Labor Gets a Working Over

By Alexander L. Taylor III

Despite better times, some companies use tough tactics to squeeze unions

Workers haven't taken this bad a beating since before 1935," says Lewie Anderson, director of the packing house division of the United Food and Commercial Workers International Union. Anderson can see the damage among his own battered members. The average hourly wages for 110,000 workers have been cut from $10.69 or more to around $8. Some pork and beef workers have been thrown out of work altogether and replaced by nonunion employees who earn as little as $5.50 per hour.

Other unions in such industries as automobiles, steel, rubber, mining and trucking are also taking a pounding. Their bargaining strength has been blunted, master contracts broken, picket lines crossed. Today union workers are often confronted with a no-win ultimatum: accept a pay cut or lose your jobs. Unemployment in these industries is high because of intense competition and slow growth. Even though the economy is now generally expanding at a robust pace, unions have not regained their former bargaining muscle.

Management claims that its tactics are necessary for survival, but workers call it union busting. Says United Auto Workers Vice President Donald Ephlin:

"This is the worst antiunion, antilabor period in my lifetime. We are the only country in the free world where the labor movement is fighting for its life."

The tentative settlement announced last week in the strike by the Amalgamated Transit Union against Greyhound bus lines is the latest ripple in a cascade of union defeats. Workers are expected to vote this week on cuts in wages and benefits amounting to 14%. But the pay concessions themselves were far less significant than the manner in which they were achieved. Although the union put on a defiant show of solidarity and won widespread popular support, it was unable to influence the company.

The union threw up picket lines in an attempt to halt bus travel. Yet Greyhound began hiring more than 1,000 new workers who were willing to defy the union, and was serving 500 locations in 27 states. Said Chairman John Teets: "Everyone misunderstood the resolve of this company to operate."

Meanwhile, in the airline industry, labor last week suffered another setback. Responding to a threat by Chairman Frank Borman that Eastern Air Lines faced bankruptcy, three major unions agreed to accept wage cuts of up to 22% next year and work-rule changes worth $367 million. In return, according to Eastern's Machinists Union President Charles Bryan, workers will get 15 million shares of stock and be able to designate candidates for two seats on the airline's board.

Equally tough bargaining methods are being used in the steel industry, where extensive concessions by labor have still not led to company profits. Last week U.S. Steel told 10,000 workers in Chicago, Cleveland, Birmingham, Johnstown, Pa., and Trenton, N.J., that all or part of their plants would be shut down unless they granted concessions that go beyond those in the basic steel contract. The company wants reductions in health benefits, work-rule changes and more flexibility in the use of outside contractors.

Labor blames many of its new problems on the Reagan Administration. Says one AFL-CIO official: "The Administration is sending a very strong and clear antiunion message throughout the entire economy, and business is responsive to that." Organized labor dates its recent woes to August 1981, when the Reagan Administration fired 11,400 air-traffic controllers for striking illegally and subsequently decertified their union. AFL-CIO leaders also charge that appointees to the Labor Department and the National Labor Relations Board have been antiunion and that the Occupational Safety and Health Administration has slackened its enforcement of workplace regulations.

Many of organized labor's difficulties, though, are due to its own shortsightedness. Union leadership has been tardy in reacting to the changed business environment of the 1980s. Malcolm Lovell, who resigned as Under Secretary of Labor earlier this year and is now a guest scholar at the Brookings Institution, contends that both unions and management have to soften their adversarial approach. Says he: "Unions have to make compromises unless they want to force companies out of business. The American public isn't going to do business with a company because it is nice enough to pay higher wages."

The toughest struggles for Big Labor are in two sectors of the economy now in the throes of wrenching change. Those are basic industries with aging plants, sickly sales and high labor costs (examples: meat packing, rubber and steel) and deregulated industries, where old-line unionized companies are being undercut by low-cost nonunion competitors (examples: airlines and trucking).

Nowhere are labor's casualties more visible than in the meat-packing industry. Declining consumption, rising labor costs and competition from nonunion packers have pushed several large firms to the brink of bankruptcy and a couple of other ones over the edge. In several cases, the meat-packers union has been forced to accept rollbacks of pay and fringe benefits. When the union has tried to blunt the wage cuts, the consequences have been disastrous. Last week 70% of Armour's 1,700 production workers rejected a tentative agreement to reduce their base wage from $10.69 an hour to $8.25. As a result, 13 Armour plants covered by the contract will close on Dec. 17 and reopen two days later as nonunion shops under the ownership of ConAgra, Armour's parent company. The new base salary rate: $5.50 to $6.50 an hour. Altogether, 2,000 union members stand to lose their jobs.

The struggle at Rath Packing in Waterloo, Iowa, has pitted the United Food and Commercial Workers International Union against itself. In July 1980, 60% of the company was sold to the firm's 2,000 workers to keep it from failing, and Local President Lyle Taylor was installed as company president. But losses continued :o accumulate, and six weeks ago Rath filed for bankruptcy. As part of the reorganization plan, Taylor wants 1,500 production workers to give up some of the generous medical benefits that he once helped negotiate and extend a $2.50-per-hour wage cut that is due to expire at the end of this month. Workers are bitter. Says Richard Campbell, 25: "I can't afford to take another pay cut, and we can't afford to lose the maternity benefits." Votes Taylor: "They have a big stake in he survival of their own enterprise. I'm confident we'll work things out."

More and more companies are turning to the bankruptcy courts as a way to break union contracts and win wage reductions.

After filing for Chapter 11 last April, Wilson Foods of Oklahoma City chopped wages for its 6,000 production employees from $10.69 to $6.50 an hour. Members of the United Food and Commercial Workers Union went on strike, but eventually they agreed to a wage cut of $2.69 an hour. Continental Air Lines, the ninth largest U.S. carrier, filed for bankruptcy in September, then dismissed its 12,000 workers, only to offer jobs to 4,200 of them at about half their previous pay. Pilots and flight attendants went on strike, but enough of them crossed picket lines for Continental to operate about half its usual flights.

The use of bankruptcy laws to break union contracts has become a subject for broad and bitter debate. C. Raymond Grebey, former chief labor negotiator for major league baseball and General Electric, calls it "the most dramatic new ingredient to collective bargaining that we have seen in more than a decade." Labor officials denounce the tactic as union busting. Says Bruce Simon, general counsel for the Air Line Pilots Association: "It was not the intent of the framers of the bankruptcy code to enable renegades like Continental Air Lines to wage eco nomic warfare by destroying our system of collective bargaining." The Supreme Court is now considering the issue in a case involving a small New Jersey building supply company.

Auto companies are using a scaled-down version of the bankruptcy ploy on individual plants. When Ford Motor Co failed to extract concessions from the U.A.W. at its unprofitable Rouge steelmaking operations, it announced plans to curtail production sharply. Four days later, the union accepted concessions, and the mill was kept open. When U.A.W. workers at Ford's Sheffield, Ala., aluminum-casting plant did not accept 50% wage and benefit cuts or the company's offer to sell them the plant, it was closed last June.

Workers claim that the auto companies are getting tougher in other ways, too. Executives, they say, pit one plant against another, using interplant rivalries to spur production, a tactic called "whipsawing." Says Bob Breece, president of the U.A.W. local at Chevrolet's Flint, Mich., motor division plant: "They come in and say, 'If you don't give concessions we're not going to give you this work or we're going to shut you down.' " Breece's plant is due to close in May or June of next year.

Former Labor Under Secretary Lovell believes that unions will have to change their philosophy in order to survive. He notes that organized labor has always tried to ignore wages as a competitive factor when negotiating industry contracts. It has contended that companies should pay workers equally and compete on something else, like quality. Now, Lovell says, unions must make sure that individual companies are successful before they demand higher pay.

Today's union leaders are angry and scared. They feel that their ultimate weapon, the strike, has lost its effectiveness. As William Winpisinger, the feisty president of the Machinists and Aerospace Workers Union, points out, "The companies have shown a remarkable ability to withstand strikes." Leaders also fear that they may lose their own jobs to more militant members if they do not stand up to management. But so far, Big Labor has not yet developed a plan to reverse its losses. Laments Winpisinger: "We are going to get beat up worse and worse."

--By Alexander L. Taylor III. Reported by Gisela Bolte/Washington and Lee Griggs/Chicago

With reporting by Gisela Bolte/Washington, Lee Griggs/Chicago This file is automatically generated by a robot program, so viewer discretion is required.