Negotiating the Future
Best Practices in Joint Action
2005 Hawaii ADR Conference
"Mending Broken Bonds"
Barry Bluestone
Center for Urban and Regional Policy
Northeastern University
October 2005
In the Good Old Days Unions
blossomed
•
•
•
•
•
Massive monopolies -- little competition
No global competitors to speak of
Huge establishments
Routine work
Taylorism dominated the factory floor
• In this environment, unions found it easy to
organize workers … and millions joined.
There was little non-union competition to
worry about
Powerful Unions





By the mid-1950s, 36% of America’s
workforce were members of unions
No one crossed picket lines
No firm dared hire striker replacements
Unions had political clout because of their
numbers
Unions won unprecedented wage and
benefit improvements
Traditional Workplace Contract







AIF/COLA Wage Formula
“Fringe” Benefits
Seniority Protection
Grievance Machinery
Work Rules/Job Classifications
Union Security Clause
Management Rights Clause
Traditional Contract Worked
Wonders in the Post-War Period

AIF-COLA Wage Formula provided
massive dose of consumer demand
 Fringe Benefits provided great security
 Seniority, grievance machinery, work
rules, union shop did the same -- gave
sense of security

And so, American workers went out and
spent their incomes generating record
GDP growth rates
The Fly in the Ointment: The
Management Rights Clause





As long as there was little foreign competition, consumers
would buy whatever American companies produced even if
prices rose, quality was shoddy, and real innovation was
lacking
Management could make all kinds of mistakes without their
companies or workers bearing the cost
But with rising foreign competition, the Glory Days were
numbered
Management now needed labor to help boost productivity,
raise quality, and bring forth innovation
The old management rights clause actually stood in the
way of these changes
The New Competitive Reality





Hot-paced, high flexibility, incredibly
competitive marketplace
Global competition
Dominance of Wall Street
Smaller scale operations in larger scale
enterprises -- Merger Mania with
downsizing
New skills needed to prosper
U.S. Trade Balance
Exports - Imports (Goods)
Truman
Eisenhower
Kennedy
Johnson
Nixon Ford
Carter
Reagan
Bush
Clinton
Bush W.
100
$
b illio n s
0
-100
-200
-300
-400
-500
-600
47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03
YEAR
Imports as % of GDP
Truman
Eisenhower
Kennedy
Johnson
Nixon Ford
Carter
Reagan
Bush
Clinton
Bush W.
16%
P e rc e n t
14%
12%
10%
8%
1929 Import/GDP Ratio
6%
4%
2%
47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03
48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04
Manufacturing Employment
as Percent of Total Non-Farm Jobs
Truman
Eisenhower
Kennedy
Johnson
Nixon Ford
Carter
Reagan
Bush
Clinton
35%
Bush W.
P e rc e n t
30%
25%
Imports as a % of GDP
20%
15%
10%
5%
0%
47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 03
YEAR
Union Strength Wanes





Today, only about 13% of American
workers belong to unions -- only 9% in the
private sector
Firms hire replacement workers
The public sector “privatizes” services
Union political clout on the decline (e.g.
NAFTA, labor law reform)
New workers harder to organize
Year
2003
2001
1999
1997
1995
1993
1991
1989
1987
1985
1983
1980
1978
1976
1974
1972
1968
1964
1960
1956
1952
1948
1946
1944
1942
1940
1938
1936
1934
1932
1930
Percent of Employed Labor Force
United States: Trends in Union Membership
40
35
30
25
20
15
10
United States: Private Union Membership v. Public Union Membership
35.0
Public Sector
30.0
25.0
20.0
15.0
Private Sector
10.0
Year
20
02
20
00
19
98
19
96
19
94
19
92
19
90
19
88
19
86
19
84
19
81
19
79
19
77
19
75
5.0
19
73
Percent of Employed Labor Force
40.0
Age Composition of Union Members
in the U.S. 2002
Age Group
Total, Age 16+
Percent of Employed
Workforce
13.3%
Age 16-24
5.2%
Age 25-34
11.2%
Age 35-44
14.3%
Age 45-54
18.6%
Age 55-64
17.4%
Union Membership by Occupation in 2003
Occupation
Union Membership
as % of Employment
Sales and related occupations
4.0%
Food preparation and serving related occupations
4.1%
Legal Occupations
4.8%
Computer and mathematical occupations
5.2%
Business and financial operations occupations
6.1%
Art, design, entertainment, sports, and media occupations
7.5%
Architecture and engineering occupations
7.8%
Life, physical, and social science occupations
9.0%
Healthcare practitioner and technical occupations
12.3%
Production occupations
17.5%
Installation, maintenance, and repair occupations
18.9%
Transportation and material moving occupations
20.1%
Construction and extraction occupations
21.7%
Protective service occupations
36.1%
Education, training, and library occupations
37.7%
Can we Rebuild the Union
Movement in America?
Keys to Economic Success in a
Global Economy

Consistent improvements in
PRODUCTIVITY

Constant attention to QUALITY

Continuous INNOVATION

Without improved productivity, quality,
and innovation, firms fail, workers suffer
… and unions disappear
Is there a new role for
unions in this new
hot-paced, highly
competitive, global
economy?
“Enterprise Compact”







Joint Productivity Targets
AIF/COLA for Basic Pay & Benefits
Joint Pricing Policy
Joint Quality Standards
No Layoff Policy
Profit-sharing/Gain-sharing
ALL DECISIONS BY JOINT ACTION
Case Studies
From Reform to Revolutionary Change







HealthEast/Children’s/Woodwinds Hospital
Circus Circus Hotel Casino
Bechtel Nevada Test Site
Quaker Oats - Cedar Rapids
Ford Cleveland Engine Plant #2
César Chávez High School
Magma Copper Company
Best Practices at Health East/Children’s
Hospital/Woodwinds
Goals: Cooperative work environment; cut costs

Adoption of Interest Based Bargaining (IBB) in contract
negotiations

Labor-management joint committees established
throughout hospital facilities

Extensive training in IBB in order to use IBB principles
universally in joint labor-management committees

Special Letter of Agreement between parties used to design
the work environment at the new Woodwinds Hospital
based on joint labor-management committees and IBB
Best Practices at Circus Circus
Goals: Reduce grievances; improve service quality

Creation of joint labor-management steering committee to
oversee training in problem-solving

Develop “Roles, Rights, and Responsibilities” and Team
Building and Problem Solving Training to transform
traditional adversarial relationship between supervisors
and shop stewards

Institute Initial Resolution Process so that supervisors and
shop stewards solve problems before they become formal
grievances

Establish joint “Train the Trainers” workshops to provide
training for supervisors and shop stewards without the
need for third party experts
Develop new disciplinary contract language to boost
quality of service

Best Practices at Bechtel Nevada
Goals: Reduce jurisdictional disputes; improve
productivity

Creation of the Alliance between Bechtel and Building
Trades to foster a more cooperative labor-management
relationship
Development of Continuous Improvement Teams

Adoption of Interest Based Bargaining (IBB)

All constituencies given training in IBB

Work Assignment Dispute Resolution Process (WADRP)
adopted by parties to resolve union jurisdictional disputes

Under WADRP, representatives from disinterested crafts
make final and binding decisions on jurisdictional disputes
involving two or more unions

Development of common work rule language for all building
trades under the Alliance

Best Practices at Quaker Oats
Goals: Empower work teams; boost productivity

Parties establish, alongside their traditional contract, a
Supplemental Partnership Agreement (SPA)

Joint Labor-Management Team governs plant

Under the SPA, team-based work systems instituted
throughout plant: 64 self-managed work teams

Floor supervisors are team members -- part of triad of
supervisor, union steward, and team leader

Joint monitoring of key plant success indicators

On-going training in soft skills, team skills, conflict
resolution, and leadership development

Teams conduct regular self-assessments
Best Practices at Ford Cleveland Engine Plant #2
Goals: Joint control of production floor; save the plant

Joint UAW-Ford team develops the Conceptual Agreement
committing both parties to “Best in Class” Quality and Cost

A new Simulteam of salaried and hourly workers is selected
to design the new operating model for the plant

The Simulteam engages in extensive benchmarking of
competitors’ practices to inform the design of the new
model

The Simulteam is made responsible for interviewing new
employees for the plant and recommending new hires

Under the joint agreement, every employee receives 120 to
150 hours of training
Best Practices at César Chávez H.S.
Goals: Empower teachers and support staff; Improve school quality

Use of Interest Based Bargaining in negotiations

Adopt and adapt Saturn Plant principles to design work
systems at new high school

Parties jointly design site-based school governance
structure

Joint selection of new school principal and other staff at the
school
Best Practices at Magma Copper
Goals: Joint management of company; save the company

Joint Union Management Coordinating Committee (JUMCC)
established to redesign production processes and entire
labor-management relationship at mine

Revolutionary 15 year contract with 7 year no-strike clause

Traditional contract “put on the shelf” -- to be used only if
parties lose trust in the partnership

Sharp reduction in work rules to boost productivity

Gainsharing plan to reward workers for productivity
improvements

“Voice of Magma” joint meetings produce new charter for
company to solidify commitment of managers and workers
to work teams and work redesign
Final Thoughts
Key “Learnings” from
the Case Studies
Key “Learnings”


To be successful, joint processes must be
developed in the context of collective bargaining,
not separate from it.
Beware of the “Quick Fix” -- Real joint
partnerships take time to generate

Successful programs begin at the top, but must
be diffused right down to the rank and file

Successful programs are “institutionalized” -the process becomes an integral part of the
organization

Sustaining the joint process is critical -programs tend to hit plateaus and can deteriorate
Prospects for a New Union Future






Unions become part of the New Economy
solution, not part of the problem
In response, Unions find greater popular
support for the union agenda
American workers begin to show new
desire to join unions
Union membership grows rapidly
Union political clout regained
American democracy reaches a new level