Feb 16, 2004
Electrolux, the world's largest manufacturer of household appliances, announced in mid-January that it would close its Greenville, Michigan, factory in 2005 and would move production to South Carolina and Mexico.
Workers in this small Western Michigan town have been producing refrigerators and earlier, iceboxes, for 127 years. A few years back, Electrolux bought the company. Now, with the stroke of a pen, this profitable plant will throw 2700 workers out in the street, devastating an entire community.
According to Electrolux's own financial records, the Greenville factory was profitable. But Electrolux wasn't getting the higher than six% return on investment Electrolux has declared it must have.
The company had toyed with the union and with state officials. It demanded tax breaks in excess of legal limits in Michigan. It demanded concessions of $24,000 per worker per year, which could only have been achieved by violating federal minimum wage laws.
The UAW tentatively agreed for workers to give up $12,600 per person a year. This proposal never came to a vote, since the company had already decided to close the Michigan plant.
Giving up concessions was not going to save jobs. It never does. Michigan had already given "incentives" of 8.7 million dollars to Electrolux for "job creation" in the past. Despite the announced 2,700 job cuts, not one state official has asked for that $8.7 million in "job creation" money back!
Instead the state, which claims to be in a budget crisis, "found" still more money to offer Electrolux: 121.2 million dollars more in tax breaks and grants.
Since 1998, Electrolux, with headquarters in Sweden, has cut over 40,000 jobs – one third of its workforce. It has closed or sold 29 factories and 50 warehouses – some in the U.S. in New Jersey and Colorado, others in Europe.
The CEO of Electrolux explains: "We have grown through acquisitions over the last 30 years or so and bought 450 companies. ...We had duplicate facilities and redundant personnel."
This is the real story – using the profits made off workers' labor, the company bought up hundreds of other companies, then combined the work and shut some down. And, of course, in all of this, they squeeze more work out of fewer workers. When the shift of Michigan jobs is done, Electrolux plans for the same work to be done by 700 fewer workers!
The downward spiral won't stop until the day workers attacked like this decide to dig in their feet.
During the period that negotiations were going on to keep the jobs from leaving Michigan, the UAW and state officials kept all of the outrageous details secret. This prevented the possibility of workers organizing a determined fight against these monstrous demands made by the company.
Now that the news is out, it will take at least 2 years for the process of closing the plant to be completed. The workers in Greenville can still decide to make a courageous fight against this company's decision. In Western Michigan, since 2000, nearly 20,000 layoffs have been announced. The Electrolux workers have allies who could join them to stop business as usual.
Giving in to Electrolux's demands didn't stop them – but a determined fight could.