Breath Of Fire Or Last Gasp?

For years, the United Auto Workers took the lead in contract talks with Caterpillar Inc. The International Association of Machinists, which represents a Joliet (Ill.) Cat plant, would copy the UAW settlement. But in 1991, the Machinists opened talks first and signed a contract on terms the UAW rejected. The auto workers went on strike and, partly because Cat's costs were lower under the Machinists' contract, it shifted some production to Joliet.

Four years later, the UAW is still steaming over that divide-and-conquer tactic. Indeed, such company ploys were one driving force behind the stunning July 27 merger announcement by three of the nation's largest industrial unions--the UAW, Machinists, and United Steelworkers. Their goal in creating a 2 million-member mega-union by 2000: to span multiple industries, gain a presence in every region, and add to their clout in bargaining, organizing, and political lobbying. "Corporations should sit up and take notice," says Machinists President George J. Kourpias.

OVERDUE. Corporate America isn't quaking in its boots yet. Spokesmen for General Motors, Ford, and USAir say it's too early to assess the impact of the merger. Other companies say the change is no big deal. "It won't mean much at the bargaining table," says a steel exec.

Critics see the merger as the last gasp of three dinosaurs, but it could help labor fend off extinction. And it's one more sign of an overdue shakeup in the labor movement. As Kourpias, UAW President Stephen Yokich, and Steelworkers chief George Becker were plotting their alliance, renegade labor leaders were mounting a challenge to AFL-CIO President Lane Kirkland, who resigned on Aug. 1. "There's no turning back," says Service Employees International Union President John J. Sweeney, who will run against new AFL-CIO President Thomas R. Donahue, Kirkland's No.2, this fall. "Labor is taking a closer look at itself to figure out how to be more effective."

The merger likely will speed consolidation among other unions, whittling them down to 20 from 100--much like the mega-unions dominant in Western Europe. The two textile unions recently merged, and the two teachers unions are talking. Canadian auto workers, steelworkers, and machinists say they may do their own merger--and eventually meld with the U.S. behemoth.

Labor experts believe the new giant could have more leverage in negotiating companywide or industrywide contracts. Currently, the three unions often represent different plants of the same company and different companies in the same industries.

By pooling resources, the three unions also will have more money to organize. Richard A. Bensinger, executive director of the AFL-CIO's Organizing Institute, says a consolidated union with locals across the country and a huge concentration in many cities will be more effective in organizing. Rather than focus on individual sites, a mega-union could sign up all the plants of a company. Or it could go after nonunion auto-parts plants or new minimills in a region. "This type of synergy could really change the power relationships in nonunion shops," Bensinger says.

TOUGH NUT. But first, the unions have to pull off the merger--no sure thing. One big stumbling block is the unions' different structures. For instance, while UAW and Steelworkers' headquarters control negotiations, Machinists' regional directors have a lot of power. Employers will resist giving wage and benefit parity to all workers in a company --a likely goal of the merged union.

Consolidating locals will be touchy, too. Companies can fire managers in a merger, but union members choose their local leaders. And what about all those midlevel officials eyeing top jobs? Says Dave Yettaw, president of UAW Local 599 in Flint, Mich.: "Not only do they have to climb up the ladder at the UAW, but they have to compete with the up-and-comers at the other unions."

Still, there's nothing like a little desperation to get the juices flowing. For the moment, at least, labor leaders say they feel something they haven't felt for a long time: hope.


The gains labor expects from merging organizations

ORGANIZING Stop the waste of resources and energy expended when the three unions fight each other during membership drives. That should help their efforts to organize more high-tech industries.

BARGAINING Add negotiating muscle, especially at large companies that now deal with multiple unions.

LOBBYING Become a major political force, with a super-PAC and the capacity to organize massive grassroots campaigns.

INTERNATIONAL EXPANSION More effectively coordinate with Mexican, Asian, and other overseas unions to organize offshore U.S. plants.