Printer-friendly VersionGlobal Prosperity and Local Shutdown
by 
Assaf Adiv
In the year 2000, Delta Galil, biggest of Israel's textile exporters, gradually laid off all 400 (Arab) workers of its plant in Nazareth, shutting it down forever. With a population of 63,000, Nazareth is the biggest Arab city in Israel, but the Delta textile plant was its only factory. Its closing is a major blow, therefore, to the local economy. Delta blames the shutdown on losses. Yet WAC (the Workers' Advice Center) has discovered that the year 2000 wasn't altogether bad for this big Israeli multi-national.
Despite its "losses", Delta managed to purchase three companies in North America, all based on the exploitation of cheap labor in East Asia and Latin America. The new Intifada broke out on October 1, 2000 in Nazareth. (In the course of the demonstrations, the police killed three of the city's sons). The eruption was in large part a reaction to social and economic changes which have bypassed the Arabs in Israel and left them futureless. Since 1985 the country has been seeking a niche for itself in the much-touted global economy. Capitalist globalization brings great wealth to the happy few, while marginalizing the masses.
When this class contradiction becomes intertwined with national issues, the result is explosive. Unemployment in Israel's Arab towns has reached record official heights of 20% in the last three years. This figure represents only those seeking work. Not included are most Arab women. Many of these would work in their towns and villages - if there were work to be had.
Here, then, we see the Israeli textile industry - practically the only one that employs Arab women - becoming extinct.
When the plant in Nazareth closed, the ramifications were felt not only there, but also in surrounding villages such as Yaf'at a-Nasira, Reina, Ein Mahel, Kufr Cana and Kufr Manda, all of which together compose the biggest Arab population center in Israel. Delta Galil shut the doors of its Nazareth plant at the end of November 2000. It was the only factory of any significance in this city of 63,000. It sat in the heart of an otherwise barren 20-acre tract designated for industry.
By contrast, the adjacent Jewish city of Nazareth-Ilit (built on confiscated Arab lands, containing 40,000 people) has 1250 industrial acres, which are full of factories. At the start of the year 2000, things looked rosy for the Nazareth textile plant. It provided work, at its height, for 400 women. During the course of the year, however, Delta laid off some 260. When word came that the factory was closing forever, the news was a shock to those who remained. Some had worked there for more than twenty years. The company promised to transfer them to its plant in (Jewish) Carmiel, thirty miles away by car. For most of the workers, such a solution wasn't feasible. The real reason for the shutdown.
The spokesperson for Delta Galil, Dorit Shahaf, told Challenge, "The company invested a great deal of effort into making the Nazareth plant profitable. Only after it was clear that this could not be done did the company decide to close it." The manager of the plant, Sahar Za'id, gave us more specific information: "The entire product of the Nazareth plant went to the British company, Marks and Spencer. Until last year, M & S was Delta's principal outlet to the world. Last year, however, it got into a crisis and therefore reduced its orders from Delta." Dov Lautmann, Delta's chairman, is the real power in the company. He had a different explanation for the shutdown (in Yediot Aharonot December 1, 2000): "We're talking about a little sewing factory that just wasn't efficient enough. We'd planned in any case to shut it down and merge it with others." The fact is, the closing of the Nazareth plant completes a series of organizational measures taken by Delta in recent years.
In the course of these steps, it has shut five small and medium-sized factories employing Arabs in Galilee. These were located in: Ein al-Assad, Bukea, Horfeish, Shefa'mr and in the Jewish village of Kfar Tavor. For a company that employs 3500 people in Israel and as many abroad, a plant with 140 workers is one small link in a long chain of production. In the same interview, Lautmann says that the plants in Jordan and Egypt today account for a third of the company's production. The link at Nazareth was too small to be "efficient" - but what was the criterion of efficiency? The entire production process, to which this link belongs, is profitable. But it is not as profitable as it could be, were it merged with others.
In this light, it matters not a whit if hundreds of families lose a source of income. That is good capitalist procedure. Why should anyone expect anything different? Delta turns to the American market Despite the structural changes that Delta has wrought in the last seven years, following peace accords with the Palestinians and with Jordan, the company announced to Wall Street (October 11, 2000) that its profits in the near future would be lower than anticipated. The market responded with a drop in the value of Delta stocks. Lautmann then explained that the lower profits would result from the increased value of the Israeli shekel against European currencies.
He went on to reveal that Delta was completing the acquisition of Inner Secrets, a US company that produces and markets textiles. This purchase, he said, would result in a major increase in Delta's sales to the American market in 2001. Within the course of a single year, in fact, Delta has managed to take control of three textile companies in the US and Canada: Dominion, Wundies Industries, and Inner Secrets. These acquisitions led to an immediate upsurge in Delta's sales to the enormous North American market.
According to its Website (
www.deltagalil.com), its sales there grew by 50% in the first half of the year 2000, compared with the parallel period in 1999. The Israeli business journal, Globes, had much praise for Delta's strategy: "Delta has proved itself to be a global company. The purchase of companies in North America will turn Delta into a source of attraction for Wall Street investors." (September 8, 2000) The temptation of globalization Delta has put into effect the mechanism of the global economy.
More than other industrial branches, the textile sector is extremely sensitive to labor costs. No robot has yet been found to replace the person at a sewing machine. A textile worker in Israel receives the minimum wage of 2950 shekels monthly ($750). Adding social benefits, the total cost to the employer can amount to $1000.
An Egyptian or Indonesian or Chinese worker, however, will do the same job for $20 - $100 monthly. The price of a worker in Israel, then, could buy the labor of ten to fifty elsewhere. The sales of Inner Secrets, recently purchased by Delta, fetched $90 million in 1999. The actual production was done through agreements with local producers in China, Indonesia, Bangladesh, Mexico, Haiti, Columbia and the Dominican Republic.
It must have been extremely tempting, indeed, to close the "inefficient" little factory in Nazareth. And where was the Histadrut? Before announcing its intention to shut the Nazareth plant, Lautmann of Delta turned to the Histadrut, Israel's national labor union, and asked for help in avoiding public protest and minimizing political damage. (Delta allows the Histadrut to operate in its plants and helps it control the workers.) The Histadrut responded favorably to Lautmann's call. It appointed Kamal Abu Ahmad to coordinate the shutdown: he is assistant to the secretary of the Nazareth Workers' Council, as well as assistant to the secretary of the Union of Textile Workers on behalf of Maki (the Israeli Communist Party) and Hadash. Maki's Arabic daily, al-Ittihad , reported on November 24, 2000 that Abu Ahmad met personally with each of the workers, attempting to persuade them to accept the company's proposal that they commute to its Carmiel plants - this, "in the light of the difficult problem of unemployment that presently obtains in the market." The mayor of Nazareth, Ramez Jereisi (Hadash) made contact both with Delta's Chairman Lautmann and with Labor Party Secretary Ra'anan Cohen, going through the motions, at least, of trying to persuade Delta's management to leave the plant open. After talking with Nazareth spokesperson Ramzi Khakim, Challenge concludes that Lautmann was very persuasive. Khakim explained: "The company had losses, and therefore it closed the plant." The shutdown passed with no public reaction.
The 400 workers who lost their jobs in the year 2000 were left helpless, for their union did not step in to organize their struggle. The Histadrut accepted the closing as an accomplished fact. So did the Municipality of Nazareth, which is headed by a coalition of Hadash and the Islamic List. WAC, as an independent Trade Union Association, rejects this "cooperative" approach to the needs of global firms. Workers cannot and should not accept the decrees of globalization as natural laws.
We must establish unions that are prepared to confront international capital and its companies, not just locally but on a global scale. The Deltas of the world must learn that their "measures of efficiency" will cost them plenty. Just as consumers with a consciousness of labor rights already boycott firms such as Nike and Gap, which exploit workers throughout the world, so too we must exact a price from Delta and its like, which are ever seeking areas of weakness in which to maximize profits. In order to oppose them, we must build a union that can mobilize a global response to the moguls of capital, who treat the labor market as if it were their own backyard.
