Freightliner faces truckload of trade issues

Monday, April 02, 2007 BRENT HUNSBERGER and JEFF KOSSEFF The Oregonian

Hours before joining 750 union colleagues on the unemployment rolls
last week, forklift operator Rex Hendrickson watched co-workers build
the last Freightliner-branded truck in Portland. Some of the rigs will
soon be made in Mexico, and Hendrickson couldn't contain his
bitterness.

"There go our jobs," he said.

The two-year Freightliner employee faults the North American Free Trade
Agreement for encouraging his employer and other manufacturers to open
plants outside U.S. boarders. "My beef with NAFTA is, who does it
actually benefit? It doesn't benefit us blue-collar workers."

Freightliner's layoffs can't all be pegged on trade. Truck fleets
ordering ahead of costly new engine emissions requirements played a big
role in the order slump, industry analysts say.

But the company's plans to build a new truck plant in Mexico, employing
up to 1,600, and to shift some production there have renewed calls by
labor groups to revisit free-trade agreements. In particular, they want
Congress to end President Bush's authority to negotiate trade deals
with little congressional input. Under what's known as "fast track,"
the administration negotiates a deal, and Congress has only an
up-or-down vote on the agreement.

The ground in the debate appears to be shifting. A growing number of
politicians and economists who previously supported free trade now
wonder whether current trade policy is having more painful impacts on
the U.S. economy than previously thought. Lobbyists on both sides of
the issue say Bush will have a hard time getting Congress to
re-authorize his deal-making authority before it expires June 30.
Without fast track, Congress could review terms of trade deals.

Trade advocates are pushing for Congress to re-authorize the trade
negotiation mechanism as soon as possible. But labor and environmental
groups say another fast track extension will not make it through the
Democratic-controlled Congress.

Economists reconsider

For years, many Democrats supported free trade, including President
Clinton, who signed NAFTA into law in 1993. As recently as 2003, Sen.
Ron Wyden, D-Ore., voted for the Central America Free Trade Agreement.

Since then, a number of well-known national economists who advocated
for trade in the Clinton years have reconsidered. Last year, Princeton
University economist Alan Blinder, a top economic adviser to Clinton
and NAFTA advocate, estimated that as many as 40 million service jobs
-- just about any that lack face-to-face interaction -- risk being
offshored in coming decades.

"We have so far barely seen the tip of the offshoring iceberg, the
eventual dimensions of which may be staggering," Blinder wrote last
year in the journal Foreign Affairs.

A key vote on the issue could come from Rep. Earl Blumenauer, D-Ore.,
who this year joined the House Ways and Means Committee, which oversees
trade policy. Wyden and Gordon Smith, R-Ore., both sit on the Senate
Finance Committee, which also reviews trade proposals.

A Smith staffer said last week that the senator supports fast track.
"Opening markets worldwide creates new opportunities for Oregon
companies," Smith spokesman R.C. Hammond said.

But Blumenauer, who has historically supported fast track, said any new
negotiation law must have protections for areas such as the environment
and human rights. He also wants Congress and the president to cooperate
more closely on future agreements.

"We have relegated the concerns that have such an impact on people and
the environment to a second tier. And that needs to end," he said.

Melissa Merz, a spokeswoman for Wyden, said the senator wants to change
the fast track law "so that more middle-class, American workers benefit
from trade policy." He also favors stronger labor and environmental
standards in future trade agreements.

"Unified economy"

Freightliner defended as inevitable its decision to shift
Freightliner-brand production to Mexico and open a new plant there in
2009. The company says competitors make more trucks in Mexico and
undercut Freightliner with lower prices. Its Mexican plants will mostly
supply a fast-growing Mexican and Latin American truck market, the
company says.

"I view NAFTA as a unified economy," Freightliner Chief Executive Chris
Patterson said last week. "I have to."

Critics say the truck maker's move south benefits DaimlerChrysler
shareholders, which owns Freightliner, at some cost to U.S. employees.
Freightliner estimates it can build a truck in Mexico for sale in the
United States for half what it costs to build one in Portland, mostly
because its labor costs in Mexico are one-sixth what they are in
Portland.

Freightliner notes that Portland workers benefit from free trade, too.
The company hopes to increase production of Western Star trucks in
Portland, heavy-duty rigs often used in mining and construction sites.
Freightliner ships Western Stars to Canada, Australia, Indonesia and
other countries that allow heavier loads on the highways.

Kristen Canham, laid off by Freightliner on her 19th birthday, isn't
waiting around to be called back. Though her grandfather and dad built
trucks in Portland and helped her get her current job, she plans to
continue schooling in hospitality management at Portland Community
College. She figures tourism is an industry that can't be outsourced.

"I can go and find a job anywhere," she said last week at a jobs fair.
"I probably won't make as much as my dad, but I'll be OK."

Brent Hunsberger: 503-221-8359; brenthunsberger@ news.oregonian.com,
blog.oregonlive.com/atwork

©2007The Oregonian