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Notice Something Missing? What Was Left Out of the GR Press’s Steelcase Coverage

January 13, 2011

On January 12, the Grand Rapids Press posted an article by Shandra Martinez plus an update by Chris Knape about an important announcement from Steelcase: the closing of the Kentwood East seating plant and two other manufacturing facilities. The loss of 750 jobs, including 400 in Kentwood. And the moving of these jobs to two sites in Mexico: Tijuana and Reynosa.

The article included a statement from Steelcase president and CEO Jim Hackett, who said, “”We continue to make improvements to our industrial system, which have left us with excess capacity to support current and anticipated future demand.” He added that the company had to be “as fit as possible in the highly competitive environment in which we operate.”

Steelcase spokeswoman and apologist Jeanine Holquist then tidied up with additional quotes in both the article and in an explanatory update, reiterating that Steelcase had excess manufacturing capacity, “so our space continues to exceed the need.”

Since Steelcase just announced a month ago that it had stronger sales and earnings than expected in its third quarter, Holquist also had some tap-dancing to do. Explaining that the shifts to Mexico will save the company $35 million annually, Holquist threw out this bone to workers here: “West Michigan will remain the most significant node in our manufacturing.”

Here are five things that the reporters for the Grand Rapids Press could have, but didn’t, ask or include in its initial reporting of the situation:

1. An explanation of “excess manufacturing capacity.” An obvious choice would be to challenge this statement, particularly from a local point of view. Steelcase has closed a number of buildings in the past few years, including its pretentious pyramid office building and, more importantly to workers, its 206-acre manufacturing campus adjacent to the headquarters building. At the same time, it has established manufacturing facilities in Mexico, among other locations. Suddenly, the facilities here have become “excess.” The Press reporters could have asked “why?” but they didn’t.

2. Examining the NAFTA factor. Pinning Holquist down on the “excess manufacturing capacity” quote could have led to interesting revelations about how NAFTA may have led to Steelcase’s abandonment of the West Michigan area. It fits as part of a general deindustrialization of the United States.

Since NAFTA was initiated in 1994, net manufacturing employment in this country has declined by more than 5 million jobs. Companies have also used the threat of moving jobs across borders to undercut union negotiations. NAFTA has authored other disasters, such as the decimation in Mexico of the ejidos, communal land holdings by villages, which have crumpled under U.S. capitalist acquisitions. It’s caused destruction of the country’s agricultural system by agribusiness. Although Canada initially seemed to enjoy gains from NAFTA, it too is feeling the trade agreement’s downside as U.S. corporations, greedy for larger profit margins, are pulling jobs from Canada and moving them to locations with cheaper labor forces and fewer regulations. NAFTA is also seen as a way of  undermining Canadian control of Canada, lowering demand for Canadian-made products and weakening the country’s social programs.

But from a purely capitalist viewpoint, NAFTA’s elimination of tariffs makes shifting jobs both possible and profitable. Since Steelcase states it is going to reduce its costs by $35 million a year, and it has facilities in place in Mexico, are those gains going to come from the cheaper labor, the elimination of benefits, and fewer manufacturing regulations made possible by NAFTA? This question went unasked.

3. Questions about Steelcase’s resistance to unionization. Since the Steelcase scenario all through the last decade might have played out very differently had workers been unionized, the corporation’s role in discouraging and breaking up union organization activities could have cast a different light on the current situation. Exploring this issue was an obvious, but overlooked, piece of the puzzle by the Press reporters.

Most notably, in 1993, a strong effort to unionize among the manufacturing workers at Steelcase was squelched, partly with threats of massive layoffs by then-president Jerry Myers. Myers, the first CEO of the company who was neither a family member or a longtime Steelcase employee, was highly unpopular for his vision of a “leaner, internationally competitive company.”

Prior to his advent, both white-collar and blue-collar employees had been used to relative transparency in the way that their wages, benefits, and information about the company’s planning were handled. But Myers began implementing harsh work rules in the manufacturing sites, cutting back on benefit packages, and slashing profit-sharing checks. Workers initiated meetings with the Teamsters and the UAW to protect their job security.

Myers retaliated with threats of widespread job cuts, and did not reveal that the company was actually showing signs of emerging from the recession of the early 90s, an upswing that then continued through most of the decade. The entire stand-off came to an end with the firing of Myers in 1994, termed a “resignation.” The layoffs that came afterward were minimal and most were short-term. Plant employees felt this was a sign that they did not need to unionize after all.

What most workers did not realize at the time was that they may have been played. The company was weathering a crisis due to a death in the family that released nearly 1 million shares of the company’s privately held stock, shares which were sold to “outsiders,” or non-family members. This ultimately led to the company going public in 1998—and a public stock offering would have been much less profitable if the company had a unionized work force.

To replace Myers, Steelcase brought in Jim Hackett—who went right ahead with Myers’ plans, taking Steelcase “‘back to basics’ through a number of Myers’s cost-cutting and international expansion initiatives [that] were left in place.”

4. Pinning down Steelcase’s actual intentions for its West Michigan work force. It’s pretty hard to see Steelcase’s presence evaporating from the West Michigan scene and still choke down the idea that it will remain “the most significant node in our manufacturing,” as Jeanine Holquist stated.

Significance is relative. Once the largest employer in the area, Steelcase has led its now-skeletal work force through one shock wave after another in the past 10 years. In 2001, the company eliminated 1,100 jobs from its Grand Rapids operations, including a full 10 percent of its manufacturing workers. Wages and salaries were “restructured” and mostly reduced. Later that same year Jim Hackett approved a 5 percent raise for himself and other top executives in the firm.

More layoffs for the area followed. In 2002, 150 jobs here were cut. Six years later, in 2008, the company announced the elimination of 300 jobs in the area. In between, these numbers have apparently been augmented by ongoing job eliminations and terminations at the company which have flown mostly under the media radar. After today’s announced job eliminations, the company will have “just under 3,000 employees” in both blue- and white-collar positions here in Grand Rapids. That’s down from over 9,000 employees a decade ago. The math shows that the job-loss bleeding has been ongoing.

The Grand Rapids Press reporters could have asked the hard question: Will Steelcase even be here in five years? Ten years? And just how much more will the company disrupt the lives of residents here in its endless quest to provide investors with increasing profits year after year?

5. Including the voice of the workers. As is the case with most of the Grand Rapids Press’s reporting, the article contained only the corporate point of view, the capitalists’ rationalizations for their decisions, and the barest information about the company’s future plans.

The coverage of this announcement is silent about the workers themselves—both those who will be losing their jobs and those who will be expected to continue working in an environment of distrust and insecurity. The Grand Rapids Press needs to give these folks a platform or at least present their side of this story.

Soon there will be more unemployed workers, more families without incomes, added to the thousands of people in this area who have lost good-paying jobs over the past years because of Steelcase’s corporate gamesmanship. They must have something to say, and it would be valuable to reach beyond the corporate double-talk and let them speak.



6 Comments leave one →
  1. January 13, 2011 11:11 pm

    The growing trade gap with Mexico since NAFTA was enacted is further evidence that NAFTA is bad for the U.S..


    (figures are in millions of U.S. dollars on a nominal basis, not seasonally adjusted (U.S. Census Bureau))

    1993 1,663.3 (surplus)

    1995 -15,808.3(deficit)

    2002 -37,145.9 (deficit)

    2010 -61,642.9 (deficit)

  2. Kate Wheeler permalink
    January 14, 2011 12:44 am

    Those are stunning numbers all right. Thanks, r, for adding that information.

  3. todd permalink
    January 16, 2011 2:54 pm

    Although I’m sure they would find a way to weasel out of it, I think that by shipping jobs abroad these companies are undermining US security and stability and should be put on trial for treason! Not to mention the corporate media that does nothing but spew capitalist/globalist propoganda.

  4. Kate Wheeler permalink
    January 16, 2011 5:22 pm

    Todd, it’s clear that capitalists will always meet only the minimum requirements of any government in their search for higher profits. NAFTA gives companies carte blanche to do what Steelcase is doing, and that’s just one way that American workers are being shafted.

    And you’re also right in pointing out that most media consistently shows things only from the side of corporations. Workers who attempt to demand their rights or better treatment, who unionize, who organize against business owners who are ripping them off, are always cast as the enemy. This area is particularly bad in the way that businesses are shown as heroes, which is one reason I wrote the piece.

    Thanks for your comments.

  5. Employed SteelCase permalink
    January 10, 2012 9:23 pm

    As a SteelCase employee, I wanted to share that not all the jobs lost in Kentwood and Grand Rapids are going to Mexico, our plant here in Athens Alabama is gaining alot of work as of late from other plants. Thanks, I truly enjoy my job at SteelCase


  1. Don’t be fooled by the Corporate Culture in West Michigan | Grand Rapids Institute for Information Democracy

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