‘….until the working class movement learns to confront bourgeois power to command and produce space, to shape a new geography of production and social relations, it will always play from a position of weakness rather than strength’ (Harvey, 2000, 48).
‘…in a time when the class struggle has receded…, is this not also a time when the painting of fantastic pictures of a future society has some role to play?’ (Harvey, 2000, 49)
This is an age where there is a marked absence of fantastic pictures, where fatalism fills the void. Thatcher’s dictum – there is no alternative, captures a mood of passivity. Victims of the 2001 closure of Chef, an Australian factory acquired by the Swedish multi-national corporation Electrolux, express their feelings in terms of class anger and an alienation from established politics (Lambert, 2004). For a young assembly line worker in the doomed factory,
‘Electrolux is run by the rich. Personally, I don’t like the rich people. All they do is think about their money. There are people starving, and these Electrolux people, they’ve got so much money, they don’t know what to do with it, right? Like the boss from Electrolux, whoever he is that makes this shit decision.
This is why the world is turning out to be such a terrible place to live in, because it’s only good for the rich, so the days of Robin Hood when you pinch from the rich, them were the good days – them days – perfect!’
For a worker in the press shop,
‘Politicians are scum. They forget about working people. When they want our vote, they come to us. After the vote, they change their story. Look at how many factories have closed. Politicians are big bludgers. They get money for doing nothing. I work hard and get paid peanuts’.
In common with virtually all closures that follow corporate restructuring, the feelings of these Australian workers did not translate into an effective common response to their predicament. Fatalism has demobilized the labour movement (Silver, 2003, 16), puncturing a century old belief that worker solidarity could challenge capital’s logic. Unions have no mechanism to reverse these decisions and appear impotent in these circumstances (Wills, 2001, 181). Consequently, these organisations are ‘paralysed’ in the face of corporate restructuring and their strategies have led into a ‘dead end’ (Moody, 1997, 1,2).
This article considers this impasse in relation to the optimism underlying Harvey’s Spaces of Hope and the new labour geography. This work is engaged through analyzing corporate restructuring in one sector, white goods manufacturing. The first section outlines the way in which leading corporations have shaped a new geography of production that has undermined trade unionism. The second considers the optimistic view of agency central to the work of Harvey and Herod. Labor can shape the landscapes of capitalism; corporate logic can be challenged. The final section confronts this optimism of agency with the reality of corporate power in white goods, exploring the tentative steps of an Australian metal union to work towards challenging the right of these corporations to exploit the uneven geographic evaluation of labor. Thus far, these endeavors have failed. However, in defining labor geography, reflection on the reasons for failure are as significant to the future development of this new field as are the success stories Herod analyses in Labor Geographies.
WHITEGOODS RESTRUCTURING & THE UNEVEN GEOGRAPHY OF CAPITAL
The Chef workers’ passivity is, in part, a product of their sense of powerlessness when confronted with closure. The essential character of restructuring is that work organisation decisions (work intensification, casualisation, outsourcing, closure and the relocation of production to geographically distant lands) are viewed as a managerial prerogative. These decisions are the business of shareholders, not workers and their unions. Strategy decisions are an exclusive managerial right. They are off limits to any form of bargaining. Casting power in this unilateral fashion meant that white goods companies were unimpeded in shaping a new geography of production as a principle method of competitive warfare. Competition was fought out through spatial fixes that exploited geographical difference in labour standards and the uneven geographical evaluation of laborers.
The strategy of the leading corporations in this sector demonstrates that the accumulation of capital is indeed a ‘profoundly geographic affair’ where spatial reorganization and the exploitation of uneven geographic development stand at the very center of the way competition is played out (Harvey, 2000, 57). Within this dynamic a clear geographic pattern emerges marked by factory closures and relocations. In North America, white goods factories move southward to Mexico and across the Pacific to China; in Europe, there is an eastwards drive into Central Europe; in Asia, a movement from Korea and Japan to China; and in Australia, a movement to China and Thailand. In each of these corporate restructures, the magnet is the absence of effective independent unionism and the uneven geographical evaluation of laborers. These locational shifts can only be slowed to a degree if workers concede to increased work intensification and casualisation. Power to impose this unilateral restructuring derives from the highly concentrated structure of the industry in the late Twentieth Century.
An historical geographical overview of the evolution of the industry from its inception early in the Twentieth Century reveals a spatial competitive dynamic played out through acquisitions, mergers and closures that both create and destroy productive forces.[1] The most successful corporations were those that were most aggressive in this drive, first within their home territory, then regionally, and finally globally. The resultant concentration of corporate power laid the foundation to increase the corporation’s scale and geographic reach and hence its capacity to exploit geographic difference. This is illustrated through the following profile, which provides insight into how this command of space and the emergence of a new geography of production further consolidates a vast power imbalance that underlies union paralysis.
The first point to consider is just how concentrated the industry has become, thereby ensuring the dominance of corporations which have consolidated vast power. As the following tables show, the five largest corporations control 30 per cent of the market with a combined turnover of 45 billion US dollars in domestic appliance revenues in 2002. The top two whitegoods giants alone controlled 15 per cent of global volume sales while the ten largest corporations account for 44 per cent of the global market. The table shows that the developed worlds MNCs dominate. The five North American and European MNCs have secured just over one third of world sales (35.6 per cent). The four Japanese MNCs achieved 14 per cent of world sales, with the emergent MNCs from China and Korea rapidly growing their market share.
According to Euromonitor (2003) in terms of share of world volume sales the top ten manufacturers of domestic appliances are:
Table 1 Ten Largest Whitegoods*Corporations (as measured by share of total global volume sales) 2001 and 2002
% volume
2001
2002
Whirlpool
(US)
7.9
7.9
Electrolux
(Sweden)
7.3
7.1
Bosch-Siemens Hausgeräte
(Germany)
5.8
5.7
General Electric (Appliances)
(US)
5.3
5.4
Haier Group
(China)
3.2
3.8
Matsushita
(Japan)
3.1
3.2
Maytag
(US)
3.0
3.1
LG Group
(Korea)
2.4
2.6
Sharp
(Japan)
2.6
2.6
Merloni
(Italy)
2.3
2.5
Source: Euromonitor: Global Market Information Database, ‘The world market for domestic electrical appliances’, November 2003.
*Note: ‘whitegoods’ are defined as the following product sectors: Refrigeration appliances, home laundry appliances, dishwashers, large cooking appliances and microwaves. This definition follows the Euromonitor database categorisations for so-called ‘large kitchen’ appliances. As a result, small consumer appliances and commercial/industrial products are excluded.
Table 2 Ranking of ten largest corporations by domestic appliances revenues (US$ million) 2001-2002
2001
2002
Whirlpool
10,343
11,016
Electrolux
8,935
9,763
Matsushita
10,829
9,395
Haier Group
7,271
8,587
General Electric (Appliances)
5,810
6,072
Bosch-Siemens Hausgeräte
5,439
5,933
LG Group
3,844
4,829
Maytag
3,955
4,421
Samsung Electronics
2,965
3,678
Merloni
1,760
2,340
Source: Euromonitor: Global Market Information Database, ‘The world market for domestic electrical appliances’, November 2003.
This high degree of concentration is the outcome of a process of capital accumulation driven by intense competition between private corporations where ‘one capitalist always strikes down many others’ (Marx, Vol.1: 929). This competitive war between private companies is the ‘driving fire’ of the rationalization of production (Marx, Vol.3: 254), which results in the expropriation of the many by the few, leading to an extreme concentration of corporate power, which in recent decades has further accelerated as a result of neo-liberal globalisation’s economic and financial deregulation. This power concentration enables the biggest to become ever more proactive in the take over wars, which then generates further rationalizations. So for example, in 1982 there were 350 corporations producing white goods in Europe. A mere decade later, this was slashed by two thirds to 100 companies. By the mid to late 1990s, a mere 15 companies controlled 80 per cent of the European market (Segal-Horn et al. 1998: 105)
There is a critical spatial dimension to this evolving industry structure.
During the 1970s, European and North American MNCs first experienced a problem that has persisted through to the present: saturation of European and North American markets and the consequent problem of overcapacity and overproduction. Annual average growth rates of corporations in these regions was a relatively low 2.1 and 2.2 per cent respectively between 1970 and 1977 compared to an average investment growth in Eastern Europe of 7.2 per cent and Asia 8.4 per cent.[1] This overaccumulation crisis provided the impetus for these corporations to become more fully globalised as they looked to markets and investment in Latin America and Asia.
The spatial fix to the 1970s overproduction crisis created the opportunity to promote new markets and exploit cheap labour either through direct investment, or through sub-contracting. In so doing these companies were shaping a new geography of production and a new set of social relations in a continuous competitive restructure that exploited geographic difference (differential labour standards and conditions), whilst at the same time introducing lean production as a global benchmark. Indeed, one of the leading players, General Electric, is regarded as the first corporation to fully embrace the new production paradigm (OBoyle, 1998).
The present status in the industry is that the two leading producers, Electrolux and Whirlpool are head to head in the United States and European markets, with Whirlpool the stronger in America, whilst Electrolux is more dominant in Europe, both having achieved this pre-eminent position through an aggressive acquisition and merger strategy. The competitive war between the major players is being waged through lean production restructuring and an engagement with cheap labour zones. Whirlpool and General Electric Appliances (GEA), the industry’s third largest producer, have led the way in relocating into these zones.
Frank (2002, 225) notes,
Jack Welsh, the CEO who has transformed General Electric…probably represents the clearest cut case of a manager who has done the bidding of Wall Street at the expense of what used to be called his ‘stakeholders’. Through an endless program of layoffs, downsizing, outsourcing, and move-em-south deindustrialization, Welsh managed to deliver miraculous rewards to his shareholders and poverty and unemployment to many of the towns and the people who used to work for him.
A key facet of the GEA restructure is the relocation of production from six unionised plants in the United States that employ 11 500 workers, to non-unionised factories in Mexico and Latin America. GEA developed a 48.5 per cent stake in Mabe, a Mexican company, which has since become one of the most important producers of white goods in the region, employing an estimated 18 000 workers who produce over 4.5 million appliances annually.
Similarly, a significant feature of Whirlpool’s global strategy is the advantage that it has taken of NAFTA to relocate a substantial volume of manufacturing to Mexico’s ‘maquiladora’ free trade zone where production costs are subsidised and where labour is cheap, defenceless and more exploitable. In 1997, Whirlpool began shifting production of small refrigerators from a US based plant to Mexico. Over subsequent years, GEA and Whirlpool’s relocation strategies led to the development of four ‘appliance’ production clusters (Monterrey, San Luis Potosi, Puebla, Queretaro). The underlying reasons fuelling the growth of these clusters were apparent- workers manufacturing cookers at GE/Mabe plant were reported to be receiving fifteen dollars per day- an equivalent amount to that received by US based GE workers for every hour expended on constructing the same products.[2] By 2002, Whirlpool had bought out its local joint venture partner (Grupo Vitro) to become Mexico’s second largest white goods manufacturer. In the same year, combined appliance exports from Whirlpool and GE/Mab in Mexico were thought to total more than one billion US dollars- a tenfold increase from the first year in which NAFTA came into effect.[3]
It was not only ‘Anglo-American’ corporations that drove the growth of the appliance industry in Mexico. Korean based LG Electronics (LGE) announced its ambitions for making a greater impact in the appliance sector by constructing a new plant in Mexico to act as a ‘regional production base’ for white goods. LGE was said to have invested $US 100 million in the plant built on a 30,000 square meter site in Monterrey in north-east Mexico.[4]
The implications of production relocation were not limited to employment relations in GE and Whirlpool. There was also a significant ‘flow on’ effect on major components suppliers and corporate competitors. In a never-ending crusade to reduce input costs, GE applied severe pressure on its parts suppliers to relocate to Mexico going so far as to organise ‘supplier migration’ conferences in the late 1990s to entice them to consider relocation.[5]
The threat of relocation was also an effective means of disciplining remaining US based, and, in particular, unionised, workers. For instance, in 1999 GEA workers at a Louisville plant agreed to assist in finding $80 million in cost reductions in order to prevent the company shifting all refrigerator production to Mexico. Similarly, GEA workers in a unionised plant based in Indiana were confronted with a stark choice- slash costs by $95 million or face the loss of 1,400 jobs.[6]
If Mexico was the fulcrum of new investments in the late 1990s, it was only a matter of time before the disciplinary power of the unconstrained capital mobility impacted even on Mexican conditions. By late 2002 the business press signalled that Mexico was losing its ‘magic’ for restless investors seeking ever-greater reductions in labour costs and increases in profits.[7] According to one report, industries in the maquiladora zone were confronting new competitive threats from even lower wage production in China, with the CEO of Mabe announcing that he was ‘worried’ about this threat and expressing doubt as to the regions ability to attract new investments. Alluding to the possibility of relocation to China, executives in other industries castigated the Mexican government for failing to provide adequate infrastructure, attractive tax incentives, and more ‘flexible’ (characterised by deregulation and the removal of basic employment protections) labour markets.[8] Notably, however, the competitive ‘threat’ from China appeared to result in relatively few cases of direct production relocation while the lay-off of hundreds of thousands of workers in the maquiladora zone in 2001-2002 was, clearly, related to a slowdown in US consumer demand. In this way, the mere threat of relocation to Asia was thought to provide an effective tactical means of creating a climate of ‘fear’ in order to suppress rising real wages, erode employee benefits, allow for ‘flexibility’ in replacing permanent staff with casual employees, and advance demands for regulatory restructuring.[9]
While the threat of relocation was perhaps as effective as its realisation, it is also clear that the intensification of competition from new Asian producers is an important force driving global restructuring. These competitive pressures, however, were just as applicable within the Asian region- a fact that is more than evident when Korean whitegoods manufacturers are considered. As with most companies producing consumer appliances, the Korean chaebols are facing difficult times in terms of their appliance operations and are looking to roll back many activities and investments. In China, however, companies such as Samsung and LG are planning for an expanded presence both in terms of production facilities and penetration of consumer markets. Samsung views China as its biggest potential market. LGE is an early market entrant in China and, as a result, has 15,000 employees and is a leading manufacturer across a range of product sectors.[10]
Moreover, with China’s entry into the WTO, companies such as LGE are reported to see further opportunities for exporting goods from their Chinese manufacturing operations as well as capturing a greater share of domestic Chinese white goods/electronics sales. In this way, China is seen as crucial as both a market and as a regional manufacturing base. According to some reports, there are even rumours LGE may consider transferring its corporate HQ to China.[11] This has led to ongoing concerns as to the ‘hollowing out’ of Korean manufacturing industries. According to figures released by the Korean Ministry of Commerce, Industry and Energy, Korean companies across a range of industrial sectors are now producing a remarkably higher percentage of their products from foreign locations. In white goods, it is estimated that offshore production of refrigerators has risen from 18.4% in 1996 to 37% in 2000. For washing machines, the rate of offshore growth is even higher, expanding from 12.4% to 40% over the same five-year period.[12]
Aside from the relocation of factories, the new geography of capital is also being shaped by novel forms of subcontracting. In a relentless drive to decrease operating costs in order to feed finance capital’s hunger, leading whitegoods MNCs are selectively sub-contracting in Asia. A GE union report argues that this ‘aggressive contract manufacturing’ is the ‘wave of the future’ that may even render ‘the Mabe styled strategy obsolete’. They point out that when GE initially considered locating production in China and India, joint ventures with local companies were considered. However, after assessing the situation, GE opted to contract manufacturing to local companies who would produce GE brands, which would then be marketed by the MNC. The report notes that as a result, ‘GE is able to leverage its brand name while risking little of its capital’. This contracting out process enables the corporation to produce ‘GE-branded products at a fraction of the cost of its main production facilities, say in Louisville, Kentucky or Bloomington, Indiana. Thus, it is not surprising that GEA seems to be more concerned with sales than production’.
Indeed, Asian based manufacturers and suppliers often tend to attract the bulk of OEM (original equipment manufacturer) contracts. Thus, aside from producing goods that are exported under its own name, in 1998 Samsung reached a US$140 million deal to supply Whirlpool with 550,000 refrigerators over five years that were to be branded by Whirlpool and exported to South East Asia, Russia and the Middle East.[13] This single order was said to have met 65 per cent of Samsung’s revenue targets for refrigerators in that year, a fact that underlines the significance of major OEM contracts. The fastest growing new Asian player within the global whitegoods industry is Haier- a previously state owned Chinese appliance manufacturer that has recorded exponential rates of growth and that now boasts of its ‘global’ dreams in the international business press. Haier could well have a significant impact on global whitegoods markets.
All the major players are pursuing precisely the same form of competition to the point where they are all leveraging advantage of uneven geography. This pushes the boundaries of how space is used to competitive advantage even further. New, previously unimagined, fluid and effective strategies are evolving in this battle of the giants. Here the Swedish MNC Electrolux has led the pack. Faced with a falling rate of profit in 1996 and 1997, the company engaged in aggressive cost cutting. A target of 6 to 7 per cent was set in terms of an operating margin and around 15 per cent in terms of the rate of return on equity.[14] The company lifted its operating margin from 4.0 per cent in 1997 to 5.2 per cent in 1998, and thereafter reported an operating margin of 6.2 per cent in 1999 and 6.5 per cent in 2000. As Electrolux’s 2000 report shows, these results were achieved by a zealous strategy of closures and downsizing that led to stock market values climbing sharply between 1997 and 1999.[15] It is the corporation’s new method of achieving these outcomes that that further advances how space is being used.
Electrolux’s year 2000 annual report reveals much about the strategic options available to this powerful global corporation, options based on exploiting geographical difference to the greatest degree possible. During 2002 the company closed cooker factories in Sweden, Italy and Germany, relocating production to Romania and, similarly, it has shifted some production capacity from a Spanish refrigeration plant to an established plant in Hungary. The wave of rationalizations continued through 2003. An air-conditioning plant in New Jersey in the United States was closed, resulting in the loss of over 1300 jobs. In Europe, the company announced its plans to close three facilities – a refrigeration plant and a cooking hob factory in Germany and a cooker plant in Norway.[16] This restructuring has continued unabated during 2004. A vacuum cleaner plant in Vastervik, Sweden was closed resulting in the loss of 600 jobs and a refrigeration plant in Greenville, Michigan was axed with 2 700 workers out of work. A new refrigeration plant is planned for Mexico.
There is a significant geographic pattern to this restructuring. Essentially, the MNC is moving out of high waged, unionized Europe, the United States and Australia into cheaper labor zones, free of democratic unionism. In Europe, for example, these waves of divestment, retrenchments and plant closures have meant that Electrolux employment levels in Northern European nations have declined markedly. Between 1998 and 2002, average employment fell by 30.6 per cent in Denmark (-865 employees), 32.5 per cent in Sweden (-3,163), 38 per cent in Germany (-3,480) and 42.4 per cent in the UK (-1,666). Undoubtedly, Sweden and Germany have experienced the most dramatic absolute decline from the mid 1990s.[17] The average number of Electrolux employees in Southern European nations also declined significantly, yet much less severely, with total employment falling in France by 16.8 per cent (-439), Spain by 12.8 per cent (-437) and Italy by 14 per cent (-1857). In the United States, the average number of employees declined by 20.7per cent (-4906) over this period.
Whilst the extent of the Electrolux restructuring and closures is remarkable, especially in Germany and Sweden, it appears similar to the spatial fixes of the other significant corporations in the industry. Where Electrolux is now pushing the boundaries of the spatial fix is in the way the MNC is shaping the new geography of production through constituting a new form of space competition within the MNC itself, a process that has been labelled, ‘regime shopping’. The corporation’s new approach is analysed as it signals the next stage of the spatial fix. The Electrolux innovation works as follows. When they bargain at a specific factory, they leverage agreements to restructure, (intensify labour, downsize and casualise), by threatening closure and relocation to another Electrolux site such as Romania, where labor costs are lower. This ‘whipsawing’ strategy of commanding space and the uneven geographical evaluation of labor to force a downward spiraling restructure that cuts costs and enhances shareholder value is now a cardinal facet of Electrolux’s managerialism. Significantly, these agreements are of short duration, forcing unions to bargain away conditions each year in the hope that this might influence the company’s future ‘regime shopping’ decisions. This strategy had its genesis Nike where the Asian producers contracted to Nike were constantly competed for the short term contracts. The crucial difference is that Electrolux has inserted the system within its own companies.
An example of ‘whipsawing’ is Electrolux’s recent Italian intervention.
In 1997 the corporation bought out a major European rival, the Italian giant, Zanussi and then created an internal bargaining dynamic where workers were forced to accept increased work intensification and casualisation when faced with the threat of the relocation to Romania.
In 1997, at the height of the pan-European restructuring process, Electrolux management provided statistical evidence at its European Works Council meeting that a ‘competitive deficit’ relative to group operations in other nations would require the closure of several Italian plants.[18] This initiated a new round of intense bargaining and in December 1997 Electrolux reached an agreement with Italian metalworking unions to prevent plant closures and maintain employment at current levels in Electrolux-Zanussi operations in Italy. The agreement was recognized as a limited guarantee of employment since it was time restricted – applying only between December 1997 and December 1999. The agreement was also limited in that it was conditional on performance. If performance and workplace restructuring targets were met there would be no ‘massive reduction in the number of direct blue collar workers’ (Bordogna & Pedersini 1999).
Electrolux signed the agreement when productivity and flexibility terms were conceded. These included an average 12 per cent increase in labor productivity; greater flexibility in the use of fixed term contracts and varying minimum weekly working hours during times of peak demand; the introduction ‘time saving accounts’ for individual employees that would bank additional hours in place of paid overtime; and, for new employees, changes to allow for pay per hours worked rather than average weekly working hours and lower than minimum enterprise wage levels for the first two years of employment.[19] Bordogna and Pedersini (1999: 39) have noted that while the agreement might be represented as an example of successful defensive bargaining for employment guarantees at a national level, the overall effect at a cross-regional and enterprise level was a ‘zero sum game’ in that ‘this innovative and pro-active intervention must be considered in the light that it apparently did not help reduce redundancies not even by one unit. It only moved them to other international locations’.[20]
In the wake of the pact forged in 1997 to trade productivity gains for short-term employment guarantees, there were further initiatives to introduce numerical flexibility in the Electrolux-Zanussi plants. In 2000, the company and the three major Italian metalworking unions formed a draft agreement to allow for the introduction of ‘on call’ employees who would be placed on open-ended contracts to perform non-scheduled tasks, supplement labor resources in periods of intense demand or substitute for absent employees.[21] During periods where their services were not required these workers were to receive no remuneration or social security entitlements, although the draft agreement did specify a minimum number of annual hours and access to training. Despite considerable tensions over co-operating with management to facilitate the use of such ‘flexible’ labour practices the draft agreement was narrowly approved by the workplace level employee councils established by the participation agreement. However, in a subsequent referendum, a clear majority of workers decisively rejected the agreement – an outcome that again exposed ongoing strategic and ideological divisions between the relevant trade unions.[22]
This analysis of corporate restructuring highlights a profound power inequality underpinning the change process. This geography of power is imposed through the spatial organization of production of these companies, which demonstrates how the production of space and scale can erode any alternative power base, thereby disorganizing and demoralizing trade union opposition. Unions accede because there appears to be no alternative, given actual and threatened spatial fixes. The relatively recent emergence of a labor geography questions this fatalism. Is there indeed no alternative?
LABOUR GEOGRAPHY & THE OPTIMISM OF AGENCY
Where, then, is the courage of our minds to come from? (Harvey, 2000, 237)
Fatalism that characterizes much of the trade union response to global corporate restructuring is a product of structural and ideological forces. There is a transformation in structural conditions highlighted above and a transformation in the discursive environment that has led to a decline in the idea and the belief in the power of workers to challenge this logic (Silver, 2003, 16). In this context, the optimism in agency underlying labor geography provides theoretical insights that may well open new horizons in the organizational and political praxis of trade unions. In exploring this avenue in relation to the predicament of trade unions in the white goods sector, we will concentrate principally on the work of Herod (2001, 2002) and Harvey (2000).
The optimism of agency is a central vein in Herod’s (2001, 1) Labor Geographies where he challenges the view that the global power of capital is the singular force shaping contemporary economic geography from the very local to the truly global scale. From this perspective, those on the receiving end are perceived to be powerless ‘as the juggernaut of global capital marches on, recasting in its wake the planet’s economic landscapes’. Herod contends that this is not the whole story and that ‘there is always opposition to power and domination, a fact that is seen everyday in countless workplaces, fields, offices…’ A key to unlocking this possibility is the development of an understanding of how space and spatial relations may serve as sources of power and objects of struggle. Hence to capture this opposition the issue of spatial praxis needs to be re-theorized in a manner that uncovers the ways in which workers are capable of fashioning the geography of capitalism and how they have the capacity to become ‘proactive, sentient, geographic actors’ rather than existing as ‘passive bearers of the geographical transformations wrought by capital’ (Herod, 2001, 5).
The notion that workers could become proactive in this way raises critical issues. How can workers who are forced into submission by workplace authority structures and surveillance systems and who are pushed to the limits by work intensification, the insecurity of casual employment contracts, the fear of closures and job loss, become the agents of change? Marx and Polanyi respond to this question by arguing that labor is a ‘fictitious commodity’ and any attempt to treat human beings as a commodity like any other would necessarily lead to deeply felt grievances and resistance (Silver, 2003, 16). Harvey (2000, 117) contends that such resistance arises because the ‘transformative and creative capacities’ of persons can ‘never be erased’. For Harvey, a person is ‘the bearer of ideals and aspirations concerning, for example, the dignity of labor and the desire to be treated with respect and consideration as a whole living being’. When treated as a commodity, persons still have the capacity to ‘contemplate alternative possibilities’ (2000, 199) even in the darkest of times when there is an absence of any obvious blueprint for social change or any social movement with plans for social change. A crucial element in the long hard struggle against unconstrained corporate power is a notion of the creative, imaginative capacity of persons, what Fromm (1947, 96) refers to as productive personality in contrast to the commodified market personality. Harvey (2000, 201) captures this in his adoption of the figure of the architect as a metaphor for human agency. Like architects, persons are capable of ‘thought experiments’, of imagining and struggling with passion and commitment for an alternative social order. In stressing this positive view of agency, these theorists are highlighting leadership, which is the crucial element in the unfolding of a new kind of labor movement, seriously building a capacity to challenge corporate power.
Whilst the question of leadership is crucial to resistance, serious obstacles in confronting corporate power need to be addressed, given the changing nature of that power. Bauman (1998: 8) contends that it is the global corporation’s ‘independence from space’ that is central to their transformed power position. This is reflected in ‘a consistent and relentless wrenching of the decision-making centers, together with the calculations which ground the decisions such centers make, free from territorial constraints – the constraints of locality’. Whilst managers and workers are locality bound, shareholders are in no way space tied. ‘They can buy any share at any stock exchange and through any broker, and the geographical nearness or distance of the company will be in all probability the least important consideration in their decision to buy or sell’. Shareholders are ‘the sole factor genuinely free from spatial determination’. Since companies ‘belong’ to them, they are the real force behind the throne, exerting intense pressure for short term maximization of returns. Restructuring is the natural derivative of such social force and its consequent psychological and social impact is absent from the calculus, for as Bauman observes, ‘Whoever is free to run away from the locality, is free to run away from the consequences. These are the most important spoils of the victorious space war’(Bauman 1998: 9).
This signals a remarkable power relations transformation for historically, power was embedded in social relations, in social interaction and therefore reflects a process of interdependence (Knights & Wilmott 1985). This social characteristic of power is denied, reified, hence power appears as a property, a given – part of a natural order of social institutions and society, restricting, determining and marking out the behaviour of subordinates. However, even this process of reification is embedded in specific social relations. Central to the development of a social consciousness of workers is a recognition that those in power are in fact dependent on the cooperation of subordinates. This can lead to a questioning of decisions and practices. Provided power is grounded in social relations embedded in particular locales, particular factories, there is a possibility of challenging and transforming these unequal relations. For this to occur, subordinates need to encounter decision makers and develop imaginative forms of resistance.
When power is dislocated, when it is free of the limits of place, then those subordinated may wait in the ring, but they find no opponent. They appear to have no point of attack. The persons they speak to are no longer the decision makers. With the capacity to circle cyberspace, the real power brokers are absent. There is no scope to bargain. Who are you to bargain with, when the adversary is absent? Refusal, resistance, negotiation is only possible within given social relations. These acts reflect the human dimension of power relations, that capacity to exert human pressure, to create anxiety and stress in other human agents in a deliberate strategy to generate conditions where negotiation and compromise becomes a desirable alternative. Geographically distant company boards are a ghostly other, leaving victims punching at phantoms. Shareholders seem even more remote, reified and removed from any human quality of engagement. They appear not as persons, a social group to bargain with, but as financial numbers on an electronic screen, capable of changing in a flash as circumstances demand, freed of any thought of the consequence of their action.
This changing character of power renders theorizing labor geography all the more vital. Recognition of the changing scale and character of power is central to this project, hence it is not by chance that Herod’s new 2002 book is entitled, Geographies of Power in which a further deepening of our understanding of the production of scale is the key focus. Can workers contest corporate power through imagining new forms of unionism based on engaging the local through a new understanding of the potential of the politics of scale?
A hierarchy of spatial scales exists (personal, local, regional, national, global) at which a class politics must be constructed, connecting the microspace of the body with the macrospace of globalisation. The nature and the possibilities of these connections ‘is an acute problem that must be confronted and resolved if working class politics is to be revived’ (Harvey, 2000, 49, 50). Harvey situates this challenge within the problematic we captured in detailing whitegoods restructuring. The factory was the traditional starting point of trade union organization ‘but what happens when factories disappear or become so mobile as to make permanent organizing difficult if not impossible?…Under such conditions labor organizing in the traditional manner loses its geographical basis and its powers are correspondingly diminished. Alternative modes of organizing must then be constructed’ (Harvey, 2000, 50).
The recent work of labor geographers (Herod, 2001, 2002; Wills, 2001) addresses ‘the grossly underdeveloped’ issue of scale and the need for alternative modes of organizing. How does one define the scale at which struggles against corporate restructuring should be fought? Scale is a socially constructed material entity that is subject to ideological and political contestation (Herod, 2001, 38). Hence workers can produce geographic scale in an attempt to challenge the unilateralist restructuring decisions of corporations. Cox (1998) makes an important distinction between what he calls ‘spaces of dependence’ and ‘spaces of engagement’. The former is more or less localized social relations upon which persons depend for the realization of their essential interests. The latter refers to spaces in and through which social actors construct associations with other actors located elsewhere. The production of scale is seen as emerging contingently out of the ways in which actors build spaces of engagement that link spaces of dependence. Hence jumping scales is not a movement from one discreet arena to another but a process of developing networks of associations that allow actors to shift between spaces of engagement. This does not mean that jumping scales is a move to a larger scale only, for actors may also focus on local action to challenge global corporations. A key issue is how workers and their unions make and contest scales as part of their political praxis, how they build networks of interaction at various geographic resolutions (Herod, 2001, 43). We address this question in relation to trade unions in the white goods sector.
CONTESTING WHITEGOODS RESTRUCTURING
The significance of these theoretical interventions is that they have potential to transform the fatalism that pervades contemporary unionism. This potential will only be actualized if these insights are transmitted into trade union discourse. In this there is a choice between contrasting approaches to labor internationalism, between the social dialogue, global collective bargaining approach of existing labor internationalism and creation of a new labor internationalism (NLI), which, in the mould of Harvey’s (2000, 200) ‘will to create’, imagines and then explores novel ways of challenging rather than accommodating, albeit often under protest, rampant corporate power.
Waterman and Wills (2001) make a significant contribution to our understanding of the challenges faced in the construction of this alternative approach and how trade unions, as they are presently constituted, ‘appear ill suited’ to this endeavor (Waterman, Wills, 2001, 2). In attempting to transform unionism, the NLI addresses three major challenges identified by labor geographers, which we highlighted in the above section on agency. Firstly, the new approach centers on constructing ‘alternative modes of organising’ that are network based and that link the hierarchy of spatial scales. Secondly, a new kind of leadership is critical to mobilizing such an endeavor. Whilst such leadership has emerged most forcefully in the south, there are isolated signs of a similar shift in the north. Thirdly, the new form and dynamic of corporate power is addressed through targeting company boards and shareholder meetings.
The new labor internationalism (NLI) is consonant with the new labor geography and is therefore a key mechanism for the transmission of these perspectives on space, scale and agency. The NLI seeks to develop a capacity to ‘identify geographic possibilities and strategies through which workers may challenge, outmaneuver, and perhaps even beat capital’ (Herod, 2001, 17). It is beyond the scope of this paper to analyse the NLI in any detail. However, the following representation (Lambert & Webster, 2004) captures the potential of this new form to engage the problem of scale and the geography of power for the NLI assumes a global campaign orientation and social movement style of organizing, whilst the established internationals generally limit their action to political lobbying, social dialogue and attempts to apply a collective bargaining model globally. In this the NLI reflects a ‘shift from a spatially hierarchical model of organizing internationalism to one focused upon much flatter spatial networks (Herod, 2003).
Established Labour Internationalism
New Labour Internationalism
Predominantly established northern male white workers in unions institutionalized in state industrial relations systems and formalized politics through parliamentary political parties
Predominantly struggling southern Afro, Asian, and Latino workers, building social movement unionism as a dynamic interplay between workplace organization and civil society
Career bureaucrats
Political generation of committed activists
Hierarchy and bureaucracy
Network and movement
Centralisation
Decentralisation
Controlled debate
Open debate
Diplomatic orientation
Mobilization and campaign orientation
Predominant focus on workplace and trade unions
Focus on coalition building with new social movements, NGOs and the World Social Forum
This summary characterization captures a geography of labor internationalism in which the power base of established internationalism is in the developed north, whilst the new forms of internationalism are most energized in the south.[23] This parallels the new geography of production in which northern MNC are increasing their rate of profit by shifting production to the south where they can exploit the uneven geographical evaluation of laborers. This characterization should not be interpreted mechanically as a rigid north/south binary divide. However, whilst the new and established styles of internationalism are present both in the north and in the south, it is in the south where the most vigorous, committed social movement internationalism is emerging. As the following analysis of trade union responses in white goods will show, there are instances where a dynamic interplay between the established and the NLI may emerge.
Identifying these different forms of labor internationalism is pertinent for, in general, the established orientation has not effectively challenged the MNCs prerogative to command and produce space in shaping a new geography of production. In contrast, the NLI strives to make and contest scale so as to reconfigure the geography of power, hence labor geography is being played out in and through the NLI. In the south, the formation of the Southern Initiative on Globalisation and Trade Union Rights (SIGTUR) fourteen years ago is one expression of these tendencies. These orientations provide a basis for assessing the prospects of unions in the white goods sector.
Unions in General Electric (GE) have evolved a strategy within the established labor internationalism. As early as the 1960s, GE unions in the United States recognized that geographic scale was important in the collective bargaining process and therefore formed a Coordinated Bargaining Committee (CBC) of GE unions to develop a common position across geographically dispersed production sites. Union leadership contends that this structure has become even more important under globalization and its purpose is to enhance collective bargaining strength through scaling up the process. The CBC has an international committee that networks with unions in GE plants across the globe and they have recently publicized the denial of union rights and the victimization of union leaders in GE plants in India and in Malaysia. They highlight, ‘General Electric’s globalization of anti-unionism’. The goals and the commitments of the CBC is seen to be strengthened through participation in the International Metal Federation (IMF), which has led to the formation of a GE World Company Council (WCC) comprising plant and national level leaders. The promotion of WCCs is central to IMF strategy, which is trying to make these structures more effective. Whilst the IMF (1999, 2) has stressed an ‘action program’ of ‘internationally coordinated campaigns’ to deal with ‘urgent situations’, as yet, campaigns to challenge the right of MNC to shape a new geography of production have still to emerge.
In Australia, leaders advancing strategies that transcend the GE workers’ traditional internationalism are being given a voice within the corporate restructuring debates. In this process, labor internationalism, so critical to the labor geography project, is a deeply contested terrain. This Australian experience will now be explored as it provides a fine illustration of the struggle between fatalism and the political and organizational will to challenge corporate restructuring in the terms labor geography theorized.
When Electrolux bought out Email, the last remaining white good producer in Australia in October 2000, part of the deal was the closure of a cooker plant in Melbourne that employed 1 200 workers, which is a large factory by Australian standards.[24] Fatalism marked the initial trade union response – management’s decision was final and could not be challenged. The Australian Workers Union (AWU) organized a brief symbolic work stoppage and street protest. At this point SIGTUR intervened, having formulated a global resistance strategy which aimed at swiftly creating a new network within Electrolux. The network would be constructed through the IMF, which could act as a bridge between the Swedish and Australian unions, setting up a global meeting to formulate a strategy challenging the announced closure. Pressure on the MNC would be phased with initial discussions advancing the position that restructuring and consequent closures should not be imposed. Change of this magnitude had to be negotiated. Workers and communities had the right to be an integral part of the restructuring decision making process with the freedom to collectively oppose management plans if they so chose. If Electrolux refused to negotiate, then the IMF would enter into discussions with the International Transport Federation (ITF) to explore the possibilities of tracking and then disrupting the company’s container movements until such time as they agreed to bargain on the issue of the Chef closure.
This imagined spatial fix was however stillborn. The IMF eventually responded by saying that they did not have the resources for such a degree of campaigning on a single closure. Furthermore, they were of the view that the Swedish workers were conservative and would not engage in such a radical global campaign. SIGTUR’s response was firstly that Electrolux and other leading MNCs in white goods were all committed to shaping a new geography of production that involved a spatial fix based on closure in unionized countries and investment in union free zones where labour could be more severely exploited. Unions may discover a way of challenging this logic through experimenting within an action orientated NLI, thereby creating a new model of effective global resistance. Secondly, politics is about winning workers over to a cause. Surely Swedish workers could be enthused into the campaign, given that they were reeling from similar closures as factories move eastwards. Despite its initial support for this model of engagement, the AWU did not follow through its initial intervention and pressure the IMF to act, hence the initiative was a failure. After this brief flicker of hope, fatalism again permeated the Chef closure with little response from the Australian trade union movement except to oversee redundancy arrangements. This was indeed a sad retreat for workers in the plant had been briefed on the plans. The alternative energized them. They were ready to stand up and fight hard at a local level. Plans were afoot to try and get the local Council to support a blockade of the factory, thereby preventing Electrolux from moving Chef machinery to Brazil and to Adelaide. When they learnt that the global action plan had not been adopted, the energy, enthusiasm and hope dissipated in an instant. Gloom, despair, fatalism again prevailed.
A similar scenario is once more being played out in Australia. Electrolux continue to demonstrate just how effectively they can command and produce space, creating a new geography of production that advances a singular goal – shareholder value. The company’s spatial fix is a US$50 million of new investment upgrading its factory in Changsha in the inland Hunan province to a ‘global production platform’. The production of fridges will expand from 650 000 per annum to 1.3 million by 2006. The new global production platform has implications for Australian workers and communities for in May 2004 the MNC announced a fifty per cent cut in the Orange workforce. Four hundred workers will lose their jobs. Another 200 jobs will be cut at Electrolux’s operations in South Australia.[25] The unions have been informed that they will have no say over redundancies and there is a fear that shop floor leaders will be targeted. As the Chinese production lines in Changsha expand over the next two years, it seems likely that the entire factory in Orange will close.
Place is critical in this unfolding drama. Orange is a country town in the central west of New South Wales that is totally dependent on employment at the refrigeration plant to sustain the local economy. In the immediate post war period the Federal government was committed to regional development, renting a small arms factory it had built to the Email corporation. To ensure that the factory prospered, the government subsidized the costs of decentralizing production through offering freight concessions and financial incentives. The government also expanded its housing program in Orange, thereby making the site attractive to workers (Clarke, 1983,33;Linge, 1963; Boyce, 1976; Jacka and Game, 1980). A large proportion of the workforce comprises people who have made a choice, leaving the big cities for a taste of the rural, buying small holdings and cultivating the land during their leisure time, developing a strong sense of place over the decades. Orange is more than just a place to work – the country town represents a lifestyle that has profoundly shaped their social being.
With a Thatcher like foresight, Electrolux has worked to prepare the way for the latest restructure, softening up workers through creating a culture of insecurity and actively seeking to marginalise trade unions (Lambert, Gillan, Fitzgerald, 2004). Such a climate is fostered through Electrolux’s commitment to ‘continuous restructuring’. [26] In only three years since the MNC take over, the workforce of 1800 has been cut to 750 plus casuals through continuous downsizing, outsourcing, and work intensification. During this period Electrolux demonstrated its command over space by outsourcing a number of manufacturing operations overseas, increasingly rendering Orange more of an assembly operation rather than a manufacturing process.
The company adopted a multi-faceted strategy to counter possible union resistance to these changes. Shop floor unionists were labelled ‘trouble makers’ who were unable to properly adapt to the rigours of global competition. Only those who cooperated and adapted could be sure of (unspecified) job security, whilst recalcitrants advancing an adversarial culture were the first out the door.
A worker reflected upon this cultural transition.
In the past they couldn’t put it over you. They knew you were not going to back down. In the past if they tried to push us we would have all been out on the grass for weeks. We used to organise a barbeque out in the front – sort of in their faces you know. Now there are a lot of yes men around, with brown noses and brown tongues, who won’t stand up for anything.[27]
The insecurity flowing from continuous restructuring and the construction of a new organisational culture has led to a decline in union membership with density now down to 70 per cent. Furthermore, the restructuring has created an opportunity for management to reconfigure the age profile of the workforce, replacing older with younger workers who are scared to participate in union events, fearing they ‘might be sacked’. Since the Electrolux take over, union meetings have generally been poorly attended. This has been exacerbated by company’s multi-faceted anti-union strategy. Shop floor delegates are not given time to speak to members. One commented, ‘I took three minutes off the line to speak to a young worker about joining the union. The foreman comes along immediately and says – ‘You should be working!’ It’s difficult to recruit the new workers in conditions like this’. Most significantly, Electrolux has utilized the 1996 Workplace Relations Act, ushered in by the conservative Coalition government to further undermine trade unionism under the guise of labor market efficiency.
Right of access and secret ballot provisions of the Act were actioned to erode any lingering culture of solidarity. Union organisers have been denied right of entry since May 2003 and the ballot process, designed to individualise workers’ response to workplace issues, have been relatively successful. Electrolux applied this process during the most recent enterprise bargaining negotiations, going to a ballot when negotiations deadlocked. Failure to win the first ballot by a narrow margin in June 2003 led to a re-instigation of the process in July, which the company then won by a substantial margin.[28] The law allows for those not directly affected by the provisions of the new agreement to vote. In the case of Orange, this included managerial, office and engineering staff, leading an AWU organiser to view this ‘as a first step in a process to do away with unions in the fifty seven year old factory’.[29] Denied right of entry, union organisers were marginalised in the bargaining process as their opportunity to advance an alternative position prior to the ballot was undermined. Another union organiser observed that this problem is compounded by the way in which Electrolux has skilfully orchestrated space and enterprise bargaining, ensuring that site agreements in the group have different expiry dates, which undermines any national, cross-plant response to the issues, effectively ‘taking the union out of the site’. Provisions under section 170LK provide employers with further options to force unions to the periphery of bargaining through enabling direct worker agreements. Although not used, the non-union LK threat was ever present with senior management openly expressing their desire for ‘company unions’ or ‘in-house tribunals’. Throughout this process, management heightened fear and insecurity by emphasising the uncertainty inherent in Electrolux’s global production strategy, claiming that the long term viability of the plant was far from guaranteed, hence workers needed to demonstrate that they were willing to make concessions.
Whilst workers were bargaining their rights away in Orange in the hope of maintaining the plant’s presence, their jobs and their rural lifestyle, Electrolux moved stealthily behind their backs, investing massively in their Chinese ‘global production platform’. In May 2004, they announced further job cuts of 400, slashing the workforce to a mere 350, thereby devastating the town’s local economy. Fatalism pervades Orange. An internal memorandum from union organisers in the town argues that a majority of the workforce view the loss of their jobs as inevitable. They do not believe that they have the capacity to ‘turn it around’ with only a ‘small minority’ being ‘prepared to take industrial action’. The majority feel betrayed by the company. They had turned their back on the union and sided with the company during the enterprise bargaining process only to find that Electrolux has rejected them. The union organisers believe that the majority of the workforce have become ‘very conservative and are unable to comprehend the implications of free trade and global competition on their day to day lives in Orange’.[30]
The initial response of union organisers in Orange is also fatalistic with the primary focus on how redundancies are handled by the company thereby assuming that the restructuring decision cannot be challenged. In the same report, the site organisers argue for voluntary redundancies rather than forced redundancies. Electrolux should provide funding assistance for training to ‘enhance the employment prospects’ of the fired workers. The organisers also argued for the establishment of a combined union campaign committee that could organise a forum in the town to discuss ‘the future viability of the plant’. Furthermore, the national unions should use Electrolux in Orange as ‘a case study of the effects of global competition and the free trade agenda of the current governments (both state and federal).’ The organisers are pessimistic, noting that the restructuring will undermine the viability of the union maintaining a branch in the town as reduced union membership will create financial strain. They doubt ‘long term viability of the plant’ due to its reduced status in the global production chain and Electrolux’s global capacity to absorb what will be left of Orange over the next three years.
Within the AMWU fatalism at the coalface is countered by the serious consideration being given to a NLI response to the crisis. The AMWU is a left wing union with a historical tradition of promoting activism in the workplace through elected delegates and democratic unionism. Senior union officials are committed, experienced internationalists and are active within the IMF at an international and regional level. The union has also been at the forefront of trade debate in Australia, challenging the logic of free trade and arguing for fair trade that links the degree of trade openness to recognition of union organising and bargaining rights. This contrasts markedly with the passivism of the rival AWU, which is a company union with no real internationalist tradition, orientations which made the development of a NLI response to the Chef closure tenuous. The political and organisational approach of local organisation is the critical springboard to shifting the geographic scale of response. The AMWU leadership is considering options and recognises that a campaign against so powerful an adversary is likely to be of a lengthy duration.
The union has already laid a foundation for such a NLI response when they organised a three day workshop of Australian, New Zealand and Swedish Electrolux union delegates in Sydney in November 2003. A positive outcome was a commitment to the building of a global workers network within Electrolux modelled on the one set up within the mining MNC, Rio Tinto. Addressing the meeting, a co-ordinator of this initiative argued that successful networks were built through ‘strategic campaigning’ that was empowered by the following principles. Firstly, the starting point is the local membership creating potential for a two way education process in which the local membership learns of the global nature of the corporation and the union leadership discovers how far the membership will go in terms of local action – ‘what they will fight for?’ Secondly, the network has to research and discover all that they can ‘about the boss’ so that potential weaknesses and contradictions can be targeted. Thirdly, workplace issues need to be expressed as social justice, human rights challenges, thereby attracting and involving the wider community. Fourthly, the emerging network needs to evolve this broad base, incorporating concerned citizens and civil society movements. Fifthly, the action strategy has to be thoughtfully devised in a manner that starts small and then increases in intensity, maximizes the impact on the corporation’s public image and creates real financial costs. He concluded by saying, ‘The corporation has to know that we will never stop, we will keep up the pressure and we will be constantly changing our tactics’.
A significant obstacle to the establishment of an Electrolux network also emerged during the course of the meeting. The Swedish union delegates were openly hostile to this campaign model of networking and indicated that they had no desire to participate as they found criticisms of Electrolux offensive. During the event this deep identification with Electrolux – a Swedish company – became apparent when they defended the company’s new geography of production and consequent factory closures, without qualification. They stated that Electrolux’s closures in Sweden were not an issue because of the fine social security system that existed. They were the union representatives on the Electrolux Board and one was a member of the Electrolux European Works Council. Their integration into the company power structure made it difficult for them to empathize with Australian and New Zealand delegates, who were volatile and angry over corporate geographic manoeuvres. For the Swedes closure and investment in China, or Mexico, or Romania is logical competitive behaviour; for those of the antipodes, shaping production in this way was crude exploitation and profiteering.
Despite these obstacles, the AMWU leadership is still prepared to commit to a NLI response. At the time of writing discussions are underway formulate a comprehensive strategy to challenge Electrolux’s restructuring along much the same lines as the failed Chef campaign.
SPACES OF HOPE?
Harvey (2000, 49) observes that in an age where class struggle has receded, ‘the painting of fantastic pictures of a future society’ is ever more vital. Part of that process is imagining and then creating a strategy that could challenge, rather than meekly accommodate corporate restructuring. This is a new terrain for unions, which, if engaged, will doubtlessly change the organisational form of unionism from its present national, industrial relations bargaining focus to a global, social movement orientation. The NLI will become a critical bridge in this transition.
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Electrolux in Australia provides a fine example of the quite considerable obstacles in the path of such a transition. The issue of agency (leadership) lies at the heart of this problematic. Will the leadership of the AMWU fully commit to a spatial fix to the localised challenges they face as factories close? In this regard, the situation is contradictory. The AMWU is working through the IMF, who have an Electrolux World Works Council (WWC) listed on their web site. This WWC, established some twenty five years ago, is a paper tiger – it has never met. One possibility is for the AMWU to work with the IMF in setting up the first meeting of the WWC. This could bring worker leaders from the leading MNCs together for the first time. If such a meeting can be realised, the challenge will be to formulate a resistance strategy grounded in the building global networks within the leading MNCs, for action strategies can only be realised if networks are there to implement the plans. The organisation of southern workers and their involvement in these processes will be critical, hence SIGTUR has a vital role to play. Imaginative forms of action that test corporate power will have to evolve. These may include engaging the capital markets and disrupting container movements. Pressure points to bring these giant companies to the bargaining table have to be found. Outside of real pressure, they are unlikely to move.
The constraints standing in the way of scaling up action are considerable. Firstly, unions remain primarily national entities, preoccupied with national politics and national industrial relations bargaining. Virtually all resources are channelled into fielding local organisers. If unions are to take the NLI route and confront the power of these corporations to command and produce space as a way of weakening unionism, they will have to shift resources to building the new global networks as the embryo of a future global unionism. The conundrum is this: restructuring and closure cuts union membership and erodes the finances of national unionism, rendering it difficult for them to keep existing organisers, far from employing new personnel to manage and build the networks. Yet unless there is an initiative to scale up unionism, this slide will continue, for it is only in confronting the issue of the geography of power that decline can be addressed. Secondly, as the experience of the Australian workshop reveals, there is an uneven development of trade unionism across the globe that can mitigate against a common approach to corporate power. The Swedish unionists at the Sydney workshop boasted that they had been ‘strike free’ for decades because their system of bargaining worked so well. To what extent does a culture of social democracy mitigate against the possibilities of radical action to force corporations to the bargaining table? Is this a significant facet in the difference between northern and southern unionism? Thirdly, in both the Australian cases where there was an attempt to globalise the response, local unionism was weak. In the case of Orange, Electrolux’s anti-union strategy had significantly weakened a previously militant union plant. Weak local unionism provides no real springboard to widen the agenda. Fourthly, the bureaucratic and diplomatic form of existing union internationalism also mitigates against commitment to a sustained global action program.
If the ‘will to create’ a new approach exists, these obstacles are not impenetrable. For example, the Korean Council of Trade Unions (KCTU), confronted with a massive casualisation of the workforce since 1997, re-prioritized its national budget, allocating a 37 per cent to the formation of a new casual workers union. Two thousand new organiser activists were funded by the budget re-allocation. If there is the political will, resources can be shifted. On the second issue, the problem of coopted leaderships maybe overcome through seeking to connect at a more grass roots level, where ordinary workers may be less sanguine over the impact of corporate restructuring on their lives. Finally, there are counter-tendencies within existing labor internationalism as well as the emergence of new movements such as SIGTUR.
The new labor geography, in stressing the potential of agency, maps a pathway of hope that stands in stark contrast to the bleak, predictable acquiescence of most union responses to the new geography of production. Herod’s (2001) major work is bristling with positive case studies, which indicate that workers can indeed be proactive in shaping the landscapes of capitalism, provided that they engage the issue of scale. Of these, one of the most relevant for the predicaments outlined in this article is the story of the successful campaign of the Ravenswood workers in West Virginia (2001, 197). However, in future work, more attention needs to be paid to the constraints on endeavours to globalise organisation and action.
The right of trade unions to genuinely bargain over corporate restructuring is the cardinal working class issue of the early Twenty-first Century, just as bargaining for a shorter working day led the mid Nineteenth Century agenda of the emerging union movement. Trade unionism in this Century was marked by an historical transition from narrow based craft unionism to industrial unionism that built a culture of solidarity and collective action in many sectors, thereby forcing concessions from powerful corporations. Unless there is the will to create another momentous transition from nationally bound industrial unions to a social movement orientated, global unionism, that forges a new kind of power, fatalism will prevail.
[1] Department of Industry and Commerce, 1981, Review of Manufacturing Industry, 1979/80, AGPS, Canberra. Quoted in Clarke, 1983, 47.
[1] Part of our work on the Australian Research Council White goods project was to map the historical trajectory of the largest MNC in the sector.
[2] Joel Millman, ‘Mexico builds a home-appliance bonanza- GE, Whirlpool shift production, boost exports to U.S.’, The Wall Street Journal, 23 August 1999.
[3] Joel Millman, ‘Grupo Vitro will sell unit to Whirlpool for $540 million’, The Wall Street Journal, 26 February 2002.
[4] LGE Media Release, 7 July 2000, ‘LGE to build consumer electronics plant in Mexico’, Accessed at www.lge.nl/nieuws/globaal/2000/mexico. [25 January 2002]
[5] Aaron Bernstein, ‘Welch’s march to the south’, Business Week, 6 December 1999.
[6] Matt Murray, ‘Will the new repairman be able to fix GE’s Appliances Division?’, The Wall Street Journal, 15 November 1999.
[7] Geri Smith, ‘Is the magic starting to fade for manufacturing in Mexico?’, BusinessWeek, 6 August 2001.
[8] Ibid.
[9] David Bacon, ‘Anti-China campaign hides maquiladora wage cuts’, ZNet, 3 February 2003 (available at http://www.zmag.org/)
[10] ‘The chaebols’ China’, Economist Intelligence Unit, 14 January 2002
[11] Ibid.
[12] ‘More that half of ROK Electronic goods produced at Overseas factories’, Korea Times, 6 August 2001.
[13] ‘Home Electronics makers striving to expand exports’, The Korea Herald, 28 April 1998.
[14] Electrolux, Annual Report 1997, p.7.
[15] Tatge, M ‘How Swede It Is’, Forbes, 24 July 2000, p. 56-57.
[16] Electrolux Annual Report 2002: 17-18
[17] All figures are calculated from Electrolux Annual Reports. Taking 1995 as a base year, the average number of employees has declined by 52 per cent in Germany (-6,170 employees) and 56 per cent in Sweden (-8,363).
[18] EIROnline, 28 October 1997.
[19] The agreement also made provisions for vocational training for new employees and the establishment of child care facilities in the plants (EIROnline, 28 December 1997; Bordogna and Pedersini, 1999).
[20] Similarly, a Zanussi subsidiary refrigerator/freezer plant in Spain (Fuenmayor, La Rioja) faced the imminent threat of closure during the restructuring process, after Electrolux’s senior management announcing a decision in 1998 to shift the production of refrigerator line to Hungary. In this context, the Spanish plant entered into intense competition with other subsidiary plants in the UK, Italy and Sweden for the proposed production of the ‘Euro-Combi’- a new high-technology product line of horizontal freezers (EIROnline, 28 November 1997). The Fuenmayor plant was ultimately able to secure the investment and a degree of employment security associated with the new production line (Electrolux Press Release, 2000), in part due to the intervention of the regional government in providing investment incentives to Electrolux management (El Pais, 18 September 1997; EIROnline, 28 November 1997).
[21] EIROnline, 28 July 2000
[22] EIROnline, 28 July 2000
[23] North and South are not defined geographically but rather in terms of economic position of subordination and domination in the global economy. This is the definition adopted by SIGTUR (The Southern Initiative on Globalisation and Trade Union Rights
[24] For a fuller analysis of this closure see Lambert, ‘Death of a Factory: Market Rationalism’s Hidden Abode’, Anthropological Forum
[25] From mid July 2003, the predicament of workers at this plant, which manufactures motors for washing machines captures a slave like subordination of the geography of global corporate power. Workers were obliged to conduct a series of tests on motors imported from China to assess whether or not they met Electrolux quality standards. The information was continuously fed back to the China plant so that it could modify faults. All the while these Australian workers knew that every piece of globally transmitted information tightened the noose of plant closure in Australia. Their knowledge and their diligence hastened their downfall.
[26] Speech by Electrolux CEO Michael Treschow who stated, ‘We will have to continue restructuring in the future as well, but as an ongoing process in our daily operations’. Reported in Appliance, 1st February, 2001.
[27] Interview, union delegate, September 2003.
[28] The unions requested that the Australian Industrial Relations Commission conduct the ballot to ensure the veracity of the vote. This was denied and Electrolux were allowed to appoint corporate accountants KPMG to administer the ballot.
[29] Interview, AWU organizer, September 2003.
[30] Australian Manufacturing Workers Union, Internal Memorandum, 11 May, 2004.
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