The Multinational Monitor

March 15, 1986 - VOLUME 7 - NUMBER 5

C O R P O R A T E   C A P A I G N S   -   W O R K E R S   H O L D   T H E   L I N E

Concessions and Convictions

Striking Meatpackers Face-Off Against the UFCD and Hormel

After months of opposition to the campaign waged by striking meatpackers in Austin, Minn., the United Food & Commercial Workers International (UFCW) pulled out all the stops March 14, 1986 and cut off strike assistance worth $40.00 a week to each of the six hundred men and women still on the picket line. Benefits formerly paid to strikers will be passed on to workers who cross the picket line and go back into the plant, officials of the International say.

"The International has told the local union to cease their strike activity," explained a spokesman for the UFCWs Packinghouse Division who insisted on anonymity. "We've also told the local that we would pay post-strike assistance for those people who do not engage in the strike and boycott activities."

The International's move, which might have ended eight months of struggle by its militant Austin affiliate against the Geo. A. Hormel & Company, has instead made battle lines more pronounced. Reports from Austin indicate that the meatpackers are determined to continue their fight for better wages and benefits with or without the help of the International.

"We're stepping up our campaign," insists Dick Shatek, a rank and file member of P-9`s Communications Committee. At the same time, he says, "Our objective [in Austin] is not to be professional strikers. We want to go back to work, but the contracts we've been offered don't make that possible."

Austin workers say they are only trying to gain a fair settlement from Hormel. But the local's stubborn stand has infuriated officials of the UFCW, who have staked their reputation as labor leaders on the promised fruits of a cautious policy of compromise and conciliation with the industry.

Particularly irritating to the International union has been the local's decision to stage a corporate campaign against Hormel with the help of labor strategist Ray Rogers. Although the UFCW sanctioned the local's strike against Hormel last August, it was opposed from the start to the strategy proposed by Rogers.

It took UFCW President William Wynn only two days to decide that any kind of campaign against Hormel would be "very regrettable," according to a cable Wynn sent to Local P-9 President Jim Guyette on October 10, 1984.

"The Austin local is only one of the UFCW locals that represent employees at Hormel," Wynn wrote. "The other locals have not assented to a campaign, nor has the international sanctioned such an effort."

The UFCWs distaste for Rogers has grown so strong that mudslinging between the two in recent months has clouded both the discussion of worker grievances with the company and the merits of corporate campaigns.

The International's opposition to Rogers is based in part on its failure to stave off several years of industry encroachment on worker rights.

Between 1980 and 1982, 35 meatpacking plants across the country closed when workers, backed by the UFCW, refused to accept concessions. Faced with the prospect of even greater losses, the UFCW decided to back down. As early as 1981, the union was calling for workers to accept retrenchments as a means of "achieving bargaining stability and developing an avenue of recovery for the future."

After Wilson Foods, one of the big five in meatpacking, filed for bankruptcy in 1983, Hormel joined other companies in the industry to take a strong stand against workers throughout the chain.

"Wilson's Chapter 11 was the straw that broke the camel's back," a UFCW official said. "We had to make a decision to allow the industry to go non-union at $5 and $6 an hour rates with re-opened plants, or to retrench within the industry and hold the concessions between $8 and $9 an hour, maintaining the vehicle [the union] that would bring wages and benefits back up."

"We made the decision, rightfully or wrongfully, to retrench," the official explained.

That decision resulted in locals at six of the eight Hormel plants signing contracts in October, 1984 that provided for a $9.00 an hour wage rate and implemented cuts in vacation time, a decrease in hospitalization coverage, and a reduction in pensions. Under the terms of the agreement, wages were slated to rise to $10.00 an hour after a year.

Alone among locals in the Hormel chain, Local P-9 vowed to put an end to the steady pattern of concessions and retrenchments that their parent union had come to accept as inevitable. They turned to Rogers and his New Yorkbased Corporate Campaign Inc., for help.

Local P-9 hoped the corporate campaign would succeed where the UFCW, using traditional tactics, had failed to make gains for their workers.

Rogers, who had coordinated the Amalgamated Clothing & Textile Workers' campaign against J.P. Stevens, offered the workers an alternative to the compromises being urged by the International.

The battle at Stevens was based on the belief that where direct pressure on a company via a strike might fail, indirect pressure, applied by targeting the financial underpinnings of the company, could succeed. Rogers' campaign against J.P. Stevens focused on seven major banks and insurance companies that had financial ties to the textile giant, including Manufacturers Hanover Trust, the New York Life Insurance Company, the Seaman's Bank for Savings, and the Metropolitan Life Insurance Company. In 1980, Rogers and ACTWU won their campaign against J.P. Stevens and opened the textile company up to organizing.

Speaking to a packed crowd of workers from Local P-9 on October 7, 1984, Rogers outlined a similar program to fight Hormel. To workers like Skinny Reese, a forty-year veteran of the meatpacking business, what Rogers said that night made a lot more sense than the compromise plan being offered by the International.

"The UFCW doesn't know anything about meatpacking," Reese explained. "They're susceptible to concessions, because that's the only type of bargaining they know."

Other local members agreed. Shortly after Rogers' first visit to Austin, more than 90 percent of the rank and file voted to take him on board.

The multi-faceted plan proposed by Rogers, a combination of public relations and civil disobedience, seemed particularly appropriate in the context of Hormel's operations in Austin, where the Hormel Company has been the backbone of the community for over fifty years.

By picketing the company's financial backer, First Bank Systems, Rogers hoped to attract public support for the workers, while at the same time forcing the bank to pressure Hormel. The Bank holds 16.4 percent of Hormel stock and has a director on the company's board. P-9 picketed the Bank to highlight its ties to Hormel.

Although the local's picket and leaflet strategy brought the First Bank Systems-Hormel ties into the open, the campaign had limited impact. The Bank owned 16 percent of Hormel stock, but had voting interest in only 6 percent. The company also owed very little money to the Bank. Several building trade unions condemned the Bank in support of P-9, but no union funds were ever pulled from the Bank.

Local P-9 also mounted a well-publicized strike support program, dubbed the "Adopt-A-Family Fund," to increase their financial resources. Representatives of the local say that unions across the country have donated thousands of dollars to the Fund. With the International and the AFLCIO joining ranks against Local P-9, the Adopt-A-Family Fund has proved crucial to the workers' ability to hold out against Hormel.

In December, 1985, Local P-9 called for a boycott of Hormel products. According to the strikers, the boycott has been successful in forcing Hormel to cut back production. But company officials deny that the boycott has had any effect on production. According to Chuck Nyberg, a vice president at Hormel, the Austin plant is at "maximum levels [of production] for the time being."

The boycott has been weakened by the fact that workers at most of Hormel's other plants have not joined Local P-9's call. But where it has failed to make a dent on the company's profits, the boycott has succeeded in helping to generate publicity for the workers' cause, Rogers maintains.

Hormel has been relatively adept at countering Local P-9's campaign. A proposed mass demonstration at Hormel's annual stockholder meeting was deflected when the company moved the meeting from Austin, where it had been held for nearly 100 years, to Atlanta, Georgia.

By threatening to pull its corporate headquarters out of Austin unless workers halted their campaign, Hormel undermined community support for the local. In addition, the company effectively rallied the City Council, which included two members of Local P-9, to call for an end to the strike. Nonetheless, the local remains committed to both the strike and the corporate campaign as a means of drawing the line on the Hormel retrenchments.

Whatever the outcome of the dispute between P-9 and the Hormel Company, Ray Rogers and this corporate campaign have raised serious questions about the growing tensions between labor's rank and file and union leadership.

In the future, union executives may be reluctant to duck the challenge posed by corporations seeking to impose concessions on the rank and file.

The Course of Events

1975 Geo. A. Hormel and Company decides to replace its 84-year old Austin plant with a modern meat-packing facility. Some 1700 workers are employed in the old plant.

1976 Packinghouse Local 9 in Austin learns that Hormel is considering sites other than Austin for construction of the new $100 million facility. Anxious not to lose the plant and the jobs it provides, local officials begin negotiations to keep Hormel in Austin.

1978 On June 27, Hormel and Local P-9 reach an agreement on a three-year new plant contract which excludes certain contract language and work rules in force at the old plant. The new contract also mandates a 20 percent increase in work speed and substitutes an escrow account for incentive pay. Two provisions in particular will be key to future disputes: a three-year .no strike" clause, effective with the opening of the new plant; and the so-called "me-too" agreement stipulating that any changes in the national pattern of wages and benefits by three or more of the five major meatpacking companies would apply to the workers at Hormel.

1979 Base wages at Hormel in Austin stand at $7.07 an hour.

1980 Against the backdrop of the late 1970s recession, a rising tide of competition, and corporate concentration within the meatpacking industry, Swift & Co. shuts down eight major plants.

1981 Plant closings spread throughout the industry. Cuhady, Wilson, Hygrade, Armour, Hormel, and American Stores all shut down one or more plants. The UFCW formally adopts a"national packinghouse strategy" of accepting retrenchments in the short term with a view toward keeping unions in the plants and building wages back up gradually.

1982 On August 9, Geo. Hormel & Co. begins full operations at its new Austin plant.

1983 Wilson Foods, one of the five major national meatpacking companies, files for bankruptcy under Chapter 11 of the Federal Bankruptcy Act and reduces wages and benefits in all of its plants from $10.69 an hour to $6.50 an hour. Following a strike, base labor rates at Wilson are set at $8.50 an hour.

Hormel informs Local P-9 that it plans to reduce wages and benefits at the Austin plant in keeping, with the national trend of concessions and retrenchments. The company claims the right to lower wages under the "me-too" clause of its contract with P-9.

1984 Six of the eight major UFCW locals in the Hormel chain prepare to negotiate their contracts under a September wage re-opener.

In July, all locals except P-9 agree to strike Hormel in September. Local P-9 President Jim Guyette argues that Local P-9 is not allowed to strike under the terms of the no-strike clause implemented in 1982.

By September, UFCW locals reach an agreement with Hormel to set base wages at $9.00 an hour with anticipation of a $1.00 an hour increase the following year.

In October, Hormel reduces base hourly wages at the Austin plant from $10.69 to $8.25 an hour. The rate is raised by arbitration to $8.75 an hour, with the stipulation that it will go up to $9.25 an hour in July 1985. Local P-9 hires Ray Rogers and his New Yorkbased organization, Corporate Campaign, Inc.

In December, the Hormel Chain and the National Packing Committee of the International refuse to endorse a corporate campaign strategy mapped out by Rogers and P-9 to bring pressure against Hormel.

1985 In August, workers in Austin vote overwhelmingly to strike after failing to reach a contract agreement with Hormel. The International sanctions the strike and provides financial assistance from the UFCW strike fund.

In December, Local P-9 begins a boycott of Hormel products. The International refuses to sanction the boycott.

1986 Hormel re-opens its Austin plant in January. The workforce is made up of about 450 former strikers and some 500 new employees.

In March, rank and file members of Local P-9 call for a resolution of differences between the leadership of the local and the International. The International withdraws strike benefits but announces a program of "post-strike assistance" to workers who return to work across P-9's picket lines. Local P-9 announces; it will sue the International for causing "irreparable harm" to its strike and campaign.

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