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Globalization on the Prairie

By Chad Broughton, Associate Professor of Anthropology and Sociology

On May 8, 2003, factory workers gathered outside the Sodexho conference center in Newton, Iowa, to protest the Maytag Corporation's decision to relocate its Galesburg refrigerator plant. From a makeshift PA system on the back of a pickup truck outside the company's shareholder meeting, Machinists Local 2063—the once-formidable union at the Galesburg factory—blasted Bruce Springsteen and criticized the corporate decision-makers gathered inside.

On the 2004 Labor Day weekend in Galesburg, the Machinists made their last stand, organizing a second rally condemning outsourcing and unrestrained free trade. Then-U.S. Senate candidate Barack Obama, who mentioned Galesburg in his keynote address at the Democratic National Convention, received a hero's welcome when he spoke at the rally. But like the first, this demonstration combined angry resilience with a notable undercurrent of powerlessness. After the rally, a union official gave out signs from the protests. "It's our going-out-of-business sale," he said dryly.

Two weeks after the final rally, the last refrigerator rolled off the Galesburg assembly line, marking the end of more than 54 years of appliance manufacturing at the plant. Each line worker signed that last refrigerator, which now sits in Local 2063's office, which will soon close for good as well. The factory, which a little over 10 years ago was a vibrant, miniature city of 3,000, is now hollowed, deserted and up for sale.

Though often fuzzy and ill-defined, globalization means something quite concrete in Galesburg. In a town where the pace of change has usually been gradual, global economic forces over the past 25 years have persistently uprooted its manufacturing base and have left Galesburg to adapt to a post-industrial world marked by economic insecurity, wrenching change, and both new perils and new possibilities.

Refrigerators in a Global Economy
Before the decision to close the Galesburg factory was announced, local Maytag managers painted a fairly grim picture for the refrigerator factory. In a global economy characterized by overproduction, Maytag faces stiff competition from domestic giants General Electric and Whirlpool, as well as upstart and low-priced foreign competitors like Korean-owned LG and Chinese-owned Haier—which, interestingly, has a refrigerator factory in South Carolina. At the same time, big-box retailers like Sears and Home Depot have been using their buying leverage to squeeze appliance makers on price. From this perspective, Maytag looks like an underdog just trying to survive in a ruthless global economy characterized by intense competition and, to put it plainly, too many refrigerators.

Despite numerous concessions by the union and local and state governments, a production shift to a lower-cost site seemed inevitable. After the North American Free Trade Agreement (NAFTA) was implemented in 1994, the state gave Maytag $7.5 million in grants and loans, and Galesburg increased its sales tax by one-quarter percent, raising nearly $3 million for the company. And eight years later, in April 2002, the union narrowly avoided a strike, accepting what was generally considered a lousy contract to keep the plant open. Just six months after the contract was inked, the company announced its relocation plans.

People in Galesburg insist that the company has lost its way. They argue that producing innovative, high-quality and American-made products for a higher-end niche market is a more realistic business strategy than trying to compete on cost with the likes of General Electric. In his time at Maytag, one upper-level manager said he'd seen the company change from "a Midwestern company with Midwestern people and values" into a company with aspirations to compete with the big players in the global industry.

Refrigerators once made in Galesburg are now being assembled in South Korea, Amana, Iowa, and Reynosa, Mexico.

Deindustrializing Towns in a Global Economy
Economic globalization has exposed American blue-collar workers to direct competition with workers from around the world. In Reynosa, a booming border town where Maytag's side-by-side refrigerators are now made, workers earn less in a day than Galesburg workers averaged in one hour: $15. Without independent unions or government wherewithal to enforce labor and environmental standards, Reynosa, bustling with poor migrants from southern Mexico, is an attractive place to do business.

Though job migration is only part of the story, global forces have played a significant role in the slow erosion of America's manufacturing base. Since 1979, the United States has lost more than 5 million jobs in manufacturing, about 2.5 million of those since 2001. While there are still over 14 million manufacturing jobs in the U.S., the heavily-unionized Rust Belt has been hit particularly hard. According to the Bureau of Labor Statistics, Michigan, Ohio, Pennsylvania and Illinois have each lost about one in every five manufacturing jobs since 2000.

Deindustrializing towns like Galesburg have an uphill struggle to cope with less money flowing through the economy, high levels of joblessness and the social problems that follow. An economic impact study estimated that Galesburg, a town of 33,000, would lose $61 million a year in Maytag payroll dollars alone. Property values and school enrollments have begun to decline, and anecdotal accounts suggest the predictable social outcomes are imminent: increased rates of divorce and broken relationships, spousal abuse, emotional distress, substance abuse and crime. But it remains to be seen how dramatic the economic and social fallout will be.

Wither the American Dream?
At the Newton protest, George Carney, who'd worked at the refrigerator factory for more than 20 years, rode his Harley-Davidson with a large, homemade banner fluttering behind his bike that read, "MAYTAG: Made in the USA," circled in red with a line across it.

Later that morning, marching outside the shareholder meeting, workers waved small American flags and shouted "USA! USA!" Seemingly out of place at a jobs rally, the workers' chant revealed profound anxiety about the loss of not just their jobs but a way of understanding their lives as workers and as Americans. The patriotism of these workers is the kind that emerges when circumstances are bleak, and people rally together to defend something important.

Ask any Maytag worker which brand they own, and they'll show you several Maytag appliances. Here it's not unusual to speak with great pride about taking extra time to shave off an imperfection on the freezer liner so it fits just right or hanging a door so it will always seal properly. Facing an uncertain future, workers who had been intensely loyal now speak derisively about their former employer—and promise never again to buy anything Maytag makes. Pinning the blame on "corporate greed," these workers feel that Maytag has betrayed their trust and their country's core values in the global race for more.

To these workers, economic globalization is a moral question, concerning loyalty, trust and mutual obligation. Like millions of working-class people before them, these refrigerator makers entered factory life on the simple premise that with hard work and loyalty to one's employer, anyone can create a path into the middle class, buy a home and a car, and provide for one's children—the American Dream.

Tears in the Social Fabric
The plight of the American middle class should concern us all. Talking to some workers, one senses that people have been severed not just from their jobs but, in a small way, from their commitment to the broader social order. While the vast majority of workers contained their bitterness, there were reports of sabotage of machinery and forklifts at the plant, two bomb threats by a disgruntled worker at another shuttering factory, and even a high-speed police car chase after a worker brought a gun to work. When dreams, plans and financial security suddenly vanish for so many, and comparable work is illusive, the social fabric is stretched and tears emerge.

Anticipating the closing, George Carney purchased the Town Tavern, a small bar in Avon, Illinois, where the banner he flew off his motorcycle at the Newton rally now hangs. He and girlfriend Lynn Nelson, another lay-off casualty, are putting their hopes into the small business.

Since the announcement, Nelson has struggled to keep their relationship together. "His nerves are shot," she said. "He's just worried about how he's going to take care of us and his kids. It's just eating away at him. I know it sounds funny, but he's not the same person now as he was when we started dating."

Carney admits that he's been quick-tempered and unfairly hard on Nelson, but he feels stuck. Looking at Carney from across the bar, Nelson said, "Depression is probably a good word for it. It's hard to deal with. It's really hard."

Becoming a New Worker
Because Maytag's relocation was deemed the result of foreign competition, displaced workers from the plant can receive educational benefits and extended unemployment insurance through the federal Trade Adjustment Assistance (TAA) program. In the next two years, the most fortunate among the dislocated in Galesburg will become service-providers—nurses or radiology and computer technicians—in Galesburg's post-industrial economy.

Deb Pendergast, 40, feels that if her family can eke it out through the difficult transitional period, she can realize her dream of becoming a surgical nurse. Pendergast, who earned $14.30 an hour after 20 years as a line worker at Maytag, now receives $350 per week in unemployment benefits for up to two years—as long as she stays in school to retrain in a government-defined "growth field."

Carl Sandburg College's classrooms are packed with non-traditional students like Pendergast, who are returning to school, starting from scratch and scrambling to avoid slipping out of the middle class. In the service-based economy, education is the difference between maintaining one's standard of living and slipping into the ranks of the working poor.

Pendergast had been taking courses at Sandburg to qualify for the nursing program but was recently declined acceptance. The community college has expanded both of its nursing programs to meet heavy demand from laid-off workers but still must turn away some qualified applicants.

"I don't want people to feel sorry for me," Pendergast said. "I want people to be happy for me because of what I'm doing. Yeah, I'm losing my job and that's tough, but I have a good family and good health. Don't feel sorry for me; encourage me and praise me for what I'm doing. It takes a lot of hard work, a lot of dedication. I'm going to have to work hard to be an RN—even harder than I worked at the factory."

Chad Broughton earned his Ph.D. from the Department of Sociology at the University of Chicago in June 2001 and began teaching at Knox College the following fall. His dissertation was an ethnographic investigation of welfare reform implementation in Chicago. His current research examines the social and cultural impact of the relocation of the Maytag refrigerator factory on workers and their families in the two communities—Galesburg, Illinois, and Reynosa, Mexico—affected by the move. In September 2003, Broughton wrote a four-part series on Reynosa as part of "Countdown to Closing," The Register-Mail series that covered the impact of the Maytag closing in both Galesburg and Reynosa. That series won a first place award for "Enterprise Reporting" from the Illinois Associated Press and second place for "New Reporting - Series" from the Illinois Press Association. At Knox, Broughton's courses cover globalization, poverty, social welfare policy, consumerism and social theory.

To read more about Chad's work, click here.