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
By DAVID BARSTOW and LOWELL BERGMAN

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.

UPDATE:

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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0 Responses to A Toxic Company – most dangerous employer in America

  1. fletch says:

    Unfortunately, I believe this type of behavior is the rule in corporate America rather than the exception. My personal experience with this behavior is with UnumProvident, the nation’s largest disability insurer. The most common mistake made by those seeking to change these corporations for the better is assuming that mere exposure to the masses through the media will produce results. It will not. In general, the public is as desensititized, cold, and callous as the corporations unless it affects them personally. The only hope for change is with the threat of and actual criminal prosecution, which isn’t going to happen but in the rarest and most extreme situations. We need a thousand Eliot Spitzers.

  2. oldcatman says:

    …..if we had a ‘statue’ of capitalism, I suspect it would be like ‘lady justice’..blindfolded! We can’t straighten up
    our (USA) companies when it comes to environmental ( much less employee safety issues) and then there is
    the rest of the world to “straighten” out…….perhaps
    Soyent Green is just around the corner……..

  3. David says:

    Soyent Green…
    Well, now that you brought that subject up.
    Can you imagine what things would be like if McWane was in the food business?

  4. Ralph Gizzip says:

    First of all, those who believe this is the rule rather than the exception obviously have no experience working in the private sector. The vast majority of corporations work diligently to remain within the law. To do otherwise is just bad business.

    But I question the people that work there. The bumper sticker pictured may be morbidly humorous but if its owner really feels that way he has no business working there. Furthermore, the fact that the McWanes have no problem finding employees tells me the people that work for them are not so concerned about their safety as others would have you believe. If they were, they wouldn’t be working there. And if the McWanes had to pay exorbitant wages to get and keep employees they wouldn’t be competitive in the marketplace.

    The fact is metal foundries are dangerous places. There’s no “do over” when it comes to molten steel. When it touches you you’re messed up. Period.

    Four hundred OSHA violations in 8 years. How may are multiple citations of the same violation? I’d wager an eagle-eyed OSHA inspector could walk into your average home and find 10 to 20 “violations” if you employed a housekeeper or other help.

    The bottom line is your workplace is only as safe as YOU make it. If YOU don’t feel safe doing something, DON’T DO IT! If your employer insists, walk out.

  5. David says:

    Ralph probably didn’t bother reading all of the post or any of the referenced articles.

    This company is not the norm, by any means. They thrive in areas where there is no other employment.

    Only men who are desperate to support their families will submit to such extreme treatment.

    As for the OSHA inspectors, I’m sure they would have found violations in almost every company I worked for, but not mutilated employees.

    I’m sure this is some kind of a record: Since 1995, 4,600 workers have been injured in their foundries and 9 have died.

    Disciplined management indeed…

  6. Ralph Gizzip says:

    You’d lose that bet, David. I not only read your post but also the links you provided. Unfortunately, given the recent reputation of the New York Times, I don’t place much faith in their reporting.

    My first paragraph addressed the comment made by Fletch who wrote, “Unfortunately, I believe this type of behavior is the rule in corporate America rather than the exception.” It’s NOT the rule, Fletch. It’s just that your job has given you a skewed view of industry.

    Secondly, I stand by my comments that if you feel it’s too dangerous you owe it to yourself AND your family to leave. You say, “Only men who are desperate to support their families will submit to such extreme treatment.” Tell me how a man is going to support his family if he’s injured or dead?

    You made the statement, “Since 1995, 4,600 workers have been injured in their foundries and 9 have died.” You’ve given no source and no comparison to other companies doing the same kind of business. In other words, there’s no way to compare their safety record to other foundries. Are they worse? How much worse? How many sites? You wrote they have facilities in 10 states so let’s assume one site per state. That’s less than one death per site over an 8 year period. Out of those 4600 injuries (that’s 460 per site over 8 years or about 57 per site per year) how many were “lost time” accidents? A typical rate in my field is 10%. That is one out of 10 “OSHA Recordable” injuries qualifies as “lost time” So now we have 5 to 6 “lost time” accidents per facility per year. That’s a pretty high number but consider this. A day off for a twisted ankle suffered in the parking lot is still considered a “lost time” accident.

    You may think I’m siding with McWane here and I’m not. Those injury statistics in my field (chemical processing) get plant managers fired quickly. My point is the employees have as much, if not more, responsibility for their safety than management does because they’re the ones doing the job on the shop floor. You do believe in personal responsibility, don’t you?

    What it will take is for the employees to stand up en masse and say, “Bullshit!” Will the company fire them all? Maybe, but once word gets around the next batch of employees may do the same thing. And keep this in mind. It’s a Hell of a lot more expensive to move or build a foundry operation than it is to implement a safety program that works.

  7. David says:

    Ralph, I appreciate your comments. I will try and fill in the gaps for you.
    As you mentioned, I believe everyone is personally responsibile for their condition, without exception. The men who work at the McWane plants have made a bad choice of employers and they will suffer the consequences unless they choose to leave.

    McVane executives have broken the law according to the most recent indictments and they too will suffer the consequences of their acts.

    I extracted the statement, “Since 1995, 4,600 workers have been injured in their foundries and 9 have died” from the sources I linked to, which you said you read.

    To compare foundries, you should read this Frontline report at
    http://www.pbs.org/wgbh/pages/frontline/shows/workplace/mcwane

    American Cast Iron Pipe Company, called ACIPCO has been in business even longer than the McWane plant. It’s in the same business: melting metal, casting pipe. It’s a process that is inherently dirty and dangerous, but ACIPCO’s rate of serious injuries is a fraction of McWane’s. The full story is quite interesting.

  8. fletch says:

    Sorry, but I’ve worked as a consultant to major corporations in finance, banking, and insurace ie..the private sector for many years. The bottom line is the only thing that matters, period. Even without personal exposure to corporate corruption, even a casual observation of the news, especially CNBC with it’s daily dose of corporate indictments, would seem to indicate something is seriously wrong with the business culture. While the specific behavior of McWane might be an exception, the culture that creates it is not.

    “But I question the people that work there.”

    As I said in my original post..in general the public is as desensitized, cold, and callous as the corporations unless it affects them personally. Thanks for making my point.

  9. Jesse Brown says:

    “as I said in my original post..in general the public is as desensitized, cold, and callous as the corporations unless it affects them personally. Thanks for making my point.”

    Yes, I see now. The fact that this company provides heavy industrial products and employs thousands of people, with medical and social benefits means that we must at all costs protect those employees from the “Evil” capitalist. That cold calculating demon and bane of the modern world.

    But of course they provide a necessary product and employment for thousands. You don’t want to shut them down, just make it a “safe” workplace.

    Where the hell is John Galt when you need him. I think I’m going to apply to work there. Sounds like my kind of place.

  10. OK, Jesse, let’s talk Objectivism. Hank Reardon would never run such a shop. He paid a higher wage rate than any of his competitors so that he could get the best workers available — workers who would know how to prevent such accidents. He also took personal responsibility for an accident if one occurred. His employees were fiercely loyal and turnover was minimal. Hank understood that the employer/employee relationship was about trading value for value. The McWane business looks more like a looter business. Their workers may not be the best, but they’re probably cheap; and even the better ones don’t have the luxury of choosing a different place of employment. The McWanes are not interested in trading value for value; they’re interested in short-term gain. Yes, they’re providing jobs and products; but so was Orren Boyle. Just because they’re running a business does not mean that they are in alignment with objectivist principles. There were a lot of business owners in Atlas Shrugged that didn’t get a personal invitation to Galt’s Gulch; I suspect that the McWanes would have been among those left in the outside world.

  11. Jesse Brown says:

    But Jennifer, no one has made a case that the “evil” McWane business is a looter business, subsisting on government subsidies and the like to maintain their position in the industry. And if they are of the Orren Boyle type then we must of course act appropriately – boycott their products. That is democracy in the last analysis – vote with your pocketbook.

  12. David says:

    Thanks to all for your thoughtful comments.

    I posted this story, not only to highlight this type of corporate insanity, but in an effort to enlist others in discovering what distribution channels or customers exist that would be responsive to public opinion.

    If McWane products are sold only to other corporations, there may be little that can be done. Municipalities and governments may be more likely to respond. A boycott works best on consumer items.

    I agree that aroused public opinion is only a start. It must be appropriately directed. If you have any ideas, let’s hear them.

    This may be the best way, longterm, for weblogs to impact society.

  13. Rhino says:

    Mcwane continues to violate human and environmental laws daily . I have seen this with my own eyes and have worked at 2 of there pipe plants only to leave due to the fact of total disregard for people at the exspence of a profit.The Govenment should inspect all of there plants wall to wall and im sure they will close them down.

  14. rhino says:

    Mcwane atlantic states killes another worker at the cost of profits again on Thurday 01/20/04 Man killed by 2 20inch pipe crushed to death
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    TITLE: McWane, nation’s most dangerous employer, faces new charges
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    BLOG NAME: Ripples
    DATE: 05/26/2004 11:46:59 PM
    I discussed the finer points of the McWane productivity system in an earlier post. It’s what McWane calls disciplined management, a term reminiscent of slave labor practices during the Second World War. McWane is a stark example of what can
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    TITLE: What Fresh Hell is This?
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    BLOG NAME: The Anti-Idiotarian Rottweiler
    DATE: 12/21/2003 02:07:29 PM
    His Imperial Majesty is not normally one to be in favor of government interference with private business, seeing as how…
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    TITLE: Must Read
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    BLOG NAME: ronbailey’s weblog
    DATE: 12/21/2003 08:50:41 AM
    David St Lawrence has written an important post covering the recent activities of McWane Inc, a corporation with a documented history of endangering both their employees and the environment.

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