Loyola University Chicago Loyola eCommons Master's Theses Theses and Dissertations 1960 Controversy in the Steel Industry: An Analysis of the Differing Views of Labor and Management in the 1959 Contract Negotiations Alec A. Lazur Loyola University Chicago Follow this and additional works at: https://ecommons.luc.edu/luc_theses Part of the Labor Relations Commons Recommended Citation Lazur, Alec A., "Controversy in the Steel Industry: An Analysis of the Differing Views of Labor and Management in the 1959 Contract Negotiations" (1960). Master's Theses. 1621. https://ecommons.luc.edu/luc_theses/1621 This Thesis is brought to you for free and open access by the Theses and Dissertations at Loyola eCommons. It has been accepted for inclusion in Master's Theses by an authorized administrator of Loyola eCommons. For more information, please contact [email protected]. This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License. Copyright © 1960 Alec A. Lazur CONTROVERSY IN THE STEEL lNDUSTR Y: AN ANALYSIS OF THE DIFFERING VIEWS OF LABOR AND MANAGEMENT IN THE 1959 CONTltACT NEOOTIA TIONS by ALEC A. LAZUR A The sie SulmUtted. to the Faculty of the Graduate School 01. Loyola University ill Partial Fulfillment of the Requirements of the Degree of Master of Social and. lDdv.strial Relations JUDe 1960 LIFE Alec A. Lazur was born in Wilkes -Barre, Pennsylvania, September 16. 1933, the fourth child of Joseph and Mary (Gmitter) l&sur. He was Iraduated from Brunnerdale Seminary Hip Scheol. Cantan, Ohio. J\II1e, 1951. From 1951 to 1953. he atten4ecl Satat Joseph's College. Renss.laer, ladta_. Durin, the y.ar. 1953-1955, he earned. college credits at Saint Joa.ph'. Colle,e Cal\lD1et Ce.er, Hammond, India.na. He was gra­ duated from UDiversity Colle,_, IAyo1a Uaiversity, with an A. B. degree in Art. aJUi Scienees at the January Con..... eaUoll. 1957. The writer had De .. employed in the basic at.el bulustry with the YOWl,stowa Sheet and Tube Compaay. Indiana Harbor Works, East Chica,., Indiana, in the Production Department, Order anc1 Scheduling, from 1953 until 1959. In September. 1959. he join.ecl the faculty of S&int Jos.ph's Colle,e Calumet Center as an instructor in Sociol&iY. He began his ,racluate studtes at Loyola University, Institute of Social and Indu.strial Relationa, in Fehruary, 1957. 1 PREFACE The a.uther ef this the.ia wiahes to express his appreciation to the many who ....i.ted him in obtaiDing imormation needed for the presentation of the present W01."k. Amon.g those he is especially indebted to are: R. Conrad Cooper and the PabUc Relations Department of the United States Steel Corpo .. ra.tion; Senator Est•• Kefauver for the vol\Ulles of the Senate Subcemmittee Hearings on Admini.tered Pl'ic...... -St •• l; David J. McDonald and the lite- search Department of the Unit'" Steelworkers of America; and Secretary of abor Ja.me. P. Mitchell for the Baelqp:ound Sta.tiltics report. it TABLE OF CONTENTS Chapter Page I. lNTItODUCTIC* . ., . 1 A. The Purpeae of the Study • • • • • • • • 1 B. Problems Faced in Studytna the Steel Controversy 2 C. Method for Treatment of the Problem • • •••• . 4 D. Materials Used • • • • • • • • • • • 5 II. '!'HI WAGE ISSUE 7 A. Management. Worker, and tae Public •••• • • • • • • • 7 1. Union determination.-Need for a wac. increase 8 a. Waae increases necotiated in other induatries 11 b. Union demand--Profits can warrant a wage increase 12 2. HalUlg8ment elefense -- No need to catch up, already ahead • • • • • • • • •• • • • • 14 a. Steel pay and e.at-of.living . • • • • • • • 16 b. Frinae benefita and increase in employment coats ••••••• • • • • • . • 18 c. Changes in m.anagement attitude • • • • 18 eI. c.mpany '1..ast Offer" • • • •• • • • • • • 20 3. Mitchell Bac~oUQ4 Statistics report • • • • • • • • • • 22 B. Productivity lsaue • • • • • • • • • • • • • • • • • • • • • • 26 1. Unio. Vie.. -output per man-hour worked • • • • • • • 27 2. Management Vie.. -Output pel' aU input factors ••• 30 3. Mitchell report and productivity • • • • • • • • 33 4. Ewan Clalue--What present productivity data slgnlfy •• 34 C. Inflation lsa.a ••••••••••••••••••••••• 35 1. Sanate investigation • • • • • • • • • • • • • • • • • • 36 2. Induatry spokesman--Iaflatio. is "Cost rush" • . 38 3. Uni.. statement.~-Inf1ation cauaed by increased pric.. 45 D. Foreign competition Iaaue • • • • • • • • • • • • • • • • 48 1. Management View--Foreian steel advantage in lower emploJl1l8llt costa • • • • • • • • • • • • • • • • • • 48 a. Foreian prlctng policy •••••••••••••• 50 b. Market penetration of foreign steel •••• • ••• S2 2. Union defenae--Hidden costa in foreian wage bill 54 a. Union View--American mill advantage in material costs •••••••••••••• S5 b. Steelworkers V1ew--Foreign Competition as a "Pheny" issue ••••••••••••••• 56 3. Secretary of Labor's report--Foreign competition 57 E. Final Settlement of Wage Issue ••••••••••• 58 iii Chapter Page III. THE WORK R.ULES ISSUE . " . 63 A. Local Working Conditions and Past Practices 63 1. JY'1&n&gement Vlew... -ltight to manage ••• . 67 2. Union V1.ew--Management propes•• to break the Uni.on ••• 68 3. Some decisions regarding local working conditions and past practices ••••••••••••• 71 B. Scheduling and Hours of Work Issue •••••••• . 83 1. Management View--P'irm.s pay for work net done • • 84 2. Union View--Meu. would he put on 24-hour call • • • • 85 3. Sem. decisions on scheduling and hours of work • • • 86 C. Uildut Strike I.sue •••••••••••• • • • 92 1. Manaaemant Vlew--Ixi.tlna provisions ineffective 93 2. Union View--Previsio~s adequate. ehaages unjustified 95 3. Some decisions reaar4ina wildcat strikes • • • • • • • • 96 D. Final settlement on the work rules iss"e •••• 101 IV. ANALYSIS AND CONCLUSIONS . 104 A, Analysis of the Wage bsue ••• • • • • • • • • • 104 1. Final meney w&le settlement • • • • • • • • • • • • • 101 2. Equatlna productivity •••••••••••••• 109 3. Inflation -- "Cost Push" or ''Delund Pull ''1 • • • • 111 4. Foreign cempet:ltien--A new market mechanism 112 B. IndU$try Gives Union tTopular" A.sistance •• • • • • • 113 1. Management rights--Provided Agreements did not invalidate them ••••••••••• . 116 2. Seaeduling and hours of work • • • • • • • • . • • • 119 3. 1'1anagem.ent prerogatives in dealing witb wildcat strike. ••••••• • • • • . 120 4. Final settlement on work rules • • • • 121 APpENDIX "CHRONOLOGY OF 1959 STiEL CONTROVERSya . 123 BIBLIOGRAPHY . 130 INDEX ••• . 137 tv - LIST OF CHARTS I. ANNUAL EARNINGS OF WAGE EMPLOYEES IN THE STIEL INDUSTRY 1957-1958 ••••••••••••••• . 23 II. SETTLEMENTS IN FIRST SIX MONTHS OF 1959 . 24 III. STEEL EMPLOYHENT COSTS HERE AND ABROAD • • . 49 XV. STEEL MILL PRODUCTS ... IMPORTS VIl. EXPORTS 1957-1958 . 53 v LIST OF TABLES I.. WAGE RATE INCREASES NEGOTIATED IN RECENT YEAR.' BY MAJOR C<J.1'PANll!!S AND UNIONS • • • • • • • • • • • • • • • • • • . 13 II. AMOUNTS p,y WHICH STEEIMOlUmRS AVERAGE HOURLY IARNINGS EXCEED THOSE OF WORKERS IN SELECTRD MANllFACTURING INDUSTRIES • • • •• 15 III. STEEL WAGE COSTS va. COST OF LIVING . ,; . - . 17 IV. WHAT THIS OFFER MEANS TO AVDAGE STEELWORKERS 20 V. 'INCRl'.ASES IN }1AJ0lt COLLECTIVE BARGAINING SITUATIONS . 26 VI. INDEXES OF STEn SHIPMENTS FOR MAW-HOUR AND EMPLOY.MENT COSTS PBIt l'1AN -HOUR • • • • • • • • • • • • • • • • • • • • • 31 VII. THE DISTRIBUTION OF THE INCREASES IN BUSINESS PROCEEDS 1950 to 1956 • • • • • • • • • • • • • • • • • . 41 VII!. IMPtolMENT COST OF 30-MONTH STEEL CONTRACT . 59 IX. WILDCAT STRIKES IN STEEL INDUSTRY . 93 vi. 1 CHAPTER I INTRODUCTION The study of industrial controversy hi both interesting and necessary·­ interesting, because of the dynamic display of conflicting views generated by the contending parties; necessary, because 1) it provides a barometer by which to judge the challging times in industrial relations and Z) it serves as a basts for deeidina whether another type of arrangement. other than our pre­ sent system. of "free" collective bargaiaing. is better and enables us to analyz carefully proposed schemes that would force acceptance and ripdity through third party intervention in. labor-management relations. The argument that the U. S. has retained its existing system without con.ieledng alternatives is peculiarly out of step with most American views. As a nation, we oppose intervention in Konomic Ufe. We pride ourselves on the ability to resolve labor -:maD&,ement difference. and direct them into channela favorable to the continuance of present arrangements. When the parties to con.traet negotiations meet an impass of such important that the controvel'sy disrupts pl'oduetion in a major American industl'Y, the question invariably arises: Does controvel'sy preclude agreement? A. THE PURPOSE OF THE STUDY: A great controversy bas arisen in recent years over the relationship of wages and prices and. the relative effect of change in each on our national economy. The fact that the economy had been in a slump in 1957-1958 cre­ ated an increased interest in the investigation of the wage-price controversy_ There are those VJ'ho argue that wages a.re too hJ.gh and that incr~asing them has caused a "cost push" t:nfiationary spiral. The rise in prices, it has been argued by others, has forced the consumer to curtail purchasing, thus decreasing effective demands. Still others have charged that both wages and prices are exorbitant and have placed an und.ue burden on the economy, espe­ dally du.ring the recession. One of. the most intense wage-price controversies has concerned the steel industry. The pressure to