COLLECTIVE BARGAINING, EMPLOYMENT PROTECTION/ CREATION AND COMPETITIVENESS IN THE UNITED STATES: THE IMPACT OF A POLICY OF INDIFFERENCE AN THE ABSENCE OF STRUCTURES - PowerPoint PPT Presentation

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COLLECTIVE BARGAINING, EMPLOYMENT PROTECTION/ CREATION AND COMPETITIVENESS IN THE UNITED STATES: THE IMPACT OF A POLICY OF INDIFFERENCE AN THE ABSENCE OF STRUCTURES

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Title: COLLECTIVE BARGAINING, EMPLOYMENT PROTECTION/ CREATION AND COMPETITIVENESS IN THE UNITED STATES: THE IMPACT OF A POLICY OF INDIFFERENCE AN THE ABSENCE OF STRUCTURES


1
COLLECTIVE BARGAINING, EMPLOYMENT PROTECTION/
CREATION AND COMPETITIVENESS IN THE UNITED
STATES THE IMPACT OF A POLICY OF INDIFFERENCE AN
THE ABSENCE OF STRUCTURES
  • Presented by
  • Richard N. Block
  • School of Labor and Industrial Relations
  • Michigan State University
  • Funded by the International Labor Organization

2
Co-Authors
  • Peter Berg
  • Michael Moore
  • Mike Polzin
  • Dale Belman?

3
How Does the Collective Bargaining System in the
United States Address Competitiveness and
Employment Protection?
  • No formal structures in the United States that
    focus on these issues
  • Little governmental involvement in substance of
    collective bargaining in U.S.
  • Is the formal, written, fixed duration collective
    agreement the best vehicle for determining how CB
    addresses competitiveness and employment
    protection/creation?

4
Importance of the Employer
  • Employer is now key actor in the IR system
  • past 20 years

5
Context
  • Legal
  • Institutional
  • Joint and Governmental
  • Economic

6
Legal Context
  • Most Important
  • accessible
  • public
  • coverage
  • coercive
  • Establishes basic structure
  • who must negotiate and for whom
  • meaning of negotiate
  • about what must parties negotiate?
  • what happens if parties cant agree

7
Basic Legal Principles
  • No presumption that CB normal
  • default is employer determination
  • Legal bargaining (election) units
  • representation rights limited to these units
  • Bargaining is unit-by-unit, workplace-by-workplace
  • multi-unit bargaining only by continuing consent
    of all parties involved
  • Minimal government involvement in process or
    outcomes

8
Implications for Competitiveness and Employment
Security/Creation
  • Employers often have competitiveness options away
    from union
  • multiple-union firms
  • no obligation to agree to employment security or
    matters that will link employee welfare and
    competitiveness
  • no system for encouraging cooperation unless both
    parties agree
  • systems protects right of either party not to
    agree on TCE

9
Obligation to Bargain
  • meet at reasonable times
  • no obligation to agree
  • limited to terms and conditions of employment
    (TCE)
  • not all er decisions that that affect employment
    a TCE
  • changes in capital structure or product mix of
    firm for the purpose of increasing firm
    competitiveness generally not considered to be
    TCE
  • basic changes in nature of business not TCE

10
BASIC POINTS
  • Law indifferent to use of CB system for
    competitiveness and job creation/protection
  • enables CB system to be so used if both parties
    wish it
  • enables CB system to not be so used if one party
    does not wish it
  • Treats these matters no differently than any
    other subject of bargaining

11
BASIC POINTS (CONT.)
  • The focus of the law is not on problem-solving
    or on linking the issues of competitiveness and
    job security.
  • The focus of the law is on the individual
    employer decision and whether or not the employer
    has the right to make that decision without
    negotiating with the union about the decision.

12
Institutional Context
  • Employer Institutions
  • No overarching er structures that encourage CB as
    a vehicle for competitiveness and job protection
    creation
  • Employers are competitive firms first and
    employers second
  • Employer Institutions tend to be lobbying or
    partisan research and education organizations

13
Institutional Context
  • Union Institutions
  • mixed
  • IU can encourage or force locals to do something,
    but locals must implement
  • locals fundamentally autonomous
  • competition among locals

14
Joint and Governmental Structures/Context
  • Not many
  • Collective Bargaining Forum
  • a group of union and employer executives under
    auspices of USDOL
  • In April, 1999, issued a report entitled
    Principles for New Employment Relationships

15
Principles of New Employment Relationships
(1999)
  • (a)cceptance . . . by union leaders and members
    of their responsibility to work with management
    to improve the economic performance of their
    enterprises in ways that serve the interests of
    workers, consumers, shareholders, and society
  • (a)cceptance by corporations of employment
    security, the continuity of employment for its
    workforce, as a major policy objective that will
    figure as importantly in the planning process as
    product development, marketing, and capital
    requirements

16
Principles . . .
  • National Association of Manufacturers refused to
    sign
  • Indicates decentralization on employer side

17
Economic Context
  • Laissez Faire with respect to employment and
    competitiveness
  • Full employment not even discussed as a policy
    issue
  • Monetary policy - minimize inflation
  • job security - wage increase link?
  • Fiscal Policy - none
  • Trade Policy - open markets, with exceptions
  • REINFORCES TENDENCY TOWARD VARIATION

18
Incidence CB and Competitiveness
  • Voos-Eaton, 1992
  • up to 79 had participatory programs
  • app. 40 had profit sharing
  • Industry analyses
  • high incidence steel (National Steel), auto
    assembly, aerospace, telecommunications, paper
    (forced)
  • low incidence auto parts, meatpacking, trucking,
    textiles
  • Gray, Gray, Myers, 1999 - 14.8 of agreements

19
Incidence CB and Employment Protection/Creation
  • IRRA Studies
  • very little
  • GGM
  • 1-3 of agreements
  • Well developed systems in auto assembly and
    National Steel
  • In general, employment security in the U.S. is
    market-based rather than administered

20
Empirical Results on Impact
  • CB and Organizational Performance
  • no evidence that CB, per se, reduces
    productivity actually can enhance it
  • gains do not necessarily go to shareholders in
    unionized firms
  • profits and rates of return generally lower in
    unionized than nonunion firms
  • supercompetitive profits in nonunion firms or
    undercompetitive in unionized firms?

21
Empirical Results on Impact (cont.)
  • CB and Competitiveness
  • capability of firm to maintain a reasonable
    market share through selling its product or
    service at a competitive price
  • special efforts by labor and management to
    address issues of competitiveness may improve
    product quality and productivity, but their
    effects may not be large. Rarely is labor
    relations the bases or one of the major bases, on
    which the firm maintains its position in the
    product . Labor relations a contributor, but not
    a major determinant of competitiveness.

22
Four Case Studies
  • GM-Lansing, Michigan and UAW
  • Alcoa-Rockdale, Texas and Steelworkers
  • Lear-Elsie, Michigan and UAW
  • Sparrow Hospital (Lansing, Michigan) and Michigan
    Nurses Association

23
GM-Lansing and UAW
1999 Oldsmobile Alero
24
GM-Lansing and UAW(continued)
  • Four Divisions
  • Worldwide Facilities
  • Sheet Metal
  • Powertrain
  • Assembly (small car)
  • about 8600 hourly and 2500 salary
  • History
  • Hometown for Oldsmobile from turn of century

25
GM-Lansing and UAW Local 652 Competitive
Environment
  • Declining Market Share
  • Corporate Reorganization
  • nameplates became marketing divisions only
  • Lansing must now compete for work
  • Nature of Product
  • small cars, losing money
  • Nature of Production Process in Lansing
  • trucking bodies

26
GM-Lansing and UAW Local 652 Noncontractual
System
  • Pervasive Jointness
  • star system
  • Unitary labor relations in a multidivisional
    system consistency
  • Movement across all four divisions provides job
    security when a redundancy in one division
  • affiliated corporations

27
GM-Lansing and UAW Local 652 Noncontractual
System
  • Examples
  • small car profit
  • signs in Sheet Metal
  • camshaft line in Powertrain
  • no contractual prohibition on subcontracting, but
    an informal prohibitions

28
Alcoa-Rockdale, Texas and United Steelworkers
Local 4895
  • Aluminum(Aluminium) extracted from other
    substances via process of smelting
  • Bauxite
  • Alumina from bauxite
  • Alumina decomposed into aluminum and oxygen via
    an electrolytic process
  • Aluminum then cast into ingots (large bars) or
    hogs (small bars) suitable for melting or
    casting

29
Alcoa-Rockdale, Texas and United Steelworkers
Local 4895
  • smelter
  • produces aluminum and aluminum powder
  • major customer is an Alcoa flat-rolled plant in
    Iowa
  • other customers are ordinance, rocket fuels,
    lithographic, paint, and personal care industries

30
Collective Bargaining
  • History
  • Generally harmonious consistent with Alcoa
    corporate philosophy
  • one national strike in 1986
  • resulted in reduced job classifications
  • Basic characteristics
  • trust
  • information sharing

31
Competitive Threats
  • Market pressure on price of aluminum due to
    increases in supply
  • volatility from 1/lb. to .58/lb. in two years
  • Information Flows
  • London Metal Exchange
  • Environmental Regulations
  • emissions
  • strip mining
  • Expense of coal vis-Ă -vis hydro

32
Collective Bargaining and Competition
  • Plant must make money at .50/lb.
  • Contract Changes
  • reduction in rate of increase in base wages
  • increase length of contract
  • reduce number of job classifications

33
Collective Bargaining and Competition
  • Noncontractual Changes
  • Partnership Team on directive from corporate and
    Int. Union
  • plant manager
  • LR staff
  • department heads
  • bargaining committee
  • Examples
  • recycle scrap metal
  • yard work
  • janitorial work

34
Conclusions on Alcoa-Rockdale
  • Mature Relationship
  • Trust
  • Partnership Teams
  • Simultaneous Focus on
  • Competitiveness
  • Job Protection

35
Lear and UAW 1660
  • Description
  • automotive components - seat systems
  • about 500 ees in plant
  • Ownership changes
  • private from 1966-73
  • ITT in 1973
  • Lear in 1997

36
Employment Issues
  • Variation in employment
  • 1991 - 305
  • 1995 - 900
  • 1996 - 290
  • Associated with specific work brought in and out

37
Competitiveness Issues
  • Major competitors
  • Bertrand Pfaume
  • Johnson Controls
  • Mariner
  • Several left market since 1990
  • Customers
  • GM, Ford, DaimlerChrysler, Saturn, Toyota

38
Change in Ownership/Corporate Strategy Issues
  • ITT
  • Corporate Strategy - maximize short-run rate of
    return
  • Lear
  • Corporate Strategy - maximize market share in
    automotive interior components market

39
Production Process
  • Production Teams/Cells for each customer
  • Employees can see a customer come and go by
    examining the plant
  • no cell, no employment a cell, employment

40
Noncontractual CB Responses for Competitiveness
  • Planning Team
  • high level union and manage
  • Joint Steering Team
  • Union and Management reps
  • Design and development teams

41
Job Security
  • Not administered
  • Directly linked to competitiveness

42
Conclusions on Lear-Elsie
  • Importance of Corporate Strategy
  • Visibility of Customers
  • Focus on Competitiveness
  • Job Security a Derivative of Competitiveness

43
Sparrow Health Systems (Hospital) and Michigan
Nurses Association
  • Largest health care system in Lansing, Michigan
    area
  • about 5600 employees
  • 1600 members of PECSH

44
Competitive Environment
  • Competition from non-hospital health care
    providers
  • 3rd party payers - insurance companies
  • Strong competitors through consolidation

45
Mutual Gains Committee
  • Patient Focused Care Implementation
  • Hiring
  • Awards for ees in short staffed areas

46
Overall Conclusions
  • No system in place that focuses on CB,
    competitiveness, and job protection/creation
  • left to legalities and the parties
  • Competitiveness fairly common issue in CB
  • Much of this outside formal agreement structure
  • Administered Job Protection rare
  • job security is market-based, on competitiveness,
    rather than administered
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