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Negotiating the Future

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. Massive monopolies -- little competition No global competitors to speak of Huge establishments

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Negotiating the Future

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  1. Negotiating the Future Best Practices in Joint Action2005 Hawaii ADR Conference "Mending Broken Bonds"Barry BluestoneCenter for Urban and Regional PolicyNortheastern University October 2005

  2. 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 In the Good Old Days Unions blossomed

  3. 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

  4. Traditional Workplace Contract • AIF/COLA Wage Formula • “Fringe” Benefits • Seniority Protection • Grievance Machinery • Work Rules/Job Classifications • Union Security Clause • Management Rights Clause

  5. 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

  6. 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

  7. 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

  8. 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

  9. Age Composition of Union Members in the U.S. 2002 Percent of Employed Age Group Workforce

  10. Union Membership by Occupation in 2003

  11. Can we Rebuild the Union Movement in America?

  12. 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

  13. Is there a new role for unions in this new hot-paced, highly competitive, global economy?

  14. “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

  15. Case StudiesFrom 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

  16. Best Practices at Health East/Children’s Hospital/WoodwindsGoals: 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

  17. Best Practices at Circus CircusGoals: 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

  18. Best Practices at Bechtel NevadaGoals: 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 giventraining 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

  19. Best Practices at Quaker OatsGoals: 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

  20. Best Practices at Ford Cleveland Engine Plant #2Goals: 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 newSimulteam 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

  21. Best Practices at César Chávez H.S.Goals: Empower teachers and support staff; Improve school quality • Use ofInterest Based Bargainingin negotiations • Adopt and adapt Saturn Plant principles to design work systems at new high school • Parties jointly design site-based school governance structure • Joint selectionof new school principaland other staff at the school

  22. Best Practices at Magma CopperGoals: 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

  23. Final ThoughtsKey “Learnings” fromthe Case Studies

  24. 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

  25. 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

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