Show 'Em The Clenched Fist!

An obscure labor activist is forging a new weapon to force corporations to do unions' bidding. His first targets caved in with scarcely a fight.

Show 'Em The Clenched Fist!
An obscure labor activist is forging a new weapon to force corporations to do unions' bidding. His first targets caved in with scarcely a fight.
By A.H. RASKIN
FORBES | October 2, 1978

UNDER THE LEADERSHIP of an activist whose name few businessmen have heard, organized labor is bringing some of the country's biggest corporations to their knees by substituting a money whip for its blunted traditional weapons of strikes and mass picketing. Fresh from their victory over Manufacturers Han­over Trust Co. and Avon Products (FORBES, Mar. 20), union forces have just added New York Life Insurance Co. to their conquest list and are stepping up pressure on both coasts to bend other giant companies and financial institu­tions to their will.

Ray Rogers

Ray Rogers, 34-year-old field marshal of the two-front union drive, predicts that labor will fill its trophy rooms with corporate scalps by using its billions in pension and trust funds to "disorganize the power elite."

"Once they are convinced we will go through with our plans, everything can be done in a way that we don't actually have to fire a shot," boasts Rogers.

The former VISTA volunteer in Appa­lachia, who now holds the mouth-filling title of corporate campaign director for the Amalgamated Clothing & Textile Workers Union, is not just whistling "Dixie." Consider the ease with which he knocked over the $15.8-billion (as­sets) New York Life.

All that it took was a Sept. 11 press conference announcing that the union­ists and their allies in churches and other do-gooder groups intended to nominate two outsiders to run against the adminis­tration slate in the April board election unless New York Life severed its inter­locking directorates with J.P. Stevens & Co., the largely nonunion textile empire labor is trying to crack as the key to organizing the South.

Bowing to the union ukase meant that Manning Brown Jr., chairman of New York Life, had to get off the Stevens board and also that the insurance com­pany had to dump from its own board the Mister Big of the textile empire itself. He is James D. Finley, the Stevens chairman, who was denied renomination to the Manufacturers Hanover board after labor turned the heat on the nation's fourth largest bank last winter. Two weeks later David W. Mitchell, chairman of Avon Products, who had been forced off the Manny Hanny board by the same union bombardment, quit as a Stevens director to deflect a boycott of Avon Products' cosmetics and jewelry initiated by union sympathizers at the National Women's Conference in Hous­ton last November.

Three days before the union's public declaration of war, Brown of New York Life told FORBES that he had no inten­tion of surrendering though he knew labor was preparing to seek nominating signatures for its two candidates from 6,300 policyholders-one-tenth of 1% of the 6.3 million individuals and groups with New York Life policies.

He praised Finley as "a good director" and said he had every present plan to keep him on the New York Life board and to retain his own seat on the Stevens board. "My feeling," Brown declared, "is that there is a process through which employees can make their own choice on whether they want a union. I consider it my duty to protect our policyholders against an unwarranted invasion of their rights in connection with a labor dispute that does not affect us."

That resolve was still firm in early September. Finley was included along with Brown and six other incumbents in the management slate filed with State Superintendent of Insurance Albert Lewis. A couple of hours later N.Y. Life's Brown expressed certainty that the state superintendent of insurance would recognize that the National Labor Rela­tions Board and the federal courts were the right places to resolve the battle over unionization of Stevens employees and would stop any improper use of the in­surance law to "mount a harassing and expensive contested election" at New York Life.

But all the fight went out of the insur­ance company that same afternoon. A group of key directors, headed by Brown, passed the word to Finley that he was now persona non grata on the New York Life board. The next day Brown put out a sheepish statement say­ing he still felt it was wrong to muscle his company on an issue that Stevens work­ers ought to decide, but his first loyalty had to be to New York Life so he was resigning from the Stevens board. Si­multaneously Finley announced he was quitting the insurance company board because he didn't want to embarrass it by staying where he wasn't wanted.

Behind the Munich-like cave-in by New York Life was a factor even more chilling to its management than a specter of a massive shifting of policies to other carriers by unions and their rank-and-file members. The New York insurance law forbids the administration slate in any contested election to use any company money, property or work time by officers or staff to advance its campaign.

Conway of Seamen's Bank
Not hurt at all?

"We figured it would cost at least a dollar to communicate with each policy­holder, and with more than 6 million to reach that was more money than any of the incumbents could afford to lay out," explained one disconsolate management supporter. "The unions had no similar limitation on their ability to finance a campaign against us."

Brave declarations of defiance are still coming from the heads of the other com­panies that have moved to the top of labor's current hit list. On the East Coast the number one immediate target is The Seamen's Bank for Savings, whose chair­man, E. Virgil Conway, continues to give an icy "no" to labor's demands that he resign as a Stevens director.

Isolating Stevens from the entire in­vestment community remains the prima­ry goal of labor's energetic shaking of the money tree. But on the West Coast labor is moving the use of this unorthodox union tactic into new ground totally di­vorced from the battle with Stevens. The only link is that most of the shots on both fronts are being called by Rogers. This electric new personality in a somnolent labor movement combines the qualities of Bible Belt rabble-rouser and comput­er-age systems analyst. He goes around the country urging unionists to unleash the financial clout dormant in $400 bil­lion in private and public pension funds, now managed almost exclusively by stan­dard financial institutions.

Brown of New York Life
Bold words,
sheepish retreat

The specific targets of the West Coast drive are Seattle First National Bank, the largest bank in the Northwest, with $6.4 billion in assets, and Wien Air Alas­ka, a regional airline in Alaska. SeaFirst is embroiled in a Labor Board conflict over a decision by its tellers, clerks and other employees to affiliate their four­-decade-old independent union with the AFL-CIO. Wien Air, which holds $27 million in loans from SeaFirst, has been operating for 16 months in the face of a strike by the Air Line Pilots Association.

The Rogers strategy involves a domino technique in which each victory over a corporate foe becomes the springboard for an attack on his next victim. Thus, if Conway and the Seamen's Bank follow Manny Hanny, Avon and New York Life into submission, he can be expected to turn his heavy artillery on Borden's and Sperry Rand, both of which have Finley of Stevens on their board, and on Gold­man, Sachs & Co. and a long list of major banks and insurance companies that are tied to the textile chain by interlocking directorates or heavy loans.

Conway, who is president of the New York State Savings Banks Association as well as head of Seamen's, insists he will not become a doormat for his union crit­ics though they have been after him for several rough months. Their pressure reached a climax in August when they pushed what they call the "Conway reso­lution" through the convention of the New York State AFL-CIO. It demanded that the Legislature give savings banks depositors direct voting rights in the election of trustees.

The undisguised purpose was to throw such a scare into the industry that all the other banks would gang up on Conway to get off the Stevens board as a way of inducing labor to call off its dogs. But Conway reports that he is getting no pressure from his own board or from his fellow bank presidents. "We have had a few withdrawals of accounts," he says, "but we have also had some new deposits by people who feel strongly the other way. On balance, we haven't been hurt at all."

On the West Coast Lloyd A. Dodd, senior vice president and personnel manager of Seattle First National, de­rides the pressure campaign against his bank as largely the product of external union careerists, not of the 4,700 Sea­First employees. The bank has been warning its workers that any substantial success in the AFL-CIO campaign to pull money out of SeaFirst would jeopar­dize their own jobs.

The knowledge that mass withdrawals could operate as a double-edged sword, hurting the unionized workers as much as they did the bank, worries the cam­paign strategists. Mike Young, north­west representative of the Retail Clerks International Union, says the union hopes its pressure will cause the bank to negotiate a contract before any workers are knocked out of their jobs.

However, Rogers, master planner of the whole effort, is convinced that the bank will chicken out before the ax falls on employees. "Banks and insurance companies are the most vulnerable of all businesses," he chortles, "because what they control they don't own. They are totally dependent on the support of their depositors and policyholders."

Invited to kick off the SeaFirst/Wien Air campaign at a convention of the Washington State AFL-CIO in August, Rogers got a prolonged standing ovation after a speech that wound up: "We must confront giant corporate capital with workers' capital. We must confront in­terlocking corporate power with inter­locking workers' power."

Whether union money power can do for labor what strikes and mass picket lines are proving increasingly incapable of doing will be put to the acid test as this youthful crusader in checked sports shirt and dungarees, onetime setter of a New England weight-lifting record for the Olympic press, charges off to new battles against Wall Street and its outposts on the Pacific frontier. -