IKEA: Work with Unions at Home, Fight 'em in the South / The Southernization of Another Foreign-Owned Plant

If you get a job at IKEA, the famous Swedish-based furniture manufacturer, you’ll do a lot better if you’re Swedish and not a Southerner from the United States.

At IKEA’s 335-worker plant near Danville, Va., workers start at $8 an hour and get 12 vacation days. They don’t get a choice on eight of those days. The company makes that decision.

However, if you work at one of IKEA’s plants in Sweden, the minimum wage is $19 an hour and you’re guaranteed five weeks of paid vacation.

These and other interesting facts reported recently in the Los Angeles Times point to an unsettling fact that most American workers—particularly Southern workers--wouldn’t like to admit but know deep down inside to be true: To foreign-owned companies opening or operating plants in their midst, they’re the same as the Mexicans and the Chinese who now do the cutting and sewing at the textile mills that once were here. In other words, cheap.

One of the many ironies of this is the fact that the community leaders in Danville and the state of Virginia put forth a $12 million incentives package to get IKEA, a plant they hoped would turn the tide of an area that once depended on tobacco and those long-gone textile mills.

They figured IKEA is a class act that will offer better wages and working conditions that any mill worker can could ever hope for. Even with the economic downturn, Danville’s median wage is more than $15 an hour.

After all, IKEA reported a 6 percent plus hike in profits in 2010. The company is an international giant.

What they got is a company that peopled its factory floors in Danville with temporary workers—one-third of the entire workforce—who come even cheaper and more docile because they never know how long the pay checks will keep coming in. They got a company that last fall dropped pay for its packing department workers from $9.75 an hour to $8 an hour.

Workers are so frustrated with the pay situation and also working conditions—unannounced-but-mandatory weekend shifts, strict and threatening workplace rules, intense pressure at the worksite—that a majority of them have said they’re interested in forming a union, Nathaniel Popper’s article in the L.A. Times says.

Most Swedish workers are unionized, and IKEA has a code of conduct that recognizes workers’ rights to organize. However, in Virginia, IKEA has hired a union-busting law firm to keep the union out, and it has required workers to attend anti-union meetings, much like Nissan CEO Carlos Ghosn did with his workers in Tennessee some years back when they started talking union.

IKEA has an interesting history. It was founded by Ingvar Kamprad, a Sam Walton-like figure in Sweden’s furniture industry who undercut competitors with super-low prices as he made his company a global retail giant.

Like Mr. Sam in Arkansas, Kamprad was so driven to beat the competition that he cut secret deals with hardline Communist rulers in Soviet-dominated Poland in the early 1960s to transport factory equipment to that country so he could take advantage of its dirt-cheap workforce and conditions. Read Malcolm Gladwell’s account in the March 28 edition of New Yorker magazine.

Of course, Kamprad is not the first industrialist to sign a deal with the devil to get a good return on his investment. As Gladwell recounts, L’Oréal’s Eugène Schueller collaborated with the Nazis during World War II. Crusading journalist George Seldes long ago chronicled how Henry Ford, Standard Oil, J.P. Morgan and William Randolph Hearst did business with and provided funding and other support to Hitler, Mussolini, and Spain’s Francisco Franco before World War II.

The two-faced hypocrisy of many foreign industrialists who invest in the U.S. South was demonstrated in a 1981 essay by corporate consultant Richard A. Beaumont. “It’s incredible but true that I will sit in the office of a large chemical company somewhere in Germany and the guy will tell me with a straight face the trouble with American employers is that they are anti-union and that they don’t understand their social responsibilities. Five minutes later he’s saying, `Now, when I go to the South, how do I operate on a non-union basis.’”