Inside Alabama’s Auto Jobs Boom: Cheap Wages, Little Training, Crushed Limbs - Bloomberg

Regina Elsea was a year old in 1997 when the first vehicle rolled off the Mercedes-Benz assembly line near Tuscaloosa. That gleaming M-Class SUV was historic. Alabama, the nation’s fifth-poorest state, had wagered a quarter-billion dollars in tax breaks and other public giveaways to land the first major Mercedes factory outside Germany. Toyota, Honda, and Hyundai followed with Alabama plants of their own. Kia built a factory just over the border in West Point, Ga. The auto parts makers came next. By the time Elsea and her five siblings were teenagers, the country roads and old cotton fields around their home had come alive with 18-wheelers shuttling instruments and stamped metal among the car plants and 160 parts suppliers that had sprouted up across the state.

A good student, Elsea loved reading, horses, and dogs, especially her Florida cracker cur, named Cow. She dreamed of becoming a pediatrician. She enrolled in community college on a federal Pell Grant, with plans to transfer to Auburn University, about 30 miles from her home in Five Points. But she fell in love with a kindergarten sweetheart, who’d become a stocker at a local Walmart, and dropped out of school to make money so they could rent their own place.

Elsea went to work in February 2016 at Ajin USA in Cusseta, Ala., the same South Korean supplier of auto parts for Hyundai and Kia where her sister and stepdad worked. Her mother, Angel Ogle, warned her against it. She’d worked at two other parts suppliers in the area and found the pace and pressure unbearable.

Elsea was 20 and not easily deterred. "She thought she was rich when she brought home that first paycheck," Ogle says. Elsea and her boyfriend got engaged. She worked 12-hour shifts, seven days a week, hoping to move from temporary status at Ajin to full time, which would bring a raise from $8.75 an hour to $10.50. College can wait, she told her mom and stepdad.

On June 18, Elsea was working the day shift when a computer flashed "Stud Fault" on Robot 23. Bolts often got stuck in that machine, which mounted pillars for sideview mirrors onto dashboard frames. Elsea was at the adjacent workstation when the assembly line stopped. Her team called maintenance to clear the fault, but no one showed up. A video obtained by the Occupational Safety and Health Administration shows Elsea and three co-workers waiting impatiently. The team had a quota of 420 dashboard frames per shift but seldom made more than 350, says Amber Meadows, 23, who worked beside Elsea on the line. "We were always trying to make our numbers so we could go home," Meadows says. "Everybody was always tired."

After several minutes, Elsea grabbed a tool—on the video it looks like a screwdriver—and entered the screened-off area around the robot to clear the fault herself. Whatever she did to Robot 23, it surged back to life, crushing Elsea against a steel dashboard frame and impaling her upper body with a pair of welding tips. A co-worker hit the line’s emergency shut-off. Elsea was trapped in the machine—hunched over, eyes open, conscious but speechless.

No one knew how to make the robot release her. The team leader jumped on a forklift and raced across the factory floor to the break room, where he grabbed a maintenance man and drove him back on his lap. The technician, from a different part of the plant, had no idea what to do. Tempers erupted as Elsea’s co-workers shoved the frightened man, who was Korean and barely spoke English, toward the robot, demanding he make it retract. He fought them off and ran away, Meadows says. When emergency crews arrived several minutes later, Elsea was still stuck. The rescue workers finally did what Elsea had failed to do: locked out the machine’s emergency power switch so it couldn’t reenergize again—a basic precaution that all factory workers are supposed to take before troubleshooting any industrial robot. Ajin, according to OSHA, had never given the workers their own safety locks and training on how to use them, as required by federal law. Ajin is contesting that finding.

An ambulance took Elsea to a nearby hospital; from there she was flown by helicopter to a trauma center in Birmingham. She died the next day. Her mom still hasn’t heard a word from Ajin’s owners or senior executives. They sent a single artificial flower to her funeral.

Alabama has been trying on the nickname "New Detroit." Its burgeoning auto parts industry employs 26,000 workers, who last year earned $1.3 billion in wages. Georgia and Mississippi have similar, though smaller, auto parts sectors. This factory growth, after the long, painful demise of the region’s textile industry, would seem to be just the kind of manufacturing renaissance President Donald Trump and his supporters are looking for.

Except that it also epitomizes the global economy’s race to the bottom. Parts suppliers in the American South compete for low-margin orders against suppliers in Mexico and Asia. They promise delivery schedules they can’t possibly meet and face ruinous penalties if they fall short. Employees work ungodly hours, six or seven days a week, for months on end. Pay is low, turnover is high, training is scant, and safety is an afterthought, usually after someone is badly hurt. Many of the same woes that typify work conditions at contract manufacturers across Asia now bedevil parts plants in the South.

"The supply chain isn’t going just to Bangladesh. It’s going to Alabama and Georgia," says David Michaels, who ran OSHA for the last seven years of the Obama administration. Safety at the Southern car factories themselves is generally good, he says. The situation is much worse at parts suppliers, where workers earn about 70¢ for every dollar earned by auto parts workers in Michigan, according to the Bureau of Labor Statistics. (Many plants in the North are unionized; only a few are in the South.)

Cordney Crutcher has known both environments. In 2013 he lost his left pinkie while operating a metal press at Matsu Alabama, a parts maker in Huntsville owned by Matcor-Matsu Group Inc. of Brampton, Ont. Crutcher was leaving work for the day when a supervisor summoned him to replace a slower worker on the line, because the plant had fallen 40 parts behind schedule for a shipment to Honda Motor Co. He’d already worked 12 hours, Crutcher says, and wanted to go home, "but he said they really needed me." He was put on a press that had been acting up all day. It worked fine until he was 10 parts away from finishing, and then a cast-iron hole puncher failed to deploy. Crutcher didn’t realize it. Suddenly the puncher fired and snapped on his finger. "I saw my meat sticking out of the bottom of my glove," he says.

Now Crutcher, 42, commutes an hour to the General Motors Co. assembly plant in Spring Hill, Tenn., where he’s a member of United Auto Workers. "They teach you the right way," he says. "They don’t throw you to the wolves." His pay rose from $12 an hour at Matsu to $18.21 at GM.

In 2014, OSHA’s Atlanta office, after detecting a high number of safety violations at the region’s parts suppliers, launched a crackdown. The agency cited one year, 2010, when workers in Alabama parts plants had a 50 percent higher rate of illness and injury than the U.S. auto parts industry as a whole. That gap has narrowed, but the incidence of traumatic injuries in Alabama’s auto parts plants remains 9 percent higher than in Michigan’s and 8 percent higher than in Ohio’s. In 2015 the chances of losing a finger or limb in an Alabama parts factory was double the amputation risk nationally for the industry, 65 percent higher than in Michigan and 33 percent above the rate in Ohio.

"I gave them a very strong message … ‘American consumers are not going to want to buy cars stained with the blood of American workers’ "

Korean-owned plants, which make up roughly a quarter of parts suppliers in Alabama, have the most safety violations in the state, accounting for 36 percent of all infractions and 52 percent of total fines, from 2012 to 2016. The U.S. is second, with 23 percent of violations and 17 percent of fines, and Germany is third, with 15 percent and 11 percent. But serious accidents occur in plants from all over, according to more than 3,000 pages of court documents and OSHA investigative files obtained under the Freedom of Information Act.

Michaels, who was running OSHA when Elsea was killed, was furious when he learned how it happened. A year earlier, while attending a conference in Seoul, he’d paid a visit to executives at Hyundai Motor Co. and Kia Motors Co. to warn them that OSHA had found serious safety violations at many of their Korean-owned suppliers in the Southeast. Michaels told the carmakers they were squeezing their suppliers too hard. Their productivity demands were endangering lives, and they had to back off.

"I gave them a very strong message: ‘This brings shame on your reputation. American consumers are not going to want to buy cars stained with the blood of American workers,’ " says Michaels, who in January rejoined the faculty of George Washington University. "They didn’t acknowledge the problem but said they were committed to safe working conditions. Clearly, they didn’t make safety a requirement for their suppliers." Safety is a top priority at Hyundai’s Alabama operation, says spokesman Robert Burns, who added that Hyundai promotes safety at suppliers’ plants with quarterly forums and requires suppliers to comply with OSHA standards.

After Elsea’s death, Ajin issued a statement saying all employees were being retrained in safety procedures. "Ajin USA is deeply saddened by the tragic loss of Regina Elsea," it said. A spokesman, Stephen Bradley, says the company can’t comment on the incident because of litigation. Elsea’s death "was a tragic accident, and Ajin remains deeply saddened," the company said in a written statement. "Safety continues to be our guiding principle."

Ajin had settled other OSHA violations a month before Elsea was killed. Eight workers had fingers crushed or fractured in recent years in welding machines. After the first seven injuries, Ajin’s safety manager recommended installation of a machine controller called Soft Touch, which slows welding electrodes and stops them from closing together if a finger is detected. Nothing happened. Then an eighth worker smashed his thumb. For the unsafe welding machines, OSHA fined Ajin a total of $7,000.

In December, after investigating Elsea’s death, OSHA fined the company $2.5 million for four "willful" citations, the agency’s most severe sanction, reserved for violators that "knowingly" disregard employee safety. Ajin is contesting the findings.

The pressure inside parts plants is wreaking a different American carnage than the one Trump conjured up at his inauguration. OSHA records obtained by Bloomberg document burning flesh, crushed limbs, dismembered body parts, and a flailing fall into a vat of acid. The files read like Upton Sinclair, or even Dickens.

In 2015, a 33-year-old maintenance worker was engulfed in flames at Nakanishi Manufacturing Corp.’s bearing plant in Winterville, Ga.—after four previous fires in the factory’s dust-collection system. The plant’s maintenance chief told the OSHA investigator that he’d been too busy to write up proper lockout procedures for working on the system. The technician suffered third-degree burns all over his upper body. Last year, OSHA levied a $145,000 fine (later negotiated down to $105,000) on the Japanese company, which supplies parts to Toyota Motor Co., for, among other infractions, a willful violation for knowingly exposing workers to unguarded radial presses.

Phyllis Taylor, 53, scorched her hand inside an industrial oven last year at the HP Pelzer Automotive Systems Inc. insulation plant in Thomson, Ga., while baking foam rubber linings for BMW hoods. The oven had been down for repairs earlier that day, and "there was always pressure to catch up," Taylor says. She slipped on a puddle of oil at her feet, and as she instinctively grabbed the oven in front of her, the door slammed down on her hand. She’d been telling her supervisor for weeks about the oil leak. "They don’t pay you no mind; they just want you to work," says Taylor, who had skin graft surgery but still can’t close her dominant hand. The plant’s maintenance manager told OSHA, "The focus of this plant is production at all costs." OSHA fined HP Pelzer $705,000 for 12 "repeat" safety violations.

"You heard all day long, ‘If we don’t get these parts out, the customer is going to fine us $80,000’ "

Nathaniel Walker, 26, had been doing the same high-wire act for three years at the factory of WKW-Erbsloeh Automotive, a supplier of metal trim parts to Mercedes and BMW, in Pell City, Ala. Every Saturday he climbed onto a ventilation duct above big dipping pools of acid on the plant’s back line, where the aluminum parts were anodized to give them a protective coat. It was always a race. At first, Walker and a co-worker had 24 hours to clean and service as many of the 34 tanks as possible. As production demands rose, management cut that to 14 to 16 hours, and sometimes to as few as 6. The job required balance and dexterity. Walker and his colleague hopped on and off the 4½-foot-high ventilation shafts, hauling hoses, tools, and 50-pound bags of caustic soda. They were always exhausted—Walker worked from 3 p.m. to 3 a.m., seven days a week, for up to six months straight.

There were no gangways, no cables, no handrails. The only training the workers got from the plant’s German supervisors, according to Walker, was in how to rinse off the ventilation ducts so they weren’t so slippery.

In July 2014, Walker fell in. He was balancing on the duct between two tanks—one empty, one full—while using a crowbar in the empty one to remove and replace a lead cathode. His hands slipped, and he tumbled backward into a vat of sulfuric and phosphoric acid 4 feet deep. Submerged, he swam for a second before righting himself. A nearby co-worker quickly pulled him out and hosed him down, minimizing damage to his skin and eyes. Walker’s cotton shirt pulled off his skin like wet tissue paper. His throat burned and swelled from swallowing the solution. He spent four days in intensive care and didn’t fully recover for months.

OSHA fined WKW-Erbsloeh $178,000 and issued the company a willful violation for failing to secure the work areas around open chemical tanks. The agency had inspected WKW-Erbsloeh eight times since 2009 and issued multiple citations after another worker’s arm was chewed up in a polishing machine and a third employee lost a thumb. Walker was earning $13 an hour when he fell into the acid. "I was way, way underpaid for working all the time in a risky situation like that," he says.

Ray Trott, a retired U.S. Marine aircraft maintenance chief, worked for WKW-Erbsloeh as a production manager until 2015. He says the German managers didn’t seem to understand the American workers and were never satisfied with what they got from them. "If you made 28,000 parts one day, the next day they’d want 29,000," Trott says. "You heard all day long, ‘If we don’t get these parts out, the customer is going to fine us $80,000.’ "

Reco Allen, 35, took a job at Matsu Alabama to get his life together. After dropping out of high school, he’d worked briefly at McDonald’s, then sold marijuana for a living. When he turned 30, with three kids younger than 6 and his wife working at Walmart, Allen decided dealing dope was no way to raise a family. "They’d see cars pulling up, hear people talking, and ask, ‘Daddy what are you doing? You ain’t got no job.’ I wanted to better myself."

He applied at Surge Staffing, a temp agency that was hiring workers for Matsu. Allen’s dad, who’d worked at the facility for a few weeks after a 30-year career making furniture at Steelcase Inc., told him to stay away—the Matsu plant was too dangerous. "Don’t let the monster eat you up," he told his son.

Allen took a $9-an-hour job on the overnight shift as a janitor. He passed up higher-paying positions on the assembly line, because "the machines scared him," says Adam Wolfsberger, the former manager at Surge Staffing who hired Allen. The only training he received was where to find the mop and broom, Wolfsberger says.

He stood there for an hour, his flesh burning inside the heated press. When emergency crews finally freed him, his right hand was severed at the wrist

On April 2, 2013, after Allen had been on the job for about six weeks, a plant supervisor ordered him to put down his broom. He assigned him to work the rest of the shift on one of the metal-stamping presses instead and admonished him not to tell anyone about the job switch. Matsu was producing only 60 percent of its parts quota and could have been fined $20,000 by Honda for every minute its shortfall held up the company’s assembly line, according to a deposition by the plant’s general manager at the time, Robert Todd, in a workers’ compensation suit filed by Allen in state court in Huntsville.

Allen testified in the case that his only operating instructions came from a co-worker who told him: "Get these blanks out of the bin. You load them in the machine, and you make sure you get back." Stepping back was essential, not only to avoid injury but to clear the vertical safety beam, or light curtain, which is supposed to deactivate the machine if a worker is standing too close when an operator cycles it on.

At about 4 a.m., Allen, wiry and 5 feet 9 inches, was leaning inside the machine with his arms extended upward, loading metal bolts. Suddenly the die, which stamps the metal parts, slammed onto his arms. "It felt like the whole world was coming down on me," he says. The press operator hadn’t noticed him working inside the machine, and Allen’s frame was so slight that the safety beam missed him.

He stood there for an hour, his flesh burning inside the heated press. Someone brought a fan to cool him off. "I was just talking to myself about what my daddy had told me," Allen says. When emergency crews finally freed him, his left hand was "flat like a pancake," Allen says, and parts of three fingers were gone. His right hand was severed at the wrist, attached to his arm by a piece of skin. A paramedic cradled the gloved hand at Allen’s side all the way to the hospital. Surgeons removed it that morning and amputated the rest of his right forearm to avert gangrene several weeks later.

Matsu, it turned out, had known for years that Press 10, where Allen was dragooned into working, was dangerous. Three years earlier a press operator on the plant’s safety committee reported a near miss on an identical machine after the light curtain failed to pick up a worker. The safety committee recommended fixes to the vertical beam, but nothing was done, according to testimony in the court case. In 2012 a worker on that same press had his hand crushed. In response, Todd, the general manager, recommended installing horizontal beams to eliminate the blind spot in the vertical light curtains of both machines. It would have cost $6,000 to $7,000, Todd testified. John Carney, the company’s vice president for operations at the time, rejected the proposal. Instead, he told Todd to install a safety bar, for $150, Todd testified. It failed to protect Allen.

After Allen’s injury, Surge Staffing gathered its 80 or so Matsu workers for a meeting, says Wolfsberger, the former Surge manager. That’s when the agency learned the plant had provided no hands-on training, routinely ordered untrained temps to operate machines, sped up presses beyond manufacturers’ specifications, and allowed oil to leak onto the floor. "Upper management knew all that. They just looked the other way," says Wolfsberger, who left Surge in 2014 and now manages a billiards parlor. "They treated people like interchangeable parts."

An administrative law judge with the Occupational Safety and Health Review Commission approved a $103,000 fine against Matsu, ruling that Allen’s injuries resulted from its "conscious disregard or plain indifference" to his safety. Matcor-Matsu did not respond to phone messages and emailed questions, nor did its attorney, John Coleman. After the commission’s 2015 decision, Coleman told the Birmingham News the judge was mistaken and that Allen was trained but didn’t follow the rules. Allen sued the company and reached a multimillion-dollar settlement out of court. He and his wife purchased 15 acres and a big house with a fish pond near the Tennessee River, prepaid their kids’ college tuition, and bought a bright-green Buick Roadmaster. "I’d rather have my arm back any day," Allen says.