As national unemployment officially hangs at 9.6%, one of the St. Louis area’s largest employers is discussing leaving. Olin-Winchester, the country’s largest ammunition producer, announced August 5, 2010, that it is “considering” moving its Centerfire (Winchester’s largest department), Metallic, and 9 Millimeter production facilities from East Alton, Illinois, to Oxford, Mississippi. This would leave nothing in East Alton (its largest plant), except Shot Tower, Shotshell, Primer, High Explosives, most of Quality Verification, and Case Fabrication.
In 2004, Winchester moved its Rimfire department to Oxford, and in 2008, it moved Military Packing. Nobody believes Olin will be in East Alton forever; most don’t believe it will be there much longer, at all. The company is obviously seeking to exploit the cheap labor of the South, where it won’t have to deal with pesky public service taxes and worker-friendly laws.
The State of Mississippi has repeatedly given handouts to Olin as incentives to move its previous operations, and now Mississippi claims they need a response by late September on whether or not Olin will be moving to Oxford.
East Alton Worker
Olin-Winchester was organized by the International Association of Machinists, Local Lodge 660, in 1944. Today, the IAM represents the majority of Olin’s workers — about 95% of those who would be affected by the proposed layoffs. Other unions include the Teamsters, Carpenters, International Brotherhood of Electrical Workers, Chemical Workers, Painters, Laborers, and Pipefitters. The company’s recent decision to “consider” moving is obviously motivated by the fact that Mississippi has weaker labor laws.
As a “right to work” state, Mississippi allows workers to work in a workplace represented by a union, without having to pay union dues. Open shops encourage workers to receive all of the benefits of unions, without ever having to pay dues or participate in activities that keep the union strong, like striking. By claiming to “allow for choice,” right to work states really only allow free riding on union benefits, until the union has no power in the workplace and is broken.
Workers’ Compensation
Workers’ compensation is the primary reason Olin offers for moving its operations to Oxford, Mississippi. The legal difference between Illinois and Mississippi labor laws allows Olin to benefit from reduced workers’ compensation costs. However, by only listening to Olin, one would think the union workers in East Alton cared about nothing but cheating the Illinois workers’ compensation protections. The company’s argument basically traces its health care costs (not injuries) through the past few decades, clearly indicating that health costs have flown through the roof. Olin’s argument is primarily a fudging of numbers.
In 1980, the United States cost of aggregate health care was $253 billion; in 1990, $714 billion; and in 2008, $2.3 trillion. Even within recent years, the Bureau of Labor Statistics has reported that every American spent an average of $3,591 in 2008, but only $2,204 in 1998. This is not an Olin problem; it’s a larger economic problem related to aggregate health care costs.
Even accounting for inflation, this simply means health care costs in the US have increased — a fact that surprises no American. The United States spends far more per capita than any other industrialized country on health care. This is due to the inefficiencies of the US, privately run, market driven health care system. When Olin mentions paying to treat work injuries, as if the total costs are the fault of Olin-Winchester workers, they are pushing off the blame from the larger economy. The argument that workers today are milking the company’s payment of medical bills and workers’ compensation systems more than decades ago, doesn’t take into consideration the fact that everyone’s medical bills have gone up.
People still die at work, and people still leave maimed. By moving to Mississippi, Olin would escape having to pay workers for injuries developed over time at work, like a hernia, carpal tunnel, varicocele, impediments developed at work through high exposures to hazardous materials, and other injuries not caused instantaneously.
It’s far more likely that more workers in Mississippi will not receive proper compensation for work related injuries, than workers in Illinois would abuse loopholes. The difference is who bears the cost — Olin, or its workers.
When?
The recent report Olin released said 5-6 years would be the estimated time before Centerfire operations had left East Alton. In reality, Olin-Winchester will probably leave as soon as possible. With this rush, the timing of the announcement is even more bothersome. Not only are the Congressional recesses problematic for influencing decisions through state mediation, but contract negotiations will not begin until December 2011. This time is roughly the time needed to build a massive production facility in Oxford, MS.
The scripted report also mentioned that the munition’s bubble is expected to pop soon. Since the 2008 Presidential Campaign, the National Rifle Association ramped up fear among its members that Obama would take their guns and ammunition. As a result, gun owners began stocking up on arms and supplies. This, along with Obama’s even larger military budget, resulted in record levels of demand for munitions goods.
Winchester has, thus, set new records in its productivity. Day after day, workers are producing figures unheard of by any munitions factory. Olin fears the bubble bursting, as it will. In reality, if the union waits almost a year and a half before acting to demand jobs stay in East Alton, when a new facility is nearing completion in Oxford, the bubble will have already burst. If that happens, Olin won’t need record high production levels anymore, making December 2011 the most optimal time for Olin to begin moving its operations to Oxford.
If the unions want to engage in meaningful interaction, they need not wait until December 2011 before they threaten action. They also need a lasting demand, like nationalizing Olin, to do away with the profit incentive for the future. However, the current leadership of the Machinists has been doing something quite upside-down.
“Buy American!”
The IAMAW is famous for advancing the slogan “Buy American!” before “Buy Union!” While this slogan may seem simple enough, it misdirects economic blame. Mexican workers have no interest in stealing American workers’ jobs. This is the “race to the bottom.” In the same way, Oxford workers don’t mean harm to East Alton workers; Olin simply sees a potential to exploit more in Oxford than in East Alton. Oxford production will still proudly proclaim on its packages, “Made in America.”
So, when the IAM leadership suggests that its workers “Buy American,” they are really suggesting Machinists should consume by distinguishing nationality, not by union. In reality, to increase the strength of American unions, we need to increase the strength of the world’s unions. Without the rest of the world in the same fight, we are forced to compete with the rest of the planet in a race to the bottom to lower everyone’s standard of living. The IAMAW has to stop its nationalist detours.
1) “Buy American” is a counter-productive diversion, not a slogan to win anything. We need solidarity with all workers.
2) Health care must be an effort won and paid for by the whole society to better each individual, not a fight to be had in every contract.
3) Doing away with the profit motive that compels moving jobs away is essential to preventing the “race to the bottom” around the world, and in the US.