How Labor Can Fight Back

How Labor Can Fight Back
USA Today
July 1984

"If union leaders want to make 'solidarity' more than just a slogan, they should identify, case by case, the forces behind the corporate assault on workers and be prepared to move against them in unison."

The failure by union leaders to plan and act strategically in the early stages of situations headed for a crisis is a major reason why unions have suffered so many setbacks recently. While Ronald Reagan is certainly no friend of the labor movement, his Administration's policies are not the sole or even the major reason for organized labor's predicament.

In addition to costing workers and their unions tens of millions of dollars, the big labor-management disputes of the past two years resulted in great hardship and trauma for hundreds of thousands of people. Yet, in every instance, the unions and their members could have and should have fared much better.

Let us take a look at some noteworthy labor struggles of the 1980's: the 205-day strike by 21,000 Caterpillar Tractor workers; the nine-week strike by 16,000 workers at New York's giant utility, Con Edison; the three-week strike by 675,000 AT&T workers; and the long, ongoing strike by Phelps Dodge copper miners in Arizona. I believe all four strikes probably could have been averted, or their duration greatly reduced, if labor leaders had understood and used sophisticated strategy and tactics in confronting management. Similarly, in responding to demands for concessions and givebacks by Greyhound, Continental Airlines, U.S. Steel, and McDonnell Douglas, union leaders again overlooked crucial areas of leverage that could have helped equalize the balance of power in negotiations.

Time and again, union leaders enter negotiations armed with statistics on wage and benefit trends, but without any real knowledge or comprehensive analysis of the people, interests, and institutions with whom they are in effect dealing. Therefore, they never consider the fundamental importance of carefully targeting individuals, institutions, and geographical areas for campaign activities aimed at forcefully challenging the true power brokers behind a company's anti-union stand.

To make matters worse, many unions have relegated their organizers and organizing departments to a secondary status while placing in their lawyers' hands the major responsibility for determining the parameters of organizing policy, strategy, and tactics. At the same time, they allow their funds to be managed by persons and institutions ideologically or viscerally opposed to the labor movement. Even the most conscientious money managers seldom concern themselves with organizational strategy, socially responsible investment options, or how their investment decisions could serve to strengthen the labor movement.

An enormous quantity of research and analysis on corporate relationships has been done by Corporate Campaign, Inc., and others. It demonstrates conclusively that workers, in most adversary situations (and in all cases mentioned here), are not simply being challenged by their employer, or any single corporate or financial entity. Instead, they are struggling against an intricate web of powerful banks, insurance companies, investment companies, and other large corporations and political interests. These interests, nearly always insulated from public accountability, are all too willing to trample on workers' rights and dignity in pursuit of greater wealth and power for themselves. Powerful institutions that are irresponsible in their labor policies and scornful of the public interest can be successfully challenged-but only if unions and other grassroots organizations develop powerful confrontation strategies of their own. We use the trademarked term "Corporate Campaign" to identify the program we created and the full range of programmatic options we try to develop for unions and other organizations faced with intransigent management positions. Essentially, a Corporate Campaign program is a mechanism to confront power with power.

Symptomatic of organized labor's refusal or inability to develop comprehensive, innovative strategies that would enable their members to fight back effectively is the depressing situation in which hundreds of Phelps Dodge copper miners and their families find themselves. The miners, living in company towns in Arizona, have been on strike since July, 1983.

Phelps Dodge officials felt comfortable taking a very "hard-line" bargaining stance. With their labor specialists, they studied the situation thoroughly and made extensive preparations months in advance. It came as no surprise when "a top law enforcement official" was quoted by the Arizona Daily Star as saying: "We're fed up. This whole scenario was adroitly planned by Phelps Dodge in New York. The only thing missing is the boxcars to move the strikers out. And instead they're using professional law enforcement as their goons to break the unions."

It is not hard to imagine what management was thinking: "Why worry about the unions? They'll fight in traditional ways and we know how to handle them. We'll contain the fight in the rural, out-of-the-way towns we control and keep the workers on the defensive. Worker will be pitted against worker, family members and friends will be fighting each other, and any incidents of violence will only undercut the unions' position in the eyes of the public. Sure, the unions will send in attorneys and get their friends in Congress to denounce us, but when it's all over, the workers will have to capitulate." Company officials knew that the economy, depressed copper prices, high unemployment, the political atmosphere, and the unions' reliance on traditional tactics were all factors that strengthened their hand.

What if the unions, prior to the strike, had armed themselves with their own comprehensive analysis of Phelps Dodge? They would then have been able to identify that the network of support behind the company's anti-union policies consists primarily of certain banks, insurance companies, and investment companies, nearly all of which are closely linked with other companies fiercely battling unions.

After identifying the key power brokers behind the company, the unions would have known who could influence the company, to the point of control, to reverse its anti-labor policies. The unions could then challenge those power brokers in ways that raise the stakes so high for them that they would soon recognize their primary self-interest and place the necessary pressure on Phelps Dodge to negotiate a fair agreement with the unions. As the "fed-up" Arizona law enforcement official realized, these power brokers plot their moves thousands of miles from the strike sites--especially in New York City, where Phelps Dodge has its corporate headquarters. By moving the workers' struggle to the doorsteps of these key power brokers, the unions could have turned the tables on Phelps Dodge and turned what has so far been a debacle into a union victory.

The victory at J.P. Stevens

The first union to act decisively on this perception was the Amalgamated Clothing and Textile Workers (ACTWU), which won a struggle in 1980 that many considered unwinnable at 10 J.P. Stevens plants in the Carolinas and Alabama. The Stevens Corporate Campaign, which I devised and directed while on the staff of ACTWU, exposed, attacked, and broke up the network of power behind the company. It was the catalyst for unprecedented resignations and dismissals of top corporate officers who sat on the boards of Manufacturers Hanover Trust Co., Avon Products, New York Life Insurance Co., and J.P. Stevens itself. Additional pressure, which proved decisive, was also brought to bear on top officials of the Seamen's Bank for Savings, Sperry Corporation, and Metropolitan Life Insurance Co.

In October, 1979, under heavy pressure, the Seamen's Bank chairman, E. Virgil Conway, who was a Stevens director, requested a meeting with the ACTWU president, Murray Finley. Conway told Finley he would do everything in his power to get meaningful negotiations going between Stevens and the union. At the time, Conway and his bank were deeply embroiled in the Stevens conflict. He had been prevented from opening a new branch for nearly a year because of a growing clamor over Seamen's "redlining" practices which the campaign, joined by community activists, raised at New York State Banking Department hearings. Within the savings bank industry, Conway's Stevens link was also becoming a hot issue, as politicians and consumer advocates joined the campaign in pushing legislation that the savings bank industry wanted no part of--to require election by depositors of mutual savings bank trustees. In addition, several hundred ministers called for Conway's resignation from a church pension board. By the time Conway had contacted ACTWU's president, he had gotten the campaign's message: "We'll keep you on the 'hot seat' until you and your cronies get off the workers' backs."

In the spring and summer of 1980, the pressure against Sperry over its directorate interlock with J.P. Stevens became so intense that Stevens finally began serious negotiations at the highest level with ACTWU. During one negotiating session in July, a top Stevens official likened the Sperry campaign to dropping a "ton of bombs" on the company. ACTWU officials had reason to hope for a settlement agreement even before Sperry's July 29th annual stockholders meeting. When it didn't materialize, we were ready to raise the Stevens issue on the home turf of Sperry stockholders and management. Nearly 700 union supporters inside the meeting kept a spirited dialogue going for five hours. Crystal Lee Sutton, the fired Stevens worker upon whom the movie "Norma Rae" was based, came up from North Carolina and spoke on working conditions at Stevens plants. We garnered the support of 650,000 Sperry proxy votes from New York public pension funds and voted them against the Stevens official seeking reelection to Sperry's board.

The stage had been set to go after Metropolitan Life, Stevens' major creditor. (Richard Shinn, then chairman of Metropolitan, was on Sperry's board of directors and served on its nominating committee. Over the formal objections of numerous union leaders and others, that committee decided to renominate the Stevens official to Sperry's board. After the Sperry annual meeting, I argued that, since Shinn used the power of Metropolitan Life to keep the Stevens official on Sperry's board, he could also use that power to force Stevens to come to terms with ACTWU.)

Events moved quickly. On Aug. 22, ACTWU Secretary-Treasurer Jack Sheinkman gave me the go-ahead to challenge Metropolitan Life in the same way we had gone after New York Life two years earlier, when its top officer and Stevens' were forced to resign from each other's boards. In late September, after Shinn found out what we were up to, it was all over for J.P. Stevens.

Even now, four years later, few people realize that the 17-year struggle some called "the cotton-mill crusade" really came to a head on Sept. 30, 1980. As The Wall Street Journal reported on Oct. 20, 1980, "Over an 8 a.m. cup of coffee in the crowded lobby of the Statler Hotel near Penn Station in New York," Metropolitan Life's Shinn and the president of ACTWU held a very important meeting. Shinn asked that the union hold off its campaign for 10 days and assured the union that Stevens would reach a quick settlement.

We had raised the stakes so high for Metropolitan Life and the mutual life insurance industry that we had created an attitude of "it's Stevens or us" among Stevens financial backers. The Wall Street Journal described what happened next:

[The] threat [of ACTWU's campaign] led Richard Shinn ... to do some behind-the-scenes maneuvering ....Mr. Shinn met with Whitney Stevens, the new chairman of Stevens .... Mr. Shinn says he applied "absolutely no pressure" on Mr. Stevens. "I merely wanted to find out how the negotiations with the union were going ....Without my ever having to say anything, [Stevens] realized that if in the course of good business dealings they could settle with the union, it would minimize our...problems.

Veteran labor reporter A.H. Raskin, in a New York Times column analyzing the ACTWU victory, hailed the union's creative use of a corporate strategy. He wrote: "Pressure on giant banks and insurance companies and other Wall Street pillars, all aimed at isolating Stevens from the financial community, helped generate a momentum toward settlement that could not be achieved through the 1976-80 worldwide boycott of Stevens products or through more conventional uses of union muscle such as strikes and mass picketing." New Jersey's leading evening newspaper, The Record, said in an editorial that the settlement "proves ... that an intelligently run and determined union can eventually achieve justice for its members by getting tough when it has to."

Among the most gratifying evidence of what we achieved was the statement of J.P. Stevens' vice president of industrial relations to a September, 1981, meeting of the South Carolina Textile Manufacturers Assn. The Daily News Record, an industry paper, reported that even this official now admitted: " ... Of the three major tactics employed by ACTWU during its confrontation with Stevens, the corporate campaign, designed to cut Stevens off from the financial community, was the most effective."

The sources of power behind Phelps Dodge, not surprisingly, also include insurance and banking interests susceptible to the same kinds of pressure that were exerted during the Stevens campaign. Metropolitan Life and New York Life, in addition to their stock holdings, accounted for about 15070 of Phelps Dodge's $667,200,000 in badly needed long-term debt as of January, 1983. Phelps Dodge's chairman, George Munroe, sits on New York Life's board of directors and another top policymaker of Phelps Dodge sits on the board of Mutual of New York, which also holds a portion of the company's long-term debt.

Among the banks intimately linked to Phelps Dodge are New York-based Manufacturers Hanover Trust Co., Citibank, Irving Trust Co., and Key Bank, as well as the National State Bank of New Jersey. In addition to serving on New York Life's board, chairman Munroe also serves on the board of Manufacturers Hanover. Manufacturers Hanover was second only to Citibank at the end of 1982 as Phelps Dodge's leading bank creditor, with total identified loans of $52,400,000, as compared to Citibank's $56,500,000. When the strike began, Citibank was also Phelps Dodge's fourth largest stockholder, with 506,469 shares, or 2.08%, of the 24,300,000 shares outstanding. The biggest shareholder in the company, with 1,132,320 shares, or 4.66%, was Batterymarch Financial Management, a Boston-based investment company.

Other banks with significant links to Phelps Dodge are Valley National Bank of Arizona and United Bancorp of Arizona. Two of Phelps Dodge's top policymakers sit on Valley National's board of directors, and the bank has stock and credit relationships with the company, although these are minor compared to the New York banks' relationships. One Phelps Dodge director on Valley National's board is William Franke, the president and chief executive officer of Southwest Forest Industries, which has been involved in a long, ongoing dispute with a union in California. Sitting on Valley National's board with the Phelps Dodge directors is the brother of Arizona Gov. Bruce Babbitt. As tensions rose, Gov. Babbitt called out the National Guard, a move which many believe served to support the company. The dean of the College of Business Administration of Arizona State University in Tempe sits on the boards of Phelps Dodge, United Bancorp of Arizona, and a subsidiary of Prudential Insurance Co.

The coalition of 13 Phelps Dodge unions, led by the United Steelworkers and including the Machinists and several building trades unions, possesses tremendous resources. The unions could have alleviated much of the strikers' frustration and prevented recurring incidents of violence by providing workers with the direction and tools necessary to fight back effectively. They should have moved the struggle right to the doorsteps of New York Life, Manufacturers Hanover, and Batterymarch Financial Management--all of which have significant financial ties to unions, their members, and allies. Also, in Arizona, Valley National Bank should have become the focal point of the battle to generate both favorable publicity and political pressure. Decisive moves by the unions in these directions would have come as a total surprise to the company and would have raised the stakes enormously for Phelps Dodge and all of its economic and political allies.

In such conflicts, I'd much prefer to move the battlefield inside a few corporate boardrooms and let a handful of men fight it out there, rather than allow the situation to explode, tearing families and whole communities apart. Such a strategy, if executed properly, would have led to a fair settlement at far less cost to the unions and with far less tragic repercussions in people's lives.

The Caterpillar and Con Edison Strikes

Now, consider the 21,000 United Auto Workers (UAW) who struck Caterpillar Tractor Co. in October, 1982. The strike lasted 205 days, and one labor columnist estimated that it cost the union's treasury $60,000,000 in addition to the enormous loss of wages and the catastrophic impact on the communities involved. According to Time (May 9, 1983), the contract settlement included "concessions by Caterpillar as well as by strike-weary workers, who voted 2 to 1 to accept it even after union leaders had recommended its rejection." One union member was quoted as saying, "I've never been so broke, desperate or dependent. I'd like to have stayed out longer, but I just couldn't afford it."

Just like the unions at Phelps Dodge, the UAW pursued what was basically a one-dimensional strike strategy while exerting little or no effort to hold accountable--or even identify and train a spotlight on--Caterpillar's top policymakers, creditors, stockholders, and political allies. Try to imagine how Caterpillar management would have been thrown off balance if union negotiators, before the strike deadline, had convinced them that, in the event of a strike, the union was prepared to launch a meticulously detailed Corporate Campaign strategy. Several thousand strikers would have been transformed into an economic and political force to confront, one at a time, the several banks in Peoria, Ill. (headquarters of Caterpillar and the scene of much strike activity) and The First National Bank of Chicago. These financial institutions are intimately linked to the company's labor policies. The union could have also made known that it had targeted key management links and major stockholders, including public pension funds, investment companies, and other financial institutions, for intensive campaign activities at the appropriate time.

The strike, I submit, could have been avoided or been far less painful if the union had raised the stakes for management in this way. The union could have brought enormous pressure to bear on the company to work out a fair settlement.

Similarly, suppose the leaders of the union representing Con Edison workers in New York City, with an eye to Con Edison's life-support network, had told management in the summer of 1983: "If you force 16,000 of us to strike, first we'll take our fight to the doorsteps of Metropolitan Life. Later, if necessary, we'll go right into the boardrooms of New York Life and Seamen's Bank. And we'll join with AT&T workers and Caterpillar Tractor workers to challenge Chemical Bank's deep involvement in setting labor policies for Con Ed, AT&T, and Caterpillar."

How much new energy and enthusiasm might have been injected into the labor movement in the summer of 1983 had the Con Edison and AT&T workers taken up the cause of the copper miners in Arizona and mobilized their huge strike forces to take on the New York financial institutions behind Phelps Dodge? While acting decisively to solve their own problems, they could have given new meaning to the word "solidarity." If union leaders want to make "solidarity" more than just a slogan, they should identify, case by case, the forces behind the corporate assault on workers and be prepared to move against them in unison.

What is saddest of all about labor's recent defeats is that, while unions historically have led the forces for social and economic justice, they are less and less prepared to fulfill that role now. How can the labor movement hope to be our "brothers' and sisters' keeper" if it falls so short of being able to protect the people most directly represented by it?

Many union leaders work tirelessly for their constituents and are firmly committed to social justice. Still, even the best of them should be challenged if they resort to outmoded tactics while failing to devise strategies that can win.

Too many union leaders continue to act on the shortsighted assumption that the only real power workers have is to withhold their labor. The fact is, workers have a lot more power than simply withholding their labor. There is power in building broad-based coalitions and in the mobilization and strategic deployment of workers' energies, their bank accounts, insurance policies, pension investments, stock proxies, purchasing power, and votes. There is also great power to be harnessed from their knowledge, imagination, and skills.

The strike, particularly in today's economic and political climate, should be the weapon of last resort. It should be instituted only when the foundation for a broad campaign is in place. In Corporate Campaign strategy, the strike is just one possible facet of a multifaceted campaign based on in-depth research, corporate/financial power analysis, and a comprehensive understanding of how the strengths of a union and its allies can be pitted against the weaknesses of the adversary and its allies.

Turning negatives into positives

A Corporate Campaign program encompasses all legitimate means of pressure. It might include the more traditional tactics as well as innovative strategies and tactics designed to weaken the primary adversary by disorganizing and, if necessary, dismantling the power structure behind it. Each tactical move, however, must be timed and coordinated as part of an over-all strategy to maximize the campaign's effectiveness.

In the most intense conflict situations, a Corporate Campaign program is relentless, constantly attacking an adversary and escalating pressure from every conceivable angle. It recognizes powerful institutions as both economic and political entities, which must be challenged in both the economic and political spheres. It shifts the workers' struggle from their own doorsteps to the doorsteps of the corporate and financial power brokers, thereby transforming the workers' customary defensive and reactive stance into one that places them on the offensive.

A major goal of the campaign is to turn the power structure supporting the company against management. In other words, you turn the underlying strength of the company against it, thereby making its greatest strength its ultimate vulnerability and greatest weakness. In so doing, you transform a positive factor into a negative factor for the company, and vice versa for the workers.

Some press accounts ascribe Corporate Campaign, Inc.'s successes to nothing more than "harassing" and "embarrassing" managements. The reality is far more intricate. The unions with which we work have won major victories because we showed them how to mobilize real economic and political pressure, and they moved quickly to take the initiative.

It is dangerously naive to expect to change the policies of a company, or to gain meaningful concessions from powerful institutions, unless you have organized significant forces of power yourself. As Wayne Glenn, president of the United Paperworkers International Union (UPIU), said in 1983, "With so many companies so eager to call in management consultants to try to destroy unions, the labor movement must fight fire with fire." That is just what he did, working closely with Corporate Campaign, Inc., in the spring of 1983 to develop and implement a program to challenge International Paper (lP). BusinessWeek reported in June, 1983, that what the union saw as "IP's increasingly hostile attitude" quickly dissipated as management felt the beginnings of a comprehensive Corporate Campaign strategy and realized the union's commitment to fully carrying it out. "Eschewing the challenge, IP's chairman, Edwin A. Gee, suggested to ... Glenn that their differences could be settled without a fight," BusinessWeek said. The UAW's publication, Ammo, described how news of the coming campaign instantaneously "brought IP corporate officials flying down to UPIU headquarters in Nashville."

According to the union monthly, The Paperworker, "When the UPIU began its campaign against IP the goals were to win a contract for the members and repair bad labor-management relations. Through the campaign, the UPIU not only won a contract but prevented production shifts to non-union sites and established regular meetings between management and the union." Glenn added: "Every American worker has rights, and unions exist to protect those rights. It's clear the campaign has helped us achieve that goal..."

The Paperworkers' campaign demonstrated once again that targeted individuals, companies, and institutions will only change their policies when they realize it is in their primary self-interest to do so. To foster such a realization, they must all be drawn into the conflict in ways that confront them where they are most vulnerable.

A company, like an elected official, survives and prospers only so long as it maintains a constituency or power base. Once a company's interlocks and stock and credit links feel pressure, begin to get shaky, and start breaking up because of a labor-management dispute, it is a clear signal that its constituency or power base is disintegrating. Then, the company, like a politician whose support is slipping away, must change its behavior and attitudes toward employees and the union and resolve its labor conflict-or else jeopardize its prosperity or its very existence.

In essence, a Corporate Campaign program is a "fine-tuning" mechanism to turn the tables on the corporate/financial power structure so that the workers, their union, and their allies can carry out a "divide-and-conquer" strategy of their own, pitting bank against bank, insurance company against insurance company, corporation against corporation, and one against the other. It is a long-overdue response to the way the corporate/financial power brokers have historically and consistently divided and abused poor and working people by creating an atmosphere that pits blacks against whites, the young against the old, workers against workers, and the "middle American" against the poor welfare recipient.

When unions struggle against an industry or a big company, they can't let their actions be contained or confined by how the industry or the company defines the situation. Workers must learn to establish the ground rules, and then take the initiative, at any given point in the conflict. In-depth research, power analysis, and targeting--an ongoing process--are the necessary ingredients to formulate a successful strategy. Once you identify the Achilles' heels of your primary and secondary adversaries, you have to target in priority order which individuals and institutions to attack. Every campaign has limited human and material resources; therefore, you must get the greatest possible return on your investment of those resources. The amount of resources you allocate to a campaign will determine in how many directions you can move at one time. The key factor is that your actions not be haphazard, but, rather, follow a logical and consistent "game plan" in which each action intensifies the pressure.

Can the labor movement resume its rightful role as the bulwark of poor and working people in their daily struggles with entrenched wealth and power? I say "yes"--but only if it picks up the tools and applies the techniques described here. When such strategic options become "standard equipment" in labor's arsenal, workers themselves will be able to take matters into their own hands and fashion a secure future.

Mr. Rogers is director of Corporate Campaign, Inc., New York City, which provides a number of services to unions.