Troy Mallott has worked his manufacturing job in Peru, Indiana, for 15 years. He planned to finish his career there.
But now Mallott and his neighbors in Peru, a small city of around 11,000 residents, are bracing for the loss of the Schneider Electric production facility, the area’s largest employer that has operated since the early 1900s. In February, the French multi-billion dollar company announced plans to close in the city, with the final waves of layoffs planned throughout the next few months.
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The writing, as it so often is when it comes to Midwestern plant closings, was on the wall. In 2017 and 2018, the company reduced the plant’s workforce by 25 percent. The remaining 306 workers, who mostly produce electrical panel-boards, were expected to largely be left unemployed as production may be sent to either Monterey, Mexico, or other U.S. facilities.
The closure has struck a chord in the traditionally conservative state in the wake of flamboyant promises from President Trump that companies would face consequences for offshoring jobs. In Miami County, where Peru is located, Trump won over 70 percent of the vote in 2016. No president could realistically halt a decades-long trend toward offshoring overnight, but facilities across the Midwest have continued to close and send jobs outside the United States despite hefty profits, lucrative federal contracts, and broad-based corporate tax cuts. On Monday morning, tens of thousands of General Motors workers went on strike when the UAW failed to cut a new deal with the company that made $2.4 billion in profit in just the second quarter of this year, and a key issue in play has been the potential reopening of an idled plant in Lordstown, Ohio.
Now, some of the same conservative areas that carried Trump to the White House in 2016 partly on the promise that he would save their jobs are boiling over with anger at the very real ramifications of his ineffectiveness—and industrial realities that have been a long time coming.
“Trump has really disappointed the State of Indiana and the City of Peru. He needs to come down here to see what’s going on,” Mallott said. “It’s going to kill the community. They’re just ruining so many lives here. So many lives. I thought I had a future here. It’s just wrong to do this to a community just to save a buck. That’s not what you do to people.”
The International Association of Machinists and Aerospace Workers union, which represents the plant, said it offered various concessions in hopes of keeping the facility open—including cuts to wages, benefits, and tax cuts from the union and local municipalities—to no avail.
“If you get federal aid from the government, that work needs to stay in the U.S.,” said Dana Eckelbarger, who worked at the plant for 12 years and said he was set to be laid off at the end of this month. “They’ve made record profits so far this year and they’re still sending work across the border to Mexico. It’s cheap labor. They don’t want to pay the wages we’re making.”
Eckelbarger added that Schneider Electric had received millions of dollars in federal contracts, tax cut savings, and stimulus funding, but was still offshoring U.S. jobs. In fact, Schneider Electric and its affiliates have started more than $9 million in new federal contracts since announcing the Peru, Indiana, plant closure. The closure has also been criticized as partly a union busting measure, as the Schneider Plant in Peru, Indiana was one of two U.S. plants to strike in 2014 amid new union contract negotiations. (Schneider Electric did not comment on whether the unionized workforce played a role in the plant’s closure.)
“This has been a money-making company for 100 years. This is the livelihood here in Peru,” Eckelbarger said. “There are a lot of things tied into the plant closure that is going to hurt big time. It’s going to hurt the schools, the police department, the fire department. It’s going to hurt everybody in the long run.”
In a June 2017 study conducted by Ball State’s Center for Business and Economic Research, researchers found 61 percent of jobs in Miami County, Indiana were at risk of automation and about 28.2 percent were at risk of trade displacement, according to one of the lead authors, Ball State’s Dr. Michael Hicks.
“These jobs were at risk of both, and I think that is precisely what is happening,” Hicks said. “Effective options for this community are limited. This will shrink the tax base, cause some outmigration, and weaken the local public finances at a difficult time, when the region faces a growing economic slowdown.”
Plant closures have devastated towns and cities across the Midwest for decades, but Trump’s blustery vows to reverse the tide have failed to materialize in the region, as multi-billion dollar manufacturing companies such as GM and Carrier’s air conditioning have continued to shut down plants and lay off workers.
“We lost K-Mart, we lost Toys-R-Us, the hospital got shut down, and last month was the final print of the local newspaper,” said Chuck Denison of Youngstown, Ohio, who worked at the Lordstown plant for 20 years before he was forced to take early retirement late last year. “Bars and gas stations have closed down. More houses are going up for sale.”
Now Denison and Frank Staples, a Carrier plant employee in Indianapolis for 14 years who is currently on medical leave, are organizing workers with the Bernie Sanders-affiliated group Our Revolution to protest other plant closures and layoffs in the Midwest, including the Schneider Electric plant.
“I’ve seen businesses in my own hometown close because Carrier fired so many people,” Staples said. He argued that if Schneider Electric followed through with closing the plant, the city’s loss in payroll taxes and cascade effect on small businesses would completely ruin the town. “They’re not going to have a Peru anymore. You’re going to have a community ripped apart in the Midwest due to corporate greed.”
This year, Peru also lost its own K-Mart retail location as Sears Holdings filed for bankruptcy in late 2018 and a major grocery store, Shoppers Value Foods, also closed.
In a statement, a spokesperson for Schneider Electric told VICE, “We made the difficult but necessary business decision to move production elsewhere in our global manufacturing network as it will allow us to remain competitive in the markets we serve. We announced this to employees in February 2019. Our employees have been and will continue to be treated with dignity and respect throughout their employment with us.” The White House did not respond to multiple requests for comment on this story.
That the closures might flip a right-leaning state like Indiana against a president gunning for re-election seemed unlikely. But amid a surging tide of labor organizing in recent months, the story of one Midwest town’s lifeline in jeopardy suggests Trump-style economic nationalism was seeing the limits of its appeal. Recent polling has generally shown Trump’s support in the Midwest to be under 50 percent, and Republicans suffered significant 2018 midterm losses in Michigan, Wisconsin, and Pennsylvania.
More immediately, residents were left to wonder what came next for them. As Gabriel Greer, the city’s mayor and a Democrat who recently attended a rally organized by Our Revolution outside the plant put it, “We supported this factory whole-heartedly for generations, and the scar it leaves to up and take all those jobs away from the factory after generations is shocking.”
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