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• W4379623115 abstract "FOCUS □ ORGANISING ANDSUPPLYCHAINS A global union's direct action promotes organising in the US The ness large hollow model national for corporation businesses. many transnational has In become direct contrast and the some busito nessmodelfor many transnational andsome large national businesses. Indirect contrast to theprior form ofbusinessorganisation, theverticallyorhorizontally integrated company, hollow corporations seektodivest andisolate themselves from therisks andobligations ofownership. Instead ofowningall aspectsoftheproduction process, themodern corporation mayactually own none ofit.Bysubstituting economic dependency ofthe contractor fordirect ownership, thehollowcorporation avoidstherequirement to investlarge sumsofcapital, can insulate itself from responsibility for environmental andsocialstandards, and caninmany casesincrease itsrateofreturn since itisimmune from thesociallegislation inthehome country ifitsourcesproducts or assembly functionsfrom countries witheither lowerstandards orinadequate enforcement. IKEAisa world leaderinusing this type ofglobal supplychain.With atvarying times morethan 2,000 vendors worldwide, many ofwhomoperate incountries lacking environmental standards while others fail tocomply with minimal socialstandards suchas ILO Conventions. YetIKEAmarkets itself as a Swedishbased business(itis actually charteredinThe Netherlands whilecontrolled by a family trust inLuxemburg). TheSwedish imageof advancedsocialandenvironmental protections is an important component to IKEA'sbusinesssuccess .Despite numerous accusations andcampaigns, IKEAhasavoidedthelevelofscrutiny that NIKE, Wal-Mart, andothers havereceived. GlobalsupplychainslikethoseofIKEApose particular problems forgovernments, communities ,workers and their unions.Whatdo workers andunionsdo whenorganising subsidiaries and subcontractors whothemselves areeconomically vulnerable? Ifthesubcontracting firm hasonlyone customer andthat customer cancelstheorder, the subcontractor and thejobs are gone. Ifthesubcontractor islocated ina developing country -providing that theparent company hasalready developed theskills tomanagea globalsupplychaintherisks areevenhigher sinceswitching from one company orevenone country toanother isa relatively easytasks.Made eveneasierbythemisnamedconceptof free trade whichinreality is anything butfreeandone couldevenarguethat whatisessentially anintra corporate transaction is noteventrade. TheIKEAglobalsupplychainis moresophisticatedthanmost .Ithas twocomponents. One is internal and actuallyowned bytheIKEATrust whiletheotheris external. One internal wholly owned subsidiary operatesin Sweden,Poland, Hungry, SlovakiaandtheUS,underthenameof Swedwood. Theexternal supply chainismanaged somewhat differently thenmany others. IKEAwill actually createthesuppliers itneeds.Through a series ofloansandinitial purchase subsidies, IKEA playsa hands-on roleinensuring quality andcompliancewithsomeenvironmental andsafety standards .After thecontractor is producing to standards ,IKEAthenstarts theprocessofsqueezing them toreducecosts.Itisatthis phaseoftheoperationthat problems tendtobecomeapparent. As thesupplier is pressured toreducecoststoIKEA theytendto do whatall ownersdo whichis to shift costsontolabour.Inthewood products sectorwhere75 percent ofthecostsofproduction is thecostofwood fiber thisisusually counter productive andineffective. Unfortunately itisstill the strategy offirst choicebymost. Swedwoodfollowsa similar pattern. The start up phase is relatively forgiving. However,once production isramped up so ispressure toreduce costs.In Danvillethiswas experienced byworkersas mandatory overtime, reducedjob security, higher linespeedswith fewer staff, reduced wages, delayedraises,and theend to overtime payfor weekendsandvoluntary vacations. Inmany ways work conditions more akintoDickens than Keynes. WhenSwedwoodworkers inDanville, Virginia, contactedtheIAM(International Association of Machinists andAerospace Workers) toform a union itwas apparent that giventheanti-union community and theculture oftheUS Southa non-traditionalapproachwouldhavetobe used ifa positive outcome was to occur. Afterextensive conversations with BWI,Builders andWoodworkers International - theglobalunionfederation which represents workers intheforest products sectors - a strategy was developedto focuson IKEA.If IKEAcouldbepersuaded tointervene inSwedwood Danvilletomitigate theharsher anti-union behavioursallowedbyUSlabourlawandintheprocess connectSwedwoodwithIKEAitmight be possible to persuadeIKEAto liveup to itsadvertised standards notonlyforitself butalso foritsinternalsupplier . Iftheseconnections couldbe made with thepublic, then socialpressure couldbe used toovercome costreduction pressures bothinside SwedwoodandinsideIKEA.Considerable discussionensuedabouttheUSas a target as compared to a less developedcountry. The capacity ofthe IAMandtheneedtoeducatebothEUunionaffiliatesandUScitizens as tothebackward nature of US labourlaw allwerepartofthedecisionmakingprocess . Byfocusing on therealconsequencesofneoliberaldevelopment policyitbecamepossibleto causeanextensive publicconversation inSweden, within theBWIaffiliates, andinportions oftheUS. IntheUS,thisdiscussion was characterised as the US becoming Sweden'sMexico,meaning a place forglobalbusinesstoexploit laxlawsinorder to exploitbothworkersand theenvironment. In Globalsupply chains likethose ofIKEApoise particular problemsfor governments, communities, workersand theirunions WILLIAM V. STREET JR., Director Woodworkers' Department, International Association of Machinists and Aerospace Workers. Page 3Volume 18Issue 3201 1 INTERNATIONAL union rights FOCUS □ ORGANISING ANDSUPPLYCHAINS I brought an workers That countries US realisation irony are corporations relief US along victimised invest campaign into that workers in by where those stark with was and this is a are victimised along with workersinthose countrieswhere US corporations investis a realisationand an irony thatwas broughtintostark reliefbythis campaign Sweden,the natureof thisdebate focusedon whether ornotSwedish flagged corporations should carry withtheir Kronasthenotionofsocialdialogueandco -determination. Iftheanswer toeither ofthesequestions is no,thendevelopment practiceswillcontinue tofailtodeliver anyofthevarious positiveoutcomespromised forworkers in either developedordeveloping nations. IKEA is restructuring its relationshipwith Swedwoodanditappearsfrom theoutsidelookingin thattheDanvillesituation is causingconsiderable debatewithin IKEAas totheir business modelnotonlyforSwedwoodbutforall oftheir contractors. It is too earlyto determine theoutcomeofthis internal debate.IKEAcontinues tobe driven byitscostsreduction businessmodeland as longas they separate thewelfare ofthosewho producetheir products from their beliefthatlow costsare in and ofthemselves a social benefit, additional struggles andconflicts arelikely. What's Next Thefight inside..." @default.
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• W4379623115 date "2011-01-01" @default.
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• W4379623115 title "A global union's direct action promotes organising in the US" @default.
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