1 Atlantic Baking Group B.C.T.G.M. Local 12 I.U.O.E. Local 95 Bloomfield-Garfield C.D.C. F.M.C.S. – Pittsburgh Steel Valley Authority

2 APEC SYMPOSIUM CASE STUDY Mexico City, Mexico

3 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

4 Discussion Agenda  General Background Organization Labor-Management relations  L-M Cooperative Initiative Initiative objective Promotion of initiative Initiative structure & processes  Lessons Learned

5 A.B.G. Bakery Pittsburgh, PA – U.S.A.

6 A.B.G. Products

7 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.

8 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

9 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?

10 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.

11 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.

12 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.

13 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.

14 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?

15 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.

16 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

17 Initiative - Structure - Processes  Buy-in Profit sharing Lease on Plant  LMC Formation Structure Goals FMCS Grant Committee Effectiveness Training (C.E.T.)

18 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

19 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

20 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.

21 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.

22 Lessons Learned  Continuation of government involvement & oversight SVA - FMCS - BGCDC