Chapter 10 -- Hi Tech, Low Pay

A Mixed Bag of Other Tactics

The Youngstown case: what went wrong

While it is important to attempt to widen support for the workers in plant closings or plant takeovers, care has to be taken not to rely on public officials, the government and courts as the fundamental lever in the struggle against the huge multinationals and conglomerates.

The classic example of this is the case of the Campbell Works of the Youngstown Sheet & Tube Company, which was shut down in September 1977 by the predatory, New Orleans-based conglomerate, Lykes Corporation. The subsequent passage of years should not dim the significance of the crisis it caused and the overwhelming suffering inflicted on the workers and their communities.

A group of clergymen together with trade unionists from the area, Mahoning Valley in Ohio, formed a coalition to fight the shutdown. It was called the Ecumenical Coalition to Save Mahoning Valley.

The overall objective was correct: a community takeover of the plant, to be operated by the workers. But it was based on pledging their own savings to purchase stock in such an enterprise. They also felt it necessary to convince the U.S. Department of Housing and Urban Development to grant them $300,000 to finance a detailed feasibility study.

Under pressure of the times and the then-existing mood of militancy, the pressure exerted was sufficient to get the grant of $300,000. The contract, however, was given to the National Center for Economic Alternatives (NCEA). After more than a year of study and research the NCEA, led by economists Gar Alperovitz and Jeff Faux, concluded that a profitable community takeover could work if the federal government would provide $15 million up front in grants and $394 million in federally guaranteed loans, plus a list of Sheet & Tube's old customers.

It is often thought that the plant-closing era started with the Reagan administration. This is altogether erroneous. The Carter administration in this major case demonstrated no greater regard for the workers.

The Carter administration at first agreed in principle to the plan, but this was in reality a ploy. After a long delay and maneuvering by U.S. Attorney General Griffin Bell and others, and the runaround to the U.S. Economic Development Administration, the loan was turned down. That ended the matter.

The idea of a takeover was correct, and so was putting pressure on the Carter administration. But what was woefully wrong in all this was for the researchers to attempt to prove over an extended period that if the money were granted, it would be a profitable enterprise. That should not be the aim of a takeover at all. It should not be contingent on profitability but on the maintenance and operation of the plant.

The U.S. post office was run by the government for almost two centuries, and profitability was never a criterion. It was deemed necessary to meet the needs of industry and of developing communications and also because of the growing number of communities that needed service. The airlines were all granted monumental sums by the government, and it was not based on any conception that the particular enterprise had to prove its profitability. The expenditures were all seen as necessary for development.

What could be more important than the maintenance of such a key project in the heart of the steel area as Youngstown Sheet & Tube?

The aim of a workers' takeover is to demonstrate the willingness, the determination to take hold of the means of production and to operate them, forcing the government to subsidize the plant as it has done for the infrastructure of all U.S. industry--but this time for the benefit of the workers.

This can only be done by broadening and widening the struggle, not by conducting it on an isolated basis. More than ever the responsibility rests on the top trade union leaders who have the allegiance of millions of workers. These apparently local struggles have national significance for all the workers and all the oppressed. To leave the communities to deal with them on their own is not only gross neglect but downright malfeasance in office.

Another attempt by the workers to keep the plants open took place at U.S. Steel in Youngstown. The case went before Judge Thomas Lambros, who had this to say: "The court has spent many hours searching for a way to cut to the heart of the economic reality that obsolescence and market forces demand the closing of the Mahoning Valley plant and yet the lives of 3,500 workers and their families and the supporting Youngstown community cannot be dismissed as inconsequential. U.S. Steel should not be permitted to leave the Youngstown area devastated after drawing from the lifeblood of the community for so many years."1

So far, so good. Then comes the punch line. "Unfortunately, the mechanism to reach this ideal settlement, to recognize this new property right, is not in existence in the code of laws of our nation."

But it is! It's enshrined in the 14th Amendment to the Constitution, which states that no person shall be deprived of their property without due process of law. The Youngstown workers over these many, many years, like all other workers, have a property right in their jobs.

It would be as easy as pie to see this as not only just but perfectly logical if the judge himself were not beholden to other property rights, the rights of the bosses, while sanctimoniously shedding crocodile tears over the workers.

Of course, there should be local legislation to deal with this as well as federal legislation, and that's what prenotification is all about. But local laws are set up merely to implement from a legal point of view what already is and should be considered as the basic, organic law that supposedly rules the country--the Constitution.

Eminent domain

Eminent domain means the right of the government to take private property for public use, indeed, any use that the government sees fit. Every state in the union, including Hawaii and Alaska, has that right enacted into law. It is also sanctioned by the federal government, which has long used eminent domain to acquire land or other forms of private property for public use. Almost all of the states have some provision which gives the various units of the state--county, city or other municipality--the right to use eminent domain.

The method by which this is done is called a condemnation proceeding. It usually calls for a public hearing; after a certain period of time the city, state, county or federal government proceeds to take over the private property.

It's important to remember how the practice of eminent domain started. It began way back when the feudal monarchies were just establishing themselves and when they actually robbed the peasants of the land to establish their domain--the palace grounds and the royal estate. During the period of capitalist development, this power was taken over by the bourgeois state, but many provisions were made to ensure some form of compensation, which was left up to either a jury or the judicial process.

Condemnation proceedings are an everyday occurrence in the U.S. and the law journals carry regular notices of them. The importance of eminent domain to the workers has arisen in the light of the current epidemic of plant closings and threats from the employers which make job insecurity a daily worry. Workers in plants that have already been closed or partially dismantled, or are on the verge, have given consideration to the possibility of utilizing the stratagem of eminent domain as a means to take over the plants, equipment and facilities of the corporations in an effort to stop the barbarous vandalism these giant multinational corporations and big banks are pursuing.

It should be noted that not only the federal government but the state, city and municipal governments have a right to delegate their authority for the use of eminent domain to a nongovernmental body. The government contributes funds, that is, appropriates money for this authority and gives it the right to operate, sometimes almost autonomously.

One example is the construction of a bridge to connect two cities divided by a body of water. The bridge authority, whether instituted by two cities or two states, is authorized to build the bridge and often to collect the tolls. The same procedure is used in the building of a tunnel like New York City's Holland and Lincoln tunnels, both operated by the New York-New Jersey Port Authority.

The most famous example was the Tennessee Valley Authority (TVA), established during the Roosevelt administration. It was subsidized by the federal government and turned out to be a vast boon to the communities it served.

How does this process start? It doesn't usually originate with the government. Most often it's big businessmen, real estate developers and construction companies who present plans to the government to show how it can be done. The government then creates an authority, composed mostly of these very same people, and money is appropriated to run the project. Where there's a considerable degree of community awareness, which most of the time has been lacking, or where the labor movement has concerned itself, they have some input. This happens rarely, however.

Considering the magnitude of the havoc created by plant closures, a group of community and church leaders and activists from the steel areas met in the spring of 1985 in Homestead, Pennsylvania, for the purpose of using eminent domain for a workers' takeover. They took the idea of eminent domain from the Tri-State Conference on Steel which has been in existence for a number of years, and announced an effort to establish a Steel Valley Authority.

The city of Pittsburgh is said to have given $50,000 to help in the project. A number of officials in the tri-state area have given their approval to it. It includes mayors from cities in the three states of Pennsylvania, Ohio and West Virginia and some state representatives from the Pennsylvania legislature. The question is how to get this off the ground since it has already been in the discussion stage for a considerable period of time.

There is no question that the idea of a tri-state Steel Valley Authority (SVA) could take on considerable momentum. It already has a wide variety of community people and steel workers who have shown interest in the project. The United Steel Workers union (USWA) through some of its local leaders has shown considerable interest. The international thus far has given it minimal attention, but it could become involved to a much larger extent. The problem really is how to proceed from here. That's what most workers are concerned with--what next?

We have seen how the bosses, real estate developers, construction companies and bankers do it. They approach the government and the government delegates the authority to them and also gives them abundant funds to start whatever project is suggested. By giving a small donation, the city of Pittsburgh has done one thing. It has validated the legal existence of the SVA. This could be important depending on what is done next.

If it remains a study group or, worse yet, a means of diverting the interests of the workers in the area, which is apparently what the capitalist politicians and bosses in the tri-state area hope, then of course it's an exercise in futility, just as in the Youngstown case.

But there's a very important opportunity if the SVA begins to act in earnest. First, it must demand a considerable sum of money from the tri-state legislatures. Second, it can subpoena the books and records of the banks and companies and then project mass actions on the basis of the tri-state authority, supported by the unions--which must be the integral part, the most important component in the SVA.

Truly mass actions have to be planned with a view toward occupying the most sensitive facilities connected with the tri-state area, which has all these years lived on the sweat and blood of the workers and is now contemptuously disregarding their plight. This involves not merely the occupation of the idle plants threatened with foreclosure but also the banks, particularly the Mellon bank and its various instrumentalities.

In an earlier period the groups involved carried out sporadic activities, demonstrations and self-sacrifice, including imprisonment. The problem was that all this had not yet attained mass proportions. This time around, from a strictly objective point of view, it is possible to renew the process on a larger mass scale and to claim full legality.

The very existence of the SVA and the fact that a central city, the city of Pittsburgh, recognized its existence, provides a significant legal means to perfect the whole process of eminent domain. From here on the actual utilizing of eminent domain depends on mobilizing the broader sections of the steel workers and their communities for the purposes of a takeover of not only the idled plants but of such facilities as banking, insurance companies and their satellite corporate entities.

Another conference is definitely needed, but this time an attempt must be made to broaden it into a rank-and-file movement of workers in the tri-state area. This conference should detail the next concrete steps to be taken, which involve the mass of the workers and all segments of the communities in the affected area. The masses must be made confident that this time around they have a legal right to do what needs to be done to perfect the right of eminent domain.

Actually doing it lays the basis for legal ratification in custom and practice, as we said earlier. All this could be used as a stimulus to arouse the mass movement to take the necessary measures. If bankers, real estate developers and construction companies can draw up their own plans for their projects, come to the city or state and get it to ratify their plan by creating an authority, why can't the workers in the distressed communities get the same treatment?

Surely if the bankers, real estate developers and construction companies felt it was feasible to construct a new bullet rail line such as the ones now in vogue in Japan and Europe, the governments would jump at the opportunity.

Well, the workers have their own plan to reopen the plants and do whatever else is necessary for the survival of the tri-state steel communities. This requires funds of a massive character, which must not be held up by delaying tactics requiring that the plan be submitted for study to demonstrate its feasibility and profitability. No, what mass struggle can do is show that the plans are not only feasible and practical but are based on urgent necessity.


What are ESOPs? ESOPs--Employee Stock Ownership Plans--are a form of veiled ownership by management where nominal ownership is by the workers. A study by Business Week2 showed that in early 1985 there were already 7,000 companies which had enrolled nearly 10 million workers into ESOPs. In the 1970s, there were fewer than half a million workers in ESOPs. There is no breakdown available on the percentage of union as against non-union workers. Most are in unorganized plants, but a considerable number are covered by union contracts.

ESOPs pose a problem of considerable importance to the trade union movement. Not only are they one of the crudest forms of class collaboration, but they also have a tendency to eventually swallow up the trade unions and deprive them of their independence.

The idea of employee stock ownership is not a new one. It began to flourish in the late 1920s and was fueled by the wild stock market speculation of that period. The idea at that time was for large corporations to put on promotion schemes for workers to buy company stock. However, what was considered a strong current for workers to become part "owners" of management came to an abrupt end with the great stock market crash of October 1929. The embryo ESOP movement collapsed, as did thousands of corporations, in the wake of the great capitalist crisis. It didn't get revived until the early 1970s.

During the great CIO upsurge of the labor movement in the 1930s such stock schemes were almost always disregarded and scorned by the trade unions. But, as can be seen, the capitalist crisis which began in 1979 and has continued for many industries up until this writing has revived them to an alarming extent.

The problem for the union is a two-fold one. First, how does the union devise ways and means to resist them where possible in the face of what is sometimes great eagerness on the part of the workers, who hope to save their jobs? The other problem is how to protect the workers' investment in the many plants and industries where ESOPs have already been established for some period of time and see to it that management does not plunder and pillage the savings of the workers by various stock schemes which dilute the workers' share in the company.

The purpose of any and all stockholding schemes is to tie the workers down to management's fundamental interests, to win loyalty to the company as against their own interests. In this connection it should be remembered that stock manipulation fraud is a long-time characteristic of big business and especially the huge multinational corporations. No corporation, however big, is free from stock fluctuations and deliberate attempts to water down classes of stock in order to liquidate the interests of the stockholders.

The usual scheme by which an ESOP is put across is very much aided and assisted by a series of laws enacted by Congress beginning as long ago as 1974. Sixteen laws in all were passed, mostly the result of big business lobbying. The most important one, passed in 1984, gives the banks some very luscious tax incentives pushed through by the Reagan administration along with other tax breaks for big business and the banks.

The way these things work is as follows: A company suddenly demands huge concessions from the workers, claiming bad business conditions. Layoffs are threatened and finally management seemingly throws up its hands and says the company is on the brink of failure. It suggests that the workers should now become the owners of the plant as a result of accepting an Employee Stock Ownership Plan.

Usually the plan does not give the workers the right to vote their stock but, depending upon the situation, does give them a director or two or, as in the case of Hyatt-Clark Industries, where the workers are represented by the UAW, three directors. The plan is worked out by expert ESOP consultants who have long worked on these things, especially the company headed by Louis O. Kelso, a San Francisco investment banking firm.

What happens then? The company often claims that it's got a cash-flow crisis and proceeds to get a bank loan. Banks, which are usually reluctant to advance money to companies in danger, are eager in the case of ESOPs. That's because they get special privileges and can write off as much as 50% of the interest as well as the loan, and other complicated privileges. The bank passes the money to ESOP. Then ESOP passes the loan to the company.

The company in return issues the stock to ESOP and it is then held in trust for the workers, but is not given to them directly. It is held in their account.

As we said earlier, corporate manipulation and fraud is a long-time practice of big business to which the Securities and Exchange Commission, especially under the Reaganites (assuming that the company is one obligated to register with the SEC), frequently "closes its eyes."

How have things worked out thus far? There are two principal examples which should be borne in mind. Hyatt-Clark Industries, previously mentioned, and the Dan River textile plant in Danville, Va. Before any ESOP plan, Dan River had 12,000 workers. Over a period of time this has now been reduced to about 8,000. The workers as a result of a campaign of fear and the constant propaganda about imports were persuaded not only to make considerable wage concessions but also to trade in their pension plan rights in favor of the ESOP.

The company thereafter sold its three Greenville plants and the workers had to learn about it from the newspapers. In addition the company closed another plant under an ESOP plan and buried the money from the workers' earnings in an account operated by trustees, who are usually appointed by management. (In this case, the trustee is the United Virginia Bank.) And the trustees of these ESOP accounts usually vote with management on the board of directors.

In the case of the Hyatt-Clark Industries UAW local, the union had three representatives on the board of directors, which included former UAW President Douglas Fraser. After considerable wage and benefit concessions made by the union, the company did show a profit. The company then decided that the $600,000 profit should go to purchase new machinery for modernization. The workers wanted it to be added to their wages. The company directors outvoted the union 9-to-1, which outraged the workers. After a series of occasional slowdowns the union agreed to cutbacks and layoffs instead. The overall result was concessions by the union which strengthened the hold of management.

As of this writing, the Hyatt company has been sold off to an Oklahoma company and Owen Bieber, the president of the UAW, has assured the new owners that the union will make further concessions.

There are cases where, as a result of threats of shutdown and bankruptcy, union or non-union workers have accepted very far-reaching concessions resulting in steep cuts in wages and benefits in exchange for two or three directors. This happened in the airline industry at Eastern and TWA, which used the strikebreaking pushed through by Continental Airlines as a weapon of intimidation. A study remains to be made on how many other workers have been pushed back in this way.

The entire experience of ESOPs, and there are a great many varieties of them, is that they not only leave the workers with a lowered income but are attempts to tie the workers securely to the chariot wheels of class collaboration. With some of the large oil and other multinationals intent on making steep cuts in the workforce and depriving the workers of benefits, they deliberately instigate a campaign of fear that the companies will be taken over by "raiders," such men as Carl Icahn, T. Boone Pickens and others. These are cases where ESOPs have been in progress for a period of time, such as at Phillips Petroleum, National Can Corporation and others.

In Weirton Steel, an old union-busting company which formed a so-called independent company union many years ago, many concessions have been made and the company has eked out an existence only because of the steep concessions made by the workers, who have no real rights over management of the company.

In the Phillips Petroleum case, the management had promoted one of the most sophisticated fear campaigns among the workers about a piratical takeover by outside interests. It virtually mobilized the employees in entire towns where the company had locations behind its defensive strategy to ward off a takeover, which would have allegedly lost many jobs for the workers.

In the end, however, the management made a secret deal with Icahn; then the company proceeded with the layoffs and cutbacks, including of salaried staff people as well. This also happened in National Can. And at Dan River, the company also put up Icahn as the great danger who was threatening a takeover. It then of course made a deal which resulted in more concessions.

The same thing happened with CBS and Ted Turner. CBS launched a campaign to line up the workers on its side against this extreme rightwinger who threatened free speech, but once the takeover threat from Turner was over, it proceeded to lay off hundreds of workers.

What workers can do about existing ESOPs

In industries and plants where ESOPs already prevail, the union's position should be first, that on the expiration of the contract, ESOP accounts should be converted into cash to be distributed to the workers in the form of wage increases. Where this proves impossible, the union should demand that there be open board meetings, and that the ESOP trust account be run by union-appointed administrators. If the union has a vote on the board, there should be prior consultation with the union and membership, and where decisions are made they should be ratified by the union membership. Local unions should have their constitutions amended in such a way as to make the ESOPs and ESOP management subject to union control.

As against ESOPs, where the workers feel that a strike may be ineffective because of the deterioration of the industry as a whole, they should fight for workers' control. Workers' control is not a permanent or stable form of struggle, given the nature of the capitalist system. However, it is superior to the ESOPs as a transitional form in the overall class struggle against the bosses. In the first place, it makes all decisions regarding operations and control only in consultation with and by consent of the workers. Unlike ESOPs, it does not put financial control in the hands of a bogus group of management-appointed or bank-controlled supervisors who in effect make decisions without any vote of the workers.

Workers' control was instituted in some of the European countries in the period immediately after the Second World War and made significant gains in West Germany, some areas of Belgium, France and other countries. But in the absence of the perspective of a socialist transformation they gradually gave way to greater and greater management control. However, as in the case of Sweden, they are still far superior to anything that the ESOPs have accomplished in the U.S. In Europe, to the extent that workers' control was instituted, it was a means of elevating the workers' interests within the framework of the capitalist system. The ESOPs here have been mostly a form of attacking the workers' interests.

ESOPs and the Great Crash

There are any number of bourgeois economists who have drawn parallels between the present speculative surge in the stock market and the one which touched off the great economic collapse of October 1929. Financial news writers in particular have drawn attention to the fact that the widely heralded period of capitalist prosperity in the late 1920s was characterized by a growing agricultural crisis which sent grain and other agricultural commodities slumping to lower and lower levels. At the same time the apologists from bourgeois academia were still singing praises to the wonders of the free enterprise system and how well it was performing.

What is of particular interest now is that an anti-labor offensive was also in progress during that period. It was little noticed in the merry celebrations of the capitalist class over their growing prosperity.

An element of exceptional importance in relation to the present situation was the big drive to get the workers to purchase corporate stock and also increasing pressure on the workers to get into various employee stock ownership plans. Among those pushing hardest from bourgeois academia during the booming 1920s was Thomas Nixon Carver, a professor of political economy at Harvard. He wrote a widely publicized book at the time with the attractive title of The Present Economic Revolution in the United States.

Carver was lyrical about the developing period and vigorously pushed the stock ownership idea. Louis Kelso and his collaborators of today are really a sort of 1980 version of Carver, who at that time wrote, "The only economic revolution now under way is going on in the United States. It is a revolution that is to wipe out the distinction between laborers and capitalists by making laborers their own capitalists and by compelling the capitalists to become laborers of one kind or another.

"There are at least three kinds of evidence that indicate roughly the extent to which laborers are becoming capitalists. First the rapid growth of savings deposits; second the investment by laborers in the shares of corporations; third the growth of labor banks. The saving power of American working men is so great that if they would save and carefully invest their savings, in 10 years they would be one of the dominating financial powers of the world."3

As everyone now knows, the Great Crash which followed wiped out many of the stock flotations held by workers and even more by middle class elements. It brought on not 10 years of dominating financial power by the workers but a 10-year worldwide capitalist recession which was only diverted by the gathering momentum of the Second World War.

There were also attempts during the 1920s to draw elements of the trade union movement into the organization of labor banks. The economic collapse virtually wiped them all out. Some, such as the Brotherhood Holding Company of the Brotherhood of Locomotive Engineers, had made huge investments and collapsed even before the capitalist economic crisis got underway.

It is well to bear all this in mind at a time when millions of workers have part of their wages in stock ownership, a variety of private pension funds and other methods of deferred wages. While a good many of these are supposed to be guaranteed by the government, pension funds and all kinds of life insurance plans by municipalities and states and even the federal government have yet to be tested in the event of an economic collapse.

Once a worker's paycheck is deposited in the bank, it enters into the mainstream of the flow of capital formation. It is true that the capitalist class as a whole controls it, but on the other hand it is the blind forces of the capitalist market which motivate the capitalists in their insatiable drive for profits.

Every effort has to be made by the trade unions, indeed by all progressive organizations, to preserve and secure the savings of the workers. These are prey to being pillaged, plundered or defrauded by an endless variety of schemes concocted by the growing multitude of labor consultants hired by the bosses whose aim is to tie the independent class interests of the workers to that of the avaricious and predatory interests of the giant corporations and banks. The only certain power of the working class and particularly of the trade union movement lies not in collaboration with the bosses but in independent organization and class struggle against the bosses.

Vigilance committees

In the wee hours of December 11, 1985, the General Electric Company (GE) acquired the Radio Corporation of America (RCA), owner of the NBC television network. It is said to be the biggest non-oil merger or acquisition in history, worth $6.28 billion.

The merger was carried out in secret by a meeting of the board of directors for both companies. There are many facets to this giant merger of two multinational defense contractors, but what ought to interest most of the workers at these two companies is that none of the several strong unions which represent them were in any way consulted or even notified. It should also be noted that the stockholders were not informed either, except those big ones who were on the inside track and close to the banks which engineered the deal. This merger or acquisition, whichever you call it, involved no less than 300,000 workers at GE and 106,000 at RCA.4 This deal concerned them.

These more than 400,000 workers created the wealth of these two industrial giants, counted in the billions. Yet the joint statement issued by the two companies announced that they now had "an excellent strategic opportunity for both companies that will help their competitiveness in world markets" and that they would "successfully compete now with anyone, anywhere, in every market we serve."

This meant first embarking on a program to cut down on duplication and reduce costs, which in the final analysis means cutting labor time and eliminating thousands of jobs. Both these companies have been doing it with a vengeance since 1978.

There have been no big mergers in the recent wave of mergers and acquisitions which did not end up with vast cutbacks and layoffs. That's their whole purpose. When a giant merger like this takes place it means that these corporate monsters have targeted the workers for job elimination. None of this, by the way, was mentioned in the announcement by GE and RCA. But the layoffs will follow as night follows day.

Both of these companies also have had experience in spinoffs or breakups. The two seem to be contradictory but are not. For instance, when RCA sold off Hertz Rent-A-Car and the CIT financial corporation, layoffs in the sold-off divisions followed. When GE sold off Utah International, the same thing happened. The purpose of mergers as well as spinoffs and breakups is job elimination. That's where the savings for the bosses come in. For them, raising productivity means cutting down on labor time.

This is what all the predatory struggles among the giant corporations are all about. They concern how to get rid of as many workers as possible from the payrolls in order to line the pockets of the top corporate bureaucracy and the bankers.

Most of these mergers and acquisitions are carried out in secrecy. While one of the purposes of secrecy is to guard against competitors as well as stockholders, the other is to keep the workers in the dark. When a rumor starts regarding a merger or acquisition, workers become more and more worried about their jobs, especially since they receive no information about what will happen to them once these industrial combinations or divisions take effect.

What must be done in this connection? Vigilance committees have to be established among the workers to monitor the situation long before these acquisitions, mergers and resulting plant shut-downs begin. These vigilance committees should act as intelligence groupings for the security of the jobs of all workers. Of course, where possible these committees need to be established not only by local union committees but by international unions on an industry-wide basis. Most people would be surprised how easy it is for workers to get the necessary information. Some information can be obtained from the press, where it is usually hidden in the financial pages. But there are other ways.

Working cooperatively, the unions and production workers have access to clerical help and maintenance workers in the executive offices of the corporation, even in the board rooms where the corporate officers meet. It is well known that these giant corporations have a network of spies of their own who eavesdrop on workers, even in the restrooms. Is that not so?

Well, workers have the right to do the same thing. It is one thing when a union is large and strong enough to be able to get expert financial advice, analyze the annual reports of the corporations and follow the stock of the individual corporation on the stock exchange. That shifts the task away from the workers to more specialized people. But workers have a way of finding the information through workers.

Remember the secret internal memo in which General Motors' plans for cutting back the workforce were spelled out in some detail? Well, it was obtained because a clerical worker brought it to the attention of the union. Telephone conversations and internal memos can and often do get into the hands of the union leadership. These are sometimes derelict in making them immediately available to the union membership or the appropriate committee, which in this case should be the vigilance committee. (Barry Bluestone and Bennett Harrison in their book5 refer to reconnaissance committees, whose purpose is limited to research, while we are suggesting worker intelligence committees to counteract management's spy network.)

What is needed is to apply the same strategy unions use at the beginning of every strike when the possibility of scabbing exists. The company has its informers and the strike committee knows some unfortunate workers may be susceptible to scabbing. Immediately upon calling the strike, a vigilance committee aware of this potential establishes a telephone tree where contact is immediately made with those susceptible to boss psychology.

Also, before a strike takes place, the vigilance committee finds out the list of suppliers, customers, banking connections, everything. Its function is to watch out for all developments and present reports to the union and the public. All this should be in addition to what the union regularly does by way of getting the public literature of the company and analyzing it.

All these measures have become more and more vital as the predatory corporations and their lust for super-profits relentlessly drive the workers and even themselves into a blind alley.

Hormel strike and the AFL-CIO leadership

Beginning on August 17, 1985, the 1,500 members of United Food and Commercial Workers Local P-9 at the Hormel company in Austin, Minnesota, went on strike against drastic wage cuts and for improved medical benefits, compensation for on-the-job injuries, seniority and grievance and arbitration procedures. In October 1984, the company had unilaterally reduced wages from $10.69 an hour to $8.25, although through arbitration this was raised to $9.25 by the time the strike was forced on the union.

Despite the fact that the international union sanctioned the strike, the local union was subjected to considerable attack by the international and the top officialdom of the AFL-CIO. William H. Wynn, president of the United Food and Commercial Workers, attacked the local for its "suicidal strategy," and issued a seven-page statement smearing the strike to the AFL-CIO Executive Board meeting in Bal Harbour, Florida, on February 17, 1986. Lane Kirkland, the president of the AFL-CIO, gave his full endorsement to this statement.

At the same time, the local was continuing its strike under the guns of the National Guard, which had been called out by Democratic Governor Rudy Perpich. By the middle of February the company was claiming it had resumed production with scabs brought in by the force of the National Guard and the courts, and was having strike leaders arrested for picketing the plant.

There may be dozens of other strikes that are similarly bitter and protracted but are not publicized. It's not easy to tabulate them since the Reagan administration has ceased taking note of such events. The Bureau of Labor Statistics no longer counts strikes which involve less than a thousand workers.

The bitterness and duration of the Hormel strike, important as they are, don't account for its special significance. The fundamental reason why this strike attained special importance and drew the attention and support of so many rank-and-file workers from coast to coast is that it became the symbol of resistance to the steady, undeviating line of concessions to the bosses by most of the AFL-CIO trade union hierarchy.

Enormous sympathy was accumulated by the local leadership precisely because it had taken on a task which millions of workers felt was necessary and indispensable for their future welfare. The strike became a veritable struggle between capital and labor, a test of strength between the working class and the capitalist class, which was still going on as of this writing.

However, there has been no real test of strength between the organized working class with all its millions of followers and the capitalist class. The potentialities of the struggle of the two class camps have not been brought forward.

Hormel is at best a medium-sized company among the giant corporations of the U.S. Whatever its financial connections may be, as an economic and industrial unit it can count its assets in the millions, or at the most a couple of billion. However, it is by no means of the stature of General Motors, Ford, or U.S. Steel, which count their assets in the tens and hundreds of billions.

The organized labor movement as a whole is the product of struggles which have successfully taken on all of these major corporations and accumulated vast experience, resources and a following of millions upon millions of workers, both organized and unorganized. While the capitalist press and media as usual may have been solidly lined up on the side of the company, in the eventuality of a real test between labor and capital, between the workers and the bosses, it remains to be seen whether the ruling class would go even a short distance to support such a middle-sized minion of high finance and big industry.

The ruling class is monolithic in its general advocacy of the anti-labor offensive. It would be another matter if, in an actual struggle, the labor movement dared to make a test case. The most advanced and militant sections of the trade union movement generously supported the strike, but mainly with moral support plus limited financial resources. In addition, many hundreds demonstrated militant solidarity by traveling many miles to help picket in sub-zero weather.

Important and invaluable as this support was, it did not constitute a test of strength as against big capital. Instead of roundly denouncing the strike, what the AFL-CIO should have done was to show that they regarded the Hormel strike as a test of their collective strength and of their willingness and readiness to engage the company in a genuine contest. That would have turned around the whole situation in no time.

The ruling class in the U.S. would be terrified at the prospect of a breakup of class peace between the workers and the bosses at a time it is faced with unprecedented revolutionary struggles around the world.

The only thing the U.S. ruling class has going for it, in light of the international situation, is that at home it has been able to maintain class peace, the submission of the working class to the extortionate demands of the bosses at a crucial time in its history.

The AFL-CIO labor bureaucracy, in its aversion to any test of strength, reflects the fear and apprehensions not of the workers but of the ruling class. It lacks a true measure of the potential political and social strength of the working class in the crucible of struggle.

This is the crudest and narrowest form of what Lenin called economism--conducting a trade union struggle or any kind of localized struggle on the basis of narrow economic conceptions when the battle is in reality of a profoundly political character. The Hormel company, like dozens of others throughout the land, giant corporations as well as smallfry, joined the pack and demanded onerous concessions precisely because the labor hierarchy was more responsive to the demands and fears of the ruling class than to the class interests of the workers.

Of course, in the initial stages of every capitalist recession the objective situation is unfavorable for the workers. They have to take a defensive posture while the capitalist class has the initiative and can take the offensive. But the whole historical experience of the working class shows that every prolonged anti-labor offensive was eventually followed by a labor upsurge. The time came when the workers did say, "Enough!" Such a time is now long overdue.

The head of the UAW, Owen Bieber, speaking at a legislative conference of the UAW in Washington, D.C., on January 16, 1986, characterized the situation prevailing in the country and the labor movement as "the strongest conservative reaction in our lifetime." While this may be true, it is a general political trend generated by the ruling class. Bieber and others who politically lean in a social-democratic direction are using this as a rationalization for a policy of concessions to the bosses and swimming with the tide, rather than bucking it or finding ways and means to respond to the anti-labor offensive. That's the only way to overcome the political reaction.

It's appropriate to recall an historic example of a test of strength between both classes that the workers won without firing a shot. After the 1937 victory of the General Motors workers as a result of the sit-down strike and the occupation of the plants by the workers, there was an unprecedented outcry from the capitalist press condemning Michigan Governor Frank Murphy, who had been the mediator between the UAW committee and the company's representative. They screamed about anarchy, chaos and the threatened revolution and warned John L. Lewis and all other labor leaders of what would befall them if such a struggle continued.

At that time the Steel Workers Organizing Committee (SWOC) headed by Philip Murray, John Brophy, Van A. Bittner, Bill Mitch and David McDonald, all working under the direction of John L. Lewis, were preparing for a test of strength in the most difficult and at that time strongest anti-labor and unorganized fortress of the capitalist class. The steel strike of 1919 had been crushed with many beatings, arrests, many families ruined and their homes lost.

Even in the ranks of labor, many felt that U.S. Steel was mobilizing not only the capitalist media but the courts and the state's repressive forces to do it again if the SWOC leaders were to seriously embark on an effort to organize and win. There were many forebodings and fears, even in the ranks of militant workers, but at the same time they felt confident, not only because of the victory over General Motors but because they knew SWOC leaders could draw on the strength of labor in the event of a test between the seemingly omnipotent U.S. Steel Corporation and the organizing committee.

It would have been a real test of strength, because the leaders were ready to do what was necessary in order to win. But the test was never carried to its ultimate conclusion. Why?

Because this all-powerful, omnipotent corporation, supported by the biggest banks, capitulated without a struggle. "(T)he largest steel company in the world surrendered. The foe that the CIO had thought would be the toughest succumbed without a struggle. By a mere show of strength the SWOC had won a 10% wage increase, a 40-hour week and union recognition for thousands of steel workers employed by United States Steel. It would be difficult to say who was most surprised at U.S. Steel's capitulation, the workers or the tycoons. . . ."6

It is precisely such preparation for a test of strength that is lacking in the labor movement today. The AFL-CIO let the struggle be carried on the shoulders of one local, with the widespread moral support of many other workers. It may have feared a generalized struggle between capital and labor, but the capitalist class itself is not ready or willing to undergo such a test. The most valuable asset it has at the moment, class peace in the midst of a revolutionary international situation, it would not surrender in the interests of just one of a multitude of huge companies.

If U.S. Steel, backed by the mightiest bankers of the time, J.P. Morgan & Company, could calculate that in its own interests it was the better part of wisdom to sign up with the SWOC, there's no valid reason why a similar evaluation would not be made this time as well. At any rate, should the ruling class, not just Hormel, alone decide to challenge the organized labor movement in a general contest between capital and labor, it would be a thousand times preferable to go through the experience of a great enriching struggle than to endure an abject, divisive, humiliating policy of surrender which history will not forget and a resurgent working class will condemn and pillory.

Inner struggles in the ruling class

Everywhere and in almost any period there are contradictory interests not only among the various capitalist states but among the various capitalist industries, as well as conflicts within each industry. Capitalist contradictions tear apart even the most giant corporations. Indeed, there is scarcely a huge conglomerate or multinational corporation that is not characterized by the sharpest antagonisms in the struggle for profit.

Take, for instance, some of the terminology that is utilized in the inner struggles for control of their corporations. The last decade has brought forth such terms as "poison pill," which applies when one group of capitalists tries to ward off a takeover by another. The idea behind this is that the group making the offer for the takeover looks very attractive, but in reality is poison and full of booby-traps. It may intervene to ruin a takeover attempt by hostile forces, but that does not necessarily make it friendly, meaning that it would offer more profitable terms to reorganize or merge.

Or take their attitude to bankers, who are frequently referred to not in hallowed terms like "advisers," but as "undertakers." Those who come out on top in any of these struggles are said to have engineered a "killing."

Thus their relationships are anything but cooperative and harmonious. They may demand harmony and cooperation from the workers, but among themselves they are torn by the most destructive forms of inner struggle. All this is due to the driving force of capitalist competition, which in turn of course is based on the chase for super-profits.

Taking advantage of the inner struggles inside management or among different cliques in the corporation or ruling class is of course very important. Vital as it is, however, to take cognizance of the antagonisms between various cliques and in management, especially among the giant corporations, it is utterly false to paint them as good guys and bad guys and try to construct a labor relations policy based on these inner struggles.

The main and fundamental lever of the struggle at all times is the unity and solidarity of the workers. The inner antagonisms of the ruling class of even a small plant or corporation can be utilized as an auxiliary weapon but that should not interfere with organizing and mobilizing the workers for struggle.


1. Quoted in Bluestone and Harrison, op. cit., p. 254.

2. Business Week, April 15, 1985

3. Quoted in Foster, William Z., American Trade Unionism: Principles, Organization, Strategy, International Publishers (New York, 1974).

4. Wall Street Journal, Dec. 12, 1985.

5. Bluestone and Harrison, op. cit.

6. Boyer, Richard. O. and Herbert M. Morais, Labor's Untold Story, United Electrical, Radio & Machine Workers of America (UE) (New York, 1955).

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