Business Power and Mobility

Russell Mokhiber 

and Robert Weissman


election season makes it patently clear how Big Business is able to transform

its financial resources into political power via campaign contributions.


an even more fundamental source of business power is corporations’ control over

investment decisions, and the tax, trade and investment rules which enhance

capital mobility. The ability to shift production to different locations, or

threaten to shift production, gives corporations enormous leverage over the

political process and over workers.


to adopt serious environmental standards to stem the corporate poisoning of the

air, water and land? Get ready to face the threat of plant closures and job

shifting. Want to force companies to bear a reasonable share of the tax burden?

Be prepared to face company moves to lower tax havens. Want to mandate payment

of a living wage to all workers? Plan to hear how business will be forced to

move to Mexico or China.


is the raw power connected to corporate mobility more apparent than in labor

management relations, as Kate Bronfenbrenner, director of labor education

research at Cornell’s School of Industrial and Labor Relations, makes clear in a

new paper, "Uneasy Terrain" (see http://www.ustdrc.gov/research/bronfenbrenner.pdf).


faced with union organizing campaigns, employers routinely threaten to close

their plant and move elsewhere. Understandably, these threats intimidate workers

– a union won’t do you any good if you don’t have a job — and they are

tremendously successful at defeating union organizing drives.


the most comprehensive survey ever of U.S. union organizing campaigns,

Bronfenbrenner found that "the majority of employers consistently,

pervasively and extremely effectively tell workers either directly or indirectly

that if they ask for too much, or don’t give concessions, or try to organize,

strike or fight for good jobs with good benefits, the company will close, move

out of state or move across the border, just as so many other plants have done



union organizing drives in the United States in 1998 and 1998, she found, more

than half of all employers threatened to close all or part of the facility if

workers voted to join a union.


the situation is even worse than that figure suggests, because for some types

employers it is difficult to make credible threats to move — hotels and

hospitals, for example, are to a considerable extent tied to place.


mobile industries — manufacturing and other companies that can credibly

threaten to shift production — the plant closing threat rate was 68 percent. In

all manufacturing, it was 71 percent. In food processing, it was 71 percent.


numbers mark a worrisome upturn from a previous Bronfenbrenner survey,

undertaken for the Labor Secretariat of the Commission for Labor Cooperation and

published in 1997. Bronfenbrenner’s data from 1993-1995 showed a threat rate of

64 percent among manufacturers, 21 percent among food processors.


earlier study, prepared for a commission created by one of the NAFTA side

agreements, was suppressed by the Clinton administration. Eventually liberated,

it provided some of the key evidence leading to the defeat of fast track.)


deliver the threats directly (after posting pictures of shut down facilities,

supervisors asked workers at a Mitsubishi plant in Tennessee, "Is your

family ready to move to Mexico?") or more indirectly. For multinationals,

Bronfenbrenner told us, there is a pervasive "silent threat. … The map on

the wall" showing the locations of a company around the world is an ongoing

reminder that the company can easily do business elsewhere.


know the threats work, Bronfenbrenner says. Anti-union training materials

emphasize that "fear is the most effective tool," she explains.


the evidence backs up the commonsense insight that threats to close effectively

intimidate workers.


election win rates were significantly lower in units where plant closing threats

occurred (38 percent) than in units without plant closing threats (51

percent)," Bronfenbrenner found. "Win rates were especially low (24

percent) in those campaigns where employers made specific threats to move to

another country. Win rates were also significantly lower in mobile industries

where the threat of closure was more credible."


can overcome plant-closing threats, Bronfenbrenner says, by running aggressive

campaigns that involve rank-and-file union members as organizers and actively

involve and energize the workers who are being organized. But the challenge is

immense, especially given the array of other anti-union tactics, including

firing of union supporters, that corporations regularly employ.


with the problem of plant-closing threats, at least in the union organizing

context, will require two major reforms, Bronfenbrenner concludes. First, labor

law must more clearly delineate such threats as illegal, and impose big enough

penalties to deter employers from making them. Second, trade, investment and tax

policy must be changed to limit corporate mobility, and to block employers from

shifting operations to avoid unionization.


not just a pro-union agenda. It is a basic pro-democracy one.


Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter.

Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor.

They are co-authors of Corporate Predators: The Hunt for MegaProfits and the

Attack on Democracy (Monroe, Maine: Common Courage Press, 1999).



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