The Betrayal of the American Dream (10 page)

Over and over in their annual reports, the Petersens stressed the debt they owed to their employees: “We want to say how highly we regard the people who make up this organization,” the family said in a 1972 report. “It is their loyalty, industry, and skill which, over the years, have made it possible for this firm to grow . . . every job is an important job and every worker a valued and respected person.” Generations of townspeople felt much like Linda Colgrove, who performed a variety of jobs at Vise-Grip in the nearly four decades she spent there: “You couldn’t ask for a better place to work.”

From this out-of-the-way village in rural Nebraska, Vise-Grips poured forth by the millions to supply the U.S. market and overseas customers as well. By the mid-1970s, more than 30 percent of the 7 million tools made in DeWitt were sold abroad. A decade later, the plant was making almost as many Vise-Grips for export as it had once made for U.S. consumers. Before economists and politicians began touting export jobs as a cure-all for America’s job woes, Vise-Grip was ahead of the curve. Here was a unique product invented in the USA, manufactured in the USA, and shipped around the globe from the USA. It was a perfect template to map out America’s future in the global economy.

The Petersen family owned the company for sixty-one years before selling it in 1985. In the following years Vise-Grip passed through more owners, but through it all the DeWitt plant remained central, producing the famous wrench, what the company called “the world’s most versatile hand tool.” In 2002 the company was bought by the Newell Corporation, a multinational corporation known for its rigorous cost cutting. Then everything changed.

Randy Badman remembers the time well. Badman was typical of so many in the plant: his father, mother, uncle, aunt, and grandfather had all worked there. He’d been there thirty-three years the day Newell arrived.

He had started as a tool and die maker, manually cutting the dies that were used to shape the components that were stamped out of molten steel by the plant’s big presses. The plant did it all. “The raw steel came in one end, and the Vise-Grip went out the other,” Badman said. In between, workers made virtually everything else: they forged the steel components, cut the teeth in the pliers, even made the screws, springs, and rivets that made the locking pliers unique.

In the 1980s, the plant had begun converting to computerized numerical control (CNC) machines to do the work long done by hand. When the first one arrived, the company sent Badman to Omaha for training in how to program and operate the equipment that was revolutionizing factory floors across America. As more CNC machines arrived at the plant, Badman’s responsibilities grew. Eventually he headed the entire thirty-nine-man round-the-clock department of tool and die makers. The new machines were reducing manual labor, but even with the new efficiencies employment grew, rising to more than six hundred.

After Newell bought the plant, the spirit that had powered decades of growth and job creation vanished. “Everyone had a very uneasy feeling when it was sold,” Badman recalled. “You never know once a big corporation gets a hold of something.”

Badman said it wasn’t long before the new corporate owners began insisting on cuts—they told him to cut 5 percent in his budget. From then on, all he heard was, “You’ve got to cut, you’ve got to cut, you’ve got to cut.” So, Badman said, “we gave them that, and then they wanted more. Once that started, we knew it was not going to be good.”

Workers at the non-union plant took a series of voluntary pay cuts, and Badman said they took a hard look at all internal processes to see what could be streamlined. “We did all the things you can do,” Badman said. Some changes made the plant more efficient, “but that can only go so far,” Badman said. “When you get a little too far, then you have to stop and say, ‘Okay, we’ve cut it to here. This is good. We’re making good profits. Now let’s run with it. Let’s sell more because we’re more efficient.’”

Early one morning in 2005, Badman was working at his desk when he saw his boss pass by on his way to human resources. Soon Badman was summoned to the same office. Seated behind a desk was a woman from Newell he did not know, and in front of her was a pile of papers. She told him to sign them. The company was “realigning,” she said, and he was being dismissed. He was escorted through the plant and out the door of the factory where he’d worked for thirty-six years and told to contact HR for an appointment to come in and clean out his desk. That same day twelve other midlevel managers and supervisors, including Badman’s boss, were fired. As bad as things had been, Badman was stunned. “You don’t think that they’re going to take out everybody who knew what was going on and who was running the place,” he said.

Three years later, in 2008, Newell dismissed the remaining three hundred workers, closed the plant, and announced that Vise-Grip production would be shifted to China. In an instant, the low-slung sprawling factory that had been the lifeblood of DeWitt for eighty-four years fell silent.

“What you miss now is the hum—the hum of the factory,” Badman recalled. “You could have your windows open on a summer evening and you’d hear the presses going up and down. And now there’s silence. Nothing.”

Looking back, Badman believes that Newell had no intention of keeping the plant going and that all its efforts were aimed at strangling it. Why else would they jettison the entire supervisory crew in one day and throw the place into turmoil unless they were planning to shut it down anyway?

“I think they wanted to squeeze us until they couldn’t,” he said. “Then they went overseas.”

Badman’s assessment was right on the money. If there were a Fortune 500 for wholesale terminations, Newell would rank near the top of the list. Two decades earlier, in 1987, Newell had purchased the Anchor Hocking Glass Corporation, one of the country’s oldest glass container manufacturers. Within four months of the acquisition, a team of Newell executives swooped down on an Anchor Hocking plant in Clarksburg, West Virginia, where workers produced novelty glasses like the Star Wars and Camp Snoopy collections handed out by McDonald’s during promotional campaigns. As Robert Trent, a personnel supervisor, told us in 1991 about a visit from the corporate owner in the fall of 1987:

We were really excited about some Newell people coming down and looking at our facility, because we thought we were doing very well. They came in about ten in the morning. We saw them come in. They went to the plant manager’s office . . . and told him they were closing this facility November 1, 1987. And that was it. They were out of here by ten-thirty.

With certain exceptions, the corporate takeover targets were profitable. They just were not as profitable as corporate raiders and Wall Street wanted. And they certainly were not profitable enough to pay bloated salaries to layers of executives.

In October 2011—three years after Newell closed the Vise-Grip plant—the hurt and the sense of loss in DeWitt were still palpable. Townspeople spoke longingly of the plant, of the positive influence it had on the town and their lives, and of the loss they continued to feel. DeWitt had lost its only grocery store. The longtime weekly newspaper had folded. Other businesses were pinched. A ready source of work for the town’s young people—either as summer jobs or as careers for those who elected not to pursue higher education—was gone.

Former plant workers have tried to move on. Some went back to school for training to become home health aides or office workers. Some took jobs in other towns. Others retired early. Randy Badman has had three jobs in manufacturing since Vise-Grip and lost two of them to outsourcing. By late 2011, he was working as a foreman at a Nebraska foundry ninety miles from his home in DeWitt, where he and his wife Marge still live and where Randy serves as the town’s mayor. He drives 180 miles round-trip four days a week to his new job. It’s a grind, but he likes the work and the job provides health insurance for himself and his wife.

In most cases, former Vise-Grip workers who have been able to find work are earning less, and they’ve learned to live on less. They’ve tried to put the past behind them, but it comes rushing back when they come upon tool displays at a Home Depot or Lowe’s and see the familiar yellow-and-blue packaging touting Vise-Grips as: “The Original. Since 1924.”

Of course they aren’t the original. The locking pliers are now made in a factory in the heavily industrialized city of Shenzhen, north of Hong Kong. Although they’re produced under tight security in a limited-access industrial park, a former worker from DeWitt obtained an inside view of the Chinese operation after Newell hired him to try to straighten out production problems there.

A twenty-year veteran of DeWitt, Bruce McDougall arrived in China not long after the Nebraska plant closed to find the new Shenzhen operation in chaos. Components were arriving from multiple suppliers and were hard to track. There was no quality control on the production line. Newly manufactured tools broke or wouldn’t work, he said. From the outside, the factory didn’t look much different from plants in the States, but inside was another story. To McDougall, the place was like a time capsule, a throwback to earlier times when Vise-Grip’s DeWitt plant relied on manual labor to make the tools.

“It looked more like Vise-Grip in 1950, when everything was made by hand,” McDougall said, rather than like the highly automated plant that Newell had shut down in 2008 to be more “competitive.” He said Newell kept throwing more and more bodies into the mix to increase production. But even with five times the workforce of DeWitt, McDougall said, production still faltered. “We were turning out fifty thousand tools a day at the end in DeWitt,” he said. “Their best day in China was fifteen thousand with five times the number of people.”

There were other contrasts too. In DeWitt, many Vise-Grip employees lived in neat, well-kept houses on quiet lanes not far from the plant, but in China Newell’s workers were packed into dormitory-like quarters adjacent to the factory. Living conditions mirrored the chaos of the plant floor. As many as twelve workers were stuffed into cramped rooms for sleeping. “The night shift guy would go in and work twelve hours,” McDougall said. “Then he’d go back to the dorm and wake up the day shift guy, who’d go in for twelve hours.” McDougall spent three months in China and couldn’t wait to leave. “The place was off the wall,” he said. Even with the cheap labor, McDougall said it was costing Newell more to make the Vise-Grip in China when he was there than it had cost in DeWitt.

This was the height of economic insanity. A once-pathbreaking American industrial innovator, whose manufacturing processes had been successfully modernized by a company that was the anchor employer for an entire community, was sold not because greater economic efficiencies could be achieved elsewhere, let alone because quality or distribution could be improved. It was picked off by a rapacious corporation and dumped haphazardly thousands of miles away. A case of a short-term gain for a corporation, but at the expense of a sustainable economic future for a community.

The loss of the Vise-Grip plant was a betrayal of the people of DeWitt. The village clerk, Linda Schuerman, whose husband worked at the plant for decades, is deeply upset over Washington’s indifference to working people and the impact it is having on communities such as DeWitt:

I’m not a political person, but something’s wrong with Washington, D.C. They are to blame. They should have kept the companies here. We are nosing our way into all these countries that don’t want us and can’t stand us when we should be helping our own people. All the people out here want to do is make a living and support their families.

Coming into DeWitt, visitors pass the massive, four-columned brick entry sign on Highway 103 that has welcomed visitors to the town for years: HOME OF THE VISE-GRIP TOOL. The town’s website also pays tribute to the enterprise that brought prosperity and economic well-being to more than three generations, but it has had to adjust to the times. On the website, DeWitt is no longer the “home” of the Vise-Grip Tool, but its “birthplace.” Like so many chapters in the story of American manufacturing, this one is now history.

THE BIRTH OF APPLE

Defenders of free trade and the ruthless corporate behavior that often accompanies it contend that the fate of companies such as Vise-Grip, while sad for those who lose their jobs, is merely part of a natural process of the American economy renewing itself. The nation, they say, is constantly being reinvented as old industries and companies give way to new ones. Along the way, old jobs are eliminated or offshored. It’s easy to assume that perhaps older companies such as Vise-Grip did not keep up with the times (though it did) or that its invention was no longer relevant (the Vise-Grip remains a hugely popular tool). But the story must be different for twenty-first-century innovators. Surely current innovations are valued more highly and treated more carefully so that their benefits can be shared by the communities that supported their creation? If only that were true. Look no further than the story of an iconic American company, Apple Computer.

The story has been told many times of how Steve Jobs and Steve Wozniak, tinkering with electronic components in the Jobses’ family garage, built the first Apple computer in 1976 and launched the personal computer industry.

Like William Petersen of Vise-Grip a half-century earlier, Jobs and Wozniak had an idea, and their curiosity and ingenuity enabled them to create a new product from it. And like Vise-Grip, Apple was soon manufacturing its products for sale, first from a building south of San Francisco and then in an assembly plant in Fremont, California, on the other side of the Bay. Soon additional plants in Elk Grove, California, near Sacramento, and Fountain, Colorado, near Colorado Springs, would be turning out Apple computers. For the two new plants, the future looked especially bright.

Apple’s Elk Grove plant, opened in 1992, became the centerpiece of Sacramento’s campaign to attract high-tech companies. Other computer makers soon followed. By the mid-1990s, the Sacramento area was considered the computer manufacturing capital of the United States. Apple’s Elk Grove plant, which manufactured circuit boards and desktop computers, operated seven days a week and employed 1,500 persons.