GE Brings Bad Things to Life | The Nation


GE Brings Bad Things to Life

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There are loftier monuments to human progress in Bloomington, Indiana--the Kinsey Institute, the alma mater of one-half the DNA discovery team of Watson and Crick, the site of the original Dog and Pony Show--but nothing so exuberantly represents the excess of American household convenience as the General Electric side-by-side refrigerator-freezer, manufactured exclusively in the city since 1967 in the biggest such factory in the world. This "Cadillac of refrigerators" (up to $2,449 retail) has been rolling off Bloomington assembly lines under the label GE or Hotpoint or the redoubtable Kenmore at a rate of 230 an hour, 4,700 a day, 1.6 million a year. But the mood at the plant is far changed from what it was thirty years ago, when the Bloomington Herald-Telephone ran boosterish photographs of bright-faced GE workers rewarded with checks in the thousands of dollars for their cost-saving suggestions.

This article is part of the Haywood Burns Community Activist Journalism series, sponsored by the New World Foundation and the Nation Institute.

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JoAnn Wypijewski
JoAnn Wypijewski, who writes The Nation’s “Carnal Knowledge” column, has been traveling the country...

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In 1999 plant management announced that profitability was falling, that $65 million in cost savings was needed, and it was the job of members of International Brotherhood of Electrical Workers Local 2249 to come up with the money. When they did, the company said it wasn't good enough. Half the production would have to be moved to Celaya, Mexico, where instead of $24 an hour in wages and benefits, labor can be bought for $2 an hour. This past December, 733 GE workers in Bloomington were cast off; in the next few months hundreds more will be out of a job and hard put to match their income and benefits anyplace else in town. When it's all over, 1,400 of the plant's 3,200 jobs will be gone.

GE is the largest manufacturer in Bloomington, but in times of "prosperity," stories like this one don't tear through a town the way they did in the 1980s. Bloomington's official unemployment rate is 1.1 percent. Hoosier basketball coach Bobby Knight lost his, but jobs are in greater number than ever. The city's biggest employer, Indiana University, is expanding; its newest offering, a School of Informatics for the techno age. Real estate is moving at a rapid clip, and the signposts of development are everywhere as this "Crossroads of America" town increasingly becomes a destination for tourists, well-off retirees and small high-tech companies. But there's a bitter wind blowing through the boom. Over the past two years 3,665 well-paid factory jobs have left Bloomington. In Indiana as a whole, since 1994, 15,000 workers a year on average have lost their jobs. The most passionate political dispute in town involves what environmentalists, rural preservationists and others call "the NAFTA highway," a proposed Interstate extension that would put Bloomington on a high-speed freight route from Canada to Mexico. The United Way's Josh Cazares, who also coordinates the local Jobs With Justice, tells of full-time workers taking supplemental part-time gigs, making regular visits to food pantries. "There's a lot of insecurity," Cazares says.

General Electric has made an art of insecurity. It is, says the New York Times, "regarded in many management circles as America's most admired corporation." On the cusp of 2000, Fortune named CEO Jack Welch, a ruthless megalomaniac, "management revolutionary of the century." Before Welch aborted his well-publicized retirement to make one more big deal, Time Warner paid him $7.1 million for his memoirs, adding to the trove of books offering tips to business climbers eager to emulate his success. No other company has ever posted a year-end profit even close to the $12.7 billion GE piled up in 2000. In polls, consumers recognize its name more widely and think more highly of it than they do any other corporation. They also know almost nothing about it.

They associate it with making things--light bulbs, refrigerators--unaware that its chief business is debt. Over the past two decades GE has transformed itself into the biggest nonbank financial corporation in the world, the biggest owner of planes and vehicles and credit-card debt. Between 1982 and 1997 (a time when American household debt reached previously unimagined heights), GE increased the value of its shares 1,155 percent. It did this while expanding its financial services department and discarding about half its US manufacturing work force. It has moved production offshore, also engineering, and lately gave an ultimatum to its US suppliers, companies that sell it everything from screws to heavy machinery: Move operations to Mexico or lose GE's business. It is a master of mergers and acquisitions, making 125 such deals in 1999 alone and capping 2000 with the $45 billion acquisition of Honeywell, where heads will roll to keep stock prices up. Nor are white-collar and service workers in the GE empire any more secure. With the sinking of Montgomery Ward, 28,000 people lost their jobs; 600 are to be cut at NBC; and though GE's profits were up 19 percent, Wall Street analysts are saying 80,000 of its workers could be jobless before 2001 is over.

Workers still speak of "loyalty" and "corporate responsibility," but as recounted in Thomas O'Boyle's estimable book, At Any Cost, Welch announced back in 1982 that GE was responsible only to its shareholders and launched what corporate staff called a "campaign against loyalty," ordering the word struck from company communications. Last summer GE and its unions agreed on a national contract worth $1 billion in wage increases and benefits over three years, but in Bloomington, as in cities across the country where GE still makes things, workers are asking, "What good is a pay increase if I won't have a job?"

The Bloomington plant, more than a million square feet, sprawls along the city's industrial strip, Curry Pike. Its warehouse can accommodate whole cargo trains, its workers forklifting through a maze of mighty refrigerators stacked eight high. Inside, refrigerator doors and inner linings and cases as large as thirty cubic feet dangle overhead, pulled along on chains from one floor to another and onto the lines. Almost everything is made by hand or simple machine. At the plant's easternmost edge is Profile Drive, a token of the town's debt to the popular refrigerator.

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