Opponents Charge ILWU Pact Was Coerced

by Charles Walker

This article, and the ones that follow, are from the web site Labor Tuesday for Jan. 7, 2003. They have been edited for Labor Standard.

As ILWU officials campaign for the ranks to ratify the recently negotiated tentative agreement, some voices from inside the union are saying it’s not the sweet deal the officials claim. In fact, they say, it’s so bad that union negotiators should go back to the bargaining table.

At this point it’s not possible to gauge how much support the contract’s critics have in the ranks. What the members decide won’t be known until their votes are tallied, late in January.

One thing is clear: the opponents aren’t raising petty differences. Their most serious charge is that the contract was negotiated with a gun to the union’s head, the Taft-Hartley Act, under which they were compelled to return to work, ending an employer-led lockout.

The critics say that, in effect, they were stripped of their right to strike, the union’s real power. Without that strike power the union couldn’t really protect its members from the shipping and stevedore companies’ assault on their traditional jurisdiction.

Twice before, they point out, the union waited for the expiration of 80-day “cooling-off” periods imposed under the Taft-Hartley Act and then bargained with their strike power intact, a power they used. Not to have waited, as the union did in 1948 and 1971, and then strike, if necessary, was a serious mistake, one that resulted in a “coerced” deal. They advocate that the ranks vote down the tentative agreement, and make the bosses negotiate, knowing the union might strike.

The coerced deal has cost the jobs of 400–600 marine clerks, in the short run. Only time will tell how many future jobs have escaped the union’s jurisdiction.

The union failed to get the same wage increase for all its members, further widening the pay gap between the “skilled” workers, on the one hand, and the dockmen, lashers, and tractor drivers, on the other.

The much-touted pension increases are real enough, but since the companies will be able to reduce their pension funding reserves to 65% from 85% of the anticipated pension costs, the companies get the benefit of a $400 million cushion right up front. Moreover, the reduction in pension funding (reserves) could one day force the union to seek government money for their pensioners, as the steel workers union has done.

While the critics haven’t made the case that the six-year term of the proposed pact will further prolong the demobilization of the membership, they do point out that without a cost-of-living clause, their wage increases (distributed unequally) are likely to be outstripped by inflation. The low wage increases and the six-year contract term were necessary, both the union and the bosses have said, to pay for the expected rise in health costs. But the workers already had what is called “maintenance of health benefits,” so they didn’t gain anything new. In fact the wage concession, at the very least, seems to allow the companies to keep their labor costs at one percent of gross revenues.

Aside from the contract terms, the critics lambaste AFL-CIO Secretary-Treasurer Rich Trumka for his part in the negotiations and in his helping to sell the pact. They insist that Trumka not be part of the new negotiations they are seeking.

President Bush, the bosses, and the union’s president, James Spinosa, all agree that the contract is good for the dockworkers and should be voted up. That is a warning sign, the critics say. Since when did the bosses and the government really care about the dockworkers?

They also criticize the ILWU leaders for not trusting the ranks, feeding the members rumors, not giving the ranks a voice in deciding whether or not to extend the old contract, and not asking the ranks for strike authorization.

One of the proposed pact’s critics is a local ILWU officer, Business Agent Jack Heyman of Local 10, San Francisco. In an Internet statement he says the contract “is a 180-degree turn in direction at a very dangerous time. If it passes, it will be a historic defeat, not just for the ILWU, but for the working class in this country and internationally. It will be interpreted that coercion by employers and the capitalist government works, even against strong unions with international links.”

At United, the Sky’s the Limit on Union Concessions

by Charles Walker

The high end of the U.S. airline industry is in a tailspin, while its workers’ hopes for the future are caught in the downdraft. The industry’s 1980s deregulation spawned low-cost competition, much like the deregulation of the trucking industry, which continues to bankrupt major freight carriers. That competition is compelling major airlines to reduce labor costs, one way or another, or throw in the towel. Two of the major airlines, United Airlines and US Airways, are now in the bankruptcy courts, another weapon to drive down their workers’ living standards.

To date, US Airways has cut its workforce by a third, to 32,000, and has won hundreds of millions of dollars in union-negotiated wage concessions. United Airlines is following a similar plan, seeking similar results.

Memories of the shutdown of Eastern Airlines and Trans World Airlines constantly remind the workers that what happened to those union workers could happen to them. That fear just eases the way for corporate and union snake-oil hucksters to peddle one concessionary scheme after another.

In 1994, United’s unions sold their members on the notion that they should become stockholders, with representatives on the airline’s board of directors, in return for wage cuts to last until 2000. This was a variation on the scheme that Eastern Airlines had used, giving the unions some stock and a seat at the boardroom table. Those unions found that the corporate bosses held “rump” board meetings without the union representatives. The union reps on Eastern’s board were told that what information they did learn at the board meetings was confidential and could not be shared with their memberships. Then the Machinists Union was blocked, when it tried to vote its stock holdings in order to prevent Eastern Airlines from being taken over by the non-union rival that closed it down.

In 1994, United’s unionized workers, excepting the flight attendants, took wage cuts that saved the firm nearly $5 billion dollars, in exchange for about 55% of United’s stock and three seats on the company’s board of directors. The 1994 scam differed from Eastern’s in that the union workers themselves (not the union) held the airline’s stock, which they had to hold until they left the company.

But that difference hasn’t dulled the economic pain that United’s workforce now is suffering, and the increased pain that lies ahead. The stock that once was above $70 is now virtually worthless, destroying many workers’ retirement dreams. A few weeks ago, the airline’s unions, excepting the Machinists ranks, which handed their officials a defeat, agreed to give up one billion dollars a year in concessions, in order for United to gain federal loan guarantees. However, United Airlines knew at the time, that shortly it would be asking the union workers for still deeper cuts. United’s chief executive, Glenn Tilton, has now revealed that the plan submitted to the feds “was designed to stabilize the company. However, we knew there was more to do going forward. What we are seeking now is to transform the company for the long term and to make that transformation sustainable.”

United did not get the federal guarantees, which were opposed by Continental, Northwest, and American Airlines. So now the airline is asking the unions to more than double their concessions to $2.4 billion a year, in order, this time, to qualify for lenders’ financing demands. Moreover, United has stated that it is seeking a liberalization of work rules, meaning that the workforce, already reduced by 17,000, will continue to shrink. If the unions don’t meet United’s new demands, the company says it will ask the bankruptcy court to unilaterally modify or even tear up the existing union contracts.

For all practical purposes, United now has its hands in the workers’ wallets, and the sky’s the limit on its demands for concessions. While there’s no evidence of a rank-and-file organized opposition to the corporate plundering, some mechanics are looking to the Aircraft Mechanics Fraternal Association (AMFA). That union came close to beating out the Machinists union in a 2001 representation election. Still, it’s not clear how much of a difference a change of unions would make, unless the AMFA commits itself to mobilizing the ranks for the type of fight that led to the rebirth of organized labor more than 60 years ago.

Clearly, organized labor once again needs to see itself as a fighting machine, or resign itself to withering away.

The United Airlines Bankruptcy

by Wadi’h Halabi

On Dec. 9, United Airlines, the world’s second largest, filed for bankruptcy. USAir, Swissair and Sabena preceded it to court this year. As with other bankruptcies, United’s is ultimately due, not to mismanagement, but to “overproduction”: the capitalist class has produced “too much” to assure profits. Jetliners sit parked in the Arizona desert.

Overcapacity was already a problem a decade ago when United’s management proposed a “solution”—an employee stock ownership plan (ESOP). Unions would give up $4.9 million in wages in return for stock. Class-conscious workers pointed out that this was a ploy to get the unions to support cutting wages, benefits, and work conditions. The offer bitterly divided United’s unions. But it ultimately passed in 1994. United became the largest ESOP company in the U.S. With wages cut, United’s shares rose, briefly exceeding $128. Some workers thought they had become wealthy, although the ESOP put sharp restrictions on share sales.

With industry “deregulation” in the 1980s, the capitalist class had also begun financing airlines with no unions and poorer wages, benefits, and work conditions. Southwest Airlines and JetBlue are examples. This in turn set the stage for even more “overcapacity.” United’s ESOP had not resolved any of capitalism’s contradictions.

The downturn in the U.S. economy in the fall of 2000 quickly exposed the “overcapacity,” not only in the airlines but in every industry. Profits fell, unemployment rose. Fewer and fewer businesses and individuals booked flights. Sept. 11 added to airlines’ woes. For weeks on end, flights were flying half-empty or worse. More jetliners went off to the Arizona desert.

The debt, though, continued to accumulate.

The capitalist class’s response to airline “overcapacity” is telling. It immediately moved not to build demand, but to cut thousands of jobs, mostly unionized. It turned to the state for welfare—for the airline bosses, of course, not for the workers, and above all to service debt. The government made airline loan guarantees dependent on the unions accepting even more cutbacks.

When the Machinists union at United finally balked at further cutbacks last month, lenders forced the airline into bankruptcy. The bankruptcy courts are likely to make even tougher demands on the workers. United’s shares are essentially worthless. After giving up billions in wages and benefits, tens of thousands of United employee “stockholders” have lost their savings. The capitalist class’s claims, above all through debt, “contractually” come before workers’ jobs, health care, even their stockholdings.

What next? Former airline executive Michael Levine, now a Yale law professor, told the Boston Globe, “United must use a bankruptcy filing to wring more productivity concessions out of its workers.” United’s pilots, he said, fly an average of 50 hours a month; Southwest Airlines’ pilots fly 72 hours a month. “Where the game gets fought is if United dares to change work rules while in bankruptcy,” Levine said. “That is the only good that can come out of the filing. USAir is trying to do that now, but they’re not big enough. If United lowers its operating costs permanently, its size would create enormous pressure on American, Delta, Northwest, and Continental to reduce their costs, too.”

So the exploiters’ response to their system’s contradictions is for the workers to work 72 hours for 50 hours pay! The communist response is to reduce work hours with no loss in pay and no lay-offs! Uncompensated-for productivity increases easily make that possible. The capitalists’ response to their system’s contradictions is to attack the unions. Our response is to defend and strengthen the unions. The capitalists’ response to their system’s contradictions is to say: “Pay the debt before paying for health care or pensions.” We say: “Health care and pensions before debt!”

In fighting against the capitalists’ unending demands for cutbacks and layoffs, United unions actually point the way in making certain that productivity increases go to benefit humanity, not hurt it. The task of tasks is to centralize and generalize such struggles, with the goal of bringing an end to this inhumane capitalist system. Only then will production serve people’s needs. In the final analysis, that’s what communism is all about.

—The report above was published in the People’s Weekly World, Dec. 21, 2002. The author can be reached here.

[Labor Tuesday Editor’s Note: Unfortunately, United’s unions are not fighting the airline’s demands for more concessions; therefore, they are not, at this time, pointing a way forward. We’re told that Southwest Airlines is unionized, unlike Jet Blue.]