European Multinationals: Slumming in America; Labor and Globalization

When you hear of companies setting up operations in a foreign country and, with the complicity of the local government, subjecting workers to conditions they would never consider applying to workers in their own country, does it remind you of nineteenth century colonialism? It should, but that is exactly what is happening in the United States today.



Two articles appeared recently in “The American Prospect” that discuss labor issues and globalization. The first, written by Lance Compa, is titled Slumming in America. Compa is interested in working conditions as a human rights issue. He provides an overview of traditional labor practices in Europe and illustrates the differences with standard practices in the United States.

“Get back to work, or we'll hire permanent replacements to take your jobs! That's what management at Robert Bosch, a German multinational firm with 270,000 employees worldwide, told union members who exercised their right to strike in December 2005.”

“Bosch's message might come as a surprise to anyone who reads the company's website, which promises "respect and support" for international labor standards, especially International Labor Organization (ILO) norms on workers' freedom of association. Bosch's threat directly contravened an ILO standard that says threatening or using permanent replacements to break a strike violates workers' freedom of association. Bosch's threat also ran counter to labor practices at home in Germany and throughout Europe, where permanent replacements are prohibited or, in the case of Germany, simply unheard of. No employer -- including Robert Bosch -- has ever tried using them there.”

“The 2005 strike wasn't taking place in Europe, however, but at Bosch's packaging equipment plant in New Richmond, Wisconsin, where the company was demanding wage cuts and higher health-insurance payments. Bosch acted legally under U.S. labor law, which uniquely allows employers to permanently replace workers who strike. Most other countries permit only temporary replacements. Some prohibit replacements altogether. Faced with permanent replacement, the Wisconsin workers returned quickly on management's terms.”

Europe’s labor practices demonstrate by contrast the United States’ resemblance to a banana republic.

“Striker replacement is just one feature of U.S. labor law that runs counter to international standards on freedom of association. Other features withhold protections for farmworkers, household domestic employees, ‘independent’ contractors who are really dependent on one employer, and low-level "supervisors" who aren't really part of management at all. Worker protections are further undercut by the disparity in U.S. labor law requiring authorities to seek injunctions against union unfair labor practices but not against employer unfair labor practices.”

“Non-interference in workers' organizing is the key international standard on freedom of association. The most common violations allowed under U.S. law are aggressive, one -- sided, fearmongering campaigns that employers launch when workers try to form unions. Managers can haul workers into captive -- audience meetings, forbidding any talk-back, to hear ‘predictions’ of workplace closure if employees form a union, as long as the predictions are not threats. This prediction-versus-threat distinction pleases judges and lawyers but leaves workers baffled and scared.”

Globalization has driven labor leaders not only into the arms of their counterparts in other countries, it has also initiated an alliance with human rights organizations. The concern is to not only prevent human rights violations in the United States and other third world countries, but to prevent the contamination of the rest of the world with U.S. practices.

“....U.S.-style management interference is also making inroads in Europe... a U.K. poultry-processing company named Cranberry Foods used an American anti-union consulting group to spoil workers' organizing in a plant near Manchester. Some U.S.-based anti-union consultants are setting up shop in Eastern European countries that recently joined the European Union.... trade unions and human-rights groups are developing strategies to turn back the U.S. union-busting model.”

The second article, by Louis Uchitelle, Globalization, Union-Style discusses the developing union strategy for dealing with multinational corporations. With the law and judges on the side of the employer, unions must consider other tactics.

“American law gives workers the right to choose to be represented by unions, but today that happens less and less as managers, ignoring the law, block the process. With employers firing or harassing employees who try to organize unions, only one in seven organizing drives eventually produces a contract. So the American labor movement has turned abroad for the organizing leverage it is losing at home.”

“The deterioration in a single generation is considerable, particularly in the last decade. Only 12 percent of the nation's workers (and just 7 percent of private-sector workers) are represented by unions today, with a further decline likely as union organizing dries up. The National Labor Relations Board (NLRB) reports a ‘precipitous drop’ since the late 1990s in the chief means of union expansion: workplace elections to certify bargaining units. Only 1,304 elections took place last year, down 60 percent in little more than a decade, with only 44,000 workers gaining representation in the elections won by unions. That number, too, has declined precipitously.”

The author uses the attempt by the communication Workers of America (CWA) to unionize T-Mobile’s 26,000 technicians and call center employees as an example.

“The CWA has been trying for years to organize T-Mobile's 26,000 technicians and call-center employees. It even endorsed Deutsche Telekom's 2001 acquisition of the company, then known as VoiceStream, in the belief that Deutsche Telekom's acceptance of unions, required by German law and custom, would carry over to the United States and that the CWA's organizing drives could then proceed without interference from company managers.”

Deutch Telekom is accused of “going native” and using standard U.S. management techniques to hinder the union’s efforts. To counter this, CWA has established ties with similar workers for Deutch Telekom in Germany.

“As part of this strategy, in 2008 the CWA reached out to ver.di, its German counterpart. Wilhelm led the fourth visit of ver.di officials to the United States in support of the CWA's organizing efforts. A former telephone installer, he rose to be a director of ver.di and, as such, holds a seat on Deutsche Telekom's board of supervisors. That puts him in regular contact with Rene Obermann, the company's chief executive. Indeed, ver.di officials occupy several of the board's seats, as provided by Germany's co-determination law.”

“Beyond engaging Obermann, Wilhelm and his union colleagues lobby shareholders and convene press conferences, hoping that descriptions of a worker's lot at T-Mobile across the Atlantic will stir up public anger in Germany. In case that is not enough, ver.di, with 2.3 million members, can appeal for support to the German government, which owns 32 percent of Deutsche Telekom.”

The T-Mobile effort is still underway, but the approach has become more common and has been of value. The goal is to get the European companies to at least be neutral with regard to union organizing.

“As globalization spreads, allowing corporations to play off workers in different nations, it also promotes global unionism. In the process, a cross -- border labor movement is beginning to add muscle to American unions. The United Steelworkers, the United Auto Workers, the Teamsters, the United Food and Commercial Workers, and the Service Employees International Union are all engaged in the novel tactic. SEIU is perhaps the most successful to date. Working in part through UNI Global Union, a relatively new Geneva-based federation of 900 unions in numerous countries, it is managing to organize thousands of American security guards whose employers were acquired by foreign multinationals.”

“A prime target is the Pinkerton company, which, fittingly enough, began as a supplier of strikebreakers in the 19th century. Today, Pinkerton's owner is Securitas AB, a giant security company headquartered in Stockholm, Sweden, a solidly pro-union nation. Securitas acquired Pinkerton in 1999, and in 2004, it signed an agreement with three unions -- SEIU, the Swedish Transport Workers Union, and UNI -- in which the company formally agreed not to interfere with SEIU's organizing efforts in the United States. Even with this commitment to neutrality, though, the going has been slow. Six years have passed, and Securitas employees in fewer than a dozen cities have been organized.”

“That is partly because the company's American managers have resisted, despite the formal agreement. ‘They push back, they argue that unionization will destroy profitability, they threaten to quit if SEIU signs up their employees, and that makes Swedish executives in Stockholm nervous,’ says Tom Woodruff, SEIU's executive vice president. ‘They don't want to have to send Swedes to run the American operation’."

This approach does appear to have some successes.

“What stands out in this data is the role of the foreign company operating in America. One-third of the dwindling number of companies organized successfully in recent years were foreign-owned, according to a study by Kate Bronfenbrenner, director of labor education research at Cornell University's School of Industrial and Labor Relations. One of her colleagues, Richard Hurd, estimates that one-half of all workers organized into bargaining units in the United States in recent years benefited from neutrality agreements. Most of them involved foreign companies with operations in the United States, but in some cases, an American company acquiesced to neutrality in exchange for a union's support in dealing with the federal government, or with state governments, on a regulatory matter or other issue important to the company's managers.”

Most of society’s ills can be attributed to income inequality and its effects. The Republican Party, and the businesses and churches that nourish it, all require large numbers of poor and ignorant people to thrive. Income inequality is no accident. It is hard to see how this issue can be addressed without a strong labor movement in the country.