V. BARGAINING IN FLUX: LABOR AND MANAGEMENT RESPONDS TO A PERIOD OF UNCERTAINTY

Instability and the Failure of Labor-Management Cooperation at S.D. Warren

MICHAEL HILLARD
University of Southern Maine

Abstract

      This paper presents a case study of negotiations at SD Warren, a Scott-owned paper mill, from 1989–1994. I explain why efforts by Scott to forge an agreement to reorganize work with its largest union failed. These negotiations occurred during a period of heightened instability in the Maine paper industry’s labor relations; unionized strikers were permanently replaced in strikes at International Paper (IP) and Boise Cascade. Despite substantial progress in negotiations, unstable paper industry labor relations, turnover in mill management and a local legacy of conflict-ridden job-control unionism ultimately thwarted Scott’s efforts to build trust with its major union.

Introduction

      This paper presents a case study of negotiations between SD Warren, a paper mill then owned by Scott Paper Company, and its unions between 1989 and 1994. Specifically, I examine efforts by the company to forge an agreement with its unions to reorganize work along “high-performance” lines, focusing on negotiations with the mill’s predominant local, Local 1069 of the United Paperworkers International Union (UPIU).¹

      These negotiations occurred during a period of heightened instability in the Maine paper industry’s labor relations. Dramatic strikes at Boise-Cascade in Rumford (1986) and International Paper (IP) in Jay (1987–1988)--where, in PATCO-like fashion, most workers were permanently replaced--reframed worker-company relations at SD Warren: workers had to accept work reorganization and downsizing or face the threat of even more drastic consequences (Getman 1998; Hillard 1989).

      Ultimately, efforts to build the trust at SD Warren necessary to reorganize work failed. I argue that unstable paper industry labor relations, combined with a local legacy of Taylorism and conflict-ridden job-control unionism, made for a hill too steep to climb for management and especially union officials.²

The Mill and Its Past

      Established in 1854 and located in Westbrook, Maine, SD Warren is one of the nation’s oldest paper mills. SD Warren unionized only in the late 1960s, several decades after the rest of Maine’s major paper mills organized. Local observers attribute this anomaly to the effective, 19th-century style paternalism of the founder and his descendents until the mill was sold to Scott Paper Corporation in 1967. The dual shift to out-of-state corporate ownership and unionization ushered in an era of tension-ridden job control unionism that continues to this day.

      Local 1069 of the UPIU, the largest of the mill’s many locals, had a history of defending its contract fiercely as a matter of pride and principle. This history originated in the rampant favoritism by supervisors who helped prompt unionization in the 1960s; such favoritism lingered long after unionization. Consequently, through the 1980s, Local 1069 filed 700–1000 grievances per year, more than any other within the Scott mills represented by the UPIU. Said one union leader: “John Nee³ had labeled us the toughest local this side of the Mississippi River . . . and [with] the tenaciousness of a pit bull we . . . won’t let them destroy our contract.”

      Local 1069 did not shy away from striking over important goals or perceived excesses in the tone struck by company negotiators. The local conducted a 5-week strike in 1977 primarily to win mill-wide seniority. The local struck again in 1983 over a company proposal to shift some of workers’ health insurance costs on to workers’ shoulders.

      Finally, from the union’s perspective, a change in management’s make-up sparked an important transition in mill relations. It became more difficult to negotiate with management, as familiar, local managers were replaced by “outside” managers:

And then, it got to the point where they were bringing in these people from outside the mill to take these jobs--foreman and department supers--and I’m not saying these were dumb people--they were very smart people, they’d been to college and they studied paper-making, and that sort of thing, manufacturing. . . . But they were clueless as far as what the problems really were. I mean, they knew how to be a manager, they knew probably the technical end of it, but the really everyday, down-to-earth problems, they didn’t understand. And when you would talk to them on it, they’d just take a hard, fast position on something and stick to it. And in a lot of cases, it wasn’t even good for the mill . . .

Negotiating Over Creating a HPWO

      Companies throughout Maine’s paper industry initiated work redesign negotiations in the mid- to late 1980s. At the time, paper companies--citing the pressures of increased global competition and opportunities to automate-sought to reorganize production workers into cross-trained teams and also to downsize. Paper companies were also taking advantage of the increased bargaining power afforded corporations by changes in the 1980s in the economic and legal climate for labor relations (Eaton and Kriesky 1998; Getman 1998; Getman and Marshall 1993; Kochan, Katz, and McKersie 1994).

      In the late 1980s, the strikes at Boise Cascade (Rumford, ME) and International Paper (IP; Jay, ME) hung like a pall over labor relations throughout Maine’s paper industry. Paperworkers throughout the state feared that their employers would similarly embrace these low-road tactics. Moreover, strike support, and education efforts by the Jay strikers in 1987–1988 who traveled throughout Maine and the country holding teach-ins on the strike, created close ties between workers in Westbrook and the strikers (Getman 1998). During the strike, Local 1069 raised money through regular membership collections to help pay the Jay workers’ strike benefits; it hosted strikers for local forums on the strike; and many leaders and rank-and-file made the 70-mile trip to Jay to join demonstrations against IP.

      So, it was in this setting that Scott Paper initiated HPWO negotiations with local SD Warren unions in 1989. Between 1989 and 1994 these negotiations went through several phases. The first was “jointness,” an effort to increase general labor–management cooperation. Scott Paper Company initiated jointness programs with the goal of taking its labor relations in the opposite direction as IP (Getman 1998:207). The new program, carried out by Scott Vice-President John Nee, required all of Scott’s mills to establish a jointness committee to pursue these goals. However,

Progress towards mutual trust at Scott Paper has been uneven. In some mills, especially those with a history of conflict, the program has been only marginally successful; in those mills, the program has been controversial within the union, and distrusted by many in mill-level management. (Getman and Marshall 1993:1857)

Westbrook was one of these mills.

      Jointness was succeeded in the early 1990s by “enabling,” under which the mill and its unions developed pilot total quality management (TQM) projects such as waste/cost-reduction committees. Finally, the company sought acceptance of a plant-wide work redesign in negotiations during 1993–1994. Rank-and-file production workers, members of United Paperworkers International Union (UPIU) Local 1069, ultimately rejected the proposal negotiated by union and management.

      Interviews with local managers and union officials make clear that these negotiations were an uphill effort. First of all, there was a gap between the strategic shift in labor relations being made by Scott and the commitments and style of local managers. The new jointness effort was seen as a dictate from “corporate,” and neither side locally rushed to embrace this new cooperation initiative. One former manager put it this way: “Both parties didn’t come to the table with the best of intents. Or with the belief that it was going anywhere, or that it was a valuable use of time.”

      While management perceived the union as recalcitrant, they admit that their side was also slow to put aside older ways of doing things. Early on, managers continued to take unilateral actions that conflicted with jointness goals. These actions included suspending members of UPIU’s negotiating team, repeatedly implementing layoffs, and making changes in production without consulting the union. Nonetheless, management officials recognized that the mill’s age, and the increased competitive pressures it faced, necessitated efficiency efforts, and therefore that the mill’s long-term survival depended on the mill redesigning its work processes. Local management never wavered from this central objective throughout the 6 years of negotiations.

      Turning to Local 1069, throughout most of the 1980s the UPIU had been highly critical of quality of work life (QWL) programs and similar initiatives:

In fact, the International warned us about it, prior to this. We used to get notifications, and training . . . to watch out for this jointness stuff. It’s just a way of stealing language and worker’s rights, away from you, under the pretense that they are going to be your friends. [emphasis added]

      One feature of this education was a critique of global competition and especially Japanese work practices. The critique was important because it was, in union leaders’ recollections, a dominant piece of the company’s discourse about the need for change. From the International, Local 1069’s leaders had learned the following argument centering on Japanese culture and especially job security. First, the obedient behavior and culture of Japanese workers was not transferable to the American workplace and was clearly antithetical to American workers’ sense of independence. Second, Japanese workers were guaranteed lifetime employment in exchange for flexibility on the job; American employers, including Scott, were unwilling to make this quid pro quo.

      So, it is unsurprising that the initiative was met with strong suspicion by Local 1069. For one, the union argued that cooperation was an established practice in the mill’s labor relations.

      Moreover, they saw Nee’s initiative as a direct threat to the union:

The thing we won’t do, is give them everything we’ve negotiated over the years. I mean, if you do that, you might as well decertify, and get the union out of there, and let the company do what they want.

Because the International had embraced jointness, the local leadership was under pressure to set aside their reservations. But following the UPIU’s shift in stance was a pill too big to swallow.

      One particular incident further illustrates the divide between union and management perception. In 1992, management and union leaders traveled to A.O. Smith, a Milwaukee auto parts plant that Scott’s consultant had worked for earlier and considered a benchmark example of HPWO. The consultant considered it a role model because union and management were able to cooperate and implement an HPWO, despite enormous layoffs. Scott’s managers were approving:

Their union president talked like he was in management. They talked about that there was value-added jobs, and those were the only real jobs. If the job wasn’t adding value, they weren’t going to protect it. They didn’t need to have people around just for the sake of being around. . . . They were totally committed to the financial
survival of that facility, and that they were going to do whatever was necessary. They were doing teamwork on problem-solving and improvement work, and, they would personally go out and try to convince members who weren’t cooperating. They had job rotation, and those workers who didn’t want to cooperate feel the heat from their union leadership. [Emphasis added]

Local 1069’s leaders recalled the trip in almost exactly the same detail, but with a different interpretation of the meaning of what they learned.

So we went out to see this great joy that was in Sol’s [the consultant’s] mind, and we met with the local union guys. And after being there for about two hours, you couldn’t tell the union officials from our managers here at the mill, here in Westbrook. The way they talked, the way they acted.

Another union official described what the problem was:

We didn’t like what we saw. They had this full job circle in place, and we didn’t like it all. . . . Number one, they had no accommodation for the injured worker. . . . What really bothered us . . . if the guy refused to rotate, the union would go down and pressure him: “What’s the matter with you? We’re going to end up taking you out of here. You’re not going to work this, you’re going to lose you’re rate” and all this other stuff.
      And so they were doing the company’s bidding, and that was very distasteful to us.

      Either side, under contract language defining the process’s parameters, had the right to unilaterally fire the consultant. The moment the visitors got back into a van to return to the airport, Local 1069’s president announced, with the consultant sitting right there in the van, that he would immediately request that the consultant be fired upon returning to Maine. The president then turned to the consultant and said:

If you think that piece of shit that you just showed us is something that we want, I got a surprise for you. Because there’s no way I’m going to let the union treat our members the way that these union officials are treating theirs. You might as well throw the contract out and you guys hire them as managers. In fact in some sense, they’re worse than the managers in Westbrook. Some other managers in Westbrook wouldn’t do to the people what these guys are doing.

      This anecdote illustrates how fundamental the divide between company and Local 1069 were. For management, it was a model of what was necessary to survive in an increasingly competitive world. The local clearly found the AO Smith union’s abandonment of seniority and coercive enforcement of job rotation to be repulsive and antithetical to the very meaning of being a union.

      Despite the hard initial stance, the union nonetheless participated in 5 years of negotiations and projects. Throughout, the union executive council debated seriously over the company’s proposals, with some leaders expressing interest or support. There was also turnover within the union’s leadership, with later leaders taking less of a hard line. And, the union fully participated in several pilot projects. One such project supported by the local was a major, highly successful waste reduction project. Local 1069’s leaders were enthusiastic about its results and believed the union’s cooperation helped in subsequent negotiations. Finally, in the rare cases during this period where a new production process was created within the mill, the union also acquiesced to management’s desire to organized work along high-performance lines.

      Whatever partial progress made on particular projects, parallel events undermined this progress. Howard Reiche, a locally bred, long-time mill manager trusted by both unions and management, retired in 1988. In the following years, a series of mill managers were brought in by Scott. Their tenure was relatively brief, and one mill leader was widely seen as disruptive in ways large and small. Another critical event was the shutdown, announced in late 1992, of the mill’s finishing operation.

      Scott eventually proposed reorganizing workers across the mill into cross-trained teams that rotated jobs. The union’s reaction to this proposal was equivocal; some of Local 1069’s leadership viewed positively certain aspects of job rotation. For example, job rotation reduced repetitive motion injuries, and it was thought that reduced hierarchy could improve solidarity amongst the rank-and-file.

      Still, both the union’s leaders and its rank-and-file had major problems with reorganizing work in this fashion. Many younger rank-and-file felt that if they were going to be trained to a first-hand level, they should be paid accordingly. More senior workers were also unhappy with job rotation. Having “paid your dues” doing the intense physical labor characteristic of lower jobs, seniority-based promotion relieved older workers of heavy physical labor. Job rotation meant the end of that benefit.

      In 1994, Local 1069’s executive council recommended the work redesign be put up for a vote of the membership, despite their serious reservations. While Scott had moved significantly on one issue--offering large buyouts to injured workers unable to rotate--the following description conveys how this recommendation came under duress:

We did come back and [recommended] . . . the acceptance of this. . . . [O]ur concern was we had a contract coming up within the next six . . . or eight months, and . . . that was in that high time of no strikes, you’re kind of [committing] political suicide to think about asking for a strike vote or anything--so we recommended it because we feared that they would force it down our throat anyway--either you get paid for it and take the buck-eighty . . . or you’d get it come next fall and you wouldn’t get a nickel for it, they’ll just put it in, and you ain’t gonna walk because of it. . . . It failed anyway. It didn’t pass,
it failed. [Emphasis added]

      This ultimate failure came in an environment marked by instability: instability in the markets and competition faced by the mill, instability in the industry’s labor relations, and instability in the management and ownership of the mill. From interviews with union leaders, the latter appears crucial if not decisive. For them, work reorganization as proposed by the company required eliminating job allocation protection and forms of seniority considered to be sacrosanct, on “good faith.” In turn, they were being asked, in their eyes, to trust outside corporate negotiators and mill managers, who turned over during this period with alarming regularity:

      Now, my vision on it was, look, sometimes you [Scott Paper] will give us people to work with that are pretty honorable people. And they work here for a few months, and then they’re gone. “Corporate” sends him somewhere else, and a new face shows up--we don’t get along with that person too well. And he may not be too trustworthy. Now, how the hell are we going to have good faith, that you’re always going to give us somebody whose going to be reputable to deal with?
      And if it doesn’t work out, a year, two years down the road--you say, “Hey, the process is over.” We look at our contract, and our contract’s been torn apart, we can’t get that back without negotiating it back. And I think once it’s gone, it’s going to be awful hard to get it back . . . . Because you guys could be gone tomorrow. All of you sittin’ here could be gone tomorrow. Then, we’re dealing with a bunch of bastards that are not willing to give us anything back, and they’re going to hold our feet to the fire on what’s left of the contract. So we’re not willing to do that. [Emphasis added]

This mistrust is seen as reflective of the character of the American employers:

American corporations don’t have very good credibility with being honest and dedicated to their workforce or the communities that they’re in. And all of that stuff was a burning issue with us.

Conclusion

      Instability in the paper industry’s labor relations, and in its management, made the development of trust between local Scott managers and Local 1069 a difficult task. But, as I argue in a longer paper, it is important to see how memories of the past shaped the culture of labor relations as SD Warren.⁴ The intensity of Local 1069’s defense of its contract was rooted in a remembered past of management unfairness, and combativeness had long taken root in the union’s daily practices. Combined with the International union’s effective past critique of labor–management cooperation and new work practices, the UPIU’s embrace of Scott’s jointness and subsequent programs was not to “trickle down” to the leaders and rank-and-file of UPIU Local 1069.

Endnotes

1. Following much of the literature, I will refer to “high-performance work organization,” or HPWO. See, for example, Applebaum et al. (2000), Applebaum and Batt (1994), Ichniowski et al. (1996), and Osterman (1999).

2. A longer version of this paper, available from the author on request, asks how do a “Taylorist past” and a history of job-control unionism produce resistance to reorganizing work? I explore this question by examining memories of the past through extensive oral history interviews.

3. Scott’s Corporate Vice-president for Labor Relations.

4. See also Hillard (2001b).

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