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Yves here. We’ve pointed out that restoring manufacturing operations in the US would require explicit and sustained industrial policy, since the US has ceded many critical skills, such as the loss of factory floor and plant-level managers. But the difficulty of the undertaking does not excuse Trump’s “all hat, no cattle” approach.
By Tom Conway, the international president of the United Steelworkers Union (USW). Produced by the Independent Media Institute
Robert B. “Bull” Bulman stood up to FreightCar America because of the poor pay and hazardous working conditions at its Cherokee, Alabama, factory. But the company savagely retaliated with threats to close the plant and relocate to Mexico.
Then, after thwarting the union drive, FreightCar America opted to offshore those 500 jobs anyway in a greedy gambit to exploit low wages and weak laws south of the border.
Although Donald Trump won the White House with a vow to reinvigorate a manufacturing base essential for America’s future, he failed to stanch the torrent of U.S. corporations absconding to countries with abysmal working conditions and lax environmental regulations.
Right under Trump’s nose, America lost hundreds of factories to offshoring, and corporations relocated nearly 200,000 U.S. jobs, all before the COVID-19 pandemic sent the economy into a nosedive. Some of these callous employers, including FreightCar America, even soaked taxpayers for millions of dollars in subsidies and other aid before they cut and run.
“They’re like parasites,” observed Bulman, who will lose his job when FreightCar America abandons its mile-long, 2.2-million-square-foot factory by the end of 2020. “They get what they want and leave.”
Bulman, who formerly worked at a United Steelworkers (USW)-represented paper mill, helped lead two organizing drives at FreightCar America because he knew a union would compel the company to provide safer working conditions and give a voice to those performing demanding, hazardous jobs.
But FreightCar America waged vicious anti-union campaigns that included threats to close the plant and—the company’s very name notwithstanding—move the jobs to Mexico. After defeating both organizing drives, the company still sold out its workers.
Although Trump promised to stop companies from playing these heartless games with families’ livelihoods, he refused to intervene with FreightCar America or lift a finger to save manufacturing jobs in a state where workers deeply trusted he’d fight for them.
He gave the cold shoulder to FreightCar America workers who called and emailed the White House with pleas for help, just as he ignored USW members who sought assistance early in 2020 before Goodyear closed its nearly-100-year-old Gadsden, Alabama, tire plant and moved several hundred remaining jobs to Mexico.
Mickey Ray Williams, the former president of Local 12, reached out to several administration officials and provided them with a presentation outlining Goodyear’s refusal to invest in the Gadsden factory even as it pumped more and more money into a Mexican site paying workers only a few dollars an hour.
Goodyear’s offshoring of the Assurance All-Season tire developed—and long manufactured—in Gadsden was exactly the kind of nefarious practice Trump bragged he would curb.
But after a few conversations that seemed promising, the Trump officials stopped returning Williams’ calls. He simply never heard from them again.
“All we asked for was one tweet,” explained Williams.
“It was like you flipped a switch, and they went as cold as Alaska,” Williams said of his administration contacts. “The way I figure it, there was no political benefit to Trump, so they cut me off. Trump and his administration did nothing to help Gadsden.”
Trump’s red campaign hats mean more to him than American workers do.
Although the plight of the Gadsden workers elicited no response from the White House, Goodyear’s longstanding policy banning political attire, including Trump hats, from its shop floors aroused Trump’s fury. He threatened to remove Goodyear tires from Secret Service vehicles and fired off a tweet calling for Americans to boycott the company, even though that would mean the loss of even more American jobs.
“He wouldn’t call out Goodyear for workers, but he will for his own agenda,” Williams noted. “That’s wrong.”
Even when Trump injects himself into a company’s offshoring scheme, he delivers far less than he promises.
In 2016, Trump assailed Carrier’s plans to close an Indianapolis facility and vowed, “We’re not going to let Carrier leave.”
Trump arranged new tax incentives for the multibillion-dollar manufacturer and then took credit for “saving” the plant when Carrier grudgingly agreed to keep it open. But the plant today isn’t what it used to be.
While Carrier kept about 700 jobs at the Indianapolis factory, it still shifted hundreds of others to a Mexican facility that, like the one Goodyear operates there, pays workers just a few dollars an hour.
And despite the deal with Trump, Carrier’s parent company also followed through on plans to close a plant in Huntington, Indiana, about 105 miles from Indianapolis, and relocated those 600 or so jobs to Mexico as well.
Instead of meting out “consequences” to companies that offshore, as he pledged to do, Trump helped to accelerate it with measures like the 2017 tax giveaway that he and congressional Republicans bestowed on America’s rich.
The legislation gives corporations tax advantages for operations in other countries. Now, on top of low wages and weak laws protecting workers, companies have still more incentives to move jobs overseas and devastate local tax bases like those in Cherokee, Gadsden and Huntington.
After defeating organizing efforts, Bulman said, FreightCar America repeatedly told workers it would remain in Cherokee for the long haul. When Trump signed a pandemic stimulus bill this past spring, the company even took about $10 million in aid that it pledged to use for retaining workers and meeting payroll.
But ever since FreightCar America entered into a joint venture with a Mexican company, Bulman feared that it was only a matter of time before his employer moved their jobs and work across the border.
Now, as he and his colleagues log their final shifts, it angers Bulman to think that FreightCar America and Trump both betrayed them.
“FreightCar employees, including me, definitely think he dropped the ball in our case,” Bulman said. “It’s very disappointing.”
The West went on a suicide mission with free trade due to our high cost of living, but no one knew this was a problem as we used neoclassical economics.
China’s rise and the decline of the West were baked in.
How did the UK prepare to compete in a free trade world in the 19th century?
They had an empire to get in cheap raw materials; there were no regulations and no taxes on employees.
It was all about the cost of living, and they needed to get that down so they could pay internationally competitive wages.
UK labour would cost the same as labour anywhere else in the world.
Disposable income = wages – (taxes + the cost of living)
Employees get their money from wages and the employers pay the cost of living through wages, reducing profit.
Ricardo supported the Repeal of the Corn Laws to get the price of bread down.
They housed workers in slums to get housing costs down.
Employers could then pay internationally competitive wages and were ready to compete in a free trade world.
Classical economics is rather different to neoclassical economics.
Ricardo was part of the new capitalist class, and the old landowning class were a huge problem with their rents that had to be paid both directly and through wages.
“The interest of the landlords is always opposed to the interest of every other class in the community” Ricardo 1815 / Classical Economist
What does our man on free trade, Ricardo, mean?
Disposable income = wages – (taxes + the cost of living)
Employees get their money from wages and the employers pay the cost of living through wages, reducing profit.
Employees get less disposable income after the landlords rent has gone.
Employers have to cover the landlord’s rents in wages reducing profit.
Ricardo is just talking about housing costs, employees all rented in those days.
Low housing costs work best for employers and employees.
Let’s look at the US cost of living.
The cost of living = housing costs + healthcare costs + student loan costs + food + other costs of living
No wonder US firms off-shore to maximise profit.
Those jobs ain’t coming back Mr. Trump.
What sort of employer would be mad enough to pay the US cost of living in wages?
There are loads of better alternatives.
US firms couldn’t wait to get out of the US to places where they could make more profit.
They then imported back into the US, to add to the trade deficit Trump keeps worrying about.
Let’s look at China.
Maximising profit is all about reducing costs.
China had coal fired power stations to provide cheap energy.
China had lax regulations reducing environmental and health and safety costs.
China had a low cost of living so employers could pay low wages.
China had low taxes and a minimal welfare state.
China had all the advantages in an open globalised world.
It did have, but now China has become more expensive and developed Eastern economies are off-shoring to places like Vietnam, Bangladesh and the Philippines.
The West was never going to do well.
The classical economists could observe small state, unregulated capitalism in the world around them.
Today’s economists worked up from micro foundations and got very confused.
William White (BIS, OECD) talks about how economics really changed over one hundred years ago as classical economics was replaced by neoclassical economics.
He thinks we have been on the wrong path for one hundred years.
Small state, unregulated capitalism was where it all started and it’s rather different to today’s expectations.
Everyone pays their own way.
Employees get their money from wages.
The employer pays the way for all their employees in wages.
Off-shore from the US, ASAP.
China became a superpower and US influence in the world declined.
The Chinese are doing something we don’t see in the West.
Learning from mistakes.
Davos 2019 – The Chinese have now realised high housing costs eat into consumer spending and they want to increase internal consumption.
They let real estate rip and have now realised why that wasn’t a good idea.
Disposable income = wages – (taxes + the cost of living)
When the cost of living term goes up, the disposable income term goes down and they wanted to increase internal consumption.
The Chinese had to learn the hard way as they didn’t have the equation and were relying on neoclassical economics.
The Chinese claimed to want to increase internal consumption for the last decade, at least.
So far, it has failed.
See Michael Pettis for a very good discussion on that (including why is it failing), including how the Chinese recovery is driven by yet more dubiously productive investment and almost no uptick in the domestic consumption.
Pettis never seems to understand why China is doing this though. If wages rise, imports rise. If imports rise, state capacity is reduced. This means China needs lots of make work projects in order to maintain social stability but can’t allow wages to rise.
Its just standard BOP stuff and china can maintain it as long as it cares to (until u.s. threat is sufficiently diminished). Nothing irrational about any of it.
They then imported back into the US, to add to the trade deficit Trump keeps worrying about
The trade deficit spreads US dollars all over the world, and enables the US Governing class to build the US empire, without any risk that a foreign dollar holder will call on the collateral behind the dollars, because there is no collateral to be seized.
To make the US empire work require US Labor’s work. and wages to be exported.
The time will come when China only pays for imports in its own currency.
The scope of this article carefully narrows the discussion of globalization to the “tactical” level of this one battle in Alabama. The solution demanded from Trump seem to be limited to “calling out” the capitalists running this factory or banning them from exporting jobs. Trump indeed did raise worker hope for change and so at the very least deserves to be criticized for his hubris in thinking he could overturn the iron laws of capitalism through isolated acts of jawboning. Capitalism, if allowed, will always scan the globe for the cheapest labor available.
But given the current situation, the tactical level is of no interest. As things stand the war is lost for American workers. Factory after factory, given the current strategic alignment of globalization, will be attritted. The job for pro-worker actors is not to “call out” isolated cases of evil capitalists. It is to change the strategic conditions of the entire system in favor of workers.
Currently the Democrats call for higher US wages, more unionization, higher environmental standards, higher taxes of corporations, increased “free” trade, and increased immigration.
The Republicans more or less want lower US wages, less unionization, lower environmental standards, lower taxes for corporations, decreased “free” trade, and to decrease immigration. These last two are more lip service than reality and have only become popular with the GOP base since Trump gained power. The Chamber of Commerce Republicans agree 100% with the Democrats that the US needs more free trade and much more immigration.
Each party has some things right and some things wrong. The strategic vision that would turn the tide is, with apologies to Stalin, is a green form of “Capitalism in One Country”. The key would be strong borders against both trade and migration. Environmental laws would be maintained at a high level but crucially applied towards imports, which if strong enough, would force much industry back to the US. Wages could increase, unionization is desirable but paradoxically to tamp down worker demands due in case of labor scarcity (Americans are often not aware of how Social Democracy actually works). Taxes should be used to incentivize higher environmental standards.
Trump has done a service to the country for at least getting one party to take borders seriously, albeit on a rhetorical level. But due to his failures, Trump does deserve to lose this election. Tucker Carlson is waiting in the wings however and will hopefully take things more in a direction of Capitalism in One Country when he wins in 2024.
Interesting. 2 things:
1). Not sure Dems are in fact “calling” for “higher US wages, more unionization, higher environmental standards, higher taxes of corporations, increased…”
2). The tactical part you speak of a good point, but tactical is still a very powerful and essential component when part of the larger strategic goal that seeks the same outcome. Just good politics. It is telling IMO that Dems are so easily out flanked by the “tactics” of those like Trump. It indicates Dems favor neither the tactics nor strategic goals that those tactics might imply.
I spent over twenty years opposing and organizing against charter schools and teacher union busting in NYC. In virtually every instance, Democrats were at best useless, and in the case of the Obama/Duncan administration, were straight-up enemies.
The claim that Democrats want increased unionization is false, and is belied by history and the evidence.
Well it was “Make America Great Again”, not “Make USA Great Again”. Mexico is still part of America.
Therefore Trump is only against China and to a lesser degree the EU, you see.
Sounds like Trump is just as bad as the Democrats. After all Obama lied about NAFTA during his first campaign and Bill Clinton pushed the thing through. Those Alabama workers better get off their duff and learn to code.
It’s probably safe to say that at the very bottom of the Dem to do list is people who build freight cars. But they have a good excuse since they are busy saving the world from Trump/Hitler. And Trump is actually starting to sound like Hitler with his threat to contest election results in the Supreme Court (not that he doesn’t have a case that the Dems will do anything to win).
What is left unsaid here the utter lack of militancy of the labor movement in the US for the past 73 years after Taft-Hartley.
What differs from the pre-WW2 era is the working class was organized, there was legitimate socialist and communist political parties and unions were unabashedly militant. For instance, the UAW finally gained recognition through “occupy” tactics (i.e., sitdown strikes) of the workplace and bore the brunt of goons, cops and the National Guard. Labor leaders were routinely arrested and even jailed.
In my previous life I was a unionized employee at the railroad. It was clear what was going to happen; Carter began railroad deregulation, then Reagan fired the air traffic controllers. Yet appeals for militancy were smacked down by the union and abetted by the company with retaliation. One concessionary contract after another followed, implementing two tier pay scales and benefits. There were radical reductions in employment and facilities. Yet the union leadership would never call for an illegal nationwide strike — they were far too comfortable with their 6-figure salaries (in the 80s) and all their Florida-based conclaves in February.
FreightCar America moves its shop to Mexico… and the head of the USW write an essay about it… This whimper goes unheard by the PMC or working class. Sure, Trump uses such events opportunistically — but should we expect different from Biden? Only in the regard that he will ignore such things, as did Obama. Free trade, free movement of goods and capital. Labor need not apply unless they are northbound.
Maybe if somebody like Sara Nelson ran the AFL-CIO, the “S” word might flow more freely from unions and actually occur on an organized industry-wide basis against the likes of Amazon, FedEx, Wal Mart, etc, etc.
Yes the “s” word. When we actually had a labor movement that piece of vocabulary was still alive and well. Now it merely serves as branding for a candidate who was really a closet Democrat (if entirely well intentioned).
IMO if labor in America wanted to be taken seriously they would start their own party. That they don’t is probably because their leadership in many cases are doing just fine thank you. The WSWS is rife with tales about the UAW in particular.
Unions can thrive when labor is in short supply, but will have a difficult time surviving when there is a good supply of labor via off shoring, in sourcing of workers and importing of goods formerly manufactured in the USA.
In the 70’s, an executive related to me a story of the behavior of a prominent labor leader during closed door negotiation with senior management of a firm..
As I remember, behind closed doors, the labor leader would negotiate with management with a very pragmatic “we get this, you get this” deal making behavior.
Then the labor leader would then publicly pronounce a “we nailed the bastards” message after the negotiations were complete.
It was good theater for the union members and the public.
The unions are necessarily weak now as well paid union leadership knows it is dealing from a weak hand given the availability of direct labor, indirect labor and the mobility of factories..
And yes, I’ve heard of the “lump of labor fallacy”, which economists trot out to suggest labor creates its own demand, so not to worry.
I suspect there can even be too many economists for them, collectively, to make a decent living.
I’m so sick of and yet just love love love how pundits call out Trump for lying. Of course he lies. Deep level everyone knew but hoped that he might start a few unexpected fires along the way. But I seem to recall Obama saying he’d walk the picket lines, stand with labor… apparently the pundits calling Trump a liar missed events like the Madison protests and how worn out Obama’s shoes were.
So all hat, no cattle for both social clubs.
My bottom line is that it is virtually impossible for workers to win against capitalist as long as The Machine’s policy and sub-routines are designed / coded the way they are. Hell, the Fed can just hand out leveraged funds or jack up asset prices to counteract any successful strike / counterstrike that workers might manage. Workers will need another way. No idea what that might be.
Unfortunately that would seem to indicate that nationalism would need to rise sky high levels and that global .01% would suddenly need physical safe havens within the US borders. Of course the global .01% have been shitting where they might decide to eat so not sure how much of a safe haven it would be.
Can’t fight global capital with local labor.
PS. I think .01% is still too high of a number. The true number / percentage of global population is much much smaller than that. Which means the number required to maintain current and future The Machine policies is much smaller than we tend to think it is. Something to ponder. When we get rid of the hat and get down to the cattle: Who are the lynchpins and where are their communities? How do we influence or even leverage them? Is that even possible?
ETA: @WobblyTelomeres Unfortunately all labor will be forever local. Which could be useful is all local labor were to upset The Machine in their own time and own ways in a loosely coordinated but sporadic fashion. But the structure of The Machine would still be there in the background ready to be picked up again.
Driving back to NH from PA yesterday, we passed a large billboard on the interstate thanking Trump for restoring manufacturing jobs to the Lackawanna Valley. In western PA–Newcastle area and epitome of Rust Belt–Trump signs vastly outnumber Biden signs; many yards having multiple Trump signs, along with “Drain the Swamp” and “Police Lives Matter”. Also one sign: “Cats–2020”.
Re: “All hat no cattle”
Thanks to an unusual series of events, I’m now experiencing TV advertising in quanity for the first time in 28 years. If you type in “trump new campaign ads” at youtube and click on the highest ranked video, at about 25 seconds you can see/hear a Latina voter say “Promises made. Promises kept.” HIs base is so attached to him that they ignore what’s actually happened–they stop looking for the cattle after they see/hear the hat. The TV ads in north Jersey also talk about promises made and kept.
Even better, after doing everything possible to gut the Post Office, that constitutionally mandated branch of government is now spending money on ads to assure Americans that all is well with it and its dedicated employees. Trying to gut an agency and then using it to trump-et his achievements for re-election is “all hat no cattle” on steroids.