Foxconn to Hold “Union Elections” – Don’t believe the hype.

Foxconn recently announced workers would be able to vote for union representatives in its factories. The first election, scheduled for this July, is to be held in Foxconn’s Shenzhen complex (1,4). As reported by John Chan in a Feb 13^th 2013 article, this is somewhat strange news as Foxconn claims it has already been holding union elections since the creation of the Foxconn Federation of Labour Unions in 2008. Chan argues this Federation of Labor was created in order to extend the policing role of the CCP’s state-controlled unions into the private sector (3,4).

The only substantial change to Foxconn’s 2008 policy reflected in the new announcement seems to be the inclusion of four “junior workers” from each of the 12 manufacturing sections in the Shenzhen complex (1,3,4). Though additional representation may help ease worker/manager relations it does not, given the small numbers of new representatives, do much to ensure collective bargaining rights for workers, nor does it give them any new meaningful leverage in their growing struggle for fair compensation and equal rights.

Independent unions are in fact still illegal in China, as are worker strikes, and the official All-China Federation of Trade Unions (ACFTU) (see footnote) is known to frequently and publicly back employers and the CCP regime against the very workers they’re meant to protect. It also boasts ultimate control over all enterprise unions throughout the country including Foxconn’s union (3). In Foxconn, as in other enterprises, senior company managers, often CCP branch secretaries, run the unions rather than workers (4). This fact explains why many observers believe any new union representation in Foxconn plants is either A. largely symbolic and/or B. intended as more of a pressure-release valve for growing tensions between labor and management.

Not only does Foxconn’s recent move not impart any real increase in power or ability to organize for workers outside of its current system, but so far there have also been no additional protections being offered elected representatives (2). China has many laws that provide legal protection for workers, but most of them are selectively enforced, leaving worker representatives vulnerable to retaliation by management and party leaders. Cases have been reported where organizers were not only fired from their company positions but also detained by local police for weeks on end.

Foxconn’s latest efforts are seen by many observers as an attempt to stem worker unrest and avoid further negative news coverage. It may also be an attempt to preserve the CCP party’s power by averting protests, strikes or otherwise politically motivated upheavals by workers in China (1,3,4). It goes without saying that there is a lot of labor unrest and political demonstrations at this time in China (4).

1. http://truth-out.org/news/item/14604-can-we-trust-foxconns-new-democratic-chinese-factories

2. http://www.clb.org.hk/en/node/110178%20http://www.clb.org.hk/en/view-resource-centre-content/100618

3. http://tv.msnbc.com/2013/02/05/foxconn-unions-holding-elections-for-some-leadership-roles/

4. https://www.wsws.org/en/articles/2013/02/13/foxc-f13.html

5. http://www.economist.com/node/11848496

6. http://en.wikipedia.org/wiki/All-China_Federation_of_Trade_Unions

Footnote:

The All-China Federation of Trade Unions (ACFTU) was originally founded in 1925, after which it was repealed twice (once by the Chinese Nationalist government and once by Mao Zedong and the Cultural Movement) before being reinstituted once again in 1976. Under the new law independent unions were made illegal, effectively giving the ACFTU a government-controlled/sanctioned monopoly on unions in China – one that doesn’t allow freedom of association, collective bargaining or strikes to occur (4,6). In 2008 Chinese policy changed requiring Chinese, but also foreign owned companies to create their own SCFTU chapters. Though there was some resistance, most notably by Wal-Mart, most companies have chosen to join. This makes sense given the ACFTU provides no real security to workers and cooperation is incentivized with government tax cuts. The addition of these companies has driven membership rates higher and further solidified the SCFTU’s role as a “yellow” union by consistently acting to defend economic growth and the protection of its own political organ over workers rights. Companies that continue to resist are blacklisted and subjected to audits, tax examinations and accusations of labor violations (4,5,6).

Putting Democracy to Work

While we plan to return in later blogs to the Mondragon Cooperative, we'd like to begin to address American worker cooperatives! We will examine what potential they might have to help eleviate rapidly deteriorating working conditions of the American working class, what obstacles they face and which American cooperatives are surviving in the current economic climate and why. 

Below is a video clip of Shift Change - a new documentary on worker cooperatives at home and abroad. It includes footage taken of Mondragon workers as well as several U.S. cooperatives we might choose to cover in blogs to come.

The Mondragon Corporation: Criticisms - Part 3 of 3

By Peter Schnall and Erin Wigger

In our first two blogs we have presented Mondragon’s business structure and corporate values with an emphasis on those aspects we find particularly important in vouchsafing the health and safety of its workers. Here, we’d like to address a few problems with the Mondragon experience as a “worker cooperative” corporation as it has undergone expansion and evolution over the past 30 years.

Expansion of the company:

By the mid-1980s it had become apparent to Mondragon’s that many of its products were in direct competition with other multinational companies. Since retooling their company to make other products would be difficult and costly, it was decided that the company would instead adapt to current global practices rather than dramatically change their own products (2,5). This meant, for example, that Mondragon would embrace expansion abroad,

Erosion of “worker collective” values:

Mondragon opened new plants in Mexico, Morocco, Egypt, Argentina, Thailand and China to name a few and, while Modragon insists it tries to ensure good working conditions in its international plants, its international workforce have not been offered member-ownership. Even within Spain, Mondragon-owned popular Spanish food chain Eroski, did not offer its 40,000 employees a chance to become worker-owners until 2009 (7, 5, 9, 2). This resulted in a loosening of Mondragon’s grip on its own stated values as a worker-owned cooperative.

Today, roughly one-third of Mondragón workers are nonmembers out of 256 companies. This exceeds the original Mondragón commitment to never employ more than 10% nonmembers.

“Temporary” labor and gender inequality:

Gender equality in their hiring practices is also an issue. As with other globally competitive capitalist corporations we’ve seen (e.g.. Foxconn) when Mondragon experiences an increase in demand from the marketplace they draw from a pool of temporary workers to fill the labor gap. Temporary hires at Mondragon are overwhelmingly female, thus many lower positions within the company are being occupied by females while blue-collar jobs at Mondragon’s coops remain largely male (10). Temporary female workers often receive less pay and, by definition, have less job security.  This social stratification of workers by gender is the anti-thesis of workplace democracy.

Alienation:

In the mid-1960s alternative approaches (in the form of Scandinavian work groups) were introduced to Ulgor workers in an effort to replace the rote and alienating line work Taylorism had brought. The recession of the 1980s, however, created a shift away from alternative manufacturing processes as the coops began to be more concerned with their bottom line (11). By the early 1990s several lean production practices had been accepted, including just-in-time inventory along with other manufacturing practices to increase productivity such as shift work (10). It’s hard to imagine in a company where workers have a share in power the actual organization of work within its factories has been left basically untouched. These practices bring into question the ability of Mondragon to support workplace democracy and whether all member-owners are truly active in decision-making within the company. (9,5,10).

Conclusion:

Mondragon is doing, many things right as we discussed in our previous two blogs re the company. However, given their commitment to the goals of worker participation and improved worker health, one would think they would extend offers of membership to their foreign employees, take a stand on gender inequality (possibly through outreach through their educational branch) and do more to encourage democracy and participation on the work floor.

1. http://www.mondragon-corporation.com/language/en-US/ENG/Who-we-are/Introduction.aspx

2.http://en.wikipedia.org/wiki/Mondragon_Corporation

3. http://www.ownershipassociates.com/mcc-intro.shtm

4. http://www.mondragon-corporation.com/ENG/Co-operativism/Co-operative-Experience/Historic-Background.aspx

5. http://participedia.net/en/cases/mondrag-n-co-operative-corporation

6. http://distributistreview.com/mag/2010/06/mondragon-and-the-global-economic-meltdown/

7. http://www.dollarsandsense.org/archives/1997/1197huet.html

9. http://www.yesmagazine.org/issues/the-new-economy/mondragon-worker-cooperatives-decide-how-to-ride-out-a-downturn

10. http://www.globaljusticecenter.org/2011/11/15/cooperativization-on/

11. http://www.community-wealth.org/_pdfs/articles-publications/outside-us/paper-clamp.pdf

Changes at Foxconn may not be sufficient

By Peter Schnall and Erin Wigger

As reported recently in the New York Times, signs of change can be seen in Foxconn’s factories. Protective foam has been placed on low stairwell ceilings inside factories and automatic shut-off devices have been added to many machines. Some workers have also received more comfortable chairs (1,2). Hourly wages are reportedly also up and hours of work per week are down. All this is supposedly good news for workers at Foxconn.

In fact, according to the Times, Foxconn has already carried out more than 280 of 360 changes recommended by the Fair Labor Association (FLA ref 2).

You might remember from our previous blogs, Foxconn and Apple both made numerous commitments to change working conditions at the plants after meeting with the Fair Labor Association (FLA), whose report  (released in March of 2012) identified numerous major problems at Foxconn including very long work hours (up to 80 hours per week), excessive and often unpaid overtime, safety violations as well as inhumane housing conditions.

Foxconn announced that by July 2013, no employee would be allowed to work more than an average of 49 hours a week (the limit set by Chinese law) and promised to increase wages so employees’ total pay would not decline when overtime hours are cut. Wages were raised for some workers in Shenzhen by 16 to 25 percent (6,7). However, despite the higher hourly wages, Foxconn’s partial compliance with Chinese weekly work limits has resulted in an average overall decrease in salaries for many workers leading to complaints by many who need the extra hours and the income to provide for their families. As we were completing this article China Labor Watch reported that workers at Foxconn Group’s Xin Hai Yang Precision Factory had gone on strike January 11^th to protest low wages. (see ref 11)

The story from the NY Times also reports that other reforms are being implemented by Foxconn in areas like health and safety, environmental protection, compensation, grievance systems, workplace conduct and discipline, and termination and retrenchment policy though it’s unclear in the article exactly what changes are being made (2).

Even with these reforms, chronic problems remain at the plant. Envoyé Spécial, a 60 Minutes-like program from a public TV station in France, went undercover at the Zhengzhou iPhone 5 Foxconn factory and reported several days ago that it had found workers living in dormitories still under construction without electricity or running water. Reporters also met with lower-paid student workers who claimed they were required to continue working at the factory in fear of losing their diplomas as well as workers who claimed that much of their upgraded $290 monthly salary was still being absorbed by the company through housing, insurance and food (3,5).

Just this past September, (six months after Foxconn agreed to a Fair Labor Association request for new internship rules), two worker advocacy groups found that students in nonmanufacturing courses were being improperly forced to work at a Foxconn plant in north central China (4). One student studying preschool education said she was prohibited from quitting her internship and was compelled to work night shifts. Afterward, Mr. Gou of Foxconn issued apologies to wronged interns and the responsible official was fired (1).

Earlier in the year reports surfaced from Students & Scholars Against Corporate Misbehavior (SACOM) finding that the year's multiple Apple product launches put added pressure on the factories, allegedly pushing workers into overtime and forcing them to endure "humiliating" disciplinary action, including the writing and reading of confession letters, and manual labor duties like toilet cleaning.

This climaxed in early October when a riot broke out at the Chengdu, China plant involving thousands of workers after a clash with security staff. Dozens of Foxconn employees were arrested.  Only 12 days later, 3,000 to 4,000 workers at Foxconn’s Zhengzhou plant walked off the job when fights broke out between quality control inspectors and line workers on the iPhone 5 (8,9).

Though Foxconn has reportedly been training managers to treat employees less brusquely, foremen still use profanity and intimidation, workers say. “The managers speak in a manner that often feels like a threat,” said Mou Kezhang, who works in iPad quality assurance at the Foxconn factory in Chengdu (1). Clearly, the pressure on Foxconn for increased production of various Apple components has led to oppressive management practices and shortcuts to increase production.  

The important issue of poor psychosocial work environment at the plants and the role work stressors play in the negative health outcomes of workers continues to be ignored.  Work stressors include; work intensity and speed-up, long work hours (this appears to have been partially addressed), organizational justice, effort-reward imbalance, low social support, job strain and threat-avoidant vigilance, to name a few. Recent research publications from China indicate that job strain and effort-reward imbalance may play important roles in the development of musculoskeletal disorders and also physical injuries among chinese workers (10,11). The FLA as well as watchdog groups such as China Labor Watch have ignored these psychosocial factors or aren’t aware of their importance. Nor has anyone examined the impact of these psychosocial stressors on the negative psychological health outcomes plaguing this population of workers - observable by the significant number of suicides the plant has experienced over the last few years. These issues need to addressed along with work hours and wages for work life at Foxconn to significantly improve. Without these changes we can expect continued and andd increasing negative health outcomes.

References:

1) http://www.nytimes.com/2012/12/27/business/signs-of-changes-taking-hold-in-electronics-factories-in-china.html?pagewanted=all&_r=4&

2) http://www.nytimes.com/interactive/2012/12/27/business/Improving-Working-Conditions-at-Foxconn.html

3) http://www.engadget.com/2012/12/14/french-reporters-infiltrate-zhengzhou-foxconn-iphone-5-factory/

4) http://news.cnet.com/8301-13579_3-57559327-37/lingering-issues-found-at-foxconns-iphone-factory/

5) http://www.pcworld.com/article/2023286/foxconn-samsung-face-labor-issues-at-chinese-factories.html

6) http://www.guardian.co.uk/technology/2012/feb/20/foxconn-apple-china-wages/print

7) http://9to5mac.com/2012/05/31/foxconn-workers-activists-claim-no-change-at-apple-plants-following-fla-audits/

8) http://www.nytimes.com/2012/09/25/business/global/foxconn-riot-underscores-labor-rift-in-china.html?_r=0

9) http://www.reuters.com/article/2012/10/06/us-apple-foxconn-idUSBRE8941JF20121006

10)  http://www.ncbi.nlm.nih.gov/pubmed/23268836

11) http://www.sciencedirect.com/science/article/pii/S0001457512004216

12) http://gadgets.ndtv.com/laptops/news/foxconn-faces-another-strike-in-china-report-316980

Work stress linked to heart attack risk in older men

Colleagues, 

Here (inserted below) is a short article from Personnel Today (January 2013) which discusses the impact of job strain on the cardiovascular health of older male workers. 

www.personneltoday.com/articles/03/01/2013/59084/work-stress-linked-to-heart-attack-risk-in-older-men.htm

Work stress linked to heart attack risk in older men

Older men with stressful jobs and little power to make decisions are more likely to suffer with heart disease than their peers with less job strain, according to a study published in Occupational Medicine, the journal of the Society of Occupational Medicine.

The researchers from University College Cork found that older male workers who had had a heart attack or had unstable angina were four times as likely to have high job strain as those that did not.

Job strain, or the combination of high job demands and low control at work, has long been associated with coronary heart disease, but this latest research looked specifically at its effects in the older workforce.

Intriguingly, it found there was a clear difference between younger and older workers - the association was not found in younger people.

Lead author Vera McCarthy said: "This study is important as it provides information on older workers necessary to inform policy-makers, clinicians, OH physicians and employers."

The society argued that as the UK's working population ages, employers will need to make work more attractive and feasible for older workers, implementing changes that enable them to work up to and beyond state pension age.

To this end, investing in OH services will become increasingly important in keeping people economically active and helping to ensure that older workers remain healthy and fit, it added.

"Employers need to ensure that they are looking after the health of their older employees, making the necessary adjustments and being flexible about the jobs they do and their working practices," said society president Dr Richard Heron.

The Mondragon Corporation: Structure/Model - Part 2 of 3

According to Mondragon, its business philosophy is contained in its corporate values statement: Co-operation, Participation, Social Responsibility and Innovation. “The Corporation’s Mission combines the core goals of a business organization competing on international markets with the use of democratic methods in its business organization, the creation of jobs, the human and professional development of its workers and a pledge to development with its social environment” (1,5).

Mondragon seeks to maintain worker participation in decision-making through worker-shared ownership and its “one worker one vote” system. After a probation period, workers are given the option to become members, meaning they can vote in the annual General Assembly (1,2). The membership fee is €13,400 (equal to approximately one year’s pay/profit which is the company’s income after non-labor costs) and can be borrowed from Mondragon’s co-operative bank where monthly and year-end losses are credited or debited (5).

Each worker’s vote in the general assembly carries the same weight regardless of placement or title within the coop. This is the key to democracy within the company. The general assembly controls production, income spread and elects members of the board. The elected board of directors then appoints management as well as a watchdog council to monitor management (8).

Another way in which Mondragon promotes egalitarianism is through it’s fixed ratio between upper management and workers wages which cannot exceed 70 percent of the equivalent in other companies in the market and is generally 3:1 to 5:1 before taxes (2). “For instance, the CEO of the entire Mondragon Corporation earns only 9 times as much as the lowest paid worker in the entire complex” (5). As a consequence of Mondragon’s policies, the lowest pay is generally higher than the local equivalent for similar work.

This social structure has led to a healthy and robust company, even in the face of economic downturns. Spain has gone through several troublesome periods over the last 20 years. In the 1980-83 recession the Basque country lost 20% of its jobs. Many companies in the area were forced to lay-off heavily or close. Yet there were very few layoffs at Mondragon during this time, helping to stabilize the region’s economy (8). In order to avoid lay-offs, workers voted to take an 11% pay decrease, paid time off or be reassigned to other working factories. In 2008 worker-owners at the struggling Fagor appliance co-operative elected to give up their Christmas bonuses and cut their overall pay by 8% in order to spare layoffs and secure the competitiveness of their company (6).  

What seems the most profound about Mondragon’s policies is its focus on the sustainable relationship of mutual benefit between worker and company. In contrast to most capitalist companies, whereby the measure of a successful company is almost always based on maximum profitability, the cooperative model offers an alternative approach that supports democracy in the workplace through an egalitarian voting system, while at the same time promoting job security for worker-members, social justice and community responsibility (10% of Mondragon profits go back into the community) (4,7).

1. http://www.mondragon-corporation.com/language/en-US/ENG/Who-we-are/Introduction.aspx

2.http://en.wikipedia.org/wiki/Mondragon_Corporation

3. http://www.ownershipassociates.com/mcc-intro.shtm

4. http://www.mondragon-corporation.com/ENG/Co-operativism/Co-operative-Experience/Historic-Background.aspx

5. http://participedia.net/en/cases/mondrag-n-co-operative-corporation

6. http://distributistreview.com/mag/2010/06/mondragon-and-the-global-economic-meltdown/

7. http://p2pfoundation.net/Mondragon

8. http://www.globaljusticecenter.org/2011/11/15/cooperativization-on/

The Mondragon Corporation: An alternative to traditional corporate structure? Part 1 of 3

Peter Schnall and Erin Wigger

So much is wrong with the way work is presently organized in America, you could look in almost any direction and find something terribly amiss. Part of this is surely due to the steady pressure of globalization on the world’s companies to compete as they strain against a slumping economy.  We have a serious problem in the world of today’s work.

Can a business survive/stay competitive in these volatile times without sacrificing their own worker’s health and financial security? Are there any viable alternatives to the current business model? We believe there are. These come in the form of companies and organizations which have gotten something right in terms of working out the balance between their bottom line and the health, safety and personal growth of their labor force. These companies recognize that their assets are weighed not only in gold, but also in the health, longevity and productivity of their workers.

Mondragón Co-operative Corporation (MCC) is one of these. MCC is the world’s largest worker cooperative. A multinational company based in the Basque region of Spain (7th largest company in Spain), with 256 different businesses under it’s umbrella, 80,000+ employees (each cooperative supporting anything from 6 to 2,000 workers), 43 schools, one college, and more than $4.8 billion of business annually in manufacturing, services, retail and wholesale distribution, Mondragon has become one of the world’s most successful story of a worker-owned company (1,4).

How did it become so successful and on what principles is it built? The Basque region has a long history of organized labor in the form of craftsman guilds, but it wasn’t until 1941 when a priest called José María Arizmendiarriet arrived and, seeing the need for education free and open to all began a democratically run Polytechnic School (1,2).

In 1956, the threat of unemployment in the area from the shutdown of a local factory that manufactured petrol-based heaters and cookers led José María Arizmendiarriet to encourage several students (and workers) from his school to purchase and manage it themselves. ULGOR, now called Fagor Electrodomésticos, was the result (3,4).

Mondragon’s following first cooperatives founded the Caja Laboral Popular credit co-operative bank, helping to secure the financial success and independence of the company. It was the Business Division of Caja Laboral that served as the catalyst for the evolution of MCC into what it is today. In our next blog we will describe how Mondragon’s workers relate to the company and to each other (2,3).

1. http://en.wikipedia.org/wiki/Mondragon_Corporation

2. http://www.ownershipassociates.com/mcc-intro.shtm

3. http://www.mondragon-corporation.com/ENG/Co-operativism/Co-operative-Experience/Historic-Background.aspx

4. http://participedia.net/en/cases/mondrag-n-co-operative-corporation