‘A dirty deal’: wave of Siemens plant closures hits latest victims in the US

Despite Trump’s promises to halt the trend, 125 people will lose their jobs at an Iowa plant, in addition to other closures and offshoring Siemens announced earlier this year

An employee installs the windshield of an Amtrak locomotive at the Siemens manufacturing facility in Sacramento, California.
An employee installs the windshield of an Amtrak locomotive at the Siemens manufacturing facility in Sacramento, California. Photograph: Bloomberg/Bloomberg via Getty Images

The twenty-first of December will be 56-year-old Joe Kempker’s last day at the Siemens turbine plant in Burlington, Iowa, where he’s worked for 31 years.

The plant has been Kempker’s life. “It takes a little bit of my heart every time one of those machines go out the door,” Kempker said. The German conglomerate, one of the US government’s largest contractors, purchased the plant in 2014 and announced its closure earlier this year. One hundred and twenty-five people will lose their jobs at a plant that has been in operation since 1870, the latest victims of a wave of closures and offshoring that have increased under the Trump administration despite promises to halt the trend.

“I’m at an age that probably is not the most desirable in the job market at 56 years old. Too young to retire early, but I can see why someone would have questions hiring someone at my age. It’s devastating,” said Kempker.

Burlington is a small city with roughly 25,000 people on the Mississippi river. Donald Trump held a campaign rally in the city in October 2015, where he promised: “I will be the greatest jobs president that God has ever created.” But critics charge Trump has done little to fulfill his promise as corporations like Siemens continue to shut down plants and send those jobs overseas.

“It’s something we keep seeing played out over and over. Companies buy a facility, in this case, it had been operating in the Burlington area for over 100 years, it was part of the community, and suddenly they get a notice the plant is closing down,” said Owen Herrnstadt, the director of the trade and globalization program at the International Association of Machinists. “A lot of people during the holiday time are going to be out of a job and we all know how incredibly painful that is.”

Earlier this year, Siemens laid off more than 200 workers at a turbine plant in Fort Madison, Iowa, just a 20-minute drive from Burlington, though a few months later Siemens announced plans to rehire 100 of those laid-off workers. Siemens also announced plans to shut down a turbine plant in Wellsville, New York, in 2020, laying off 250 workers from a plant that has been in operation for more than 100 years, and it shut down a plant in Mount Vernon, Ohio, in September 2018, laying off about 400 workers.

Since Trump was elected, German manufacturing company Siemens has offshored 1,700 jobs throughout the United States, yet they have won $765m in federal contracts during the same period.

“You hear Trump saying all the jobs out there, but what they never mention is the majority of those jobs out there, it will take two of those jobs to replace a good job like we’re losing,” added Kempker. “There are still unemployed people if one person has to take on two of those jobs. There aren’t twice as many jobs out there. It leaves a big hole and a person shouldn’t have to work two jobs to make a living.”

The Siemens closure comes a month after General Motors announced it was laying off 14,700 people.

“On the heels of the GM closure announcement, yet another federal contractor is laying off workers,” said Joseph Geevarghese, the executive director of Good Jobs Nation. “Despite President Trump’s promises to the workers in Iowa that he would be the ‘biggest jobs producer God ever created’ GM, Siemens and other federal contractors are shipping jobs overseas at a record pace, and Trump has done nothing to stop it.”

Good Jobs Nation has criticized the Trump administration for its inaction over corporations closing factories throughout the US while they send those jobs offshore, yet still receive billions in government subsidies and tax breaks.

Offshoring of jobs has rapidly increased under the Trump administration. According to a report by Good Jobs Nation the rate of offshoring by major federal contractors is on track to be the highest in a decade.

Siemens has received $1.5bn in public subsidies over the past 20 years. Earlier this year the Siemens CEO, Joe Kaeser, praised Trump’s tax cuts, which decreased the corporate tax rate from 35% to 21%, claiming they would lead to job growth. According to Siemens’ 2018 annual report, the company is saving about $500m annually due to Trump’s tax cuts.

Workers at the Burlington plant noted their work is being sent to either Winston-Salem, North Carolina, or overseas to the Czech Republic and India.

“Right before they announced the plant closing, our business was picking up and they had brought a single stage turbine line in from Wellsville, New York. We started working overtime again and they just pulled the rug out from underneath us,” said Robert Morrison, who is being forced to take early retirement due to the plant closure. He said most of his fellow employees are either leaving the area to find work or struggling to find a comparable job with the wages and benefits they previously received.

“We’re still in a state of shock. As they’re pulling these machines out now we’ve run for years, you see this look of disbelief on people’s faces,” Morrison said. “This is a dirty deal. They bought the competition that was beating them and because they’re a big company they can move our work to the Czech Republic or India.”

Siemens told the Guardian in an email: “Over the last year we have been witnessing major structural shifts in the global power generation market. In the Americas specifically, we’ve seen a significant market decline for steam turbines and our Energy Products facility in Burlington has seen a direct impact of this decline. Currently, Siemens is operating at a global overcapacity and it is no longer viable for the company to operate as many facilities, thus, the decision has been made to close our Burlington factory.”

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