The Associated Press July 23, 2011, 10:51AM ET

Va. union drive puts IKEA's global image to a test

The union attempting to represent workers at IKEA's only U.S. plant is challenging the Swedish furniture giant's vaunted corporate ethos, accusing the retailer of paying its American workers low wages and tolerating unsafe working conditions.

Approximately 320 workers at IKEA's Swedwood Danville plant will vote Wednesday whether to join the International Association of Machinists and Aerospace Workers.

The machinists union has put IKEA's reputation as a labor- and environment-friendly Swedish employer at the forefront of its organizing drive as it attempts to organize workers at the company's subsidiary, Swedwood. They assemble the sleek, low-cost bookshelves and coffee tables that the big-box retailer sells in its distinctive, cheery, blue-and-yellow stores.

IKEA's corporate conduct is guided by its so-called IWAY Standard, which outlines environmental, social and working rules -- an 18-page document governing everything from drinking water supplied to workers to lighting levels to a ban on child labor. The company says the standards follow a directive that "the IKEA business shall have an overall positive impact on people and the environment."

Many of the company's high corporate standards stop at the U.S. border, the machinists' lead organizer said. The union said workers are grossly underpaid compared to their Swedish counterparts, suffer high injury rates, are forced to work overtime, and demoted or fired for expressing union sympathies.

The IWAY standards say overtime must be voluntary and ban employers from preventing workers from associating freely and collective bargaining. They also require workers be protected from "exposure to severe safety hazards."

"You should not be able to reap the economic benefits of an image if that image is not true," said Bill Street, director of the woodworkers department of the machinists international. "When you walk into an IKEA store, you're walking into a little bit of Sweden."

The Associated Press was not able to talk directly with workers involved with Street in organizing the Danville plant. He said workers feared retaliation.

An IKEA spokeswoman denied the union allegations that the Virginia plant operates in conflict with IKEA's principles, saying the Danville operation has consistently measured up to its own internal and third-party audits.

"Swedwood Danville operates according to the same principles as all Swedwood plants," Ingrid Steen said in an e-mail.

Steen also said IKEA will honor the union vote. "Swedwood respects the right of co-workers to join, form or not to join a co-worker association of their choice," she wrote.

IKEA's selection of Danville for its first U.S. factory came with $12 million in incentive grants and the goal of ultimately hiring 780 people in Southside Virginia near the North Carolina line. The region has one of the bleakest economic landscapes in a state that traditionally has an unemployment rate a couple notches below the national rate.

The last capital of the Confederacy, the city of approximately 43,000 has struggled as tobacco and textiles declined. The jobless rate has hovered around 10 percent in recent years.

IKEA, which has 26 Swedwood plants in Europe and saw profits rise 6 percent in 2010, was welcomed by accolades from the Capitol in Richmond to local economic officials, none of whom would publicly discuss the union drive with the AP.

Street, who brought in a union official from Sweden to talk to Danville workers this year, said he quietly began his organizing at Swedwood three years ago mindful of IKEA's reputation for paying and treating its workers fairly.

"We thought to ourselves this was going to be a very simple, straightforward campaign," he said in an interview amid one of his many trips to Danville from his home in Oregon. "After all, this was IKEA."

Ultimately, he said, he concluded the message from IKEA was "Sure, no problem. As soon you get 51 percent of the workers, we'll come back and bargain."

Street was able to get the necessary 30 percent of the workers to support a union vote, and the National Labor Relations Board scheduled the balloting at the plant.

One of the union's complaints is that starting pay at Danville of $8 an hour is approximately half of what their Swedish counterparts earn.

"We know in terms of safety, in terms of health care, in terms of pension, their European counterparts are treated vastly superior than the workers in Danville," Street said.

IKEA's Steen described the pay and benefits of Danville workers as "very competitive in the region." She said many of IKEA's 16,000 workers worldwide are members of unions or worker associations, adding it's difficult to compare U.S. workers with workers in Europe.

"Conditions of different countries are very complex questions," she wrote. "It is difficult to compare different national systems (such as) taxes, cost of living, systems of social insurances, etc."

Street and the machinists union face an uphill battle in a right-to-work state and amid a period of some of the lowest private-sector union membership in the United States. Union membership fell to 7 percent in 2010, the lowest in decades, according to the Bureau of Labor Statistics.

Arthur B. Shostak, professor emeritus at Drexel University and an expert on the American work force, said the union is smart to target IKEA's image to make its case, which has received the attention of international union organizers. He said young, hip shoppers might not be inclined to shop at IKEA if they were aware of the union allegations in Danville.

"Ikea has a big stake in protecting its brand," Shostak said. "Brand protection is very, very important. This is a mess, and not for the union."

Paul A. Argenti, a professor of corporate communication at the Tuck School of Business at Dartmouth College, said it's a reach to compare workers in Danville's rural economy with highly industrialized workers in Europe.

"We're a developing nation to them," he said. "Sweden is ridiculously expensive."

While the union claims have some basis in fact, he said, the machinists are attempting to "paint IKEA as a monster."

Street said he's confident, despite declining union numbers and concessions by public sector workers.

"It's been one of the best times to organize because employers have been overreaching. It's kick `em when they're down," he said.

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Online:

International Association of Machinists and Aerospace Workers: http://www.goiam.org

IKEA: http://www.ikea.com/us/en/


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