Strategic Lessons for Labor from Candyland
by Dan Swinney
Appearing in New Labor Forum, Fall/Winter 1999
Today there are references to labor community coalitions and alliances in almost every labor publication you can find-from independent voices such as Labor Notes and various activist caucuses to the AFL-CIO. This is a welcome development and an obvious move for a labor movement that is still struggling to reverse the steep decline in membership over the last two decades. Clearly, if a labor movement that represents 12-15% of the workforce is going to grow, it requires a strong identity and connection with the broader working class community. But in large part, both the left, center, and right of the labor movement are still driven by a strategic perspective and tactical arsenal for the economy that was created and refined in the post World War II expansion. The differences between them are not as large as they think. What's missing, and what still hamstrings even the best financed and publicized initiatives by labor is a contemporary strategy that reflects both the profound changes that have taken place in our economy; and a willingness by labor to seize the opportunities and responsibilities that new conditions require if labor is to return or surpass its earlier period of strength.
A deeper look into what is actually taking place in the economy that goes deeper than the claims of the "dream economy" and the American "jobs machine" reveals the deeply destructive consequences of larger and larger sections of capital turning to even more speculative and short-term strategies for share-holder return. This qualitative shift in the strategy and capacity of the business community has created an equally stunning opportunity for labor, in alliance with community, to gain a leadership role in the whole society through offering another way to run the economy. This new strategic perspective is emerging from the experience of a number of activist leaders and organizations that have been engaged in a profound level of investigation, experimentation, and reflection over the last two decades, in the context of particular struggles in particular communities and companies. Not only are lessons be learned on the tactics of organizing in this new context, but more importantly on the strategic analysis that should be guiding our work. These are the issues that should be debated and discussed by labor, community, and political leadership as we enter the new century.
The Center for Labor and Community Research (CLCR) was founded by labor and community organizers and leaders in the early 1980s in response to the wave of plant closings that swept over Chicago and every other major city in the country. For those of us, like myself, who had been working in industry for 10-15 years, the depth of the upheaval in manufacturing challenged many of the assumptions that had undergirded community and labor organizing in the post World War II period. During the decade of the 1980s, Chicago alone lost 3,000 out of 7,000 factories and 150,000 basic manufacturing jobs. I was the organizer and Vice President of USWA Local 8787 at Taylor Forge-as subsidiary of Gulf + Western, in Cicero, Illinois-an industrial suburb of Chicago. Taylor Forge became a victim of G+W's "cutting-edge" corporate strategy called "milking the cash cow." I and 800 workers lost their jobs with the company finally closing its doors in 1983. Between 1980 and 1986, Cicero lost 50 % of its jobs! Workers, union leaders, and community leaders were scared. The threat to move or close a company was very real. A demand by management for concessions in wages and benefits in exchange for job security completely undermined any sense of militancy or even loyalty to union organization. The gutting of the economic foundations of the community left community-based organizations overwhelmed by new demands and needs of constituents and fewer resources to meet those needs. And all of the information in the press and media about the "new global economy", the "new information age," and the new "service economy" left everyone with the sense that this emerging crisis was inevitable and beyond the reach of traditional organizing approaches.
For some, paralysis accompanied the view that this huge change in our economy was inevitable. For others, like CLCR, this unfolding crisis in manufacturing communities-urban and rural-became the cauldron for the emergence of new approaches to building labor/community alliances. We created CLCR to look more deeply at this new reality in the context of particular companies and communities. Over the last years, we have looked at hundreds of companies in Chicago and around the country, worked on behalf of scores of labor and community coalitions, and played a major role in several labor/community campaigns in the Chicago area.
A Labor/Community Alliance in Candyland
The most influential campaign in our development began with a call in 1989 from the community organizers of the Northwest Austin Council and the South Austin Community Coalition-both leading members of a broader coalition called the Garfield/Austin Interfaith Action Network (GAIN). The members of their block clubs had been losing their jobs at Brach Candy Company, located in Austin. They had heard of CLCR's earlier efforts to prevent plant closings and wanted us to look into what was going on at Brach on their behalf. In 1987, Chicago's largest candy company, Brach Candy, had been purchased by a European billionaire. Within two years, the company had laid off 1,000 workers, had 5 different CEOs, and lost $100 million in sales. The owner threatened to move the company unless granted a free trade zone by the Federal government. We agreed to look into the situation at Brach. We immediately made contact with Teamster Local 738 that represented the employees at Brach and facilitated direct contact between the local union and GAIN, starting an alliance that was sustained for seven years.
Our work began with in-depth research to assess the viability of the company to determine if the community and the union could be successful in their efforts. We reviewed all the public information we could find about the company and industry, and interviewed workers, industry analysts and top management personnel who were alienated from and fearful of the consequences of the strategies of the new owners. This was a viable company, with long-term potential, and very suitable to a form of employee ownership in partnership with management. Our next research was a "Social Cost Study" that documented the impact of the likely loss of 2,000 jobs on the local economy. This study indicated that the crisis at Brach would cost an additional 5,000 jobs in other sectors of the economy and $91,000,000 to government! Both studies of this company gave us a foundation to convincingly suggest that there really was another way to run this company and a compelling reason to maintain good wages and benefits.
Our opening gambit was an effort to facilitate a employee/management buyout. In discussions with Peter Rogers, one of the ex-CEOs of the company, other managers, and the union, we concluded that this type of capital strategy could be our most powerful and successful move. The company was clearly poorly managed and, with a motivated workforce we could gather the key information that was needed to turn the company around. It also seemed like a way to provide the owner with an admirable exit. This discreet year and one-half effort came to a dead-end when the owner simply refused to sell, but the effort proved to be worth the hard work and patience.
The company continued to deteriorate, and workers continued to lose jobs due to mis-management, and a narrow and poorly conceived strategy by the owner. With our partners in the Teamsters and in GAIN, we declared that the owner may have the right not to sell, but he didn't have the right to destroy a company that Chicago employees and managers had built over the decades and that served as anchor company for the community. We decided to leave the quiet strategy of acquisition and began to organize a broad-based mass campaign to save jobs and save the company. With the release of CLCR's study, "Misadventures in Candyland" that suggested an alternative strategy that could sustain the company, its jobs, and current wage rates, the Coalition to Save Jobs at Brach was launched. The Coalition had the support of 20 to 30 local community, labor, religious, civic, and development organizations--all insisting that company management work together with the community to turn the company around. The company agreed to meet with union and community representatives in face of growing pressure. The Coalition and Union's basic positions were:
* If Brach had a business plan that was plausible and on the "high road"--decent wages, and a partner in the development of the community--we would be their best friend.
<* If Brach wanted to pursue the "low road", we would fight them at every step and be their worst enemy.
To our initial relief, the company assured us that a new partnership was desirable and possible--we just needed to work through the details. In that context, the Coalition and the Union developed a series of creative proposals that would enhance the company and strengthen the position of labor within the company and promote the development of the community. These proposals were "state of the art" in labor/management issues and "cutting edge" in relation to the community. Part of the motivation by some of the union leaders was a deep commitment to the broader community. But the most powerful motivation was the recognition that if these negotiations led to a strike, the community would play a decisive role either in support of the strike, or in opposition-including crossing picket lines. The demands included:
1. Strengthening the efficiency of the company including a dramatic reduction of job classifications (from 240 to 6) and labor participation in management. This was a dramatic shift for the union in offering to drop a device that was used for years to protect certain jobs to increase the efficiency and productivity of the company. This was a statement to management and the community that the union was serious about impacting the way the company was run and managed.
2. A first option to buy the company if it became available for sale. The union and Coalition anticipated continued turmoil in management and ownership and wanted to be positioned to assume control of the company if the owner wanted to get out of the business.
3. Participating in ownership of the company through an ESOP. The union wanted to create an ownership culture within the workforce, even if majority ownership and control wasn't possible.
4. Community participation on the Board of Directors: This demand, in tandem with the demands for employee ownership, opened up an interesting opportunity if the company was serious about building public support for its products and strategy, and would accelerate the learning curve in the community on the challenges and opportunities that went with managing a major asset in the community.
5. First-source hiring from the community: Brach was located in the African American community, yet fewer and fewer people were being hired from the surrounding community-particularly for the high skilled jobs. This demand was a key issue in the eyes of the member groups of GAIN, and one of the reasons for their persistence in the fight. The union recognized the leading role the GAIN community coalition played in raising the concerns about job loss at Brach, and the powerful positive or negative role the surrounding community could play if there was a strike, and supported this demand.
6. Training programs in local community organizations for first-time applicants: This objective would have provided a great opportunity for the company to build the capacity and support of local organizations to insure that new applicants were work-ready. Workforce development programs through the community and the union allow the inclusion of labor/community values in the training in addition to technical and vocational skills.
7. Services for dislocated workers. Many workers were out of work and would not return to Brach. Extending services to them would build solidarity among the employed as well as with the unemployed.
8. Contracts to purchase goods and services for existing or new start-up business in the community. This demand made business sense as well as demonstrating the union's commitment to the development of the surrounding community. Success in achieving this demand would have created significant opportunities for African American entrepreneurs and would have built tremendous good will for the company, the union, and the Coalition.
9. The creation of a Candy Institute that would service the confectionery sector that would involve all the stakeholders in the candy industry and that would encourage "high road" business strategies and secure government support for High Road companies. This new project signaled to everyone that we were going to be involved in the industry for a long time, and that we were confident in our ability to shape the future of this key sector in ways that made absolute business sense but also corresponded to values and priorities of labor, community, and the broader public.
Following a brief period of constructive negotiations, the pressing deadline of the union contract forced the company to reveal its real strategy--and it was ugly and revealed the new Low Road business strategy that the new owner thought could prevail in the economic and political climate of the United States. The company launched a determined effort to break the union, to institute a two-tiered wage structure--cutting wages and benefits in half for new employees.
The union and community countered by escalating their organizing and public education efforts. The Coalition grew to include more than 100 area organizations. The union continued to work without a contract as it worked to build its strength internally and in the broader community. Building Dan Swinneythe Coalition and building the unity of the local was no easy matter. From the very beginning, management tried to drive a wedge between the community and the workforce. They tried to ridicule the demands on behalf of the community that had emerged in negotiations, saying that the union leadership had been taken over by the community. This argument had an impact in light of the newness and creativity of the approach and the lack of education on these issues within the rank and file, but also because of the internal divisions within the international that were being played out with a vengeance inside the local.
On Thanksgiving weekend 1995, the campaign made a decisive move. Every year on this weekend, Brach had sponsored the Christmas parade down Michigan Avenue. This was their big promotional event of the year. It was easy pickens'. Coalition members-ministers with their collars, West Side residents and their organizations, Teamsters wearing their jackets, and others filled the crowds on the side of the parade wearing masks that depicted the face of the owner of Brach wearing a Santa Clause hat and carrying signs with the same caricature. We had leaflets describing how Brach Candy Company was destroying Christmas for Chicago families. Two blocks away from the parade site at the Methodist Temple, 1,000 members of Teamster Local 738 met and took a strike vote and then filed into the streets to join the coalition members in protesting Brach's policy. That night, every TV station carried the message of the Coalition-not Brach's.
In a couple of days, the company retreated and signed a four-year contract. They withdrew their demands for a two-tiered wage system, accepted the union's proposal for employee participation and gainsharing, and agreed to provide millions of dollars of severance pay, if the company closed. Six months later, in a final act of vengeance, the company initiated a civil suit against me, CLCR, the Coalition charging us with conspiracy and trying to wreck the company. The suit was finally dismissed after a 16 month legal battle.
With the conclusion of the legal battle around the legal suit, the formal coalition came to an end. In the course of our research on Brach, we found out that Chicago produces more candy than any other city in the world. We have over 90 candy companies employing more than 13,000 people with more than $4 billion in sales. We new that many of these candy companies paid decent wages because of the artisan skills of the work force but that were also vulnerable to the low road. Inspired by the success and character of the Garment Industry Development Corporation in New York City organized initially by the International Ladies Garment Workers Union, CLCR organized the Candy Institute--a public/private initiative to provide assistance to all of the stakeholders in this industry on issues of production, technology, marketing, finance, and education. The Candy Institute doesn't pretend to be a trade association, but is instead the advocate and organizer in the industry for strategies and programs reflecting the High Road. The Candy Institute has now expanded its working relationships with local companies, with all of the unions-principally the Teamsters and Bakery, Confectionary, and Grain Millers International Union--representing candy companies, and with the community. We are now launching a major work force development initiative in the city linking schools, companies, and good jobs. We are also creating the Chicago Cooperative Kitchen that will house and assist micro-enterprises and small companies in the specialty food market (including candy) both to help them grow and create jobs and wealth for local owners, but to also begin to nurture a network of entrepreneurs who share our High Road values.
There were several lessons of this 7 year labor/community alliance that now inform our other campaigns and organizing efforts. At the heart of the campaign was the commitment and capacity to run the company with a plan that made business sense as well as reflecting the values and priorities of labor and community. When labor wasn't able to buy the company, it sought to increase the leverage and role of labor in influencing production decisions, and to link the company solidly to the community. This approach was in sharp contrast to the traditional position of labor and community simply asking for a slightly bigger piece of a pie cooked by someone else. We didn't succeed at placing the company solidly on the "high road", but we successfully blocked the "low road" strategy. We advanced a high road vision of the company, and assembled a coalition that included not only labor and community, but sections of management and the business community. Not only did we prevail in this particular company, but we prevented the Low Road from gaining momentum in the industry as a whole. A Low Road victory for a company the size of Brach would have had a huge impact on industry and government policy of the city.
This was a sustained multi-year community/labor alliance with partners demonstrating enormous patience, and capacity to learn, and the ability to stand firm once they understood the strategy and knew we could win. Community leaders were heroically patient in waiting for the internal changes in the union that were required for a true alliance to take hold. They were tolerant of the initial union culture that screamed, "we don't really need the community." This attitude on the part of the union was a by-product of the easy years when negotiations generally focused on straight-forward and incremental concerns such as an increase in wages, rather than on complex and more substantial issues such as the future of the company. When faced with the hard possibility of losing their jobs, union members and leaders embraced a coalition culture. The patience on the part of the community wasn't easy to build or sustain, and took constant efforts by CLCR and top community and union leadership to build. This was a union local that had intense internal tensions reflecting the national divisions and community leaders protected this strategic relationship when it was very difficult to defend. The community stood with the local during its bitter contract fight. Since the fight, the community organizations have remained insistent on labor's role in development, contrary to the standard position of most community development organizations. The union, on the other hand, boldly placed community issues on the table during its negotiations for its own contract--an unprecedented move. And once the fight for the contract was over, the Teamsters provided the costly legal defense for its community allies when the company tried to crush them with legal action.
Despite the victories, there were some fundamental weaknesses in the organizing efforts within the union and within the community that emerged to jeopardize the fight--bringing us to the edge of defeat on several occasions. There was a continued failure to adequately educate the rank and file in both the union and community on the new features and complexities of this campaign-- leaving us vulnerable to internal divisions and low morale. This was due in part because of the typical thinness of staff capacity in the union, in the community, and at CLCR. But of greater influence was the typical culture of organizing that is wide spread in community organizations and in the labor movement today-even with the greater emphasis on action, militancy, diversity, and creativity that focused only on short-term objectives, and not addressing more complex and more long-term implications of the campaign. There was the habit of not significantly raising the consciousness or understanding of the "troops" or secondary leaders that is essential for successful long-term campaigns. We learned that the requirements of advancing a more complex and more promising strategy absolutely requires a deep commitment to education and leadership development. In reflection of these weakness, CLCR developed a more detailed critique of traditional organizing in a paper on the "Development Model of Organizing".
The breadth and complexity of the campaign tested the organizational capacity of the union, the Coalition, and CLCR. Each two steps forward was painfully accompanied by a step backward--often at the worst moment. The breadth of our coalition, the complexity of contending for leadership in a complex company in a complex sector, the greater variety of tactical options--all went beyond the experience of any of the key organizations in the effort. It created a variety of internal pressures that were difficult to address as we tried to rise to the challenge. The level of organizational discipline and sophistication required for the kind of short-term campaign that the community organizations as well as the union was simply not adequate for the kind of sustained and protracted effort. A key lesson from these efforts has been the recognition of the absolute necessity to allocate resources and time for organizational development for organizations that engage in these new kinds of strategies. GAIN, the coalition that led the fight in the community collapsed a year or two after the Campaign. CLCR for one, came out of this experience with a different management structure and culture, a staff union, and a determined effort to walk the talk we directed in our criticisms of managers of traditional companies.
The Need for a New Strategic Direction for Labor
Of greater importance were the broader strategic lessons that, in part, came out of this campaign that point the need for a dramatic shift in the strategic agenda for labor. They are:
1. Business is increasingly turning to the Low Road: Recognition that a significant and expanding section of the business community has turned to speculative and short-term investment as well as cutting wages and benefits, undermining and breaking union and social organization, and pitting regions and nations against each other which has led to increased destruction of the world's productive capacity. This trend has significantly grown since the late 1970s, is painfully visible and recognized by the broad public. This is what we call the Low Road. This was the policy embraced by the new owner at Brach and his management team. It was critical that our Coalition and the union challenged and defeated this Low Road initiative, both to win the immediate objectives of saving jobs, wages, and benefits; but also in discouraging other sections of the business community from embracing this approach.
2. The dramatic growth in the use of Low Road business strategies creates the space, need, and public support for a High Road vision of development. The High Road seeks development that iseconomically, socially, and environmentally sustainable; and internationalist. Labor must develop, advocate, and fight for a comprehensive vision and plan of how to run the economy in a way that is practical as well as consistent with its social vision. The demands that emerged in the Brach fight went way beyond the typical labor/management disputes in most union negotiations and strikes. They included hiring practices, ownership options, training, benefits for the local business community. We advanced our immediate demands in the context of an alternative, comprehensive vision for the industry. The breadth of the campaign made the battle over the details possible and winnable.
3. The question of who guides and drives the production and control of wealth as well as its redistribution is central to this strategy. There must be a fundamental change in the social relations of production and in those responsible for the creation and control of wealth and developing our productive capacity. The strategy demands that the labor and community social movements must transcend the politics of opposition and the limits of advocating only redistribution of wealth which has been the agenda of labor for decades. Here is George Meany, past President of the AFL-CIO summarizing this tradition in 1955:
Where management decisions affect a worker directly, a union will intervene... (But) those matters that do not touch a worker directly, a union cannot and will not challenge. These may include investment policy, a decision to make a new product, a desire to erect a new plant so as to be closer to expanding markets, etc...
In the post World War II period, the squeaky wheel got the grease. Labor and community organizations were focused only on their share of the pie, not how the pie was made. This was their luxury in an expanding economy-to fight only for the democratization of the distribution of wealth-confident that capital was an adequate steward of the American economy. This was the basis for the economic program of Alinsky organizations, the CIO, the Civil Rights Movement, the Women's Movement, and others. In the economic struggle, the left and the right in labor differed on relatively minor issues--more or less jobs, wages, or benefits; or the degree to expose corporate America; or the level of stridency or militancy--but not on how the key decisions of production and wealth creation were made. This is a luxury we can no longer afford.
Labor and the social movement must now take responsibility for the creation of wealth, the starting of companies and the creation of jobs, welcoming the responsibility for good management, productivity, and efficiency as well as justice; and use this power to promote the fair redistribution of wealth. This isn't because we want to; it's because we have to as larger and larger sections of capital increasingly abdicate its responsibility for this function in our global society. To fail to rise to this challenge will relegate labor's role as a "special interest" in society that will continue to be marginalized.
In the Brach Campaign, we championed not only immediate labor and community interests, but the future of the industry itself through initiatives like the Candy Institute. We identified the assets of the industry; their significance to the public; the cost of a Low Road strategy; and began to articulate a labor/community vision of a market or business strategy for this sector. Even at the early stages of the campaign, we began to be recognized as "experts" in the industry and our influence began to expand. That has significantly increased now that projects like the Candy Institute, that were birthed in the Brach Campaign, have taken hold. Unlike the fears of some activists, this breadth of interest on the part of the leaders of the campaign deepened our base in the community rather than narrowed it.
Our strategy was not a "free market strategy" but recognized and used the strengths of the market, and opposed and blocked the negative aspects of the market. After all, there is no true "free market" or completely "planned economy" for that matter. The market always fails at some point and government or a section of society must intervene. Out of necessity, labor must become entrepreneurial and be leader in the market place as well as in the social and political world.
4. The High Road strategy requires recognizing and working with all the stakeholders in the company, the community, and the economy including sections of the business community. We recognize the sections of the business community that take the High Road as tactical and strategic allies even as we identify and oppose those in the business community that degrade our communities and companies. In this context we recognize an important distinction between those who seek a fair return through increasing our productive capacity and those who seek it through speculation that leads to the destruction of productive capacity. We need to leave behind the knee-jerk "anti-corporate" position that is so common with labor's left. Early in the campaign, we reached out to top management within Brach and business leaders within the industry who could at least tactically side with us. They were critical to the success of our fight. They gave us a deeper understanding of the problems and options which made it more difficult for Brach management to marginalize us. Their perspectives opened up tactical options that we would have never considered. And their support gave us broad legitimacy in the city.
5. A comprehensive strategy for the economy strengthens short term campaigns: And maybe the most important point to recognize is that the breadth of this strategic approach enhances rather than diverts our short-term organizing campaigns. That has been our experience over the last 15 years as we have gradually embraced this strategy in our organizing efforts. Successful community and labor organizing and alliances require a strategy that is contemporary, comprehensive, and meets the crisis of our economy and society head on. A determined application of new strategic perspectives must replace a romantic pre-occupation with earlier eras.
From our experience in the trenches of the manufacturing economy in Chicago's Candyland as well as in other communities around the country, it is clear that the labor movement is at a genuine crossroads. In front of it is a business community that is more destructive than ever before as it cuts wages and benefits, fights unions, and destroys the integrity of work through its management practices as it pays itself billions. And it is potentially more vulnerable than ever before because of growing public sophistication and anger about the enormous costs of their greed and short-sightedness. And just wait to see what it is like when the "bubble" bursts. Yet to tap into this potential public anger and to lead it in a way that will support labor's short term objectives of organizing, good contracts, and our political agenda requires a dramatic shift in labor's long-term strategy for the economy and re-defining its responsibility within that economy.
It's time to recognize that changing the clothes and language of labor isn't enough. We must force this strategic discussion by challenging the old habits, old thinking, and old formulas whether from the left or the right. And their couldn't be a more effective way of winning the debate than by demonstrating the strength of a new strategy in coalition with community organizations and leaders in saving companies and in developing communities that have been abandoned by those who used to be recognized as the stewards of our economy.
October 11, 1999