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Issue 5___Article 10.Pdf (1.641Mb) 113 i an approach entails risks, ant risks simply allows so- Equitable Efforts and n our opinion, "reciprocal lg of efforts and sacrifices Rejoinder t also clarifies many issues • Lance Compa & Paul J. Baicich >n of Union and Worker in fact achieve a real Drity at Eastern, and we 2 shared by all unions. It f unions are to adequately worthy of emulation. That there will not be serious lways be a tremendous representatives of its rs subject to many forces Most of Randy Barber and Andrew R. Banks' response to our tat Eastern management analysis of the "District 100 model" exaggerates our arguments, then VI official has observed: goes on to attack the exaggerated versions. In charging us with 2 closet. But they're still "inflexible and unthinking 'fightback' and 'no concessions' rhetoric": e them." • They imply, in relation to the blocking of the sale of workers' ptics would have unions common stock, that we say "the union arbitrarily decided that >m approach to the very it didn't want them to be able to recover some of their money ly condemn unions to for two years." the "real" District 100 • They assert that we "argue that the IAM'S agreement has no and believe that this is value simply by saying that it leaves 'real control firmly in Air Lines. We hope that management hands! " J the District 100 Model them. • They say that we "argue against such an agreement on the grounds that the union did not gain complete control of the company" • They suggest that we would have preferred that Eastern employees be "sacrificial lambs" to dramatize the crisis in the industry. • They charge us with holding that "all forms of change in company-union relations are bad." 114 LABOR RESEARCH REVIEW Barber and Banks characterize these arguments, which they impute to us, as "fear-laden," "misleading," "ludicrous," "absurd" and "profoundly conservative." They well may be, but they are not the arguments we made. Detailing a response to each of these charges would be repetitive. We urge the reader to re-read our article for what we actually said on these points. A few other points, nevertheless, need further clarification: 1) It was imprecise on our part to say that Eastern workers were given "watered stock." In Wall Street parlance, it is indeed the existing stockholders whose stock is watered upon the issuance of new shares. But earnings per share are diluted for all stockholders, new and old. It is not just a coincidence that the stock now being sold to workers at a fixed rate of $6.00 per share, hovers around $4.50 per share on the market—a 25% drop. 2) Of the $260 million in the "preferred stock trust" (we find the term imprecise; it is actually a profit-sharing pot), Barber and Banks assert that "all of this money is in fact secured" and would be repaid if the company went out of business tomorrow. But the fact that the debt would be covered if the company liquidated its assets tomorrow only means that it is secure for the moment, not that it is secured for the future as well. Eastern reported a net loss of $28.1 million in the first quarter of 1984. Based on EAL's net worth of $176 million, continued losses at that rate would wipe out the preferred stock trust in six quarters. 3) Barber and Banks point out that the union achieved the right of approval of the 1984 Eastern Business Plan. We think we gave that feature of the agreement the attention it deserved. A "Business Plan" is a mix of scenarios, good intentions, desirable results and bright ideas, all showing how7 a company is going to do the best it can in the coming year. A "veto" over the Business Plan has no practical meaning. At any rate, the union approved the Business Plan, so here we are. 4) Our criticism of the pension plan was not because we belittle union attempts to control them. In voting for the contract back in March 1983, I AM workers were given every reason to believe that they would have 50% of the pension board members. (See Barber's excellent report on this and on the company's subsequent evasion in Labor Research Review, No. 4.) Getting two union votes out of five, nine months after the company has agreed to two union seats on a four-member board is a step backward. It is better than none, and is commendable for that, but that is all. 5) We neglected to include any reference to the unionized lead- man responsibilities in our original piece. This has long been a goal of the District and of the Bryan administration in particular, and has merit. Nowhere, however, does the lead have "complete control of i-^i :;';•••;, ,«»?,. ,,• ^tV. ««MiB*»|&& « laJ^^^ KM ^s^£^te.^aib^a^duLfcfa«^ :W The 1AM District 100 "Model—A Debate 115 : arguments, which they impute the work process." The lead does not control manpower—the size ," "ludicrous," "absurd" and of the crew that is to work under his leadership and direction. As 11 may be, but they are not the to the Washington National Airport situation, the increase in lead- Donse to each of these charges man responsibilities began in June '83, and served as an initial T to re-read our article for what prototype for the system. It preceded the December agreemeent by 6 months. leed further clarification: 6)- Finally, we concur with Barber and Banks that "the real say that Eastern workers were problem" we have with the Eastern agreement is that "it represents arlance, it is indeed the existing a threatening and potentially far-reaching development." Taken as d upon the issuance of new a model tor all unions to emulate, concessions bargaining for uted for all stockholders, new employee stock ownership and participation in management :hat the stock now being sold threatej is to turn the American labor movement into a company ir share, hovers around $4.50 unl a movement, where each union is devoted to the success of a P- single capitalist enterprise. >rred stock trust" (we find the Tiiese are difficult times for the labor movement. Barber and Banks haring pot), Barber and Banks correctly point out that "static solutions are not producing secured" and would be repaid demonstrable gains." In this context, it is tempting to seek what ^morrow. But the fact that the appears to be bold innovations. But is what Banks and Barber liquidated its assets tomorrow advocate really so new? loment, not that it is secured In the 1920s there was a rage for "New Capitalism" inside and ed a net loss of $28.1 million outside the labor movement. The entire labor movement was pressed Mis net worth of $ 176 million, to adopt a bold approach to collective bargaining, which was termed >e out the preferred stock trust "the higher strategy of labor." Many union leaders saw it as their salvation. Enthusiasm grew for such initiatives as the B & O Plan, the union achieved the right where workers exchanged economic concessions for promises of job ness Plan. We think we gave security and joint participation in day-to-day operations. In 1925, ition it deserved. A "Business President Green of the AFL maintained that "organized labor is ;ntions, desirable results and coming to believe that its best interests are promoted through concord any is going to do the best it rather than by conflict." The AFL Executive Council was moved to er the Business Plan has no announce in 1928 that "At no time in its history has the trade union n approved the Business Plan, had greater influence in industrial circles. The constructive policies which we advocate and follow challenge the attention and respect i was not because we belittle of employers in this country and abroad. ." •ting for the contract back in Within a decade, American workers rendered judgement on the every reason to believe that "higher strategy of labor." Industrial unionism, general strikes, sit- oard members. (See Barber's downs, mass community organizing campaigns, innovative political mpany's subsequent evasion action and other policies of aggressive struggle against the employers tting two union votes out of brought millions of workers into the new unions of the CIO, and as agreed to two union seats forced the AFL to shake off its lethargy and organize millions more. ward. It is better than none, We are not taking refuge in an iron law of history. There is none. t is all. Labor's predicament is difficult, and no easy extrication is presently rence to the unionized lead- in view. But American workers move their unions forward in spurts, ce. This has long been a goal not at a steady velocity. The unrelenting employer attacks on workers Oration in particular, and has and unions could well be answered by a new outpouring of class- d have "complete control of conscious, aggressive trade unionism, breaking through barriers in 116 LABOR RESEARCH REVIEW organizing and political action. But this cannot happen if workers are told that reciprocal bargaining for equality of sacrifice and participation in management is the solution to their problems. We are not talking about static solutions at all. We are talking about some of the basic precepts of American trade unionism. Call it old- fashioned; that is not necessarily perjorative. And, it is no more old- fashioned than Barber and Banks' revival of "New Capitalism" pro­ posals. We welcome the debate on these issues. In the end, as they should, rank-and-file union members will decide who is correct.
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