NYT on Downsizing with Muted Cries

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>DOWNSIZING COMES BACK, BUT THE OUTCRY IS MUTED
>Louis Uchitelle    12-7-98
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>>When Rhoda Wright learned that the television assembly plant where she
had worked for 27 years would close, she did all the right things. She
helped to counsel fellow workers through their shock. She used her $13,000
in severance to pay off a car loan. And once the plant shut in April, she
enrolled as an accounting student -- hoping to one day get back to her old
wage of $10.60 an hour. 
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>>But for all her energy and determination, a bleakness creeps into Ms.
Wright's story. Her unemployment insurance will run out by next December,
six months before she graduates. She expects to land an accounting job
quickly enough, even at age 49, but only at $8 an hour. ''I don't have a
clue anymore what our income is going to be,'' she said, ''but we'll get
by. We always have.'' 
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>>She has told her two grown daughters not to come to her for help any
more. Her big concern is that her husband, Ronald, who is 53 and just back
at work as a metal worker after suffering a mild stroke, will fall ill
again. ''I would probably have to quit school and take one of those
$6-an-hour jobs,'' she said. 
>>
>>Ms. Wright is hardly alone in the difficult choices she must make after
losing a job she had counted on to sustain her until retirement. Plant
closings, layoffs and forced early retirements are rising sharply again.
The cutbacks announced recently at Bankers Trust, Boeing and Johnson &
Johnson, and threatened at Exxon and Mobil, are only the latest examples.
But the outcries and conflict that characterized the waves of downsizing in
the 1980's and early 1990's are largely gone now. 
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>>Rather than protest, unions are more likely to help laid-off members make
the transition to other jobs, often working in tandem with the very
managers who did the laying off. For their part, corporate executives no
longer call attention to downsizing as healthy for profits and stock
prices. Much more often they express regrets, blame global forces beyond
their control, fatten severance packages for workers and announce layoffs
well in advance of the final day. 
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>>The downsizing is coming just when a strong job market, mainly in the
service sector, offers new jobs more quickly than in the past, softening
the blow considerably. Unemployment has fallen to 4.4 percent nationally
and less than 3 percent in central Indiana. The layoffs are concentrated in
manufacturing, both nationally (245,000 jobs have disappeared through
layoffs and attrition since March) and here in central Indiana. More than
three dozen companies have announced or carried out layoffs here in recent
months. 
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>>''You would see a more militant and adversarial relationship come back if
the unemployment rate were two or three percentage points higher than it is
today,'' said Larry Gigerich, president of the Indianapolis Economic
Development Corporation. ''There are plenty of unfilled jobs, and although
they are at lower pay, people feel they can take them and work back up to
their old wage, or they feel that another job will soon open up like the
one they lost. Such expectations are not necessarily realistic.'' 
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>>Certainly Ms. Wright is far from regaining her old wage, and so are most
of her former colleagues at Thomson Consumer Electronics. Thomson gave 14
months' notice to 1,100 workers that its television plant in nearby
Bloomington would be closed last April, and the operation moved to Mexico.
Since then, only 100 have matched or bettered their old pay -- at a General
Electric Company plant in Bloomington that makes a popular double-door
refrigerator and has been adding staff at $10 to $12 an hour. Thomson had
paid $10.50 to $11 an hour. 
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>>Still, labor unions and workers seem more willing than in the past to
accept, as beyond anyone's control, the reasons offered by corporate
America for a plant closing or a layoff -- the main reasons lately being
the Asian crisis and too much production capacity. 
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>>''Let's be realistic,'' said George Becker, president of the United
Steelworkers of America. ''If it is inevitable that a place is going to go
down and there is nothing that can be done to save it, if there is no way
to compete or there is no market for the product -- if that is going to
happen, we are going to negotiate with the company.'' 
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>>Federal subsidies, channeled through the states, also ease the pain,
making layoffs seem more routine. The money goes not only for retraining
but increasingly for counseling, often on the shop floor right after a
layoff is announced. Some of the Federal money pays the wages of labor
union staff members involved in retraining. But despite all the help,
regaining the old wage rarely happens. 
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>>The largest group of former Thomson workers, more than 500, has taken
early retirement, accepting lump-sum pension payments of $80,000 or less
instead of the $90,000 or more they would have received at full retirement.
Ms. Wright is in a group of 200 men and women who are either unemployed or
going to school to qualify for new careers, according to the company and
the union, the International Brotherhood of Electrical Workers. And finally
there are 200 ex-Thomson workers who have found new jobs at lower pay. 
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>>Many in this group joined Cook Inc., a nonunion shop that makes medical
catheters in Bloomington, and pays $6 to $8 an hour. But some, like Martie
Hammer, a 46-year-old divorced woman with no children, were more
adventuresome. 
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>>Ms. Hammer, who drove a forklift at Thomson for 17 years, took a
four-month course in truck driving, and now drives a tractor-trailer
cross-country for the Celedon Corporation, one of numerous truckers here,
all of which seem constantly short of drivers.
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>>Her life has changed. Instead of being home every evening -- she owns a
house on the White River near Bloomington -- she is on the road for 10
days, sleeping in a bunk in her tractor cab, then at home for two days.
That is a disruption, she says, to her social life. And her pay is less:
Not quite $400 a week, compared with her Thomson wage of $424, excluding
overtime, which in her case averaged 15 hours a week. 
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>>''I don't mind driving a truck,'' she said. ''A lot of people would not
do it, but I am trying to get back to where I was at Thomson. It takes away
from your self-esteem until you find something as good, or better. You know
there has to be something better.'' 
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>>Maybe. Thomson's ex-employees have been engaged in this odyssey to regain
their old wages for only eight months. Six hundred former Maytag
Corporation employees have been struggling for two years, with little more
to show for it. Their Maytag jobs ended in December 1996, when the company
closed a stove factory in Indianapolis and, to cut costs and improve
efficiency, moved the operation to a nonunion Maytag stove factory in
Tennessee. 
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>>''We had 400 of the 600 workers placed in jobs in less than a year; we
were happy about that,'' said Mr. Gigerich, who worked with the Private
Industry Council, a local group of union and corporate representatives that
lent a hand. But today few of the former Maytag workers earn the $34,000
annually they averaged at Maytag. 
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>>The best paid, roughly a third of the old work force, earn about $25,000,
mostly at the numerous machine tool shops in this area, Mr. Gigerich said.
Another group found work at about $22,000 in warehouses and distribution
centers, as forklift drivers or loading trucks. And a third group earns
about $20,000 in retail stores or at the telephone customer service centers
and data processing operations that have proliferated in this area. 
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>>In hindsight, the Maytag layoff -- announced in February 1996, nine
months before the plant closed -- was a turning point, the first
significant example in greater Indianapolis of the softer approach to
downsizing. A year earlier, the First Data Corporation, which employed
1,000 people at a telephone service center here, had closed the operation
on short notice without first notifying the local government. Downsized
workers told hardship stories in television interviews, and city officials
were publicly critical. 
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>>The officials wanted less confrontation. And Maytag obliged. Apart from
the nine-month lead time, Maytag sweetened the severance package beyond
what the contract with the Sheet Metal Workers Union required. The company
also piled on overtime in the final months to stockpile stoves and to give
workers extra money to pay off debts and build up nest eggs -- an
opportunity most took. Finally, the company participated in a
worker-management committee that supervised retraining and counseling. A $1
million Federal grant financed the endeavor. 
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>>''We were trying to tell that work force that you could not have done
anything to prevent the move,'' said Thomas Schwartz, a Maytag spokesman.
''That plant closing, and the way we worked with the city, and the employee
group, that is as close to a model as I can come up with.'' 
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>>That still leaves Margaret Edens and her husband, Clifford, struggling.
Both had worked at Maytag, she assembling stove counters at $12.50 an hour,
he repairing damaged stoves at $13.13 an hour. Both lost their jobs. They
finished up in a marathon of overtime and then, when the end came, they
used some of the accumulated pay to finance a week's vacation in the
Southwest -- the Grand Canyon, Las Vegas, Nev., Monument Valley -- before
facing their new, diminished life. 
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>>Mrs. Edens, who is 44, is the sort of worker that corporate managers and
union officials point to as ideal in a downsizing situation. She is among a
minority, they say, with the self-discipline and focus to benefit from job
training, and also among a minority with the emotional fortitude to
overcome the trauma of losing a pay package she cannot easily replace, and
yet get on with life. 
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>>After Maytag announced the closing, Mrs. Edens became a union
representative on the transition committee. For a while, she drew a
Federally subsidized salary as a case manager, counseling laid-off workers,
including some from Maytag -- work she loved. Now she is a part-time claims
taker in the state employment office, earning $8.05 an hour, without
benefits. Her goal is to work full time in the employment office, with
benefits, although the pay, she says, will probably be less than what she
earned at Maytag. 
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>>''We used to make money and our life style just rose,'' Mrs. Edens said.
''Now when I get up, it is, 'How much do we have to earn to get by?' And
that is $8 or $9 an hour for each of us just to maintain a
middle-of-the-road life. We are just managing to do that.'' 
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>>Clifford Edens, also 44, reacted to the downsizing the way many workers
do. He shunned job training or counseling, and did not accept, until months
later, that he would probably never match his Maytag earnings and
company-paid health insurance. ''You work so long for a company, you lose
touch with the job market,'' he said. He had entered the factory in 1972,
right out of high school. 
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>>Mr. Edens had hoped to shift into social work, but without more
schooling, he said, the pay was an ''unrealistic'' $7.50 an hour at best.
He took a job at a Goodwill Industries factory, as a group leader at $9 an
hour, helping disabled workers keep an assembly line going. But the work
was too stressful and he soon left. 
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>>Finally, he learned from a friend of an opening at Flexalloy Inc., as an
inspector of the giant bolts and other fasteners the company supplies for
bridge and building construction. There was an on-the-job training
requirement, and a Federal training grant helped for a while to pay Mr.
Edens's starting wage of $9.25 an hour. That was in September of last year;
he now earns just over $10, and pays $12 a week for health insurance. 
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>>''I am treated very well at this company,'' Mr. Edens said, allowing
himself a little optimism. ''There are positions there that pay $13 an hour
or more that I could possibly attain.'' 
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