Analyzing the Pilot Issues at American Airlines (1999)

In this LabotTalk issue:

How a Corporate Campaign Defeated J.P. Stevens

By Ray Rogers, Director, Corporate Campaign, Inc. | Fall 1999

In 1974, after a 14-year struggle, the Textile Workers Union of America (TWUA) won an election to represent 3,000 workers at seven J.P. Stevens & Co. plants in Roanoke Rapids, N.C.

A few years later, Sally Field won an Oscar as best actress for her performance in "Norma Rae," a movie based on the organizing struggle at Stevens and the experience of TWUA member Crystal Lee Sutton. In the movie, many of the names are changed — for example, Stevens becomes "O.P. Henley & Co." — to protect the moviemakers from legal liability.

In the final scene, a jubilant crowd of workers loudly celebrates their victory over an industry well known for brutal working conditions and a company regarded as the nation’s worst labor law violator. A happy ending, but not the whole picture.

Real Life vs. Reel Life

Actually, the Stevens workers didn’t get the fruits of their victory — a contract — until six years later. The company stopped resisting the union only after ACTWU (the Amalgamated Clothing and Textile Workers, formed by the 1976 merger with the smaller TWUA) made Stevens the target of the first corporate campaign by organized labor.

Today, the abuses of corporate power are multiplying as rapidly as the lists of lawless acts by Stevens back in the ’60 and ’70s. Community, public interest, environmental and religious groups, as well as labor unions, want to challenge irresponsible corporate behavior. How to do this, and greatly increase the chances of success, will be the subject of this column in The Labor Educator.

The J.P. Stevens Corporate Campaign, which I directed for ACTWU, was not the only reason for the happy ending that occurred with labor’s victory over Stevens in 1980. But it did provide irrefutable evidence that there are methods other than long and costly traditional strikes and boycotts to challenge powerful institutions and force them to behave responsibly.

Boycott Wasn’t Enough

When ACTWU was formed in 1976, its leaders and George Meany, then president of the AFL-CIO, announced the kickoff of an international "consumer boycott" against Stevens to pressure the company to sign a contract. While on the union staff, I had researched Stevens and concluded that such a strategy, however well intentioned, was insufficient.

I reasoned that a consumer boycott could never bring enough pressure on the company to force a contract settlement, nor could any kind of moral suasion, even with thousands of political, religious, civic and labor leaders signing on as supporters. Less than a third of Stevens’ products were sold to consumers and even those were mostly sold under names other than J.P. Stevens or could only be identified by checking lists of registration numbers.

Also, it was illegal at the time for unions covered by the National Labor Relations Act to pressure retailers to stop selling products by boycotting their stores; unions and their supporters could only appeal to consumers not to buy a product. (After the Debartolo decision in 1988, unions are no longer prohibited from engaging in such "secondary boycott" activity.)

I wondered how, in 1976, all those labor leaders with so much at stake could make such a bold commitment based on a strategy that had about as much chance of succeeding as the proverbial snowball in hell.

Stevens Surrounded on All Sides

So I conceived a multi-faceted campaign of strategy and tactics to empower the union. I did this by drawing a chart with a circle representing J.P. Stevens in the middle. Then I drew several arrows converging on the circle from all directions, each representing a key element for building a comprehensive campaign.

The union needed a plan that would allow no means of escape for Stevens. At the heart of the concept I called a "Corporate Campaign" was one arrow on the chart labeled "Confronting the Web of Power Behind the Company."

Unions and others fighting for justice cannot confront powerful adversaries and expect to gain any meaningful concessions unless they are backed by a significant source of power themselves. A real corporate campaign is a mechanism to confront power with power.

They Run, But They Can’t Hide

In 1976, TWUA sent a group of 11 people to attend Stevens’ annual meeting; about 30 others carried signs outside. Such a public presence, particularly in New York City, made the union look weak and its cause almost inconsequential.

A year later, ACTWU’s Corporate Campaign organized hundreds of people to buy a share of Stevens stock in order to attend the annual meeting, while thousands demonstrated outside. The company, which had for decades held annual meetings in New York, was so stunned that it moved the following year’s meeting to South Carolina and never returned to New York.

In an article published in 1981, I wrote that a corporate campaign "takes on the power behind a company. It shows clearly how to cut off the lifeblood of an institution… Since powerful institutions are both economic and political animals, they must be challenged in both the economic and political spheres." Workers’ and poor peoples’ struggles must be moved "to the doorsteps and into the boardrooms of the corporate power brokers."

That’s what happened with J.P. Stevens. Eventually, several top corporate officers resigned or were dismissed from the boards of Manufacturers Hanover Trust, New York Life Insurance and Stevens itself. The company’s corporate allies, led by Metropolitan Life Insurance, finally gave Stevens an ultimatum: "Settle or else!"

The vitality and relevance of corporate campaign strategies was underscored in 1995, when prominent business leaders — including Thomas Donahue, president of the American Trucking Assn.; Gary Hess, head of Associated Builders and Contractors; R. Bruce Josten, a senior V.P. of the U.S. Chamber of Commerce; and Paul Huard, senior V.P. of the National Association of Manufacturers — demanded that Congress make such campaigns illegal (because, as Donahue said, "this kind of reprehensible conduct has no place in America.")

Cutting Off the Cash Flow

One year after contracts were signed at Stevens, a company vice president, Hal Addis, addressed the annual meeting of the South Carolina Textile Manufacturers Assn. "Of the three major tactics employed (by the union) during its confrontation with Stevens," he said, "the corporate campaign designed to cut Stevens off from the financial community was the most effective."

The veteran labor reporter A.H. Raskin of the The New York Times made a similar point: "Pressure on giant banks and insurance companies and other Wall Street pillars, all aimed at isolating Stevens from the financial community, helped generate a momentum… that could not be achieved through the 1976-80 worldwide boycott of Stevens products or through more conventional uses of union muscle such as strikes and mass picketing."

As part of the 1980 Stevens settlement, the company demanded what the news media called "the Ray Rogers clause," which stated in part: "…the Union will not engage in any ‘corporate campaign’ against the Company… (and) will not in any manner attempt to effectuate the resignation of members of the Board of Directors of Stevens, or to effectuate the resignation or removal of Stevens executives from the boards of directors of other companies, or to restrict the availability of financial or credit accommodations to Stevens, or by deliberate conduct to affect materially and adversely the relationship between Stevens and any other business organization."

Next month: More on Stevens, subsequent battles, and how today’s unions can take the offensive and win.


Corporate Campaign Lessons For
Airline Industry Unions

By Ray Rogers, Director, Corporate Campaign, Inc. | Fall 1999

Two recent highly publicized, high-stakes disputes in the airline industry, apparently won by management, could have had far better outcomes if the unions involved had understood and employed the Corporate Campaign concept.

Last month in The Labor Educator, I explained that a real Corporate Campaign is multifaceted and multidimensional. Like the union campaign against J.P. Stevens in 1976-80, which I directed, it should leave no room for opponents — whether corporations, government agencies or individuals — to escape the hot seat. No union strategy should be so scripted or one-dimensional that management and its allies will know what to expect or how to respond.

Both the Federal Express pilots and the Allied Pilots Assn. members at American Airlines tried to challenge sophisticated and highly resourceful managements with one-dimensional confrontation strategies. They isolated themselves and failed to educate and communicate with their thousands of AFL-CIO and independent union brothers and sisters, their employers’ customers and the general public.

They also allowed the debate on each conflict to be narrowly confined to specific labor issues, rather than broadening the issues to engender more public support. A timely warning from professional strategists about their seriously flawed approach could have saved both unions a lot of money and trouble.

Foul-up at FedEx

The 3,500 FedEx pilots counted on the threat of a strike during the peak Christmas season to extract major concessions from the company and win a significant first contract victory. FedEx responded by outsourcing work and beginning to radically restructure operations in order to cut pilot jobs. The union, convinced that FedEx was taking steps to eliminate hundreds or even thousands of jobs, abandoned its strike threat and instructed members "to resume flying overtime if needed by the company during the peak Christmas season."

The showdown with FedEx ended abruptly when the threatened strike lost its power potential and the pilots had no other strategy. Although the union finally gained its first contract, it was, by all accounts, dictated by the company.

Like the FedEx pilots, the Allied Pilots Assn., representing 9,200 American Airlines pilots, tried to place all their eggs in one basket and ended up with egg on their faces. A couple of years ago, pilots at American — led by then-President Capt. James Sovich — went on strike. The strike ended within minutes as a result of President Clinton’s order. That took away their only real weapon and rendered them powerless.

During the busy Presidents Day weekend this year, the American pilots (now led by a new president, Rich Lavoy) resorted to an illegal sick-out (a kind of selective strike). The result was havoc, disrupting plans for 600,000 passengers as 6,600 flights over 10 days had to be cancelled. Massive public outrage was directed at the union, followed by an injunction and the citation of union leaders for contempt. In April, the union was ordered to pay American more than $45 million in damages (substantially more than the union’s total cash reserves). Also pending are lawsuits filed by various passengers seeking damages of more than $200 million.

Playing into Management’s Hands

As a staunch supporter of labor, aware of American’s long history of belligerency toward employees, I applaud the willingness of APA’s leaders and many of the pilots to stand up to management. Regrettably, they followed a course of action that played right into the hands of management and created a terrible predicament for themselves and their union.

If the pilots stick together and learn from their strategic blunders, APA can recover and become a stronger union. If the enormous proposed fines are upheld and the pilots are smart, they’ll throw in about $5,000 each to pay off the fines and keep union resources intact while they regroup and try to mend fences with the flying public.

After all, if it weren’t for the union, the pilots wouldn’t be able to pay the fines in the first place. While opposing the company’s scheme to shift work performed by American pilots to lower paid pilots employed by a "new" airline purchased by American’s parent, AMR Corp., they should promote other issues that will generate broader support.

An American pilot quoted by The New York Times (April 17) said: "We were led to believe that we had run out of options, that the only thing left to do was vote with our feet." Nothing could be further from the truth. As we learned in the J.P. Stevens days and in many later struggles, any union or organization can develop and wage a successful campaign if two key problems can be solved.

A Question of Vision

The first problem is an analytical or conceptual one. You must be able to articulate and outline on paper a strategy in which you have total confidence — meaning you know you’ll win if you can carry it out. A Corporate Campaign program can be viewed as a kind of spectrum, with a beginning point ("A") and an end point ("Z"). Point "Z" is defined as total defeat or, in the most extreme cases, total annihilation of the adversary through lawful, nonviolent means. If you can steadily progress from "A" toward "Z," there will always be a breaking point or a point of compromise, and the battle will end long before point "Z" is reached.

A comprehensive Corporate Campaign plan encompasses a variety of strategies, tactics, issues and targets. In-depth research, specialized corporate/financial/political power analysis, careful selection and prioritizing of individual and institutional targets and issues — these are all critical components of a winning strategy.

The term "strategy," as used here, means far more than the usual assortment of demonstrations, media exposure and public relations gimmicks. Unions faced with tough situations won’t get very far by simply trying to harass or embarrass powerful and intransigent corporate and political adversaries. Why would they make decisions and adopt policies that cause them to lose face? Why would they hand over millions of dollars through concessions?

Practically speaking, the only alternative is to force an opponent to deal with real and inescapable economic and political pressures. These are generated through a relentless series of actions in which each move serves as a springboard for the next, thereby broadening the conflict. Once you have identified strengths and weaknesses — your own as well as your opponent’s — the union’s strengths can be pitted against the opponent’s weaknesses. Such a matching process alone will go a long way toward diminishing the size and power of the "Goliath" confronting you.

Raising the Stakes

The campaign must escalate in ways that so raise the opponents’ costs (or feed their fears) that it becomes imperative for them to take what the late Saul Alinsky called the "low road to morality." They will do the right thing, albeit for the wrong reasons. They will deal fairly with the workers’ legitimate needs and concerns only when they are convinced they have a lot more to lose than they have to gain if they don’t.

Once you have developed a winnable campaign plan, the second problem is one of organization and execution. Does the union have the know-how and resources to mobilize and channel the economic and political forces that are needed for victory? Researchers and strategists must know what to look for and how to analyze and use the information uncovered. Similarly, organizers who understand the Corporate Campaign concept must become campaign technicians — able to structure campaigns, expand the union’s resource base and outreach capabilites, and coordinate multiple actions to give workers the greatest chance for victory.

Next month: What a pilots’ fightback strategy should entail.


‘Fighting Smart’: A Better Flight Plan For
Union Pilots

By Ray Rogers, Director, Corporate Campaign, Inc. | Fall 1999

Pilots who work for the nation’s major airlines consider themselves an elite group. They’re well paid, highly trained and responsible for safely transporting millions of people and billions of dollars worth of cargo. Within their industry, they are indeed elite professionals.

But that doesn’t make them any smarter than the average rank-and-filer about "fighting smart" against their unions’ adversaries. When it comes to confronting today’s corporate establishment, these elite professionals often behave like amateurs and dabblers — as confused and uncoordinated as I would be in the cockpit of an airplane.

It is sometimes suggested that if the American Airlines pilots who belong to the independent Allied Pilots Assn. (APA) would merely join the much larger Air Line Pilots Assn. (ALPA) under the umbrella of the AFL-CIO, all their problems would be miraculously solved. This is nonsense; ALPA and many other large AFL-CIO affiliates have fared no better in recent years (and in some cases, a lot worse) than the APA.

When sophisticated corporate manipulators foment a labor-management crisis, most unions — whether independent or affiliated with the AFL-CIO — suffer needlessly because they lack any sense of direction. They wander aimlessly over unfamiliar terrain without confidence in themselves or a map to guide them. Even "elite" union pilots might as well be flying blindfolded when they cannot, or will not, learn about corporate research and analysis, confrontation strategies, solidarity building and campaign technology.

Lessons from Alinsky and Ann Landers

In training sessions for workers and union leaders, I always advise them to think strategically. A story about the late Saul Alinsky, the superb organizer who wrote Reville for Radicals and Rules for Radicals, underlines the importance of doing so. The Chicago ghetto in which Alinsky worked was beset by two big problems: politicians and rats. The city council had voted money for rat eradication, but wouldn’t release it — so, angry and frustrated residents loaded hundreds of rats into their old pickup trucks, drove to City Hall and released them.

Suddenly, the squirming politicians freed the funds to wipe out those pesky rodents. What can we learn from this? The best way to solve a serious problem is to make your problem a problem for those who have the power to solve it.

American Airlines’ parent, AMR Corporation, has been trampling on its pilots and other workers for a long time — sometimes in complicity with the federal government. It’s time for APA leaders and members to heed the wise counsel of advice columnist Ann Landers: "The Lord gave us two ends, one to sit on and the other to think with. Our success will depend upon which end we use the most."

Challenging the Corporate Coalition

From the perspective of a pro-union strategist, American Airlines is very much like other corporations. It’s a coalition of individual and institutional interests — some more vital and vulnerable than others — that can be challenged, attacked, divided and conquered. The strategist must first analyze the company’s roster of top officers and directors, each of whom should be held accountable for the company’s labor problems.

It’s a simple truism that with ownership comes responsibility. The owners of companies — stockholders — must also be held accountable for the actions of the board they elect and the entities they control.

Finally, the creditors, banks, public pension funds and particularly the insurance companies that hold the lion’s share of American Airlines long-term debt must be drawn into the conflict because of the critical influence they can exert upon corporate officials. After all, access to credit is the food and water supply for a corporation.

The fondest wish of the typical CEO, director or major investor — other than perpetual profits — is to avoid interference with business-as-usual. A credible challenge to board interlocks or major stock and credit relationships will do to a targeted company what prolonged lack of income does to strikers and their families. Willingness to compromise will then become a painful necessity.

Cultivating Public Sympathy, Not Frustration

Left to its own devices, a company like AMR or Federal Express may be willing to expend huge chunks of its accumulated wealth to wage war on employees. But it’s another story for the company’s support network — the outside directors, interlocked institutions, major stockholders and providers of credit. These folks will be far less willing to engage in massive resistance if they are drawn into the conflict in ways that directly threaten them.

That is why Corporate Campaign strategists break down both the company and its power network into manageable units. Then comes the attack phase: going after vulnerable board members, major shareholders and lenders. (It’s not uncommon for board members to be linked to major stockholders and/or creditors.) A thorough examination of the corporate and political structures surrounding AMR and FedEx will reveal innumerable ways to weaken the resolve of the companies and their allies.

Also critical to the pilots’ success is that they broaden the issues and guide public attention and debate on them. Labor issues can often be hard to digest, but the public can understand and condemn corporate greed and malfeasance. At American Airlines, as well as certain companies with which it is intimately linked, there are mountains of "dirty laundry" that top policymakers don’t want aired in public lest they jeopardize the squeaky-clean image they’ve spent many millions and many years to create.

Unlike a strike situation, the type of scenario I would propose for American and FedEx pilots would place enormous pressure on airline executives without causing the members, their unions or the airlines to suffer devastating, long-term financial losses. Embarking on such a strategy would heighten the anxiety level for management — but just as importantly, it would lay the groundwork for job actions and threats of job actions that would be much more effective than what the unions have attempted thus far.

Passenger and cargo customers would be educated and forewarned in ways that would make them much more sympathetic to the pilots and critical of management. The orchestration of sympathy for the pilots and skepticism toward management would also discourage untimely government intervention that can, as we’ve seen, severely injure even a strong union.

In next month’s column, I’ll offer more specific suggestions — and specific targets — of which the American and FedEx pilots ought to be aware.


It Takes More than Solidarity
To Take On Airline Bosses

By Ray Rogers, Director, Corporate Campaign, Inc. | Fall 1999

American Airlines pilots and their union are still being battered by their company’s propaganda and lobbying machines. It’s time the union seized the initiative in the lengthy contract dispute. Here’s how they might do so.

First, concerning unions in general: while leaders and members may belong to different political factions, when it’s time for contract negotiations they must set aside their differences. During a contract fight, political infighting must be put on hold so that energy and resources are focused on challenging the union’s real adversaries. Everyone in the union needs to keep their "eyes on the prize" — but solidarity alone is not enough. A union also needs a battle plan that leaders and members can embrace, one in which everyone is motivated to participate.

The American pilots, members of the Allied Pilots Assn. (APA) could build widespread public and political support by embarking on a massive public relations effort involving themselves and their families and aimed at winning new allies. It should be stressed, however, that such an effort would not involve wasteful expenditures on paid advertising.

Airing the Airlines’ Dirty Laundry

APA could produce high-impact literature for mass distribution that portrays top policymakers at AMR Corp., American’s parent company, as the pariahs they are. While the general public often finds labor-management issues boring and confusing, practically no one supports or condones extreme corporate greed and wrongdoing.

AMR’s labor relations history is so deplorable that when U.S. District Court Judge Joe Kendall issued a temporary restraining order against the pilots’ sickout action, he commented: "If you would look up bad labor relations in the dictionary, you would have an American Airlines logo beside it." In recent years, AMR has also made news by dumping toxic wastes, participating in price-fixing schemes and incurring heavy fines for neglecting airplane maintenance.

Yet, American’s boss and his closest colleagues reap lavish rewards for themselves, not only from the airline but from other companies and institutions on whose boards they serve. Take Donald Carty (please!), who replaced Robert Crandall as CEO in May 1998 and has been paid more than $10 million by AMR in the last three years. Even those payouts pale in comparison with Carty’s expected future compensation, particularly from exercising stock options. He piles up still more big bucks and boosts his own political and economic clout by serving on the boards of Dell Computer and Brinker International.

To kick off a serious union image-building effort, each of American’s 9,200 pilots could take on a simple assignment: hand out just 100 brochures telling the pilots’ side of the story and asking sympathizers to contact Carty and say, "Please tell us what specific steps AMR is taking to right so many wrongs." This alone would set off a public relations and logistical nightmare for the company: in a very short time, each pilot could visit 100 neighbors or greet 100 passersby at an airport or travel agency. Nearly a million brochures would be circulating, and AMR would be helpless to stop them.

Brochures and appeals for help could also be sent to thousands of union leaders and labor activists throughout the U.S. and other countries to which American flies. (Corporate Campaign, Inc. maintains a unique database of nearly 75,000 entries for just such purposes.) Other activities could include targeting the communities in which AMR bigwigs live for literature distribution and rallies; soliciting support through E-mail and the Internet; preparing and placing pilots for appearances on radio and TV, and generating newspaper interviews, Op-Ed columns and letters to the editor.

Pinpointing the Problem

The pilots would stay "on message" at all times, and the message would be: "We want to keep flying and safely transporting millions of passengers and tons of cargo each year. That’s what has made the airline so profitable. But we need management that is more trustworthy and less greedy, confrontational and disruptive. You can help us get it."

Carty’s lucrative board membership at Dallas-based Brinker International, one of the country’s largest "casual dining" companies, provides another way to drive the pilots’ message home. His fellow board members at Brinker, including Dallas Mayor Ron Kirk and football legend Roger Staubach, would certainly be surprised to discover people handing out literature, doing informational picketing or conducting media interviews outside hundreds of the Brinker restaurants.

If the pilots’ campaign kept the heat on Carty, and AMR didn’t resolve its labor dispute, Carty could be forced to resign from Brinker. There are many other sensitive targets, including Aetna, that are intimately linked to American’s disgraceful labor policies.

And then there are the campus connections: it so happens that the presidents of the Universities of Pennsylvania and Oklahoma fill two of the 11 seats on the AMR board. Delegations of pilots should demand to meet with them, making it clear that if necessary, the whole university community might be drawn into the campaign.

In reaching out to other unions, the American pilots should give special attention to the United Auto Workers who are facing tough negotiations at General Motors. Two of AMR’s top policymakers sit on the GM Board of Directors and help set labor policies there. APA could also assign teams of its members to "Adopt a Politician" in Washington. It’s a safe bet that Ann McLaughlin, former secretary of labor in the Bush administration, and former U.S. Sen. David Boren of Oklahoma have used their influence in Congress to keep American pilots on the defensive; after all, both serve on the AMR board. Isn’t it about time the pols whose districts include millions of union households tried to help level the playing field at AMR?

What about Fedex?

Even a cursory look at Fedex’s corporate structure reveals numerous vulnerabilities at that company. Despite the pilots’ near-total isolation in their effort to secure a decent first contract — and even despite the clashes their independent union has had over the years with the much larger, AFL-CIO-affiliated Air Line Pilots Assn. — they could have forged alliances with several unions, including some of the largest in the AFL-CIO.

Why? Simply because the UAW, Teamsters, Service Employees and Communications Workers, among others, are looking down the barrel of the same union-busting shotguns that are pointed at the Fedex pilots. Most of the leaders and members of these unions have no idea that the Fedex board of directors includes people who sit on the boards of companies like Caterpillar, Nike and Walt Disney (the parent of ABC) that have no use for unions. Last winter, when the Fedex pilots tried to have an impact while standing virtually alone, 2,400 CWA/NABET members were locked out by Disney/ABC.

It’s a shame that Fedex management got the upper hand in the struggle over the pilots’ first contract. Their union suffered unnecessary humiliation and will surely face more difficult struggles in the future. By thinking and acting strategically, they could have saved themselves a lot of grief.

Ray Rogers, Director of Corporate Campaign, Inc., is considered the nation’s leading labor strategist.

His Bio can be found at: http://www.corporatecampaign.org/ray_rogers_bio.php

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