American Company Unions

Front matter

A STUDY OF EMPLOYEE REPRESENTATION PLANS, "WORKS COUNCILS" AND OTHER SUBSTI- TUTES FOR LABOR UNIONS

By ROBERT W. DUNN

WITH CONCLUSION AND A PROGRAM FOR THE FIGHT AGAINST COMPANY UNIONISM

Chapter I: What are Company Unions?

I.

WHAT ARE COMPANY UNIONS?

The Definition.

By company union, as the term is used in the pages of this pamphlet, we mean all kinds of shop committees, representation plans, works councils, conference boards, boards of operatives and industrial representation schemes, applied to the workers of a particular company or plant, and instituted on the initiative of the company employing these workers. "Shop committees," as the term is understood by trade unionists, are not discussed in these pages, but only those committees initiated, controlled and dominated by the employers and divorced from the trade union movement.

This pamphlet also will not include any discussion of certain types of dual unions instituted usually thru the influence of a number of employers, or by an association of companies, and including the workers in the several plants or mines operated by these companies. Such unions as the recently organized Mine Workers' Association of West Virginia, the Pittsburgh District Federated Miners' Association, and the Independent Bridge and Structural Iron Workers' Union, (confined to New York City), are not included in these pages. There may, however, be one or two such associations covered by the figures on railroad company unions.

As indicated in the preface, we have also excluded from this discussion those different shades of class collaboration which, tho involving regular trade unions, have in effect almost the same purposes as company unions.

The company unions discussed in this pamphlet are the familiar types, of company-installed works councils and employee representation plans, covering the workers of companies, large and small, ranging all the way from small clothing firms to the great steel, packing, and railroad companies.

Relation to Other "Welfare" Schemes.

Company unions are usually accompanied by other welfare, uplift, and cooperation schemes, which will not be treated in these pages both because they are subjects for separate studies and because they are not an essential accompaniment of company union plans. Many companies, such as the United States Steel Corporation, that have introduced stock ownership for workers, have no company unions. Other companies that have gone in for "representation" have not adopted stock ownership, thrift schemes, bonuses, and other "loyalty" and production stimulating devices. Some companies believe they can keep their workers "under control," and out of labor unions, by the application of the more obvious welfare poultices. Others, more thoro-going, believe their workers cannot be kept on the road of "sound economics" without some sort of "works council" scheme thru which they can have a "voice" in certain limited features of factory management. So we find all sorts of variations and degrees of paternalism in the gamut of personnel relations. In this study we confine ourselves to one phase of these relations, although occasional references will necessarily be made to other management devices now in vogue in American industry.

Backed by the Open Shoppers.

It should be noted at the outset that company unions are a part of the program of many of the American Plan and Open Shop associations, large and small, local and national. At conventions and conferences they have endorsed this device as a 100 per cent American way to bring capital and labor together.

The League for Industrial Rights, one of the most active open shop, anti-union organizations, urges the workers to rally to "factory solidarity" as opposed to "class solidarity." The factory solidarity program includes undivided allegiance and loyalty to the leadership of the employer and his foremen. "These are the only labor leaders the employees need," say these militant class-conscious employers.

The Chamber of Commerce of the United States has officially endorsed this "new union," or this "new type of collective action." The report of one of its conventions, as carried by a well known capitalist wire association, touches on the company union resolutions as follows:

This news report goes on to state that "the business union" (the United States Chamber of Commerce) proposes to be a national combination. But, it insists on "shop representation" or single plant organization for labor.

In this story of the Chamber of Commerce endorsement we get the kernel of the company union idea. It could hardly be better stated to bring out its essentially anti-union character. The slogan is: "Unite the Employers. Divide the Workers."

The more furious of the manufacturers' organs, such as the New York Commercial, hail these company unions as the death knell of "so-called collective bargaining" and "widespread organization of labor" which, with the growth of the employee representation plans, is now "unneeded."

Mr. Noel Sargent, manager of the Industrial Relations Department of the National Association of Manufacturers, and a most sedulous mouthpiece of the open shop interests, in a report on labor in England in 1925, contrasts the more favorable condition in which the American capitalists find themselves in view of the weakness of labor here and the growth of the company union. He says:

And such outspoken union-baiters as Henry Harrison Lewis, agent of President Barr of the National Founders' Association, and editor of many journals fighting for the non-union shop, have been lavish in their praise of the company union, particularly the highly advertised Pennsylvania committee plan. Like the League for Industrial Rights, Lewis and his organizations and organs are keen for the "new type of intra-factory organization of employees" and believe it will "produce greater loyalty and solidarity between the management and the employees and thereby make the men less susceptible to the appeal of militancy."

It need not be explained to the reader of this pamphlet that to the open shop, company union advocate, "militancy" means any form of bona fide labor union activity.

Chapter 2: Extent of Company Unions

II

EXTENT OF COMPANY UNIONS.

Developments—1917 to Date.

The growth of company unions dates from about 1917, not more than a dozen plans of any consequence having existed before America entered the war. Among the more important of these earlier plans were those of the Davis Coal & Coke Co., the White Motor Co., the Printz-Biederman Co., the Nunn, Bush and Weldon Shoe Co., Wm. Demuth & Co., the Colorado Fuel and Iron Company, and several plans sold to company executives by the magnetic, go-getter, "industrial evangelist," John Leitch, author of Man to Man. Company-guided "shop committees," for special purposes, had of course been known before this in American industry, and had been used by the shrewder employers in settling grievances without the intervention of a labor union. But the plans above mentioned were among the first permanent committee systems adopted in this country.

During 1918 and 1919 some one hundred firms adopted joint committee arrangements upon the suggestion or under the pressure of the National War Labor Board. The Shipbuilding Labor Adjustment Board also put across many "shop committees" in the government ship yards, some of which are still in existence, much to the annoyance of the Machinists' Union. The purpose of these committees, instituted partly through governmental pressure, was to gain "industrial peace" and thus, secure greater war production, to conciliate labor, which then—the employers contended—"had the upper hand," and to check the rapid spread of unionism. To be sure, not all of these committees clashed immediately with the trade unions, as the trade union leaders had given up the strike weapon in the most essential war industries, and were closely collaborating with the government. Later, a few of these committees were dropped, having served their war purposes, but the majority of them remained, and other employers, who had seen them applied during wartime, under the supervision of government boards, began to introduce them with no outside or governmental supervision to interfere with the employer's complete control over his workers.

A fairly thorough survey of company unions ("works councils," as they call them) made by the National Industrial Conference Board—a federation of American employers' associations which carries on research and propaganda on behalf of the employers—shows the following increases in the number of councils, and workers represented in them, since 1919:

Year | Number of Councils | Number of Workers

1919 | 225 | 391,400

1922 | 725 | 690,000

1924 | 814 | 1,177,037

As the Conference Board concludes, "this represents a rapid and practically continuous growth from 1917 to 1924." The number is reported to have decreased in 1925, and one might venture the guess that there are now no more than 800 of these company unions actually functioning, embracing over a million industrial workers.

The 814 above mentioned were included in some 212 separate systems of "works councils," some of which cover many separate business organizations. As we shall note later this number also includes only a few of the railroad companies which are known to have established one form or another of "independent unions," and "divisional representa- tion systems," chiefly during and since the strike of 1922.

In recent years the company unions have shown notable growth in the printing trades, in public utilities, and on the railroads, though the distribution statistics indicate the largest number in the various branches of the metal trades (210), with lumber next (160). However, most of the latter are local branches of the Loyal Legion of Loggers and Lumbermen, an extensive company union system embracing a large number of companies in the Northwest. This organization was created to destroy the I. W. W. and the other lumber workers' unions in that section during and immediately following the war. After the lumber industry come, in order of numbers, the company unions in the printing, food products and rubber goods industries after which came the longshoremen.

The company union is naturally a useful tool in the large factory industry; more than half the number of employees covered in the Conference Board survey represent establishments with over 15,000 employees each. (See Special Report No. 32, Nat'l. Industrial Conference Board).

The Railroad Company Unions.

The railroad company unions deserve separate and special mention in any study of this subject. For the roads have been particularly afflicted with the disease, their company associations having frequently taken on the form of what might be called a dual union. Some of them, such as the Associated Organization of Shop Craft Employees on the Great Northern, have displayed a structure and form similar to that of the bona fide railway unions with lodges—grand and otherwise—travelling business agents, system officers, trustees, official organs, and other features closely imitating the regular rail unions.

The Statistical Bureau of the United States Railroad Labor Board in 1924 prepared a list of local and unaffiliated labor organizations almost all of which, with the exception of the American Federation of Railroad Workers, and a few smaller organizations, could be described as company unions. All of them, furthermore, represent some class or craft of workers in regular negotiations with the railway companies. This list is incomplete in some respects, but it includes some 64 railroads, 22 of them classified as eastern roads, 17 in the southeast, and 25 in the west. The list covers some 300 separate associations and organizations on these 64 roads. None of them are affiliated with the Big Four train service brotherhoods or with the railroad labor unions operating under the banner of the A. F. of L.

Some of the railway company unions are small and local, while others comprise the workers over whole systems and include scores of shop committees, lodges, and locals. The following classes of workers are included in this list of associations: Clerical and Station Forces, Maintenance of Way and Structures and Unskilled Forces, Supervisors of Mechanics, Shop Crafts (including boilermakers, machinists, electrical workers, blacksmiths, sheet metal workers, carmen, linemen, and other mechanical workers), Telegraphers, Enginemen and Firemen, Signalmen, Train Dispatchers, Yardmasters, Dining Car and Restaurant Employees, Marine Department Employees, Train Porters, and Miscellaneous Employees.

The largest inroads on the regular railway unions have been made among the shop craft workers' organizations, the clerical workers, and the maintenance of way men—those unions which experienced a rapid growth during the period of government control of railroads, but which suffered the heaviest losses during the railroad executives' offensive of 1921–23. For example, the United Brotherhood of Maintenance of Way Employees reported at its 1925 convention that "there were 25 railroads infested with company unions or dual organizations since the last convention." On 13 of these roads the regular union stated it had won a complete victory against the company union, which means that it secured the right to appeal its grievances to the Railroad Labor Board in case of disagreement after direct negotiation with the company. On the other roads the regular union was worsted by the company unions and lost all rights of representation either for all or a part of the workers under its jurisdiction. This report of the Maintenance of Waymen indicates the apparent vitality of the company union even in the face of labor unions the officials of which have spent most of their working hours in recent years combatting the menace of the "independent" company association.

Chapter III: Why Company Unions Are Installed

III

WHY COMPANY UNIONS ARE INSTALLED.

The Chief Aim.

The aim of the company union, expressed in the very broadest sense, and in the language of the employers, is to secure some kind of "cooperation in management" between workers and employers. There may be a score of subsidiary aims and objectives but the average employer hopes to gain some sort of cooperative relationship with his workers when he puts in a "plan." In dealing with his workers in this way the employer naturally has no use for a real labor union, in other words, a union over which he cannot have complete control, For a trade union, no matter how conservative it may be—and no matter how reactionary its leaders,—may, upon occasions, make wage demands or ask for hours and conditions which the employer refuses to grant. The struggle for the surplus value of labor's toil is always implicit in any "employer-employee situation," as it is called. A union, not under the thumb of the employer, cannot always be depended upon to obey his commands and carry out his wishes. Hence his preference for his own kind of committee. Hence the opposition of trade unions to company unions. Hence the efforts of the employer when confronted with trade unions, to try to break them to pieces and to introduce his "functional" company committee.

In this section we shall examine some evidence which will help to explain why the employer installs company unions and why he uses them to undermine every other kind of union organization.

One student of the problem, E. J. Miller, of the University of Illinois, explaining the rapid increase in the number of plans in 1918–1919, says:

This observation has been made by others including a dozen or so college professors who have looked into the development and growth of company unions during this period. Underlying all other motives ran that common fear of labor organizations and a desire to find a substitute that would, the employer hoped, satisfy the restless workers.

The Employers' Interests Primary.

Certain unmistakable assumptions underlie the company union, They appear again and again in the literature describing it. For example in A Works Council Manual, issued by the National Industrial Conference Board, we read that "the company's interests are of primary concern in the joint meetings, and accordingly compensation of the employee representatives by the company may be reasonably expected." The "company's interest" is thus frankly stated to be the first concern of these "mutual arrangements" and "industrial democracy" plans. It is only natural that the workers should be compensated for working in the company's interest. The significant fact is that so completely are they hypnotized by the catch-phrases of the company's "human relations" salesmen that they perform their committee service gratis, or at least for no higher compensation than they receive on their regular jobs.

To Offset the Union.

"A large employer of labor who organized a shop committee has told me recently that the whole aim of the shop committee movement is to head off unionism. That, he pointed out, was its principal merit," writes John A. Fitch in his Causes of Social Unrest. The same writer, who has had some opportunity to know the mind of the employer in its franker moments, records an incident which is typical:

Still another instance, cited by the same social investigator, will throw light on the motives of employers when they turn to "shop committees" to save themselves from labor unions:

"The supervisor of welfare work in another large institution once said to the writer in speaking of the election of representatives. 'Of course we let the workers think that they are selecting their own representatives, but actually we select them'."

Rubber Stamp Committees.

Says W. D. Moriarity, professor of economics. at the University of Washington, who has apparently looked into the shop committees with some care: "It is one of the triumphs of the employers' unions (that is, associations confined to one concern or one line of business, and fostered by the employers as a way of getting their men out of control of the American Federation of Labor) that they have been able to use the shop committee … to get more and more control over their labor"” He says further that the committee is often "just a 'rubber stamp' to satisfy the men that they are having something to say about things and a way of meeting their employers to present grievances or requests."

Another student who made a survey of some 175 plans in operation concluded, after he had weighed the evidence from all the companies, that "employee representation systems are not organized to give employees means for exerting economic pressure. When they take advantage of the opportunity to do so, the plan is usually abandoned."

It should be observed also that many of the plans lie more or less dormant when there are no strikes on the horizon, but in time of industrial disturbance they are revived and dressed up to fool the worker again and keep him away from the real trade union. Should a strike come before the plan has been installed; it will frequently be introduced immediately after the strike is broken, with the strikebreakers as charter members! One company, the Standard Gas Engine Company of San Francisco, after inaugurating such a plan after a strike had been smashed, reports that its shop "is now` being operated under the American Plan manned by clean-cut and loyal Americans of a high order of intelligence." Other company superintendents have in public and private described the company union "as an excellent buffer against organized labor."

A Bit of Oil History.

Mr. B. H. Sinclair, an officer of the Midwest Refining Company, told a conference of employers in 1924 why he thought their representation plan, installed in 1919, had been such a "wonderful success." The anti-union role of the company committees is illustrated in his remarks:

Employers as Labor Leaders.

The Chief Engineer of a large machine manufacturing company also expresses this common object of the company union:

The same engineer goes on with brutal frankness to show just how the committee can be used to suit the employer's purposes:

"Passing On" the Wage Cut.

An Interdenominational Committee on Industrial Relations which studied the company unions in several plants in 1924 found among many of the workers a strong feeling against the works council. The workers told this committee in many instances that wages and conditions were still determined exclusively by management and that the only function of the company committees was to pass the wage cut on to the men, with the least disturbance. As one worker expressed it: "The company will give us just what it wants to give us, councils or no councils." We shall note later how really practical and useful the company association has been, in dozens of instances, in inducing workers to take wage reductions without resistance, if not without complaint.

Strike-Breaking—Union-Smashing.

All thru the literature dealing with the company unions we read of workers who, because of a "plan," refused to strike or, if they had struck, returned to work sooner than the rest of the workers in the community. The Goodyear Tire and Rubber Company's company union, which calls itself a "Republic," and its citizens, "Industrians," holds its meetings in a million-dollar club house. It reported some years ago with enthusiasm, "When a machinist strike was called in Akron recently, only 40 per cent of the Goodyear machinists responded. In a few weeks they returned to work." The "Republic" had functioned efficiently as a strike-breaking machine.

Indeed, so well is the main purpose of the company union understood to be the liquidation of labor unions and labor union strikes that a scribe for the New York Trust Company, commenting on the growth of the company union, said in 1925, "The rapid growth of works councils suggests the possibility that their development, by recognizing the mutual interests of employers and employees, has to a great extent removed the necessity for unionism." And where labor unions have to be destroyed, the company association has proved of great value to the employer. Scores of "plans" have been installed during or at the close of unsuccessful strikes. Refusing to deal with the trade union, the employer must frequently offer his workers a substitute "collective bargaining" on another platter. The Western Union Telegraph Company, the Pennsylvania Railroad, the Amoskeag Manufacturing Company, du Pont de Nemours & Company, Washburn-Crosby Company, Westinghouse Electric and Manufacturing Co., and the leading meat packing companies are illustrations of the types of corporations, the shop committees of which have been used as effective instruments in "liquidating" trade union organization among their workers.

"Promoting Efficiency."

In the shops where the presence or threat of unionism is absent, the chief general purpose of the company union is to promote efficiency and get more work out of the workers. The tendency is for a large number of grievances to be settled soon after the introduction of a plan, but these gradually recede in importance. This tendency is described by the Assistant to the President of the Bethlehem Steel Corporation, writing in Factory, in 1925:

And Harold Swift, Vice President of Swift and Company, writes in the same journal, that:

While the President of the Knox Hat Company brings out the same development:

Chapter IV: Specimens

IV

SPECIMENS.

To give the reader a close-up of company unions, and a better understanding of the employers' objectives, let us sketch briefly a few of them. We have already noted that there are endless varieties of plans. Attempts have been made to classify them according to form, structure, degree of "control" permitted the worker, and by other arbitrary standards. We leave aside these hair-splitting distinctions based upon analysis of constitutions and by-laws. We describe the plans with a view to showing what they have meant in terms of anti-trade unionism, in the only terms the average employer can comprehend. The class-conscious corporation manager asks of the company union one major favor, "Rid my plant of the union"; or, "Keep that union out of my shop." Those workers who have had intimate experience with the company union may consider the following examples all too inadequate to illustrate this one underlying motive of the capitalist. However, these random examples suggest the intensity of the struggle between the trade union and the company unions and the main characteristics of the latter. And in non-union industries, where few workers have ever been permanently organized, these examples will suggest the methods used to cultivate this most subtle and paternalistic instrument of exploitation.

Packing House Councils.—"Industrial Democracy" in the Jungle.

Since 1920–21, the workers in the packing houses of Armour, Swift, Wilson, and Cudahy—the big quartette of meat preparers—have been working under company committees and councils. These councils and conference boards were installed to engineer wage cuts and put the trade union out of commission. A wage cut of 10 per cent was effected in November, 1921, thanks to the docility of the Armour "representatives" and their fellow-dupes in the plants of the other firms. When some of the militants struck against this sell-out, and all the stock yards were crippled by the strike, the judges, police, and other agents of the capitalist state, put to rout the recalcitrant workers. The "representatives" were bullied into getting the workers back to the plants, and the strike fizzled in two months. The publicity men of Swift and Company thereupon announced that "the whole episode was a justification of our taking our employees into our confidence." The company union had scored!

All these highly advertised packers' plans are presented to the public as new ventures in "industrial government." They are said to inspire in the worker "an interest in the business," and to give him an opportunity to "learn the point of view of the employer." But the control over the lives of the workers remains exclusively in the hands of the management. The Swift plan, for example, leaves the final veto power with the chief executive of the company. The Armour conference board plan also permits the worker to appeal to the Big Boss—the General Superintendent. From his decision there is no higher appeal unless the worker—cares to carry his case to God—or his story to the Daily Worker!

Under the "new democracy" bearing the Armour label, the general superintendent presides over all meetings of the General Plant Conference, the supreme "parliament" of the Armour plants. Imagine a worker—an ordinary hog-killer—filling such an important post. It would never do under the Armour brand of democracy! Note also that the other strategic and influential position—secretary of the Conference Board—is always occupied by a salaried company official, functioning from the "front office" and under the thumb of the superintendent. Under such strike-proof control what chance does a worker have who proposes a wage increase? Oh yes, a committee will be appointed "to look into the matter." The company will serve up the necessary figures to prove the impossibility of a wage advance. The hand-picked committee will be confused, and "impressed" with the company's figures. The wage move will be smothered. The worker who proposed it may be fired. To be sure, he can appeal to the General Superintendent!

Accompanying the packers' company unions are the other incentives to plant loyalty—bonus schemes, pensions, group insurance, safety devices, company magazines—all concentrated on one thing—to teach the worker the highly-prized "sound economics" which the company experts have invented. The worker is "made to see the problems of the company" and the frightful competition the company has to undergo—in a monopolistic industry! There are also the usual stool pigeons, spies, and undercover men invaluable to any company that would keep abreast of "what's on the workers' mind."

The most recent act of the company union in the Armour Plant has been to entertain suggestions from the company that the 12- and 14-hour day, and the 60-hour week schedule be restored. At present the plants are operating on a ten hour day and a 54-hour week. Should the packers put over this move it would be largely due to their careful cultivation of the Conference Board Plan.

The "splendid spirit of devotion to the company's interest" which Mr. Louis F. Swift, President of Swift & Company, refers to in his annual report for 1925, resulted in an approximately 18% return on the real investment of the stockholders. At the same time the average male worker in the packing house earned $27 a week. Mr. Swift attributes the "devotion" to employee representation.

General Electric Company.

In 1918 the trade unions were strong in the plants of the General Electric Company. The National War Labor Board, as was its custom, installed shop committees in settling a strike and the regular unions went along in good faith. After the war and the liquidation of the Labor Board, the regular unions were deflated but the shop committees remained to function under the domination of the company. In Lynn the plan has gained the loyalty of some of the old strike leaders who have accepted responsible posts on Joint Adjustment Committees. As with other plans of a certain type the Committee's decisions are referred to the plant manager whose decision is final. One old worker who has displayed high powers of absorption of the employers' point of view, writing in Management and Administration, says: "We passed thru two wage reductions without labor difficulty of any kind."

The General Electric News, a classy fortnightly published by the Lynn Works, is used chiefly to promote the plan. Minutes of the committees show the plan concerned chiefly with home ownership, safety rules, and the "general business outlook." The remainder of the pages of the News are packed with social notes, bridal showers, tributes paid by Gerard Swope, the President of the Company, to a deceased member of J. P. Morgan & Company, radio club news, "sound economics," illustrations, children's puzzle pictures, baby contest snap shots, a report of a speech by Owen D. Young, blurbs on the joint celebration of Roosevelt Day and Navy Day, bowling club scores, and other "human interest" material. (Incidentally, the importance of the company's employee magazine in cultivating the plans and the "plan spirit" should be carefully studied by those interested in the spread of company unions. The works journal is the most effective channel through which plans are put over—and kept over—among the workers).

At the G. E. C. works at Schenectady the representation plan is also in full boom. A report from a reliable informant at this plant in October, 1925, tells of a "representative" who lost his job "because he took his position seriously and actually tried to represent the wishes of his fellow-workers who had chosen him." It appears that he fought for the rights of his constituents and was fired for his pains. The regular trade unions have been almost completely extinguished in the Schenectady Works thanks to the deceitful company association. The electrical workers' union which formerly had nearly 2,000 members in the plant has now been reduced to "a number" not disclosed by the local business agents. The machinists were also quite active in the plant in wartime, but are now defeated and unrecognized. Patternmakers and plumbers are functioning to some extent. This situation illustrates the weakness of the out-of-date craft unions in the face of a plant management with a policy directed against organized labor, and using the "factory solidarity" argument to build up the company organization. No wonder the General Manager of the G. E. C. can be reported by the Com and Financial Chronicle as saying, "If we had been 100 per cent right in our dealings with labor, labor would never have organized … in my opinion employee representation substitutes a better method and will prevail." A better method of robbing the workers!