Stephen, J. Cabot blog

This Labor Day marks an important point from which Corporate America must look ahead and be prepared for changes that will affect governance, profitability, productivity, and competitiveness.

There are many labor issues that are being pushed by unions: card checks, full representation of workers by unions in collective bargaining when only a minority of workers at any given facility are union members, the composition of the National Labor Relations Board, the re-classifying of independent contractors as employees, the fate of healthcare savings accounts, and much more.

With the Democrats in the ascendancy in national polls, organized labor is not only looking forward to majorities of their party in both houses of congress, but also to a Democrat in the White House.

Organized labor has given much of its resources, both in treasure and personnel, to the election of politicians who will be sympathetic to labor’s concerns. And when those politicians are in office, organized labor will present its bills: bills for repayment, and proposed bills of new legislation.

If Corporate America is to maintain its flexibility and competitiveness, it must begin taking action now to ensure its freedom to act. Our annual Labor Strategy Survival Seminar provides a blueprint for what Corporate America must do now to deal with what organized labor will be doing in the days, weeks, and months to come.

During periods of war and other national emergencies, government agencies and workers usually act in concert for the common good of the country. That point of view seems to have escaped officials of the American Federation of Government Employees (AFGE) who have said that they will file an appeal with the U.S. Supreme Court in order to prevent the United States Department of Defense from implementing those parts of the National Security Personnel System (NSPS) of which the union disapproves.

The U. S. Court of Appeals denied a previous motion by AFGE Defense Department workers, and and a lower court had earlier upheld the NSPS regulations.

While the country faces ongoing threats from terrorists and is fighting a war on two fronts (Iraq and Afghanistan), it is essential that all elements of the government cooperate and not be derailed from the important missions that the country is engaged in. For a union to place its own interests above those of the welfare of the entire country is, indeed, a sorry commentary on union priorities.

As if unions are not satisfied with the attempt to use card checks to increase their power, they are now petitioning the National Labor Relations Board to order employers to engage in collective bargaining with unions that represent only a minority of workers.

Such an action would be a dramatic departure from current collective bargaining practices, where employers must bargain with a union that represents a majority of employees. Obviously, this is simply another tactic for unions to beef up their membership roles.

This new tactic is being aggressively supported by the United Steel Workers and the United Auto Workers, which hope that a Democratic president will appoint pro-union members to the NLRB, which in turn will adopt the position now being put forward by the unions.

Last Tuesday, the Democratic candidates for president squared off for their debate before an audience of 12,000 union members, their friends and families. What ensued was an extraordinary amount of anti-business pandering. Each candidate is hungry for an endorsement from the 10-million member AFL-CIO. In order to win that endorsement some of the candidates issued outrageous statements about pulling out of NAFTA and the WTO.

It was, of course, ironic to see those who voted for NAFTA choosing to decry its effects simply because the AFL-CIO thinks it was a disaster.

The 12,000 attendees whooped and hollered when the candidates offered their unrealistic prescriptions, which - if enacted - would significantly damage Corporate America and the economy. It’s a shame that such obvious pandering passes for political debate. If one had wanted to discuss labor relations in a thoughtful manner, the debate last Tuesday did not provide such a forum.

AFL-CIO leaders and members obviously feel that the candidates are in their debt, for the union believes that it was instrumental in helping the Democrats win majorities in the House and Senate.

In order to further enhance their self-proclaimed king-making power, the union will no doubt wait until a front runner emerges before issuing an endorsement. It’s called a self-fulfilling prophecy.

I have long advocated that labor and management must bury the hatchet and eliminate their old adversarial relationship. This is even more important now than before. Corporate America is facing huge challenges from the rapid economic growth of China and India. If we are to be competitive, if we are to succeed, we must pull together as a team.

One way to improve the situation for labor is to defuse its own internal politics.

If organized labor is to have a realistic and productive relationship with management, it must stop promoting and breeding adversarial relationships within its own ranks, between local unions, and between industry-wide unions seeking to encroach upon each other. Internal strife prompts a militant stance toward management and results in unrealistic demands on business.

Other changes should also be considered by organized labor:

1. Rank-and-file should be told of the true situation about the ability of employers to meet new wage demands and whether union concessions will be necessary.

2). Politics within the local union should not determine demands, but should ensure that leadership, policy, enforcement, bargaining, solicitation, and general procedures represent the viewpoint of the majority.

3). The voices of younger workers and minority union members should be considered.

If the situation does not change, Corporate America along with its workers will face hard times in a world economy increasingly dominated by China, India, and various small Asian countries. The time for a new agenda is now!