Imported American Branded Tuna

By Mitch Gurney

I think the following ties in with Virgil’s posting regarding Hershey outsourcing to Mexico.

I am sure some of us are aware that canned tuna, labels like “Star Kist”, “Chicken of the Sea” and “Bumble Bee” are no longer processed or canned on the U.S. mainland, having been outsourced to lower labor cost areas. Although it may not state so on the labels these products are processed and packaged in regions like American Samoa and Puerto Rico,(each are unincorporated U.S. territories) as reported by the U.S. Dept of Labor. The Dept of Labor also reports that:

•“at the present time, there is only one cannery operating on the U.S. mainland. (Bumble Bee operates a loin-processing plant located near Los Angeles.) The Chicken of the Sea cannery in San Pedro, California, (CalPac) the last full-scale cannery on the mainland, closed in 2001.”

These products were at one time manufactured here in the U.S. Star Kist for example had at one time the world’s largest processing plant at the Los Angeles port at Terminal Island. Its history is traced in a Star Kist Report prepared by Jones & Stokes for the purpose of determining whether the building site could be classified as a Historical Landmark. In 1917, Martin J. Bogdanovich founded the French Sardine Company, which would become Star-Kist, and eventually, the company became the largest fish cannery in the world. In 1963, H.J. Heinz Co. acquired the Star-Kist Co. (Star Kist Report, pgs 11-16). In 2002 Heinz sold Star Kist to Del Monte who in turn sold the firm along with its other seafood businesses to DongWon Industries of Seoul, Korea in June 2008.

Per the Star Kist Report on pgs 9 -10:

• “Through the 1920s and 1930s, fishing and canning operations expanded at Fish Harbor, Terminal Island in Los Angeles and became the focus of the industry at the Port. Twelve canneries leased space at Fish Harbor during this period. During the 1930s, fishing and canning was a significant industry at the Port. In 1936, the value of the Los Angeles fish pack represented half the total for all of California and was twice that of the next largest fishing port. By 1939, the canneries and fishing fleet at the Port employed over 6,000 workers with a combined payroll of $6.75 million (Board of Harbor Commissioners 1936:55, 1939:25).”

• “The fishing and canning industry remained strong through the 1960s, though the future of the San Pedro facilities became doubtful as Van Camp and Star-Kist, the largest canners, opened new plants overseas, including American Samoa and Mexico.”

Reported on pages 17-18:

• “While the Star-Kist operations on Terminal Island remained the largest tuna cannery in the world through the late in 1970s, globalization and foreign competition began to have a major impact on the U.S. tuna industry by the 1980s (Los Angeles Times, 1977). Even with tariffs applied to tuna imports, U.S. tuna makers, like Star-Kist, found it increasingly difficult to compete with foreign competition, which could pay substantially less for non-union tuna processing labor and ultimately produce a cheaper tuna product. By 1983, Star-Kist began to decrease its work force at the Terminal Island plant by laying off 750 night shift workers, in addition to reducing the work week to three days.”

• “In October of 1984, in response to high labor costs and competition from low-priced tuna imports, Star-Kist closed its last mainland canning facility on Terminal Island and moved operations to American Samoa. Despite efforts by workers to prevent the plant closure, nearly 1,150 Star-Kist employees were laid off at the Terminal Island location. The Star-Kist cannery in Samoa became the largest cannery in the world at this time and remains the largest to present day (U.S. Department of Labor 2007).”

Our frustration regarding the accumulative impact that outsourcing has had on our jobs market and the economy is understandable and a legitimate case can and should be made that the practice has gone to extremes. But quite honestly folks our scorn is 30 years behind the trend at least. We have largely been asleep in the back seat while industry leaders and legislative leaders drove us into the globalized economy we find ourselves in today.

Outsourcing initially was about survival for many U.S. firms. Once a profitable business model is developed it is duplicated and refined by other firms as we can clearly see. In Revisiting NAFTA by using the outsourcing of 17,000 jobs by “Fruit of the Loom” in the late 1990′s I calculate the profits outsourcing potentially generates for firms. It is important we recognize, as I wrote in Globalization: Multi-national Corporations Paradigm Shift that for multi-national firms it is not about country or even people first. It is about growing and defending profits and market share. Firms don’t have the same needs as people do and it is pointless to apply the same human rationale to firms as we do with people. For multi national firms the globe is their territory and therefore they do not perceive the global marketplace in terms of borders or along political party lines. Their decisions are not of a personal nature; their business strategies are about gaining and defending profits and market share.

The broader point I am attempting to make is that while many of us were asleep in the back seat we are now awakening to a new reality of a fully functioning globalized marketplace and all that this implies. Far from perfect but fully operational none the less. What many of us may be realizing rather than merely competing for a finite number of jobs among a smaller labor pool contained within our own borders we now compete with a much larger one on a global scale. Today, the reality is if anyone anywhere on the planet will do your job cheaper than your job is potentially at risk.

Some folks recommend boycotting imported products and buy only American made products but to do this we must first make them here in the first place. I challenge anyone to prove me wrong but at least 70 percent if not more of the products we think of as imports are American branded products made outside the U.S. So finding such products will be extremely difficult to do. Secondly we need to find stores that have sufficient enough American made products that we actually need so we can buy them. Go into any store and conduct your own survey and look not only where a product is made but what company it is. You will find the overwhelming majority of these products and that is products that are highly consumable and are most in demand, are as I have pointed out American branded. Such stores I suspect will be extremely difficult to find as well. As this post and Virgil’s post regarding Hershey disclose even U.S. branded candy and tuna are imported products.  Some of these companies have even moved their headquarters to tax haven areas such as in the Caribbean as I wrote about in Revisiting NAFTA.

Granted this is not pleasant news and a harsh reality and I suspect many of us are in a state of denial but denial will not serve our greater needs. But this is how the world currently operates and our responses to it, as members of the global work force, will need to be within the context of how the global marketplace functions today and not based on the past. People around the globe have needs too and want to feed and provide for their families just as we Americans do and we need to come together and create global strategies that serve all our needs as best as is possible as we have seen multi-national companies have done.