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February 24, 2012 8:35 pm
There is nothing glamorous about the RS Owens factory in Jefferson Park, a gritty lower-middle-class neighbourhood in north-west Chicago. The building itself seems to have changed little since it was built in 1960, as does much of the surrounding area, where small single-family homes punctuate strips of low-rise light industrial buildings. Inside, there is almost no automation. Workers use ageing equipment to melt and shape metals in much the same way as has been done since the factory first opened.
Yet RS Owens plays a central role in one of the glitziest nights in the American calendar: the Oscars. Those 13.5in gold statues – that every film star dreams of brandishing while delivering a homily to less-successful fellow nominees, colleagues, parents or God – have been made here for 30 years.
There is a handful of trophies that are iconic and for many instantly recognisable – the World Cup, the Super Bowl, the Ashes – but the Oscar is in a class of its own, undoubtedly the best-known industry award in the world. The statue defines the Academy Awards. It is the trophy, not the stars, that dominates the advertisements for the event.
The Academy of Motion Picture Arts and Sciences claims the figure on the award is a knight holding a crusader’s sword, standing on a reel of film with five spokes, signifying the Academy’s five original branches – actors, directors, producers, technicians and writers. In fact, he is a faceless art-deco figure of the machine age – capturing a time when the movies were magical and industrial production promised American workers a bright future of well-paid jobs in efficient factories.
RS Owens ran one such factory. In the decades following the second world war, blue-collar jobs were profitable and secure, helping millions of Americans lead a
middle-class lifestyle despite little formal education or training.
The Midwest was America’s industrial heartland, with factories pumping out the staples of middle-class life – cars, washing machines, refrigerators – that filled the homes in the ever-expanding suburbs of cities such as Chicago, Detroit and St Louis. Factory work was plentiful. Homes and consumer goods were affordable. Many Midwest residents were immigrants from places such as eastern Europe, living out their aspirations of achieving the American dream.
A half-century later, optimism has been replaced by malaise. Much of the Midwest is still struggling to shake off that industrial heritage. Across the rust belt, whole towns have been devastated by the loss of factories because of cost pressures and the changing nature of demand. The population of the Midwest’s largest cities and countless small towns has dropped as workers leave for other parts of the country in search of work.
More than 2m manufacturing jobs were lost in the last recession alone. Even if demand returns, many will never come back because of increased automation and larger investment in emerging economies aimed at capturing new markets. After years of foreclosures, high unemployment and stagnant wages for those who are working, the middle class now feels under attack. There is widespread anger at America’s broken political system and wounded economy.
President Barack Obama has placed the revival of manufacturing at the heart of his economic plan – and at the centre of his strategy to retain power in November’s presidential elections. In his State of the Union address last month the president laid out what he called: “A blueprint for an economy that’s built to last . . . This blueprint begins with American manufacturing.”
RS Owens encapsulates the story of what has happened to much of American industry. In its heyday in the 1970s, the company employed 400 full-time workers and worked three shifts around the clock. Today, it employs just 100, having cut 30 jobs over the past three years. It cannot offer full-time hours to all its workers. Overtime is rare. The economic downturn has hit demand hard: as corporations struggle to survive, cut jobs and trim other costs, rewarding their employees’ hard efforts with trophies has hardly been a priority.
RS Owens is not just the manufacturer of the Oscar statues. It’s one of the last trophy companies that actually makes its awards in the United States, using the same methods to hand-cast its various statues for more than seven decades. Thirty years ago, it had about a dozen large, profitable rivals, all vying for a lucrative market chiefly fuelled by companies’ internal awards. Today, only a handful of competitors survive. All of them make or source their trophies in China and sell them in the US at low prices.
Battered by weak demand and undercut by low-cost foreign competition, RS Owens is fighting for its life.
The Oscar begins in the hands of Martin Vega, a cheery-faced 43-year-old who sports a blue baseball cap and a grimy purple T-shirt. Vega, who has worked at RS Owens for seven years, stirs a pot of molten metal bubbling away at 700F. It is Britannium, the pewter-based alloy at the core of the Oscar statue. With a sense of ceremony, Vega scoops impurities off the top using a metal cup on the end of a long handle and then ladles the bubbling alloy into a mould. Hand-casting like this is a manually intensive process that results in a high-quality, expensive product. “This is like an art form,” says Vega, who can make about 20 of the statues a day, producing a year’s worth of Oscar innards in little over two days. “To make an Oscar is a real honour.”
Vega bangs the mould a couple of times before removing the statue. It emerges with frayed edges that will need to be ground off, also by hand, before the Britannium core is finished with layers of copper, nickel, silver and, finally, 24-carat gold.
When Vega removes the statue, it is recognisable as an Oscar but clearly different. In a way, it encapsulates the contrast between the workers in the dingy Chicago factory who bring it into being and the glamorous stars at the Kodak Theatre in Hollywood, where it will take centre-stage. At this point, the statue is made of base metal, rough and unfinished. By Oscar night, it will be glistening and perfectly formed, but superficial: the gold layer is only a fraction of a millimetre thick.
In true Hollywood style, Oscar has even had some nips and tucks. “We gave it a facelift six years ago,” says Scott Siegel, RS Owens’ owner. “They felt the features were less distinct and asked us to make some changes, but to make them almost unnoticeable.” The statue also got taller, although the reel of film it stands on was made shorter, to keep the overall height of the trophy the same. The 64-year-old Siegel is an unlikely looking owner of a small manufacturing company. Short and slight, with immaculate silver hair, a diamond earring and a lip goatee, he speaks quietly and calmly. On our second interview, I observe how Zen-like his office is and ask if he is a Buddhist. He responds: “I’ve done some chanting.”
Siegel inherited the company from his father, who started the manufacturer in 1938 and built it into a business that, although it suffered in economic down cycles, was essentially robust and growing. But RS Owens is now a shadow of its former self.
Siegel senior used to worry about domestic competition. Globalisation has hit the trophy industry, and Siegel junior’s concerns are more about cheap Chinese competition. One by one, US companies have either folded because they cannot compete, or have started themselves to source from China, where factories die-cast designs made in the US or copy American trophies.
Siegel claims most of the Chinese trophies are poor quality, a charge companies that source from China deny. This may seem like an obscure intra-industry squabble, but it became the stuff of celebrity news last year, when Robert DeNiro was awarded the Cecil B DeMille lifetime achievement award at the Golden Globes.
DeNiro conspicuously turned up at a backstage press conference without the award, explaining to the assembled reporters that the trophy was already broken. Ever the pro, DeNiro laughed it off. “The top fell off,” he said. “They warned me. They’ll have to solder it back on.” Nevertheless, the incident was embarrassing for the Globes – and provided Siegel with high-profile evidence of his claim about the quality of Chinese-made statues.
Siegel has tried to fight back. This year, he insisted the company’s catalogue carry “Made in the USA” next to all its metal statues. Again, this reflects an important plank of Obama’s re-election campaign. The president has argued that the US should promote “onshoring” – bringing back jobs once outsourced to China and elsewhere. On a visit to Wisconsin this month, he gave a speech in front of a wall of crates bearing the stamp “Made in the USA” and spoke of “a huge opportunity that exists right now to bring jobs and manufacturing back to the United States of America”.
Price, however, is a powerful motivator. As well as the Golden Globes, RS Owens has lost a string of contracts to Chinese competitors in recent years, including the Academy of Country Music Awards, the MTV Awards, and the People’s Choice awards.
Even RS Owens is not immune to China’s siren song. The company sources raw materials from China and imports some non-metal trophies from Asia, accounting for about one-fifth of its sales.
The Oscars may not be the company’s biggest money-spinner (Siegel declines to say how much the Academy pays every year for the 45-odd statues), but they bring prestige and other business. The company also makes the Super Bowl players’ trophies; the Emmys; the American Idol final award and the Baftas that are given out in the US, but it is the Oscars that are the company’s lifeline.
So far, the Academy has never hesitated in renewing its annual contract with the company. “If they go to China we’ll throw in the towel,” Siegel says.
The Chinese are not Siegel’s only headache. RS Owens was recently involved in a bruising contract dispute with the Teamsters union, which represents workers on the factory floor. The union balked at management’s demand to freeze wages and cut one-and-a-half weeks of holiday time. It threatened to shut down the factory, and sent out a press release saying the Oscars ceremony might be disrupted as a result.
The claim was widely reported in the media, even though the Academy said it had enough statues for this year’s awards. (It orders them a year in advance after thieves made off with the Oscars in 2000.) The dispute was resolved just before Christmas, but it has left a sour taste in the mouths of both management and workers at RS Owens. The tussle highlighted the arguments raging in the US about how to create decent jobs for workers in an America that is still suffering from the great recession, and where Occupy Wall Street has brought to public attention the country’s growing inequality.
For the union, Siegel’s conditions encapsulate how the middle class is being squeezed by employers who are forcing productivity gains by making employees work longer and harder without raising wages. For Siegel, the negative publicity created by the union, which he says has never helped him defend the company from Chinese competition, endangered RS Owens’ contract with the Academy and therefore imperilled the very jobs the union claims to defend.
It is revealing that the labour force on the factory floor is almost entirely made up of immigrants from Mexico, many of them unable to speak more than a few words of English. A few decades ago, Siegel recalls, they were all Polish, Czech, Italian or German. As in many areas of the US economy, immigrants from Latin America are more willing to take low-paying, semi-skilled jobs than their counterparts from Europe.
Off the factory floor and speaking in Spanish – a language that separates RS Owens’ workers from its management – Vega is more open. He recounts how he came to the US 32 years ago from rural Michoacán, in western Mexico. Back home, he was a farmer, growing corn, beans, tomatoes and chilli peppers. In America, he worked as a kitchen hand in an Italian restaurant before switching to factory work. Although he is thankful for the job at RS Owens, he says it doesn’t pay well, and, because of the fall in demand, the company can sometimes only give him 30 hours of work a week. He and his wife, who works in a food plant, collectively bring home about $40,000 a year. He has four children and tries to send money back to his family in Mexico – at least $100 every other month.
A generation ago, an immigrant such as Vega might have worked his way into the middle class, with all the comforts and benefits that conferred. But the man who gives birth to the Oscar statue views the prospect of joining the middle class as a distant dream.
“We’re living from paycheck to paycheck,” he says. “We’re surviving, no more than that. I’ve considered going back, but my kids are American. So I’m stuck here.”
Hal Weitzman is the FT’s Chicago and Midwest correspondent.
His new book is “Latin Lessons: How South America Stopped Listening to the United States and Started Prospering” (Wiley, £17.99)
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