Staggered by Hits, Unions Need Ways to Regain Punch : Jobs: Balance of power tips to management, leaving workers feeling vulnerable in a cold new business world.

PEORIA, Ill. —  Fay Vogelsang thinks her union is greedy, arrogant, shortsighted, stubborn and deceitful, and she supports it wholeheartedly, knowing the company is so much worse. Besides, who else is going to look out for the Little Guy in a business world that orbits around the Almighty Dollar?

The strike at Caterpillar Inc. has been going on for 11 months now, so long that Vogelsang “can’t even remember who did what to who first.” Sometimes, she would like to herd both sides into a room, bang all their ornery skulls together and forbid them to leave until they come up with a contract.

She has analyzed the issues as best she can, siding with the union here and the company there. Her loyalty to the United Auto Workers comes less from the sum of this abstract reasoning than the tug of gut instinct: The union exists for the benefit of the workers, and the same cannot be said of the company.

“Without a union, Caterpillar would just be a dictatorship and do whatever it wants,” she said. “I make $18.99 an hour with good benefits, and that’s because of the UAW, not the benevolence of the company. How much longer it will last, I don’t know. Sometimes I feel like I’m falling off the earth.”

Like so many Americans, Vogelsang does not fully understand the changes going on in the world’s economy and how they will touch her future. What she feels bone-deep is a gnawing sense of vulnerability. Competitive pressures have been changing Caterpillar with ruthless speed. The union has always been her advocate and protector, but now it no longer seems the company’s equal.

Cat has been accomplishing the remarkable. With a makeshift work force of office workers, temporaries and union line-crossers, it has not only operated its factories during the strike, it has been able to take advantage of high demand for its earthmovers and turn in record profits of $823 million.

The two sides have recently begun to meet again, but occasional talks have yet to bring a settlement. The UAW’s only leverage lies in its hopes of tiring the company out. Managers and office workers are wearying of their hours in the plant, though fewer than 1,000 of them are still filling in for strikers.

Some 4,000 UAW members are crossing the line, but the number on strike has more or less remained steady at about 9,400. People like Fay Vogelsang, vowing to stick it out no matter what, are the UAW’s main source of strength.

At age 45, she is an outgoing, big-hearted woman who in 20 years has done almost every kind of job in Cat’s foundry outside of Peoria: poured molten metal and scraped the furnace and run chemical tests in the lab.

Vogelsang is no malcontent. Her supervisor is such a close friend that she refers to him as “my dad.” Another boss is in her Bible study group. When the UAW asked workers to wear anti-company T-shirts and buttons, she decided it was not her thing. Unlike most strikers, she never calls anyone a scab. “You never know,” she said. “Someday I might be a scab myself.”

This time, though, she is loyal to the union. “In the back of my mind, I think we’re going to lose, and I ask myself: Why should I suffer? But I’m tired of seeing the Little Guys always getting beat up by the Big Guys.

“Big Business is just wiping out the unions, and pretty soon there won’t be any more blue-collar people like me in the middle class. Even if we don’t win, at least I want them to have to put on a Band-Aid.”

*

Labor is like a half-dead tree, taking nourishment from those few roots that remain hearty. Only about 11% of the private work force now belongs to a union; some experts predict that number will fall to 5% by the year 2000.

This decline has a ripple effect. Union contracts have often set a pace for the wages and benefits of non-union workers as well. With Labor strong, companies frequently paid their workers a premium to keep a union out. But with Labor weak, the momentum goes the other way. Unionized companies face ever-increasing pressure to keep wages down to compete with non-union rivals.

Since 1973, the growth rate of the U.S. economy has slowed from postwar highs but has advanced nonetheless. Growth in wages, on the other hand, has been stopped cold and has actually gone into reverse for the younger and less-educated. That means workers are producing more than they did 22 years ago while only getting roughly the same pay. It is important to ask why, and one reason is Labor’s decreasing ability to command its share of the pie.

In most industrialized nations, organized labor is considered a vital institution. But Americans barely think about unions at all. Last year, the AFL-CIO commissioned a confidential study of public attitudes toward Labor. A copy has been obtained by The Times. For most of those interviewed, unions were “not an important part of how they see the world,” the report said. In focus groups, participants had plenty of bellyaches about their jobs, but “it literally did not occur to them to look to unions as a solution.”

In polls, nearly as many people felt negatively about unions as felt positively. Two-thirds said unions were “concerned only about their own members” rather than workers in general. Non-union people actually felt “tremendous resentment” about high union incomes; they considered unions to be “bastions of special privilege,” unfairly inflating the wages of a few.

Very often, unions were seen as undemocratic, a sort of second boss telling workers what to do. People who said they knew a lot about unions were the most likely to feel this way. They also considered unions to be “out of touch.”

The report was sobering. Once a champion of the Everyday Joe, Labor has not only lost its political clout but its moral authority. There are some dynamic elements in unions today, but the public’s image remains one of hard-arteried, powerbrokering dinosaurs, more at home beside the pool at their annual Florida convention than at the time clock where working people punch in.

*

To talk with even the most forward-looking people inside Labor is to hear a discouraged chorus. What has become of the Labor movement? Most of all, they answer, it is not really a “movement” anymore, just an odd collection of unions, many of them too busy circling the wagons to look very far ahead.

No one strategy will put Labor back on course, they add. Different workers have different needs. Poorly paid restaurant workers might well benefit from traditional union structures, but computer programmers and other white-collar workers need unions that allow for their individuality and creativity.

The nature of work itself is changing. Fewer people expect long-term, or even full-time, jobs with a single firm. Labor must find a way to provide union protections that “travel” even as workers move among companies.

Multinationals such as Caterpillar employ about one-fourth of all laborers in the private sector. At these global giants, with the geographic mobility to simply leave workers behind, experts see a different challenge. Unions must prove themselves essential to a company’s competitiveness. They must add more to productivity than they extract in a wage premium. They have to “cost out.”

Approaches under the heading “labor-management cooperation” are the ideas most often presented by academics, presidential commissions and even union leaders. At companies like AT&T; and National Steel Corp., the traditional arm-wrestling has given way to a genuine partnership. Managers and workers collaborate on everything from shop-floor protocols to long-range planning.

Others within Labor are wary of such arrangements. They argue that the partnerships often turn out to be mythical and that the workers’ interests are inevitably laid aside for those of the stockholders. But the main opposition to welcoming a strong union as a partner comes from management itself, these days getting more of what it wants without sharing any of its natural power.

Thomas Kochan, a professor at the Massachusetts Institute of Technology, is a leading supporter of cooperative strategies, but he finds that too few companies are willing to make the leap. “The United States has the highest amount of conflict between Business and Labor of any democratic nation. The bitterness and lack of trust for each other’s basic legitimacy is a national disgrace.”

Since the 1970s, companies have become skilled in what is politely called “union avoidance”: tactics to block representation elections or win them at the ballot box. There were only half as many elections in 1990 as in 1980; these days, companies win such votes slightly more than half the time.

While these victories are partly owed to Labor’s waning appeal, much also can be traced to management’s hard line. Companies have little to lose in firing union organizers, even if some of the discharged workers eventually win a return to their jobs through the National Labor Relations Board. The penalty is only back pay, minus whatever the worker has earned somewhere else.

According to NLRB numbers, for every 48 workers voting to form a union from 1986 to 1990, at least one was illegally fired for organizing activities.

*

Fay Vogelsang is tired of hearing the company brass talk about the global economy. To her, this always seems to involve an implied threat: If the union does not play ball, Caterpillar will move more of its operations abroad.

“Maybe the only next step is to unionize the world,” she said, lingering on that intriguing thought for a while. She would bet the strike would be over fast if Cat’s workers in Brazil and Belgium and England walked out too.

Actually, more and more people are thinking this way, that unions need to link hands internationally. “Global unionism is the answer to global capitalism,” Jack Henning, executive secretary-treasurer of the California Labor Federation, said in a speech last year. “There is no other answer.”

Corporations have slipped the bonds of national loyalty, but this will be a more difficult challenge for unions. The spirit of nationalism seems mightier than the idea of global solidarity. Would Fay Vogelsang risk her comfortable home and Plymouth Voyager to help aggrieved Caterpillar workers in Indonesia?

*

Organizing is to a union what blocking and tackling is to a football team: the fundamentals. Unions only have about the same number of members today as they had in 1955, when half as many Americans were in the work force. People in Labor seem to agree: Unions need to get back to the basics of organizing.

But some also give excuses. They say the labor laws now favor Business--or organizing is just too expensive. Union leaders commonly estimate the cost of signing up one new member at $1,000. Based on that, it would cost Labor more than $300 million each year just to remain at 11% of the growing work force.

Others, however, argue that the problem has more to do with Labor’s vision. It must project itself again as a national movement, forming coalitions with the downtrodden and dispossessed, fighting injustice wherever it is found.

More than anything, Labor needs to deliver a simple but compelling message: People are entitled to a say in the way they work and how they are paid, and they have a right to some kind of safeguard against the malice of a bad boss.

*

The decline of unions: That is Fay Voglesang’s main reason for spending so much of the past four years on strike. She does not want to see Labor lose another round. This principle has already cost her $35,000 in wages, and very often she has wondered whether the sacrifice makes any sense. “Who am I to stand up for the middle class? I’m just one little person.”

She is not unhappy with her salary at Cat; her worry is keeping her job at a time when Big Business is constantly cutting back. Once, Caterpillar laid her off for 6 1/2 years. Those were rough times. She was a divorcee then, supporting two kids. The jobs she was able to get did not pay nearly as well. Debt crept up on her like the incoming tide.

Vogelsang is remarried now. Her husband, Mark, works as a phone company lineman, and these days his income keeps the family ahead of its bills. “But Mark’s company is laying people off too,” she said. “It seems like no one’s job is safe anymore, at least nobody I know. Do you know anybody?”

*

Caterpillar has been in high gear. During the first eight months of the strike, it relied on its foreign plants for 9% of the products usually made in the United States, according to the company. But since March, production at the U.S. plants has been enough to satisfy even current robust demand.

There have been some problems. For one, turnover has been high among temporary workers. But managers say this has been more than offset by the zealous attitude of the temps who stayed, many of them eager to one day be hired full time. At several factories, the company boasts of record output, strike or no strike.

UAW line-crossers have profited handsomely from the strike; in 1994, their average earnings were $55,700 because of all the overtime. Some now dread the union’s return. “It sickens me to think about it,” said line-crosser Diane Roberts. Strikers will return angry at Cat, and even angrier at those who they consider union traitors. “They’re out there building up their hate.”

In anticipation of this, the company intends to enforce a new code of conduct that limits what employees can say or wear on the job. “There’s a union hard-core that tries to make things difficult,” said Chuck Elwyn, a Cat production manager. “But frankly, we’re not inclined to take it anymore.”

What is more, with so many technicians and tool designers working in the factories during the strike, the company has learned how to speed up some of the shop-floor processes. It will not need as many union workers as before.

*

The strike years have also been good to Caterpillar’s shareholders. Known on Wall Street in the ‘80s as an under-performer, Cat became a bright blue chip in the ‘90s. Last August, after the stock had coasted past 100, the board asked shareholders to approve a 2-for-1 split, which they gladly did.

The actual meeting was held in the First National Bank Building in downtown Chicago. Outside, a few thousand strikers were chanting anti-company slogans and singing protest songs. No one inside heard a thing. The meeting was in a basement amphitheater, sealed off from the distracting noise of the street.

*

Both sides proclaim their reasonableness, and their evidence has been similar. Cat has had good relations with other unions within the company, such as its security guards. By the same token, the UAW has made amicable deals with other makers of heavy equipment, including Deere & Co. and Case Corp.

The two antagonists reserve their vitriol for each other, like a couple whose marriage has been riven with distrust and turned hateful. For the union, the chief bogyman has been Cat’s CEO, Don Fites. For the company, it has been the UAW’s top negotiator, Bill Casstevens, though that soon may change.

Next month, both Casstevens and UAW president Owen Bieber are due to retire. Casstevens has said he wants to continue running the campaign at Cat as a special appointee; leaders of the union locals prefer that as well. But two weeks ago the UAW’s board of directors rejected that idea, refusing to break with longstanding retirement policies.

In the union halls, the strikers now suspect that Cat is waiting for “Cass” to retire, hoping to extract better terms from his successor.

*

The strike has been a smithy that forged some people into UAW radicals--and others into company loyalists. And still others it just seemed to melt down.

These days, the presidents of the locals no longer talk about knocking Cat flat on its back. Instead they complain about the company’s dumb luck, taking on the UAW when business was so strong and the dollar so weak, making it easier to sell tractors abroad. “It’s like someone put their hand on them and healed them,” said Larry Solomon, head of the Decatur, Ill., local.

Jerry Brown, of the Peoria local, does not know how the strike will turn out, but he intends to declare it a victory so long as the union still exists. “I’m more convinced than ever that the company was out to bust us, and our standing up to them is the only thing that saved us.”

Whatever the final terms of an agreement, they will have to deal with the many union members who have been fired for strike-related activities dating back to 1991. By the UAW’s count, the number has passed 125: Fired for calling someone a “scab,” fired for pounding against a strikebreaker’s car, fired for handing out union Christmas greetings on Caterpillar property.

There have been four or five suicides among the strikers as well, though they are hard to keep track of. Not everyone left a note, and it is difficult to know what role the walkout caused in so hopeless and final an act.

The latest was Charles (Mike) Power, 45. He had worked in assembly, bolting down heavy parts with a big air wrench. After the strike began, he could not decide whether to go in or stay out. He crossed the picket line for a while, then came back on strike, crossed once more, then came out again. People from both sides were angry with him and considered him disloyal. “This strike is over for me,” he announced to a friend on the day before he shot himself.

*

In March, Don Fites won a poll of 3,300 American chief executives and was named CEO of the year by Financial World magazine. In a cover story, he was described as “not one to back away from a good game of chicken.” That attitude, the article said, enabled him to lead Caterpillar to record profits in 1994 despite “a long and bitter strike by the United Auto Workers.”

The presentation of the award took place at a $1,000-a-plate banquet in New York, with the proceeds donated to the Special Olympics. During the cocktail hour, the tall, energetic Fites was a popular man among the other tuxedo-clad CEOs. Well-wishers put aside their canapes and drinks to pump his hand and slap him on the back.

The actual dinner was elegant. A fume blanc was served with the salmon appetizer, a pinot noir with the filet mignon. Fites rose from the dais to a standing ovation and accepted the honor on behalf of “many thousands of people--the worldwide family that has made Caterpillar what it is today.”

Researcher Anna M. Virtue contributed to the reporting of this series.

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Top 10 Unions

The biggest AFL-CIO unions in the United States and how membership has changed:

(in thousands) 1981 1993 % change IBT 1,832* 1,316 -28.2% International Brotherhood of Teamsters AFSCME 957 1,167 21.9% American Federation of State, County and Municipal Employees UFCW 1,034 997 -3.6% United Food and Commercial Workers International Union SEIU 579 919 58.7% Service Employees International Union UAW 1,275** 771 -39.5% United Auto Workers IBEW 834 710 -14.9% Int’l Brotherhood of Electrical Workers AFT 461 574 24.5% American Federation of Teachers IAM 680 474 -30.3% Int’l Assn. of Machinists and Aerospace Workers CWA 526 472 -10.3% Communications Workers of America USWA 918 421 -54.1% United Steelworkers of America

Source: AFL-CIO

* Teamsters figure. Affiliated with AFL-CIO in 1987

** UAW figure. Reaffiliated with AFL-CIO in 1981