The U.S. is to Ikea as Mexico is to U.S. corporations. That’s what workers in Danville, Va., discovered after the Swedish furniture giant built its first American plant in the southern rural community. In Sweden, Ikea has a reputation for paying high wages, giving good benefits, and accepting unions. Even when it built factories in Eastern Europe, its good image remained intact. But in Danville, according to the Los Angeles Times, the three years since the Ikea factory opened have seen workers complaining about “eliminated raises, a frenzied pace and mandatory overtime.” Many workers aren’t even entitled to the meagre benefits and wages of the regular employees, since a third of them are temps.
When the employees tried to form a union, the factory hired one of America’s most prominent union-busting law firms. And there have been accusations of racial discrimination; six African-American workers have already filed grievances, claiming that black workers “are assigned to the lowest-paying departments and to the least desirable third shift” for making difficult-to-assemble furniture. In Sweden, people are shocked to see Ikea throw away what Swedish union boss Per-Olaf Sjoo called its “good Swedishness,” turning into a typical capitalist behemoth.
Why would a company abandon its friendly corporate culture? One explanation is the same reason why U.S. firms outsource to other countries, or why carmakers set up non-union shops in the southern U.S. Ingrid Steen, a spokeswoman for Ikea’s parent company Swedwood, told the Times that the difference in wages “is related to the standard of living and general conditions in the different countries,” and people in Sweden expect a higher standard of living than in the U.S.
Another clue is that Ikea is reportedly relying mostly on Americans to run its U.S. division. “Why would a company with a solid corporate culture and decent reputation throw all that away?” asked John Cole of the U.S. blog Balloon Juice, who points to those managers, shaped by “U.S. law schools and M.B.A. programs,” as the culprits. It turns out that when a Scandinavian firm is run by Americans, it looks and acts an awful lot like an American company.