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April 2011, Week 2

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Mon, 11 Apr 2011 22:38:03 -0400
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IKEA's U.S. Factory Churns out Unhappy Workers
A union-organizing battle hangs over the Ikea plant in
Virginia. Workers complain of eliminated raises, a
frenzied pace, mandatory overtime and racial
discrimination.
By Nathaniel Popper
Los Angeles Times
April 10, 2011

http://www.latimes.com/business/la-fi-ikea-union-20110410,0,4172495,full.story

Reporting from Danville, VA

When home furnishing giant IKEA selected this fraying
blue-collar city to build its first U.S. factory,
residents couldn't believe their good fortune.

Beloved by consumers worldwide for its stylish and
affordable furniture, the Swedish firm had also
constructed a reputation as a good employer and solid
corporate citizen. State and local officials offered
$12 million in incentives. Residents thrilled at the
prospect of a respected foreign company bringing jobs
to this former textile region after watching so many
flee overseas.

But three years after the massive facility opened here,
excitement has waned. IKEA is the target of racial
discrimination complaints, a heated union-organizing
battle and turnover from disgruntled employees.

Workers complain of eliminated raises, a frenzied pace
and mandatory overtime. Several said it's common to
find out on Friday evening that they'll have to pull a
weekend shift, with disciplinary action for those who
can't or don't show up.

Kylette Duncan, among the plant's first hires, quit
after six months to take a lower-paying retail job. "I
need money as bad as anybody, but I also need a life,"
said Duncan, 52. She recalled having to cancel medical
appointments for her ailing husband because she had to
work overtime at the last minute.

Some of the Virginia plant's 335 workers are trying to
form a union. The International Assn. of Machinists and
Aerospace Workers said a majority of eligible employees
had signed cards expressing interest.

In response, the factory - part of IKEA's manufacturing
subsidiary, Swedwood - hired the law firm Jackson
Lewis, which has made its reputation keeping unions out
of companies. Workers said Swedwood officials required
employees to attend meetings at which management
discouraged union membership.

Plant officials didn't return calls and declined to
meet with a Times reporter who visited the Virginia
facility. Swedwood spokeswoman Ingrid Steen in Sweden
called the situation in Danville "sad" but said she
could not discuss the complaints of specific employees.
She said she had heard "rumors" about anti-union
meetings at the plant but added that "this wouldn't be
anything that would be approved by the group management
in Sweden."

The dust-up has garnered little attention in the U.S.
But it's front-page news in Sweden, where much of the
labor force is unionized and IKEA is a cherished
institution. Per-Olaf Sjoo, the head of the Swedish
union in Swedwood factories, said he was baffled by the
friction in Danville. IKEA's code of conduct, known as
IWAY, guarantees workers the right to organize and
stipulates that all overtime be voluntary.

"IKEA is a very strong brand and they lean on some kind
of good Swedishness in their business profile. That
becomes a complication when they act like they do in
the United States," said Sjoo. "For us, it's a huge
problem."

Laborers in Swedwood plants in Sweden produce bookcases
and tables similar to those manufactured in Danville.
The big difference is that the Europeans enjoy a
minimum wage of about $19 an hour and a government-
mandated five weeks of paid vacation. Full-time
employees in Danville start at $8 an hour with 12
vacation days - eight of them on dates determined by
the company.

What's more, as many as one-third of the workers at the
Danville plant have been drawn from local temporary-
staffing agencies. These workers receive even lower
wages and no benefits, employees said.

Swedwood's Steen said the company is reducing the
number of temps, but she acknowledged the pay gap
between factories in Europe and the U.S. "That is
related to the standard of living and general
conditions in the different countries," Steen said.

Bill Street, who has tried to organize the Danville
workers for the machinists union, said IKEA was taking
advantage of the weaker protections afforded to U.S.
workers.

"It's ironic that IKEA looks on the U.S. and Danville
the way that most people in the U.S. look at Mexico,"
Street said.

The Swedwood factory is situated on the outskirts of
Danville, in the midst of rolling tobacco country, just
north of the North Carolina border.

For most of the last century the town of 45,000 relied
on textiles and tobacco for jobs. Today the riverfront
is lined with empty red brick warehouses and crumbling
mills. With the unemployment rate high - currently at
10.1% - the city has put muscle behind attracting new
companies, including IKEA.

"They've definitely given jobs to people that
desperately needed them here," city manager Joe King
said.

Swedwood says it chose Danville to cut shipping costs
to its U.S. stores. The plant has been run mostly by
American managers, along with some from Sweden.

The facility looks like a series of interlocking,
windowless white boxes - as neat as an IKEA store -
with a blue-and-yellow Swedish flag flying out front.
Employees inside produce Expedit bookshelves, which
start at $69.99 in IKEA stores, and Lack coffee tables,
which retail for as little as $19.99.

Low prices have helped IKEA weather the economic
downturn. The company made 2.7 billion euros in profit
last year, up 6.1% from 2009, according to its most
recent financial statements.

Still, last fall, Swedwood eliminated regularly
scheduled raises and made cuts to some pay packages in
Danville. Starting pay in the packing department, for
example, was reduced to $8 an hour from $9.75. Steen
said the changes were made to free up more money to pay
incentive bonuses to top performers.

The median hourly wage in the Danville area is $15.48,
according to the Virginia Employment Commission.

Current and former plant employees said they resented
the unpredictable work hours and high-pressure
atmosphere. The plant assesses penalty points for
violations of work rules; workers who accumulate nine
of them can be fired.

"It's the most strict place I have ever worked," said
Janis Wilborne, 63, who worked at the plant for two
years and quit last year.

Six African American employees have filed
discrimination complaints with the Equal Employment
Opportunity Commission, claiming that black workers at
Swedwood's U.S. factory are assigned to the lowest-
paying departments and to the least desirable third
shift, from 11 p.m. to 7 a.m.

"If we put in for a better job, we wouldn't get it - it
would always go to a white person," said Jackie Maubin,
who worked the night shift in the packing department
until last year, when she was fired on her birthday.

Swedwood has been trying to settle four of the
discrimination complaints through mediation. The
company initially offered Maubin $1,000. She settled
for $2,000. She said she needed the money to keep her
car from being repossessed.

Global competition has motivated all manner of
companies to seek out low-cost sources of production,
said Ellen Ruppel Shell, the author of the book "Cheap:
The High Cost of Discount Culture." IKEA is no
exception. What's different, she said, is that the
company has done such a good job of burnishing its own
corporate image.

"There's a mythology around the company," Shell said.
"That's why these kinds of revelations surprise a lot
of folks."

____________________________________________

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