Supply Chain Inquiry, Los Angeles, 12 March 2016

syndicalist

I posted it on my FB page. Not sure how much it helps, but.... Good luck!

Thanks comrade.

As Pannekoek rightly stressed, opting for the power of councilor forms of organization “poses problems” rather than providing a solution

As co-presenters at the workshop in Los Angeles, here's our report-back. It's also a brief account of some of the logistics infrastructure witnessed during our journey as some of us drove to and from Los Angeles from San Francisco and passed through the massive agribusiness zones of California's Central Valley. We approach these travels, as well as the workshops we participate in, as missions of "problem posing" -- hence we call them inquiries as we study the continuous process of the making and remaking the California working class.

Northern California Logistics Tour

As we crossed the San Francisco-Oakland Bay Bridge, we left the East Bay in a torrential downpour and traveled out I-580, following the route of the western end of the first Transcontinental Railroad, and noticed the Safeway corporate headquarters right where it crosses I-680 in Pleasanton. Safeway took its name in 1925; it distinguished itself from other grocers who offered credit, as it was formed as a “cash-and-carry” operation – and later one of the first chains to provide parking lots. Merrill Lynch bought an 80% share in 1926, making co-Marlon Skaggs CEO of the biggest chain west of the Mississippi. Safeway moved to Oakland in 1929, making Emil Hegstrom’s former Mutual Creamery Building (5726 International Boulevard) its headquarters in 1931, remaining there until it moved its headquarters to Pleasanton in 1996.

The area of the Safeway Building is booming, as though the crash in 2008-2009 never happened. The I-680 Corridor had been a “back office” zone, where office parks had been relocating for the access to cheaper contingent labor than the Financial District, centered on Montgomery Street in San Francisco, for decades. A little further north on I-680, San Ramon’s Bishop Ranch business park hosts Chevron’s world headquarters, AT&T’s West Coast Headquarters, GE Global Research’s “nerve center” for software development, as well as regional offices and distribution centers for Toyota and UPS. Bishop Ranch has become a major cluster of administrative functions for regional branches of global corporations like Nestlé, Toshiba, GE, PG&E, FedEx, Ford, Proctor & Gamble, OCCL (steamship carrier), IBM, New York Life, 24 Fitness, Sprint, Armanino, Bank of the West, JP Morgan Chase, Chubb, and Robert Half International.

Safeway had been bought in March 2014 by Cerberus Capital Management in a $9.4 billion deal, which merged it with the Boise, Idaho-based Albertsons supermarket chain. The purpose is to compete with big-box retailers like Walmart, Target, Costco, but also rising players like Trader Joe’s, and convenience stores selling food. Another possible threat is online grocery and delivery services like Fresh Direct and Amazon Fresh. Another benefit of the merger is shared efficiencies from combined distribution.

Statistics about the merger of the Safeway and Albertsons supermarket chains:

• stores of combined Safeway & Albertsons: 2,400 (2nd in U.S. to rival Kroger’s 2,600)
• 27 distribution centers & 20 food processing factories
• approx. 250,000 employees
• locations in 20 states, primarily California, the West, Midwest & mid-Atlantic from Safeway; 15 states, including California, Colorado, Louisiana & Texas from Albertsons

Mergers like this reflect the near-continuous reconfigurations of the retail industry which further transforms how people in the U.S. will shop for groceries, now and into the future. And it affects a once highly-paid, benefited working class sector, as all these changes have made retail work much lower paid, as well as increasingly un-benefitted and more precarious. One major, decisive blow was the bitter defeat of the Southern California grocery strike of 2003-2004. It lasted 20 weeks and pitted 77,000 grocery workers in the UFCW against three national chains: Kroger, operating as Ralph’s, Safeway, operating as Vons/Pavilions, and Albertsons.

1st-hand account

I personally visited Los Angeles three times to support – and investigate – the strike. I walked picket lines from northeast LA to Pasadena, talking with every worker I could. What was most remarkable was the overwhelming support customers offered the strikers. While walking a picket line in Highland Park (in LA), the store was completely empty except for the skeleton crew of scabs. Neighbors drove by and offered the strikers homemade tamales and ice chests full of cold drinks bought at non-striking stores. It was beautiful! Briefly, around Thanksgiving, UFCW strikes threw up pickets around distribution centers of all three chains, which were honored by Teamster drivers. This was the most effective tactic, as already empty store shelves weren’t getting replenished, especially around the most food-intensive holiday of the year. Sadly, the pickets at the DCs were pulled and the strike dragged on, with as many as 10 strike-related deaths. It ended on Leap Day 2004, with workers signing a 2-tier contract that was worse than what was on the table before the strike. The next contract resulted in a 3rd tier. Now work at retail groceries is among the worse-paid sectors. It wasn’t always this way: in 1948 the average retail worker earned 91% of the average worker in the U.S.; in 2011, it had dropped to 65%

.
From the Safeway building, other office parks are spread east along I-580 as it goes from Amador to Livermore Valley. And never-ending building of malls, condos and houses as far as the eye can see. Oracle has an office tower here too, where software is developed, along this stretch. The open fields which once marked the stretch through Livermore approaching the Altamont Pass, gateway to the Central Valley, is now wall-to-wall suburban development.

California’s Central Valley

For two decades now, the valley had ranked as one of the fastest growing regions of the country, and more than a few demographers were predicting a doubling of the population—to 12 million—by the year 2040. Already, the land between Bakersfield and Sacramento was the king of fast food and big-box discount houses. When corporate McDonald’s wanted to introduce a new flourish to its Egg McMuffin or test a new high-tech way for customers to pay, it did it here.

—from Arax & Wartzman’s The King of California

Some of the suburban towns at the outer edges of the metropolitan San Francisco Bay Area, like Antioch, Pittsburg, and Brentwood, were where many people of color had pursued the “American Dream” of home ownership; they had become ravaged by foreclosures when the economic crisis began to show signs of breaking out. In 2007 the top three cities for foreclosures in the U.S. were a little further east in Modesto, Stockton and Merced – all in California’s Central Valley – and some new arrivals were commuters increasingly traversing the Altamont Pass to the core cities of the Bay Area – some driving as much as two hours each way, to and from work. These same cities, where African Americans, Latinos, Filipinos and other non-whites were finally able to buy homes, were not only having the highest rates of foreclosures, but in 2008 Merced led the nation in unemployment too.

Once over the Altamont Pass, we passed by the Altamont Raceway which closed for the final time in 2008. It is infamous for the ill-fated Altamont Free Concert on December 6, 1969, where the Hells Angels were used for security and stabbed Meredith Hunter, a young African American man, to death near the front of the stage; this barbarity captured by the concert film Gimme Shelter. Some date the end of 1960s counter-culture to this event.

The first major logistics cluster we passed was the massive Safeway Distribution Center in Tracy, along highway I-580, just south of I-205 and opposite of the triangle formed by I-5. Tracy’s industrial cluster is mainly centered on food distribution. In addition to Safeway Inc. and Costco Wholesale Corp., H.J. Heinz Co., Cargill Food Distribution (d.b.a Excel Food Distribution within the U.S. Cold Storage facility, a U.K.-based multinational founded in 1816), and other firms have DCs in Tracy.

Safeway Distribution Center in Tracy:

A brief (and incomplete – and possibly needing clarification/correction) chronology of Safeway’s moves:

• Safeway’s Richmond dry grocer warehouse burned to the ground in a spectacular -- and highly suspicious -- fire in 1988. It had dry goods in one location, refrigerated food in another and health and beauty products in a third. Another warehouse was in Fremont
• In order to consolidate, in 1992 those sites were closed & a new “campus” built in Tracy, chosen because of access to road, rail and the port of Stockton 20 miles to the north
• it was originally operated by Summit Logistics, a third-party logistics (3PL) firm (subsidiary of Tibbit and Britton, acquired by Exel in 2004)
• it became mired in a bitter and violent 7-week strike by Teamster workers in 2000; Safeway then assumed direct management of the facility

Stats for Safeway Northern California Distribution Center in Tracy:
• 2,200,000square feet (including frozen food warehouse)
• 1,700 employees + 200 temps
• serves 268 stores from Monterey, California north to the Oregon border, and east as far as Hawthorne, Nevada
• ships about 100 to 120 containers a week to stores in Hawaii
• trucks rack up about 24 million miles a year
Under one roof, there is:
• produce warehouse (464,000 square feet)
• meat/seafood warehouse (100,000 square feet)
• frozen warehouse (253,000 square feet)
• Other facilities:
• dry grocery warehouse (678,000 square feet)
• general merchandise warehouse (390,000 square feet)
• recycling center
• truck repair shop
• administration building
• 2 wind turbines for electrical generation
• Software:
• EXE warehouse management system to run its operations (EXE is now part of Atlanta-based Infor)
• WMS integrates inventory data at the distribution center with store inventories in real-time
“Store orders are downloaded into our order management system, which in turn are routed through Manugistics (now part of Phoenix-based JDA Software) and the routes are uploaded into the WMS and CAMS Software”

We noticed that most of this clusters of DCs and warehouses in Northern California had been developed by the San Francisco-based logistics real estate firm ProLogis. That firm, after a series of recent, mergers has become the largest industrial real estate company in the world, with more than $40 billion in assets under its management and a platform of logistics and distribution facilities on four continents.

Paterson, California: [formerly claimed to be] "Apricot Capital of the World"

Patterson, in Stanislaus County, is on Interstate 5, further south from Tracy. In the housing boom in the 2000s, it doubled its population to just under 20,000 by trying to attract long distance commuters. This is because I-5 doesn't get the gridlock traffic conditions that commuters to Tracy, Modesto, Manteca and Stockton encounter daily along 1-205.

We took some French comrades on a tour of foreclosed areas of the Central Valley in 2008 and found Paterson deserted like a ghost town at the outbreak of the global financial crisis. This time Patterson had houses full of people, with only an occasional house with overgrown weeds and seeming abandoned – which was confirmed by a “For Sale” sign dangling out front. We also noticed all the SUVs and peering into driveways and opened garage doors as we drove by, all the signs of typical suburban consumption: motorcycles, RVs, boats on trailers, etc. Yet the developments were clearly not finished in places, as vacant lots were interspersed within the tracts, creating a strange patchwork of open fields that clearly had once been agricultural. At the fringes of this formerly Portuguese agricultural town of orchards and fields, trees were being chopped down and fields were being graded for major construction projects, like the 1.5 million square foot Restoration Hardware DC built in 2014 along I-5. Paterson seems to be at the beginning of a process of rapid growth as an DC/warehouse cluster. Several other warehouses have been built recently, like the Amazon Fulfillment Center in 2011 (below), in addition to a 500,000 square foot CVS/Caremark DC and a 650,00 square foot Kohl's Corporation DC which were both opened in 2006.

Amazon Fulfillment Center (1,000,000 square feet, opened 2011), 255 Park Center Dr., Patterson, CA 95363

Crows Landing Logistics Center (proposed)

Less than 5 miles from the logistics hub of Patterson, is the proposed Crows Landing Logistics Center, sandwiched between highways I-5 and 33 – and with rail access. The development project plan calls for a business-industrial park, with an airstrip, using a former Navy training airport built in 1942. It was connected with former Moffett Field Naval Air Station in Silicon Valley, which when decommissioned in 1994 was transferred to NASA’s Ames Research Center – along with Crows Landing Flight Facility.

Los Angeles Infrastructure Tour

As we had a guest from the U.K., we began the day with a drive down the Harbor Freeway for a jaunt through the Los Angeles/Long Beach port complex by going over the Vincent Thomas and Gerald Desmond Bridges. The latter is too low for ultra large container vessels (ULCV), so it is currently being rebuilt as part of a $1.26 billion replacement to give it 205 feet of vertical clearance (from the current 155). We drove as close as possible to the new Long Beach Middle Harbor development for the Long Beach Container Terminal which is set to open soon and will become the most automated terminal in North America -- based on the many workerless facilities at the Port of Rotterdam in The Netherlands.

Worker Supply Chain Inquiry Workshop

The event was held in L.A.'s Chinatown, at the meeting space of the Public School. 14 people attended and the presentation and discussion lasted around 2 1/2 hours. It was informal, but some serious questions about struggles in the logistics sector were discussed. The one giving rise to the most lively debate was whether blockades by those "outside" the production process can take on an anti-capitalist dynamic. Most of us disagreed and those advocating for "blockadism" used a management-funded study of "port [disruption] impact," funded by the Pacific Maritime Association during the 2002 lockout of the ILWU for 10 days in 2002, to claim that stoppages cost the U.S. economy "$1.94 billion a day." Since the whole new field of Supply Chain Management has a subfield of studying Disruption, we pointed out that to truly cause financial damage to bosses you'd have to "sink the ships." Which is the name of a study of the 2002 lockout by pro-labor professor Peter Hall (the full title is: "“We’d Have to Sink the Ships”: Impact Studies and the 2002 West Coast Port Lockout").

Other topics were supply chains for foodstuffs, especially for commodities like beef. One participant asked whether Chinese buyers of American stockyards affected labor relations, to which we had to answer that we couldn't see the conditions getting any worse with foreign bosses than they are will domestic ones.

Someone else asked about textile and garment production in China, with a discussion about China's entry to the WTO in 2001 and the expiration of the Multi Fibre Arrangement in 2005 caused floods of new clothing commodities to the U.S, but tempered by higher wages in China pushing production to lower wage zones like Vietnam, Cambodia, Bangladesh -- and more recently India. It was a good discussion as one person had experience working in the Los Angeles garment industry.

Those of us from the Bay Area ended our Southern California visit with a very brief tour of the Inland Empire, where we could see new "tilt-up" warehouses and distribution centers continuing to sprout up in eastern Los Angeles County along highways Interstate-10 and U.S. Route 60.

Hopefully we can gather further comments from the workshop and tour and post them on this thread.