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Rust Belt Resistance: How a Small Community Took on Big Oil and Won

Sunday, 17 June 2012 13:22 By Carl Finamore, Talking Union | Book Review

Rust Belt Resistance(Image: Kent State Univ)It was only a short time ago on April 24, the two-year anniversary of the 2010 catastrophic explosion on the British Petroleum (BP) Deepwater Horizon drilling rig in the Gulf of Mexico, that the government made their first arrest of a BP engineer.

Justice Department charges noted that the greasy, toxic discharge was far more disastrous than reported by the company.

No surprise for the good citizens of Lima, Ohio. The small community of 40,000 learned firsthand in the mid-1990s how the world's fourth largest company in the world specializes in lies and deception as much as it does in oil and gas.

So, be forewarned, if you didn't much like BP to begin with, this book will only add more fuel to the fire.

In Rust Belt Resistance, Author Perry Bush, professor at nearby Bluffton University, tells a story published by Kent State University Press of how top BP officials in London headquarters exhorted workers at their Lima refinery to save their jobs by working "harder and smarter."

All the while, these same executives were actually planning to close the plant with the ready-made excuse that workers failed to turn the unproductive and unprofitable aging plant around.

But, to the surprise, and embarrassment, of these corporate big wigs, workers made numerous operating innovations that resulted in an astounding turnaround. Both production and profits were dramatically increased in the century-old refinery.

Even the local refinery manager took BP officials at their word and worked earnestly to encourage workplace ingenuity. But all was for naught. BP executives pushed aside the well-intentioned plant manager, dodged all the political pleadings of the persistent mayor and even brushed off several serious buyout offers.

Corporate governance was undeterred. The refinery was to be closed, period.

Overproduction on the world market resulted in a temporary drop in prices during the mid-1990s so the BP boardroom privately decided to reduce refining capacity in order to further invest in more profitable U.S. exploration.

A prime example of cutting domestic production amid duplicitous allegations that more oil production in this country is needed, even in protected wetlands and offshore sanctuaries.

In another self-serving "profit versus public" moment, the company was unwilling to sell the Lima refinery to competitors, thus leaving hundreds of families in the lurch.

Of course, this is considered normal business in some quarters as described by Bush. The late free-market apostle and Nobel Prize-winning ultra-conservative economist Milton Friedman is quoted as bluntly stating that "the one and only...social responsibility of business" is to "increase profits."

Corporations Dominate the American Experience

The history professor and author does a very good job tracking similar business decisions that conflicted with communities dating back to the 19th century rail and steel tycoons.

These sections should greatly interest the reader.

One such noteworthy reference is the Supreme Court Santa Clara decision of 1886 which Bush describes as recognizing that corporations "were real persons, deserving of every protection as natural beings under the Fourteenth Amendment. Corporate lawyers quickly used the Santa Clara ruling to induce courts to strike down hundreds of laws regulating corporations and in other ways restricting their autonomy as real persons."

As an aside, Bush mentions a 1938 observation by liberal Supreme Court justice Hugo Black that 50 percent of cases invoking the Fourteenth Amendment, originally intended to define citizenship for freed slaves, actually expanded rights of corporations while only less than half of one percent involved issues of racial justice.

These documented historical references are woven throughout the book and very much helps readers better understand current events.

For example, the extremely controversial Jan. 21, 2010 U.S. Supreme Court Citizens United v. Federal Election Commission viewing "corporations as people" and allowing unlimited corporate contributions to Super PACs can be traced back to the Santa Clara decision.

Resistance of the Few

Ultimately, the Lima refinery was saved and still operates today.

But this success did not come from a broad-based labor or community campaign which I first assumed when eyeing the title of the book. In fact, much like experiences during the original "Rust Belt" layoffs of the 1970s, the mid-1990's threat to Lima was not met by a mobilized and socially conscious movement of thousands.

In fact, relatively muted responses to unmitigated and unloosed corporate greed were the same in both periods – largely, an utter failure by the labor movement and the political establishment to challenge corporate decisions that savaged communities and families.

Along with efforts of the indefatigable Lima mayor, it was ultimately a notable international investor that bailed out the Lima refinery after making BP a very profitable offer.

But there seems to be no end to BP's duplicity in this story. There is another twist that exposes the betrayal that runs deep in the corporate world.

This occurred when BP seriously undercut the new owners of the Lima refinery by keeping secret for a few more days BP's merger with Amoco.

"It was imperative that the Amoco deal remain super-secret until after it had closed its sale of the Lima refinery," Bush reports. The Lima refinery investors assumed that BP would be a major customer. With the Amoco deal, BP had all the refined oil it needed, placing the new Lima refinery owners in dire straits.

"Oh well!" we might have heard Milton Friedman sigh.

But the failure of unions and the community to massively challenge the corporations in the "Rust Belt" period is the larger story. And it had consequences. Lima itself, in the end, was not saved. Today, the former booming, proud industrial little giant in America's heartland stands a different city.

The author points out that the U.S. Census estimated the poverty rate in 2003 was at nearly 23 percent. Another report only a few years earlier estimated another 20 per cent living below that bare minimum.

No More Limas

The book effectively tells a story of greed and corruption in one small town that actually had also swept like a hurricane through hundreds of other communities in the previous two decades. And, it will again unless we learn from our past as documented very well by Professor Bush.

As a country and as a people, we have to ultimately decide upon issues raised by the experience in America's "Rust Belt."

First, and most obviously, we have to definitively reject any notion that cold, calculating corporations have warm blood running through their veins.

Second, and more controversially, we have to seriously consider organizing our natural resources to serve the public interest just as we do with our publically owned national parks. Removing slick speculators and privateers from ownership and control of our treasured oil and gas reserves would mean the common interests of Lima refinery workers and the community would finally be prioritized and valued.

Haven't we seen enough damage done to our communities by oil companies and, I would add, banks? Why is nationalization of these mammoth institutions of narrow, personal self interest not even worthy of discussion in Washington?

Thankfully, these issues are now being raised by Occupy Movements all over this country and all over this world. Nationalizing major industries that have been looted to enrich a handful of selfish and gluttonous owners, for example, is currently a major demand of the freedom and justice movement in Egypt.

If broad discussion of radical solutions and more resolute resistance to corporate greed had been present in Lima, perhaps the city's fortunes would have turned out better.

This piece was reprinted by Truthout with permission or license. It may not be reproduced in any form without permission or license from the source.

Carl Finamore

Carl Finamore is Machinist Local 1781 delegate to the San Francisco Labor Council, AFL-CIO. He can be reached here.


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Rust Belt Resistance: How a Small Community Took on Big Oil and Won

Sunday, 17 June 2012 13:22 By Carl Finamore, Talking Union | Book Review

Rust Belt Resistance(Image: Kent State Univ)It was only a short time ago on April 24, the two-year anniversary of the 2010 catastrophic explosion on the British Petroleum (BP) Deepwater Horizon drilling rig in the Gulf of Mexico, that the government made their first arrest of a BP engineer.

Justice Department charges noted that the greasy, toxic discharge was far more disastrous than reported by the company.

No surprise for the good citizens of Lima, Ohio. The small community of 40,000 learned firsthand in the mid-1990s how the world's fourth largest company in the world specializes in lies and deception as much as it does in oil and gas.

So, be forewarned, if you didn't much like BP to begin with, this book will only add more fuel to the fire.

In Rust Belt Resistance, Author Perry Bush, professor at nearby Bluffton University, tells a story published by Kent State University Press of how top BP officials in London headquarters exhorted workers at their Lima refinery to save their jobs by working "harder and smarter."

All the while, these same executives were actually planning to close the plant with the ready-made excuse that workers failed to turn the unproductive and unprofitable aging plant around.

But, to the surprise, and embarrassment, of these corporate big wigs, workers made numerous operating innovations that resulted in an astounding turnaround. Both production and profits were dramatically increased in the century-old refinery.

Even the local refinery manager took BP officials at their word and worked earnestly to encourage workplace ingenuity. But all was for naught. BP executives pushed aside the well-intentioned plant manager, dodged all the political pleadings of the persistent mayor and even brushed off several serious buyout offers.

Corporate governance was undeterred. The refinery was to be closed, period.

Overproduction on the world market resulted in a temporary drop in prices during the mid-1990s so the BP boardroom privately decided to reduce refining capacity in order to further invest in more profitable U.S. exploration.

A prime example of cutting domestic production amid duplicitous allegations that more oil production in this country is needed, even in protected wetlands and offshore sanctuaries.

In another self-serving "profit versus public" moment, the company was unwilling to sell the Lima refinery to competitors, thus leaving hundreds of families in the lurch.

Of course, this is considered normal business in some quarters as described by Bush. The late free-market apostle and Nobel Prize-winning ultra-conservative economist Milton Friedman is quoted as bluntly stating that "the one and only...social responsibility of business" is to "increase profits."

Corporations Dominate the American Experience

The history professor and author does a very good job tracking similar business decisions that conflicted with communities dating back to the 19th century rail and steel tycoons.

These sections should greatly interest the reader.

One such noteworthy reference is the Supreme Court Santa Clara decision of 1886 which Bush describes as recognizing that corporations "were real persons, deserving of every protection as natural beings under the Fourteenth Amendment. Corporate lawyers quickly used the Santa Clara ruling to induce courts to strike down hundreds of laws regulating corporations and in other ways restricting their autonomy as real persons."

As an aside, Bush mentions a 1938 observation by liberal Supreme Court justice Hugo Black that 50 percent of cases invoking the Fourteenth Amendment, originally intended to define citizenship for freed slaves, actually expanded rights of corporations while only less than half of one percent involved issues of racial justice.

These documented historical references are woven throughout the book and very much helps readers better understand current events.

For example, the extremely controversial Jan. 21, 2010 U.S. Supreme Court Citizens United v. Federal Election Commission viewing "corporations as people" and allowing unlimited corporate contributions to Super PACs can be traced back to the Santa Clara decision.

Resistance of the Few

Ultimately, the Lima refinery was saved and still operates today.

But this success did not come from a broad-based labor or community campaign which I first assumed when eyeing the title of the book. In fact, much like experiences during the original "Rust Belt" layoffs of the 1970s, the mid-1990's threat to Lima was not met by a mobilized and socially conscious movement of thousands.

In fact, relatively muted responses to unmitigated and unloosed corporate greed were the same in both periods – largely, an utter failure by the labor movement and the political establishment to challenge corporate decisions that savaged communities and families.

Along with efforts of the indefatigable Lima mayor, it was ultimately a notable international investor that bailed out the Lima refinery after making BP a very profitable offer.

But there seems to be no end to BP's duplicity in this story. There is another twist that exposes the betrayal that runs deep in the corporate world.

This occurred when BP seriously undercut the new owners of the Lima refinery by keeping secret for a few more days BP's merger with Amoco.

"It was imperative that the Amoco deal remain super-secret until after it had closed its sale of the Lima refinery," Bush reports. The Lima refinery investors assumed that BP would be a major customer. With the Amoco deal, BP had all the refined oil it needed, placing the new Lima refinery owners in dire straits.

"Oh well!" we might have heard Milton Friedman sigh.

But the failure of unions and the community to massively challenge the corporations in the "Rust Belt" period is the larger story. And it had consequences. Lima itself, in the end, was not saved. Today, the former booming, proud industrial little giant in America's heartland stands a different city.

The author points out that the U.S. Census estimated the poverty rate in 2003 was at nearly 23 percent. Another report only a few years earlier estimated another 20 per cent living below that bare minimum.

No More Limas

The book effectively tells a story of greed and corruption in one small town that actually had also swept like a hurricane through hundreds of other communities in the previous two decades. And, it will again unless we learn from our past as documented very well by Professor Bush.

As a country and as a people, we have to ultimately decide upon issues raised by the experience in America's "Rust Belt."

First, and most obviously, we have to definitively reject any notion that cold, calculating corporations have warm blood running through their veins.

Second, and more controversially, we have to seriously consider organizing our natural resources to serve the public interest just as we do with our publically owned national parks. Removing slick speculators and privateers from ownership and control of our treasured oil and gas reserves would mean the common interests of Lima refinery workers and the community would finally be prioritized and valued.

Haven't we seen enough damage done to our communities by oil companies and, I would add, banks? Why is nationalization of these mammoth institutions of narrow, personal self interest not even worthy of discussion in Washington?

Thankfully, these issues are now being raised by Occupy Movements all over this country and all over this world. Nationalizing major industries that have been looted to enrich a handful of selfish and gluttonous owners, for example, is currently a major demand of the freedom and justice movement in Egypt.

If broad discussion of radical solutions and more resolute resistance to corporate greed had been present in Lima, perhaps the city's fortunes would have turned out better.

This piece was reprinted by Truthout with permission or license. It may not be reproduced in any form without permission or license from the source.

Carl Finamore

Carl Finamore is Machinist Local 1781 delegate to the San Francisco Labor Council, AFL-CIO. He can be reached here.


Hide Comments

blog comments powered by Disqus