by Robert G. Rodden

Freezing the Death Benefits

In other business the 1960 Convention defused a financial time bomb that was ticking away in the general fund. This consisted of a liability for death benefits which began to snowball after World War II. IAM death benefits, payable to individual members out of the general fund, were initiated at the Kansas City Grand Lodge Convention in 1897. Originally the benefit was limited to $50 and was payable after six months good-standing membership. At a time when few members could afford commercial insurance and fewer foresaw a nationwide system of Social Security or Railroad Retirement the IAM's death benefit was looked upon as burying money. By 1960 IAM members not only enjoyed burial and survivors' benefits under Social Security or Railroad Retirement, but many also had life insurance under collectively bargained contracts.

Having been gradually increased through the years the death benefit ranged up to $300 by 1960. At the end of World War II death benefits cost the organization less than $250,000 a year. From 1897 to 1945 only $4.8 million was paid out altogether. After 1945 yearly outlays for death benefits began to head for the stratosphere. By 1960 the Law Committee reported the total liability for the IAM's 823,462 good-standing members had reached $132 million. The liability for twenty-year members alone was more than $72 million. The Law Committee recommended death benefits be discontinued for new members and frozen at existing levels for everyone else. This was an emotional issue and set off a great deal of wailing and gnashing of teeth. Sensing the convention was ready to reject the Law Committee's recommendation, Hayes asked permission to make a report from the chair. He explained that "actuaries have told us . . . unless we supplement the income of this organization we will e forced to reduce our operating activities." Since the delegates were not ready to "supplement the income" they approved the motion to drop the death benefit for new members and freeze it for all others. The move came barely in time. By the mid '70's death benefits const over a million dollars a year and by the end of the decade total outlays rose to $30 million. They began to taper off in 1978, but the final death benefit will not be paid until sometime around 2029.

In one of the last actions taken before adjournment the delegates established the IAM's college scholarship program. As originally introduced the scholarship resolution proposed a monthly $5.00 assessment against every local lodge. The Resolutions Committee withheld concurrence on the ground that such an added burden should not be put on local lodges in this manner. In referring the question back for further consideration the delegates made it plain they wanted some kind of program that would give young people a better understanding of the labor movement. A substitute resolution adopted in the final moments provided for voluntary funding. Over the years the IAM's scholarship program has financed four-year grants of $1,000 a year to children of members and $2,000 a year to members. By the early 1980's as many as 30 scholarships were being subsidized each year.

Roy Brown vs. Elmer Walker

Having isolated himself from Hayes and the rest of the Executive Council at the St. Louis Convention, Roy Brown forfeited their support in the 1961 election for Grand Lodge officers. When he was dropped from the endorsed slate he decided to run against it. After so many years he might have won re-election as a GVP without the endorsement of the rest of the Council. Many of his GLR's urged such a course. However, he realized that re-election as a  vice president would put him at the mercy of an IP he had gone out of his way to alienate. As long as Hayes had the power to draw territorial boundaries and make GVP assignments, Brown could as easily end up in Northern Alaska as Southern California. He was realistic enough to know that he could not beat Hayes in a head-to-head contest. But he thought the comparatively new GST, Elmer Walker, might be vulnerable. As a vice president in the Great Lakes territory and at headquarters, Walker was known neither for tact nor diplomacy. And he hadn't improved as GST. If he thought a business rep was wrong, he didn't hesitate to say so in a very loud voice. If an auditor or full-time financial secretary needed chewing out Elmer knew all the choice terms. Over the years he managed to insult and offend a lot of people, including a number of influential business representatives and GLR's.

Brown's bid for GST opened a free-for-all on the rest of the ballot. The only two unopposed offices were international president and the IAM's delegate to the Canadian Labour Congress. All of the other eighteen offices were contested. By challenging the endorsed slate Brown created a dilemma for most of the GLR's on his staff. Though assigned to his territory they were ultimately answerable to Hayes and the Executive Council. In past elections brown's GLR's, like those in the rest of the country, routinely supported the Executive Council's endorsements. Now they were torn. Their jobs belonged to Hayes, but their hearts were with Brown.

Hayes understood and was prepared to make allowances for this dilemma. He could accept neutrality. But he was not willing to overlook the open opposition he got from nine of Brown's GLR's. In the heat of the campaign they openly challenged the Council by signing and circulating an appeal in support of Brown's candidacy. It had little effect on the election and was, in fact, a hopeless gesture. When the votes were counted the Council-endorsed slate carried easily. Of more than 85,000 votes cast for GST, Walker got almost 63,000. Brown obviously miscalculated in believing that Elmer's abrasiveness made him unpopular. The magnitude of Walker's majority indicates that most business reps and members interpreted his brusqueness as evidence of a kind of prickly integrity.

After the tally was officially certified, Hayes made what was probably the most serious misjudgment of his career. He summarily fired the nine GLR's who openly endorsed Brown. He did not doubt his right to do so. To him the issue was clear. They were his employees. They were disloyal. Therefore, they had to go. As he saw it every IP from James O'Connell to Harvey Brown was free to hire and fire field staff at will. As far as he was concerned nothing had changed. The problem was, of course, that something had changed. Union elections now came under the scrutiny of the Federal Government.

When the Landrum-Griffin Act became law two years earlier, the Executive Council denounced it in a long policy statement which predicted, in part, that it would protect "disruptive and divisive minorities against any internal discipline." The "Bill of Rights" included in the new law specifically gave union members the right to "express any views, arguments, or opinions; and to express at meetings . . . views, upon candidates in an election of the labor organization." In Hayes' opinion this provision was not meant to protect representatives who were hired to carry out Executive Council policies. Seven of the nine fired GLR's decided to challenge their dismissal in court. The issue was argued for seven years in a legal battle that was eventually settled in the Supreme Court. Hayes' theory was rejected and the GLR's were upheld on the ground that nothing in the Landrum-Griffin Act indicated Congressional intent to exclude "Officer-Members" from its protection. The Court said that "to exclude officer-members . . . would deny protection to those best equipped to keep union government vigorously and effectively democratic." In the end Hayes' miscalculation cost the organization substantial damages and legal fees. It also sowed the seeds from which the IAM Representatives Association germinated.

Cloud Over Camelot

With the passage of time John F. Kennedy's years in the White House have been transmuted into the misty sentimentality of the Broadway musical, Camelot. The Machinists wholeheartedly endorsed Kennedy's candidacy and continued their support to the last day of his brief presidency. The new president tried to keep this campaign promise "to get America moving" by submitting a series of legislative recommendations to Congress--i.e. redevelopment of depressed areas, speeded-up highway construction, channeling defense contracts to depressed areas, reduced interest on FHA mortgages, and special job seeking services to those unemployed because of age, automation, or depressed local conditions. Reports from the field indicated IAM members were beginning to feel the effects of deep and fundamental changes in the work place. In a series of interviews with business representatives attending the 1961 MNPL's National Planning Conference the Machinist found rising anxiety about loss of jobs to automation and low wage foreign competition.

Apprehension about job-destroying technology was not new. The fears that drove 18th century textile workers in England to destroy Cartwright's spinning jennies have never completely died out. Such fear was at the heart of machinist John Morrison's testimony, cited earlier, bemoaning the fragmentation of machinist skills in the 1880's. In flares with each new advance in technology. In 1900 the Journal complained that

Human labor is being rapidly replaced by machinery, electricity, compressed air, etc. The displacement is more in evidence in the U.S. than elsewhere because here is the storm center of mechanical inventions and discoveries of the resources and forces of nature.
Dread of mechanization peaked in the Great Depression. In 1932 the Journal reminded its readers that "technological unemployment resulting in displacement of men by machinery was causing grave concern even before the depression" and warned that with "the ever increasing introduction of labor-displacing machinery it will be an absolute impossibility even in so-called normal times to find employment for all." Editor Hewitt's prescription in 1932, like O'Connell's in 1900, was a shorter workweek. By the 1960's a new wave of postwar technology, variously known as automation, computerization and cybernetics, was creating a revolution that demanded wider responses in collective bargaining, In March 1961, the Machinist told of an automated, multi-purpose machine tool "that can interchange thirty-one different cutting tools and hundreds of operations in sequence without a touch from a machinist". Describing what it called "the revolution in your life" The Machinist marveled,
There are machines that see, hear, and feel. There are machines that have memory units. There are automated machines that inspect the product they are turning out, reject substandard units, and correct the errors they make. There are machines that change their own parts when they break down or wear out and lubricate themselves.
While a number of doomsday economists began predicting a world in which humans would be completely displaced by machines, Hayes refused to succumb to such gloom. Having seen great advancements in the living standards of working people during his own lifetime, he was convinced that over the long run rising living standards depend upon advancing technology. His position, stated many times, before many audiences, was summed up in 1963 testimony supporting a Senate resolution to establish a Presidential Commission on Automation.
The American Labor movement is not opposed to automation . . . We welcome technological advance because . . . it can release mankind from mind-numbing, back-breaking labor, [as well as] the toils of traditional scarcity . . . Unlike the desperate and unhappy men who roamed the English countryside more than a century ago smashing the machines that were destroying their jobs . . . we do not want to destroy the machines, but we do not want the machines to smash our society.
Like O'Connell in 1900 and Hewitt in 1932, Hayes believed the ultimate solution was a general reduction in hours. However, he recognized that the difference between automation and earlier forms of mechanization would require more than a shorter working day or shorter workweek. In speeches, articles, letters and debates with employers, politicians, reporters and professors, he repeatedly stressed the need to reduce the total number of hours individuals worked in their lifetime through negotiations for longer vacations, more holidays, worker sabbaticals and earlier retirement.

The IAM was one of the first unions to draft collective bargaining clauses designed to cushion automation's impact on individuals. Responding to resolutions and reports of the 1960 Grand Lodge Convention, the Research Department prepared a booklet, Meeting the Problems of Automation Through Collective Bargaining, to help IAM representatives deal with problems of technological change. Along with actual case studies it contained suggested language for contract clauses requiring advance notice, transfer rights, restraining, relocation, income preservation (rate retention, supplemental unemployment benefits, severance pay), early retirement, continued insurance and fringe benefit coverage, job classification renegotiation and "equitable distribution of gains resulting from greater productivity through general wage increases, more leisure and other socially desirable ways."

In 1962 Hayes and John Snyder, president of U. S. Industries, Inc., a manufacturer of automated equipment, agreed to set up a "Foundation on Automation and Employment" to try to "develop ways to ease automation's impact on displaced workers." Snyder was a rarity among corporate executives, and Adlai Stevenson Democrat with a social conscience and a good record of collective bargaining with his employees.  His company produced a mechanical worker, called a TransfeRobot, capable of performing such routine tasks as oiling clock movements. finishing typewriter parts, assembling electronic switches and packing chocolates. This device, which rented for $25 a week, was being built for the sole purpose of replacing human workers. Snyder recognized the catastrophic implications of wholesale unemployment and felt a responsibility to try to find answers to the problems created by his TransfeRobots. As he told delegates to the Grand Lodge Convention in Miami Beach in 1964 his concern sprang at least partially from self-interest.

I want to sell the automation machines that my company makes but if our economy turns sour, if the unemployment problem is not solved, I will have difficulty selling them and no reason to make them. To my way of thinking, all businessmen should share this view--that the unemployment problem and the automation problem are as serious for business as for labor.
Having worked with Hayes on a foundation set up to study collective bargained health and welfare plans in the early 1950's, Snyder suggested a foundation to study and seek solutions for problems caused by automation. He offered to fund the proposed Foundation on Automation and Employment with royalties from each sale or lease of USI's automated equipment. Over the next few years the Foundation subsidized a number of conferences and publications. Despite the sincerity of Snyder's concern, this approach produced little except a source of grants for academic research. When Snyder died in 1965 his successor at U. S. Industries immediately withdrew the company form further participation.*
*Hayes tried, but failed, to find another corporate sponsor. Eventually his successor, Roy Siemiller, recruited a vice president of Essex Wire, Frank Gallucci, to serve as co-chairman. They later spun off an Institute of Collective Bargaining to study ways in which bargaining techniques could be applied to other areas of human conflict..
The anxieties caused by automation were compounded by a rising tide of low-wage foreign imports in the early '60's. By the time Kennedy entered the White House America's postwar dominance in world markets was already eroding. Having rebuilt their war-shattered industries with generous American aid, Japan, West Germany and much of the rest of Europe were clamoring for free access to American markets. As the Machinist began noting with increasing frequency more and more of America's largest corporations were exporting jobs by closing factories in the United States and reopening overseas.

Membership worries about "loss of work due to imports from foreign countries" and "export of American jobs to foreign countries" surfaced in a series of resolutions at the Grand Lodge Convention in St. Louis. The resolutions committee recognized the legitimacy of this concern. It cited recent reports in the Machinist of Remington Rand transferring manufacturing overseas and noted that similar situations existed in "sewing machines, transistor radios, plumbing supplies and other industries where IAM members are employed." Though recognizing the problem, the committee was reluctant to concur in resolutions advocating restrictions on foreign trade. Noting "the complexity of world trade problems and the limited and often conflicting information available to our members" the committee urged Hayes to call a union-wide conference on world trade "as soon as practicable."

When the conference was held in Washington the following year, the Kennedy Administration was preparing to negotiate what came to be known as the "Kennedy Round" of tariff reductions. The President sent a warm message of greetings which noted Europe and Japan's need for stable and expanding export markets. The administration also sent two of its big guns--Undersecretary of State Chester Bowles and Secretary of Labor Arthur Goldberg--to champion free trade and warn against protectionism. With help from George Meany and the IAM's own international representative, Rudy Faupl, a glittering array of authorities from industry, government, universities and the labor movement persuaded the delegates to endorse a "continued national policy of liberal trade."

The final recommendations called for federal aid to communities hurt by foreign trade as well as government help for workers whose jobs were eliminated by exports. Neither Hayes nor anyone else foresaw the extent to which America's so-called trading partners would set up quotas, export subsidies, barter arrangements, licensing fees, local content requirements and al long list of other direct and indirect restrictions to bar American-made goods while systematically destroying America's industrial base. With the rest of the labor movement the IAM went along with the Kennedy round of tariff reduction, learning too late that 19th century theories of free trade were not relevant to 20th century realities. While multinational corporations received a license to export U. S. technology, jobs and capital, American workers received unemployment and poverty from countries practicing protectionism overseas.

The ultimate crisis of widespread joblessness due to automation and the destruction of America's industrial base by so-called free trade policies was delayed for more than a decade by the military buildup in Viet Nam. Hayes was not alone in failing to foresee that collective bargaining would not be adequate to protect workers against the degree of unemployment inevitably generated by a lethal combination of twentieth century technology and nineteenth century trade theories.


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of Siouxland Lodge 1426 IAMAW
Greg Enright