The UAW’s recent endorsement of the U.S.-South Korean trade pact illustrates not only the difficulty of navigating the treacherous waters of global trade, but the schizophrenic nature of juggling two contradictory positions?steadfastly refusing to have anything to do with something while, simultaneously, trying to improve it.
Some years ago I was part of a negotiation where we were forced to do exactly that. It was a contract bargain between the Kimberly-Clark Corporation and Local 672 of the AWPPW, the union representing K-C’s Fullerton, California, facility.
The bargaining began normally, with each side making its preliminary pitch and reading its formal agenda, item by item. But when management finished their presentation, they closed their notebooks, put down their pens, looked across the table at us, and declared ominously that they would “not be signing any contract that raised the costs of the facility.”
As far as opening statements go, their announcement, while defiant, was not particularly original?companies were always making speeches about the importance of containing costs. But because the declaration was uttered with such melodramatic weightiness, it got our attention. And as negotiations proceeded, as one week of bickering dissolved into the next, we became increasingly concerned.
Two things bothered us:
(1) This was our first contract since a 57-day strike three years earlier, and because both sides knew that the membership rarely strikes twice in a row, it gave the company some serious leverage.
(2) They never deviated from their position. They never modified it, never softened it, never so much as hinted that it could be negotiated away, which made us believe it wasn’t simply a bargaining chip.
In the fourth week they dropped their bombshell. They announced that we would be receiving lump-sum payments in lieu of traditional roll-ups. A lump-sum is exactly what it implies?a wad of cash, a one-time payment, something you can easily piss away on a modest weekend shopping spree. Roll-ups are permanent; lump-sums are transient.
Example: Take a standard 3-year contract with raises of 3 per cent per year. If you start at $20/hour, that first raise brings you to $20.60. The second year you get another raise, but it’s computed at 3 per cent of the $20.60. That brings you to $21.21. The third year you add 3 per cent of $21.21, which brings your total to $21.85. And so on. It rolls up.
Without this formula, your wage at the end of those three years stays at $20/hour. You gain nothing. Roll-ups are also important because vacation pay, holiday pay, medical leave, personal holidays and overtime are computed on your hourly wage. In a facility like ours, where overtime was king, you lose out considerably?not only on your weekly paycheck, but on your pension, which is based on gross earnings.
So when the company announced lump-sums, we made sure they knew exactly how we felt. We emphatically rejected it, using all the above examples to make our case. But as hard as we tried (and we came close to making fools of ourselves), we couldn’t get them to budge. It was clear that lump-sums were going to be included in their “last, best, and final offer,” and there wasn’t a thing we could do about it.
Worse, we all remembered what happened at that AWPPW local who screwed up years earlier. In the early1980s, a union bargaining board in Washington had been so opposed to lump-sum payments, they didn’t even make an effort to get the company to sweeten its offer. The negotiating team didn’t want to confuse the company by appearing to take that first bite of the apple.
Instead, they presented the lowball offer to the membership and urged them to send the company an unambiguous message by rejecting lump-sums on the spot. Unfortunately, fearing that a rejection could lead to a strike, the membership, by a narrow margin, voted to accept it. This meant that a substantial amount of money?very likely several hundred dollars per person, per year?had been left on the table.
Because we couldn’t risk making that same mistake, we were forced to negotiate on two contradictory fronts. On the one hand, we pounded the table and told the company we had absolutely zero interest in accepting anything even resembling a lump-sum payment; and on the other hand, we kept driving the numbers upwards, insisting that their lump-sum figures were nowhere near high enough.
It’s reminiscent of that old joke about the two ladies complaining about the lousy meal they were just served in a restaurant. “The food was terrible, just terrible,” the first lady says. “I agree,” the second lady says, “and such small portions.”
We finally got the company to increase each year’s lump-sum by about 30 per cent. While it was a good bit of bargaining, it certainly wasn’t all our doing. The company undoubtedly assumed we’d eventually buy into it and would try to bump them up, so they purposely came in with low opening figures.
Although the adjusted lump-sums amounted to a lot of money, they were nowhere near as desirable as roll-ups. We knew it, they knew it, and our savvy membership knew it. But because it was, in our opinion, the best deal we were going to get, we ratified the contract, saddled up, and moved on.
Which, arguably, is what the UAW did with the Korean trade pact.
Instead of continuing to reject every inferior treaty that comes down the pike?and watching them become law?the UAW chose a different tactic. They chose to work within the framework of a treaty, to chip away from the inside, and by doing so, they got some meaningful concessions.
Unions still need to oppose these one-sided, often “rigged” trade agreements, but they also need to be nimble enough and willing enough to carve out the occasional useful provision. It’s a schizoid approach to doing business, but until someone figures out a way to make these treaties go away, it may be labor’s only choice.
Yet it was amazing how quickly the critics pounced. It seems that no one wants to see the UAW (which has lost more than one million members) stop the bleeding. One observer accused them of being “stupid” for jumping the gun on this deal because there happens to be a “burgeoning grassroots, fair-trade movement in Congress,” which the UAW is either too dumb to recognize or has chosen to ignore.
Really? Congress is poised to abandon these trade pacts?the ones that have ravaged American industry and led to the exploitation of child labor all over the world? That’s great news. Apparently, those 63 congressional seats which pro-business Republicans just gained in the last election are evidence of this “burgeoning” movement.
DAVID MACARAY, a Los Angeles playwright, is the author of “It’s Never Been Easy: Essays on Modern Labor”. He served 9 terms as president of AWPPW Local 672. He can be reached at email@example.com