In a previous position I was responsible for safety in a manufacturing plant. We were strict on safety, yet accidents happened. I always felt bad for the employee and for the employee’s family. Losing a finger, hurting a back, damaging a hand not only limit your ability to work but it also significantly changes what you can and cannot do at home. Fortunately we never had any major OSHA violations associated with these accidents, they were just that; accidents. A moment of inattention and suddenly there is an injury. But that is not the case with a company in Wisconsin. In a three and a half year period they have recorded over 1000 work-related injuries.
OSHA levies a heavy fine
According to an OSHA press release the 1000 work-related injuries occurred to a workforce of 4500 employees. That is almost 25% of the workforce receiving an injury. OSHA inspected the facility of Ashley Furniture in Arcadia, Wisconsin and found “12 willful, 12 repeated and 14 serious safety violations” for which they were fined $1,766,000 in penalties. The presence of willful and repeated violations indicates that Ashley was inspected before and failed to correct noted violations. According to the press release “The company has also been placed in the Severe Violator Enforcement Program for failure to address these safety hazards.” The company has a long history of visits from OSHA and a long list of previous safety issues. The company has 15 days to respond to OSHA so the final financial outcome is not yet determined. However, what about the other costs?
There are other costs associated to this safety record of Ashley. First there is the harm to the company’s reputation. As Dr. David Michaels, the assistant secretary of labor of occupational safety and health, said, “Ashley Furniture intentionally and willfully disregarded OSHA standards and its own corporate safety manuals to encourage workers to increase productivity and meet deadlines. The company apparently blamed the victims for their own injuries, but there is clear evidence that injuries were caused by the unsafe conditions created by the company. OSHA is committed to making sure that the total disregard Ashley Furniture has shown to safety stops here and now.” U.S. Secretary of Labor Thomas E. Perez said “Ashley Furniture has created a culture that values production and profit over worker safety, and employees are paying the price. Safety and profits are not an ‘either, or’ proposition. Successful companies across this nation have both.” Embarrassing to say the least to have these statements spread across the news. Although Ashley is a private company, and thus stock prices may not be affected, there is still the potential impact this may have on aware buyers.
The company also has to deal with the impact on employees and the cost associated with a poor safety record. An employee’s productivity is certainly affected when the fellow worker beside them has his fingers sliced off. The morale is diminished. Given that this plant is the largest employer in Wisconsin’s rural Trempealeau County, with a population of about 30,000, most employees probably feel trapped in their job, which also diminishes productivity and morale. I don’t know for certain but my guess is that the plant is also unionized which has costs associated with it. And then the associated Workers’ comp costs must be through the roof.
Then lastly there is the cost to the individual employees who are injured. Their loss of income; their loss of mobility; their loss of future opportunity all add up to a price tag that is unnecessary if you have a good safety program.
I know from experience that a good safety program pays dividends in fewer injuries, higher morale, higher productivity, fewer visits from OSHA, and a return of dollars to the bottom line. If Ashley is as profit concerned as Thomas Perez accuses them of being I suggest they would be better served by improving their safety.