Plant Closings

A Study Paper of the Lutheran Church in America by William E. Diehl, no date

BACKGROUND
The decade of the 1980s has made it abundantly clear to all Americans that we are now part of a vast global economy. The industrial domination of the United States and Western Europe has been diffused and scattered to all corners of the earth. Even Japan, which a decade ago was the primary challenger of the industrial West, has begun phasing out some of its heavy industries as newer, more competitive rivals such as Korea, Taiwan, Hong Kong, Brazil, and Mexico emerge. United States corporations are increasingly building new production facilities in nations with lower labor rates at the same time that Japanese auto producers are constructing their own assembly plants here.

In the 197Os, the twenty fastest -- growing economies were all Third World nations. During this period, Singapore, Taiwan, Hong Kong, South Korea, Mexico, and Brazil averaged 9.'I percent growth per year. While the industrial West went through wrenching recession in the early 1980s with the seven largest industrial nations showing a decline in economic growth, Hong Kong, South Korea, and Taiwan were registering gains.

There is a globalization of many industries and corporations underway. For example, General Motors now assembles exactly the same model car in the United States, Canada, Australia, Brazil, and South Africa. Ford assembles its Escort model in the United States, Britain, and West Germany. John Naisbitt, author of the popular book Megatrends, predicts that by 1990 the 30 automotive producers of the world today will be reduced to seven or eight -- perhaps even only four. Ninety-five percent of all baseball mitts used in the United States come from Japan--but they are made from U.S. cowhide which is tanned in Brazil. The world's financial institutions are so interrelated that investors follow the sun as they move resources from one nation to another. The system is so sensitive that a major bank crisis in Ohio can send the dollar plunging on world markets.

The impact of these changing economic patterns has been felt most severely in the more mature industries, such as the primary metals in steel and aluminum production, automobile manufacturing, and textiles. The Western nations have reacted to these changes in a variety of ways. In some instances, trade barriers have been erected to exclude lower-priced imports. In other cases, heavy government subsidies have been the means for enabling certain industries to compete in world markets. In most every Western nation there has been a gradual constricting of industrial capacity, as the least efficient producers are phased out of existence.

The effect of these changes in the global economy has been painful for the United States. In 1960, the United States had a 25 percent share of the entire free world market in manufactured products. By 198'~, it had shrunk to less than 16 percent. In 1960, U.S. auto makers had 95 percent of the domestic market; by 198k, even with the help of voluntary restraints by Japan, the share was less than 75 percent. The steel industry in the United States faces import levels of 25 percent today; in 1960, it was less than 5 percent. Currently the U.S. textile industry is facing a dramatic decline. Over 50 percent of all textiles purchased in the United States in early 1985 were imported -- double the rate of 1980.

The natural consequence of these new economic forces has been a phasing out of the less competitive U.S. manufacturing facilities. There has been a substantial shift in the nature of employment in this country. During the 1970s, of the 19 million new jobs created in the U.S., only 5 percent were in manufacturing. While the total labor force grew by 18 percent in the `70s, jobs in the health care field grew by 118 percent, in computer-related activities by 83 percent, in banking by 83 percent, and in local public services by 76 percent. Moreover, these new service-oriented jobs pay significantly less than the industrial jobs. When a steelworker who earned about $23 per hour, including benefits, is able to find work only in a fast food restaurant at one third the former rate, there is real pain involved.

Using national averages for unemployment levels can be highly misleading. While the United States was able to see its national average for unemployment drop to 73 percent in early 1985, there was at the same time double digit unemployment in the steel towns of Buffalo, Youngstown, Johnstown, Gary, and the Monongahela Valley. On the other hand, there were some cities with virtual labor shortages. While all of these changes have been going on for some time, the rate of change has been exacerbated by a recession in 1981-83, and by the strong dollar in world markets. As a consequence, we have witnessed an increasing number of plant closings in this country. However, as we shall point out later, not all plant closings can be attributed to forces of a global economy.

Plant closings have a significantly greater impact on workers than do ordinary recession-related layoffs. During a business slump, the employee on layoff can usually expect to be recalled, and frequently has the resources and public support systems to bridge the unemployment gap.

In most instances, plant closings invoke permanent displacement of the employee. He or she will not be called back; a new skill and a new job must be found. Furthermore, plant closings do not respect seniority or status. The 25-year veteran is affected just as much as the apprentice; the superintendent just as much as the laborer. Thus, the impact on senior workers can be devastating.

Many studies have been made of the social impact of unemployment. While these studies differ in detail, the conclusions are the same: unemployment brings a higher incidence of heart disease, suicide, homicide, alcoholism, crime, mental disorder, child and spouse abuse, and general decline in the health of all family members.

These problems place a higher demand for social services on a community at the very time that its tax base is being reduced by the plant closing. Furthermore, the ripple effect of plant closings on retail sales, housing, professional services, and the like can be significant, particularly if it is a large plant in a small town.

WHY DO PLANTS CLOSE?
Seldom does a plant close because of a single factor. Usually a combination of factors is present, and the importance of these factors can vary from situation to situation. Some of the factors are critical for survival in a global economy; others are not. Consequently, the usually related to its profitability. An operation which is causes listed below cannot be assumed to be in any order of' importance. They have been grouped, however, into those factors which tend to be related to a world economy and those which are not.

A. Factors Related to a Global Economy
1. Wage rates. In early 1985, the average labor rate for an American steelworker was $23 per hour, including benefits. In Japan it was $12 per hour; in Korea, $2. However, direct comparisons are not always valid since the workers in some nations may receive benefits from the government which are normally provided by the employer in other nations. Nevertheless, wage rate differences play an important role in the competitiveness of manufacturing plants.

2. Labor productivity. Hourly wage rates alone do not tell the full story. A work force which can turn out twice as much product per hour as another can afford to pay its people a somewhat higher wage rate. Productivity can be influenced by such factors as efficiency of plant and equipment, good management, worker attitude, and work rules. The so-called "featherbedding," which was common in the railroad industry, is an example of work rules which decrease productivity.

3. Plant and equipment. Not only do modern plants and equipment help to increase productivity, but they can also result in higher product quality and faster service. However, the ability of a company to invest in new plants and equipment is not profitable or only marginally so, will frequently have difficulty raising the funds to pay for new plants and equipment.

4. National industrial policy. The degree to which a nation's government assists its industries can influence its competitiveness in the world market. For example, when the government of France discovered that parts of its aging steel industry were no longer competitive in world markets, it was faced with the choice of either providing direct subsidies to the unprofitable plants or paying unemployment compensation to the steelworkers displaced by plant closings. For many years, France elected to subsidize its weak plants and, in a sense, export its own unemployment to other nations. More recently, however, France has begun to shut down unprofitable plants. While Japan has not had to subsidize its steel industry directly, the government has provided loans for plants and equipment beyond what U.S. steel makers could secure through normal commercial borrowing channels. However, Japan has had a long history of erecting trade barriers for those products in which it is not competitive. The United States has never had a comprehensive industrial policy. Rather, policy has been made as the result of pressure groups succeeding in securing relief. Farm and tobacco subsidies, guaranteed loans to Chrysler, and "voluntary restrictions" on auto imports are examples of U.S. policy which has resulted from political pressure.

5. Taxes. Local, state, and federal tax policies may cause plants to be less competitive in the world market.

6. Government regulations. New government regulations may impose unusually high costs on certain industries. For example, environmental air quality regulations imposed serious problems for the cement and foundry industries. In many cases, the cost of making these plants environmentally acceptable was so high that it could never be paid back in future earnings. Occupational safety and health regulations imposed higher operating costs on some industries. And the sheer volume of paperwork required to comply with government regulations adds to the cost of operation.

B. Factors Not Necessarily Relating to a Global Economy

1. Product obsolescence. Buggy whips are the typical example. Anthracite coal mining for home heating is another.

2. Loss of market share. A multi-plant corporation in losing a share of its market will consolidate operations at its more profitable locations and close the marginal ones.

3. Geographic dislocations. Older plants were built close to consuming markets or sources of raw materials. As populations shift or as raw materials run out, the geographic location may become a disadvantage.

4. Change in product mix. A large multi-product corporation may find that as demands for some of its products change, there is no further use for the plants in which these products were made. Or the cost of refitting the plant for new products may exceed the cost of building a new plant elsewhere. The US. automotive industry faced this problem in switching to small cars.

5. Change in manufacturing technology. When steel mills used iron ore as a raw material, they located along the Great Lakes in order to receive ore by boat from the Minnesota Iron Range. As newer steel-making technology shifts to electric furnace operation, it becomes desirable to locate closer to sources of scrap metal and lower electric rates.

6. Changes in product design. The 1973 energy crisis provided a good example of this. Fuel-efficient cars had to be smaller and lighter. The switch in design quickly had an impact on the steel and rubber industry.

7. Mismanagement. Some plants, especially in smaller one-location companies, may close simply due to mismanagement. A family-owned plant which loses its chief executive may not be able to survive if the family tries to take over. Of course, mismanagement can exist within any company, regardless of size.

8. Maximizing profit. High rates of return on various types of financial investments have put pressure on corporate management to maximize short-term returns. Careerism among managers may cause them to do what will show the best immediate return on investment. It may look better to close a moderately profitable plant and transfer those resources to bolster a more profitable one.

9. Takeovers, mergers, and acquisitions. The consolidating of two or more corporations can result in plant closings, and sometimes for no other reason than the taking of profits in the stock market. In recent years, conglomerate or multi-plant corporations whose stock was undervalued due to poor performance of certain component operations, became the target for outside takeovers. If the takeover was successful, the new owner frequently closed those facilities which were not earning a high enough profit. Likewise, those companies which wanted to protect themselves from unfriendly takeovers frequently closed down those operations which were not making a strong enough contribution to corporate profits. Even in the case of "friendly" mergers or acquisitions, plant closings may result as production is consolidated in the most efficient facilities. Plant closings resulting from takeovers, mergers, or acquisitions are frequently the most difficult for workers and the community to accept. In these situations, plants which are admittedly profitable are closed down--simply because they were not profitable enough.

SOME WORDS ABOUT PROFITS
The matter of profits usually enters the picture whenever plant closings are discussed. At times members of management, the unions, and public interest groups are drawn into philosophical debates about the capitalist system itself. While these debates do give people the opportunity to vent their ideological biases, they seldom help resolve the problem of a specific plant closing. Whether one likes it or not, the U.S. economic system operates under a form of capitalistic market system. To deal with the unfortunate consequences of plant closings, one must focus on the ways in which this system causes companies to cease operating.

A basic element of the capitalistic market system is the need for profit. There is either profit or loss. If there is sustained loss, a company goes bankrupt. If there is adequate sustained profit, the company has the wherewithal to maintain plant and equipment in competitive condition.

The question is, what is "adequate" profit? Many people are uninformed about how much profit American corporations generate. Part of the blame for their ignorance can be placed with the management of American corporations themselves, due to the way they report profits. Frequently corporations will introduce their news reports with such headlines as "XYZ corporation reports a 25 percent increase in profits." Only in the body of the report does one learn that the 25 percent increase means that net profits rose from k percent to 5 percent. Yet the casual reader of business headlines reads the words "profits" and "25 percent" and incorrectly concludes the company has earned a 25 percent profit return. Companies also mislead the public by announcing profits in terms of dollars. To say that XYZ corporation reported third quarter profits of $5 million is, in itself, not very meaningful. Five million dollars profit on 50 million dollars of sales is quite good; it is not very good, however if sales were 500 million. Yet, the public reads 5 million and assumes high profitability.

There are two generally recognized ways of reporting profitability. One is to report profits as a percent of total sales, either before or after deducting taxes. The other is to report profits as a percent of investment. Most companies report both ways in their annual financial reports.

The average profit as a percent of sales for American heavy industry and manufacturing has tended to range between k and 6 percent in the last ten years. The general public tends to perceive significantly higher levels, say from 10 to 20 percent.

However, for those who have money to invest in new plants and equipment, a more important indicator is the profit rate as a percent of investment. Here the range of profitability is very wide. Investors are much more likely to put money into a company which is generating profits at a rate of 25 percent return on investments than one which is running at a rate of 2 percent. It is precisely because corporate management want to attract investment capital that they tend to focus on short-term results and report profits as favorably as possible.

A fairly recent example of the investment dilemmas facing corporate management was presented when U.S. Steel Corporation purchased Marathon Oil Company. At the time of purchase, U.S. Steel had enough capital and borrowing capacity to go ahead with the construction of an entirely new steel mill in northeastern Ohio. At the same time, energy-related industries were returning very attractive profits to their owners. As U.S. Steel management looked at their options, they were faced with the choice of investing in the equipment must be moth-balled or moved, property taxes must still be steel industry, which was projecting low returns on investment -- or in the petroleum industry, which was projecting much higher returns. They decided to move into the energy field.

Critics of U.S. Steel claim that the company had an obligation to invest in its own industry simply from a moral standpoint. They say the company owed at least that much to its own steelworkers. Critics further claim that a modern U.S. Steel plant in Ohio could have been more profitable than the older ones which the corporation operated.

Defenders of the company decision argue that because of the cyclical nature of the steel industry, corporate diversification provides greater chances for survival. They point to the fact that while the steel maker segment of U.S. Steel lost money in 1982, the Marathon Oil division made money. They argue, therefore, that a lesser percent of steelworkers was laid off in their plants than in other steel-making companies because of the profit contribution of Marathon Oil. The United Steelworkers Union disputes this claim.

Should U.S. Steel have invested in new plants and equipment in the steel industry, or did it do the right thing in diversifying into the energy field? Different people answer that question in different ways. Did the company have a moral obligation to its steelworkers? If so, how well did the company do in fulfilling its obligations? Let the reader decide.

Another reality which escapes much of the public is that profitability is not necessarily improved by closing a plant. To shut down a plant on a temporary or permanent basis involves costs -- productivity goes down as the plant nears the closing date, is difficult to assess the degree to which a particular problem paid, and so on. Furthermore, the company runs a high risk of not being able to capitalize on the opportunities of a turn-around in its market. After an extended plant closing, new workers have to be trained and equipment must be reconditioned. Meanwhile, the company has missed months of profitable operation. It is necessary to remember this reality in dealing with plant closings. For it may well be that forces or organizations outside the company may be able to provide short-term relief to enable the company to "bridge" the recessionary period, if that is the problem. Temporary tax forgiveness or labor concessions may be enough to tip the scales in favor of keeping the plant going.

In dealing with companies involved in plant closings, public Interest groups are in a much stronger position if they have an accurate knowledge of the company's profit picture, both in terms of return on sales and return on investment. Such information can be obtained on a consolidated basis from the company's annual report or in a more detailed form in the company's 10-K report, which can be secured from the company upon request.

ADDRESSING THE PROBLEM OF PLANT CLOSINGS
As one looks at the problem of plant closings, two issues immediately surface: 1) What can be done to prevent plants from closing? 2) What can be done to minimize the effect of plant closings on workers and the community?

A. Keeping Plants Open. Many of the factors listed in this paper as reasons for plant closings can be reduced or eliminated if action is taken soon enough. But if a number of factors are involved, it is difficult to assess the degree to which a particular problem contributes to a plant's demise. Will local government consider tax relief, or will labor consider reduced wages if they are only one part of the problem? How do they know that management is not simply trying to increase profits? Who is to say that an upswing in the business cycle will not remove the threat of a plant closing? Why not press the federal government for tariff protection or federal loans if foreign competition is part of the problem? Up to now, there have been very few instances in which parties concerned about a plant's closing came together early enough to make a difference. The frequency of plant closings during the 1981-1983 recession may have awakened everyone to the threat. The time may be ripe for interested parties to respond to plant closing alerts sooner and with greater effectiveness.

B. Minimizing the Effect of Plant Closings. There are a number of policies which a company could adopt to minimize the effect of plant closings on its workers.

1. Advance notice. If the company can notify workers of a closing date 12 to 18 months in advance, they would have time to prepare for it. Many companies argue that this request presents two problems: (a) In many cases, company management does not know for certain that a plant will close in 12 to 18 months. A change in business demand or a change in some critical factor facing the company can turn a bad situation into a good one or vice-versa. (b) Management is concerned that once an early announcement of a plant closing is made, all the best workers will quickly get jobs elsewhere and the plant's quality, delivery, and costs will turn sour. Everyone concedes, however, that one day's notice of closing is totally

2. Severance pay. A commonly suggested formula is for each worker to receive severance pay equal to one week's earnings for every year of service. The practice of granting severance is fairly common in industry today. Severance pay should not be forfeited if an employee secures another job prior to the actual closing. Otherwise, employees might not begin to look for other work for fear of losing the severance pay.

3. Health benefits. Workers' health benefits should be covered by the company for at least one additional year after the employee is dismissed.

4. Early retirement. Workers who are within three years of normal retirement should be retired on full pension, with years of service computed as if they had worked until age 65.

5. Transfer. In the case of a multi-plant corporation, all workers at the facility should have the opportunity to transfer to an equally paying job at another plant, with full moving expenses covered by the employer.

6. Job retraining. Company-sponsored training programs should be established to train and place workers in other jobs in the local community. These programs should also include family counseling for all employees.

7. Employee purchase. Workers and the local community should be given the opportunity to purchase the plant and operate it under an Employee Stock Ownership Plan (ESOP). This may not be practical if, for example, the plant makes a specialized part for the larger corporation and would have little or no outside market for such a product (auto bumpers, for example, for General Motors). Or, if the plant lends itself to independent operations, the parent company would be unwilling to help establish another competitor in the field. Of course, unless there is a change in those factors which caused the plant to close in the first place, there is no assurance that employee ownership will be any more viable than before.

8. Phasing out of local taxes. Since the closing of a large plant in a small town may have a severe impact on local tax receipts, companies should phase out their local taxes over a five year period. This may involve a voluntary contribution to the local taxing authority if the plant and equipment are disposed of in a way that will severely reduce property taxes.

All of the above practices cost the company money. Very few companies have adopted all of them. Some companies do none of them. In the case of single-plant companies which go bankrupt, there may be no assets left to do any of the above things for workers after all the creditors have been paid. But society should do everything possible to reduce the impact of plant closings on both workers and the community.

LEGISLATION
Is it possible to pass laws which could mandate some or all of the eight policies listed? A look at plant closing laws in Sweden, West Germany, and Great Britain suggests some possibilities.

Sweden's national labor market board is a tripartite committee made up of labor, business, and government representatives. Employers are required to notify the county branch of the board, as well as the union and individual workers, of any decision to close plants or permanently reduce the level of employment at a facility.

Typically, the local board calls a meeting of all interested parties if the employment cut is significant. Under Sweden's co-determination law, the implementation of the closing or cutback must be negotiated with the union. The union has full legal rights to financial and other information about the company. Every aspect of the decision must be negotiated, and the company must await the outcome of the negotiations before it proceeds with its plan. These negotiations introduce greater flexibility into plant closing policy, as strategies can take into account specific firm and industry conditions. Furthermore, a wide range of government programs including vocational training, placement services, and in-plant training allowances for firms, are aimed at improving labor mobility.

In West Germany, every enterprise with five or more employees must have a "works council" elected by workers in the plant. In addition, any company with more than 2,000 employees must have 50 percent employee representation on its supervisory board. Management must give the supervisory board one year's advance notice of impending decisions that could have an adverse impact on the workers. The company must give the works council its reasons and provide full access to corporate data. All aspects of the decision are subject to negotiation. Employers usually must make very high severance payments.

British workers between the ages of 21 and 64, with two or more years of service, are entitled to lump-sum severance compensation of one-and-a-half weeks' pay per year, in addition to regular unemployment benefits. The financial obligation rests entirely with the employer. The government has a variety of programs to promote alternative employment and job mobility. In addition, the government regulates the location of industry, and can deny a license for new industrial floor space if the new production capacity displaces plants in other communities. Advance notice of plant closings (60 days if 10 to 99 workers are affected, and 90 days if 100 or more workers are affected) must be provided. Detailed information on reasons for the cutback must be provided to the government and the unions. The employer is obligated to consult with the government and the unions. During the period of notice, affected workers are entitled to time off with pay to look for new jobs.

While Canada has no laws which mandate certain company policies during plant closings, it does provide a Manpower Consultive Service (MCS) which assists workers and companies in order to minimize the impact of closings. If the union, workers, or the company request it, an MCS advisor will endeavor to create a Manpower Adjustment Committee consisting of representatives of all interested parties. This committee will interview employees who will be displaced, determine their interests and talents, and assist them in preparing job resumes. It will also coordinate job search activities of the union, the company, and local government agencies. The committee's operations are funded jointly by the company, the union, and local and national government. Participation in the program is voluntary, but where it has been used, MCS has demonstrated high success in placing people in new jobs.

In the U.S., at least three states have laws affecting plant closings. In 1971, Maine enacted legislation requiring companies to give 60 days' notice of a plant closing or relocation, and to pay the affected workers a lump sum equal to a week's wages for each year of service. Four years later, the Wisconsin legislature approved a bill requiring 60 days' notice of closings, mergers, or relocations. Michigan has an old law that requires any corporation leaving the state to repay all money, bonds, land, and other inducements it received to locate there. Local groups are pushing to strengthen the law. Supporters of plant closings legislation consider that these existing laws have been ineffective in deterring the closing of plants.

In 1982, Philadelphia became the first city to require firms with more than 50 employees to provide 60 days' advance notice of a shutdown to workers and government. The law followed years of lobbying by more than 50 of the city's churches, unions, and community groups.

Legislation relating to plant closings has been proposed in a number of other states and in Washington, D.C. Most bills provide for advance notice of closings, severance pay and continued health insurance for employees, and some form of payment to local government. Opposition to state legislation comes from chambers of commerce, economic development organizations, and other groups seeking to attract new industry into the state. Opposition to federal plant closing laws comes primarily from those who think the federal government should not be meddling in the normal flow of economic forces.

However, even where laws exist, as in Europe, Maine, Wisconsin, and Michigan, workers and communities are not provided for to the extent suggested in this paper. In the absence of comprehensive legislation, individual corporations must decide how much help they should provide for workers and communities affected by their plant closings.

ADVOCACY
There is a variety of ways in which Christians can serve as advocates on behalf of those affected by plant closings. These will be examined in light of the two issues discussed earlier: 1) ways to keep plants from closing, and 2) ways to help those who are displaced by plant closings.

A. Keeping Plants Open
As mentioned earlier in this paper, plants close for a variety of reasons. In some cases, factories close due to a temporary slump in the economy. In some cases, they shut down due to a basic structural change in the economy. Some closings are the result of management's drive for short term profitability. At other times, the mercantilistic policies of other nations may force plants to close here. Therefore, there can be no general advocacy strategy which would apply in all situations. They must be considered individually, or at least by types of situations.

As Christians we should consider the global implications of economic activity. If, as General Motors has stated, U.S. automobile producers cannot produce subcompact cars as efficiently as the Japanese, should we not concede that segment of the market to the bona fide low-cost producer? Is it fair to the Japanese worker for us to advocate restrictive trade laws designed to protect noncompetitive American industries? On the other hand, if American jobs are being lost due to heavy government subsidies in other nations, such as the steel industry in Western Europe, fairness would suggest that trade laws and trade negotiations recognize that fact and respond accordingly in the short term while still pressing for free world trade in the long term. In this light, efforts to enact "domestic content" laws for the American automotive industry are probably ill-advised.

As a general rule, if an American plant is closing as the result of a structural shift in the world economy due to the ability of another nation to produce the product more efficiently in a free and open market system, should one advocate for legislation, boycotts, or other means of preserving the life of the plant?

If, however, plants are closing solely as the result of a depressed economy, then actions taken to help such plants bridge the slump can indeed serve a useful purpose. Changes in depreciation rules, union "givebacks," revision in work rules, pay cuts for salaried workers, and improved worker productivity are examples of steps which have enabled some companies to survive the steep recession of 1981-83.

Legislation designed to reduce the frequency of corporate takeovers has been proposed, but the phenomenon of these unfriendly takeovers is so new that their ultimate effects cannot yet be seen. Some argue that the pruning process, which frequently involves plant closings, ultimately makes the core organization a stronger competitor in the world market. Others say that the primary objective of such takeovers is the attaining of short-term profits. These critics argue that since long term effects are not being considered by the takeover organizations, legislation should control the activity.

Because of the historic adversarial relationship between labor and management and, to a lesser extent, between management and government, efforts to forestall plant closings have frequently been clouded by distrust among the various parties. Labor has sometimes charged that management is using threats of plant closings to extort reduced wage arrangements from the workers. Similarly, local government has often ignored calls for help from a plant which is truly on the brink of failure.

It is in this area that the church has perhaps the greatest potential for effective advocacy. Church leaders, with no personal self-interest at stake, can play an important intermediary role in the communities faced with potential plant closings. Pastors and lay people can form mediating structures to bring together management, labor, and government to determine what needs to be done to keep a plant operating until economic recovery returns. There have been a number of examples of church coalitions swinging into action only after a plant has closed. Too little attention has been paid to such groups' potential for helping to prevent certain types of plant closings.

Since our nation has no well-planned, comprehensive industrial policy, one wonders if the church could also play a mediating role in bringing together labor and management to begin working toward a national industrial policy.

While most so-called plant closing legislation is aimed at relieving the plight of the displaced worker, there is also a deterrent factor present in that the financial obligations imposed on companies which shut down plants may cause management to find other solutions to their problems. However, the likelihood of enacting comprehensive plant closing laws on a state-by-state basis is slight. Those states which are most threatened with more plant closings are the very states which most want to attract new business and industry. Strict plant closing laws will only make a state less attractive for new industry. Comprehensive plant closing legislation should be undertaken at the national level, in the absence of industry-wide voluntary programs.

B. Minimizing the Effects of Plant Closings
A comprehensive federal plant closing bill providing for the eight policies mentioned earlier would undoubtedly be a major step forward in easing the impact of plant closings. Yet, even such legislation would be of little help to workers who lose their jobs due to a company's bankruptcy. Some people have suggested that it would be better to set up a national plant closing insurance fund, similar to our present unemployment insurance fund. All companies would be required to pay into the fund and, at the time of a plant closing, resources would be drawn from the fund to help the workers.

Canada's experience with its Manpower Consultive Service, as described earlier, can serve as another model of how government can aid in minimizing the effect of plant closings. Such services could be established at a state level, and would not deter new industry from entering the state. Advocacy for such an agency of government should be encouraged.

A number of unions have negotiated certain plant closing provisions into their contracts over recent years. Certainly this is another point for advocacy. It must be remembered, however, that this strategy overlooks the white collar workers and others who are not members of unions.

Another channel for advocacy is the direct appeal to corporations to establish well-defined policies for plant closings. In recent years, religious and public interest groups who hold stocks in American corporations have exercised their rights as shareholders to discuss the issue with management, and to file shareholder resolutions requesting that specific policies be established for plant closings. There is evidence that some companies have changed their policies as a result of such efforts. Certainly this type of advocacy should be encouraged.

Finally, local churches or coalitions of churches can be the means for bringing labor, management, volunteer agencies, and government together in a coordinated program to help the displaced workers. In too many cases it has been up to the displaced worker to discover which resources are available from the union, the company, the United Way agencies, and governmental agencies. While local congregations can provide some emergency needs, counseling, and support for displaced workers, they should also advocate a broad community-wide response to the needs of the workers.

As can be seen, there are many potential routes for advocacy on behalf of those displaced by plant closings. Depending upon individual circumstances, some may be better than others.

CONCLUSION
There is no doubt that plant closings impose a high social cost on the affected workers and communities. Furthermore, since we are members of a global community and since the church is a transnational organization, it is shortsighted to consider plant closings to be a purely domestic phenomenon. Global economics are highly complex. Yet, as a world-wide community of faith, the Christian church must do its best to understand what is going on, to minister to the needs of those who have been hurt by economic forces, and to be an advocate for economic justice on their behalf.