The Multinational Monitor


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Plant Closings in Korea...

300 workers at Pico Korea were stunned when their employer abandoned its operations and fled the country in February 1989. The wholly-owned subsidiary of Products, Inc., a Liverpool, NY based cable television component manufacturer and supplier, owed its workers more than $1 million in back pay and several months of severance pay and benefits. In addition to the debt to the workers, Pico Korea reneged on several creditors, including the Korean government, to which it owed an estimated $176,000 in back taxes.

Pico Korea fled in the middle of contract negotiations with the Pico Korea Labor Union without filing the declaration of closure required by the Korean government. After the shutdown, workers occupied the Pico Korea facility; the occupiers have been supported by Korea's labor movement.

In April 1990, three leaders of the Pico Korea Labor Union followed their employer to the United States to discuss the dispute. Thousands of workers across Korea, angered by the succession of foreign companies fleeing Korea in order to escape unionized workers, contributed to send the union leaders to New York.

The labor conflict began in June 1988, when the workers, 90 percent of whom are women, organized a union and called for negotiations with the company. Management signed a contract with the union in November 1988, but refused to abide by the contract or to negotiate in good faith with the union. When workers attempted in January and February 1989 to negotiate wage increases, management fled the country.

Bernard Hitchcock, chief executive officer of Pico Products, says the company decided to close its Korean factory "when labor costs became so high that the factory was no longer economically viable." But according to the Washington, D.C.-based Korea Coalition, Pico Korea's production records indicate that production rose, not fell, during the last six months of operation, while workers' wages remained fixed. After closing the plant, Pico subcontracted with another South Korean factory to make the same product.

In April, Hitchcock met with the three Pico Korea workers, and disclaimed all responsibility for the situation in Korea. The meeting ended when he walked out, calling the workers "criminals" for their occupation of the Pico Korea facility.

Representatives of U.S. labor unions, churches, international solidarity groups and Korean student and community organizations held a rally at Pico Products headquarters in late April to protest "the company's refusal to engage in fair negotiations for a just resolution."

The Pico Workers Support Committee says that the Pico Korea plant closure is just one example among many of corporate disregard for national and international standards for businesses. "Pico Products, Inc. is one of many U.S.-owned companies ... abusing workers overseas with sub-minimum wages and anti-union practices." It points out that in their ongoing search for the lowest cost operating environment, corporations divide and abuse workers around the world. "Practices such as these pit American workers against their foreign counterparts, driving all wages down, and are violations of internationally recognized workers rights."


When 130 members of United Electrical Workers (UE) Local 174 reported to work in Philadelphia last October, they were told that their employer, SMS Automotive Products, was closing its factory and liquidating its assets, effective immediately. SMS owners gave the employees a paycheck for the previous week's work and laid them off.

Local union officers and UE District One president Robert Brown attempted to negotiate the terms of closing with SMS owners and First Pennsylvania Bank, which had foreclosed on SMS loans and forced the shutdown. After more than two months of stalling by First Pennsylvania, union members occupied the factory, demanding that the company meet its contractual obligations to the union members. After four days, SMS Automotive owners agreed to pay approximately $40,000 in medical premiums, hospital bills and vacation pay.

Brown argues that although the occupation was ruled illegal, "as far as we were concerned, it was right to protect our own rights through a form of civil disobedience that was going to bring, at least, political pressure."

....And Baltimore

When the Duralite Truck Body and Container Corporation closed its factory in December 1989, more-than 100 employees were laid off. Duralite's sudden shutdown violated its union contract, since the company did not give notice of the closing to its workers. Adding insult to injury, workers soon discovered that their final paychecks were drawn from an account without sufficient funds and that their health benefits had not been paid for several months.

The Maryland state Attorney General's office is investigating Duralite owner John Smith for misappropriating money taken from workers' paychecks that was supposed to go to union dues, child support and back taxes to the IRS.

Upon closing the plant, Smith filed for bankruptcy and the banks to which he owed money began to sell off the factory's assets. Union members locked themselves inside the factory gates to protest Duralite's debts to the banks being given priority over its debts to workers. Bob Simpson, president of United Electrical Workers (UE) Local 122, says, "we felt like the employees should have gotten their money first," before the bank.

The banks called the police, but instead of making arrests, police officers, many of whom had worked at the factory as off-duty guards and had also received bad paychecks, called Maryland state delegate Charles Avara to ask for his help in negotiating with the banks. Avara succeeded in obtaining a 36-hour freeze on the factory's assets. Says Avara, In my view, the workers had reason to complain; I believe that certain things shouldn't be protected by bankruptcy laws."

Workers will be attending May 14 bankruptcy hearings and have filed complaints with the National Labor Relations Board, protesting Duralite's violation of the contract provision requiring notice of the closing.

Delegate Avara says, "The chances of these average people, living from one paycheck to another, ever recovering is very slim." But he added that he would continue to work for the workers' money. "If there is no satisfactory relief in bankruptcy court then I am going to put a bill in the General Assembly."

Edmund Brown, UE director of organization in the UE International, defends the civil disobedience action, saying, "Closing down plants that make good products, destroying jobs and ruining working people's organizations is a much bigger crime than a brief plant occupation will ever be."

Conoco's Hazardous Homes

Conoco Inc. has agreed to by 400 houses in Ponca City, OK, compensating homeowners whose groundwater was contaminated with toxic chemicals from the oil giant's refinery. The residents had brought suit against Conoco charging it with the contamination and with endangering their health. In a tentative out-of-court settlement, Conoco, a subsidiary of E.I. du Pont de Nemours and Company, has agreed to pay an estimated $18 million for the homes and to place another $5 million in a fund that would go to other neighborhood residents. The company is admitting no liability or responsibility for any claims, injuries or damages in the settlement.

According to Marilyn Garcia of the Oklahoma office of the National Toxics Campaign, complaints about the effects of the refinery began in the 1950s. A school was closed in the 1970s after dozens of teachers and students fainted from the fumes of a nearby creek which runs through the plant site.

The situation worsened in recent years when a high groundwater table caused an orange sludge that smells like gasoline to seep into residents' basements. Residents maintain that underground water, polluted with hydrocarbons, particularly benzene, has led to an inordinate number of illnesses and cancer fatalities.

In response, Ponca City residents formed a neighborhood association to research the problem. They conducted an informal door-to-door health survey to determine the extent of illnesses in the neighborhood. The residents' group also researched death certificates, finding a disproportionately high number of lymphoma cancers. In addition, the neighborhood association drilled its own wells to monitor groundwater contaminants.

Residents examined Environmental Protection Agency (EPA) records and found numerous violations of the National Pollutant Discharge Elimination System (NPDES) permits granted to Conoco. According to Marilyn Garcia of the National Toxics Campaign, 'Conoco has violated nearly every one of its permits by dumping more than is allowed or by dumping at too high a concentration."

Based on their findings, the citizens appealed to the Oklahoma Health Department and the federal EPA. The Health Department declared that there was no imminent health threat, but advised residents with gardens not to eat their vegetables. Garcia claims that because the residents "were such a small interest group, they were patted on the head and told 'there's no problem here, go back to sleep.'"

Conoco was no more responsive. Conoco "has treated the entire problem up to now as a PR problem," says Garcia. When residents' complaints started attracting media attention, Conoco held a big rally in downtown Ponca City and passed out free t-shirts and bumper stickers that said "Conoco-Ponca City's Best Neighbor."

The neighborhood association's difficulty in pressuring Conoco was not surprising, given the company's dominance of the town and the importance of oil to the state. "This is an oil state.... It's un-American if you're against Conoco. ... This is one of those cases where Conoco really is the whole town; if they left it would kill the town," Garcia says.

After exhausting all other possibilities, residents filed suit against Conoco in May 1989. Under the settlement, Conoco has agreed to pay each of the 400 families the assessed value of their property plus an additional 45 percent bonus and $6,000 in moving expenses. If the resident accepts, Conoco has no further liability. Residents may instead opt to receive only the assessed value of their property from Conoco and retain the right to sue for health damages.

Conoco has already proposed a cleanup option which would include dumping much of the contaminated water into the nearby Arkansas River. But since residents as close as three-quarters of a mile from the refinery use well water, the National Toxics Campaign will attempt to challenge such proposals.

Rick Klinger, a member of the residents' group's steering committee, says "the EPA and state officials failed to protect the public" in Ponca City before and the neighborhood association plans to do what it can to make sure citizens are not endangered further. "We will be watching closely; the public has to monitor carefully to make sure they do their job."

- Katherine Isaac

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