- 6 months ago
Jeff Madrick looks behind the political rhetoric to see how companies, workers, and civic leaders are wrestling with global competition and the end of an era of industrial affluence.
Category
📺
TVTranscript
00:00The Democracy Project
00:08The numbers just aren't adding up.
00:20You run a leaner operation, or you shut down.
00:25How many people will you have to let go?
00:28Or is there another way?
00:33Tonight on Frontline, what does it take to stay in business today?
00:38We had to go through that downsizing period, or we wouldn't have survived.
00:42Correspondent Jeff Madrick looks at the hard decisions companies have to make,
00:47and the people they affect.
00:49There is no loyalty anymore to the employee of America.
00:53Tonight, does America still work?
00:58Funding for Frontline is provided by the Corporation for Public Broadcasting.
01:05And by annual financial support from viewers like you.
01:09This is Frontline.
01:13Milwaukee, Wisconsin has been called the city that works.
01:34The city with sweat on its brow.
01:37But something has changed in America, and some Milwaukeeans are listening to a new message.
01:46Corporate profits are soaring.
01:48I don't mind corporate profits soaring, but why aren't the working men and women in the American families sharing if the times are good?
01:55The day before the 1996 primary, Patrick Buchanan brought his anti-corporate message to town.
02:07We've got to stand up for that idea and that ideal.
02:11Something called a living wage for the men and women of America.
02:14And these trade deals have sold that out.
02:16You and I know it.
02:19I got a job.
02:21I don't want to see it go away because they can find someone that will work for less than what I'm getting.
02:30I want it there, and so I'll be able to support my family.
02:34I want to see it go away.
02:35Go, Red, go.
02:37Buchanan received nearly 40 percent of the Republican vote in Milwaukee.
02:42He touched a nerve not only here, but across the nation.
02:46Go, Red, go.
02:48Now, the mainstream candidates are echoing him.
02:52Many of our largest companies are laying off workers, some of them because they have to to compete in the global economy.
02:59Some of them are doing it even when their profits are going up.
03:02The electoral battle for the hearts and minds of the anxious class is in full swing.
03:09Corporate profits are setting records, but so are corporate layoffs.
03:13There's a wide and growing gap between what the government statistics say about our economy and how Americans feel about it.
03:20After a decade and a half of downsizing and layoffs, corporate America has borne much of the blame this election season.
03:28Robert Eaton, the chairman of the Chrysler Corporation, takes exception.
03:33Now, I don't mean to get personal, but my mother has been my biggest fan over the years.
03:39At least she was until recently.
03:40Now, the poor lady is getting confused.
03:46That's because every time she opens a magazine or turns on the television, she's told that people like me are no good.
03:56She reads that people like me like to fire thousands of other people so we can impress Wall Street and get bigger bonuses for ourselves.
04:04Oh, I'm trying to address all of this stuff.
04:08The rhetoric out there is absolutely not in agreement with the facts.
04:13Well, I know you've criticized the Newsweek piece, the New York Times downsizing piece.
04:18Are you saying they're just plain wrong?
04:21Oh, absolutely.
04:22I think it's just sensationalism that just absolutely makes my blood boil.
04:27The number one responsibility that we have is survival so that we can, you know, employ people, so that we can pay taxes, so that we can contribute to the community.
04:39And to say that management, you know, their whole objective is to reduce employees, they don't care what happens, and it just is, shows a recognition of simply not understanding the world at all.
05:00Rudy Kuzil heads the United Auto Workers local at Chrysler's Kenosha plant, just south of Milwaukee.
05:06There's so much to use their own euphemisms, downsizing and temporary employees.
05:14Sometimes I think of this economy as a game of musical chairs, and for every hundred people, there's only 20 or 25 chairs.
05:25And when the music stops, 20 or 25 have got good jobs, and the rest of them are standing.
05:31Now they've got part-time jobs or crummy jobs, but they don't have a good job.
05:36In Milwaukee, as in much of America, job security was once the norm.
05:42But it's increasingly harder to come by.
05:45One by one, many of the big corporations that made the city famous have either left or cut their workforce.
05:55Reporter Jack Norman has covered business here for the last 14 years.
05:59He writes for the Milwaukee Journal Sentinel.
06:04Nobody can breathe easy.
06:05The place I work was so secure, so comforting, we called it Ma Journal.
06:11Ma Journal, last year, threw hundreds and hundreds of people out.
06:16It will happen anywhere.
06:18It can happen anytime.
06:20And nobody can be secure.
06:22In a globally competitive world, what responsibility do corporations have to their workers?
06:31Is it still possible in America to have a social contract where hard work is exchanged for a secure and decent life?
06:41For the last five years, Frontline has followed the stories of several Milwaukee families and of two workers whose fortunes are tied to the dramatically changing relationship between American business and its employees.
07:02Bill Donald was laid off by an automaker.
07:04You know, I understand downsizing, but you have to have a limit.
07:09You have to take care of your employees.
07:12You can't keep doing what you're doing and say, the first thing is, employees get laid off.
07:19When Sheila Caldwell got laid off from her job, she felt it changed her.
07:25I was so bitter toward everyone.
07:29And I had no patience.
07:31It was just a side that I had never seen in myself.
07:36And I wasn't used to that.
07:38I'm usually friendly, outgoing, but this really, it really just made me just pure bitter.
07:45Back in 1991, when Frontline producers first met Sheila, she had lost her union job at Briggs & Stratton.
07:51Briggs, mainly a maker of lawnmower engines, had long been Milwaukee's largest private employer, providing over 10,000 family-sustaining jobs.
08:03Briggs was paying good wages because it had a strong union that negotiated the wages, and that Briggs was profitable enough to be able to pay those wages.
08:15Briggs didn't have as much in the way of competition.
08:18People bought lawnmowers and paid a lot of money for them.
08:22Years ago, if you wanted a small engine, you got a Briggs & Stratton.
08:27But in the 1980s, Briggs was forced to compete with low-priced Japanese imports.
08:32So we decided to try and cut costs, partly by asking for wage concessions.
08:38Long, debilitating fights between union and management followed.
08:44At a membership meeting, workers rejected a company request for concessions.
08:47They were asking for outrageous things, I think.
08:50We worked for six years without pay increase, and there's no reason why we should have to keep conceding.
08:58Briggs began to eliminate jobs in Milwaukee.
09:00By 1994, it had cut its local workforce almost in half.
09:06Ultimately, Briggs had a business decision to make in order to compete,
09:11especially in order to compete in engines for lawnmowers that would be sold at the Walmarts and the other big discounters,
09:19where price is all that matters.
09:22Briggs had to get some relief on the wage side,
09:25and they did that by telling its union, you either cut your wages or we're going south.
09:31The sun was shining over Statesboro, Georgia today,
09:35as Briggs & Stratton executives broke ground on a new $75 million small engine plant.
09:40The company said it had no choice.
09:42Briggs' future was at stake.
09:45Ultimately, the strategy worked.
09:47By the early 1990s, Briggs had record profits, and its stock price soared.
09:53But for many in Milwaukee, CEO Fred Stratton was now just another corporate villain.
10:01Fred Stratton, the man, is being vilified inappropriately.
10:07Fred Stratton is a businessman, and he's doing what he sees is necessary for his company.
10:14Fred Stratton declined to participate in this program.
10:18If you were to interview Mr. Stratton, I'm sure he would tell you that the labor leaders at his Milwaukee plant were hard-headed,
10:26and that much of this is their fault, and that they weren't willing to deal on certain crucial issues when he needed them to deal.
10:32If you were to talk to the labor leaders, they would, of course, throw it back in Fred Stratton's court.
10:37I don't think that it's that simple.
10:40Historian Stephen Hauser has tracked the consequences of corporate flight in Milwaukee.
10:48You're in the heart of what once was the old Alice Chalmers complex.
10:55This really was a state-of-the-art manufacturing facility in its day.
11:00Now what I see is a microcosm of what's happened to the United States between the 1950s and the 1990s.
11:08You see a place where jobs for $4 or $5 or $6 an hour have replaced jobs that used to pay around $16, $18, or $20 an hour right on the same location.
11:21This was the new economy Sheila Caldwell found herself in after she lost her job.
11:28Low wages and, as important, few of the benefits she'd taken for granted.
11:35When I was laid off from Briggs and Stratton, I was off for about, what, a month?
11:40And my insurance played out, and it was hard to make ends meet at times.
11:47And sometimes I used my master charge or whatever just to pay for medical and medication.
11:57Sheila needed the medical insurance, but she couldn't find a job that offered it.
12:02She says she didn't want to go on welfare, so she wound up working for $3.50 an hour at a medical parts plant.
12:10I don't like to depend on nobody but myself more.
12:14So if I go to work, I know I'm going to have a paycheck.
12:21Sheila's problem was that she was going into debt paying for medical treatments for her daughter Tamara.
12:29Tamara had been diagnosed with cervical cancer.
12:33When I first found out my daughter had cervical cancer, I was afraid and I didn't want to believe it.
12:39And I was angry because I had the insurance through Briggs when this first happened.
12:46And I was able to go in and get medical attention, good medical attention.
12:51And then after my insurance ran out, it was more or less like, you come in here, we want your pay first.
13:00It was more or less when I had insurance, I was treated with kindness and respect.
13:05And then after the insurance ran out, it was more or less, we don't want you here because you don't have the money, you know, on that order.
13:14And that's really upset me.
13:18Sheila was paying the price for what was seen as the necessary transformation of the American economy.
13:25The question is, was it too high a price?
13:29Labor Secretary Robert Reich.
13:32Do you think corporate streamlining has just gone too far?
13:34I think re-engineering or restructuring or downsizing or right-sizing or whatever you want to call it, it's basically firing, has gone way too far.
13:46Employees, as I talk to them across the country, feel that they are not respected, they are not valued, they are worried about their jobs.
13:54They simply feel that the company is no longer loyal to them.
14:00Why should they be loyal to the company, they ask me?
14:02Why should I go the extra mile?
14:04Why should I care?
14:06You think they've lost trust in their companies and their managers?
14:09Trust is the most fragile commodity in any organization, in any culture, in any society.
14:17Once trust is abused, once it's lost, it is very hard ever to regain it.
14:24They've been building cars in Kenosha for 86 years.
14:28But soon, the big old auto plant on the lakefront will close.
14:31Chrysler is leaving town.
14:33So are 5,500 jobs.
14:35It was 1988.
14:37Chrysler had bought out American Motors and its Kenosha plant just the year before.
14:41Now, only 1,000 workers were left here.
14:45Everyone had great expectations when Chrysler bought this plant because they came to the community
14:52and promised that the plant would be in operation for at least five years assembling two Chrysler cars,
15:00the L-body and the M-body.
15:03And they weren't here a year when they announced they were closing the plant.
15:08Blame us for being dumb managers for spending $200 million to put two old cars in an 86-year-old plant.
15:15But please don't call me a liar when I've got to close it sooner than I thought.
15:19Management said, gee, we're sorry.
15:22We made a promise, but we can't keep it because we promised the people in Detroit, too.
15:27So, tough luck.
15:30Those were rough times in 1987 when Kenosha was closed.
15:35Looking back, was it really necessary?
15:37There isn't any company in the world that is competitive and doing well that says, golly, I'd like to downsize.
15:45We had to go through that downsizing period in 89, 90, or we wouldn't have survived.
15:52And so, while it's very unpleasant for the companies and more so even for the people,
15:58you've got to clearly, not something that you want to do.
16:04It's an unbelievable hardship on the employees and so forth.
16:08But it's a necessary thing to do to be able to ultimately grow and change and be more competitive.
16:22Chrysler had laid off five out of every six workers at Kenosha, 5,500 in all.
16:28Bill Donnell was one of them.
16:31He'd worked 16 years on the assembly line.
16:40It's like your whole world is coming to an end.
16:45I mean, you watch that last car go down the line and you're like, wow, you know, this is it.
16:51What am I going to do?
16:53You try to keep up your morale and then you've got to go home and say,
16:56how am I going to keep my health?
16:58How am I going to keep my family?
17:01Bill couldn't find a well-paid permanent job, so he worked mostly through temporary agencies.
17:07In this area, I was a door-to-door salesman.
17:10I sold ice cream.
17:11And it was all commission.
17:14And my job was to sign up new customers.
17:17So I would go around with a half gallon of ice cream and hand it to them.
17:20And come back a couple days later and tell them about our service and leave them a brochure and ask them to go through it.
17:27And I worked for that company for nine months.
17:30It's not like being hired in.
17:32You don't feel comfortable.
17:34It's like you're only there temporary.
17:37The people treat you that way in a lot of situations.
17:41I was more fortunate than other people because I got along with everybody.
17:46And they said, you're one of the best temps we had.
17:48But you don't really feel part of it.
17:51This is one of the places I worked as a distribution supervisor.
17:57And I only worked there for about five months.
18:00Here, I worked here approximately around six weeks.
18:03And for $5.25, I was working for another temp service called Cornwell at the time.
18:09I was supposed to be here for 30 days, and it could have turned permanent.
18:12But I only worked here seven days.
18:14I don't know what was the reason why.
18:16But I guess when I got here, I found out that the company had filed Chapter 11.
18:21You don't have it the way you had it back in the 50s and early parts where you went to work for a company.
18:28They took care of you.
18:29They did everything in their power to keep you.
18:31Now it's, let's make the money.
18:33We don't care what plant we close, where we go.
18:36We got to worry.
18:37But yet we're willing to pay these top executive millions of dollars a year.
18:41And they're willing to put people out on the street.
18:43And they say, well, it's the world, global economy.
18:47Wait a minute.
18:48You don't have to keep moving out.
18:51Because we're the ones that are paying for it ultimately.
19:02Through the 80s, there's no question about the fact that the auto industry in the United States was not very competitive.
19:08Either from the time it took to do a product, the amount of investment it took, the cost to build it, or the quality.
19:18And the industry went through a very substantial changeover domestically.
19:23We were either going to change or we weren't going to survive.
19:28We almost didn't survive.
19:30We had another brush with bankruptcy only six or seven years ago.
19:36And I think there's nothing that focuses people, you know, like that survival instinct.
19:43In fact, what I'll do is ask you people.
19:45Sheila Caldwell also had to fight for survival.
19:50After two years at low-wage jobs, she just couldn't make it.
19:54So she quit work and, with some public assistance, attended school full-time to retrain in the medical field.
20:02I decided to go ahead and quit my job and go to school and try to make the best of it while I can.
20:08Because I don't know when this opportunity is going to come again, and I'm getting older, and the children are getting older.
20:15And I'm going to have to do something.
20:18Altery.
20:19Pain.
20:20Cell.
20:22Cell.
20:22Cell.
20:23Cell.
20:23Cell.
20:23Cell.
20:23Cell.
20:23Cell.
20:23Cell.
20:23Um, that's protruding, hernia, swelling.
20:30I told them I was going back to school and they were shocked.
20:33And I was telling them that, don't get mad and don't begrudge me of this.
20:40So they look and now they're at a point, well, okay, we'll give you study time.
20:46We'll help you study.
20:48Spell it then.
20:49You got five seconds more.
20:51And I'll tell you to make it.
20:53Okay, I give up.
20:54Three.
20:55Four.
20:57Five.
20:58Spinal cord.
20:59Without medical insurance, Sheila couldn't afford to keep up with proper care for her daughter, Tamara.
21:08Well, I look at her and I say, you know, why is this happening to my child?
21:13Is it going to go away?
21:14I was told, no, she would never be cured of it.
21:16I don't know what's going to happen in the future.
21:21I don't know what she's going to do in the future.
21:24V1.
21:25And you want to look for...
21:26Sheila was training to become an EKG technician and a health unit coordinator.
21:33At the time, EKG technicians started at about $9 an hour.
21:38Even if I had to take two part-time jobs, it would be pretty good.
21:45As long as I would get the benefits that would be included in on it.
21:49That's the main thing, the health benefits.
21:51Because without those health benefits, I don't know, it's going to be rough.
21:57Retraining.
21:59That's all you ever hear about is everybody says, retraining, retraining.
22:02What are you retraining these people for?
22:04Are you retraining them for jobs that exist?
22:08Are you retraining them for jobs in the future?
22:10You don't have to worry about it.
22:11When I lost my job at Chrysler, I was told, finish your education, get a better education,
22:17and you'll move on.
22:18And I've got certificates of kaboo to show you that I attended.
22:22And I maintained somewhere around a 3...
22:24You know, from a 4.0 to a 3.7 in my training programs.
22:28But I yet couldn't get a job.
22:31Here you got CNC turning.
22:34My computer repair.
22:35They're not in order.
22:35They're electronic fundamentals, computer software systems.
22:39I got tons of them.
22:41Mathematics.
22:42All right, here's Blueprint.
22:43Here's my supervisory management certificate.
22:46Finally, Bill Donald got what he thought was the opportunity he'd been waiting for.
22:51A state-run retraining program that promised a good job upon completion.
22:56I thought, if I can't believe the state of Wisconsin, who am I going to believe?
23:00There's going to be more computers in this country, and they've got to have computer repairmen.
23:04So I thought, this is great.
23:06It's something that I've always wanted to do.
23:08What was it?
23:08The one said that...
23:09The comment?
23:10The comment she made.
23:10You're on camera.
23:11This is the comment.
23:12Partway through the course, the retraining program folded, and there were no jobs.
23:17The students were left in the lurch.
23:19We're saying pride has been since the beginning that we want that training.
23:24We want the training we were supposed to get.
23:26Right.
23:26And I thought I checked it out because my wife asked, is this going to be one of these
23:30other scams where they promise you this education and a job at the end with no job?
23:35I said, no, hon.
23:35I questioned everybody.
23:38Do we have employers at the end of this program?
23:41Well, I'll tell you what.
23:42My wife is sitting there laughing, and she was ready to divorce me.
23:44I'm not kidding you.
23:45I told you so.
23:47You wasted 29 ways of your life.
23:49What the hell are you going to do?
23:50I can't keep working like I am without, you know, how are we going to make it?
23:55Because I borrowed on my credit card and stuff like that.
23:58I mean, I did.
24:02My wife, she works at a bank.
24:04She makes enough to make the mortgage and the second mortgage.
24:10She pays for their medical, okay, which is a lifesaver.
24:15But when it gets real tight in months, if I'm not working, we can't make it.
24:20So, she's the one that's kept us together, I mean, by working and that.
24:25But it does put a strain on us.
24:27I mean, family-wise, my kids can't do as much as they used to do.
24:33Kim, what kind of future does she have?
24:36We've got more McDonald's and sandwich places than we do factories.
24:42I don't know if I could even afford to send them to school.
24:46I mean, right now, if either one of them would want to go to college, I couldn't give them that money.
24:49So, I don't know how they would be able to afford to go.
24:55I'm, you know, scared that if I make a promise, I won't be able to keep it.
24:59And that's, so I don't try to make any promises.
25:03I'm sorry, maybe that's not the answers you want, but that's it.
25:05A lot of people in the middle are anxious, and they are anxious for two reasons.
25:11One, because of the long-term decline in median wages.
25:14That's the wage of the person right smack in the middle and everybody below.
25:17But also because the rate of job loss that is permanent is higher in the 1990s than in the 1980s.
25:25You have two wage earners most families rely on, or they rely on a single wage earner who is the sole parent in that house.
25:32And therefore, if one wage is lost, that can mean the difference between making ends meet or destitution.
25:41So, for a whole variety of reasons, there is genuine economic insecurity out there, even though the economy overall is doing splendidly.
25:48Like millions of Americans dislocated in the new economy, Sheila's retraining didn't enable her to replace what she had lost.
26:01She was now working 16 hours a day.
26:04She had two full-time health care jobs, catching a few hours of sleep between them, so she could work all night.
26:14I would leave at 10.30 to be at county hospital by 11 o'clock.
26:18At night.
26:20And then I would get off at 7 in the morning, change clothes, and then work from 8 o'clock in the morning until 4 o'clock in the evening at family.
26:32I would leave there, come home, and then cook, wash, clean, take care, you know, the children's problems, grocery store, whatever I had to do.
26:44Everything else is done, right?
26:46Yeah.
26:46Yeah, I thought that.
26:48Good night.
26:48No Nintendo, no TV.
26:50Good night.
26:51What had been lost was an old-fashioned American promise that a balance could be struck between a hard day's work and a quality of life for herself and her family.
27:02Good night.
27:02It is five years later, in 1996, we return to Milwaukee.
27:14Jack, what was the environment like in the early 1980s when all these companies were leaving Milwaukee?
27:28First, it was a shock and a surprise as each one would either leave or shrink, and then over the years, it builds up and then people become to expect that that's what's going to happen to the point when it becomes a kind of surprise when a company doesn't do that.
27:45One company that has stayed in the face of hard times is Harley Davidson.
27:50Harley Davidson was making big motorcycles, and it got killed by the Japanese motorcycles.
27:57It also was a company that found itself sold off to a big conglomerate that just didn't care about this little motorcycle operation, and quality just completely went kaput.
28:09But Harley decided to make itself over, and it's riding high.
28:17So this is the pride of Milwaukee.
28:19This is Milwaukee iron.
28:21This happens to be a product called the Fat Boy.
28:24It's a soft-tail motorcycle, which is...
28:27Richard Tierlink is the chief executive and part of the team that engineered a management buyout.
28:32The typical Milwaukee...
28:33Was there a decision that had to be made about staying in Milwaukee, or did you never really consider leaving?
28:40If you go back to 1981, which was the time we did the leverage buyout, we didn't have a choice because we didn't have any funds to relocate.
28:49And if you also go back to that time, you find that was when we had to face a very tough decision in 1982 to lay off 40% of our people.
28:57We also vowed at that time, we'll never do that again.
29:02Our challenge was we had too many people.
29:05We weren't efficient.
29:07We weren't making products, quality that our customers wanted.
29:10And we started the whole issue of getting people to understand what they want to do to satisfy customers.
29:19Couldn't you make more money if you moved to an area where labor was cheaper or didn't have a union shop?
29:26Well, if you view that the objective is only to make money, yes.
29:33But we view that what we have to do is balance stakeholder interest.
29:39We have six stakeholders we have to serve.
29:41The investor is one.
29:43Very important one.
29:45But we also have employees, and we have customers, and we have suppliers, and we have government and society.
29:50And we have to try and deal with all of those, not just one.
29:53Because if all I worry about is the bottom line and abuse my employees, I'm not going to have quality products.
30:00Harley-Davidson spent money to modernize its headquarters.
30:06It's preserving its jobs in Milwaukee.
30:09And while from time to time it may have some difficult relations with its unions,
30:14it's managed to always resolve those situations in a peaceful fashion,
30:19and has not only that, but has extended itself into the immediate neighborhood of its community.
30:24It's a community that has been devastated by the departure of its manufacturing base.
30:31But Harley is not the only company to stay in the inner city.
30:35In Metcalfe Park, once a middle-class neighborhood, the Master Lock Company is prospering.
30:41A climate has been created, I think, in corporate America in the last 10 or 15 years,
30:46that it is okay to leave.
30:48It is okay to go find the cheapest labor you can find.
30:54Master Lock decided not to do that.
30:56Why?
30:57When plants relocate, they're generally in search of a more cost-effective environment.
31:03We have a very cost-effective plant here.
31:05Our manufacturing efficiencies are based on vertical integration and a skilled labor force.
31:12So we do our own die-casting and stamping and heat-treating and plating.
31:17We even make the plastic bumpers that are on the Master Lock padlock.
31:23In order to maintain a plant like that, you need a skilled labor force.
31:28Our labor force has grown up with the company.
31:31The average age of the individual we have working here is approximately 44 years.
31:38They have approximately 14 years of seniority.
31:41That level of skill is necessary in order to keep this process going and keep it efficient.
31:51In Milwaukee, jobs at Master Lock are coveted, and Sheila Caldwell landed one.
32:01When I get the lock bodies, I check and make sure that the lock bodies have rivets in them.
32:08Checking for the springs and making sure the springs are in there and then in their right.
32:16After all her retraining, Sheila had decided to go back to the assembly line.
32:21In return, she got a job with regular hours and full benefits.
32:30Master Lock more or less brought me out of a hole.
32:34You're so down.
32:36You have no self-esteem.
32:39You, it's more or less like you hit rock bottom and then all of a sudden you have another chance.
32:44Go fly to the east, fly to the west.
32:48Fly to the one you like the best.
32:49Oh, shake it, Sister Sally.
32:51Oh, shake it, Sister Sally.
32:52Shake it to the one you like the best.
32:55Okay.
32:56Yay.
32:57Since we last saw her, Sheila has become a grandmother, and her daughter Tamara's cancer is in remission.
33:07Sheila's insurance paid for Tamara's crucial surgery.
33:10What is it?
33:11You don't pay for your insurance.
33:13Master Lock pays for that.
33:14And if you have a referral from your main doctor, you know, to go to the other doctors, all that's free.
33:21That's a blessing in itself.
33:23Tell me it would be good.
33:26One of the reasons that Master Lock has been able to stay in the community is that for the most part, management and labor have stopped fighting each other.
33:34The last major strike here was in 1980.
33:38This morning, the police made their presence known.
33:41They lined the streets as non-union workers drove in and out, keeping the couple hundred picketers on the sidewalk.
33:48I was the head of the strike committee.
33:53It was rough.
33:53We had other companies from other cities coming in and joining us on the picket line.
33:59We had Solidarity Day where we flattened cars.
34:03To look back on that and we go, man, that really happened.
34:09Don Tiny Cheatham is a union worker and Master Lock's representative for community relations.
34:15Six years ago, the company asked me if I would mind getting into the community and find out why the residents were so bitter about Master Lock.
34:28He oversees the company's neighborhood outreach programs.
34:31And the reason we're doing it is because we want to open up to the minority ladies because we're getting our young men.
34:39But we want some women.
34:40And it's not dirty.
34:41It's not, you know, you won't get dirty.
34:45I can go like this.
34:46This is how I used to go when I...
34:48We've had a lot of kids throw water and throw stones.
34:54We had graffiti on our building.
34:57And if we didn't get involved with our community and have somebody that's out there on the field, so to say,
35:04then I think we wouldn't be here.
35:08One of the things that I was going to be involved doing was getting rid of bad actors in our neighborhood.
35:17And this building was one of them.
35:19This was prostitutes, drugs, you name it.
35:22I mean, the cops were here every night, and we leveled it.
35:26We didn't literally tear it down by hand, but we got the city and the people at the city hall to be in power with us to help us get rid of this.
35:39We've done that with the people in the neighborhood.
35:42When I first started about five years ago, the houses were just kind of...
35:50I couldn't see anybody living in them.
35:51But now as you drive through, there's more and more houses being rehabbed, and the really bad ones are being torn down, and they're building new ones.
35:58The environment in which our people come to work, the environment in which they work and which they live, have a great effect on their attitudes, the constructive approach that they bring to the job.
36:17It makes them feel better.
36:19It makes your employees feel better.
36:21It makes them more productive.
36:22But companies like Masterlock may be more the exception.
36:30Dan Luria is a management consultant.
36:33No more than 20% of American companies are clearly on the high road to stay.
36:39Everyone else has either chosen the low road or is being actively tempted to take the low road.
36:45And that is, in large part, what's wrong with the American economy.
36:48It's what makes us produce too many things that are at the low end of the food chain in manufacturing and not enough at the high end.
36:57Is it simply becoming fashionable in corporate circles to take what you describe as the low road?
37:03Is it just the thing to do?
37:04Look for low wages and low investment production facilities rather than high wages, good managerial techniques, high investment?
37:14Doing the right thing is risky.
37:18And if the right thing involves making big investments in equipment, in old plants, in older workers, those are all things which carry risks.
37:28You can put all this money in, you can have the best intentions of the world, and you can lose your shirt.
37:33Absolutely right.
37:34But if you don't take the risk, you are not going to be a leader in your field in the long haul.
37:39One other company that decided to take the risk and invest in the Milwaukee area is Chrysler.
37:53The company invested aggressively in the Kenosha plant, which makes engines for the popular Jeep Cherokee.
37:59It also upgraded its technology and retrained its workers.
38:05Of the 5,500 laid off, 500 were rehired.
38:09Bill Donald is an auto worker again.
38:14He's back, making over $18 an hour with full benefits and an annual bonus.
38:20It was the best day of my life.
38:23I mean, smiles and everything.
38:24I'm not kidding you.
38:26I mean, because it was like to myself, hey, that's a $10 an hour raise, you know, more, you know.
38:31And I said, great.
38:32I kiss that ground right now every day I go in.
38:35I mean, I'm serious.
38:37I appreciate it.
38:38There was an effort that started really in 1987, 88 to completely rejuvenate the product lineup of the Chrysler Corporation.
38:48And at the same time, try to bring the workforce in as a partner in working to improve cost and quality.
38:58No longer can an auto company afford to have the so-called dumb assembly line worker that doesn't know anything.
39:06These people are doing industrial engineering.
39:08They're doing ergonomic engineering.
39:10They sit in groups and brainstorm and do problem solving.
39:15We've had our whole assembly line reengineered and redone by the people that work out there.
39:21If you've got the features there and a feature in the backwards hooker, you should be able to pick up the short block like that, too.
39:29They've got a counterweight.
39:30What they've come to realize is the people that are out on the line doing the job day in and day out learn a lot about their job and a lot about how it should work.
39:40We have designs, we talk about what the design people are proposing, and then exchange will this work or won't this work in our context.
39:50And being an engineer, I have a mindset as to how things should work, whereas the assembly people or our union workers here have different ideas and actually have the work experience to do it.
40:00You can dislike the management, but you can't dislike your customers, and you can't dislike yourself.
40:08Now, workers and management have got a common objective that nobody can argue with, and that's giving their customers the best possible product they can give them.
40:20Working together to raise quality is new at Kenosha.
40:23When American Motors owned the plant, worker-manager relations were poor.
40:27I got one instance where it really ticked me off.
40:33A machine broke down that I was running.
40:35I knew it broke.
40:38They called the maintenance over and the engineers over to look at it, and I said, you know, I think there's something wrong with the table.
40:47You know, the table don't seem to be working right.
40:49It's supposed to rotate.
40:50It rotates, but there seems to be something wrong.
40:54And they told me, shut up.
40:55We're engineers.
40:56We know what we're talking about.
40:58Well, about an hour later, after it's been down this long, the engineer says, oh, I found out what's wrong.
41:03The table's offline.
41:05I says, yeah, you found out what's wrong.
41:06That's what I told them the first five minutes.
41:09But because I was a peon, they didn't listen to me.
41:14Now the first thing they would do is ask me, what do you think's wrong?
41:16Bill Donald's union seniority got him the job at Chrysler.
41:26Now he's been retrained as an engine repairman.
41:29You have to pay attention.
41:33You've got to listen.
41:34It's being trained the right way.
41:36It's just a learning experience.
41:38If you have problems, you go talk to another repairman, see if he ever ran into problems like that.
41:47It's using your brain instead of your bra.
41:49I'll let you go out of here and get to work.
41:50You got something like $5 million for retraining from the state of Wisconsin.
41:55How critical is that at Kenosha?
41:58Well, it is very, very significant.
42:00I mean, there's no question that it's not only the money, but it's also the commitment with the community and the recognition that this is a partnership with the community.
42:14Is there a place for government to help you accomplish these goals, do you think, through incentives, tax breaks, changes in regulations?
42:25Well, there isn't any question that there's a lot of things that would help.
42:31Basically, with respect to changing the culture of the company, we have to do that.
42:37Like Chrysler, Harley also changed its culture.
42:40A lot of corporate leaders these days, perhaps they feel under the gun, but a lot of them say business does not have a social responsibility.
42:57If it had to worry about that, it wouldn't do business.
43:02They may not feel they have a social responsibility, but if they ignore the powers of society, they'll be out of business.
43:10Because society can complain to government, and then government can regulate, and government can do the one thing they do very well, and that's over-regulate.
43:21But when times were hard, Harley turned to the government for help.
43:25Well, there was this huge tariff imposed on big Japanese motorcycles, and that gave Harley-Davidson an opportunity.
43:33If it could get the quality of its motorcycles back where it had been, and put out good marketing, it had a window, a few years, of high tariffs to reestablish itself in the market.
43:44And that's exactly what it did.
43:47In fact, it was so successful that Harley went to Congress and said, we don't need the tariff anymore, get rid of it.
43:55We were where we thought we had to be.
43:57Was there a PR advantage to that? Absolutely.
44:00But the fact is, we did it.
44:02All businesses aren't sitting around just waiting for a handout.
44:05If they're given an opportunity to perform, and if there are measures, you might find that they will do the right thing.
44:12When I talk to chief executives about government, they always say, we don't want government.
44:16We don't want you in our business.
44:19That's an understandable response.
44:21But if you talk to them specifically, do you want a tariff to protect yourself?
44:27Do you want a bailout if you get in bad trouble?
44:31Do you want a tax incentive for tuition assistance to your employees?
44:36Do you want a tax break for research and development?
44:40The story is very different.
44:41Oh, yes.
44:42Well, that's, yes, something like that is very, very necessary.
44:45And then I come back, well, isn't that government?
44:47Well, yes, it is government, but it's government helping us.
44:54You can't really have it both ways.
44:59But Secretary Reich's boss, President Clinton, seems to want it both ways.
45:04At last week's conference on corporate citizenship, he used the bully pulpit to encourage CEOs to do the right thing and make money.
45:13He stopped short of threatening government interference.
45:16What do employers owe employees?
45:19What do employees owe employers?
45:21What, if anything, should the government do to help to deal with the new challenges that we face?
45:30There is promise in the new economic environment.
45:33But the new social contract doesn't include job security.
45:36The simple truth is that in the 1990s, those who have lost their jobs are, on average, out of work longer than in most of the 1980s.
45:47The new jobs workers find typically pay less than the ones they lost.
45:52And the distribution of income in America today, according to most economists, is more unequal than anywhere in the advanced industrial world.
46:02Wages for Americans in the top 20% of earnings are doing quite well.
46:10If you're in the top 5%, you are doing extremely well.
46:13If you're in the top 1%, you are doing better than the top 1% has done probably in 50 or 60 or 70 years.
46:18But if you're in the bottom 20 or 30 or 40%, you're not doing well.
46:25In the meantime, CEOs are certainly in the top 1%.
46:28The salaries they pay themselves are extraordinarily high.
46:33Are they making too much money?
46:35I think it's not good for a company, in terms of its own bottom line, to allow too great a gulf to open up between the compensation of the boss at the top and everybody else.
46:48Well, first of all, there's no question.
46:50I think CEOs in this country are very well paid.
46:54They are paid by a committee of the board always, in the case of every case I know, at least, of outside directors who are dedicated to representing the shareholder.
47:08And there's been a big change in compensation in this country in the last few years, and it's tied to the performance of the stock.
47:18Something in approaching 75% of my compensation is purely tied to the success of the stock.
47:30We talked about that if the company makes a profit, everybody benefits.
47:36On a relative scale, compared to other CEOs, I suppose you could argue that Eaton is not excessive.
47:44When you compare them to the head of Disney, who's making hundreds of millions a year.
47:50But I think they're all paid too much.
47:53They really are.
47:54I mean, the Japanese executive, and this is nothing personal against Bob Eaton, who I think is, he and Lutz are doing a very good job of running this company.
48:02But I think they're all overpaid.
48:05$4 million a year, that's $2,000 an hour.
48:09Nobody's worth $2,000 an hour.
48:11But Chrysler's profits are way up, and they've adopted a generous profit-sharing plan for their employees.
48:20Our new 2.7 V6 engine, which is new to Chrysler Corporation, will be building it next summer.
48:27They're also expanding the Kenosha plant to build an engine they now buy from Mitsubishi.
48:32That'll mean considerably more jobs.
48:35We're not saying exactly how many.
48:36But with all the new efficiencies, it's likely only a quarter of those who originally lost their jobs will be called back.
48:44Through this facility.
48:46It's a lot better.
48:47It's not as stressful until she was told that she made a lot of jobs.
48:50Despite being one of the lucky ones, Bill is still feeling hard times.
48:54He's deeply in debt, and he figures it will take five years to get back to where he was in 1988.
49:00His daughter, Kim, is working part-time and considering whether to go to college.
49:06Now that he's making more money, he can pay for my prom dress and my prom shoes that I just bought yesterday.
49:12It's really nice of him, isn't it?
49:14Instead of making me pay for my prom stuff.
49:16There are things that you pay for that Ma doesn't tell me I pay for.
49:20You're just buying it. I got them right now.
49:22I know there's a—they went shopping yesterday.
49:24I know I bought something.
49:25I can't tell you how many people that have come back to work at Chrysler that aren't married anymore and they're divorced.
49:33And the pressures of all that time off or during that time just isn't the same like it was.
49:41Not to say that their families would have stayed together.
49:43I don't know.
49:44But I think there was a big—you can see a lot of people.
49:48I know a lot of people that went bankrupt.
49:50I know a lot of people that lost their—that they lost their families and just, you know, certain things.
49:56They're happy to be back and it's great and they're feeling great that they're starting to live what they used to live like.
50:02And they're starting to get their feet back on the ground again.
50:07Now that I'm working at Master Lock, it seems like I'm more independent.
50:13I'm stronger.
50:14It's like I can do this on my own, like—
50:19How are you doing?
50:19I don't know how you would say it.
50:22It seems like it's pride.
50:24I don't know.
50:24It's just self-pride.
50:26Okay.
50:30In my mind, Master Lock is going to be there forever.
50:33I see it as my retirement job.
50:35But can the Sheila Caldwells of your company at last breathe easy?
50:46Well, I don't think any of us can breathe easy.
50:49The imports produce a low-priced product with low-cost labor.
50:56We can't compete on those bases.
50:59We have to figure out how to work smarter, not harder.
51:02Would a smart worker today say to herself,
51:05These are different times.
51:07Anything could happen.
51:08I'd better keep more money in the bank.
51:10I'd better keep my eyes open for opportunities.
51:13What we hope Sheila's doing is figuring out how she can increase her skill levels
51:18so that she has more to offer Master Lock or more to offer another employer
51:22so that she can do a better job running the improved processes
51:26and the better equipment that we need to stay competitive.
51:29You cannot relax.
51:32Again, you've got to think about whatever you're doing every single day,
51:37there's somebody that is going to buy that product or that service.
51:42Every morning when they wake up in Japan or Europe or Brazil or whatever,
51:47they're trying to become more effective and more productive
51:51so that they can do better in the world market.
51:54And if we don't do the same thing, they'll run right over us.
52:00I was hired to build cars.
52:01If they don't build cars or build engines, whatever it is,
52:05then I don't have a job again.
52:07And I don't want to go through that again.
52:09I don't want to go through that again.
52:10Visit Frontline's website at www.pbs.org
52:27for a wider discussion of what business can or should do to protect its workforce.
52:33Opinions on corporate responsibility,
52:35the future of capitalism, and the American dream.
52:38The debates about our economic health,
52:42are we in long-term trouble?
52:44And lots more at Frontline Online at www.pbs.org.
52:55And now for your letters.
52:58Here is a sampling of the comments about our program on Jesse Jackson.
53:01Dear Frontline,
53:02at the end of your broadcast,
53:04the question was raised as to whether Reverend Jackson's time has passed.
53:07It is precisely now that his mission is most crucial.
53:11As long as he's able to speak for those of us who cannot,
53:14and those of us who have not,
53:16we in the minority need him to make that wake-up call.
53:19Sincerely, Teresa A. Buckley, COSAD, Nebraska.
53:23Dear Frontline,
53:23how terrible,
53:25a black guy with an ego and ambition.
53:27Well, it takes that to run for president,
53:29and how much more so for a black man running for the presidency of a racist white society.
53:34I find a lot to admire in Jesse's pride and belief in himself and the rightness of his cause.
53:39That's what got him nearer than anyone has ever come to busting the race barrier wide open during that campaign.
53:44Thanks, Jesse, from a white Hoosier.
53:47Eric Teal, West Lafayette, Indiana.
53:49Dear Frontline,
53:51Jesse Jackson is not the only voice which serves as a moral compass for America,
53:55but it is certainly one of the clearest and most effective.
53:59Jerry Shepard, Austin, Texas.
54:01Let us know what you think.
54:03By fax,
54:04by email,
54:05or by the U.S. mail.
54:06Next time on Frontline,
54:12two American families
54:14doing their best to hang on to the American dream.
54:18But nearly every day is a struggle.
54:21For the last five years,
54:23Bill Moyers has been documenting their lives.
54:26Living on the edge.
54:28Watch Frontline.
54:29But I think they're all overpaid.
54:36Four million a year.
54:38That's $2,000 an hour.
54:40Nobody's worth $2,000 an hour.
54:42The End
54:51The End
55:25Funding for Frontline is provided by the Corporation for Public Broadcasting.
55:55And by annual financial support from viewers like you.
56:01Frontline is produced for the Documentary Consortium by WGBH Boston, which is solely responsible for its content.
56:08The Democracy Project
56:20For videocassette information about this program, please call this toll-free number.
56:291-800-328-PBS1
56:32This is PBS.
Be the first to comment