Globalization victims need assistance, not `sorry'

June 24, 2007|By Jay Hancock | Jay Hancock,Sun columnist

It's time the government did more to compensate people such as the 130 FMC Corp. employees who found out last week they're losing their jobs to globalization.

Either that, or risk a political backlash that slows the pace of globalization.

There's no question which alternative presents America with the bigger problem. Plus, providing relief to U.S. workers hurt by the world economy is the right thing to do.

FMC's Baltimore plant is the story of U.S. manufacturing writ small. For decades it made pesticides, herbicides, rocket fuel and other chemicals on the city's waterfront.

Baltimore's port let FMC import ingredients and ship finished products affordably. Unlike some manufacturers, who made components for assembly operations that started moving overseas in the 1980s, FMC's U.S. farmer customers weren't going anywhere.

In the late 1990s the economy was growing so fast and demand for FMC's bug killers was so high that the Baltimore plant couldn't run fast enough. The 185 hourly workers were working 70- or 100-hour weeks, and in 1997 they briefly walked off the job in protest.

Thanks to overtime some were pulling down $70,000 a year, and as recently as five years ago the plant had more than 350 employees.

But the painful export of U.S. jobs that many believed would eventually slow down has never done so, especially for manufacturing. Since 2000 the nation has lost 3.2 million factory jobs; 40,000 of them were in Maryland.

The point is often made that U.S. manufacturing output is still growing and relatively healthy, that the job losses are largely about productivity improvements. But this does no good to employees whose jobs are wiped out by productivity gains.

To its credit, Philadelphia-based FMC tells no fibs about what doomed the Baltimore plant. Frank Siwajek, director of North American operations for FMC Agricultural Products, told The Sun last week that the factory was under pressure from low-cost, overseas producers, that FMC is cutting expenses and that production will go to Asia. Subcontractors will get the job.

Baltimore's great port, its skilled and energetic workers, the declining value of the dollar, the recent American boom in corn plantings -- none could save the FMC plant.

Had workers known it, three months ago they could have listened to FMC chief executive William G. Walter explain the dry facts behind their impending unemployment.

"Eight years ago we embarked on a manufacturing or sourcing strategy that had us transferring ... the capital cost of manufacturing to somebody else's balance sheet, [varying] the cost structure for us and significantly improving our global cost competitiveness," Walter told a group of investors.

"The result has been nearly $60 million of cost that we've taken out during that period of time. We've identified already another $30 million which we'll be able to take out [later]."

It looks like Baltimore represents most or all of the $30 million.

If you're CEO Walter, maybe you're doing what you have to do. FMC stock has gone from $15 to $85 in five years.

If you're a U.S. farmer, you want the kind of competition and cost reduction that are causing the Baltimore plant's closure.

Never exactly flush with money, farmers have been coping with increased chemical prices caused by the high cost of oil, a key ingredient.

If you're a U.S. taxpayer or Social Security beneficiary, you don't want to shield the economy from the pressures that did the FMC plant in. Foreign competition helps spur productivity improvements and growth that are crucial for increasing tax revenue without raising tax rates.

If you're a human being, you hope the international ties being forged by FMC and 100,000 other companies will eradicate global poverty and perhaps reduce the wars that have dogged the species since the dawn of history.

But if you're an FMC employee, you're out a $50,000-a-year job. You and your fellow manufacturing employees have shared hardly at all in the growth and productivity boom of the last decade. And you have little prospect of landing a job with similar pay.

So far none of the presidential candidates sounds as protectionist as Richard Gephardt did when he was running in 1988 and 2004. But Democrats Barack Obama, John Edwards and even Hillary Clinton are all waxing skeptical on free trade.

And evidence from the damage to U.S. workers from globalization mounts every day. At some point the pressure to do "something" will be irresistible.

Before we hit that point, let's do something that will help everybody.

"Trade adjustment assistance" has existed in the United States since the 1960s, signed into law by President John F. Kennedy and aiding workers affected by the North American Free Trade Agreement and other deals.

Now let's expand it, providing real wage insurance for globalization's losers and increasing the chances that globalization will proceed apace.

jay.hancock@baltsun.com

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.