Labor woes brew at U.S. Ikea plant

DANVILLE, Va. — When home furnishing giant Ikea selected this fraying blue-collar city to build its first U.S. factory, residents couldn’t believe their good fortune.

Beloved by consumers worldwide for its stylish and affordable furniture, the Swedish firm had also built a reputation as a good employer and solid corporate citizen. State and local officials offered $12 million in incentives. Residents thrilled at the prospect of a respected foreign company bringing jobs to this former textile region after watching so many flee overseas.

But three years after the massive facility opened here, excitement has waned. Ikea is the target of racial discrimination complaints, a heated union-organizing battle and turnover from disgruntled employees.

Workers complain of eliminated raises, a frenzied pace and mandatory overtime. Several said it’s common to find out on Friday evening that they’ll have to pull a weekend shift, with disciplinary action for those who can’t or don’t show up.

Some of the Virginia plant’s 335 workers are trying to form a union. The International Association of Machinists and Aerospace Workers said a majority of eligible employees had signed cards expressing interest.

In response, the factory — part of Ikea’s manufacturing subsidiary, Swedwood — hired the law firm Jackson Lewis, which has made its reputation keeping unions out of companies.

The dust-up has garnered little attention in the U.S. But it’s front-page news in Sweden, where much of the labor force is unionized and Ikea is a cherished institution. Per-Olaf Sjoo, the head of the Swedish union in Swedwood factories, said he was baffled by the friction in Danville.

Laborers in Swedwood plants in Sweden produce bookcases and tables similar to those manufactured in Danville. The big difference is that the Europeans enjoy a minimum wage of about $19 an hour and a government-mandated five weeks of paid vacation. Full-time employees in Danville start at $8 an hour with 12 vacation days — eight of them on dates determined by the company.

Low prices have helped Ikea weather the economic downturn. Profits were up 6 percent last year.

Still, last fall, Swedwood eliminated scheduled raises and made cuts to pay packages in Danville. Starting pay in packing, for example, was reduced to $8 an hour from $9.75. The changes were reportedly made to free up more money to pay incentive bonuses to top performers.

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