Manufacturing jobs lost to productivity

"Bogus!"

You deny the effect of automation on both productivity and jobs? Please clarify what is "bogus".

ou deny the effect of automation on both productivity and jobs?
Please clarify what is "bogus".

Not at all. I'm asserting that automation is not the primary contributor to their productivity claims. Outsourcing is.

What facts back up your assertion?

Read the business articles about globalization and outsourcing.
They're not difficult to find.

I have, I do. Automation is the real issue, outsourcing is a sideshow. We are wealthier today than in 1990, we were wealthier then than in 1980. Automation eliminates union jobs. Overseas outsourcing is a temporary expedient.

Another very important cause of the move of manufacturing companies off shore is the myriad of government regulations!

Mexico and or China have less regulation? NOT!-while it may play a role it is not thee role.

Automation eliminates union jobs.

No it doesn't. It displaces relatively low-skilled jobs (regardless of any union affiliation, if any) with fewer, but higher skilled jobs.

"The high wage begins down in the shop. If it is not created there it cannot get into pay envelopes. There will never be a system invented which will do away with the necessity for work."
-- Henry Ford

And as I stated bluntly before, globalized outsourcing operates opposite to this approach: it utilizes cheaper labor and less sophisticated manufacturing processes to undercut the capital investment necessary for automation.

Incidently, lax safety and environmental regulations in foreign nations also undercut capital investment requirements vis a vis domestic production facilities.

"No it doesn't."

Yes it does. That you claim it doesn't demonstrates you are unwilling to accept the real world.

"Automation to speed the flow of cargo through West Coast ports, and the union jobs it would eliminate, have been the core issue during the contentious contract talks that began May 3 and eventually led to a 10-day lock-out of dockworkers by management."

http://www.bdpint.com/news_events/al_200211011600.html

http://www.ksworkbeat.org/Issues/RTW_Is_WRONG/rtw_is_wrong.html

"Due to the export of jobs, outsourcing and automation, existing union jobs are being lost as fast as new members join unions."

More Consumers Reach Out to Touch the Screen

By AMY HARMON

Published: November 17, 2003

INDIANAPOLIS — Striding into the airport here one recent afternoon, Kimberly Ward did not so much as glance at the two ticket agents waiting at the counter. Like most of her fellow travelers, she instead claimed an automated check-in terminal, touched its screen a few times, and took the proferred boarding pass with a quick smile of thanks.

Ms. Ward, 37, pays for gas only at the pump. She shops at Marsh, a supermarket in her neighborhood that has machines that let customers scan, bag and pay for groceries themselves. Her favorite bank teller is her A.T.M.

Dealing with humans in such situations "just slows you down," she says. "This is a lot more convenient."

A new generation of self-service machines is slipping into the daily lives of many Americans. Rejected for decades as too complicated, the machines are being embraced by a public whose faith in technology has grown as its satisfaction with more traditional forms of customer service has diminished. Faced with the alternative — live people — it seems that many consumers now prefer the machines.

"The main thing is you don't want to deal with the cashiers and their attitudes," said Dexter Thomas, 37, bagging his own pizza rolls and Eggos in a self-checkout lane at Pathmark store in downtown Brooklyn this month. "That's why people come to this line."

Soon they may have little choice. Eager to save money on labor costs, businesses are stepping up the pace of automation. Nearly 13,000 self- checkout systems will have been installed in American retail stores like Kroger and Home Depot by the end of this year, more than double the number in 2001, according to the market research firm IDC. Delta Air Lines spent millions of dollars this year to line 81 airports with chest-high automated kiosks: 22 million of its passengers — 40 percent of the total — checked in by touch-screen this year, up from 350,000 in 2001.

Fast food restaurants like Jack in the Box and McDonald's are experimenting with automated ordering stations that executives say have reduced lines and the need to order from a human being. "Skiosks" dispense lift tickets at several Colorado ski resorts. Urged on by theater advertising, millions of moviegoers now buy tickets from one computer by phone and pluck them from another at the theater, though eye contact is sometimes still necessary to gain admission.

The sudden influx of the machines, which still look and sound like the souped-up PC's that they mostly are, heralds what economists see as the eventual roboticization of large chunks of the service sector. In a standard economic paradox, they are already beginning to both eliminate jobs and increase productivity.

But their arrival is also prompting a retooling of people's reliance on machines, and each other. Celebrated for their convenience, the devices appeal to an antisocial impulse that critics find troubling.

"The question we should be talking about is not how much faster do you get your chicken if you go through a kiosk," said Sherry Turkle, a psychologist at the Massachusetts Institute of Technology who studies human interactions with digital devices. "The question is, `What is it doing to our social world when we deploy this technology to all these parts of the life cycle?' "

For many Americans, however, chicken check-out speed turns out to be quite the burning question. Marcia Boone, 62, said she has been using self check-out ever since it was installed in her local grocery store earlier this year. She has become so good at it that she sometimes chooses to go through the steps in Spanish, just for the challenge.

"You eliminate a step," explains Mrs. Boone. "Even in our express lane with a regular checker, they run it through and then it's sitting on the counter, and then they bag it. Whereas I run it through and then I bag it right away."

A self-described "people person," Mrs. Boone, of Talleyville, Del., says she now talks back to the machine. "After you scan, if you don't put it into the bag fast enough, it will say. `Please put the item in the bag,' and I'll say, `I'm getting there, I'm getting there,' " she said.

The growth of self-service machines, experts and users say, is partly a result of improvements in the technology since the early days of automated teller machines, which were much slower to catch on. Now more R2D2 than Darth Vader, most of today's kiosks have shed their hulking shells. Grubby number pads and monochrome displays have been replaced with brightly colored touch-screens that respond instantly — and help foster a trust in the technology that mere mortals may never again command.

Delta self-service kiosks dispense tickets to customers at LaGuardia Airport.

"If we asked people even a few years ago which would be more likely to make a mistake, an A.T.M. or a cashier, they would say the A.T.M.," said Clifford Nass, a professor of communication at Stanford University. "Now people would say the cashier. That's an amazing change."

But for many of those who declined to use similar technology in similar places when it was repeatedly tried over the last 20 years, the main appeal of the machines is the chance to avoid what they say are increasingly frequent frustrating, hostile or guilt-inducing interactions with service workers.

"They always get mad at me at Amtrak," said Megan Lesser, 26, of Brooklyn, who prefers to discuss schedules with Julie, the train company's voice-activated phone service, and buy her tickets at the electronic kiosks in Pennsylvania Station. "They say I have the wrong card, or if you go up to the window too fast, they're like, `You have to get back in line and wait until someone calls you.' "

Critics say the machines may also provide an all-too-easy escape from social interactions across class lines that may prompt some shoppers to wonder uncomfortably if a minimum-wage cashier has health insurance, or lead an employee to respond angrily to a customer. But some weary consumers say they would just prefer to serve themselves.

Brian Southard, 30, of San Diego said employees at his local supermarket make him feel like it is an inconvenience for them when he shops there. He prefers kiosks at airports and was thrilled to find them installed recently at his Home Depot.

"I like people, but if someone's having a bad day and you get that wave of negativity, it can impact my day, too," said Mr. Southard.

Machines have been displacing people since well before the Luddites began smashing them at the dawn of the Industrial Revolution. But economists say this is the first time computers have been flexible enough to automate a broad range of skills, including cognitive ones, that previously required complex interaction with people.

"The types of jobs now amenable to displacement by technology is really something we haven't seen before, said David Autor, a labor economist at the Massachusetts Institute of Technology. "If you don't have one of those jobs, you're a beneficiary, because the lines are shorter and your airline ticket price won't go up as fast. But it's going to have a significant impact on the people in these jobs now."

Businesses insist that they are not using machines as a direct substitute for human labor, but plan instead to compete by improving their service over all. But union representatives say jobs have already been lost as a direct result of the kiosks, and they say that the machines are causing perceptions of customer service to decline.

Airline employees say they often have to soothe passengers after a frustrating kiosk encounter. Twenty-five percent of the riders surveyed by New York City Transit recently said they had had a problem with the city's recently installed MetroCard machines, which now handle more than half of all sales.

Navigating a Delta kiosk for the first time at the Indianapolis airport, Cathie Franklin, 52, yearned for the days when someone else at least pretended to be happy to press the buttons for her. "I deal with computers all day at work," said Mrs. Franklin. "I don't want to have to deal with them when I'm traveling on vacation."

Many service employees are now being told to train people to use the technology that will ultimately replace them.

"The managers tell our people to tell customers to use those machines," said Bobby DePace, president of District 143 of the Machinists Union, which he said had already lost jobs at Northwest Airlines directly as a result of the kiosks. "If you don't tell them to use the machines, you're going to be disciplined."

Driving the corporate embrace of machines is some basic math. A typical airline kiosk costs less than $10,000, said Robert W. Mann Jr., an airline industry consultant in Port Washington, compared with a salary for a customer service agent of $20,000 to $40,000, plus benefits. Self- checkout systems pay for their $80,000 price tags after about 15 months, and then the average cost of a transaction to the retailer is cut nearly in half because of labor cost savings.

"Self-service machines never call in sick," said Greg Buzek, president of the IHL Consulting Group, a retail technology research firm. "You don't have to worry about scheduling issues. You don't have to worry about vacations."

Then there are the things you do have to worry about.

One morning this month, Luciano Guerreiro of Manhattan deposited a $100 bill in a machine at the 23rd Street C/E subway station for a $20 MetroCard, only to discover that it would not give him the change. The clerk in the booth listened sympathetically as Mr. Guerreiro explained at high volume what had happened.

"I'm sorry," the clerk said, giving him a number to call. "Once you use the machine, I can't help you."

http://www.ct-yankee.com/manfctry/labr_col.html

"On the Pre-Modern Waterfront" (Wall Street Journal, 10/3/02, page A14) describes the conflict between union labor (International Longshore and Warehouse Union) and productivity improvement, as desired by the Pacific Maritime Association. "Automation has become a main union sticking point across the U.S. economy. …They [workers] swap short-run wage gains for long-run layoffs and underfunded pensions." As an example, ILWU wants to continue entering shipment data by hand instead of scanning bar codes. The intention is apparently to protect ILWU jobs from the effects of automation. The effect will be to destroy ILWU jobs when offshore labor plus automation make them noncompetitive.
Labor's opposition to productivity improvements goes back to the early nineteenth-century Luddites, if not before. The Luddites smashed textile machinery because they were afraid it would put them out of work. They did not understand that automation brings higher wages and a higher standard of living for everyone.
Henry Ford, whose industries were directly responsible for making the United States the wealthiest and most powerful nation on earth, wrote in "Today and Tomorrow" (1926),

The theory that efficiency and better methods make for unemployment is pernicious, but it is widespread. … It all goes on the theory that there is only so much work in the world to do and it must be strung out. … The fallacy of this has been proved over and over again and nowhere more effectively than in our own industries.

That is the issue! Applause!

"No it doesn't."
Yes it does. That you claim it doesn't demonstrates you are unwilling to accept the real world.

No it doesn't.

The examples you cite involve transportation, distribution and service, NOT manufacturing.

The topic of this thread is MANUFACTURING productivity, not transportation and distribution.

Yawn. I can post manufacturing examples by the hundreds. I will if you insist. Your blindness is amazing. Did you bother reading your buddy Henry Ford's comments?

When production or other processes become automated, production efficiency rises, fewer workers are required to run the operations, and corporate profits generally increase substantially. In 1961 a U.S. House of Representatives subcommittee published statistics on the impact of of automation on jobs in the preceding half decade. The Steel Workers Union reported a loss of 95,000 jobs, while production increased 121 percent. The United Auto Workers (UAW) reported more than 160,000 members displaced by automation. The Internation Union of Electricians (IUE) claimed a loss of 80,000 jobs in the electrical industry, while productivity increased by more than 20 percent. Between 1952 and 1962, more than 1,500,000 lost their jobs in the manufacturing sector in the United States (Rifkin, p. 67). As we look at the current situation in the 90's, we find continued trends towards automation and technological investment. The following quote illustrates the cause for even greater concern in our times as machines become increasingly sophisticated. 'Machines are drastically different from the 1950s and 1960s,' said Charles O'Leary, president of the Maine AFL-CIO*. 'They are much more efficient, so there are fewer people running those machines.' With 30 years of research and development, the machines of today have the potential to displace even more workers, and in fact to eliminate entirely complete sectors of the traditional job market. According to the Bureau of Labor Statistics' 1996 Occupational Outlook Handbook, precision production, craft and repair occupations and operator, fabricators and laborers are projected to grow much more slowly than average in the years 1994 to 2005 due to continuing advances in technology, changes in productions methods, and the overall decline in manufacturing employment.

http://srproj.lib.calpoly.edu/projects/psych/Dunwoodie_Brice_Craig/blue.htm

EAST MILLINOCKET - Edgar Hamm Jr. had a great location in town, right across from the Great Northern Paper mill. For years, the bar at his motel filled up when the shift changed at the mill.
No longer. On a recent weekday afternoon, the bar was quiet and mostly empty. Only a few people sat at the bar. Two people played a game of pool.

Machines have replaced dozens of Hamm's customers, and many of the remaining millworkers are so uncertain about their jobs that they don't spend money the way they used to.

''People don't know what tomorrow will bring, so they try to hold on to what they have,'' Hamm lamented. ''The last thing anyone has to do is go out and eat or drink.''

Hamm isn't the only one feeling the effects of the paper company's downsizing. The entire Millinocket region is reeling from the effects of a steady, long-term reduction in the paper industry work force. The number of millworkers in the area has been cut by about 1,000 people since 1984.

New technology was a significant factor behind the downsizing.

George Tapley, president of a paperworkers' union local in East Millinocket, easily ticks off some of the changes.Thirteen people used to feed wood into a grinding machine; machinery replaced half that crew. Five people used to wrap paper; automation cut it to two. At one time it took three people to peel bark off logs coming into the plant; now there's one person using joysticks.

Throughout the paper industry and manufacturing as a whole in Maine, technology has increased production. Employment has dropped and wages have stagnated. The same pattern is being played out in other industries, even in government offices in Augusta.

A five-month investigation by The Portland Newspapers found that technology has played an important role in the widening gap between the wealthy and middle- to lower-income wage earners.

The findings:

Technology has helped companies boost productivity and increase revenue. Economists say those gains often aren't shared fairly with workers.
From 1988 to 1995, investors in eight publicly traded paper companies that do business in Maine saw an average 44 percent overall total return on stock investments, adjusted for inflation. Chief executive officers of those companies overall saw an average 65 percent increase in cash compensation, adjusted for inflation, from 1988-94, the last year for which figures are available.

Hourly wages for Maine paperworkers increased only about 1 percent from 1988 to 1995, adjusted for inflation, and employment declined 17 percent in the same period.

Technology has eliminated good-paying jobs for people with limited skills.
Manufacturing accounted for about one in three Maine jobs in 1978, but only about one in five jobs in 1994. Production per employee increased dramatically in the same period.

Workers displaced by automation, especially those who did not attend college, have a hard time finding new jobs that pay as well as the ones they lost.

The drive to automate will accelerate. Global competition fuels increased investment in new equipment. Companies have to automate to survive, but such investments often mean fewer workers are needed to produce goods.
Paper mills today are far different from the mills of 20 years ago. The buildings may look the same outside, but the equipment inside often has been modernized with high-tech machines.

''Machines are drastically different from the 1950s and 1960s,'' said Charles O'Leary, president of the Maine AFL-CIO. ''They are much more efficient, so there are fewer people running those machines.'

REDUCING NEED FOR WORKERS
East Millinocket and neighboring Millinocket, rural towns perched on the edge of Baxter State Park, have always been dominated by Great Northern.
Businesses and homes were built next to hulking, steam-belching plants in both communities. Trucks filled with logs rumble down Route 157, which runs through the towns.

Great Northern Paper, a division of Bowater Inc., has always employed most of the people and owned most of the land. For many years it even owned the property that workers built their homes on.

For most of this century the company was looked on by residents as part of an extended family. Great Northern gave students work in the summer, almost guaranteed local high school graduates some of the highest-paying jobs in Maine and even donated the use of heavy equipment to build the foundations of homes for its employees, residents said.

''That was a different era, when the workers were needed as much as the wood,'' said Millinocket Town Manager James Kotredes.

Automation and cuts in production have lessened the need for workers.

The company no longer recruits at high schools or helps build homes. Summer jobs are scarce. Great Northern, residents say, is no longer considered a member of the family. They attribute much of that to the job cuts.

Since the mid-1980s, new technology was the driving force behind a reduction of about 45 percent in the work force of the East Millinocket plant, which now has about 500 workers.

Down the road at a sister plant in Millinocket, technology played a smaller role in job cuts. Reduced production was largely behind the loss of half the work force there, according to the company.

In East Millinocket, production has stayed roughly level, even though the work force has been cut back drastically. Union officials say those productivity gains haven't been equally shared.

''I can't say we got a fair share,'' said Dale Cyr, a 42-year-old worker at the East Millinocket plant who was recruited out of high school. ''We haven't seen any profits come this way.''

Cyr is vice president of the United Paperworkers International Union, Local 37. Cyr, and other union officials at the East Millinocket plant, said workers went through the late 1980s without a raise and in the 1990s have been getting annual increases of about 2.5 percent.

Great Northern has been owned by three different companies in that time: Great Northern Nekoosa, Georgia-Pacific and now Bowater Inc. Georgia-Pacific purchased the company in the spring of 1990. It sold Great Northern to Bowater on Dec. 31, 1991.

Financial reports show that both Georgia-Pacific and Bowater stock investors saw substantial gains in their investments from 1988 to 1995. Someone who purchased Georgia Pacific stock in 1988 would have enjoyed a 76 percent total return, adjusted for inflation. An investor who purchased Bowater stock would have seen a 31 percent gain in the same period.

Gordon Manuel, spokesman for Great Northern, said he understands workers' concerns about small salary increases. But he said workers there make a good wage, comparable to the $42,500 average annual salary for paperworkers statewide.

Manuel said Great Northern suffered losses during an industrywide downturn from 1991 to 1994. ''Conditions certainly have improved'' in 1995, he said. The company recently announced plans to implement profit-sharing, he said.

For the paper industry as a whole in Maine, returns to stock investors have been increasing, but wages have been stagnant and employment has dropped. An analysis of reports by Bloomberg Financial Services shows that investors in most publicly traded paper companies with operations in Maine made money from 1988 to 1995.

For example, International Paper investors had an inflation-adjusted total return of 51 percent over that period. Scott Paper stock investors saw a 156 percent gain before its December 1995 merger with Kimberly-Clarke Corp. Only two of the eight companies considered in the reports showed inflation-adjusted declines: James River Corp. and Boise Cascade.

Wages for paperworkers in Maine increased only about 1 percent in the same period. Nationally, they dropped by more than 5 percent.

Also, in the manufacturing sector as a whole in Maine, economists say technology pushed a 50 percent increase in the value of goods produced per employee from 1980 to 1992, adjusted for inflation. But wages increased by only 11.6 percent, adjusted for inflation, during the same 12-year period.

Many businesses are not sharing their gains equitably with their workers, economists said.

Cyr, the union vice president in East Millinocket, said the job cuts and stagnant wages in the Millinocket region have taken their toll on workers and the community.

When he first went to work at Great Northern in the 1970s, Cyr said, he felt secure in his job and believed the company cared about his welfare.

''Now they look at me like I'm just a number. I have no loyalty to the company at all.''

Manuel, the company's spokesman, said the modernization of equipment, which has displaced workers, was necessary for the company to remain competitive in the global economy. ''You have to compete today on a global scale,'' he said. ''You're dealing with competitors that have the modern technology.''

Still, Cyr and other residents say they're worried about what is happening to their community.

''It's dying,'' Cyr said. ''It's dying because people young and old are leaving and the rest of us are waiting for the chance.''

THE LOSS OF OPPORTUNITY
''For Sale'' signs, some with bright banners reading ''Price Reduced,'' can be spotted on almost every street in East Millinocket and Millinocket, the legacy of continued job cuts.
It's a buyer's market. Homes that went for $100,000 five years ago sell for $80,000 today, said Fred Wentworth, an agent for North Woods real estate in Millinocket.

''In too many instances selling prices are dropping by a quarter or a third,'' he said.

Millworkers who lost their jobs generally have had to leave town to find employment. There was little chance of finding work that paid similar wages, especially for workers recruited out of high school.

As the population shrinks, business is suffering. Consumer sales in East Millinocket dropped 15 percent from 1988 to 1995, adjusted for inflation. They dropped 14 percent in Millinocket during the same period.

Some businesses are hurting more than others. For example, in Millinocket, the retail center for the two towns, taxable sales of general merchandise dropped 22 percent from 1988 to 1995, adjusted for inflation. Automobile sales plummeted 37 percent in the same period.

Perley Wheaton, who owns a Ford dealership in Millinocket, said his business is down by half from the mid-1980s.

The millworkers who remain don't have the same confidence about the future they used to, he said. Workers used to come in and buy a new pickup truck every two to three years, he said. Now they hold onto their vehicles until they fall apart.

Wheaton said he now specializes in selling used, 1-year-old rental cars to keep in business.

Ultimately, the declining manufacturing base in the Millinocket area, and Maine as a whole, means fewer good jobs for Mainers with high school diplomas.

Throughout the state, technology through automation and other means has helped cause a substantial loss of manufacturing jobs. From 1980 to 1995, manufacturing employment in Maine dropped 18.5 percent, or 21,000 jobs.

Hundreds of workers laid off from mills in the Millinocket region left the area.

Paul Jamo is one of those who stayed.

Jamo, who was recruited out of high school and worked in the Millinocket mill 17 years, said he was lucky to find a job selling cars in his hometown. Given his education, there weren't many other options, he said.

''Package-wise I did take a cut'' in pay, said Jamo. He said he was laid off from the plant in Millinocket in 1994 after new equipment installed at the East Millinocket plant took over work formerly done by his mill. ''There aren't too many places that offer wages and benefits like the paper company.''

New technology, in addition to automating routine tasks, is creating some jobs that demand highly skilled workers. But such jobs generally require computer skills and an education beyond high school.

A computer analysis by The Portland Newspapers of state and federal databases found that the fastest-growing job sectors in Maine are ones that generally require a college degree.

In the Millinocket area, ''kids have gotten the message that the jobs aren't there for them,'' said Brent Colbry, superintendent of the district.

About 87 percent of high school graduates leave to attend two- or four-year colleges. This is far above the statewide average of 55 percent.

The students who get further education will have a shot at high-paying jobs. But most of them won't be able to work anywhere near their hometown.

A COMMUNITY IN FLUX
The Millinocket region is aging because of the outflow of young people seeking opportunity. The average age of workers at Great Northern is 46 years old.
The loss of youth is having a serious impact on the region, residents say, and contributes heavily to the feeling that the area is dying.

For example, East Millinocket used to have eight pee-wee baseball teams, residents said. Now the community is down to three and had to pull in children from a nearby town to fill out the squads.

Student populations have dropped so much that schools are closing. An elementary school in Millinocket has been closed and parts of it are used for office space. The district plans to close another elementary school soon.

Both East Millinocket and Millinocket have economic development plans to try to bring in new business and diversify the local economy. A lot of hope is being placed on recreation-oriented businesses because of the proximity of the towns to Baxter State Park and the Allagash Wilderness Waterway.

There are some early signs of success, such as a business that takes tourists out on a local lake in pontoon boats to see moose and Mount Katahdin. But it could take years for that kind of business to boost the economy, town officials said.

For now, efforts are focused on trying to keep the paper mills going. Both towns are vigorously competing for a new, high-tech, $140- to $160-million pulp-making facility that Bowater is considering building.

Landing the plant ''really tells you what the future of the mill is in your community,'' said Kotredes, Millinocket's town manager.

Paradoxically, getting the new equipment won't boost municipal revenues because of tax breaks, he said. Also, the new facility would replace existing machinery and lead to further downsizing.

Residents hope that eventually the mills will reach a point where they don't need to lay off people. And, although everyone hates the fact that people are losing their jobs, there's also a realization that the mills must automate to survive.

''You can't blame the company,'' Kotredes said.

Paper companies, as well as most industries in Maine, face stiff competition from around the world.

The competition creates a dog-eat-dog atmosphere where companies constantly strive to become more efficient and create new products in shorter time spans.

''If they don't do these things, then companies elsewhere do them, and in the long run they will go out of business. It's a circular process,'' said Joseph Pelton, director of the Center for Advanced Research in Telecommunications at the University of Colorado at Boulder.

Edgar Hamm, owner of the motel in East Millinocket, said modernization to him means one thing: ''more downsizing.''

A faded sign hanging outside his motel reads: ''You're a stranger here but once.''

The problem is, Hamm said, not many strangers are coming in anymore. He doesn't expect that to change soon.

''I've had to close my dining room at nights because traffic is so slow,'' he said. ''I'd like to be optimistic and say there's light at the end of the tunnel.''

But he can't.

''I listed my business for sale about about three months ago.''

Eric Blom, staff writer, contributed to this story.

http://www.pressherald.com/specialrpts/richpoor/day4.htm

The Closing of a Torrington Plant
By Keith Knauss and Michael Matuszak

A description of this work follows, the full text can be found in Chapter 5 of the book, Grand Designs, the Impact of Corporate Strategies on Workers, Unions and Communities. edited by Charles Craypo and Bruce Nissen, ILR Press, Ithaca New York, 1993. It is available through academic bookstores and libraries.

This case study is from 1975- 1985 is by Keith Knauss and Michael Matuszak, participant observers in the events they describe. It involves Ingersoll-Rand's (I-R) shutdown of a heavy bearings plant in South Bend, Indiana. As they explain, the shutdown was part of a plan to relocate and consolidate the operations of I-R's Torrington subsidiary from northern (union) plants to southern (nonunion) plants. The Entire global bearings manufacturing industry was being consolidated and automated as a result of increased competition from Japanese producers and technological advances that enabled major companies such as SKF of Sweden, the world's largest bearings manufacturer, to build factories in which steel came in one end and finished bearings came out the other in a continuous, on-line production process. The results were global overcapacity, plant closings, and job losses. During the five years after 1972 during which SKF rationalized its bearings operation worldwide, twenty thousand jobs were eliminated in the industry . Thus, the question for Torrington, the second largest domestic producer behind Timkin and sixth in the world, was not whether to modernize its manufacturing operations but how to do so: by renovating existing facilities in the Midwest and Northeast or by constructing new plants in the South and using different work forces.

In the early 1960's, Torrington revealed a corporate strategy of relocating plants from high-wage, high-tax locations to states offering "competitive labor costs, realistic government regulations, prudence in tax structures and cooperative attitudes in the community and among its leaders." (Torrington Register, May 31, 1961). This policy was, if anything, intensified after Ingersoll-Rand acquired Torrington and included the relocation of its South Bend bearings operation to South Carolina. In the process, Torrington's management led everyone to believe that the northern plant could be saved through hard work and cooperation, although internal company documents intercepted by workers and made available to local union officials revealed that the decision to relocate had already been made.

Nevertheless, neither elected union officers nor city officials were prepared to challenge the company before or after the closing, apparently in the belief that so doing would alienate Torrington and other businesses and reduce the prospects of workers, union and community either retaining existing jobs with Torrington or attracting new manufacturing. Moreover, Torrington was able to persuade union workers to implement a new "cell-manufacturing" production process before it closed the plant and transferred the cell machinery and know-how to South Carolina

(Grand Designs Bruce Nissen and Charles Craypo, ed., ILR press, Ithaca NY, 1993

Other Research
DLS
IUSB

http://www.iusb.edu/~sblabor/Research/torr.html

Henry Ford, whose industries were directly responsible for making the United States the wealthiest and most powerful nation on earth, wrote in "Today and Tomorrow" (1926),

The theory that efficiency and better methods make for unemployment is pernicious, but it is widespread. … It all goes on the theory that there is only so much work in the world to do and it must be strung out. … The fallacy of this has been proved over and over again and nowhere more effectively than in our own industries.