Another Phony Scandal (Originally from May, 2013)
The unfolding IRS scandal is chilling, historically so. As is the Justice Department’s spying on journalists. But, we are likely only seeing the tip of two icebergs, and there are other entire icebergs. One such iceberg concerns Barack Obama's use of myriad federal agencies to persecute, bully, and harass corporate symbols of non-union success. Federal agencies as diverse as The U.S. Fish and Wildlife Service, The Food and Drug Administration, The National Labor Relations Board, the National Highway Traffic and Safety Administration, and The FBI, have been thuggishly targeting corporations in support of Obama's big labor union agenda. President Obama has redefined the “bully pulpit” and marshaled every tentacle of federal power to do his bullying.
Labor unions are Obama’s largest support system. Unions supplied billions in the last three election cycles, practically all of it to Democrats. More importantly, unions supplied the boots-on-the-ground and the muscle for Obama’s vaunted ground-game (1). The labor union agenda is Obama’s agenda according to Obama himself (2). The most frequent visitors to the oval office are labor union bosses and labor union lobbyists. Government is unionized five times more than the private sector: 36% vs 7% and growing rapidly (3). In essence, when government agents knock down your door, union members are knocking down your door. When the IRS audits you or demands to know the "content of your prayers", those are union members doing that. The IRS’s own labor union boss, Colleen Kelly, was at the White House the day before the IRS abuses started. (This is particularly worth noting in the context of the cases below.)
These corporate/union bullying cases are similar to the IRS scandal in that government agencies were selectively targeting opponents of Obama’s political agenda. But, there are significant differences too. The IRS scandals broke because the targeted parties, non-profits and individuals, made a big stink. In these corporate cases, the targets are for-profit corporations who will never make a stink. Unlike individuals and non-profit groups, corporations have a huge incentive to keep quiet when being targeted by their government. Corporations answer to their shareholders, and shareholders care about one thing only - share value. Confronting abusive government is never a shareholder priority. Corporations are also easily painted as villains. When corporations get unjustly targeted by governments, they usually suck it up, pay their fines, settle the lawsuits, and quietly get back to work.
Moreover, these corporations were occasionally bi-partisan targets. That’s not surprising; The Code of Laws of the United States runs over 200,000 pages making virtually every corporation, individual, or group in violation of something and probably many things at any given time. According to author Harvey Silverglate, who wrote a book on the subject, everyone in the US likely commits “Three Felonies A Day” (4). What makes these corporate cases conspicuous is the over-the-top way they were handled, the timing, and the symbolic existential threat they posed to Obama’s labor union agenda. Taken one at a time, each case is curious, puzzling; however, taken together and in the light of the IRS cases, the picture becomes clear.
The curious case of Tylenol and Johnson & Johnson:
In 2011, the FDA took over three J&J/McNeil/Tylenol plants, shut one of them down, recalled a bunch of products, and started a criminal investigation claiming poor quality on several fronts (5). The infractions cited were various: musty odors, poor quality, bacteria, imperfect doses, and dangerous containers. Headlines were written, criminal violations alleged, reputations shot, management shuffled, mea culpas issued, fines paid, and tons of money lost to J&J. How many people did these deficient products kill? How many were maimed? In all cases…none. Yet, to this day, it is difficult to find brand named Tylenol and many other J&J products in a store.
This is not to say J&J products are perfect. No company, much less a pharmaceutical company, can make that claim. Every drug has side-effects, is prone to misuse, and has impurities. But, J&J was severely punished for routine issues. This all has the distinct air of a witch hunt. Why the harsh treatment?
J&J is one of the countries largest pharmaceutical companies and one of its most revered workplaces. What makes J&J so successful, or any great company for that matter, is its people. If you want a great company, you need great people. If you want great people, you need a great workplace. On that score, J&J consistently gets awards for being one of the best workplaces in the country (6). One reason J&J is such a great place to work is its founding ideology, and that is precisely why Obama and the unions have singled it out.
Robert Wood Johnson, a founding member of the company, immortalized J&J’s ideology in 1943 in a document he called “Our Credo” (7). Line two, paragraph two, of the J&J Credo states:
“Everyone must be considered as an individual.”
This is anathema, inimical, to the concept of a labor union. A synonym for labor union is “collective bargaining agreement”. Unions seek to be considered as a collective, not as individuals. The J&J Credo is a symbolic existential threat to the very idea of labor unions. Considering J&J’s perch at the top of the prestigious pharmaceutical industry and their reputation as one of the best places to work, it is easy to see how they were a symbolic threat to unions.
The Credo also made J&J vulnerable when the federal government decided to bully them. The Credo states:
“…everything we do must be of high quality.”
Barack Obama’s tactical bible, “Rules for Radicals” by Saul Alinsky, teaches:
“Make the enemy live up to its own book of rules.”
No company could endure the scrutiny of the FDA when determined to find things like bacteria (which is everywhere), and odors (which are everywhere). Whole J&J plants have been shuttered for such nebulous infractions.
Today, J&J does employ union workers. Unionization at J&J runs about 5% compared to 7% for the entire private sector (8). Public sector unionization is seven times higher averaging 36% (3). Not only was J&J a possible target due to their prominence and Credo, they were also unionized at below average rates.
Side bar: In the 1980s, seven people died after ingesting cyanide tainted Tylenol. The case was never solved, but the investigation did narrow the source of the cyanide to the Tylenol distribution network around Chicago. Chicago in the 1980s would have been the perfect place if a union had wanted to frame a corporate enemy with poisonings and get away with it. Organized crime and organized labor controlled everything including local law enforcement and politicians. (Not sure much has changed.) Moreover, unions in Chicago had control of the packaging and distribution of Tylenol. Tylenol was shipped from J&J’s plants in bulk containers to independently owned distribution centers where it was put into capsules, then into jars, and finally boxed and shipped to retailers. The cyanide was introduced somewhere in that union distribution network (9).
One person, James Lewis, was convicted for extortion related to the Tylenol case and is still considered a suspect, but he has never been charged. Following the murders, J&J took their packaging away from the independent contractors and the unions and began doing it in-house. Unions may have had nothing to do with those murders, but they did have the means, the motive, and the opportunity.
The curious case of Toyota and unintended acceleration:
On August 28, 2009, four people were tragically killed in a Lexus with a stuck accelerator. The tragedy properly led to further inquiry, and at the end of it all:
· NHTSA had taken several Toyota models off the market (an unprecedented move)
· Obama’s Transportation Secretary, Ray LaHood, instructed Americans to not drive Toyotas (also unprecedented)
· Toyota’s top leadership, including President Akio Toyoda, was compelled to testify before congress
· There were numerous congressional hearings
· There was a 1.1 billion dollar lawsuit settlement
· Toyota was ordered to pay about $15 million in fines to the National Highway Traffic and Safety Administration
· Millions of cars were ordered recalled
· Toyota lost its spot as the number one autmaker in the world
· Billions were lost in value and profit.
· Toyota’s reputation was seriously damaged.
What caused the unintended acceleration and what was the fix? In the case of the tragic Lexus accident that triggered it all, it turned out to be errant floor mats installed by a dealer. No other cause was ever definitively found (10). Toyota did eventually recall millions of cars and replace some parts, but the whole issue faded with a whimper.
Unanticipated acceleration is a ubiquitous charge against all automakers. It is nearly impossible to prove or disprove. In short, the case against Toyota was a giant witch-hunt which seriously hurt Toyota and helped GM. Why would the government want to hurt Toyota and help GM?
Not only is Toyota non-union while its rival GM is unionized, the UAW union owns GM along with the federal government who is the majority shareholder. That makes Barack Obama the overlord of GM, Toyota’s main competitor.
Consider the following timeline:
2008 - Union support of Barack Obama helps him win the Presidency of the US
Non-union Toyota surpassed unionized GM as the world’s largest automaker
2009 - GM and Chrysler go bankrupt and get bailed out by the US government, which hands a huge chunk of GM to the UAW union
Toyota is accused of unanticipated acceleration
Toyota cites floor mats and issues warning.
2010 – The ubiquitous complaints persist and the US government insists on recalls
Toyota is forced by the US government to cease selling several models, unprecedented in automotive history.
GM offers $1,000 checks to Toyota owners who switch to GM cars
Toyota sales are flat for the year.
GM sales rise 21% for the year.
But there’s more. The unions had other reasons to have Toyota in the crosshairs. While Toyota is non-union, they did have one plant in California that was a joint venture with GM staffed by UAW workers. The partnership was called NUMMI, New United Motor Manufacturing, Inc. GM pulled out of that partnership in 2009 after the government take-over. Obama and the unions apparently had no interest in a partnership with non-union Toyota now that they owned GM. Toyota was then stuck with UAW workers who had an inherent conflict of interest; while they worked for Toyota, they were also part owners of its largest competitor. Toyota chose to close the plant and the unions responded with a fatwa:
"You are going to see an attack on Toyota that is unprecedented." said Rome Aloise, a top Teamsters official.
"We will take this fight to every Toyota dealership in California." Richard Trumka, president of the AFL-CIO, said via a videoconference link. "Our message is that Toyota kills American jobs. This comes at a time when Toyota can ill afford another black eye."
"If they close the NUMMI plant, we union people will not buy another Toyota." said Bob King, UAW vice president.
The source of the above quotes is a definitive piece on the subject, “Firestone Revisited: Was Toyota a takedown target in the name of NUMMI?” by Mandy Nagy (11)
Despite all that and the tsunami in Japan, Toyota recently regained their position as world’s largest automaker surpassing GM in global sales. Their cars still do not accelerate unexpectedly.
Side bar: If you were around in the ‘80s when Audi was practically forced out of the US based on a similar charge of unintended acceleration, this may all sound familiar. In the Audi case, like the Toyota case, the whole thing turned out to be nebulous at best, and at worst, a coordinated attempt to take-down Audi complete with a scary "60 Minutes" story. At the time, Audi of Germany was having unprecedented success in the US with its Audi 5000 model and eating into the lucrative UAW made Cadillac and Lincoln markets.
The curious case of Gibson Guitar Corp:
On August 2nd, 2011, armed federal agents from The US Fish and Wildlife Service raided Gibson Guitar Corp. in Nashville Tennessee. They stormed-in like a swat team, frightening workers, shutting down production, and confiscating computers, raw materials, documents. This was the second time Gibson had been raided since Obama took office, the first having occurred in 2009. At the time, the reasons given had to do with some alleged violation of an obscure statute having to do with foreign laws and exotic wood. This made no sense. Other guitar makers were using the exact same wood, but they weren’t raided. Why Gibson?
Some suggested Gibson was targeted because CEO and owner, Henry Juskiewicz, gave donations to Republicans while Martin Guitars, Gibsons rival in the acoustic guitar market, donated to Democrats. This suggestion has re-emerged in the wake of the IRS scandal, but this also makes no sense. Lots of CEOs give to Republicans and don’t get raided by armed federal swat teams.
No, Gibson, like J&J and Toyota, symbolized an existential threat to Obama’s union agenda: Gibson had relocated from a forced-union state to a right-to-work state.
Gibson was founded in Kalamazoo, Michigan, right smack in-between union strongholds Chicago and Detroit. But, Gibson moved production to Tennessee in the 80’s, fleeing a forced-union state for a right-to-work state. This is a cardinal sin for Obama and the unions. Obama has called the right-to-work “the right to work for less money” (12). Unions hate right-to-work laws because it makes future unionization less likely and less lucrative for them.
Side bar: Gibson’s two major competitors in the domestic-made guitar market, Martin and Fender, both manufacture primarily in forced-union blue states, Pennsylvania and California respectively. Fender Musical Instruments, Gibson’s rival in the electric guitar market has historical ties to media giant CBS, which owned the company until the mid ‘80s. (Meanwhile, Michigan became a right-to-work state in 2012, and the conversion did not please Obama or the unions (13).)
The curious case of Boeing:
Another curious case which relates to Gibson is the case of Boeing’s South Carolina plant. When Boeing tried to relocate some production to right-to-work South Carolina, Obama and his NLRB tried to block Boeing from operating the plant which had already been built at the cost of a billion dollars. The whole thing was an outrageous and obvious attempt to both intimidate others from relocating to right-to-work states, and blackmail to get Boeing to reach agreement with its machinists union in Washington State. It likely succeeded on both fronts (14). In light of the Gibson case and the question of motive, the Boeing case highlights the extent to which Obama will go towards bullying corporations to achieve his ends.
Whenever Barack Obama acts in a puzzling way, it is best to consult his tactical mentor, Saul Alinsky, for therein usually lies the answer:
“The Radical may resort to the sword but when he does he is not filled with hatred against those individuals whom he attacks. He hates these individuals not as persons but as symbols representing ideas or interests which he believes to be inimical to the welfare of the people.” Saul Alinsky, 1946 (emphasis added)
The unifying theme in all the above cases is that the targets are all “symbols representing ideas or interests” which Obama believes to be inimical to his political agenda. All four companies are leaders in their industry and they threaten unions in symbolic ways: J&J because it is so successful and has a Credo to treat employees as individuals, Toyota because it is non-union and is UAW/GM/Obama’s top rival, Gibson because it fled Michigan’s forced-unionism to relocate in a right-to-work state, and Boeing because it was a twofer: leverage for the machinists and a message about right-to-work.
Unfortunately, these are not the only cases. Unions have a long history of playing dirty and dangerous when threatened. What makes all this so remarkable and chilling is that, in Barack Obama, the unions have a new thuggish partner capable and willing to use the full force of the federal government to harass their mutual enemies. Individually, each case could be dismissed as plausibly due to some overzealous agency, but when taken as a whole, there can be no benefit-of-the-doubt.
(8) According to sources at J&J. J&J declined to comment on their labor relations or union relations.