those years of rock-ribbed Republican loyalty are increasingly being rewarded with savage kicks.

Historically, farmers, small businessmen and light industry dominated the region. The latter two, however, which promised a middle-class lifestyle in return for hard work, good service, and loyalty, have all but evaporated. In my hometown, the refinery which dominated the eastern skyline is being mined for scrap, and the previous "largest employer," an auto parts plant, shut its doors in the late '80s. Oh, and downtown is being slowly hollowed out by the chain megastore built outside city limits.

The available jobs? Minimum wage track positions, no benefits. Speaking of benefits, the remaining mid-wage employers are ratcheting back on those. Have to remain competitive and profitable--in the most grimly Darwinian sense--don't you know.

And because it's not profitable enough, 2500 people and their families are being tossed aside by men who get golden parachutes under the same circumstances.

Lest we forget, brothers and sisters of a libertarian bent:

A theory that makes profit the exclusive norm and ultimate end of economic activity is morally unacceptable. The disordered desire for money cannot but produce perverse effects. It is one of the causes of the many conflicts which disturb the social order.

A system that "subordinates the basic rights of individuals and of groups to the collective organization of production" is contrary to human dignity. Every practice that reduces persons to nothing more than a means of profit enslaves man, leads to idolizing money, and contributes to the spread of atheism. "You cannot serve God and mammon."


What Electrolux did--and other corporations that do the same damn thing year after year--is an obscenity. It is a cavalier utilitarianism toward human beings distinguishable only in degree from the latest biotech lab horror, partial birth chop shop or push for euthanasia.

Indeed, Electrolux just pulled a Michael Schiavo on an entire community that is now inconvenient to it, leaving a few thousand shattered lives in its wake. The corporation found someone else more interesting and able to give it what it wants--ka-ching--right now. At least until it discovers that labor costs in Bangladesh are even lower than in Monterrey.

Lest we forget, there is a social dimension to the Gospel. Satisfying the shareholders and stock analysts at all costs isn't it.

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