SEVERAL months ago workers dubbed Decatur, Ill., the ''War Zone,'' saying the outcome of bitter disputes with three large corporations would shape industrial relations throughout the country.
Judging from the tide of battle, however, a more accurate label might be ''Labor's Waterloo.'' Management clearly has the upper hand in all three wrangles.
Now, the AFL-CIO aims to turn a rout into victory. The umbrella labor federation, having last month elected a president with a penchant for head-on confrontation with management, has thrown itself behind 735 unionized workers locked out by the A.E. Staley Manufacturing Co. in Decatur.
Staley workers ''have a good strategy and what we want to do is bring more power to it, escalate it, and ratchet up the decible level very quickly,'' says Joe Uehlein, organizing director at the AFL-CIO's industrial union department. ''It is not a question of new strategic directions but of bring more resources to an existing strategy,'' he adds.
Labor experts say that if the federation hopes to win isolated disputes and turn around the union movement, it must change its image. Recent polls indicate that the public and nonunion labor are not convinced that the benefits of traditional organization outweigh the costs.
''If labor is to slow its decline, it's got to deal with some basic problems like its negative public image,'' says Leo Troy, a professor of economics at Rutgers University in Newark, N.J.
Since Tate & Lyle acquired Staley in a hostile takeover in 1988, Staley has accounted for 40 percent of Tate & Lyle's profits and helped to raise dividends and pre-tax profits by more than 140 percent each. Meanwhile, real hourly wages at Staley's Decatur, Ill., plant have fallen.
''This is the decisive front line in the war to defend American middle-class workers against greedy managers,'' says Art Dhermy, a bargaining-committee member.
''Both workers and management across America are watching Decatur. If labor loses here, then businesses everywhere will start squeezing workers even more than they are now,'' Mr. Dhermy says.
The strikes have contributed to a more than 4 percent decline in the average wage in the county since 1989, according to the Chicago-based Coalition for Consumer Rights.
The workers hope to pressure PepsiCo Inc., which buys about 30 percent of Staley's sweetener, to choose a different company. Pepsi-Cola Company, a division of PepsiCo, is not commenting on the issue, says company spokesman David Egner.