Emblematic of 1 Percenters, Cooper Tire Punk’d Workers
Four years ago, Cooper Tire told its workers they’d have to sacrifice to save the company. With a straight face, Cooper executives said it was essential for the corporation’s survival that workers take tens of millions in pay and benefit cuts.
The workers understood the link between their livelihoods long term and Cooper’s success. Dedicated and loyal, they accepted the cutbacks. Soon afterward, city and state officials granted Cooper millions in subsidies.
Management didn’t share in the workers’ and taxpayers’ pain, though. The top dogs rewarded themselves with millions in pay increases and a shiny new corporate jet.
Cooper punk’d the workers and taxpayers.
This isn’t an aberration. It’s a pattern. Corporate executives, the 1 percenters, slash workers’ wages, then give themselves big bonuses. CEOs tell mayors and governors their businesses are in such dire shape that they may close or move offshore. Government officials dutifully shovel truckloads of taxpayer cash into CEO hands, then the CEOs grant themselves more perks. The television show Punk’d, in which actor Ashton Kutcher humiliates famous people, took a five-year hiatus. The 1 percenters gave workers and taxpayers no such break. Punking the 99 percent for profit has only escalated.
At Cooper, 1,050 members of the United Steelworkers union in Findlay, Ohio agreed in 2008 to give the company $30 million in concessions when executives cried destitute at the negotiation table. The next year, after witnessing the same sad song and dance, Ohio officials began transferring $2.5 million from taxpayer pockets to corporate coffers.
Between 2008 and 2011, though, Cooper awarded its executives two pay hikes and double bonuses. The year after Cooper told workers they had to suffer for the company, Cooper CEO Roy Armes got a 50 percent pay increase. The next year, in the middle of the recession, his bump was 19 percent, giving him a package worth $4.7 million in 2010.
Cooper 1 percenters also bought themselves a corporate jet and, for $17 million, a Serbian tire company. Since January of 2009, Cooper posted $360 million in income before taxes.
The workers who took the cutbacks and taxpayers who subsidized the company got punk’d.
Then, this year, Cooper top dogs went back to the bargaining table with Steelworkers. Despite the big profits, they demanded more concessions. They planned to punk those workers again.
When workers in Findlay rejected a vague proposal from the company but offered to continue working under the terms of the old contract while talks continued, Cooper locked them out.
This would be disturbing if Cooper were a rogue company. But what’s more alarming is that it’s not. Profitable companies routinely blackmail workers and townspeople. They threaten to close or move to Mexico or China if workers won’t take cuts and if politicians won’t grant tax breaks. After the demands are met, the corporate executives shower themselves with cash.
Think of hugely-profitable Wal-Mart. The largest retailer in the world told its workers in October that it would substantially cut health care coverage for part-timers and significantly increase premiums full-timers must pay. By contrast, Wal-Mart’s CEO Mike Duke made sure he wouldn’t suffer. He had the board of directors change the way his pay is calculated when it looked like declines in sales at some stores would mean less compensation for him.
No matter his performance, the CEO is richly rewarded. No matter their performance, workers get cut. Punk’d.
This holds true on Wall Street too, where bank performance this year was lackluster. After declines in bank stock value, mid-level workers learned in recent weeks their bonuses would shrink. But not so for CEOs. Shares in Citigroup, for example, fell 44 percent, but its CEO, Vakram S. Pandit, was awarded a $16.7 million retention bonus as well as $3.7 million in stock while many Citigroup workers were told last week they would receive no bonus or a small one.
Mitt Romney’s Bain Capital is another example. It operates just like other vulture capital firms. They buy struggling companies, borrow against the assets, fire workers, cut the pay and benefits of the remaining ones, and take a huge chunk of that money and give it to vulture capital executives. Often the purchased companies, struggling under the excessive debt, go bankrupt, killing all the workers’ jobs.
The Wall Street Journal evaluated 77 deals Bain made while Romney was there. Of those companies, 22 percent closed or went bankrupt within eight years of the Bain investment. Even so, Bain executives made millions for themselves off those deals.
At the same time, Bain took handouts from taxpayers. Phil Mattera of Dirt Diggers Digest provides a list of tens of millions in taxpayer-financed subsidies Bain companies collected.
Workers and taxpayers got punk’d.
This isn’t a criticism of free enterprise or capitalism. It’s about civic duty and patriotism. A corporation has obligations to more than just its executives and shareholders – especially when the Supreme Court contends it’s a person. Every person is beholden to the community and country that provide nurture, protection and support. A corporation is accountable to its workers, its customers, its community, its country.
The executives who run American corporations have forgotten that. Or they reject it. These are the same CEOs who rail against regulation ensuring public safety and laws ensuring worker rights. They don’t want to be told they can’t pollute or let explosive methane collect in mines. And they don’t want to be told they can’t fire workers just for trying to form unions.
A little more regulation and a little less taxpayer subsidy might remind corporations of their obligations.
Workers and communities aren’t asking for the power to punk employers. They’re just asking not to be punk’d.