[Congressional Record Volume 141, Number 138 (Thursday, September 7, 1995)]
[House]
[Pages H8667-H8668]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                  MORE BAD NEWS FOR AMERICA'S WORKERS

  The SPEAKER pro tempore (Mr. Hoekstra). Under a previous order of the 
House, the gentlewoman from Ohio [Ms. Kaptur] is recognized for 5 
minutes.
  Ms. KAPTUR. Mr. Speaker, tonight I want to talk about another company 
in our country and more bad news for America's workers as a result of 
NAFTA, the $20 billion trade loser. This time the damage comes from 
Topeka, KS, where workers at the Flexel cellophane plant are being 
forced to take another pay cut, this time for 11 percent. This was 
reported in the August 31 issue of the Capital-Journal, which is their 
local newspaper. That means for a worker in that company making $8.50 
an hour they will now have their pay cut to close to $8 an hour, and 
all this has happened after a wage freeze at that company that has been 
in effect since 1991. In fact, workers at Flexel have seen their wages 
drop from $13 an hour 5 years ago now to the current proposal to 
ratchet them down even more, to $8 an hours.
  What has been happening to cause this ratcheting down of U.S. worker 
wages? Mexican-based cellophane manufacturing plants have been 
increasing their penetration of the United States market to nearly one-
fifth, or 20 percent, of our marketplace, up from only 3 percent 4 
years ago. Our workers are being forced again to compete against 
multinational companies that can set up shop anywhere on the globe in 
order to seek the lowest wages possible along with no environmental 
enforcement. In Mexico workers at those relocated cellophane plants 
earn about 50 cents an hour, and that is where America's wages are 
headed, my friends, and did you notice that the price of cellophane has 
not dropped in our grocery stores? You can figure out who is making the 
money off workers on both sides of the United States-Mexican border.
  It is time to cancel NAFTA, go back to the drawing boards and reshape 
it, and stand up for the hard-working families of our continent who all 
are being taken to the cleaners, and, if I might quote from a retiree 
from that particular plant in Kansas, he tells us a little bit about 
what the story is in that community. He said originally du Pont company 
built what was then called the Tecumseh cellophane plant and brought it 
on line in 1958, and back in those years that was the fifth plant in 
the United States making cellophane.
  Mr. Speaker, the news articles I will include in the Record indicate 
that there are only two left in this country.
  This worker went to work for that company in 1964 and retired in 
1985. He says when he retired from the plant it was the last plant 
operating for du Pont in the United States making cellophane. About 1 
year later it was sold to this owner, Flexel, out of Atlanta, GA, and 
when he left the company back in 1985, he was making just over $12 an 
hour. Mr. Speaker, he wrote me because he was shocked to find 10 years 
later the workers in that plant were making so much less. He said:

       Ms. Kaptur, the imports from Mexico have had an impact on 
     this plant and its workers, and I'm concerned because I still 
     have a lot of my friends working there. Unfortunately all 
     those workers in the United States and the low-paid workers 
     in Mexico will gain no fairness, they will gain no equity, 
     because there is nothing in the trade agreement that tries to 
     compensate for the difference in living standards, political 
     standards, and environmental standards between these two 
     adjacent nations.

  So, Mr. Speaker, this evening I will be submitting into the Record 
the entire story of what has happened
 in Topeka, KS, one community in our country that understands well the 
impact of footloose multinational corporations and what happens when 
the Government in Washington falls asleep and fails to protect the 
workers of this continent.

  [The articles referred to are as follows:]

               [From the Capital-Journal, Aug. 31, 1995]

            Pay Cut of 11 Percent Goes Into Effect on Monday

                          (By Morgan Chilson)

       An 11 percent pay cut will begin Monday at the Flexel plant 
     in Tecumseh, company officials told employees Wednesday.
       Pay cuts are part of a company-wide plan to reduce costs 
     because of increased global competition and declining demand 
     for cellophone, said Gerry Broz, site manager at the plant.
       Broz also stated adamantly Wednesday that reports from 
     employees that company officials walked out on negotiations 
     with Amalgamated Clothing and Textile Workers Union, or 
     UNITE, last week were ``completely inaccurate.''
       ``After almost 10 months of good-faith bargaining and 
     agreement on most issues, the company submitted a final 
     proposal last Thursday calling for an 11 percent pay cut and 
     work-rule changes that would lead to additional cost 
     savings,'' Broz said.
       Broz told employees in meetings Wednesday that Flexel and 
     the union deadlocked over the issue of wage concessions.
       Flexel officials opened financial information to a union 
     auditor in the spring so employees would understand the 
     economic difficulties facing the company, Broz said. Despite 
     that, employees continued to ask for a five to 10 percent 
     wage increase, he said.
       Broz didn't elaborate on what the additional money saving 
     measures were, but employees highlighted the loss of premium 
     pay or Sunday time-and-a half pay.
       The cuts change several regulations, such as what happens 
     when an employee goes home from work sick, according to 
     Randal Carnegie, an employee at Flexel who attended a morning 
     meeting Wednesday.
       ``On the original program, if you get sick and if you work 
     over two hours and you go home after that two hours, you get 
     eight hours pay,'' Carnegie said. ``They've done away with 
     that.''
       Carnegie said the company also will no longer pay for 
     annual physicals for employees. That expense will be out-of-
     pocket for the portion insurance doesn't cover, he said.
       For employees on full-time disability, the company will not 
     begin payment of disability pay until after four days and 
     then only with a doctor's excuse, Carnegie added. Disability 
     pay did start the first day off work, he said.
       Carnegie, who has been working at Flexel for one year, 
     makes $8.50 an hour at the plant. His hourly wage will drop 
     to $8.04 an hour under the new cuts.
       A source familiar with the negotiating process who spoke on 
     the condition of anonymity said the average base wage at the 
     plant has decreased since 1993 to $12.78 per hour. An 11 
     percent decrease would lower that average base rate to 
     $11.37.
       The plant employs over 240 employees, the source said. The 
     base wage has gone down from the 1993 average salary of 
     $13.66 per hour because of lower starting wages, the source 
     said.
       Flexel Corp., based in Atlanta, owns the two remaining 
     cellophane plants in the United States, the one in Tecumseh 
     and one in Covington, Ind.
       The Covington plant felt its share of cutbacks in April, 
     when about one-third of the plant's 345 employees were laid 
     off, according to reports published in the Commercial News in 
     Danville, Ill.
       That newspaper reported 20 salaried and 80 hourly employees 
     were laid off.
       The last time employees were laid off at the Tecumseh plant 
     was in 1989, when 12 salaried employees and 30 temporary 
     employees were laid off.
       ``We don't want to cut Tecumseh wage roll jobs because we 
     want to keep Tecumseh production levels high,'' Broz said. 
     ``So we have no choice but to cut wages.''
       Carnegie said many employees believe other cost-cutting 
     measures weren't researched. For example, he said, workers 
     currently are paid for lunch shifts and if that policy could 
     be dropped, it would save the company 2.5 hours per week per 
     person.
       Broz said it is untrue that other cost-cutting measures 
     haven't been considered.
                                                                    ____

                      Flexel Workers Face Pay Cut

       Mandatory employee meetings today at Flexel Corp. will 
     determine what options are left for members of the 
     Amalgamated Clothing and Textile Workers Union of America 
     after negotiations with management came to a halt last week.
       Employees of Flexel, one of two remaining cellophane 
     manufacturing plants in the United States, voted in October 
     1994 to join ACTWU and then began working with Flexel's 
     management to negotiate a contract. It never got that far.
       Last Thursday, members of the management negotiating team 
     walked out of negotiations after leaving their only offer on 
     the table, a source familiar with the negotiations said 
     Tuesday on condition of anonymity.
       Jerry Broze, site superintendent at the Flexel plant in 
     Tecumseh, said the company would comment today on labor 
     negotiations.
       The source said Flexel's offer involved a reduction of $1.4 
     million, which amounted to an 11 percent pay cut for 
     employees. When totaled in with other aspects of the offer, 
     including no more premium or overtime pay 

[[Page H 8668]]
     for working on Sundays, employees would be taking about a 17 percent 
     cut in pay and benefits, the source said.
       ``They basically put this crazy offer on the table and said 
     it was because of their financial problems,'' said David 
     Martinez, who has worked at Flexel for 16 years. He began 
     with the company when it was owned by Du Pont. ``We came 
     through with a lot of suggestions of things that they could 
     save money on. They just basically put that offer on and 
     never negotiated anything in good faith.''
       Workers were told the new policies would be instituted 
     Friday, and many think the mandatory meetings today will 
     announce that plan.
       Martinez said employees haven't received pay raises in more 
     than four years, which has added to their disenchantment with 
     management.
       Wages were frozen in December 1991 at the average salary of 
     $13.66 an hour, according to a report in 1993.
       Martinez alleged poor corporate management was the reason 
     for the company's woes.
       Martinez cited the purchase of a machine to make rubber 
     gloves that is boxed and sitting in the warehouse unused as 
     an example of poor decisionmaking by Flexel.
       In previous years, management said the company experienced 
     financial difficulties because of unfair competition from 
     Mexico. Mexican companies export cellophane to the United 
     States without paying a tariff.
       In 1991, Lindsey Walters, president of the Atlanta-based 
     Flexel Corp., said Mexican cellophane plants increased their 
     penetration of U.S. markets to 18 percent from 3 percent 
     during the previous four years.
     

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