Is Labor Headed For Splitsville?

Unless Sweeney goes, the AFL-CIO could break up into two federations

Fifty years after the American Federation of Labor merged with the Congress of Industrial Organizations, the U.S. labor movement may be heading for a breakup. Five unions that want to unseat AFL-CIO President John J. Sweeney are considering leaving the federation should he win reelection when his term expires in July, BusinessWeek has learned. Those unions, which account for roughly 40% of AFL-CIO membership, include the Service Employees, the Teamsters, the Food & Commercial Workers, the Laborers, and UNITE HERE, the needletrades group.

The dissidents had intended to back John W. Wilhelm, No. 2 at UNITE HERE, to run against Sweeney. But after failing to sway other union leaders, they abandoned a plan to announce his candidacy at a Teamsters meeting in Las Vegas the week of May 10. Instead, on May 16, the group released a platform to reform the AFL-CIO in hopes of winning over a few key leaders among the other 53 unions in the federation.

Will the five really leave? As with any negotiations, there's an element of bluff in such threats. Ongoing efforts at compromise -- including the search for a new president both sides can agree on -- could forestall a showdown in July. Sweeney has held one-on-one discussions with three of his opponents in recent weeks and has asked all five to meet with them as a group. But their leaders may not be able to back down once they fire up their membership against him. As the camps lock into opposition, a breakup of the AFL-CIO into two labor federations is more likely, say leaders on both sides. "It's clearly not our desire to leave the AFL-CIO, but it's a subject we feel we need to consider," says UNITE HERE President Bruce S. Raynor.

What's behind the momentum to defect? The five unions have complained for several years that the rebirth Sweeney sought for labor when he took power in 1995 has stalled. Despite early bold moves on his part, union membership has continued to sink and now represents less than 10% of the private-sector workforce. His critics think fresh leadership is needed to prod unions into redoubling recruitment efforts. While Sweeney agrees with their goals, Wilhelm & Co. want the AFL-CIO to play a larger role in membership drives. "Sweeney tried to change labor but ran up against a lack of political will [among union leaders] and what became his own lack of will to change it," charges Andrew L. Stern, president of Service Employees International, labor's largest and fastest-growing union. "Now we need to build something stronger."

A splintered labor movement would be a boon to Corporate America and the GOP. While unions continue to shrink as a share of the U.S. workforce, they still sign up hundreds of thousands of new members every year. Warring camps could undercut those efforts if unions raid each other for members, as officials on both sides threaten to do. A breakup would also undermine labor's vaunted political machine. Its ability to bring millions of union voters to the polls in recent elections has been one of Sweeney's chief successes. Already the unhappy unions have demanded that the AFL-CIO remove their members from its master list of names, which has been crucial to labor's mammoth get-out-the-vote election drives. Since labor typically swings Democratic, a division of the house would probably weaken opposition to President George W. Bush and other Republicans.

The protesters' move toward a scorched-earth strategy stems from their failure to get a majority of unions behind them. For several months they have tried to win over American Federation of Teachers President Edward J. McElroy, a personal friend of UNITE HERE's Wilhelm. They also hoped to bring aboard United Auto Workers President Ronald A. Gettelfinger, who has long been unhappy with the AFL-CIO. But when both men made it clear in early May that they weren't ready to abandon Sweeney, Wilhelm and his colleagues decided that just announcing his candidacy wouldn't change anyone's mind.

"A NAKED THREAT"

The problem is that threats to pull out may only prompt Sweeney supporters to dig in more fiercely. While no one thinks that Sweeney has reversed labor's fortunes, his allies back a plan he announced in April to refocus on recruitment. Some labor leaders also remain loyal to Sweeney personally and believe it would be bad for labor as an institution to unseat its chief. Talk of forming a new federation "is a naked threat; are we going to throw Sweeney over the side to prevent this blackmail?" demands Gerald W. McEntee, president of the American Federation of State, County & Municipal Employees and a key Sweeney ally.

The unhappiness with Sweeney isn't new. Starting last summer, Stern has threatened to go his own way unless the federation undergoes a major overhaul. More recently he has broadened his demands to include Sweeney's departure. Now his fellow rebels are moving in the same direction. In March, UNITE HERE's executive board authorized a review of leaving the AFL-CIO, and its leadership has had follow-up meetings since then to consider the options, Raynor says.

The Teamsters are also looking into how the union would operate outside the AFL-CIO, insiders say. Many of its officials harbor ill will toward AFL-CIO Secretary-Treasurer Richard L. Trumka for opposing James P. Hoffa's election as Teamsters president. Hoffa so far has held off public talk about leaving the AFL-CIO, largely because he worries his executive board wouldn't want to wait until July to get out. "If Hoffa raised the issue, he'd get run over going out the door," says one Teamsters insider. The United Food & Commercial Workers, too, could leave if Sweeney wins reelection, officials say. Its bargaining strength in major industries is closely linked to the Teamsters, which negotiates with many of the same employers. So if Hoffa pulls out of the AFL-CIO, the UFCW probably would, too.

The Laborers union, which represents many construction workers, is the furthest from backing out. Still, it is deep in debate over whether to quit the AFL-CIO's Building & Construction Trades Dept. because of Sweeney's demand that it expel the International Brotherhood of Carpenters. The Carpenters have long shared Stern and the others' negative views of Sweeney's leadership and were the first to quit the AFL-CIO over the issue back in 2001. Typically, the carpenters' union controls construction labor contracts that the Laborers need to get work. If the Laborers withdraw from the Building Trades, there would be less keeping them in the AFL-CIO, officials say.

The question is whether the dissidents will make good on their threat to start a rival labor federation should they lose at the AFL-CIO's quadrennial convention in July. Some Sweeney backers think a lot of the talk is posturing. But the more the critics threaten to leave, the more difficult it will be for them to change course. Stern, for one, says he is ready to follow through and walk out if need be. "The worst thing would be for us to huff and puff, and then if Sweeney is reelected with little change, to say, 'Oh well, let's go back to work,"' he says. Unless some middle ground can be found, the AFL-CIO's 50th anniversary may also be its death knell.

By Aaron Bernstein in Washington

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