Masters of Eminent Domain? Union, Struggling Mass. Town Take on Aerospace Giant
Nov 19, 2010
By Roger Bybee
The Fifth Amendment allows local governments to take control of private land for "public use." But too often the "public purpose"—as viewed by the U.S. Supreme Court—merely turns out to be enhanced private profits. A prime example is Detroit's destruction of the "Poletown" neighborhood in the 1980s to clear space for a GM plant subsidized with $350 million in public funds.
Up until now, labor activists have sought to use eminent domain, but have found few good opportunities. But last week the City Council of Taunton, Mass., pushed by the United Electrical and Machinery Workers union, came close to using eminent domain for a genuine public purpose: to save family-supporting jobs in a struggling industrial town of 54,000. At its November 9 meeting, a majority of the Council's members voiced support for the move, but they delayed an official vote until next week to obtain a legal opinion on the matter.
The UE is proving that eminent domain is a tool that can be wielded by workers and communities against corporate greed. The union is fighting to save 100 jobs at an operation that aerospace and defense giant Esterline technologies wants to destroy, as I reported in September.
Esterline is not content to merely close the plant. It is also intent on preventing the highly-skilled workforce from buying and operating the plant on their own or as a subsidiary of another firm. Esterline has announced that it no longer feels bound by its earlier promises to allow the workers the right of first refusal on buying the plant's equipment.
In response, UE Local 204 members and their allies persuaded the Taunton City Council to invoke the eminent domain doctrine to block Esterline from selling off the plant's equipment. Esterline has set an auction for December 14 to dispose of all the machinery it does not want.
EMINENT DOMAIN AS 'KEEPING,' NOT TAKING
"Eminent domain usually involves a 'taking,' but this is a 'keeping,'" said UE Eastern Region President Peter Knowlton after the Taunton City Council vote. "We're trying to keep a viable operation running and providing jobs."
"We've lined up the former plant supervisor to step in, and he has among the foremost expertise of anyone in the industry," Knowlton said as he ticked off the workers' efforts to keep the plant running. "We have an experienced and skilled group of workers who want to save their jobs. That's why we need eminent domain to prevent the equipment from being sold off out from under us."
The plant, which makes specialized silicone-rubber seals and gaskets for military planes and the airline industry, has been consistently profitable, but Esterline wants to move the jobs to non-union plants in Mexico and California.
Esterline, based in Bellevue, Wash., was infuriated when the union insisted that the corporation abide by Massachusetts law and provide funding for three months of healthcare after the workers are laid off. Finally recognizing that it could not evade the law, after the point was driven home by State Sen. Marc Pacheco (D-Taunton) and a federal mediator, Esterline still found a way to lash back at the UE.
To make up for the cost of the legally-mandated healthcare, Esterline said it would reduce the total severance package—already agreed upon earlier—for the workers by $143,000. "They finally agreed to abide by the law, but then they reduced their severance offer," said an incredulous Knowlton. "That's illegal because it's regressive bargaining, so we're filing charges [with the National Labor Relations Board.]
Esterline also informed the union that it no longer had first right to buy the plant's equipment, because the corporation needed to recoup the severance costs through auctioning off the equipment to the highest bidder. "Essentially, Esterline is stealing the workers' labor represented in the machinery that they've worked on for years," declared Knowlton.
NEARLY $120 MILLION IN PROFITS IN 2009
The UE finds the company's need for the auction just as plausible as the Pentagon needing to hold a bake sale to fund a new invasion. Esterline has no shortage of funds, as evidenced by the pay of CEO Robert Cremin and nearly $120 million in profits last year.
According to CEO Paywatch, "In 2009, [Esterline CEO] Robert W. Cremin received $6,731,506 in total compensation. By comparison, the average [US] worker made $32,048 in 2009. Robert W. Cremin made 210 times the average worker's pay."
While many other companies suffered severely from the recession in 2009, Esterline enjoyed profits of $119.8 million on $1.42 billion in sales. But even such substantial profits are never enough; its annual report cites the value of cost-cutting at its relatively new plant in Mexico: "Management has taken actions to reduce cost including but not limited to setting up operations in Mexico."
'WHAT'S WRONG WITH THIS PICTURE?'
Esterline has responded to the City Council's support for using eminent domain by threatening to withhold the severance pay from workers, who were terminated on October 26.
But this threat seems to represent yet another case of Esterline pulling back benefits to which it had already agreed, again in violation of labor law.
If Esterline moves ahead on trying to hold the auction, the union believes that the eminent domain declaration by the Taunton City Council will enable it to win a binding injunction blocking the sale of equipment, Knowlton said.
For the union and its members, the struggle against Esterline is about preventing the wanton, pointless decimation of a viable operation—and with it, increasingly-rare family-supporting jobs.
"Saving the jobs seems like a no-brainer to us," says Knowlton. "What's wrong with this picture where Esterline is out to destroy the jobs? What's wrong with our country?"