For half a century the United Auto Workers has been one of the nation`s largest, most powerful and progressive unions-an organization that commanded serious attention from the executive suites in Detroit and the Oval Office in Washington.
The late Walter Reuther (1907-1970), an organizer for the union who rose to its presidency in 1946, has been enshrined in America`s labor pantheon alongside Eugene Debs, John L. Lewis and Joe Hill.
Things change.
”I dreamt I saw Walther Reuther last night, and he wasn`t too happy,”
quipped Sean McAlinden, automotive economist with the University of Michigan`s Transportation Research Institute.
His twist on the old labor anthem refers to the UAW`s de facto surrender last week to Caterpillar Inc. Facing the prospect of having its members replaced by outside workers, the union Tuesday ordered its 12,600 members unconditionally back to work, ending their 5-month strike.
While a new contract is being negotiated, UAW members will work under the terms of the company`s last offer-a meager proposal by the UAW`s past standards that over the next three years includes an increase in the average hourly wage to $19.28 from $17.85. More worrisome for the UAW is Caterpillar still hopes to create a separate and lower pay scale for new workers hired in its parts-manufacturing and distribution divisions.
On the plus side for the union, workers will get a six-year job guarantee. And the company squelched rumors that 15 percent of the workers wouldn`t be called back because of automation and downsizing. All 12,600 strikers will begin returning this week, and the 1,350 excess jobs will be pared away over time using voluntary retirements and attrition.
But the most serious wounds suffered last week by the UAW, and to some extent all unions, had nothing to do with wages and benefits.
The collapse of the Caterpillar strike gave further legitimacy to managements` use of replacement workers, or the threat thereof, as a pre-emptive bargaining device; and it dislodged the highly effective industrial union technique called ”pattern bargaining.”
Under pattern bargaining, UAW and other unions negotiate separately with individual companies in an industry, then try to impose the terms of the first settlement on the other companies to obtain pay parity across company lines.
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But Caterpillar is breaking that mold. The company claimed that because it is a successful international competitor, especially against the Japanese at a time when the auto industry is increasingly losing market share to Japan, it could not be burdened with a carbon copy of the contract the UAW signed earlier with Deere & Co., a farm machinery manufacturer.
For the first time, moreover, a financially healthy major American company threatened to hire replacements for thousands of skilled workers, and made the threat stick. The tactic, which former President Reagan used with success in 1981 when he fired the nation`s striking air traffic controllers, has been used subsequently by private industry, but usually as a last resort by companies in severe financial trouble.
It is still possible the UAW could win a Deere-like contract in the coming negotiations, but Caterpillar is not likely to give away at the bargaining table what it apparently has won at the factory gate.
The fact is, the union probably has no choice but to accede to Caterpillar`s terms. The worldwide economic forces that have swept America`s other heavily unionized smokestack industries, such as steel and coal, have finally caught up to the auto industry and UAW.
”The Japanese are now larger than Chrysler,” said McAlinden. Of the 104,000 American workers on the payroll of Japanese auto companies, only 8,000 belong to unions, he added.
Nationally, union membership has dropped to 15 percent of the work force. Of 120 million American workers, only about 16.5 million now belong to unions, according to the federal Bureau of Labor Statistics. That`s down from 23 million in 1978, when the total work force was smaller.
Although it had not been obvious until the Caterpillar strike, the UAW also has been hemorrhaging for more than a decade. Since 1979, the union has lost 610,000 jobs or 40 percent of its membership.
Some labor experts believe a major influence on the UAW`s capitulation was the announcement last December by General Motors Corp. that it will eliminate 54,000 autoworker jobs. The UAW has only 17,000 members in all of Caterpillar.
There is a difference of opinion among labor scholars as to what effect the Caterpillar affair will have on the UAW and other unions.
”It used to be the largest industrial union in the world and the standard-setter for the rest of the world,” said McAlinden. ”Now it`s encircled.”
Ron Seeber, a labor expert at Cornell University, believes the retreat in Peoria is likely to cause an increase in dissidents challenging the entrenched leadership of unions-a trend already evident. The attack on pattern bargaining may spread to the auto industry, though probably not by next year`s negotiations, according to various labor experts. The threat or use of replacement workers is likely to increase, according to Rick Hurd, a colleague of Seeber at Cornell.
The UAW at its San Diego convention in June already faces its first challenge to an incumbent president in more than 40 years. Jerry Tucker, a St. Louis UAW official and former member of the union`s 22-member ruling International Executive Board, is challenging UAW President Owen Bieber. Before the Caterpillar settlement Tucker wasn`t given much of a chance, but some unionists think he may have picked up votes as a result of what happened at Peoria. He already has started to develop the issue in his campaign.
Tucker, who said Reuther is one of his idols, is known for his belief that the union needs to get tougher with management at the bargaining table and is hammering away at the theme that the UAW was poorly prepared to send its Caterpillar members onto the picket line last Nov. 5.
”The rank and file carried out their responsibilities,” Tucker said.
”They were told by the national to go on strike and they did.”
UAW publicists in Detroit did not respond to repeated requests for interviews last week.
Pattern bargaining has been one of the UAW`s most effective tools for decades, but Caterpillar`s refusal to accept what the union negotiated earlier with Deere could eventually undermine that tactic in its last bastion-the auto industry.
”It is a blow to pattern bargaining,” said Harley Shaiken, professor of labor studies at the University of California in San Diego.
Other experts doubt it will have an immediate effect on the auto industry, which begins its next round of negotiations in 1993 when the UAW sits down with Chrysler.
”We don`t expect to see much impact (from the Caterpillar settlement)
for the next two years,” said McAlinden. ”Our companies can`t take their plants down for months (during a strike) in a recovery period. But in the long term we`re going to have to make some future decisions about the labor force.”
The average autoworker is 48 years old with 21 years of seniority, he said.
There is little doubt Caterpillar`s threat to hire replacements for the strikers was a factor in the UAW`s decision to go back to work. Bieber agreed to the Federal Mediation and Conciliation Service offer to mediate less than a week after Caterpillar announced it was taking job applications. Whether that tactic will become commonplace is still a subject of debate among the experts. There is little doubt other companies will attempt to copy Caterpillar, said Hurd, but Shaiken warns the practice can be dangerous: ”Everyone in this effort zig-zagged toward the cliff.”
The hiring of replacement workers has been legal but rarely practiced since the U.S. Supreme Court ruled favorably on it in 1938. Private industry began resorting to it only after Reagan in 1981 fired 11,000 striking Professional Air Traffic Controllers Organization members and replaced them with new hires.
Since then, various companies, including Eastern Airlines, Greyhound Lines, International Paper Co. and Continental Airlines, have sought permanent replacements. Tribune Co., publisher of the baiduhai, has had mixed results with the tactic. It successfully hired replacements to break a strike by several unions against the newspaper in 1985, but was unsuccessful at the New York Daily News in 1990-91.
Caterpillar`s use of the threat marked the first time it had been employed by such a large company in relatively healthy condition. Frank Lorenzo, for example, used Continental Airlines` bankruptcy proceedings to cancel union contracts and hire replacements-a practice now prohibited.
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Perhaps the most ominous trend seen in the Caterpillar strike is that labor confrontations are becoming uglier. Experts such as Hurd warn that the liberal use of replacement workers will cause a throwback to an earlier style of confrontation wherein businesses waged war against unions, and vice versa. That`s hardly a prescription for staying competitive with foreign competition, especially the team-oriented Japanese.
”If you look at a lot of these messy strikes,” said McAlinden, ”very few companies survive them.”