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About Northwest labor press. (Portland , Ore.) 1987-current | View Entire Issue (Nov. 7, 2008)
NOV. 7, 2008 :NWLP 11/5/08 10:04 AM Page 2 ...Freightliner to exit Portland (From Page 1) company offers a generous enough sev- erance package, that would give them incentive to stick around until the end. If too many workers quit before the closure, the company could recall workers laid off in earlier waves. The company is expected to keep produc- tion going until the end, and may build up inventory to cushion the transfer. Because the assembly makes use of ex- pensive robotics, Daimler will have to shut down the Portland plant and trans- fer the machinery before production can begin elsewhere. The Swan Island plant employs some skilled workers, including certi- fied welders, electrical repair workers and workers in some machine and building maintenance classifications. If the currently worsening economy re- bounds by 2010, they may be able to find equivalent work elsewhere in town. But most of the workers to be laid off are in unskilled assembly jobs. Be- cause they have a union, and because the company has continued to be very profitable, those Machinist-represented assemblers make $22.75 an hour plus b h m k full benefits. Once laid off, they’ll be very unlikely to match that compensa- tion in other unskilled work. Less senior employees were the first to be let go in earlier waves of layoffs, so all those who remain at the Swan Is- land plant have been there since at least 1995. Their average age is 48, and a siz- able fraction are workers in their 50s. Some may be eligible for early re- tirement, with a reduced benefit. For example, a 55-year-old worker who’d been there for 30 years could take early retirement; under the Machinists con- tract, members can take early retire- ment if their age plus years of service equals 85. For those who can’t retire, the best hope may be to accept a package of federal government benefits offered by the U.S. Labor Department’s Trade Act Assistance (TAA) program. Because work is moving to Mexico, this plant closure is almost certain to be deter- mined trade-related, That will make workers eligible for TAA benefits, in- cluding employment counseling, tu- ition reimbursement for up to two years of trade school or technical edu- cation, up to two years of unemploy- Bennett Hartman Morris & Kaplan, llp Attorneys at Law Oregon’s Full Service Union Law Firm Representing Workers Since 1960 Serious Injury and Death Cases • Construction Injuries • Automobile Accidents • Medical, Dental, and Legal Malpractice • Bicycle and Motorcycle Accidents • Pedestrian Accidents • Premises Liability (injuries on premises) • Workers’ Compensation Injuries • Social Security Claims We Work Hard for Hard-Working People! 111 SW Fifth Avenue, Suite 1650 Portland, Oregon 97204 (503) 227-4600 www.bennetthartman.com Our Legal Staff are Proud Members of UFCW Local 555 PAGE 2 ment benefits, a health insurance sub- sidy, job search and relocation assis- tance, and a wage subsidy to give em- ployers incentive to hire them and provide on-the-job training. Anti-union types sometimes blame plant closures on “excessive” union wage and benefit demands. But odds are that no union concession could have stopped Daimler from moving to produce trucks in Mexico, when truck assembly workers in that country make less than a fourth of the Portland work- ers’ wages. And there are other reasons for the move. As Daimler put it in the an- nouncement, “a migrating supplier base and high logistics costs have had a major impact on the cost of produc- tion in [Portland].” In other words, roughly translated: Earlier decisions to outsource production of Freightliner parts to Mexico meant the company could now also save money by not having to ship those parts to Portland for assembly. Next February, the company will launch a new truck which will be mar- keted as the premier model in the Freightliner brand lineup. It’ll be named Cascadia, a nod to the mighty Cascade mountains of the Pacific Northwest. Sierra Madre might have been a more appropriate name, how- ever, since that’s the mountain chain visible from the company’s brand-new manufacturing plant in Saltillo, Mex- ico, where the new truck model will be made. Machinists Union Representative Joe Kear lays blame for the Portland plant closure on politicians who sup- port NAFTA, the North American Free Trade Agreement. “These trade agreements need to be renegotiated,” Kear said. “We need to have tariffs again that protect key jobs and industries in the United States.” At one time, the American truck L EGAL P ROBLEMS ?? 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But NAFTA, which began to take effect in 1994, brought Mexico gradually into a tariff-free zone with the United States and Canada. Freightliner began mak- ing its first moves to Mexico in 2000. Freightliner was the brainchild of Leland James, president of Consoli- dated Freightways (CF), a Portland- based trucking company. In the 1930s, James had an idea for a lighter truck that would save on fuel costs for his company, so he hired engineers and built it. The Portland Freightliner plant started production in 1947, and moved to its present Swan Island location in 1969. But in 1979, trucking was dereg- ulated. Union trucking firms were hit hard. CF decided to sell Freightliner in 1981, and found a willing buyer in Daimler-Benz AG, the German multi- national known for the Mercedes- Benz. Daimler-Benz, which became Daimler-Chrysler with the purchase of Chrysler in 1998, continued to buy other North American truck brands, in- cluding Ford’s heavy truck division, which then became the Sterling brand, and Canada-based Western Star Trucks, which specializes in cus- tomized heavy-duty trucks for mining, logging, and oil fields. In 2000, Daimler started making its more downscale Freightliner trucks in Santiago Tianguistenco, Mexico. The following year it outsourced Freight- liner parts production and closed the Portland parts plant. Western Star pro- duction was relocated to Portland in 2002, and the Kelowna, British Colum- bia plant where it had been made was closed. In 2007, Daimler sold money- losing Chrysler and moved production of its flagship Freightliner truck model from Portland to Santiago Tianguis- tenco and North Carolina. And the Portland plant closure is just a small part of the restructuring an- nounced Oct. 14. Daimler will also be discontinuing the Sterling Truck brand in March 2009, and close the Canadian Auto Workers–represented plant in St. Thomas, Ontario, where the medium- and heavy-duty trucks are made; about 700 workers are being laid off there this month, and 700 more will go when the plant closes. The closure of the Portland plant will decimate Machinists Lodge 1005. The automotive mechanics local will drop from 1,100 to 470 active mem- bers. [The local also has close to 700 retired members, who are voting mem- bers under the union’s Constitution.] Lodge 1005 will continue to represent diesel mechanics at Peterbilt, Cum- mins, Swan Island Dairy, Safeway, and the City of Portland, as well as workers at Silver Eagle Manufacturing, a manu- facturer of converter dollies and light trailers. And there are sure to be ripple ef- fects on the local economy as local suppliers lose business and the laid off employees cut back spending. Portland Mayor-elect Sam Adams called the closure “a punch in the gut for Port- land’s economy.” The closure will also end an emo- tional connection that thousands of Portland families have had to the com- pany. Tom Chamberlain, president of the Oregon AFL-CIO and a former president of Portland Fire Fighters Lo- cal 43, remembers what a difference it made growing up when his father went to work at Freightliner in 1961. “It changed our life,” Chamberlain recalls. His family was able to move from a house without a bathtub or shower to a house that had one. They ate better. Relatives who’d been working as poorly paid ranch hands in Nebraska moved to Portland to work there too. And when the younger Chamber- lain grew up and started work as a fire- fighter, it meant something that all the fire rigs in Portland were also made by Freightliner. “It was a Portland company,” Chamberlain said. “We had a lot of pride in that.” NOVEMBER 7, 2008
