War Breaks Out in ‘Hostile Textile Country’-Part II: The Cat’s Out of the Bag
War Stories By Phil Cohen
During the shutdown period, I received a Cone Mills document filed in court for the purpose of justifying bankruptcy despite a recent return to profitability, explaining its primary liabilities:
A huge debt and huge dividend payouts to class A shareholders are bleeding the company. Interest rates and preferred dividends are exorbitant, and prevent the company from paying off $145 million in debts.
There was no reference to labor costs.
The parties took their respective seats at the bargaining table on July 17. Following a few minutes of polite banter about everyone’s vacation, Stahle ceremoniously announced that the company was prepared to offer its economic proposal.
“The practice of paying double-time on Sundays is no longer practical or competitive,” he began. “We need to fall in line with what remains of the denim business.” The HR director then itemized three significant changes already in force at Rutherford:
Reducing double-time on Sunday to the standard time-and-a-half
Eliminating Wednesday/Saturday protection – no longer guaranteeing time-and-a-half on the final day of a twelve hour shift when their regular Sunday was cancelled.
Eliminating shift premiums – no additional hourly pay for the inconvenience posed by night work.
“We need for the union to agree to these changes here at White Oak,” he continued. “But, understanding that everyone has bills to pay, we’re prepared to compensate for this with a three percent wage increase.” His proposal also provided for a one dollar decrease in employee health insurance premiums.
“I need some time with my committee,” I responded and management left the room.
“This some bullshit here!” shouted a loyal but hot-headed young woman named Sharon Maynard who worked a twelve-hour shift in the weave room and had recently joined the shop committee. She started punching numbers into a calculator and scribbling on a napkin while speaking. “Now see here! Three percent puts another $60 into my pocket every month. But giving up double-time on Sunday takes away $144.” Sharon’s voice level continued rising with anger as she turned toward me and Horace. “Ain’t no way we’re going along with this bullshit! No way!”
Several other committee members began simultaneously echoing her sentiments until Horace cut them off. “Why don’t we see what Phil has to say about this?” The room immediately became silent.
“You all know me well enough to realize I’m gonna shove this back in their face. The big question now is whether this is just an opening proposal in response to ours, or really their bottom line. We’ll find out during the next few weeks, during which we escalate toward a fight one step at a time. They may just be trying to test our nerve and now is the time to test theirs.”
Horace summoned Stahle and his team back into the room and the ball was in my court. “I believe John Bakane that White Oak needs to cut operating costs by $900,000 to stay in business. He’s never lied to me before,” I diplomatically began. “And you know damn well the union has worked closely with the company to help keep you running this long.
“But taking that $900,000 out of the workers’ pockets isn’t an acceptable option. Cone’s five top executives earned a combined total of 6.8 million dollars last year between salaries, bonuses and preferred stock dividends. If they all took a fifteen percent cut in their compensation package, it would more than fill the gap in operating costs, and I wager these multi-millionaires would still manage to pay their electric bill.”
“Are you all done?” asked Stahle with a touch of sarcasm.
“For the moment,” I responded with an edge in my voice.
Stahle regaled us with cliché rhetoric about how hard these top executives worked to “keep the ship afloat” and while acknowledging the union’s assistance, cited the brilliance and expertise of Cone’s leadership as the primary reason the company was still in business. “What you’re suggesting is inconsistent with normal corporate practice and categorically rejected,” he concluded.
“You’re forgetting that, as good as your designers are, Cone wouldn’t be dominating the value added denim market without the expertise and experience of your workers, who turn concepts into finished product. Some of our folks are third generation Cone employees. They grew up with this and it’s in their blood. Members of management have bragged to me about owners of offshore mills complaining how they can’t compete with us in this market because of our highly skilled workforce. They shouldn’t be the ones picking up the tab here and the company’s proposal is outright rejected.”
Stahle remained silent and Sharon began to speak but I held up my hand and continued in a softer tone. “Look, Stahle. We’ve worked together for long time. I know deep down you genuinely care about the workers and trust you believe the same about me. Give the union one solid reason why you believe the company’s proposal is the only way to resolve its problems.”
“Because we’re going through a difficult period of transition and need to become more competitive.”
“I couldn’t agree more but you haven’t answered my question.”
“I believe I have and suggest we adjourn at this time.” The next meeting was scheduled for July 29.
I distributed a leaflet on all shifts:
UNITE TELLS CONE:
WE WILL FIGHT FOR DOUBLE TIME ON SUNDAY!!
I explained the math behind behind executive compensation versus the $900,000 reduction in operating costs:
“We don’t have a problem with these people prospering from their business. But we have a real problem with them asking us to take a pay cut while they continue to line their pockets with our hard work!
Cone is committed to reducing our paychecks. The Union is committed to protecting everything we have.”
Horace and I accepted an unexpected invitation from Stahle to join him in a private meeting on July 26, accompanied by Michael Whisenant, Executive Vice President of Denim Product Operations. He was among the five highest-paid executives being discussed at the table and ridiculed in our leaflets, and apparently wanted to weigh in on the conversation.
The local president and I were curious about what might be revealed on the appointed day as we sat across from Stahle and Whisenant in a smaller, more intimate conference room. The executive vice president was man of medium height, with the common body type of middle aged executives displaying a lack of physical exercise and over-indulgence in expensive, unhealthy foods. He rose to shake my hand, presenting himself as an affable, easy-going gentleman.
After engaging Horace in small talk for a few minutes, he got down to business. “I was very disappointed by the message you put out to our employees in your recent leaflet. We’re working very hard to save their jobs and instead of urging their cooperation, you seem to be stirring them up for a fight.”
“We’ve never met,” I responded, “but you know my reputation for working closely with Cone Mills in its efforts to survive in a changing world. But don’t mistake the union’s good will as carte blanche to demand whatever you want. You’re asking workers to suffer a substantial wage reduction to resolve a comparatively modest overage in operating costs, while you continue to enjoy million dollar paychecks. The company refuses to provide tangible justification as to why this is the only alternative. It’s my job to fight you under these circumstances and it’s only going to escalate. But since you’re here, why don’t you crunch some numbers to convince me why your proposal is the only solution?”
“Let’s not get hot under the collar,” replied Whisenant. “We’re all family here. White Oak, Rutherford, union members, nonmembers…we’re all one big family and need to work together for the common good.”
“First off, Rutherford isn’t my family. Their workers spit in our face every time we tried to organize them and I don’t represent their interests. I don’t give a damn if you cut their salaries down to minimum wage. At White Oak, the nonmembers are a burden I legally have to bear but nothing more. My family is the members of Local 1391. Don’t forget this: My paycheck doesn’t say Cone Mills. It says UNITE. This is your last chance to provide some logic and numbers to back up your proposal. Otherwise, to quote Shakespeare, Cry havoc and let slip the dogs of war.”
I tapped Horace on the arm and following some terse handshakes, we walked out the door. “I can’t believe he actually expected you to consider the people at Rutherford as family,” said the president.
“Remember when every year the union sent us down to Rutherford along with a few organizers and White Oak activists?” I replied. “We’d line the street leading to the plant gate and try to hand leaflets to workers as they drove in and out. People cussed us out, threw food at us, and tried to run us over with their pickup trucks. Now we’re supposed to suddenly give a damn about these morons?”
July 29 negotiations proved to be another exercise in double-talk coupled with a new threat. Stahle declared the company might consolidate denim manufacturing into either White Oak or Rutherford, with the higher labor costs at our plant being a strong consideration.
“Don’t try to twist our arms,” I responded. “We can twist back.” Toward the end of the session I proposed another contract extension until August 31. To my surprise, Stahle refused.
I immediately put out another leaflet:
UNION TELLS CONE: NO GIVE BACKS!!!
IT’S TIME TO STAND UP AND FIGHT!!!
I began by mocking Cone’s proposed concession of a one-dollar reduction in health insurance premiums and then cut to the chase:
“Our contract expires on July 31. The Union in good faith offered Cone another extension but they refused! When a company does this, it is an act of war! As of August 1 we will be working without a contract. Under the law the Company must continue to negotiate and cannot make any changes (including cut our pay) while this is taking place. We gain the right to fight Cone in a number of ways that we legally can’t when under contract – including strikes, sick outs, slow downs, etc.”
Negotiations were clearly gridlocked and I took measures to preempt Cone from declaring an impasse with the NLRB, which if approved would allow management to unilaterally implement its last proposal. I bombarded Stahle with pages of convoluted new information requests, necessary to assess the company’s position. Impasse can’t be upheld while the union awaits an opportunity to discuss unanswered questions.
Stahle called UNITE’s Southern Regional Director Harris Raynor to protest my unreasonable position and arranged for him to meet with the parties in the main conference room on Monday, August 4. I always knew I was doing a good job when management complained to the regional director.
I sat between Harris and Horace, surrounded by committee members on both sides, facing management as what might hopefully be a turning point began to unfold. Stahle reiterated Cone’s proposal and arguments that it was the only way to keep the company profitable. He was betting on Harris’s reputation as a diplomat who prioritized building productive relationships with employers. Following the presentation, we caucused to discuss matters among ourselves.
“There’s three percent on the table right now,” said the director. “Perhaps you oughta take the money and run.”
Unions are chain-of-command organizations and there are certain basic rules of engagement. One never disagrees with the ranking person at the table in front of workers. I’ve always supported this because to do otherwise is the road to chaos and division. But committee members all began shouting objections at once until Horace seized the floor.
“The people ain’t never gonna go along with this. If we try to push this on them it will divide us worse than the old days and a lot of folks gonna get out the union. Something ain’t right here. This is the first time I remember Cone not being straight-up about why they want something. What do you think, Phil?”
Horace was a very smooth player and had opened the door for me.
“I have to continue doing my thing,” I told Harris. “The company has only given us two choices: cave in or fight. The first isn’t part of my repertoire and I don’t think you want it to be.”
“Someone get Stahle and I’ll tell him we’ll consider his position,” said Harris. “Then I’ve got to run and catch a flight. Keep me posted, Phil and don’t push too far. You’re treading on very thin ice. I’ll do what I can on my end to see if I can get more information through back channels.”