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TABLE 2.-Jones & Laughlin Steel Corp.cost increases-purchased material

l'ersus wages and salaries3 steel plants COMPARISON OF MARCH 1947 WITH APRIL 1948

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Senator SPARKMAN. Mr. Chairman, I must ask to be excused. I will take a copy of Mr. Stephens' statement with me and read it.

Senator FULBRIGHT. Mr. Stephens will you go ahead?


RELATIONS, UNITED STATES STEEL CO. Mr. STEPHENS. I assume I am supposed to supply a lot of information. I hope you are not disappointed.

May I say first in response to your question to the Admiral, there were introduced before the Special Panel appointed by the Wage Stabilization Board which heard both parties, a number of exhibits. I shall be happy to provide a clean copy of what is identified as company's exhibit 2, which gives the statement of the cost of the demands susceptible to determination for the industry as represented before the panel. We can produce that, sir, and I am sure it shows the method of calculation. I do not recall it in detail now. I have not looked at it since last February.

Senator FULBRIGHT. We would want that included.

Does thạt give the basic data from which you make the conclusions as to the cost ?

Mr. STEPHENS. Yes, sir, it does. This is not a clean copy. That is a marked-up copy that I have been carrying around. We can provide copies.

Senator CAPEHART. I think it ought to be in the record.

Senator FULBRIGHT. I think it might be included as one of the exhibits.

Senator CAPEHART. Mr. Chairman, it is really what you have been asking for and I think it ought to go in the record.

Senator FULBRIGHT. Is that for the industry or for your company?

Mr. STEPHENS. That is for the industry as the industry was before the panel, Mr. Chairman.

Senator FULBRIGHT. I think it might be helpful if we had an example of your individual company for comparison. I am telling you this because they have challenged the basis of calculation,

Mr. STEPHENS. We will be glad to do that.

Senator FULBRIGHT. I do not know how we can resolve that difference of opinion about it, unless we have your figures, and they will have to show how they are not correct. That is the only way I know to get at it.

Senator CAPEHART. Mr. Chairman, I think this ought to go into the record because this is really what has been asked for two or three times this morning.

For example, here is how they arrive at the cost of double time on Sunday.

Senator FULBRIGHT. The only thought I had was a practical one. If they will give us a number of copies we will have them. It might be more manageable that way.

Senator CAPEHART. Maybe the chairman does not know it, but this record we are making here, while it is an executive session, when the record is printed that is being handed out to all the press and I understand there are hundreds and hundreds of copies being asked for-I would like to make a motion that this whole document be put into the record.

Senator FULBRIGHT. I have no objection to it.
Senator CAPEHART. It covers just what we are looking for.

Senator FULBRIGHT. It is 16 pages. Very well, we will put it in the record.

(The information referred to will be found in the appendix, p. 2463.)

Mr. STEPHENS. On the first sheet of my statement I merely point out my name and why I am here, and then I go on to say that I chairmaned the first collective bargaining conference between United States Steel and the union, and thereafter was intimately associated with the dispute at all phases, serving as chairman of the bargaining conference for six companies in New York and meeting subsequently with Messrs. Feinsinger and Bullen in New York and in Washington with them plus Dr. Steelman.

At the top of the second sheet I say what I hope to be able to present to you, namely, that my thesis is divided into three parts-collective bargaining; second, the Wage Stabilization Board, its composition, rules, and functions; and finally, whether the Board's recommendations can in fact be regarded as asserted by Mr. Feinsinger and the President of the United States, as merely permitting workers to “catch up”-steelworkers to catch up—with workers in other industries.

In the next paragraph I offer, of course, to answer questions.

I might respectfully suggest that there are many questions which may be in your minds which will perhaps be covered in my statement and the time might be better conserved for the questions to come at the end, but that is entirely up to you gentlemen, of course.

Under the caption "Collective bargaining," I state that Mr. Murray and others stated there was no collective bargaining with respect to a renewal agreement and that such was because of a premeditated effort of steel-company managements to prevent such bargaining.

In United States Steel's first conference with the union on November 27, 1951, and many times thereafter in many forums Mr. Murray charged that United States Steel intended from the beginning not to bargain but to see to it that a dispute be developed and be referred to the Wage Stabilization Board.

In intended substantiation of this charge he quoted frequently from a November 15, 1951, public address by Mr. B. F. Fairless, president of United States Steel. The portion quoted was:

Whether our workers are to get a raise, and how much it will be if they do, is a matter which probably cannot be determined by collective bargaining and will apparently have to be decided finally in Washington.

What are the facts? In my opinion, they can be derived from the following: In the first place, Mr. Murray did not, I believe, in using the above quotation from Mr. Fairless' address, at any time quote the very next sentence which followed. That sentence was:

It is a question which involves the basic anti-inflation program of our Government and one which will clearly affect our entire economy.

In further recognition of the fact and in an effort to avoid the consequences implicit to our economy in substantial concessions to the steel union, Mr. Fairless, on December 21, 1951, proposed that the union abandon any attempt to get the increase in steel prices to which it might be entitled. This proposal was at various times characterized by the union as "phoney," I believe was the term.

The New York Times of November 6 and 8, reported the proceedings of the convention of the Congress of Industrial Organizations. The November 6 account carried the following:

Although the steel union will not draft its specific demands until next week, union officials doubt it will be possible without governmental intervention to avert a strike of 1 million steelworkers on New Year's Day.

The November 8 report declared that Mr. Philip Murraycharged that the regulations of the Wage Stabilization Board had killed free collective bargaining, and he served notice that his own union would ignore the limits fixed by the Board in seeking pay increases for 1 million steel workers later this month.

The steelworkers' demands, presented to United States Steel on November 27, would, so far as those costs could be assessed, have increased employment costs by more than 60 cents an hour.

The demands involved practically all sections of the agreement then in effect. The present dispute arose out of these demands.

Had the union wished, it could have requested, because of the magnitude of the task involved, that United States Steel and other companies commence collective bargaining November 1, or earlier as it had in 1950.

But it did not and the companies were in effect foreclosed from such a suggestion. This was because the officials of the union who attended the CIO convention in early November elected not to call a meeting of the wage policy committee of the steelworkers' union to formulate its demands, until November 15, I believe, in Atlantic City.

In fact, a release from that meeting announced that conferences with United States Steel would commence in Pittsburgh, Tuesday, November 27.

When I met personally with Mr. Murray on November 19 in Pittsburgh, I referred to that release, and readily agreed to meet on the day selected by the union, having earlier suggested that the sooner we could confront the major task ahead of us, the greater chances of some degree of success.

Was there any bargaining! I direct you first to the transcript of the hearings before the special panel of the Board.

On January 10, 1952, Mr. Murray again declared :

The steel companies, acting obviously in concert, refused to engage in any collective bargaining with the union.

A day or so later, the following from Mr. Murray appears in the transcript:

On noneconomic matters, the United States Steel ('orp. did submit counterproposals.

The subsequent transcripts disclose that United States Steel offered counterproposals running to 11 of the 18 sections of the agreement. And, in fact, some six issues were by agreement of the parties reserved from presentation to the panel, on the ground that the union proposals and the counterproposals from United States Steel were sufficiently close as to warrant the belief that they could be adjusted satisfactorily when other matters before the Board had been concluded.

In the first bargaining conference on November 27, I advised that certain provisions of the then expiring agreement required clarifica

tion and recasting. These sections dealt with management's direction of the business in an efficient manner and with wage incentives.

Misunderstandings as to the meaning of such provisions had caused very serious strikes. Further, we sincerely believed that certain provisions called local working conditions were being abused by the union in the grievance and arbitration procedures.

They were musts from our angle so far as clarification in the new agreement under negotiation. I so declared to the union delegation.

The union, however, would bargain on its own terms only. It made clear that except as the companies agreed in ways satisfactory to it on the wage and other cost demands, the union would not address itself seriously to a composition of the sections which the company, on the basis of experience, regarded as requiring modification.

The result was a stalemate. United States Steel was confronted, in its opinion, with the substance of the New York Times report of November 8, that the union would ignore stabilization regulations.

Faced with such substantial cost demands, United States Steel made no counter offer on wages, shift differentials, holidays, overtime, vacations, reporting allowance and other demands.

It acted as it did for three reasons: First, it would not join with the union in any program to breach stabilization regulations, as it understood them; second, in a period of controls and in the light of the accumulating experience in the operation of the business, United States Steel could not, in the absence of knowledge of what could be cone pricewise, hope to reach agreement at that time and without material union concessions on these extraordinary demands because of their unbearable effect on its employment costs; and finally, our experience in collective bargaining has led us to the conclusion, inevitable and true, in our opinion, that when judgment indicates that diegotiations cannot be concluded by such offers as might be made, it is unwise and unfortunate to make offers which provide a foundation for those who will ultimately deal with the dispute, on which to build.

So much for the collective bargaining phase.

Now, with respect to the Wage Stabilization Board—its composition, rules, and functioning—in August, 1950, responding to a letter request from Senator James E. Murray, that I give my views on certain wartime labor disputes procedures, I wrote, among other things, that any wartime labor disputes board should be composed, so far as policy making, administration and awards were concerned, of outstanding public members dedicated exclusively to the public interest.

In answer to another question, I expressed my belief that were the principles by which such an agency would be governed determined in advance, such fact might minimize the work load of such an agency.

My reasons for these views are, first, bargaining is an inherent characteristic of tripartite boards. And, in the affairs of men, selfinterest or what is regarded as such rarely can be put completely out of mind-in the broader good.

My suggestion to Senator Murray contained the thought that labor and management advisers could be appointed to advise the kind of board suggested—but that such advisers should not be permitted to play other than an advisory role in policy making or awards.

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