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127

Moving toward a Shutdown: Bloomington, 1969-1998

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R. Cowie, J. (199). Moving toward a Shutdown: Bloomington, 1969-1998. In R. Cowie, J. Capital Moves: RCA's Seventy-Year Quest for Cheap Labor. Cornell University Press, pp. 127-151

129

In contrast to the swift shutdown in Memphis and the rapid exodus of consumer electronics from Camden, however, Bloomington's television production simply drifted slowly away. "I think the first move was to Tennessee in a very small way," said the RCA worker Elizabeth Shelton in 1979, "but the rumors started as long as twelve years ago that eventually RCA in Bloomington would be reduced to just more or less a shipping point or a final assembly [operation]. And it all happened gradually over a ten-twelve-year period." Although marked by occasional large-scale layoffs, the decline in receivermanufacturing jobs took place over the course of a generation as employment reductions combined with the early retirement of workers to eliminate 7,000 positions between the late 1960s and the mid-1990s. Judy Cross explained, "We had eight thousand people working here and all the chassis went .... [Then] we lost our tuners, we lost our pre-amp, we lost our remote control." Even after the television chassis started arriving from Mexico in the mid-1970s, the Bloomington workers at least performed the tasks of attaching equipment to the core of the set, but then the chassis began arriving in Bloomington with all the components already in place. In sum, according to Sandy Anderson, rather than laying everybody off at once, "they just sort of snuck it out one line at a time." The Bloomington workers were actually more fortunate than many U.S. workers in the consumer electronics industry, for RCA kept some production in the country longer than many of its competitors did.

this is kind of funny

—p.129 by Jefferson R. Cowie 2 years, 9 months ago

In contrast to the swift shutdown in Memphis and the rapid exodus of consumer electronics from Camden, however, Bloomington's television production simply drifted slowly away. "I think the first move was to Tennessee in a very small way," said the RCA worker Elizabeth Shelton in 1979, "but the rumors started as long as twelve years ago that eventually RCA in Bloomington would be reduced to just more or less a shipping point or a final assembly [operation]. And it all happened gradually over a ten-twelve-year period." Although marked by occasional large-scale layoffs, the decline in receivermanufacturing jobs took place over the course of a generation as employment reductions combined with the early retirement of workers to eliminate 7,000 positions between the late 1960s and the mid-1990s. Judy Cross explained, "We had eight thousand people working here and all the chassis went .... [Then] we lost our tuners, we lost our pre-amp, we lost our remote control." Even after the television chassis started arriving from Mexico in the mid-1970s, the Bloomington workers at least performed the tasks of attaching equipment to the core of the set, but then the chassis began arriving in Bloomington with all the components already in place. In sum, according to Sandy Anderson, rather than laying everybody off at once, "they just sort of snuck it out one line at a time." The Bloomington workers were actually more fortunate than many U.S. workers in the consumer electronics industry, for RCA kept some production in the country longer than many of its competitors did.

this is kind of funny

—p.129 by Jefferson R. Cowie 2 years, 9 months ago
135

Indeed, many critics pointed to the cheaper labor employed by Japanese firms as the factor behind the relocation of jobs in the consumer electronics sector, but by the mid-1970s the Japanese advantage in labor costs had almost disappeared. In 1963, U.S. wages were six times higher than those in Japan, but by 1977 the difference between the two had shrunk until U.S. wages were only 1.5 times those of Japan. As early as 1966 Television Digest declared that Japan's rapidly developing economy was no longer the "low-cost, high-laborcontent bargain basement of [a] decade ago." In 1973 Sony could even claim that the two countries' wage costs were about the same once the elaborate system of Japanese fringe benefits was calculated into the equation. The "Japanese cheap labor" argument for moving U.S. production abroad held what little merit it could claim only until the mid-1970s, when it became clear that the Japanese government's investment in industrial policy, in the form of subsidized and targeted development strategies under way since the 1950s, was what was really paying off. By that time, however, the foreign labor against which U.S. workers competed did not belong to foreign firms but could be found on the payrolls of their own companies. Every U.S.-owned television manufacturer had become a transnational manufacturer by 1977.

—p.135 by Jefferson R. Cowie 2 years, 9 months ago

Indeed, many critics pointed to the cheaper labor employed by Japanese firms as the factor behind the relocation of jobs in the consumer electronics sector, but by the mid-1970s the Japanese advantage in labor costs had almost disappeared. In 1963, U.S. wages were six times higher than those in Japan, but by 1977 the difference between the two had shrunk until U.S. wages were only 1.5 times those of Japan. As early as 1966 Television Digest declared that Japan's rapidly developing economy was no longer the "low-cost, high-laborcontent bargain basement of [a] decade ago." In 1973 Sony could even claim that the two countries' wage costs were about the same once the elaborate system of Japanese fringe benefits was calculated into the equation. The "Japanese cheap labor" argument for moving U.S. production abroad held what little merit it could claim only until the mid-1970s, when it became clear that the Japanese government's investment in industrial policy, in the form of subsidized and targeted development strategies under way since the 1950s, was what was really paying off. By that time, however, the foreign labor against which U.S. workers competed did not belong to foreign firms but could be found on the payrolls of their own companies. Every U.S.-owned television manufacturer had become a transnational manufacturer by 1977.

—p.135 by Jefferson R. Cowie 2 years, 9 months ago
141

The 1970s were difficult times for the company as the combined effects of the recession, foreign competition, and poor management eroded RCA's competitive position. After a dramatic sixty-year history of expanding sales and product innovation, Fortune magazine pronounced the corporation one of the worst-managed companies in the United States. Investment in research declined precipitously, a string of relatively short -lived CEOs followed Robert Sarnoff's resignation after his short but disastrous reign, and the company, burdened by nearly $2.9 billion of debt, finally divested itself of its various subsidiaries. "I am anxious to get back to the roots of this company," announced Chairman Thornton F. Bradshaw, who was imported from Atlantic Richfield to restore order to RCA. "We'd like to spend more on our production lines to bring them up to the Japanese level of investment." Some observers believe that if the company had been investing in its productive cap abilities rather than buying other companies and searching out cheap labor, both the workers' and the industry's future would have been quite different. By moving production abroad so early in the face of international competition, the industry made an implicit decision to embark on a long-term strategy that would eventually end domestic production. "A decision to battle imports with automation and radical technological change" earlier on, argues one industry analyst, "could have resulted in a dramatically different outcome.

—p.141 by Jefferson R. Cowie 2 years, 9 months ago

The 1970s were difficult times for the company as the combined effects of the recession, foreign competition, and poor management eroded RCA's competitive position. After a dramatic sixty-year history of expanding sales and product innovation, Fortune magazine pronounced the corporation one of the worst-managed companies in the United States. Investment in research declined precipitously, a string of relatively short -lived CEOs followed Robert Sarnoff's resignation after his short but disastrous reign, and the company, burdened by nearly $2.9 billion of debt, finally divested itself of its various subsidiaries. "I am anxious to get back to the roots of this company," announced Chairman Thornton F. Bradshaw, who was imported from Atlantic Richfield to restore order to RCA. "We'd like to spend more on our production lines to bring them up to the Japanese level of investment." Some observers believe that if the company had been investing in its productive cap abilities rather than buying other companies and searching out cheap labor, both the workers' and the industry's future would have been quite different. By moving production abroad so early in the face of international competition, the industry made an implicit decision to embark on a long-term strategy that would eventually end domestic production. "A decision to battle imports with automation and radical technological change" earlier on, argues one industry analyst, "could have resulted in a dramatically different outcome.

—p.141 by Jefferson R. Cowie 2 years, 9 months ago
147

Few things demonstrate the process of silent integration more effectively than the fact that about 75 percent of the Bloomington RCA jobs had been lost before the acronym "NAFTA" even entered the political discourse. Indeed, the threat of capital flight had hung over all labor relations at the plant since the late 1960s, but by the 1990s, with global pressures increasing and labor law turned against the workers, it became a weapon wielded aggressively against the dwindling numbers of RCA employees. In 1991, during standard contract negotiations between the Bloomington union local and the company, for instance, RCA-Thomson demanded a wage cut of $2 an hour or it would relocate all of the 20-inch sets, one of the factory's staple products, to Mexico, where it could save nearly $80 on every set produced. Rather than submit to extortion and surrender 20 percent of their members' paychecks, the union representatives decided to call the company on their threat. Their response clearly demonstrated the distance the Bloomington workforce had traveled since the early days. "We caucused back in the room," reported an exasperated Bill Cook, and decided, "Fuck it! Move 'em! And they did."

The union made its bold decision to call the company's bluff in the context of events it had closely observed unfolding at Zenith's operations in Missouri. Their competitor had followed a similar migratory path, moving from industrial Chicago to Springfield, Missouri, and finally to Matamoros and Reynosa, on the Mexican border. Having just witnessed the Zenith IBEW local make painful concessions on the promise that the workers would get to keep what remained of their jobs, only to see them transferred to Mexico six months later, the RCA local was not in the mood to offer much in the way of concessions. "The story going around the [Zenith] plant was, if you didn't give them the wage concession, they were going to move to Mexico," explained a former Zenith employee who had worked at the plant over twenty-four years. All of the concessions they granted to keep the plant open, however, "just gave them an extra five years to finalize their plans to move. We just helped pay for it." [...]

—p.147 by Jefferson R. Cowie 2 years, 9 months ago

Few things demonstrate the process of silent integration more effectively than the fact that about 75 percent of the Bloomington RCA jobs had been lost before the acronym "NAFTA" even entered the political discourse. Indeed, the threat of capital flight had hung over all labor relations at the plant since the late 1960s, but by the 1990s, with global pressures increasing and labor law turned against the workers, it became a weapon wielded aggressively against the dwindling numbers of RCA employees. In 1991, during standard contract negotiations between the Bloomington union local and the company, for instance, RCA-Thomson demanded a wage cut of $2 an hour or it would relocate all of the 20-inch sets, one of the factory's staple products, to Mexico, where it could save nearly $80 on every set produced. Rather than submit to extortion and surrender 20 percent of their members' paychecks, the union representatives decided to call the company on their threat. Their response clearly demonstrated the distance the Bloomington workforce had traveled since the early days. "We caucused back in the room," reported an exasperated Bill Cook, and decided, "Fuck it! Move 'em! And they did."

The union made its bold decision to call the company's bluff in the context of events it had closely observed unfolding at Zenith's operations in Missouri. Their competitor had followed a similar migratory path, moving from industrial Chicago to Springfield, Missouri, and finally to Matamoros and Reynosa, on the Mexican border. Having just witnessed the Zenith IBEW local make painful concessions on the promise that the workers would get to keep what remained of their jobs, only to see them transferred to Mexico six months later, the RCA local was not in the mood to offer much in the way of concessions. "The story going around the [Zenith] plant was, if you didn't give them the wage concession, they were going to move to Mexico," explained a former Zenith employee who had worked at the plant over twenty-four years. All of the concessions they granted to keep the plant open, however, "just gave them an extra five years to finalize their plans to move. We just helped pay for it." [...]

—p.147 by Jefferson R. Cowie 2 years, 9 months ago
148

Before the company made its demands, events may have led the employees to believe that their jobs were safe for at least a little while. Two years earlier the city of Bloomington had granted the company an "enterprise zone" status that had already saved it over $1 million in taxes. As one city official remarked in the wake of the threat to relocate, however, "You don't buy loyalty when you buy a company through tax breaks." In addition, Thomson had announced substantial profits just the day before the meeting in the parking lot and had recently committed $10 million to have the name of the Indianapolis Hoosier Dome changed to the RCA Dome for the next ten years. The company, however, still talked tough about the need for "bold actions to cut costs" and argued that it had to "think and act globally." RCA-Thomson managers announced that their actions would be "swift" because their options were "limited" and their time "short."

motherfuckers

—p.148 by Jefferson R. Cowie 2 years, 9 months ago

Before the company made its demands, events may have led the employees to believe that their jobs were safe for at least a little while. Two years earlier the city of Bloomington had granted the company an "enterprise zone" status that had already saved it over $1 million in taxes. As one city official remarked in the wake of the threat to relocate, however, "You don't buy loyalty when you buy a company through tax breaks." In addition, Thomson had announced substantial profits just the day before the meeting in the parking lot and had recently committed $10 million to have the name of the Indianapolis Hoosier Dome changed to the RCA Dome for the next ten years. The company, however, still talked tough about the need for "bold actions to cut costs" and argued that it had to "think and act globally." RCA-Thomson managers announced that their actions would be "swift" because their options were "limited" and their time "short."

motherfuckers

—p.148 by Jefferson R. Cowie 2 years, 9 months ago