Atlantic Baking Group B.C.T.G.M. Local 12 I.U.O.E. Local 95

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Atlantic Baking GroupB.C.T.G.M. Local
12I.U.O.E. Local 95

• Bloomfield-Garfield C.D.C.
• F.M.C.S. Pittsburgh
• Steel Valley Authority

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APEC SYMPOSIUM

• CASE STUDY
• Mexico City, Mexico

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A.B.G. Presenters

• William T. Cagney Business Manager, I.U.O.E.
  Local 95 95A Pittsburgh, PA
• James Crawford Director of Manufacturing, Steel
  Valley Authority Pittsburgh, PA
• Robert S. Ditillo Commissioner, U.S. Federal
  Mediation Conciliation Service Pittsburgh, PA
• Ronald Pepperdine Vice President Operations,
  Atlantic Baking Group, Inc. Pittsburgh, PA

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Discussion Agenda

• General Background
• Organization
• Labor-Management relations
• L-M Cooperative Initiative
• Initiative objective
• Promotion of initiative
• Initiative structure processes
• Lessons Learned

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A.B.G. BakeryPittsburgh, PA U.S.A.
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A.B.G. Products
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Steel Valley Authority

• An intermunicipal public agency incorporated
  under the Municipal Authority Act of 1945 and
  governed by a board with representation from
  twelve member communities.
• Funded by the Pennsylvania Department of Labor
  Industry - Dislocated Worker Unit to avert
  layoffs and business failures as part of the
  rapid response program.

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Strategic Early Warning Network

• A team approach working with public and private
  economic development groups on business failures
  resulting in layoffs.
• Comprehensive Professional Services
• Business Plans
• Financial Restructuring
• Operations Reviews
• Labor-Management Relations
• Succession Planning
• Employee Stock Ownership Plans

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The Labor-Management Problem

• How to avert a plant closure by developing a new
  bakery business?
• How to compete for scarce public and private
  capital resources as well as managerial resources
  in a global economy?
• How to reinvent the daily workplace practices of
  the bakery to again become competitive in the
  cracker industry?

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Reinventing the Workplace Previous Conditions

• Branded product with a monopoly position in the
  marketplace commanding very high prices and
  profits.
• Multinational, conglomerate, heavily leveraged
  corporation with multiple tiers of management in
  the organizational structure.
• Production heavily managed and controlled by
  professional, non-union personnel.

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Previous Conditions

• A top-down, corporate wide attempt to improve
  the competitiveness of the company through
  training and a more active labor-management
  committee process was abandoned. This led
  directly to the downsizing of the company and the
  closure of the plant as an alternative means of
  improving profitability.

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Previous Conditions

• Very high wages with compressed labor rates such
  that there was very little differential between
  the highest and lowest paying jobs.
• The frequent use of union seniority to seek out
  the easiest jobs rather than ones requiring
  increased skill, responsibility, and knowledge of
  the production process.

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New Situation

• ABG to manufacture a private label cracker
  product in a highly competitive market with low
  profit margins.
• Start-up company with a large amount of equity
  investment and a very shallow management
  structure.
• Extensive investment in new equipment and product
  development required.

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Choices

• Traditional high-wage, heavily managed model of
  labor-management relations?
• Low-road, low pay, heavily managed model of
  labor-management relations?
• High-road, competitive wage, high-performance
  model of labor-management relations with
  decision-making and responsibility shared with
  the workforce?

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Forging a Labor-Management-Government Partnership

• Maintaining the trust of both labor and
  management in order to be effective.
• Providing guidance about public assistance.
• Providing leadership at critical junctures.
• Listening to others and attempting to understand
  the business in historic, economic, and moral
  terms.

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Initiative - Structure - Processes

• Training Fund
• Local 95 Program
• Customized for bakery

• Lead Worker Training
• Benefits of an Internal Work Force
• Budget Preparation
• Computer Application
• Energy Conservation
• Health Safety
• Human Relations
• Planning Time Mgt.
• Recommended Skill Levels
• Record keeping
• Reports Presentations

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Initiative - Structure - Processes

• Buy-in
• Profit sharing
• Lease on Plant

• LMC
• Formation
• Structure
• Goals
• FMCS Grant
• Committee Effectiveness Training (C.E.T.)

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F.M.C.S. Involvement

• F.M.C.S.
• Independent Federal agency
• Created by law in 1947
• Neutral assistance to L/M community
• Dispute resolution
• Training
• Grants

• Grant Overview
• To joint LMC
• Grant Award
• To assist in training initiative

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F.M.C.S. Involvement

• C.E.T. Assessment
• To I.D. skill needs
• Training Program development
• C.E.T. Focus
• Group processes
• Joint problem-solving
• Team based decision-making

• Training Modules
• Effective Planning
• Effective Meetings
• Group Problem Solving
• Consensus Decision Making
• Effective Communications
• Understanding others
• Interpersonal Skills
• Shared Leadership
• In progress

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Lessons Learned

• The labor-management committee needed to be more
  involved in the planning for the production
  equipment to be installed.
• Primarily because of the historical association
  of the labor-management committee process with
  only daily production activities this was not
  done.

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Lessons Learned

• Every aspect of the design and equipment used in
  the plant as well as the terms and conditions of
  the labor contracts needs to support the strategy
  selected to compete in the marketplace to the
  fullest extent possible in order to be
  successful.

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Lessons Learned

• Continuation of government involvement
  oversight
• SVA - FMCS - BGCDC