Why Did RCA Move, Essay Example

Capitalism, despite the variety of definitions assigned to it, has been correctly understood as an international phenomenon, one that has linked to the experience of diverse immigrants and workers into a single holistic economic system. But conceptual predilections within labor and social history also account for the neglect of transient workers. Labor historians have focused their studies primarily on questions of temporal transition, making distinctions between artisans and workers, working-class awareness and working-class consciousness, pre-modern and modern forms of protest. How class relations and class conflicts were spatially rather than temporally expressed and understood, by contrast, has, as Jefferson Cowie in Capital Moves: RCA’s Seventy-Year Quest for Cheap Labor has suggested, received less attention from historians.

The RCA story demonstrates how developing countries have served as sites for manufacturing and assembling plants and how the flow of international capital prioritizes capital over labor and profits from exploiting human lives. In an excellent discussion of capital mobility, Cowie examines a series of “moves” of the RCA’s radio and television manufacturing across three states and finally to Mexico, “disclosing a detailed and more complex history of capital migration than we tend to hear about in the global era” (Cowie 1-2). Mexico alone has seen a spectacular rise in US-owned, export-based assembly plants (called maquiladoras). Cowie calls significant attention to the market’s revolution from “an actual place” to “a free-flowing surge of capital movement and information that pressures to overcome employees grasp on the pace of history” (Cowie 2). “RCA became one of the first Fortune 500 companies to move overseas”, says Cowie (114), and “they looked for the same things companies look for today: high employment, low wages and an abundance of young women”.

Cowie confirms that at least one large company moved operations repeatedly in its history to escape gradual increases in labor costs and labor organizations. RCA’s first plant was in Camden, New Jersey, where thousands of largely female immigrant employees were employed at low wages. In the 1940s, due to the escalation of labor costs in Camden, RCA opened a plant in Bloomington, Indiana. The area had a high level of unemployment and offered rustic women with a “good work ethic” as employees, and there were mainly women. By the 1960s the situation in Bloomington had changed. Workers were no longer desperate for any job and organized to secure better pay and benefits. This was RCA’s cue to move its assembly operations Memphis where they could hire African Americans at lower wages. Although the Memphis move was never completely implemented, Bloomington workers and the community were forewarned of the fragility of the RCA’s commitment to them. RCA’s last move (yet) has been to Ciudad Juarez in Mexico in search of docile, low-cost labor. The Memphis and Bloomington facilities are now closed.

At each stage, RCA were looking for a cheap compliant workforce but they also had to ensure that the products that these plants made, mostly television sets, could be easily transported to the core market which continued to be the USA. The company also had to calculate strategy on the basis of their capital investment. So it was not the case that the company could move anywhere at any time, rather, Cowie argues that RCA made decisions at key moments about whether to reinvest in existing plants or to search for new cheaper locations. The plant in Mexico, for instance, was not the cheapest option in terms of the cost of product but when transport and other costs were factored in, it made sense for the company to draw on relatively cheap and pliant labor, while enjoying relatively and predicable transport costs.

By concluding his research, Cowie states, “Understanding capital mobility to Mexico in the context of a long-lasting history of plant relocations clearly challenges the view that the globalization for capital signals a radical departure from previous systems of labor control” (179). Furthermore, RCA historically demanded special considerations and infrastructure from local taxpayers at each location as a condition of moving operations there. Cowie quotes E. E. Shumaker, president of the RCA-Victor Company, in a 1929 speech to the Camden Chamber of Commerce: “The Company I represent can only grow if we can build cheaper here than elsewhere. That means taxes must be low. It means we must have a Delaware River port and transportation advantages” (p. 16). Perhaps companies are not so different after all in the new worldwide wealth.

When RCA left, what effect did it have on the communities it left behind?

Despite the display of organized labor’s open support for American capitalism and its continued expansion abroad, many corporate leaders fiercely resisted the spread of unionism inside the United States. This was glaringly evident in 1946 when industry-wide strikes broke out in the auto, steel, meat-packing, and electrical industries. Cowie focuses on the demands by workers in each community and upon the eventual consequences for these communities after RCA left. The result was that Taft-Hartley allowed low-wage, low-tax regions to become the setting for the first wave of U.S. corporate globalization, undermining strength of labor in the rest of the economy. As Cowie shows in his study, the relocation of manufacturing plants of the RCA, or just the threat of it, has long been a weapon in capital’s arsenal to hold workers’ demands in check. Through tracing RCA’s “moves” to escape unions and keep wages down, Cowie explains the pre-NAFTA roots of the “runaway shop”.

For at least two decades, the full implications of the runaway shop in the American South and elsewhere were masked by the postwar economic boom and the hegemony exercised by the United States in the global marketplace. These conditions aided unions as they successfully bargained with employers in major industries. In exchange for higher wages, benefits, and guaranteed pensions, unions conceded the basic prerogatives of management rights in the workplace. These negotiated agreements set standards for unions in industries. The increases in wages among progressively stronger packages for health and retirement profit have stretched well ahead of huge unionized industries, setting standards for all the national employers.

It may seem ironic, but this attention to how class is geographically grounded is closely associated with a growing interest in cross-cultural and global analyses. Yet given the connection between the movement of work and a number of key tensions in working-class culture and experience, this should not be a surprise. Not only do commonalities of class connect the varied local experiences that new working-class studies explores, but local communities are all being affected, albeit differently, by a global change in economic and political structures. More concretely, the loss of jobs that challenges working-class culture in place may be directly related to the growth of manufacturing, often in the form of sweatshops, elsewhere. One of the most interesting trends in new working-class studies is the development of studies that view the working class as both local and global. Jefferson Cowie follows one company’s movement of its production across the United States and finally to Mexico, identifying significant commonalities, including the way women workers in all four communities resisted being seen as simply “cheap labor”. As his work suggests, place and locality matter, in part because communities are connected in ways that may not at first be obvious. Understanding these intersections and issues is especially important today, as the United States and the world face a period of massive social and economic disruption, increasing class stratification, and political uncertainty. Identity seems more fluid than ever; community is fragmenting; national cultures are being challenged; and globalism is growing in ways that are often troubling. Perhaps more than ever before, one must come to understand the connection between race, class, gender, and sexuality and the root causes of social, economic, political, and educational problems.

In the course of time, capital has moved farther and farther across the world. Industrialization and de-industrialization are therefore two sides of the same coil. If the value of a concept like “global labor history” is apparent anywhere, it is here, in research into de-industrialization. As Cowey points out, de-industrialization also means that the vicissitudes of groups of laborers in different parts of the world are connected in complex ways. Cowie reveals some of the connections in his book. He critiques the failures of industrial recruitment and the racial division of labor in one complete chapter about Memphis in his book. The greatest challenge to historians now seems to link the local (material and cultural) aspects of de-industrialization with the “larger picture” of ongoing transnational capital mobility.

Works Cited

Cowie, Jefferson. Capital Moves: RCA’s Seventy-Year Quest for Cheap Labor. The New Press, 2001. Print.