I know this is coming as a SHOCK to everyone here, but Kongsberg has decide to CLOSE another plant. This one is in Sweden, again. Wonder if they’re moving those operations to the new Polish plant or somewhere with even fewer environmental laws and lower taxes. But hey, don’t take my word for it, take a read of ABN:

Kongsberg, Norway, April 23, 2008 - Kongsberg Power Products Systems AS, which is a subsidiary of Kongsberg Automotive Holding ASA, has declared it is considering proposals regarding closing the factory in Märsta, Sweden and intends commencing negotiations with the Unions. The factory in Marsta has 54 employees, and the workforce will be informed at meetings today. The facility today produces heavy duty cables, pedals, hand controls, hydraulic valves and electrical components to the Commercial Vehicle and off-highway vehicle market. The potential closure of the factory may lead to a transfer of production in Märsta to existing Kongsberg Automotive locations within Europe. Kongsberg Power Products Systems AB will continue to service its customers through its operations in Ljungsarp, Sweden. The potential closure is due to the company's need for realizing cost savings in order to improve overall competitiveness. "To Kongsberg Automotive, it is decisive that we find ways to optimize our production in order to stay competitive in an ever increasingly competitive global market. The potential transfer of business from Märsta will better align us to market needs and restore profitability for the Division to an acceptable level", says President for Power Products Systems, Jim Ryan.

I want you to take a look at the emphasized text. I bolded it for one reason, this is the theme for Kongsberg.

Closure of plants despite profitability in hopes for greater profitability down the road. Basically, it’s Greed for Greed sake.

So, I look to the locked out workers in Van Wert and I have to say, I’m not sure why I’d ever take a reduction in income to work for a company that treats it’s works like they’re disposable.

The profitability of any company is based on the production and frequently also the quality of work that is done on that company’s behalf. Well, all except Wal-Mart who seems to think they can do anything without recourse, but I digress.

Kongsberg Automotive seems to be of the mind that being profitable isn’t enough, they must better align to market needs so as to bring each Division up to their acceptable level for profitability. I wonder what that level is? And why it is that the people who helped to make the company profitable in the first place are the people reduced to nothing in the hunt for greater profits down the road, somewhere else.

Kongsberg Automotive seems hell bent on adding to their history of greed.

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I got an e-mail from my old local in Cleveland (I’m on the mailing list). They were sending us info from FLEXNEWS

Hershey announced a 3-year restructuring plan on 15 February 2007 to save up to USD 190 million a year. The company said that, under the restructuring, 1,500 jobs could be cut.

The company intends to transfer Reading production activities (York Peppermint Patties and 5th Avenue bars) to Monterrey, Mexico, before the end of 2008.

According to Teamsters’ General President Jim Hoffa, the Hershey plant move to Mexico shows how trade deals like NAFTA harm American workers. He said that about 260 workers at the plant will lose their jobs.

“These so-called trade deals are killing American jobs … They aren’t about trade, they’re about helping companies move their factories to countries with cheaper labor”, said Hoffa in a recent statement.

I’m not sure if Flexnews missed some of the point of the move or if it was IBT. Like the info I’ve posted on Kongsberg, these companies aren’t only moving for labor costs, they move for lower environmental standards and a lower tax rate for the company. They move for fewer regulatory requirements and because they don’t have to provide benefits (or fewer) to their employees. They move because they can work folks longer and not pay them more. They move because we have Free Trade agreements that gut our entire system of providing for workers, the environment, government services, and goodness knows what else.

I actually don’t buy Hershey’s because they insist on using cocoa harvested using slave labor in West Africa, specifically children in Côte d'Ivoire. This is just one more reason to continue to boycott Hershey’s, for using slave labor abroad and turning their employees out on the street here.

All in all, this is what Free Trade gets us. So, not only how does this benefit us, but explain to me how more pollution, low pay and few if any benefits actually is in the best interest of Mexico or in Kongsberg’s case, Poland?

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That's what United Steelworkers were told in Van Wert Ohio nearly 5 weeks ago. Give it up or the company would lock them out.

So, guess what happened?

Yep, they locked them out.

A local Van Wert blogger summed it up last week:

A lot of why American companies can’t compete on a global market is because of lazy incompetent company managers from CEO on down. It’s pretty brainless to simply market your product via production by sweat shop laborers. From a market standpoint people will always prefer quality to quantity. I am using China as an example but there are many more foreign companies buying up top of the line U.S. companies that run them into the ground. Look at the stuff we buy in stores today and compare it to stuff we bought 20-30 years ago. From a quality standpoint its probably 50% less then it was back when we bought from our neighbors. Remember the day? I sure do!

It's a pretty good summary, but try this one on for size :

Peter Spencer, the Group Executive and President of the Kongsberg Driveline Systems, sat inside the offices and calmly discussed the labor situation between United Steel Worker employees and Kongsberg Automotive. In a nutshell, he explained the current situation is a confluence of the global economy and the woes of the automotive industry. United States manufacturers are no longer bidding against other United States manufacturers. They are in competition with suppliers from all over the world.

"We're in a situation here with our driveline section, my intention is to make this business profitable and sustainable," Spencer said. "From the business point of view, we're going to stay on the right side of the ethical line and the legal line. That's our commitment to all of our employees and I think that we take that very seriously.

"However, we are where we are and, as of today, we've got a very large opportunity on the table from a global customer, $30 million as it happens, but I need to quote them and the bottom line is the customer has told me very simply that if you quote this at fifteen bucks an hour, you haven't got it. If you quote this at $9 an hour, you've got a good chance."

Hey, but don't worry, Spencer has all the answers:

"So there is only one outcome to this and that's closure (without the wage concessions)," he said. "You have to ask if you want a factory here for the next 12 months or the next ten years."

Yum, did you catch that? Oh,wait, I hadn't told you yet, this is Kongsberg's history , closing plants. And wait, closing profitable plants, like the Amotfors seat heating system plant in Sweden.

The reorganisation reflects persistent margin pressure in the European automotive industry, Kongsberg Automotive said.

"We are one of the world's leading suppliers of seat heating systems for cars. To maintain this position we must adapt our production costs to a level which yield acceptable earnings also in future," said Olav Volldal, CEO of Kongsberg Automotive.

"The potential closure is not because our employees have not performed. It is due to the significant cost gap between high cost and low cost countries," Volldal added.

Sweet, huh?

So, that had me thinking. They were willing to close a profitable plant on the hopes that they'll be even more profitable when they pay lower wages and move out of high environmental standard Sweden and into low environmental standard Polland. But best of all is probably the line form their Fourth Quarter 2005 annual report where they noted:

The Group is reporting a tax cost percentage of 26 % in 2005. The tax cost is around 28 % for all the countries where Kongsberg Automotive operates, except for Poland where the tax rate is 19 % and the USA where the tax rate is around 33 %. There are no taxes payable for the Norwegian operations due to significant tax loss carryforward related to the Raufoss acquisition.

Do you see the tax base numbers? 33% for the US and 19% when they do business in Poland. So, how long will it be before they move the Van Wert Teleflex operations to Poland?

Sure seems as if this is their kind of business model...acquire patent technologies and then burn the communities where these items are made as they move to less taxing, less environmental standard countries. I really doubt this lock out has anything to do with the workers and everything to do with the way Kongsberg sees the US, as 33% tax. Looks as if they just want to lower the tax rate, costs for doing business and of course labor costs to that of Poland. Come on Poland, what happened to Solidarity?

Nothing more has changed in the lock out since I wrote on it just last week. Well, one thing has changed,

Locked out Kongsberg Automotive workers wait in a hallway at Trinity Friends Church for the opportunity to shop at the church's food pantry. Carolyn Garwood of Trinity Friends reported that the pantry was opened to the workers for three hours Friday morning and that 90 families were helped through the effort.

The thing that's changed is these families are now finding that their community supports them. No one outside of Van Wert Ohio seems to be talking about this Norwegian company and their desire to close plants to "pass the savings on to their customers". I wonder how much Spencer and Volldal are spending on groceries right now. Somehow, I think it's more than what their employees are. Seems like the Van Wert local blogger called it...this is what's wrong with our country and after 8 years of this, it's time we say to hell with this bullshit.

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Last night, the Van Wert city council met and the mayor decided to make a statement about the Lock Out. From the Times Bulletin:

Van Wert Mayor Louie Ehmer took an opportunity to clarify the city's neutral position in the matter, saying, "I would just like to point out that Clair Dudgeon, Nancy Bowen and myself made a visit to Kongsberg Automotive. We were out there just to convey that we want the plant to remain in Van Wert, and we wanted to maintain open communication during this time... We also made a conference call to the governor's office, and they also stressed the importance of keeping the plant here in Ohio. Our purpose was to show the importance of keeping the facility in Van Wert and that the city and the county are concerned about the outcome for the company and the people they employ.. "

When questioned further about the administration's role, Ehmer emphasized, "We do not want to get involved in the negotiations... Whatever we can do to keep the lines of communication open, that's all we can do, to help the company as well as the workers."

The company locked out the employees. I’m not really clear on why the Mayor would want to stay neutral. These are, after all, neighbors and friends, aren’t they? Well, I didn’t have to wait long, there is support in local government. Again from the Times Bulletin:

City Law Director Greg Unterbrink offered words of praise for the locked out workers. "If [the lockout] is prolonged, there will be the chance of provocation, but I can tell you from sitting in on some union meetings, their union rep is telling them it's a lockout and they aren't supposed to do anything to provoke either side," reported Unterbrink.

However, he did not share the same opinion of Kongsberg management. "But I can't say the same for management," he stated. "I feel that companies in Van Wert should be good corporate citizens."

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So, I'm originally from Ohio and I figured I'd take a look at the local Van Wert papers to see if I could locate any information on the lock out. I found some interesting comments about it on The Van Wert Times Bulletin:

Posted: Monday, April 07, 2008
Article comment by: laura davis

Niki you have voiced a question that many, MANY, people are asking today. Over 300 people were locked out of their jobs last week. Three hundred productive, tax-paying voters who want nothing more than to do an honest day's work for a reasonable day's wage. Van Wert county's unemployment rate is already higher than we've seen in many, many years, yet after locking out those workers our elected officials "stand ready to assist the company in any way they can?" And they are there to "offer support to the company and to local officials?" These statements have many people puzzling over our elected official's priorities. If they have our community's best interests at heart, would they not be more concerned with finding a solution to help BOTH parties in this situation rather than "assist and support" the company alone? This lockout is going to have a negative effect on the community in countless ways, and I believe that everyone in the area would like to see it resolved satisfactorily for EVERYONE involved.

Posted: Monday, April 07, 2008
Article comment by: niki motycka

Why are the state and local governments putting their support behind the company? I understand that it is important for Van Wert to keep as many of the current businesses but, what about the workers who are now walking the street? It was the company's decision to lock the doors. I know many people who have worked at Teleflex for many years and are now being asked to take a $9 an hour pay cut. I wish that everyone in this community would sit back and think about this. If you had worked at a company for the last 25 years and then all of a sudden a couple of dollars is taken away from your hourly rate. Ok you are upset but at least you still have your job and health insurance. Then that same company wants you to give up $9 more. What are you supposed to do? That company wants the workers who have put in most of there lives to work for only $9 on hour. After taxes that is only about $300 a week. If you have kids you cannot hardly make it on that. Why are we sitting here and letting our local government take the side of the company when we elected them to represent us? With gas prices and living expenses soaring I think all of our government officials need to reevaluate this suituation.

And this story from the same paper:

Kongsberg lockout: Day 1
BY ED GEBERT

Times Bulletin News Writer

egebert@timesbulletin.com

VAN WERT - The first full day of the lockout at Kongsberg Automotive saw no changes in either labor or management positions. Workers who voted down the auto parts manufacturer's contract offer stood just off company property with picket signs. Meanwhile private security remained on site at the facility to make sure the locked out workers stayed out.

Early in the morning hours, windows at the facility were boarded up and private buses began bringing in replacement workers to make parts for considerably less wages than the locked-out employees.

Meanwhile city officials expressed their hope for an early end to the lockout. "I just hope the union and company management can get this worked out," stated Nancy Bowen, Van Wert County economic development director. "I think everybody feels the same. We'll do anything we can do to help, and I've let the company know that."

Bowen revealed that she will be meeting Friday morning with company officials to see if anything can be done to resolve the situation.

"We don't know if there is anything we can do, but we're going to explore it and see," Bowen explained. "It's really an issue between the union and the company, but it always helps to talk and at least let the company know that they are important to our community and our economy."

Van Wert Mayor Louie Ehmer agreed that the presence of Kongsberg in Van Wert is important. "If they would shut down we could lose a lot of tax money, close to a quarter of a million dollars a year."

Ehmer shared that he had personally visited the site of the lockout to be sure there were no problems related to the city. Van Wert City Police Chief Joel Hammonds confirmed that through the day on Thursday there had been no legal issues at the factory site.

"There have been no problems," he said. "Both sides have been great. They've set up and they are within the law, and that's all we ask from both sides."

Some of the union workers had expressed concern that police cruisers were present, wondering aloud if officers were there to protect incoming replacement workers. Hammonds flatly denied that charge.

"Our policy stipulates that we are neutral," he declared. "We're just to insure that the public peace is kept and that traffic can move to and from the facility and surrounding businesses. That's our role. We've been patrolling out there to maintain the peace."

Or these Worker Voices on the Van Wert Independent

Woman of Kongsberg worker concerned
To The Editor:

Being a family that is affected by the recent developments at Kongsberg Automotive (Teleflex), I feel compelled to write to ask (for) the support of the Van Wert and surrounding community. I think some people are of the opinion that these displaced workers are on strike, which is not the case ... these people WANT to work and were willing to continue working under their current contract until something could be ratified. The COMPANY chose to lock these people out and bring in employees from a temporary staffing company. This was the choice of the COMPANY not the UNION EMPLOYEES. These people are your neighbors, your children, or even grandchildren, and are trying to achieve the American dream: To own their own home, to provide nice things for their families.

My husband is a 29-year employee at Kongsberg, this being the only job he has known since graduation from high school. I think that it is totally unfair to ask these people to take a cut in pay as the company is asking. After 29 years to only make $10 an hour ... this is mind boggling at best to even imagine that this could even be given a yes vote. I would like to commend the local businesses who have said they will not cross the lines to provide services to Kongsberg and also wonder if the Fair Board is endorsing the activity of letting these people park their cars on their grounds and allowing the busing of these people into the plant.

If they do stand behind this, I can guarantee that there will be at least 350 families that will boycott the Van Wert County Fair this year.

The trickle down will be seen quickly, these people will no longer be spending money to go to the gym for workouts ... no longer be spending as much money at the grocery stores or eating establishments. Please, drive by these workers on Industrial Drive, honk your horn in support of their cause, and know that they are not looking to prosper – only to maintain their current level of income ... they are not asking for a huge raise, but have stated on numerous occasions that they would hold with their current wage.

With the rising cost of gas and everything else, I think this is commendable. Thank you for the opportunity to voice my opinion.

Michelle Brincefield

Van Wert
via email

>snip<

Kongsberg: Not bargaining in good faith
To the editor:

It should be obvious to the good citizens of Van Wert and the surrounding area that Kongsberg is not bargaining in good faith. With a single, swift, unethical maneuver they have put over 300 people out of work. Many of these people are individuals with whom I personally worked until 1992.
For all of you wonderful owners of Kongsberg who supposedly want so badly to bring these people back to work let me tell you that they are much more than just numbers. They are people, real flesh and blood people who have given a good portion of their lives to work at your Van Wert facility and produce the quality automotive parts that make your profits. I can remember many of them going through personal crisis after personal crisis and still coming to work. I can remember at least one of the employees giving the ultimate sacrifice and ending up being carried out on a stretcher, never to return.
Even after being wronged in various ways over the years by the previous owners, Teleflex, these dedicated workers stayed on the job and gave you an honest day's work. Kongsberg, I think most people can see that you have no intention of settling this lockout. You have the mindset and mentality of 19th century industrialists. I truly think that if you could get away with it you would hire 12 year olds and pay them a dollar a day.
Now, you have added insult to injury by denying these workers unemployment. Many of these people have serious medical conditions and require expensive medications. Do they eat or do they get their medicine? Maybe neither. I simply do not see how any company can be so heartless.
The previous writer was correct that the damage is going to go much further than the individuals who are now unemployed. Every business in the area is going to feel the sting. All of Van Wert is going to suffer and the tax base will decrease dramatically. The next bond up for vote in Van Wert might be doomed to rejection. City Fathers, think about that.
I also agree with the comment about the fair board allowing the scabs to use the fairgrounds and I really hope that each and every one of these workers remember the "thoughtfulness" of the fair board. Not only will many of these people boycott the next fair but even if they wanted to, many of them won't have the extra money to spend on the fair. What goes around comes around.
As far as the scabs themselves, yes, I know they need jobs, too, but at the expense of their neighbors? That's totally unacceptable.
I will close by saying that no matter what happens the good workers of Kongsberg will hold their heads up high because they were not the cause of this and I sincerely think … no, I KNOW that Kongsberg's so called leaders will someday get their reward for this gross injustice.

Gary Lane
Van Wert
via email
4/12


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Kongsberg management given shot
To the Editor:
In the day of global economy and the fierce competition it would be understandable the companies are looking for ways to reduce cost, but should it not start at the TOP management, including the CEO paychecks?
Did Kongsberg not know the pay scale when they made the purchase? Was it their intent all along to get rid of the current workforce? Will the CEO get a BIG bonus for putting over 300 families out of work? How does the Board of Directors of the company justify that? Or does it matter, it doesn't affect them … yet.
Can the top management live on what they expect the employees to? Are they willing to take the same percentage cut in pay? People have built their lives around wages they have been earning for years and had no reason to believe this drastic of cuts would happen.

Who is going to buy all the homes that will be foreclosed on or the vehicles that will be repossessed? The CEO of Kongsberg?

If all companies continue to do this, who is going to have the money to buy any of the products (including cars) being made? China? Mexico? Brazil?

The concept that you start with the workforce that makes the company products, therefore producing the money that pays EVERYONE does not hold water You don't bite the hand that feeds you. I am self-employed and know that I cannot expect employees to bite the bullet when I am not willing to do it also.

It seems common sense has been left out of the equation.

America has sold its soul (land, companies, etc.) to foreign companies for the almighty dollar and the foreign companies do not care about their employees or what they do to them and the communities. This (Kongsberg) is a good example.

I believe employees would be willing to negotiate and be reasonable but it seems they have not been given that opportunity by Kongsberg. It was their way or be LOCKED OUT. That's the American way? If you don't like the American way of life, stay where you are.

Georgianna Adkins

Van Wert
via email
4/12


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Writer upset over Kongsberg actions
To the Editor:
I have a question for Mr. Aberdeen, plant manager of Kongsberg. Why haven't you paid your property taxes? As of now, you owe $21,929 in back taxes and penalties. You won't pay your taxes, you refuse to negotiate in good faith with you employees and you feel compelled to bring in "security" to maintain the peace. These aren't the actions of a company "committed" to the Van Wert plant. These are the actions of a company looking to provoke an excuse to abandon the Van Wert plant.

So when does Kongsberg intend to tell us they're moving the product line to their new 350,000 SF plant in Brazil? And the 300 plus employees left in Van Wert are the victims of the "global economy?"
Kirby R. Kelly
Van Wert
via email
4/10

The local media in Van Wert is at least talking about it. Doesn't seem to be anywhere else right now.

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So, I've been reading and talking to Joe about the news of the lock out in Van Wert county, Ohio (my home state).

I decided to do a little digging into Kongsberg. Norway is a trade unionist country with very strong ties to the international trade unions among European countries. So, I decided to look at their 4th quarter annual report to see what they had to say.

Apparently, they had a loss of revenue (they lost money) when they closed their Amotfors seat heating system plant.

Norwegian vehicle components maker Kongsberg Automotive Holding ASA announced on Friday (28 September) that it has initiated employee negotiations regarding a possible closure of its seat heating systems plant in Amotfors, Sweden.

Kongsberg Automotive said that it plans to transfer the operations to its existing production facilities in Poland in order to reduce costs.

The reorganisation reflects persistent margin pressure in the European automotive industry, Kongsberg Automotive said.

"We are one of the world's leading suppliers of seat heating systems for cars. To maintain this position we must adapt our production costs to a level which yield acceptable earnings also in future," said Olav Volldal, CEO of Kongsberg Automotive.

"The potential closure is not because our employees have not performed. It is due to the significant cost gap between high cost and low cost countries," Volldal added.

The restructuring of the operations will affect 90 employees in Amotfors.

So, that had me thinking. They were willing to close a profitable plant on the hopes that they'll be even more profitable when they pay lower wages and move out of high environmental standard Sweden and into low environmental standard Polland. But best of all is probably the line form their Fourth Quarter 2005 annual report where they noted:

The Group is reporting a tax cost percentage of 26 % in 2005. The tax cost is around 28 % for all the countries where Kongsberg Automotive operates, except for Poland where the tax rate is 19 % and the USA where the tax rate is around 33 %. There are no taxes payable for the Norwegian operations due to significant tax loss carryforward related to the Raufoss acquisition.

Do you see the tax base numbers? 33% for the US and 19% when they do business in Poland. So, how long will it be before they move the Van Wert Teleflex operations to Poland?

Sure seems as if this is their kind of business model...acquire patent technologies and then burn the communities where these items are made as they move to less taxing, less environmental standard countries. I really doubt this lock out has anything to do with the workers and everything to do with the way Kongsberg sees the US, as 33% tax. Looks as if they just want to lower the tax rate, costs for doing business and of course labor costs to that of Poland. Come on Poland, what happened to Solidarity?

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