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Tuesday, June 20, 2017

Where factory jobs are plentiful, Trump's supporters want better


HUMMING ALONG: Record sales of recreational vehicles mean plenty of jobs at factories in and around Elkhart, Indiana, including this LCI Industries glass components plant. LCI says it is working to improve conditions that many industry employees say make their jobs unattractive.
REUTERS/Joshua Lott

Pummeled in the Great Recession, Elkhart, Indiana, bounced back quickly, thanks to a boom in the RV business. But the work is grueling for the pay, and many locals hope the president's pledge to bring jobs back means bringing good jobs back.

By TIMOTHY AEPPEL
Filed June 20, 2017, 2 p.m. GMT

ELKHART, Indiana—While many politicians, including President Donald Trump, say the United States desperately needs more manufacturing jobs, this small industrial city has more than enough.
The problem, for many workers here, is one of quality, not quantity.

That's the case with Brandon Seitz. The rail-thin 32-year-old worked for 12 years on an assembly line at one of the local recreational-vehicle factories that have made Elkhart the RV Capital of the World. The job, Seitz says, nearly wrecked his health.

His pay, as for assembly workers at most RV factories, was a combination of a low hourly wage and a large production bonus, referred to as the "piece rate." The frantic rush to meet output targets — and thus earn bonuses — made it easier for accidents to happen, he says. During his first year, he tore tendons in his knee when a steel frame hit him.

And then there was the heat. Most RV factories lack air conditioning. "I was constantly sweating," he says. "There were days in summer when I drank two-and-a-half gallons of water and was still dehydrated." In 2014, surgeons cut into his back and used a laser to break up and remove a large kidney stone that they said was caused by dehydration.

That's when Seitz vowed never to work on an RV production line again. "The money is good," he says, but "it's just so hard on your body."

A manufacturing revival was well under way in Elkhart by the time Trump began promising one during last year's presidential campaign. During the Great Recession of 2008-2009, the local unemployment rate hit 20 percent, among the highest in the country. It has since recovered to a seasonally unadjusted 1.9 percent, its lowest in nearly two decades and far better than the national rate, an adjusted 4.3 percent.

The RV industry accounts for a big chunk of that improvement. Local officials estimate that half of jobs here are related to manufacturing and that half of those are linked to RVs. Today, Elkhart County and the surrounding region produce 85 percent of U.S.-made RVs. Unit sales last year were the highest since the 1970s.

HOT JOBS: Most of the RV plants in Elkhart, like this Thor Industries assembly shop,  lack air conditioning. Tough working conditions are why many RV workers say they hold out hope that U.S. President Donald Trump can fulfill his campaign promise to bring better manufacturing jobs back to the country. REUTERS/Joshua Lott

Judging by such numbers, times are good in Elkhart — not the sort of place to find those white, working-class voters who, feeling forgotten by the political class, helped propel Trump to the presidency.

Yet, people here voted two-to-one for Trump, more so than even in deeply Republican Indiana as a whole. And a few months into the new administration, despite the investigations into alleged Russian involvement in the election, and despite the president's failure so far to get much of the agenda he ran on enacted, support for Trump is strong among local workers, including many Reuters interviewed who stayed away from the polls last November.

Seitz is one of the more recent converts. He didn't vote in the November election. He says he wasn't sure whom to believe. Now, he says, he would probably vote for Trump in the future. "He's already living up this promise to bring work back from Mexico," Seitz says.

He and many other workers interviewed for this article don't want more jobs like the ones readily available in Elkhart. They want jobs with steady, predictable pay for the long haul – the kinds of jobs that decades ago helped build and sustain a solid middle class in Elkhart and across the industrial Midwest. And they blame immigration and the forces of globalization for reshaping the work that is available.

OFF THE LINE: Brandon Seitz stands outside the Goshen, Indiana, factory where he worked on an RV assembly line for 12 years, until the job, he says, nearly wrecked his health. He would probably vote for Donald Trump in the future, he says, because the president is already bringing jobs back from Mexico. REUTERS/Joshua Lott

"I really think (Trump) can make America great again," says Mary Swihart, 28, who voted for Trump. She works in an RV factory here owned by Thor Industries Inc, the nation's largest RV maker, where she earns about $15 an hour stringing wires into harnesses that go into the vehicles.

She especially likes Trump's pledges to halt illegal immigration and speed up deportations. Like many workers here, she believes that immigrants are willing to work for less than native-born workers and don't complain as readily about bad conditions.

"If we sent them back, it would mean more jobs for legal Americans," she says.
Elkhart County's population is about 75 percent non-Hispanic white. About 30,000 Hispanics live in the county, according to Census data, forming a small but fast-growing community.

Robert Warren, a former Census Bureau demographer who is now a senior visiting fellow at the Center for Migration Studies in New York, has estimated the number of illegal immigrants in states and counties across the U.S. By his calculation, about 9,400 illegal immigrants, mostly from Mexico, live in Elkhart County, and of those illegal immigrants who work, 67 percent have some type of factory or production job.

Officials at Thor and other local RV makers say they don't pay immigrants less and don't hire undocumented workers. "There's no difference in pay," says Jeffery Tryka, a Thor spokesman. "Every one of our workers is required to provide documentation that they're here legally — so they're all paid the same."

As for the work, Thor and other producers say their plants are safe, despite the hectic pace. "There's no question it's a physically demanding job," Tryka says.

Ken Julian, Thor's vice president of administration and human resources, says the industry is constantly improving the ergonomics of assembly line jobs to make tasks easier and safer for employees of any age. To deal with the heat, he says, they also keep water or other drinks on hand, and "if we see a 100-degree heat index, we'll shut the plant."
Industry executives say the bonus system is popular with workers, since it allows them to earn more money in less time.

Attractive or not, jobs in the RV industry are emblematic of the kind of work that is increasingly the best option for blue-collar workers. The industry is prone to booms and busts, as wells as shorter-term fluctuations throughout the year, which can mean frequent layoffs, though that hasn't been a problem amid the current production boom.

The frenetic pace of piece work means many people stay at the best-paying assembly line jobs only for as long as they can stand it or until their health or stamina falters. When they no longer can, these workers often move into lower-paying jobs.

That's what Seitz did after his kidney-stone surgery. He now works in the service department at Jayco, an RV maker recently acquired by Thor. He figures he puts in about 48 hours a week, compared to the 35 hours he averaged on the assembly lines — and his weekly take-home pay is $500 less. But he much prefers working at his own pace and interacting with customers.
His former employer, Forest River Inc, part of Warren Buffett's Berkshire Hathaway Inc, didn't respond to requests for comment.

Workers jump from job to job in search of better conditions or to maximize their earnings before the next downturn. At many RV factories, the annual turnover rate is 100% or higher – meaning a number equal to the total workforce or more is replaced each year. Much of the churn occurs as the companies struggle to fill the same lower-end, entry positions over and over again.

OLD SCHOOL: Assembly of RVs, as at this Thor Industries plant, is more akin to home construction than the automated systems that dominate auto manufacturing. REUTERS/Joshua Lott

RV workers are among the "anxiously employed," says Andrew Downs, director of the Mike Downs Center for Indiana Politics in Fort Wayne.  Trump appealed to these workers by saying that "You're working hard, but you're still not doing as well as you'd like" and that there was a time in the past when their lives — and the jobs available to them — were better.

That message resonated in Elkhart, once home to a more diverse industrial base that provided steady middle-class paychecks. Before it was the RV capital, Elkhart was known as the Band Instrument Capital of the World for the dozens of musical-instrument factories that operated here. Most of that work has moved to China.

Elkhart also had a huge pharmaceuticals company. Miles Laboratories Inc invented the diabetic test strip here and once had Elkhart factories churning out everything from Flintstones vitamins to Alka-Seltzer tablets. Germany's Bayer AG bought Miles in 1978 and eventually moved everything away. All that's left is a roadside marker honoring the test strip.

What's happened in Elkhart has occurred across industrial America. The average wage on U.S. factory floors dropped below the average for all private-sector workers in 2006, and the gap has widened since. Manufacturing workers now earn an average of $20.79 an hour, according to the U.S. Bureau of Labor Statistics, below the $22 an hour for all workers. Service workers, meanwhile,

pushed ahead of their factory-floor counterparts in 2008 and now earn an average of $21.79 an hour.
A 2016 study by the Labor Center at the University of California, Berkeley, concluded that a third of production workers in the U.S. earn so little that they qualify for some form of government assistance, such as food stamps. Many of these workers weren't putting in enough hours to earn more, the study found, but about a third worked at least 35 hours a week.

FOREIGN INFLUENCE: Stacy Curtis, who worked in Elkhart's musical-instrument industry before Chinese companies grabbed a big part of the U.S. market, blames Mexican immigrants for her inability to find stable employment in recent years. She says she was cheered by Donald Trump's tough talk on immigration. REUTERS/Joshua Lott

"You go look in these factories today and you hardly see any whites or Americans—they're all Mexicans."
Stacy Curtis, unemployed Elkhart worker
Stacy Curtis says she voted for Trump because she liked what he said about bringing back "good" jobs and for taking a hard line on immigration. Curtis dropped out of school at age 16 to work in a van-customization shop. She later landed a sought-after job at one of the town's musical-instrument factories. It was a union job, with good pay, and it was prestigious for the skills needed to fashion thin metal into trumpets and trombones.

In 2006, workers at Curtis's factory went out on strike after the company, the Vincent Bach division of Conn-Selmer Inc, demanded changes in work rules that would allow it to pay lower wages to compete with Chinese rivals. The strike ended after three years, when workers severed their links to the United Auto Workers and accepted the company's offer. Curtis didn't go back to making trombones.

As she sought factory jobs in recent years, always at far lower pay, she says she felt at a disadvantage because of her background. "You go look in these factories today and you hardly see any whites or Americans—they're all Mexicans," says Curtis, 54.
Now unemployed, Curtis has applied for Social Security disability benefits, citing fibromyalgia and lupus.

Sour attitudes about immigrants are part of a broader hostility to the forces of globalization that Trump's campaign tapped into. And in the eyes of some people, comments like Curtis's reflect a distinctly racial component to the Trump phenomenon in the Elkhart area.

Tracy DeGraffreed, 48, is an African-American. He voted for Clinton in November. He has spent most his career in the RV business — many years for suppliers and, since 2015, running his own business as a trucker, towing RVs to dealerships.

He says he understands why many of his white neighbors support Trump. "As an African-American, we've always been struggling," he says. "But the Caucasians have always had what they wanted. Now they're feeling the pain the others have always felt."

RACIAL ANGLE: Tracy DeGraffreed, a self-employed RV delivery driver, says many white voters in the Elkhart area supported Donald Trump because he spoke to the "pain" of their struggle to find solid, secure jobs that used to be plentiful. REUTERS/Joshua Lott

"The Caucasians have always had what they wanted. Now they're feeling the pain the others have always felt."
Tracy DeGraffreed, RV hauler
That "pain," he says, is the struggle for well-paid, secure jobs that were once relatively plentiful in Elkhart. "That's why Trump won here."

Voters' frustration was fueled in the middle of the campaign last year when two manufacturers with deep roots in Elkhart announced they were moving work abroad.

CTS Corp, a maker of auto electronics that began here in 1896 as the Chicago Telephone Supply Co, said it was moving all of its Elkhart production abroad to "simplify" operations, cutting 230 jobs here and elsewhere in the U.S. Crown Audio, a subsidiary of Harman International Industries Inc that makes amplifiers, said it was moving 125 production jobs to Mexico and California in order to stay competitive.

Over time, moves like that have left the local economy increasingly reliant on RV manufacturing.
Each factory is typically dedicated to a handful of models. The result is a proliferation of workplaces. Thor, which had sales last year of $4.6 billion, operates 190 plants, most of them in or around Elkhart. The company's complex on the outskirts of Goshen, down the road from Elkhart, has 30 separate plants sprawling out in a grid of metal buildings and parking lots.

The factory buildings are more like workshops than the high-tech assembly lines used in the auto and other modern industries. The process is similar to home construction; workers hoist walls and install sinks as the RVs inch along while others crawl over, under and inside the vehicles.

None of the plants are unionized and never have been. Nearly all of them pay by piece rate — something most other industries have abandoned. Workers receive a low base, about $10 an hour, and earn bonuses for hitting production targets.  At assembly plants that make the most expensive or in-demand models, workers can earn more than $60,000 a year when operations are humming.

TRADEOFF: Kirsten Southern was paid by "piece rate" in a series of RV assembly jobs until the constant fatigue that the work caused prompted her to take a job for lower pay as a receiving supervisor for LCI Industries. REUTERS/Joshua Lott

Kirsten Southern, a 34-year-old mother of three, was paid by piece rate in successive jobs on RV production lines at two different companies. The work "tears your body down after a while," she says. "A lot of bad things happen when piece rate comes into play, because you're trying to rush to get things done," she says. She was never injured on the job, she says, but she was constantly exhausted.

She now works for lower pay as a receiving supervisor at an LCI Industries plant in Goshen, making sure deliveries are accounted for and moved to the production line when needed. She has a fixed schedule, and she says she's generally treated better.

Had she voted last fall, she says, she would have voted for Trump. "I know Trump is for bringing the jobs back," she says, "and I agree with that."

Piece rate pay fuels the hectic pace in the factories. That, workers say, has given rise to increased numbers of "speeders," people who take methamphetamines and other stimulants on the job. Manufacturers say they enforce strict drug-free policies.

Thor requires drug tests of job applicants and tests workers after accidents if drug use is suspected, says Julian, the Thor executive.

Southern's employer, LCI, is one of the industry players taking steps to try to make the work more appealing. Nick Fletcher, chief human resources officer, says when he arrived four years ago, turnover at the company was over 100 percent. It's now less than 40 percent, and he expects it to continue falling.

Fletcher has been on a campaign to end the piece rate system, which "doesn't incentivize workers to be safe or produce high quality," he says. More than 75 percent of the company's workers are now on fixed hourly pay, averaging about $17.50, he says.

Safety has improved, too. Fletcher points to a chart on his computer screen showing that the number of "recordable incidents" has fallen to 3.84 now from 6.22 in 2013. (Recordable incidents, a measure used by federal safety regulators, is the number of workplace injuries or illnesses that require more than basic first aid multiplied by 200,000 and then divided by number of hours worked.) The improvement is especially notable, Fletcher says, because it happened as LCI added 3,000 workers, for a total of 8,000.

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For the majority of RV factory workers, though, conditions remain much as they have been for years.
Cassidy Davies jumped from one RV job to another earlier in his career, he says, because the atmosphere in many plants was unbearable.

"I've seen people get into fist fights because somebody else used their power-drill battery," says the 29-year-old. "And the money is constantly going up and down" as production rises and falls.
He now works in a large Thor factory, which he says he likes better than any of the other places he worked. That doesn't mean he thinks it's the sort of job on which he can build a career.
"I really don't know how long I can do it," he says, "because you're beating the crap out of yourself every day."

Davies says he has never voted. "I don't like the way Trump talks to people, the way he treats people," he says. "But I do agree with some of the things he's doing," including Trump's talk of bringing back good manufacturing jobs.

STACKING UP: The lot of a Thor Industries plant in Elkhart is chock full of new RVs as the industry enjoys sales volumes not seen since the 1970s. REUTERS/Joshua Lott

Hard Labor
By Timothy Aeppel
Graphics: Maryanne Murray
Photo editors: Steve McKinley and Chris Helgren
Design: Jeff Magness
Edited by John Blanton
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