Ethics, the Law and a Plant Shutdown at Youngstown
By: Don
Burgham
June 30,
2002
Abstract
The objective of this
paper is to explore an example of a legal business decision which may be
deemed unethical. In 1977, the Lykes Corporation made a decision to close
a steel-producing plant in Youngstown, Ohio, without giving notice to
employees and without providing any assistance to community service
agencies that were attempting to help the layoff victims.
Ethics, the Law and a Plant Shutdown at Youngstown
This brief paper will look at the law and ethics
behind a decision to shutdown a major steel manufacturing plant in the
Mahoning Valley; a community that was dependent upon that plant for its
livelihood and prosperity. In this paper, I make the assumption that work
and also the prosperity of a community is an unalienable right. “…[W]ork
creates the opportunity for individuals to pursue their ‘unalienable
rights’ to life, liberty and the pursuit of happiness” (“No Prosperity,”
2000). Assuming human beings possess this right, it would follow that the
elimination of work and community prosperity by a company decision to
close a plant without warning and without employee retraining is
unethical; however, in 1977 there were no laws to prevent it. I will use
an example from my personal experience to analyze this theory.
As a young man in the 1970s and 1980s, I lived
in the Mahoning Valley; an area of the country known then as “The Steel
Belt of America.” The Mahoning Valley was home to some of the nation’s
largest steel producing companies; including Youngstown Sheet and Tube,
Republic Steel, Bethlehem and Inland Steel, and US Steel (Lilko, n.d.).
Youngstown was a one-industry community. Most of
the city’s 140,000 residents were employed by a steel-making company or
employed by a steel-related company (Buss, 2000, p. 2). In his book,
Shutdown at Youngstown, author Terry Buss relates that “…Youngstown’s
steel workers were one of the most productive, best-paid, and seemingly
secure industrial labor forces in the world” (p. 2).
On September 19, 1977--Black Monday--the Lykes
Corporation suddenly and without warning, announced the closing of the
Campbell Works plant which employed nearly 5,000 workers (p. 21). This
announcement was the beginning of the end of the steel industry in the
U.S. and ushered in bleak times for the people of the Mahoning Valley. In
a few short years following Lykes’ announcement, other steel companies
closed their plants, leaving the people of Mahoning Valley unemployed and
demoralized. Youngstown’s unemployment rate grew at an alarming rate.
Surrounding communities reached unemployment rates as high as 30% (Buss,
2000).
At the time of the steel mill closings in the
Mahoning Valley, there were no federal laws addressing worker notification
of a shutdown. The Worker Adjustment and Retraining Notification Act
(WARN) was not enacted until August 4, 1988 and became effective on
February 4, 1989 (U.S Department of Labor, n.d.). The WARN Act requires
employers to notify workers at least 60 days in advance of a plant
shutdown. Until the passage of the WARN act there were no legal
requirements for employers to notify employees or the community of a
pending shutdown.
Although they were not required to do so, as
Buss notes, the Lykes Corporation did nothing to retrain its life-long
steel-workers, to help them find new jobs or to aid them in any way (p.
21-22). Instead, it simply closed up shop, and left the community and
workers with nothing but miles of abandoned steel mill buildings. An
eyesore and a painful reminder of the devastation. The community was left
to fend for itself.
The community and the workers were unprepared
for the devastation that followed. Lykes would not even provide
Youngstown’s community service agencies access to worker records, leaving
the agencies struggling to identify layoff victims and providing them with
no means to assist laid-off workers with unemployment claims, retraining
or psychological assistance.
Although Lykes did not break any laws, their
actions and inactions caused needless harm to many long-term employees and
to an entire community. Even the U.S. government was slow to respond to
the catastrophe in Youngstown. It was ten years after the “steel belt of
America” began to rust that Congress acted to pass the WARN Act; a law
that, at a minimum, forces companies to provide advance warning to
workers. To this day, there remains no federal law requiring companies to
assist a community in retraining idled workers.
In the decision to shutdown the
plant at Youngstown, Lykes was not interested in its moral obligation to
several of its major stakeholders; the employees and the community. Lykes’
actions in Youngstown betrayed its philosophy toward workers; employees
were merely a resource to use for its own gains. The eighteenth century
philosopher, Immanuel Kant, maintained that all human beings have a worth
or dignity that must be respected. In an on-line article entitled “Rights,”
the Markkula Center for Applied Ethics at Santa Clara University
suggests, “This dignity makes it wrong for others to abuse us or to use us
against our will. Kant expressed this idea in a moral principle: humanity
must always be treated as an end, not merely as a means. To treat a person
as a mere means is to use a person to advance one's own interest. But to
treat a person as an end is to respect that person's dignity by allowing
each the freedom to choose for himself or herself” (n.d.).
I, and ten’s of thousands of
others, abandoned our families and homes in Youngstown for a more
promising life in other parts of the country. I often wonder if Youngstown
would be different today if Lykes had involved its workers and community
in the decision to shutdown the plant. Would it have been possible to turn
a bad scenario into a good one? What would have happened if Lykes gave
warning to the community of the pending doom of the steel industry? Would
the community have begun to prepare itself? Would it have begun a crusade
to attract a different industry. I sometimes imagine what my old home town
would be like today if the community had the opportunity to replace the
steel industry with something like technology. Would we now be calling the
Mahoning Valley the center of the “rust belt of America”; or might we be
calling it the Silicon Valley?
References
Buss, T. (1983).
Shutdown at Youngstown: Public policy for mass unemployment. Albany,
New York: State University of New York Press.
Lilko, J. (n.d.). History
of Youngstown. Retrieved June 20, 2002 from the World Wide Web: Http://lilko.cisnet.com/~jimlilko/history_of_youngstown.htm
Rights. (n.d.). Markkula
Center for Applied Ethics, Decision making. Retrieved on June 20, 2002
from the World Wide Web: http://www.scu.edu/Ethics/
No prosperity without
labor. (2000, September 4). Hartford Courant. Retrieved June 21,
2002 from ProQuest on the World Wide Web: Http://proquest.umi.com
U.S. Department of Labor.
Employment and Training Administration. (n.d.). The worker adjustment
and retraining notification act: A guide to advance notice of closings and
layoffs. Retrieved on June 22, 2002 on the World Wide Web: http://www.doleta.gov
