If new factory is the carrot, automation is the stick for unionists
A union vote for automation? This week Local 201 of the International Union of Electrical Workers elected to accept looser work rules and longer hours at an automated factory to be built in Lynn, Mass.
If they had not, their employer, General Electric Company (GE), vowed to build a $52 million helicopter-engine plant elsewhere and use nonunion workers.
''Blackmail'' is how one union leader described the ploy. Most Local 201 members, however, consider the vote to be an investment in future jobs in this old, industrial community.
The new facility will employ 100 skilled laborers to do the work 300 would do in a conventional plant. But if the vote had gone against the computerized factory, it may have also jeopardized jobs in a GE jet-engine shop already operating in Lynn.
The plant's general manager, James N. Krebs, says he has asked GE for about $ 450 million to upgrade equipment. If the union had voted down the new automated factory, he said the company might have thought twice about how much money it puts into an area where ''modernization had been rejected.''
Labor experts say such carrot-and-stick tactics are not uncommon, but this case offers insights into labor-management interplay as more industries opt for automation.
For instance, GE will operate the helicopter-engine facility nonstop. The company's archrival, Pratt & Whitney, a subsidiary of United Technologies Corporation, recently opened an automated factory with the potential for continuous operation in Columbus, Ga. High interest rates will push more companies into around-the-clock shifts, economists say.
''One of the big reasons to go to the 24-hour mode is the price of capital. They're not getting anything back when they operate only seven hours a day,'' says Audrey Freedman, a labor economist at the Conference Board in New York.
But the GE demand for three- and four-day weeks with 12-hour shifts goes against the union grain. For years, organized labor has fought for shorter shifts. True, longer shifts mean more days off, ''but 12-hour shifts are rough, '' says Richard B. Freeman of the National Bureau of Economic Research in Cambridge, Mass.
Automation also gives management the opportunity to soften union work rules, increase cross-training among workers, and have more flexibility with assignments. For example, there are now ''maybe 50'' job classifications in existing GE plants, says a GE union official. Workers in the new Lynn plant (groundbreaking is later this summer) will fall into one of three job categories.
''When a crane breaks down, management would like to have one all-around handyman to fix it. But work rules may call for an electrician to unplug the machine, an electrical operator to do something else, and so on,'' says Ms. Freedman. ''You get a loss of productivity.''
Over the years, some unions have strictly defined each job and category in the process of securing wage hikes and safety standards, she says. In the shift to broader categories, however, some union members may feel their job needs are no longer being specifically addressed by their leadership. ''If electricians were the top of the scale . . . , they may feel they're becoming just one of the hoi polloi - the masses,'' says Ms. Freedman.
Why did GE offer to build a union plant when it had the nonunion option?
James Krebs, who pushed for the Lynn site, admits he ''raised a few eyebrows with the choice. But the company said if you want to, go ahead and try (to get the necessary union concessions).'' Both GE management and union officials say they are pleased with the results.