International Harvester strike of 1979–1980
Encyclopedia
The International Harvester strike of 1979–1980 was a strike
Strike action
Strike action, also called labour strike, on strike, greve , or simply strike, is a work stoppage caused by the mass refusal of employees to work. A strike usually takes place in response to employee grievances. Strikes became important during the industrial revolution, when mass labour became...

 by the United Auto Workers
United Auto Workers
The International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, better known as the United Auto Workers , is a labor union which represents workers in the United States and Puerto Rico, and formerly in Canada. Founded as part of the Congress of Industrial...

 (UAW) against the International Harvester
International Harvester
International Harvester Company was a United States agricultural machinery, construction equipment, vehicle, commercial truck, and household and commercial products manufacturer. In 1902, J.P...

 (IH) company over work rules. The strike began on November 1, 1979, and ended after 172 days on April 20, 1980. As of May 2008, it was the fourth-longest strike of national importance ever held by the UAW.

Previous bargaining history

The UAW first negotiated
Collective bargaining
Collective bargaining is a process of negotiations between employers and the representatives of a unit of employees aimed at reaching agreements that regulate working conditions...

 a master contract with International Harvester in 1950. At the time, there was no mandatory overtime
Overtime
Overtime is the amount of time someone works beyond normal working hours. Normal hours may be determined in several ways:*by custom ,*by practices of a given trade or profession,*by legislation,...

 and both management and the union
Trade union
A trade union, trades union or labor union is an organization of workers that have banded together to achieve common goals such as better working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members and negotiates labour contracts with...

 believed that the company could not request mandatory overtime. The 1950 master contract also codified an existing practice whereby a worker could transfer to any other job in the company provided he or she was the most senior
Seniority
Seniority is the concept of a person or group of people being in charge or in command of another person or group. This control is often granted to the senior person due to experience or length of service in a given position, but it is not uncommon for a senior person to have less experience or...

 applicant for the position.

During the 1958 contract renewal talks, IH attempted to restrict job transfer rights. The union struck for nine weeks, and IH dropped the demand in exchange for other concessions.

Between 1961 and 1976, four of the six three-year contracts were signed only after the union struck—although each of the strikes was short, lasting from two hours to two-and-a-half weeks. There were also a large number (more than 100) wildcat strikes
Wildcat strike action
A wildcat strike action, often referred to as a wildcat strike, is a strike action taken by workers without the authorization of their trade union officials. This is sometimes termed unofficial industrial action...

 during this period. After a 15-day strike in 1973, the union agreed to include a side letter
Side letter (collective bargaining)
A side letter or side agreement is a collective bargaining agreement that is not part of the underlying or primary collective bargaining agreement , and which the parties to the contract utilize to reach agreement on issues the CBA does not cover, to clarify issues in the CBA, or to modify the CBA...

 into the contract in which the union agreed to encourage employees to voluntarily agree to work overtime (with advance notice, and only up to seven Saturdays a year)—although few employees ever volunteered.

By the late 1970s, International Harvester had come to believe that unlimited transfer rights were being abused and creating productivity
Productivity
Productivity is a measure of the efficiency of production. Productivity is a ratio of what is produced to what is required to produce it. Usually this ratio is in the form of an average, expressing the total output divided by the total input...

 problems. The company also instituted a new disciplinary program to crack down on wildcat strikes, and outlasted one UAW local when it engaged in a five-week-long wildcat strike in 1978 in an attempt to have the program withdrawn.

McCardell takes over

In 1979, International Harvester was the fourth-largest company in the United States.

Archie McCardell
Archie McCardell
Archie R. McCardell was an American business leader. He was best known for his tenure as chief executive officer, president, and chairman of the board at the International Harvester farm and heavy equipment manufacturing concern from 1977 to 1982...

 was appointed president
President
A president is a leader of an organization, company, trade union, university, or country.Etymologically, a president is one who presides, who sits in leadership...

 and chief operating officer
Chief operating officer
A Chief Operating Officer or Director of Operations can be one of the highest-ranking executives in an organization and comprises part of the "C-Suite"...

 of International Harvester in August 1977, named chief executive officer
Chief executive officer
A chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...

 in January 1978, and chairman of the board
Board of directors
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors...

 in June 1979. He was charged with shaking up the family-run company to increase profit
Profit (accounting)
In accounting, profit can be considered to be the difference between the purchase price and the costs of bringing to market whatever it is that is accounted as an enterprise in terms of the component costs of delivered goods and/or services and any operating or other expenses.-Definition:There are...

ability. He received a then-exorbitant salary of $460,000 (making him one of the highest-paid CEOs in the country), a $1.5 million signing bonus and a $1.8 million loan at 6 percent interest. He instituted an aggressive cost-cutting program which immediately cut spending by $640 million and a modernization program which poured $879 million over three years into the company's plants. His actions boosted market share
Market share
Market share is the percentage of a market accounted for by a specific entity. In a survey of nearly 200 senior marketing managers, 67 percent responded that they found the "dollar market share" metric very useful, while 61% found "unit market share" very useful.Marketers need to be able to...

, and led to record sales
Sales (accounting)
In bookkeeping, accounting, and finance, Net sales are operating revenues earned by a company when it sells its products. Revenue are reported directly on the income statement as Sales or Net sales....

 of $8.4 billion and record profits of $370 million (up from $203 million). Despite McCardell's actions, IH's profit margin
Profit margin
Profit margin, net margin, net profit margin or net profit ratio all refer to a measure of profitability. It is calculated by finding the net profit as a percentage of the revenue.Net profit Margin = x100...

s were still only half those of competitors like Caterpillar Inc.
Caterpillar Inc.
Caterpillar Inc. , also known as "CAT", designs, manufactures, markets and sells machinery and engines and sells financial products and insurance to customers via a worldwide dealer network. Caterpillar is the world's largest manufacturer of construction and mining equipment, diesel and natural gas...

 and Deere & Company
Deere & Company
Deere & Company, usually known by its brand name John Deere , is an American corporation based in Moline, Illinois, and the leading manufacturer of agricultural machinery in the world. In 2010, it was listed as 107th in the Fortune 500 ranking...

.

Among the many changes McCardell made was to fire 11,000 of the company's 15,000 mid- and upper-level managers, whom McCardell felt were too close to UAW shop stewards
Union steward
A union representative, union steward, or shop steward is an employee of an organization or company, who represents and defends the interests of her/his fellow employees but who is also a labor union official...

. McCardell took personal control of IH's labor relations, and appointed a new vice president of human resources
Human resources
Human resources is a term used to describe the individuals who make up the workforce of an organization, although it is also applied in labor economics to, for example, business sectors or even whole nations...

, W. Grant Chandler (who was to assist McCardell in all union negotiations). McCardell's actions stripped the company of nearly all its experienced labor negotiators, and those who remained were mostly ignored during the upcoming round of negotiations. McCardell and Chandler had little labor relations experience, however, and none in heavy manufacturing or in negotiating with the UAW.

Early negotiations

Negotiations opened on August 9, 1979, in Chicago
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...

, Illinois
Illinois
Illinois is the fifth-most populous state of the United States of America, and is often noted for being a microcosm of the entire country. With Chicago in the northeast, small industrial cities and great agricultural productivity in central and northern Illinois, and natural resources like coal,...

. UAW International Vice President Pat Greathouse and two veteran IH negotiators—Art Shy, and Cletus Williams—led a union bargaining
Collective bargaining
Collective bargaining is a process of negotiations between employers and the representatives of a unit of employees aimed at reaching agreements that regulate working conditions...

 team composed of 20 representatives from 51 IH local unions. Among the proposed changes to the contract that the union proposed was that the union contract be automatically extended to any new plants opened by International Harvester—essentially allowing the union to organize new workers without holding an election.

Instead of a similar long list of demands (which the company had traditionally countered with in the past), Chandler gave the union only seven demands and advised it that these proposals must be dealt with, strike or no strike. The proposals were aimed at largely ending job transfers and seniority, adding five shifts a week, and instituting a mandatory overtime scheme; the company claimed it had lost $1.3 billion over the previous three years over these issues. Many companies in turnaround seek to improve product design and production processes, and managerial expertise before seeking labor concessions. But McCardell concluded that the fastest way to achieve cost savings was to persuade workers to accept work rules changes which would have cost employees $100 million. Surprisingly, however, IH agreed to match the pay increase pattern set earlier in the year by automobile manufacturers in Detroit
Detroit, Michigan
Detroit is the major city among the primary cultural, financial, and transportation centers in the Metro Detroit area, a region of 5.2 million people. As the seat of Wayne County, the city of Detroit is the largest city in the U.S. state of Michigan and serves as a major port on the Detroit River...

.

Despite the concession, these early negotiations did not go well. McCardell and Chandler were inexperienced negotiatiors, not picking up on the private signals the union sent and did not understand the importance of the signals when they did become aware of them. Even company-side negotiators complained about the inexperience of McCardell and Chandler, arguing that this inexperience lessened the company's ability to divine the union's real bargaining positions. When McCardell and Chandler were not at the bargaining table, negotiators who were present had no real authority to bargain on behalf of the company. Combined, these two factors significantly hindered IH's bargaining abilities. As one scholar pointed out: "There was no sense that the company negotiators had the capacity to understand the industry, the union's positions, or the politics that these leaders faced; neither were these negotiators truly free to develop that understanding."

Other company actions unintentionally hardened negotiating positions and decreased trust between the two parties. The company moved the negotiations out of a neutral local hotel and into management conference rooms, limited informal side conversations (which had been used in the past to explore compromises), refused to build social ties with the union bargainers, refused to informally signal their true intentions, and ignored symbolic issues (one IH negotiator wore a silk suit to negotiations, which offended the blue-collar negotiators).

International Harvester also unintentionally disempowered the union negotiators, making it harder for them to agree to company demands. For example, the company repeatedly went public with its bargaining proposals, which made it harder for company negotiators to back down later and reach compromises. The company's "match the pay pattern" announcement also had the effect of depriving union leaders of the ability to claim a "win" in negotiations by claiming they had achieved a pay raise—making it harder for union negotiators to "sell" more hard-to-swallow compromises later, and forcing the union to entrench itself to achieve gains in other areas.

The talks recessed after just one day.

Less than a week later, International Harvester reported on August 15, 1979, record sales and earnings for the first nine months of fiscal 1979. Year-to-year net earnings for the third quarter rose $1.12 per share to $2.19, and the year-to-year third quarter dividend
Dividend
Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business , or it can be distributed to...

 raised 5 cents to 62.5 cents. Net income for the quarter rose to $67.91 million, an 89 percent increase over the same period last year, and net income for the first three quarters of the year was $221.9 million, a 95 percent increase over the previous year. The company said prospects for the final quarter also looked strong.

Bargaining resumed on August 21, 1979.

International Harvester's behavior at and away from the bargaining table, coupled with the company's exceedingly positive economic news, hardened the UAW's bargaining position. On September 14, 1979, the UAW said it would strike all heavy-equipment manufacturers it was negotiating with if new collective bargaining agreements were not reached. The UAW's contract at International Harvester expired on October 1, 1979. But despite the union's more rigid stands, a council of all 51 IH local unions agreed to extend the contract on a day-to-day basis as negotiations continued.—a decision opposed by the international union.

In late October, IH received mixed signals about the Auto Workers' intentions and capabilities. On October 18, the union reached a new three-year agreement with Deere & Co. after an 18-day strike by 31,000 employees, while at the same time 23,000 of Caterpillar's 40,000 workers engaged in a wildcat strike to protest the slow pace of negotiations at that company. Six days later, the union made it clear it would strike IH if no agreement was reached, but IH officials merely reiterated that their seven demands must be met. Another 17,000 Caterpillar workers struck on October 28, and IH officials suggested that the UAW would be too financially exhausted and organizationally stretched too thin to engage in a third strike. International Harvester refused to budge on its demand for mandatory overtime.

Strike

The union did strike, however. On November 1, 1979, 35,000 UAW workers (36 percent of International Harvester's workforce) at 21 plants in eight states—Georgia
Georgia (U.S. state)
Georgia is a state located in the southeastern United States. It was established in 1732, the last of the original Thirteen Colonies. The state is named after King George II of Great Britain. Georgia was the fourth state to ratify the United States Constitution, on January 2, 1788...

, Illinois
Illinois
Illinois is the fifth-most populous state of the United States of America, and is often noted for being a microcosm of the entire country. With Chicago in the northeast, small industrial cities and great agricultural productivity in central and northern Illinois, and natural resources like coal,...

, Indiana
Indiana
Indiana is a US state, admitted to the United States as the 19th on December 11, 1816. It is located in the Midwestern United States and Great Lakes Region. With 6,483,802 residents, the state is ranked 15th in population and 16th in population density. Indiana is ranked 38th in land area and is...

, Kansas
Kansas
Kansas is a US state located in the Midwestern United States. It is named after the Kansas River which flows through it, which in turn was named after the Kansa Native American tribe, which inhabited the area. The tribe's name is often said to mean "people of the wind" or "people of the south...

, Kentucky
Kentucky
The Commonwealth of Kentucky is a state located in the East Central United States of America. As classified by the United States Census Bureau, Kentucky is a Southern state, more specifically in the East South Central region. Kentucky is one of four U.S. states constituted as a commonwealth...

, Minnesota
Minnesota
Minnesota is a U.S. state located in the Midwestern United States. The twelfth largest state of the U.S., it is the twenty-first most populous, with 5.3 million residents. Minnesota was carved out of the eastern half of the Minnesota Territory and admitted to the Union as the thirty-second state...

, Ohio
Ohio
Ohio is a Midwestern state in the United States. The 34th largest state by area in the U.S.,it is the 7th‑most populous with over 11.5 million residents, containing several major American cities and seven metropolitan areas with populations of 500,000 or more.The state's capital is Columbus...

, Tennessee
Tennessee
Tennessee is a U.S. state located in the Southeastern United States. It has a population of 6,346,105, making it the nation's 17th-largest state by population, and covers , making it the 36th-largest by total land area...

, and Texas—struck International Harvester at noon rather than accept the new work rules and mandatory overtime provisions. But McCardell was not alarmed, seeing the strike as a way to challenge the union's power in the workplace and as an opportunity to improve efficiency by regaining concessions the company had made in the past.

For nearly a month, no talks were held. The two sides met briefly on Monday, November 26, for roughly an hour, but no progress was made. Thereafter, the union stepped up its pressure on the company. Bargaining reopened on December 13. As the talks resumed, the UAW settled the strike at Caterpillar, ending what was then the longest strike in history against that heavy-equipment manufacturer. Nonetheless, talks broke off December 15, the same day the Caterpillar strike ended. Days later, International Harvester announced a year-to-year increase of 98 percent in its profits for the entire fiscal year. Yearly earnings reached a record $369.9 million, and sales rose a 25.9 percent to reach a record $8.4 billion. Net income nearly doubled to $12.01 a share (up from $6.14 a share). But on January 10, 1980, the company said that losses in the first quarter of the year (November 1979 to January 1980) could be as high as $225 million (or 10 percent of the company's shareholders' equity) if the strike continued. To help weather the strike, International Harvester's top 25 officers took 20 percent salary cuts, travel expenses were curtailed, meetings were cancelled or moved to company offices, the budget for the annual stockholders' meeting scaled back, advertising spending curtailed, capital spending slashed by $100 million (to $400 million), and a new line of credit established to provide access to emergency funds (if needed). McCardell, however, vowed to continue to seek agreement on the company's seven demands.

In mid-December 1980, the Fort Wayne Journal Gazette quoted an internal International Harvester memorandum (written in January 1979) in which the company appeared to advocate manufacturing plant decentralization as part of a plan to break the union. The memo specifically mentioned a new IH plant to be built in Wagoner, Oklahoma
Wagoner, Oklahoma
Wagoner is a city in Wagoner County, Oklahoma, United States. The population was 7,669 at the 2000 census. It is the county seat of Wagoner County.-Geography:Wagoner is located at ....

 (a right-to-work
Right-to-work law
Right-to-work laws are statutes enforced in twenty-two U.S. states, mostly in the southern or western U.S., allowed under provisions of the federal Taft–Hartley Act, which prohibit agreements between labor unions and employers that make membership, payment of union dues, or fees a condition of...

 state) which would eliminate unionized jobs at the company's Fort Wayne plant. The memo said the Wagoner plant was only the first step in a scheme to slowly dismantle the Fort Wayne plant. The memo outraged the union, which felt the company had intended to bargain in bad faith
Bad faith
Bad faith is double mindedness or double heartedness in duplicity, fraud, or deception. It may involve intentional deceit of others, or self deception....

 over its contract extension proposal.

The company's tendency to go public with negotiating positions led to further entrenchment on both sides, and no talks were scheduled for most of January.

While International Harvester was forced to cut costs, the United Auto Workers improved its financial position. On January 30, 1980, the union gave striking workers a $15-a-week across-the-board increase in strike benefits, raising the benefit to $55 a week for a single worker and $65 a week for married workerd with dependents.

The company and union resumed talks on February 4, 1980, but the discussions ended after just one day. IH modified its overtime proposal to require worker consent, and asked the union to create a group of part-time employees who would be mandated to work overtime when not enough regulartime employees could be found to work. The union rejected the proposal without explanation and walked out of the talks. The strike, by now the longest in International Harvester's history as well as the longest in UAW history (surpassing the old record of 117 days), resumed and the union threatened to stay on the picket line
Picket line
A picket line is a horizontal rope, along which horses are tied at intervals. The rope can be on the ground, at chest height , or overhead. The overhead form usually is called a high line....

 until March if necessary. Industry analysts worried that IH would begin to lose market share
Market share
Market share is the percentage of a market accounted for by a specific entity. In a survey of nearly 200 senior marketing managers, 67 percent responded that they found the "dollar market share" metric very useful, while 61% found "unit market share" very useful.Marketers need to be able to...

 as its inventories dropped.

As the annual company shareholders' meeting approached, the union accused International Harvester of attempting to prevent union members' attendance. The United Auto Workers, which owned six shares of Harvester stock, accused the company of deliberately selecting a meeting hall which was too small to accommodate the number of union members who would be voting those shares and issuing too-few tickets to permit admission for the union members. The union filed an injunction
Injunction
An injunction is an equitable remedy in the form of a court order that requires a party to do or refrain from doing certain acts. A party that fails to comply with an injunction faces criminal or civil penalties and may have to pay damages or accept sanctions...

 in United States district court
United States district court
The United States district courts are the general trial courts of the United States federal court system. Both civil and criminal cases are filed in the district court, which is a court of law, equity, and admiralty. There is a United States bankruptcy court associated with each United States...

 to force International Harvester to admit its members.

Days before the shareholder meeting, International Harvester reported a first-quarter loss of $222.2 million. The company also admitted that unfilled orders of $4.2 billion, up from $2.8 billion a year earlier, and attributed the loss and backlog to the effects of the strike. Despite the loss, the company still paid a dividend of 62.5 cents a share for the quarter.

The annual shareholders' meeting, held at the First Chicago Center in Chicago on February 21, was described by the press as "turbulent." On February 20, the union obtained a court order requiring International Harvester to set up closed-circuit television facilities so members of the UAW and other shareholders could observe the meeting. The overflow room was at a hotel several blocks away. But when the meeting opened with about 200 seats still empty, McCardell delayed proceedings for an hour as 175 UAW members were brought from the hotel to the First Chicago Center. The UAW bitterly attacked McCardell throughout the proceedings. Cletus Williams, chairman of the UAW's negotiating committee, accused McCardell of manipulating the shareholders' meeting so that many UAW members didn't know they could attend until it was too late. Despite the rancorous shareholders' meeting, bargainers resumed talks that same day. IH once more altered its overtime proposal, suggesting that employees be required to work up to 14 Saturdays a year and establishing a voluntary pool of part-time workers to fill in shifts when not enough full-time workers volunteered to work a particular Saturday shift. But the company withdrew its proposal when the union declared its opposition.

IH's financial situation worsened on March 6, 1980, when Moody's Investors Services
Moody's
Moody's Corporation is the holding company for Moody's Analytics and Moody's Investors Service, a credit rating agency which performs international financial research and analysis on commercial and government entities. The company also ranks the credit-worthiness of borrowers using a standardized...

 downgraded the company's short-term bond credit rating
Bond credit rating
In investment, the bond credit rating assesses the credit worthiness of a corporation's or government debt issues. It is analogous to credit ratings for individuals.-Table:...

 from Prime 1 to Prime 2. The company estimated the downgrade would cost it $4 million in profits by the end of the fiscal year. In yet another cost-cutting move, 8,000 of the company's 10,000 salaried and management employees were forced to take a week's vacation due to low workloads. Rumors of yet another management pay cut came amid signs that the company was planning to sell its construction equipment business to raise money.

But talks did not break off after resuming during the annual shareholder's meeting. Mounting losses and the arrival of farm implement sales season kept the company at the bargaining table and led to agreements on a short-term layoff provision and the job-transfer issue. Negotiators agreed to negotiate over local matters affecting each plant and settle these before returning to the more contentious national issues. Six local unions quickly settled their local issues.

On March 18, 1980, negotiators for both sides announced they had reached a tentative agreement on the mandatory overtime issue. According to the Associated Press
Associated Press
The Associated Press is an American news agency. The AP is a cooperative owned by its contributing newspapers, radio and television stations in the United States, which both contribute stories to the AP and use material written by its staff journalists...

, full-time workers and retirees could volunteer to become part of a special overtime pool which could be drawn from to fill vacant weekend work shifts. Seniority, holiday pay and the ability of piece work
Piece work
Piece work is any type of employment in which a worker is paid a fixed "piece rate" for each unit produced or action performed regardless of time...

ers to go home after fulfilling their quotas were still outstanding. Forty-two locals had also settled their local issues contracts during the previous week, leaving only six large locals with outstanding agreements.

Amid calls to submit the unfinished tentative agreements to the membership for ratification and halt the strike, the 300 members of the International Harvester council of 51 local unions overwhelmingly rejected any such proposals. Because the job transfer, new plant contract extension, and the piece worker issues were all still outstanding, the council felt it could not recommend ratification. With six of IH's largest local unions still negotiating, International vice president Pat Greathouse announced that the UAW was breaking off talks at the national level in order to focus on these local contracts. The company agreed, feeling the six large locals—located in East Moline
East Moline, Illinois
East Moline is a city in Rock Island County, Illinois, United States. The population was 20,333 at the 2000 census. East Moline is one of the five Quad Cities,, along with the cities of Rock Island, Moline, and the Iowa cities of Davenport and Bettendorf. The Quad Cities has a population of 379,690...

 and Rock Island
Rock Island, Illinois
Rock Island is the county seat of Rock Island County, Illinois, United States. The population was 40,884 at the 2010 census. Located on the Mississippi River, it is one of the Quad Cities, along with neighboring Moline, East Moline, and the Iowa cities of Davenport and Bettendorf. The Quad Cities...

, Illinois
Illinois
Illinois is the fifth-most populous state of the United States of America, and is often noted for being a microcosm of the entire country. With Chicago in the northeast, small industrial cities and great agricultural productivity in central and northern Illinois, and natural resources like coal,...

; Fort Wayne
Fort Wayne, Indiana
Fort Wayne is a city in the US state of Indiana and the county seat of Allen County. The population was 253,691 at the 2010 Census making it the 74th largest city in the United States and the second largest in Indiana...

, Indiana
Indiana
Indiana is a US state, admitted to the United States as the 19th on December 11, 1816. It is located in the Midwestern United States and Great Lakes Region. With 6,483,802 residents, the state is ranked 15th in population and 16th in population density. Indiana is ranked 38th in land area and is...

; Springfield
Springfield, Ohio
Springfield is a city in the U.S. state of Ohio and the county seat of Clark County. The municipality is located in southwestern Ohio and is situated on the Mad River, Buck Creek and Beaver Creek, approximately west of Columbus and northeast of Dayton. Springfield is home to Wittenberg...

, Ohio
Ohio
Ohio is a Midwestern state in the United States. The 34th largest state by area in the U.S.,it is the 7th‑most populous with over 11.5 million residents, containing several major American cities and seven metropolitan areas with populations of 500,000 or more.The state's capital is Columbus...

; and Louisville
Louisville, Kentucky
Louisville is the largest city in the U.S. state of Kentucky, and the county seat of Jefferson County. Since 2003, the city's borders have been coterminous with those of the county because of a city-county merger. The city's population at the 2010 census was 741,096...

, Kentucky
Kentucky
The Commonwealth of Kentucky is a state located in the East Central United States of America. As classified by the United States Census Bureau, Kentucky is a Southern state, more specifically in the East South Central region. Kentucky is one of four U.S. states constituted as a commonwealth...

—were "the key" to ending the strike.

The council's decision not to recommend ratification lead to a break in the UAW's hierarchy. The day after the decision, Cletus Williams, chairman of the UAW bargaining council, announced that his union—Local 1357 in Canton, Ohio
Canton, Ohio
Canton is the county seat of Stark County in northeastern Ohio, approximately south of Akron and south of Cleveland.The City of Caton is the largest incorporated area within the Canton-Massillon Metropolitan Statistical Area...

—would take a non-binding vote on the unfinished contract by the end of the weekend. But on Sunday, March 22, 1980, members of Local 1357 rejected Williams' plan to conduct a non-binding vote.

Although the East Moline and Rock Island locals settled their local contracts in the next week, local issue bargaining collapsed after three days. The job transfer issue prevented resolution of the remaining four local contracts. The company believed that if these four local contracts could be settled, the strike would end. Company and union negotiators recommitted themselves to the bargaining process, and an agreement was reached at three more plants the following week The final plant settled its local contact on April 14. National contract talks resumed the following day.

End of the strike

After two days of bargaining, International Harvester and the United Auto Workers reached a tentative agreement on the national master contract on April 16, 1980.

The UAW ratified the three-year contract by a vote of 15,494 in favor and 3,877 against on April 19, 1980. Local 1309 in Rock Island, Ill., and Local 1077 in Shadyside, Ohio
Shadyside, Ohio
Shadyside is a village in Belmont County, Ohio, United States, along the Ohio River. It is part of the Wheeling, West Virginia Metropolitan Statistical Area...

, rejected the master agreement apparently because they disagreed with the plan to gradually resume work; those locals remained independently on strike.

The agreement on mandatory overtime provided for little more than the 1973 side letter had already gained for the company.

The contentious issue of limitations on the number and type of job transfers was dropped from the master contract and addressed to varying degrees in plant-level agreements. Limitations varied widely. In one plant, employees could make no more than five transfer requests at one time (files would be purged every six months), there were no restrictions on transfers to higher-paying jobs, and lateral and downward transfer requests were limited to six a year. At other plants, a few stricter limitations were set, such as limiting transfers to one every 90 days. But industry analysts agreed that these were marginal gains.

IH also agreed to extend the union contract to only one new plant. The pact only covered the proposed facility in Wagoner, Okla. While union members would be given preference for jobs at Wagoner, they would lose their seniority and would have to accept the Wagoner plant's pay and fringe benefits (which remained to be negotiated).

UAW chief negotiator Pat Greathouse called the contract an "overwhelming victory" for UAW members.

Nearly all independent commentators saw the agreement as a losing proposition for International Harvester. The company had incurred deep financial costs, lost market share, and achieved none of its key demands despite McCardell's assertions that the proposals were critical to the company's success. "[T]here is no question the company is the big loser in this one," one Wall Street
Wall Street
Wall Street refers to the financial district of New York City, named after and centered on the eight-block-long street running from Broadway to South Street on the East River in Lower Manhattan. Over time, the term has become a metonym for the financial markets of the United States as a whole, or...

 analyst said.

The strike lasted 172 days, at the time making it (at the time) the longest in UAW history and the longest strike in International Harvester history. International Harvester made key errors—including using inexperienced negotiators, going public with bargaining demands, and attacking key union issues such as seniority and the lack of mandatory overtime without giving itself room to negotiate—which greatly prolonged the strike. The seeming arrogance of top company officials is considered by many to be a serious strategic error. Company officials seemed surprised that the union could hold out for any length of time, and McCardell appeared to assume that the international union staff (not rank and file members) were pushing for a strike.

Aftermath

International Harvester incurred significant delays in resuming operations. Plants in Rock Island and East Moline took several weeks to resume work. Several small UAW-represented craft unions
Craft unionism
Craft unionism refers to organizing a union in a manner that seeks to unify workers in a particular industry along the lines of the particular craft or trade that they work in by class or skill level...

 which were not part of the master contract talks continued to strike at IH's Louisville plant. The large blue-collar locals refused to cross the picket line (which was their right under the contract), keeping the plant shut.

The strike severely impacted the company's financial status. International Harvester lost $257.2 million in the second quarter, for a total of $479.4 million in the first half of the year, while sales slid 47.3 percent. The company confirmed earlier rumors and put its Scout utility vehicle division up for sale to help cover the losses, and by the end of April 1980 was forced to take out loans which increased its short-term debt from $442 million to a staggering $1 billion.

International Harvester never recovered from the strike. In November 1981, IH asked the UAW for $100 million in wage and benefit concessions. Rising interest rates, demand weakened by the early 1980s recession‎, and high manufacturing costs pushed the company's total debt to a whopping $4.5 billion. On December 23, 1981, the company reached an agreement with 200 of its lenders to refinance $4.15 billion of its debt in a bid to avoid bankruptcy. On January 20, 1982, the UAW rejected Harvester's request for concessions because McCardell had just given $6 million in bonuses to salaried employees. But with the firm's financial condition rapidly worsening, the UAW opened negotiations in March 1982. Negotiators reached a tentative agreement nearly two years to the day after the 1979–1980 strike ended, giving Harvester $200 million in wage, benefit, pension, and other savings over three years.

On May 3, 1982, one day after the UAW ratified the concessionary contract, Archie McCardell was fired by International Harvester. Although McCardell asserted he had resigned, industry and press observers said that he was fired. Time
Time (magazine)
Time is an American news magazine. A European edition is published from London. Time Europe covers the Middle East, Africa and, since 2003, Latin America. An Asian edition is based in Hong Kong...

reported that the company's 16-member board of directors met in a two-hour meeting over the weekend. Pushed by the company's debtor banks, the board finally agreed to fire McCardell. "The real wonder was that McCardell had not been ousted much earlier," Time said.

The company's downard financial spiral continued. For fiscal year 1980, 1981, and 1982, International Harvester incurred a combined three-year loss of $2.4 billion—the largest such three-year loss for any American company in history at the time. International Harvester sold its farm equipment division to Tenneco
Tenneco
Tenneco is a $6.2 billion Fortune 500 company that has been publicly traded on the NYSE since November 5, 1999 under the symbol TEN...

 in 1985, and changed its name in 1986 to Navistar International
Navistar International
Navistar International Corporation is a United States-based holding company that owns the manufacturer of International brand commercial trucks, MaxxForce brand diesel engines, IC Bus school and commercial buses, Workhorse brand chassis for motor homes and step vans, and is a private label...

.

Pat Greathouse retired from the UAW in May 1980.

External links

The source of this article is wikipedia, the free encyclopedia.  The text of this article is licensed under the GFDL.
 
x
OK