Bringing globalization home: Boom, Bust, Exodus by Chad Broughton

Last updated on: March 26, 2015 at 2:08 pm by Guest Contributor

Bringing globalization home: Boom, Bust, Exodus by Chad Broughton 2015-03-26T14:08:00-05:00 Guest Contributor

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This review was originally posted at our sister blog The Working Catholic. Thanks to Bill Droel for letting us share it with you!

It is hard to get a handle on globalization because it includes nearly instant communication, instant transfers of money, Cover for Boom, Bust, Exodus plus trade policies, including tariffs and NAFTA. It is also the IMF, currency rates, immigration policies, large-scale assembly and distribution of goods, speculative trading of complex financial instruments, outsourcing and an international drug market, plus sweatshops, changes in government regulation, changes in the protection of patents, changes in labor relations and fluxionary natural resource markets. It is the education gap and the income gap as well as a new corporate culture of mergers, bankruptcies, short-term bottom lines and so-called scientific management techniques.

Yet Chad Broughton helps us understand it all with a compelling “tale of two cities”: Galesburg, Illinois which is off Interstate 74, about 200 miles west of Chicago and Reynosa, Mexico, just across the border from McAllen, Texas. His Boom, Bust, Exodus (Oxford University Press, 2015) weaves around a handful of workers in each place.

The Galesburg part of the story centers on Maytag Corporation, founded in 1907 by Frederick Maytag. He was authoritarian, but over time negotiated with a union. Maytag invested in the infrastructure of his Iowa town, the factory’s location. He rewarded loyal workers with monetary gifts and regularly conversed with those on the shop floor, those in sales and the retail dealers. This family ethos continued with modifications under his son and grandson. In the mid-1980s the appliance company opened a plant in Galesburg. In those years it also, Broughton explains, evolved away from its family credo as displayed in the plant’s lobby: “Our management must maintain a just balance among the interests of customers, employees, shareholders and the public… None can long benefit unless the needs of all are served.” Maytag adopted “a corporate governing structure,” beholden exclusively to stockholders.

Maytag closed its Galesburg factory in 2004. CEO Ralph Hake serves as the villain. He is hardly responsible for all the downsides to globalization. Suffice it say though that his obsession with quarterly stocks, his lack of critical thinking and his compassion deficit ruin the company. Yet, consistent with his short-term vision, Hake did fine. He sold his home for $641,000, bought a Las Vegas mansion and then wrote a hate book. By the way, he got a $10million parachute plus millions more in stocks.

Maytag opens a plant in Reynosa, but there too it finds “a way to slough off…any sense of obligation to the place.” The Reynosa plant is one of many border factories for U.S.-based companies (maquiladoras) that beginning in 1987 set off enormous migration from rural areas of Mexico; a process during which the admittedly poor but family-rich and relatively safe life of villages gives way to danger and uncertainty in the manufacturing towns of both countries.

Laura Flora is a Mexican drawn to Maytag in the hope of a better life. Yet “from the moment she started at Planta Maytag…her circumstances turned bleak,” Broughton details. She like others earns about 78 cents an hour; eventually about $1.35. Her daughters now live in a risky environment. By 2008 Maytag, then owned by Whirlpool, closes its Reynosa plant and Flora loses her home. She is one example, Broughton concludes, of “the low road industrialism of North America: low wages, low skill requirements and low retention.”

Mike Allen is a pathetic character during this episode. He was ordained an Oblate priest in the mid-1960s. He resigned about ten years later and through contacts with business and agencies he became the “most diehard of capitalists.” He was, Broughton details, “the main actor in the explosive bi-national boom taking place in [the McAllen/Reynosa area].” Sadly, Allen continues to say the poor workers are his parishioners while measuring “his success exclusively in the language of business and economics,” avoiding “responsibility for what was happening in Reynosa.” But Allen kids himself. “During the day, the multinationals held sway over the formal economy. At night, El Cartel dominated the lucrative informal sectors,” particularly the drug market.

A journalist is not obligated to solve the situations he or she describes. Broughton has no easy formula for reviving the working class in the United States or ending the exploitation in Mexico. He does, however, provide a few suggestive examples, including humane and honest worker centers in Mexico staffed by heroic church leaders and some renewal energy manufacturing in the United States. Broughton’s achievement is a superb profile of real workers in real places with just enough analysis, but not with premeditated moralizing.

Bill Droel is editor of INITIATIVES (PO Box 291102, Chicago, IL 60629), a newsletter about faith and work.

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