A Toxic Company – most dangerous employer in America

KennedyValve.jpgYou may think your working conditions are bad, but be thankful you are not working for McWane Inc., one of America’s largest privately owned corporations, and one of the nation’s most persistent violators of workplace safety and environmental laws.

In the U.S., since 1995, they’ve been guilty of more than 400 health and safety violations in workplaces they own in 10 states. Since 1995, 4,600 workers have been injured in their foundries and 9 have died.

You might wonder how the McWane family, which is known in Birmingham, Alabama, for its quiet generosity, can justify such callous and inhumane business practices. The company’s managers call it the McWane way, otherwise referred to as Disciplined Management.

This term, disciplined management, is eerily reminiscent of German treatment of slave labor during the Second World War. It is what happens when there is an extreme concentration on financial results with no thought for the real costs in human lives and damage to the environment.

In the last decade, many American corporations have been cutting costs, laying off workers and pressing those who remain to labor harder, longer and more efficiently. But top federal and state regulators say McWane has taken this idea to the extreme. Describing the company’s business, they use the words “lawless” and “rogue.”

McWane’s disciplined management also embraces falsification of documents, lying to inspectors, intimidation of workers, and hiding evidence of criminal behavior according to a recent federal indictment.

The McWane story was documented by the CBC in January 2003 and by a series in the New York Yimes in January 2003, yet the abuses continue.

Update: Here is the Pulitzer Prize winning article: Deaths on the Job, Slaps on the Wrist

Just a few days ago, five executives of a McWane foundry in Trenton, NJ were indicted for conspiring to violate workplace safety and environmental laws..

McWane companies manufacture cast iron pipes and various components for municipal, commercial and residential water and waste-disposal services. Their operating revenues are estimated to be worth between US$1.5 and $2 billion a year.

The accounts of working conditions at their plants are chilling and they have been repeatedly fined, but they have managed to evade any corrective action since 1995. They are well-connected, well-represented, and show no sign of changing. A recent statement by a lawyer for McWane, the former Whitewater prosecutor Robert Ray, typifies this attitude:

“While this is a difficult day and a disappointing day for the company,” he added, “the company also knows that it is now in a position to move forward and get through this process.”

A quote by another McWane attorney bears this out:

“Son,” said N. Lee Cooper, past president of the American Bar Association and founding partner of the Birmingham law firm that has long represented the family’s corporate interests, “the McWanes haven’t talked in a hundred years, and they aren’t about to start now.”

The worker’s plight might best summed up by this simple image. After a worker’s death at Kennedy Valve, a McWane foundry in Elmira, co-workers expressed their desperation with bumper stickers that read, PRAY FOR ME, I WORK AT KENNEDY VALVE

With the prevailing management attitude at McWade, they will need many prayers.

Company spokesmen say that McWane remains committed to making all of its plants “model facilities for the 21st century.” I suggest you take that with a grain of salt. Be skeptical, very skeptical.


While browsing for other references to toxic companies, I found this article, Danger:Toxic Company, by Alan Webber in an old issue of Fast Company. This article, although written about high tech organizations, mighty apply equally well to McWade Inc. The significant difference is that the article assumes that employees can quit. McWade exploits those who have no other source of employment.

The article quotes Jeffrey Pfeiffer, the author of The Human Equation: Building Profits by Putting People First (Harvard Business School Press, 1998). According to Jeffrey Pfeffer, when it comes to the link between people and profits, companies get exactly what they deserve.

Companies that treat their people right get enormous dividends: high rates of productivity, low rates of turnover. Companies that treat their people poorly experience the opposite — and end up complaining about the death of loyalty and the dearth of talent. These are “toxic workplaces,” according to Pfeffer.

There is a lot more to this article and it is a worthwhile read for any manager.

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