Alabama Firestorm over foreign workers
Alabama Firestorm over foreign workers
Date: Friday, July 25, 2003 1:11 PM
JOB DESTRUCTION NEWSLETTER
www.ZaZona.com
Alabama gave Mercedes $253 million in subsidies to build its original
plant in the mid-1990s and another $119 million for the $600-million
expansion. Mercedes promised jobs for state residents in some instances
they are hiring cheap laborers from Poland.
These Polish workers are using B1 visas to enter the U.S.
But the men of Apt. 1404 say they will net -- in Polish money -- the
equivalent of $1,100 a month. They say their checks are deposited in
their banks in Poland and Transsystem pays their living expenses while
in the United States.
Stan Karczynski, president and business manager of the Sheet Metal
Workers Local 73 in Chicago, said that the workers told him they make
about $5 or $6 an hour, plus overtime. In Polish money that works out
to about $1,100 a month.
In comparison, members of Local 48 of the Sheet Metal Workers union in
Birmingham, Ala., earn an hourly wage of $20.71. What the article
doesn't mention is that the wage differential is actually far worse and
here is the key phrase that explains why:
But the men of Apt. 1404 say they will net
-- in Polish money --
the equivalent of $1,100 a month. They say their
checks are deposited in their banks in Poland and
Transsystem pays their living expenses while in
the United States."
In this case, Transsystem acts as a bodyshop that subcontracts Polish
workers to Mercedes. Transsystem deposits the paycheck directly into
the employees Polish bank account. Transsystem deposits the money in
Poland because they don't have to pay taxes or FICA. The Polish B1 visa
holders are given a "living allowance." Living allowances are tax free
so the Polish workers don't pay into our system.
The irony of this legal tax avoidance is that they are entitled to
services that are funded by the taxes American workers are paying. They
use Alabama's city parks, roads, and other infrastructure without
having to pay for it.
This is a win-win situation for the B1 worker and the bodyshop because
the tax-free status allows them to underbid any US citizen that's
saddled with Social Security and income taxes. If an American worker
were willing to take $5 an hour to do the same work, they still
wouldn't be hired because they would still be more expensive. This
tax-free status gives the foreign worker an unbeatable advantage in the
job market.
For more information on "living allowances" go to:
http://www.zazona.com/ShameH1B/Library/Archives/SaveSS.htm
http://www.wsu.edu/payroll/nonUS/GuidelinesTaxation.htm
"Compensation is sourced at the location where the activity is
performed. If the location of activity is outside the United States,
the income is not taxable and not reportable."
So here is what Alabama gets for investing over $370 million to create
jobs US:
$0.00 in taxes from B1 visa holders at Mercedes
increased jobless rate
http://www.freep.com/money/autonews/worker24_20030724.htm
Firestorm over foreign workers
BY JENNIFER DIXON
FREE PRESS BUSINESS WRITER
July 24, 2003
COTTONDALE, Ala. -- At 6:20 in the morning in central Alabama, the six
men of Apt. 1404 throw their lunches into plastic grocery bags, dash
down the stairs to the sidewalk, and climb into a white van.
Then it's off to nearby Vance, where DaimlerChrysler AG is doubling the
size of its Mercedes-Benz assembly plant. The man are among those
building the portion where luxury vehicles will be painted, clocking as
many as 65 hours, and as many as seven days a week, on the job.
Their take-home pay, according to them: the equivalent of $1,100 a
month.
But Piotr and Piotr, Jerzy and Andrzej, Stanislaw and Edward do not
complain. Things could be worse. They could be back home in Poland
earning just a fourth of what they make in the United States.
A spokeswoman for Mercedes says the men of Apt. 1404 and dozens like
them are in the country legally, on visas that permit them to work at
the plant because they are installing a highly specialized paint
system.
"Mercedes-Benz always encourages its contractors to meet all federal
and state laws," Linda Sewell said. "That's very important to us."
But union officials question whether the visas were obtained under
false pretenses. They say the Polish men are doing the same work as any
skilled U.S. pipe fitter or sheet-metal worker, and that the Poles,
along with men from elsewhere in Eastern Europe and Britain, were
imported just because they are cheap labor.
A member of Congress is investigating the visas, while the federal
Bureau of Immigration and Customs Enforcement says the men's B1 visas
are supposed to be used by foreigners on short-term business, not for
extended stays.
For the Polish workers, this is the American dream, circa 2003. They
live here for three to six months in a furnished apartment supplied by
their bosses. While they earn only a fraction of their American
counterparts, it is still enough to furnish their homes in Poland.
For U.S. workers, this is the hard reality of the American economy,
circa 2003, where large international companies export jobs to places
like China and India and, even more disquieting, import labor from
overseas.
"I imagine that's the way America is working these days," said Ezzard
Davis, a 51-year-old union sheet-metal worker from Mobile who would
like to work on the Mercedes site, about a four-hour drive away. "It's
unfortunate. It's a shame that if they're not sending jobs out of the
country, they're bringing people into the country."
And never mind that the Polish workers represent only a fraction of the
6,500 workers who have helped expand the Mercedes plant. What really
hurts, Davis and union leaders say, is that Mercedes got $253 million
in incentives, mostly from state taxpayers, to build its original plant
in the mid-1990s and an additional $119 million for the $600-million
expansion.
They thought the tax breaks were supposed to create jobs for Alabama
workers. Now, with the national unemployment rate at 6.4 percent, and
at 5.7 percent in Alabama, dozens of jobs created by Mercedes'
expansion are going to foreign workers.
"I think that it's a crying shame that we're giving tax breaks to a
company that's allowing foreign workers to come in. I don't appreciate
it at all, and the Alabama people shouldn't appreciate it," said Robert
Payne, an organizer with the Sheet Metal Workers Local 441 in Mobile.
Polish imports
Union leaders from Michigan and Alabama have asked members of Congress
to investigate, saying the foreign workers may have improper visas.
Diana McBroom, district director for U.S. Rep. Sander Levin, a Royal
Oak Democrat, said the Bureau of Immigration and Customs Enforcement
has agreed to Levin's request to investigate the men's visas. The
inquiry began in early June.
"Our office would be deeply concerned if there were individuals or
entities trying to take advantage of a system that is designed to allow
individuals to come into the U.S. fairly, and work where there is a
need, without taking jobs away from American workers," McBroom said.
Mercedes spokeswoman Sewell said she was unaware of Levin's inquiry.
Levin's office was alerted to the situation by Bob Donaldson, business
manager for Local 292 of the Sheet Metal Workers union in Troy.
Donaldson visited the Mercedes site this spring with a Polish-speaking
colleague, Stan Karczynski, president and business manager of the Sheet
Metal Workers Local 73 in Chicago, at the request of union leaders in
Birmingham, Ala.
Donaldson says that no other auto plant paint shop in the United States
has been built with imported construction workers. Other automakers
building or expanding factories in Alabama -- Hyundai, Honda and Toyota
-- all say they use U.S. labor.
The foreign workers at Mercedes are employed by two companies --
Transsystem of Poland and Gregorec Ltd. of Britain. The businesses were
hired by Eisenmann, a German company that is installing the paint shop.
Mercedes is expanding its factory to add a second assembly line, which
requires a second paint shop. The factory will produce two vehicles: a
new M-class SUV and the Mercedes-Benz Grand Sports Tourer.
The first Transsystem workers arrived in January, and as many as 37
have come to work at Mercedes, including the men of Apt. 1404. Today,
there are 32 Transsystem and 23 Gregorec workers at the site.
The Polish workers said they stay either three or six months, and when
they return home, others are brought in to replace them. They say they
travel from job to job, and from country to country, doing similar
work.
Transsystem says it specializes in works for paint shops. Gregorec is
an industrial pipe-fitting company.
Sewell said the Gregorec and Transsystem workers have B1 visas. Those
visas allow foreign workers to come to the United States to install,
service or repair commercial or industrial equipment or machinery
purchased from an overseas company. The foreign worker must have
specialized knowledge.
Sewell said Eisenmann and Transsystem assembled, tested and
disassembled the paint shop equipment in Germany. It was shipped to
Alabama and reassembled using the same workers who built the equipment
overseas.
"This is a common practice, not only in the automotive industry, but in
many industries, when you're dealing with complex equipment and
manufacturing processes," Sewell said.
Eisenmann has done work for Ford Motor Co. and General Motors Corp.,
but used local labor. The difference this time: The company says new
technology requires specialized workers from Transsystem and Gregorec,
which helped develop the process for assembling the paint system.
The Polish men themselves and union leaders like Donaldson and
Karczynski, who have seen their work, say it is not specialized and
could be done by Americans.
"I paint, I cut," a Polish worker said. "I do everything an assembler
has to do."
An industry insider also said installing paint shops is not
complicated.
"Hundreds of companies in the United States do that. I could understand
if they were installing a nuclear reactor, but they're installing sheet
metal in a paint shop," the insider said, speaking anonymously for fear
of jeopardizing future work with automakers.
"Any U.S. firm could do that."
The men's visas raise a second issue: Are they the proper visas for
workers who are in the United States for months at a time, living in an
apartment and working six or seven days a week?
Sarah Mouw, a spokeswoman for the Bureau of Immigration and Customs
Enforcement, said: "Typically, an alien does not work and live in the
U.S. on a B1 visa. A B1 visa is to do business here, not to have a job
here."
Cornelius Scully, who retired from the State Department in 1997 after
35 years in the visa office, said the situation involving the Polish
workers puts them in the "grayest of the gray" area of immigration law.
He said the Polish workers have a legitimate reason to be in the United
States if the work they are doing is highly specialized.
"If it's routine stuff that anyone can do, it's not legitimate. The
question is who is telling the truth."
The paycheck
Union leaders also question the workers' wages and say Transsystem is
undercutting the paychecks of U.S. laborers.
The size of the workers' paychecks depends on who is asked.
Marola Szubart, human resources manager for Transsystem, said the
workers net about $2,800 a month.
But the men of Apt. 1404 say they will net -- in Polish money -- the
equivalent of $1,100 a month. They say their checks are deposited in
their banks in Poland and Transsystem pays their living expenses while
in the United States.
Karczynski said the workers told him they make about $5 or $6 an hour,
plus overtime.
In comparison, members of Local 48 of the Sheet Metal Workers union in
Birmingham, Ala., earn an hourly wage of $20.71.
Sewell from Mercedes declined to discuss the men's wages. An Eisenmann
executive said he was unfamiliar with the foreign workers' pay, working
or living conditions.
"I have no knowledge of what they are getting paid," he said. "It must
be a decent salary or they wouldn't be here." When Mercedes built its
plant in the mid-1990s, it used another German company, Durr
Industries, to install the paint system with U.S. workers.
Brent Newsome was a general foreman on the job. Today, he is business
representative with Local 48. He, Sam Rollan Jr., business manager for
the local, and Sammy Dodson, president of the Central Alabama Building
and Construction Trades, say the decision to use foreign workers is all
about money.
"They think they can come down here to Alabama and nobody will figure
out what they're doing," Dodson said.
" 'Bout right," Newsome said.
They don't fault the Poles. "They're just being taken advantage of,"
Dodson said.
Apt. 1404
It is Saturday evening in Apt. 1404, and as the six men come home from
work, it is time for a swim in the pool, housekeeping and a procession
of visitors.
The men have worked six days straight.
Andrzej scrubs a dirty pan and tosses out two empty vodka bottles.
Jerzy vacuums the living room's kelly-green carpeting, then steers the
Dirt Devil down the hallway toward the bedrooms. Piotr and Piotr peel
potatoes over a garbage bag in the dining room.
Andrzej boils the potatoes in one pan; in another, he cooks chopped
onions in an inch of oil.
Soon, dinner is ready. Andrzej fills each plate with potatoes mashed
with the onions, adds a couple of meat patties and drizzles gravy on
top. The men add a serving of homemade coleslaw.
The roommates eat in silence, their forks clinking against the plates.
There are no napkins at the table, no salt and pepper shakers, nothing
to drink. They finish in five minutes.
The television is on at all times, tuned to cable stations that promise
segments on "Hot Young Hollywood Stars."
After dinner, the men drift to the living room or the small balcony for
a smoke.
As the sky darkens, Andrzej gets out the vodka. He lines up several
glasses on the kitchen counter, pours a large shot into each, and adds
a splash of Sunny D with Calcium, an orange drink.
Cheers, they toast each other.
Sunday is a short day. While they still start at 7 a.m., they are done
by 1 p.m. Tonight, they can relax.
Entire days off are precious. On one of them, they drove to Florida and
back, just to see the sand and the water and the palm trees. They told
their story in their native Polish through Free Press photographer
Sylwia Kapuscinski, giving only their first names.
As they talk, some of their friends stop by to visit. One who is
celebrating because he is returning to Poland stumbles in, drunk. He is
asked to leave. Too much vodka, a worker says.
Rural Alabama is not what the Polish men expected, another worker says,
in English.
"Until we came here, everyone saw America in the movies -- New York,
Chicago, Miami," said Maciek, 25. "We were a little bit shocked when we
came here -- that people live in trailers, there are forests, no
skyscrapers."
He says the Transsystem workers were brought to the United States
because Eisenmann trusts them. The older Piotr says it is because they
are the best workers -- they work the longest days and can get the job
done on time, so 2,000 American people can start working in the
factory.
The Polish men's paychecks will be waiting for them at home.
"It's a lot of money," Maciek said. "There are jobs in Poland, but here
you can earn more money. Working here, you can build a house or buy a
flat. If you stayed in Poland, you couldn't do that."
Contact JENNIFER DIXON at 313-223-4410 or dixon@freepress.com.
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