Strategic Contract Campaigns at Multinational Corporations
Rob Hickey
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[Table]
[Appendix]
AbstractThis paper examines first contract campaigns at five multinational corporations. The case studies include a cross-section of unions and a variety of industries. Several common patterns in the cases highlight important strategic considerations for unions. First, solid organizational structures and rank-and-file activism serve as a prerequisite for sustainable campaigns. Second, strategic considerations of external factors, such as the union's strength in the industry and leverage capacity contribute to successful campaigns. Third, the level of resistance varies widely across employers and strongly affects the campaign. Finally, while the legal framework of bargaining matters, it emerges as a source of last hope against highly resistant employers.
On March 28, 2001, 70 workers in Marion, Illinois ratified their first contract with Excel Mining Systems, a manufacturing company that produces roof bolts for mines. The victory came 17 months after they had certified the United Steelworkers of America (USWA) as their union. An Australian-based multinational corporation owned Excel at the time of union certification, but sold it to an in-house management group during negotiations. In the previous 10 years, the company had changed ownership several times. Despite facing threats of capital mobility through changing global ownership structures, these steelworkers maintained their unity and won a first contract after a campaign that took six times longer than the original organizing campaign. The challenges faced by this group of workers reflect the broader challenges facing the U.S. labor movement in a global economic environment. [End Page 71]
The growth of regional and global economic integration has profoundly changed the terrain for the U.S. labor movement. While much attention is placed on trade flows, globalization is part of a larger transformation taking place in the U.S. industrial relations system in the past twenty-years (Kochan, Katz, and McKersie, 1994). Capital mobility is linked to other aggressive tactics such as plant closing threats, concessionary contract demands, decentralization of collective bargaining, and the rise of strategic human resource management tactics. Flexibility has become a central topic for collective bargaining and business strategy. Through capital flexibility, employers move investments to any corner of the globe. Numeric flexibility through part-time and contingent employment relationships allows management to adjust staff and production levels to rapidly changing market conditions. Functional flexibility strives to collapse restrictive job classifications and create a multi-skilled workforce (Moody, 1997).
Combined with the new forms of corporate flexibility, the new global economy is also characterized by rapid changes in corporate ownership and structure. Mergers and acquisitions have created ever-larger multinational corporations. The effects of increased capital mobility, aggressive anti-union tactics, and the growth of multinational corporations have placed severe pressures on unions' traditional activities of organizing and collective bargaining. Bronfenbrenner's research showed that the win rate of National Labor Relations Board (NLRB) certification elections for workers attempting to organize at a U.S.-based multinational was 39 percent and just 31 percent for workers at a foreign-based multinational. This compared to an overall win rate of 44 percent (Bronfenbrenner, 2000). But, even when the union wins the NLRB election and gains collective bargaining rights, successful first contract negotiation rates have declined to less than 70 percent today (Cooke, 1985; Bronfenbrenner, 1997 and 2001).
In response to the changing nature of the global economy, U.S. unions have had to develop strategies much different from the traditional collective bargaining process. The combinations of high levels of member participation and militancy with strategic research and multifaceted pressure tactics have created powerful examples of strategic contract campaigns capable of taking on large multinational corporations and winning. In Ravenswood, Juravich and Bronfenbrenner chronicle the heroic struggle and victory of the USWA against the international fugitive Marc Rich and his Ravenswood Aluminum Corporation (Juravich and [End Page 72] Bronfenbrenner, 1999). The authors contrast the Steelworkers' model with other labor struggles that failed to make the connection between militancy and strategy or relied on a more single faceted approach such as a corporate campaign.
Similarly, Matt Witt and Rand Wilson describe how the 1997 strike victory at UPS by the Teamsters Union was the result of a nine-month strategic contract campaign involving intense internal organization and membership education combined with the development of strategic external linkages to the community and other sources of bargaining power and leverage (Witt and Wilson, 1999). Strategic contract campaigns constitute a large strategic framework that considers the union's internal organizational strength, external points of leverage, and the company's own strategic program and interests.
Unions are engaging in comprehensive campaigns to organize and win first contracts in the context of the fundamental shifts in industrial relations systems, and the economy in general. This paper will analyze first contract campaigns at five multinational corporations. The case studies cover a cross-section of unions; United Steelworkers of America (USWA); Union of Needletrades, Industrial and Textile Employees (UNITE); United Autoworkers (UAW); and the International Brotherhood of Electrical Workers (IBEW). The case studies cover a variety of industries including auto parts, telecommunications, manufacturing, and warehouse distribution. In particular, through case study research, I will assess what factors contribute to, or hinder, successful first contract campaigns.
It is clear from earlier research that employer and union tactics significantly influence the outcomes of organizing and first contract campaigns. (Dickens, 1983; Cooke, 1985; Freeman, 1985; and Bronfenbrenner, 1996). What is less well known is how these tactics interact with other factors in a strategic contract campaign such as the union's strength in a particular industry or geographic area, the employer's attitude towards unions, and the role of rank-and-file bargaining committee members. Interviews of participants and other qualitative research methods are needed to draw out the stories of the campaigns and understand how the various factors influence the campaign through its actors. To further understand the factors that influence the outcome of first contract campaigns, this paper will examine the contract campaigns from the perspective of the participants.
Through qualitative research, I expect to show that four factors are critical to understanding the process and outcomes of first contract campaigns. [End Page 73] The diagram in Figure 1 below provides the basic outline of the analytical framework. First, the union's organization strength fundamentally impacts the first contract campaign process. These factors include several components such as the legacy of union building actions during the organizing campaign, the level of union activity and nature of support for the first contract demands, and the extent to which institutional characteristics of the union, such as a steward structure or grievance procedure, are established within the company's operations before the contract settlement is reached. Second, the external factors category reflects the critical role of the sources of leverage and support outside the bargaining unit. [End Page 74]
Whether or not unions represent workers at the company's other facilities or the extent of union density within the industry or among the customer base may constitute a determining variable in the success or failure of a first contract campaign. A third set of factors is grouped under the title "employer attitude." The management culture of a specific firm may fundamentally oppose any union presence in its operations leading to an aggressive level of resistance. By contrast, local human resource managers may consider local human resource problems to be more important than the corporate directive to fight the unionization effort. Strategic business decisions and the level of its resistance to organizing and contract negotiations will be a significant part of the story of a first contract campaign. The fourth category in this analytical framework examines the extent to which unions seek recourse—and bargaining leverage—through the National Labor Relations Board (NLRB).
These four factors interact with each other as indicated in Figure 1. For example, a strong and well-entrenched union presence in the company's operations may mitigate the level of resistance in the employer's attitude. Conversely, an employer that is fundamentally opposed to unionization and employs sophisticated tactics to defeat the campaign may very well succeed in dismantling the union's organizational presence. External factors influence both the union's organization strength and the employer's attitude. Employers with an established bargaining relationship with the union at another facility may be less likely to vehemently oppose the union's presence. High union density in the industry, or a strong presence at the company's customer base may result in having experienced union activists leading the first contract campaign or instill a higher level of expectation or confidence among the general workforce. Unions without these external points of leverage may be forced to seek recourse through the NLRB to overcome employer opposition.
This study is being conducted in the context of earlier quantitative works that have examined the effects of employer and union strategies on the outcomes of NLRB union certification elections and first contract campaigns. Freeman (1985) showed that employer anti-union tactics negatively impact election outcomes and that the incidence of employer unfair labor practices has risen sharply. In first contract campaigns, Bronfenbrenner (1996) has shown that the use of union building strategies significantly improves the ability of a union to organize and secure a first contract. Union tactics such as one-on-one organizing, active rank and file members on the negotiating committee, and broader participation [End Page 75] by union members in inside strategies and solidarity days, significantly contribute to the workers' ability to secure a first contract.
Qualitative works on post-election union activism and first contract campaigns have tended to focus on topics related to, but distinct from comprehensive union building strategies (Markowitz, 2000; Sciacchitano, 1998). In analyzing the first contract campaign at the Steeltech plant in Milwaukee, Wisconsin, Sciacchitano describes the critical role of building community participation in the union's successful first contract campaign. Sciacchitano attributes the union's success to the rank and file nature of the campaign itself.
One reason [the United Electrical, Radio and Machine Workers of America] UE was able to arouse this [community] participation was the role of the Steeltech workers themselves; they spoke at the public hearing, they were interviewed on radio stations, and they addressed community groups, not only as workers and union members but as community members, taxpayers, and consumers. Their presence provided the moral and political foundation for the campaign's force. The work UE spent in supporting and empowering workers to speak for themselves was central to the campaign's success (Sciacchitano, 1998: 162)
Markowitz focuses her study on, "how different levels of participatory democracy incorporated during the organizing campaigns influence workers' perceptions and actions after campaigns successfully end" (Markowitz, 2000: 13) While focusing on workers' perceptions of their union, Markowitz argues that participatory union strategies are critical to the future of the labor movement.
Method
The cases selected are a subset of a larger study of 413 NRLB certification elections by Cornell University researcher Kate Bronfenbrenner in her recent work, "Uneasy Terrain: The Impact of Capital Mobility on Workers, Wages, and Union Organizing," which was commissioned by the U.S. Trade Deficit Review Commission (Bronfenbrenner, 2000). I assisted in this study, which examined the incidence and impact of plant closing threats during union organizing drives conducted in 1998 and 1999.
The five case studies were selected from the 413 cases in the NLRB sample on the basis of three criteria. First, each case involved a subsidiary of a multinational corporation at the time of the election. Each company, or its parent corporation, has operations outside the U.S. This criterion [End Page 76] was designed to target those cases that would best reflect the changing patterns and pressures of the global economy. Second, the unions used at least five comprehensive union building tactics from a total list of eighteen tactics. 1 (A complete list of the union building tactics and which were present in each case is included in the appendix.) As outlined in the analytical framework, these union building tactics during the organizing campaign heavily influence the level of organizational strength. By selecting cases of similar organizational strength, I hope to show the importance of the other three categories in the framework. Finally, the organizing campaign had to result in successful union certification to qualify for a first contract campaign case study.
The case study research involved on-site and telephone interviews of workers, union staff and officers, and company management. The interviews lasted between 30 minutes and one hour, with follow-up interviews conducted on an as-needed basis. The lead negotiator in each case study also completed a detailed survey about the negotiation process, the employer campaign, and the union campaign during first contract negotiations. Bronfenbrenner conducted the first contract survey as part of a follow-up study to her earlier research of the organizing phase of the selected NLRB certification elections (Bronfenbrenner, 2001). Additional information on the various multinational corporations was gathered through print and electronic research.
The qualitative research methodology used in this study provides insights into union strategies and details of the participants' stories not available through traditional quantitative survey methods. The contract campaigns displayed characteristics unique to the union, the multi-national corporation, the location of the plant, and the demographics of the workforce. Furthermore, participants within each case study recounted different perspectives of what the important factors were in the campaign. Below, I briefly summarize each case and place into context the factors that the participants saw as having a significant impact on the contract campaign.
First Contract Campaigns
UAW—Tower Automotive
Twenty-four hours a day, seven days a week, nearly 400 workers at the Tower Automotive plant in Plymouth, Michigan, build frames for Chrysler's Durango sports utility vehicle. Steel pieces are welded into a [End Page 77] finished product with the help of some 300 robots in this five-year old, state-of-the-art factory. The frames are loaded onto rail cars and delivered "just-in-time" to the nearby Chrysler assembly plant.
After losing their first organizing campaign by one vote, Tower workers ran a second campaign. Once again, Tower responded by mounting a textbook anti-union campaign. By holding captive audience meetings and one-on-one discussions; hammering away on strikes, dues and fines; promising improvements; threatening that the union would not change anything; and firing a union activist; the company thought they would once again defeat the drive. Instead, the union won by a margin of four-to-one. Management was shocked by the election results (Mahssney, 2001). This margin of victory and the resulting display of worker unity would carry through as a critical feature of the first contract campaign. The culture of the workforce had transformed from embattled discontent, to a sense of effective power through organization. Tower employee and bargaining committee member Shane Vaughn explained that during the second organizing campaign workers developed a sense of self-confidence in their union. "People realized that things didn't have to be this way. We didn't have to accept the company's rule as law" (Vaughn, 2001).
The location of the frame plant created external leverage and contributed to the workers' self-confidence in their union. First, Chrysler heavily influenced the geographic location of the plant to fit closely within its industrial complex. While the frames could just as easily be manufactured in South Carolina or South Korea, Chrysler's "just-in-time" assembly operations demanded that the parts plant be geographically embedded in the customer's industrial complex. Second, the UAW still permeates the working class communities in southeastern Michigan. Many Tower employees have a family member or relative who works in a UAW auto plant. Tower also received federal training grants to locate in the area, providing another leverage point for the union.
During the seven-month bargaining process, the union developed a strong institutional presence in the plant by establishing an unofficial grievance machinery long before the first contract was settled. Rank-and-file bargaining committee members directed the growing worker frustration at the front line supervisors. Tower employees maintained a constant level of pressure and visible support for the union with hats, t-shirts, and buttons.
The UAW's position in the auto assembly industry provided tremendous potential leverage against Tower whose sole customer at the [End Page 78] time was Chrysler. The union's ability to disrupt Tower's time-sensitive relationship with Chrysler operated as an untested but very credible threat against the company during negotiations. A growing bargaining relationship between the UAW and Tower at other auto parts plants further strengthened this position.
USWA—Nexans Magnet Wire
Mexico, Missouri, is a small farming community in northcentral Missouri. On the surface, Mexico appears to be the perfect greenfield site for a non-union magnet wire manufacturing plant. But nestled among the farms and livestock auction yards, Mexico still harbors a brick manufacturing industry with a long union tradition. While the brick manufacturing industry has declined over the years, USWA local 660-A still serves as a cornerstone of union presence in the community.
Workers had twice attempted to organize at the Mexico magnet wire plant over the past 10 years, even winning the second certification election. However, at that time, a Japan-based multinational corporation, Optec, owned the plant and maintained an unrelenting anti-union campaign throughout negotiations. The corporate strategy worked and the company busted the union two years after certification (Cassaday, 2001). The Japanese owners eventually sold the plant to the French conglomeration, Alcatel. The first actions by the new French owners were to eliminate all accrued sick leave and institute 12-hour shifts. The union, which had been subdued by the aggressive tactics of the previous owners, once again sprang to the surface.
Following union certification, the company's human resource director resigned rather than be in charge of a unionized facility. The company brought in a new human resource director from its unionized plant in Canada. While the corporate headquarters had indicated a preference to keep the Mexico plant union-free, this was not translated into an aggressive anti-union campaign at the local level during contract negotiations. Three reasons account for the shift in employer attitude. First, Alcatel's other two North American magnet wire plants were unionized, making it difficult for corporate managers to enforce a strict "no union contract" position. USWA bargaining committee members contacted the other unionized magnet wire plants and used their contracts to prepare for contract negotiations. Second, local management realized that the union was well entrenched in the workforce, that is the organizational strength of the union mitigated against an anti-union attitude. Third, local management [End Page 79] recognized serious internal problems such as large disparities in wage rates and attendance problems. Local management decided that negotiations could be used to address these problems. Negotiations quickly focused on the core union demand to eliminate arbitrary actions by managers and the human resource focus, to eliminate widely divergent pay rates. The union ratified its first agreement just two weeks after the first bargaining session.
USWA—Excel Mining
As described in the introduction, this campaign was characterized by long delays in the bargaining process. After a seven-month delay following certification, the union filed unfair labor practice charges, which compelled the company to schedule bargaining sessions. Although the company no longer refused to meet, Frank Cavaretta, USWA lead negotiator, charged, "the employer continued to frustrate bargaining at every turn" (Caveretta, 2001). A final agreement would take another 10 months of negotiations and more threats of NLRB charges before Excel employees voted to approve a contract on March 28, 2001. However, even after ratification, the employer invoked a rarely used NLRB charge claiming that the union misrepresented the contract offer to the membership at the ratification meeting.
Two related, but contradictory factors stand out in this case. First, management's delaying tactics were insufficient to bust the union. A strategy of prolonged delays in negotiations without a supplemental campaign to win over disaffected workers or eliminate union supporters did not succeed in busting the union. Second, although the union's organizational strength maintained worker unity through the long campaign, community support was insufficient as a sole source of external leverage, forcing the union to resort to the NLRB to compel bargaining and reach a settlement.
IBEW—GTE North (Verizon)
The GTE call center in Kokomo, Indiana, is a model facility of the new service-sector economy. Some 450, mostly women, workers are employed at the call center. The women, most of whom are single mothers, work as collection associates arranging payment schedules for telephone customers across the country. Inconsistent and unfair treatment by the company's "coaches" (supervisors) sparked the organizing campaign in [End Page 80] February 1998, just a few months after the call center first opened. Although the employer campaign during the election was low key, the IBEW ran an aggressive campaign that used a host of union building tactics. With the assistance of an organizer from the international union, the local union drew in rank and file volunteer organizers to conduct housecalls, attend small group meetings, and even campaign inside the facility.
One of the volunteer organizers, June Kneller, was the treasurer of the local union executive board and an experienced steward at the Fort Wayne call center. Ms. Kneller worked with the bargaining committee to draft the contract proposals, drawing heavily from her own unit's contract. The committee started by using the organizing campaign structure to conduct a bargaining survey. The local union provided training for the nine bargaining committee members after the certification election (Kneller, 2001). The bargaining committee formed the core union structure during the first contract campaign. "Our bargaining committee came from all walks of life. We represented every group of people in the center. Management did not intimidate the women on the bargaining committee. We had a strong sense of self and our union" (Bailey, 2001).
The extremely high turnover at the call center weakened the union's internal structure, but it also mitigated against an aggressive anti-union campaign by the company. From January 1999 to October 1999, the Kokomo call center turnover rate was 100 percent. Union negotiators assessed that resolving these severe human resource problems was more important to management than stonewalling contract negotiations.
The other major factor supporting the union's position is the union's strength in this sector of the telecommunications industry. The IBEW local union represents another call center in the area, and several thousand telecommunication members in Indiana. The expansive bargaining relationship between the IBEW and companies in the telecommunications industry created productive local level negotiations. The parties reached an agreement after 10 bargaining sessions (Bame, 2001; Kneller, 2001).
UNITE—Goya Foods
Through repeated delays, harassment of union activists, plant closing threats, and illegal firings, Goya Foods management effectively used an arsenal of anti-union tactics to thwart the union's first contract campaign. On December 4, 1998, The Union of Needletrades, Industrial and Textile Employees (UNITE), won certification elections at two bargaining [End Page 81] units (warehouse/drivers and sales representatives) at the company's Miami distribution center. For over two years, Goya maintained an aggressive anti-union campaign and evaded signing a contract with its employees, but it did not succeed in busting the union.
From the start of the organizing campaign, Goya Foods interrogated workers and threatened to close the facility if the employees supported the union. Top officials of the family-owned company repeatedly questioned workers about the union and said the company would never agree to any union demands. Employer resistance continued at the same level after the election. Employer negotiators agreed to listen to and consider union proposals, but they never engaged in serious collective bargaining (Pitt, 2001). Goya fired three union activists following one of the rallies at a Winn-Dixie store. Management made unilateral changes and never accepted the union as a legitimate entity in their operations (Cullen, 2001).
UNITE conducted a comprehensive first contract campaign, but ultimately lacked significant leverage over the company's operations. The union's community coalitions in Miami mobilized the support of religious leaders, elected officials, and other community activists to pressure Goya to reach a settlement. The union targeted Goya's customer base in Miami in an effort to build external leverage. Goya workers and the larger Miami labor community held rallies and demonstrations at Winn-Dixie grocery stores to promote a boycott of Goya products. Goya workers conducted a one-day unfair labor practices strike, contacted health department officials about rat infestations at the food warehouse, and took off holidays in defiance of the company's orders to report to work (Pitt, 2001). Despite this array of creative tactics, Goya management remained defiant.
The UNITE case is an example in which a union builds active rank-and-file support, runs an aggressive campaign, pressuring the company on multiple fronts, yet does not have the power to leverage a first contract agreement from the employer. Management's anti-union attitude is bolstered by the union's relatively weak position in the company's overall structure and the lack of any other union presence at the company, particularly at its food processing plant.
Goya Foods Inc. is headquartered and has its main food-processing factory in Secaucus, New Jersey. The company employs 2,000 people at 13 facilities throughout the U.S., Caribbean, and Europe. The Miami facility is one of six sales and distribution centers in the U.S. The distribution centers enhance the company's market share in cities that sell large volumes [End Page 82] of Latin food products (Houston, Los Angeles, Chicago, Miami, New York and several New Jersey cities), but they are not central to its business strategy of producing Goya label food products. Throughout negotiations, the company reminded the union bargaining committee that it could distribute its product without the Miami center (Pitt, 2001).
UNITE successfully pursued multiple unfair labor practice charges against the company. On February 22, 2001, NLRB Administrative Law Judge Lawrence Cullen ordered the reinstatement of three union leaders and found that Goya had illegally imposed unilateral changes to the terms of conditions of the represented employees. (Cullen, 2001) The importance of the union's legal strategies grew as the public contract campaign failed to move the employer. The potential monetary liability resulting from the unilateral changes may be the leverage that finally breaks through Goya's wall of resistance (Pitt, 2001).
Analysis
The analyses of the case studies described above are summarized in Chart 1 below. Using the framework I introduced at the beginning of the paper, several patterns in the cases become strikingly clear. First, the only cases to resort to the NLRB lacked other sources of leverage against the company or within the industry. Both the USWA's Excel campaign and UNITE's ongoing effort at Goya Foods highlight the importance of these external factors in forcing the employer to accept the union's presence and agree to a contract. The UNITE case is particularly stark as a result of the bargaining units' weak position in the company's operations and the union's weak position in the food distribution industry.
In two cases (Nexans and Verizon) employer attitudes focused on using the collective bargaining process to resolve local human resource problems. In both cases the union structure had become institutionally entrenched in the workforce after certification, largely as a result of the organizing tactics that built the union prior to the election. The combination of organizational strength and external factors such as union density and bargaining history, led to similar management attitudes.
Management at Tower Automotive did not adopt the same problem-solving attitude, but dealt with the union as a legitimate bargaining representative because of this same combination of factors. The relationship of these factors is clear in the Tower case. Management strongly opposed the organizing drive and bargained hard over the contract, but the union tempered this hard-nosed attitude by credibly threatening its [End Page 83] [Begin Page 86] ability to cripple the company's operations in the auto industry and supplementing these threats with shop floor agitation against front-line supervisors.
External factors influence the union's organizational strength as displayed in the Nexans case, in which the bargaining committee established linkages with the unionized workers at the company's Kentucky plant. The committee used the contract at the other plant to draft their own proposals and strengthen the legitimacy of their own demands. Similarly, the UAW's strong position in the auto assembly industry and Tower's vulnerable position as a just-in-time provider of high value-added parts to nearby auto assembly plants emboldened that workforce.
Influences in the other direction, that is the union's internal organizational strength enhancing external factors also occurred. For example, UNITE's ability to reach out to community allies and bring governmental food safety inspectors in to investigate rat nests depended on an engaged and committed membership. However, influences in this direction appear more limited, at least in the short term. Higher levels of militancy would not have increased the union's leverage over the company's operations at Goya. By contrast, the participation of Tower members in the UAW's Tower Automotive network will increase that union's external strength there in the long term.
The combination of an entrenched union structure and a strong position in the industry, that is tangible union bargaining power, caused employers to agree to a contract settlement. Where the union established a unified and active rank-and-file membership through the organizing campaign, but did not hold strategic leverage outside the shop floor, employer attitudes remained unchanged. In these contexts recourse to the NLRB did provide some leverage to compel employers to settle, provided the union was able to maintain its organizational strength in the bargaining unit during the long legal proceedings.
Conclusion
The case studies in this research highlight several common factors that influence first contract campaigns. First, the foundation of each contract campaign depended on building a union structure that was embedded in the workforce during the organizing phase and institutionalized after certification. Second, rank-and-file unity alone was not a sufficient condition for securing a first contract. While each union exhibited a high level of organizational strength, external leverage, and the union's strategic [End Page 86] position in the industry, in particular, determined leverage capacity. Third, only one employer in the case study sample engaged in an aggressive, sustained, anti-union campaign after the election. The company's labor-relations program, while influenced by the union's strategic position in the industry and strength of the rank-and-file structure, also acts as an important independent variable. Finally, the legal recourse to the NLRB is an important lever in contract campaigns but functions more as a tool of last resort than a consistent influence in the process.
Acknowledgement
I would like to recognize the support of Kate Bronfenbrenner. Without
Kate's help and support this research project would not have been
possible.
Rob Hickey is a Ph.D. candidate in the School of Industrial and Labor Relations at Cornell University. His address is 407 Etna Road, Ithaca, NY 14850; e-mail: rsh26@cornell.edu.
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