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Propensity for shock

SoVaNow.com / February 15, 2017
“This guy appointed by Trump as an advisor on regulatory matters,” emailed a watchful reader back in late January, “is the same Icahn who raided Dan River Mills and sunk it in his predatory efforts to get control of it. His actions forced it into bankruptcy. Thousands of jobs lost as a result.” The email was titled, “Charles Icahn,” but hey, close enough: Anyone who lived through the death of Dan River Mills as it choked on gobs of debt from a hostile takeover attempt will remember the rapaciousness of the raider, Carl Icahn, if not the exact name of the man himself.

Icahn was only 46 when he launched his proposed stock buyout of Southside Virginia’s largest company, in 1982. At the time, Dan River Mills employed 8,000 workers in the City of Danville and surrounding areas. The company fought off Icahn, but at the price of its future survival: weakened by enormous debts rung up during the struggle, Dan River went under two decades later. Now in his 80s, Icahn is back on the public radar: the longtime (and odious) wolf of Wall Street has been placed in charge of a sweeping regulatory rollback with a new team running the show in Washington. “It’s time to break free of excessive regulation,” said Icahn when his new job as special advisor to the incoming president was first announced in December.

When people talk about “Making America Great Again” — when Donald Trump pumps his signature catchphrase — it’s generally understood to mean (at least in part) the revitalization of America’s industrial muscle: factories and workplaces that crank out goods and pay wages that a man can support his family on. (In this retro imagining of the future, it’s always men out front.) Lowering the trade protection hammer on cheap foreign producers is supposed to be a major fix for America’s manufacturing decline. But no one talks much about a major, different part of the problem — predatory capitalists such as Icahn, or the private equity crowd personified at one time by Bain Capital’s Mitt Romney, or those generally who claim millions for themselves by buying up companies and ripping them apart for profit. In doing so, they make life miserable for conventional businesses that have enough trouble dealing with middling margins and competition without finance-sector vultures circling overhead.

Predatory capitalism, brutal foreign competition, a lax regulatory state, the City of Danville: Shards of distinct but related stories form a prism for viewing a modern-day industrial scandal in Southside Virginia: a spate of workplace fatalities at Goodyear Tire & Rubber Company in Danville. This week, the Virginia Department of Labor and Industry entered into a $1.75 million settlement with Goodyear after four workers died at its Danville plant over a span of 12 months from August 2015 to 2016. Of that fine amount, Goodyear gets to claw back $750,000 to implement safety measures that the company should have had in place all along. Oh, and the fact that Goodyear has settled with the state and paid a million-dollar fine cannot be used as evidence in lawsuits that loved ones of those who have died may bring against the company. To top it all off, the agreement carries the blessing of the United Steelworkers, the bigfoot union that represents workers at the Danville plant.

What’s going on here? Is this settlement simply a slap on the wrist for Goodyear, a $9 billion corporation presumably with the means to support workplaces where employees aren’t dying on the job? Did the state of Virginia — which could have sought criminal sanctions — go easy on the company, or cave at some point during negotiations? What about the Steelworkers Union; did they sell out the interests of dues-paying members? Some element of each of these statements, if not the gamut, is probably true. But that’s not the question that we’re interested in exploring here. Rather, it’s this: How did we even arrive at a point where workplace deaths would be treated as just another cost of doing business?

Please don’t misunderstand my point. Most of the time I don’t buy into dark motives, conspiracy theories and tinfoil futures, and I don’t believe that a market leader and iconic company such as Goodyear, nor Virginia’s labor department, nor the United Steelworkers would be anything short of stricken and catalyzed to action by recent tragic events in Danville. All of the key players in this story — business, labor, government — are groupings of human beings, good and bad, though I’d wager there are many more in the former category than the latter. All of which makes this situation even more shocking to consider. Buried in the dry language of labor department accident summaries are the gruesome facts of how each worker died: A maintenance mechanic fell through the floor into a pit of boiling water and oil; two workers were crushed to death by plant floor machinery. The fourth victim, a Halifax County electrician, died when a cutter wheel activated as he was adjusting a proximity switch. Each suffered a hideous death; to contemplate their fate is first to ask: What’s a life worth?

Surely that’s a question Goodyear, the USW and the Virginia Department of Labor and Industry have asked, too. And their answer seems to be: who knows, but nothing will be accomplished by driving Goodyear out of Danville, with 2,200 workers currently on the payroll. It’s certainly possible that state government could have hit Goodyear with steeper fines and harsher punitive action without jeopardizing the company’s presence in the city. But who’s to tell these days? If Goodyear did try to pack up and leave, maybe President Trump could stop the company in its tracks by firing off some derogatory tweets. Then again, this is the same White House that has tasked notorious corporate raider Carl Icahn with determining whether regulations — including workplace safety rules and enforcement — are too onerous and harmful to business competitiveness. Point being, state labor department regulators and union officials had a weak hand to play against the company, should they even have desired to do so. And just how firm is the position of Goodyear itself?

Yes, Goodyear is a household name; yes, its executives make boatloads of money. But we shouldn’t lose sight of the fact that Goodyear is like any other American manufacturer — vulnerable to brutal price competition from knockoff products made in China and other low-wage, low-cost countries. This is no excuse for running an unsafe factory, but perhaps a corporate culture that gave us the horrors of a death-trap workplace sprung from something other than the malign motives of management. Globalization, trade, prioritization of short-term profit over long-term value — all these pressurizing forces on American industry have left even the biggest companies exceedingly vulnerable to disastrous mistakes from within and without.

The rise of Donald Trump and his brand of economic nationalism-cum-protectionism offers companies like Goodyear potential safe harbor from the buffeting forces of global capitalism. But instead of giving corporate America some breathing room to firm up its domestic operations, in exchange for a share of the benefits flowing to workers, this oafish White House team is setting the stage for the worst of all worlds: the picking of economic winners and losers based on the propensity of executives to suck up to our narcissistic new president. Meantime, at the state level, regulators probably have done the best they can do in resetting day-to-day conditions at the Danville Goodyear plant. As part of the $1.75 million settlement by the company, union, and Commonwealth, Goodyear has pledged to apply for entry into the state’s Voluntary Protection Program, a seal-of-approval standard for worker health and safety. That may seem like weak tea brewing, but it’s better than nothing.

Creating a sound foundation for a thriving manufacturing sector — high and low, innovative and traditional — is a challenge that demands more space for discussion than we have available here. Nor have we even mentioned the role of labor unions in this story; suffice it to say that a stronger union likely would have helped to stave off the deaths in Danville. Changes in industrial policy really do need to start at the top, with a stronger emphasis on fair trade and reasonable standards for operations by businesses and workers alike. In this light, putting a marauder like Carl Icahn in charge of setting corporate rules represents absolutely the wrong approach, and presages misery for working people as employees of Dan River Mills learned a generation ago. Judging from more recent tragedies at Goodyear in Danville, we still have a lot of work to do striking the right balance.





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