Union Victory at Virginia IKEA Plant: Resistance Grows Against Race-to-Bottom Wages

Ikea workers in Danville, Va., aren’t taking Thomas Friedman’s advice. Last week, after a three-year struggle, they chose by a 221-69 vote to unionize Ikea’s first manufacturing plant in the United States. Their move defies conventional wisdom that a competitive future requires a lower-wage, less unionized America. And Ikea’s choices — to build a factory in the old capital of the Confederacy, to deploy America’s best union busters, and ultimately to rein them in — illuminate dynamics that get ignored in debates over outsourcing. Ikea’s example shows how easily European companies can embrace American-style union busting. And it shows a path for workers to fight back.

“Sweden’s Mexico”?

The post-NAFTA era has been marked by elite consensus, articulated for a decade by New York Times columnist Thomas Friedman, that a country’s competitiveness depends on holding down labor costs in order to compete for increasingly mobile capital. By that measure, the opening of an Ikea plant in Virginia rather than Europe would seem a sign of progress. (Technically, the employer at the plant is Swedwood, a wholly owned subsidiary of Ikea.)

The state of Virginia and the city of Danville, home to declining textile and tobacco industries, showered the company with a combined $12 million in incentives. But it’s doubtful that tax cuts were Danville’s greatest draw. It’s a low-income, significantly segregated city, in a “Right to Work” state, in a country whose labor costs and organizing rights pale in comparison to Sweden’s. As Americans, “we demand nothing” from companies, says CUNY history professor Judith Stein, “and in fact locals say ‘Don’t worry, you won’t have to deal with the union.’” In April, the Los Angeles Times reported that Danville workers faced starting wages less than half those of their Swedish counterparts and less than half their vacation time.

During its successful campaign to organize the Danville workers, the International Association of Machinists (IAM), through its Machinists News Network, produced a web video called “Same Rules, Same Respect.” It charged that “when on American soil, IKEA is playing by a very different set of rules than when at home.” In the video, IAM Woodworking Division director Bill Street says, “We’ve become Sweden’s Mexico.” (The Daily Show chose a similar description for the situation.) There are many ways to hear that statement — as a particularistic appeal to nationalism or chauvinism, or as a comment on the universalism of companies’ pursuit of profit. Stein disputes the Mexico comparison, noting that the products produced in Danville will be sold in America, not shipped back to Sweden. (The analogy also disregards the fraught history of migration, border regulation and violence between the United States and its southern neighbor.)

Stein says there are significant reasons other than labor costs that foreign companies have placed more production in the United States since the 1970s, including proximity to where their products will be sold and — in the past — avoidance of tariffs. However, she says avoiding labor costs and labor militancy explain these companies’ preference for the American South. Street says that foreign-owned companies represent a growing share of the industry in the United States. Echoing Stein, he says that Ikea’s choice to locate in the United States fits the company’s business model of doing production closer to its distribution. But he adds that in the United States, it became clear that Ikea “didn’t have to bring the social contract with them” from Sweden.

Companies Doing What They Can Get Away With

Operating in Virginia, Ikea quickly dispelled any hopes that its pay, benefits or working conditions would resemble those in Sweden. Over the three years since the factory opened, Street says, “as production has gone up dramatically, wages have gone down.” Workers complained about unpredictable scheduling, excessive and undercompensated overtime, inadequate safety, management racism, and harsh and capricious discipline. OSHA cited the company for safety violations. Seven employees filed complaints with the Equal Employment Opportunity Commission, three of which the company settled out of court. Complainant Jackie Maubin told the Los Angeles Times this spring, “If we put in for a better job, we wouldn’t get it. It would always go to a white person.” Lynn Adkins was fired without an explanation and told the Danville Register & Bee, “It was just a bad, bad experience for me. I wouldn’t wish that on nobody.”

And when employees filed for a union election, Ikea responded like most American companies: It called in professional union busters. And it didn’t do it on the cheap. It brought in Jackson Lewis, perhaps the nation’s premier anti-union firm. “There’s no Danish word” for union busting, says Street, because companies can’t get away with it there. But when Street initially confronted an Ikea vice president about Jackson Lewis, he responded, “Don’t even think you’re going to tell me who we’re going to get legal advice from.” Street says local managers were “out of control.” Management organized anti-union meetings, and rumors started about the plant closing down if workers chose a union. The IAM filed National Labor Relations Board (NLRB) charges against Ikea, charging illegal anti-union tactics, including firings of union supporters. Ikea announced that it had sent auditors to investigate conditions at the Danville plant and found it in compliance with Ikea’s code of conduct.

Stein points out that “McDonalds in Germany provides healthcare and social benefits, and German firms which negotiate with [German] unions in the auto industry, when they set up an automobile industry in Alabama, they’re union free ... Even the best socialized company, if they can get away without a union, they’ll do it … The union takes away your power to do what you think is best for the company.”

The willingness of many companies to take advantage of the anti-union repertoire of countries in which they operate can have direct deadly consequences. U.S.-based Coca-Cola has drawn international condemnation for alleged complicity in the assassinations of union leaders in Colombia.

Forcing Accountability

The standards workers have won in Europe didn’t stop Ikea from abusing workers in the United States. But it helped create an opening for workers to win a change.

While workers were organizing for a union in Danville, the Building and Wood Workers’ International (BWI) labor federation, of which IAM is an affiliate, was working to pin responsibility for Virginia anti-union tactics on Ikea headquarters in Europe. Ikea workers and supporters engaged in global solidarity actions, including thousands of phone calls and emails and an informational picket line in Australia. The workers’ struggle in Virginia for the benefits that are assumed in Sweden drew repeated Swedish media coverage, including a segment on the country’s top-rated news show.

Street says that pressure paid off in the months before the union vote, as Ikea corporate concluded that protecting their brand in Europe required getting Jackson Lewis to scale back its anti-union tactics in Virginia. Although Ikea never complied with the standards set forth in its corporate code of conduct or its agreements with a global union federation, Street says, “we were able to have Ikea essentially put handcuffs on Jackson Lewis.” As a result, the election became “a referendum on Swedwood” without the same degree of fear and confusion that can follow a full-force Jackson Lewis campaign.

The Swedish example also strengthened workers’ sense of what was possible in Virginia. In the month before the election, a leader of Sweden’s Ikea manufacturing union flew to Danville and met with workers to describe the wages, benefits and respect they had won. BWI also organized to send the 335 Danville workers messages of support from workers around the world, including hand-written letters and videos. The week before the election, five Danville workers passed out from excessive heat after being denied breaks and water. Days later, they won their union with 76 percent of the vote.

Stein says the Ikea example is instructive because Americans are more used to seeing themselves as providers, rather than the beneficiaries, of global solidarity. “It’s not just the rich American workers helping their benighted third-world brothers. It works all the way around … It’s solidarity. It’s similar.”

The Danville struggle may offer a cautionary tale and a way forward for the United Auto Workers (UAW), which has recently announced new efforts to organize foreign automakers’ plants in the American South. Discussing prospects for organizing a new Volkswagen plant in Chattanooga, UAW District 8 director Gary Casteel told the Tennessean, “It’s a whole different legal structure in Germany that they operate under. They don’t see unions as a detriment to their business. It’s a lot more mature view, and they seem to be a lot more evolved as a corporation than most other transplants.”

Casteel’s words suggest he’s hoping the UAW will have an easier time organizing Volkswagen workers because of how evolved their company is in Germany. But the Danville case gives reason to expect a less positive kind of evolution. It shows how easily companies adjust to what they can get away with where they are — unless workers, through organizing at work and international solidarity, build leverage that forces a different kind of adaptation.


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