Are government regulations crippling American industry? Donald Trump insists they are. He would like nothing more than to see all the factories in Mexico shut down and those jobs transferred to to US production facilities. This week, Bloomberg Business Week takes a look at auto manufacturing in Alabama.
20 years ago, Mercedes Benz built a new factory in Alabama to manufacture its hot selling M Class SUVs. Its decision to locate in the fifth poorest state in the nation was influenced by two factors — the absence of unions and a package of tax incentives offered by the state. In short order, Toyota, Honda, and Hyundai also built factories in Alabama.
The Parts That Make The Car
When people look at an automobile, they see a single product. They know it is made from many parts but we assume most of them are made by the company whose name is on the back. That is not so in today’s world. The manufacturer may make the chassis, but many of the things that turn that chassis into a finished car come from outside suppliers.
Today, 160 auto parts manufacturers have also located in the Alabama to make parts for the cars coming off the state’s assembly lines. Combined, those companies pay over $1.3 billion in wages every year to 26,000 workers. That is the kind of story of American job creation that Donald Trump likes to talk about. But there is a darker side to the picture.
Profits Over Safety
Bloomberg Business Week for March 23 takes a look at worker safety inside those auto parts manufacturers. It finds a shocking lack of safety standards leading to an appalling history of worker death and dismemberment. Probably the federal agency most hated by industry is OSHA. Its rules and regulations designed to protect workers from injury are seen as products of a nanny state mentality designed to frustrate companies trying to make a profit in a highly competitive world.
That not the way David Michaels, head of OSHA during the last 7 years of the Obama administration, sees it. “The supply chain isn’t going just to Bangladesh. It’s going to Alabama and Georgia,” he says. For 2014, industrial injuries at the factories operated by parts suppliers was 50% higher in Alabama than the rest of the US industry. Not only are those workers exposed to greater risk of injury, they also earn about 30% less than workers in the industrialized (and unionized) North. Although industrial accidents have declined in recent years, the rate of work place injuries in Alabama is still about 10% above the national average.
Pressure on workers is intense. Quotas are impossibly high and the companies often require workers to put in 12 hour shifts. 6 or even 7 day work weeks are common. Management is obsessed with the penalties that car companies can assess if quotas are not met. “Pay is low, turnover is high, training is scant, and safety is an afterthought, usually after someone is badly hurt,” says Bloomberg correspondent Peter Waldman.
A Death On The Factory Floor
On June 18, Regina Elsea was impaled by a robot while working at Ajin USA in Cusseta, Ala. According to the accounts of those present, two welding tips pierced her upper body while workers ran around frantically trying to make the robot release her. A supervisor was sped to the location but ran away when he saw what had happened.
“The rescue workers finally did what Elsea had failed to do: locked out the machine’s emergency power switch so it couldn’t reenergize agai — a basic precaution that all factory workers are supposed to take before troubleshooting any industrial robot. Ajin, according to OSHA, had never given the workers their own safety locks and training on how to use them as required by federal law. Ajin is contesting that finding.” reports Waldman. Elsea died a day later. Ajin USA sent one artificial flower to her funeral. No one from the company has ever contacted her family.
That is an extreme example but not all that unusual. Unreasonable quotas encourage management to overlook safety in order to meet production goals. Amber Meadows, 23, who worked beside Elsea on the line, says, “We were always trying to make our numbers so we could go home. Everybody was always tired.”
A Dangerous Fall
Nathaniel Walker, 26, was employed for three years by WKW-Erbsloeh Automotive in Pell City, Alabama. The company makes metal trim pieces for Mercedes and BMW. His job was to clean the air ducts over the anodizing equipment that places a protective coating on the trim parts. At first, he and a fellow worker had 24 hours to complete their task but as production needs increased, that time was cut to as little as 6 hours.
Walker worked for six months 12 hours a day, 7 days a week, hauling hoses and 50 lb bags of chemicals through the ventilation ducts. In July, 2014, he lost his balance and feel into a four foot deep vat of sulfuric acid. He was lucky. His didn’t lose his eyesight thanks to the quick work of his co-worker but it took months for him to recover completely.
OSHA fined WKW-Erbsloeh $178,000 and issued the company a willful violation for failing to secure the work areas around open chemical tanks. The agency had inspected WKW-Erbsloeh eight times since 2009 and issued multiple citations after another worker’s arm was caught in a polishing machine. A third employee lost a thumb. Walker was earning $13 an hour when he fell into the acid. “I was way, way underpaid for working all the time in a risky situation like that,” he says.
Ray Trott, a retired U.S. Marine aircraft maintenance chief, worked for WKW-Erbsloeh as a production manager until 2015. He says the German managers didn’t seem to understand the American workers and were never satisfied with what they got from them. “If you made 28,000 parts one day, the next day they’d want 29,000,” Trott says. “You heard all day long, ‘If we don’t get these parts out, the customer is going to fine us $80,000.’ ”
A Lack Of Safety Training
Reco Allen was a $9.00 an hour janitor for Matsu Alabama. One day, the plant supervisor ordered him to put down his broom and operate a metal stamping press. He was given no training about how to operate the machine, something the company denies. At 4 o’clock that morning, Allen’s arms were trapped by the press. When rescue workers freed him, three fingers on his left hand were severed. His right wrist was cut off and dangling inside his work glove. Weeks later, doctors amputated a part of his right arm because gangrene had set in.
After the accident, it turned out the company had known for years that the press that injured Allen often had problema. A suggestion to install a $6,000 safety barrier was rejected by management because it was deemed too expensive. After Allen sued the company, it entered into a multi-million dollar settlement. He used the money to purchase a 15 acre parcel of land and a big house with a fish pond near the Tennessee River. He prepaid his children’s college tuition, and bought a Buick Roadmaster. “I’d rather have my arm back any day,” Allen says.
Not All Government Regulations Are Harmful
None of this matters to Donald Trump. When he talks about creating jobs, he doesn’t factor in whether those jobs will kill or maim some workers. To hear him tell it, all government regulations are bad for business which makes them bad for American workers. He doesn’t consider forced overtime or the unending pressure to meet production quotas. What they do to the workers’ quality of life is no concern of his. All he wants to do is take a chain saw to the regulations he says put too much burden on industry.
No one would suggest that all regulations are good or that all bureaucracies operate efficiently. But the story Bloomberg tells about workers in Alabama makes it clear the system already places too much of a premium on profits at the expense of safe working environments. American jobs for American workers is a laudable goal but those workers need more job safety, not less.
Workers need protection from unsafe working conditions, whether that protection comes from unions or government regulations. With no one to advocate for their safety, they are subject to workplace abuse that most Americans would find intolerable — if they knew about it. Thanks to Bloomberg, now they know.
Source and image credit: Bloomberg Business Week