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Negotiating the Future Best Practices in Joint Action 2005 Hawaii ADR Conference "Mending Broken Bonds" Barry Bluestone Center for Urban and Regional Policy.

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Presentation on theme: "Negotiating the Future Best Practices in Joint Action 2005 Hawaii ADR Conference "Mending Broken Bonds" Barry Bluestone Center for Urban and Regional Policy."— Presentation transcript:

1 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

2 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

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




11 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



14 Age Composition of Union Members in the U.S. 2002 Percent of Employed Age Group Workforce Total, Age 16+13.3% Age 16-245.2% Age 25-3411.2% Age 35-4414.3% Age 45-5418.6% Age 55-6417.4%

15 Union Membership by Occupation in 2003 Occupation Union Membership as % of Employment Sales and related occupations4.0% Food preparation and serving related occupations4.1% Legal Occupations4.8% Computer and mathematical occupations5.2% Business and financial operations occupations6.1% Art, design, entertainment, sports, and media occupations7.5% Architecture and engineering occupations7.8% Life, physical, and social science occupations9.0% Healthcare practitioner and technical occupations12.3% Production occupations17.5% Installation, maintenance, and repair occupations18.9% Transportation and material moving occupations20.1% Construction and extraction occupations21.7% Protective service occupations36.1% Education, training, and library occupations37.7%

16 Can we Rebuild the Union Movement in America?

17 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

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

19 “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

20 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

21 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

22 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

23 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

24 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

25 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

26 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

27 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

28 Final Thoughts Key “Learnings” from the Case Studies

29 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

30 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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