Collective Bargaining Negotiations Exercise: QFM Company

[Holley] [Chapter bm-d0e4] 11/3/8 15:7:23

APPENDIX A

Collective Bargaining Negotiations Exercise: QFM Company and IWU Simulation Contributor: Charlie T. Cook

LEARNING OBJECTIVES 1. To gain an understanding of negotiation preparations, actual negotiations, and assessment of negotiations’ outcomes. 2. To develop an appreciation for the psychological interactions and the realism of contract negotiations. 3. To learn the mechanics of give-and-take, compromise, trading issues, and the art of negotiation. 4. To familiarize the participants with the issues in collective bargaining and the challenge of writing provisions acceptable to both parties. 5. To realize the importance of and problems associated with teamwork and intra-organizational bargaining. 6. To gain an appreciation for the application of bargaining theories to negotiations.

RULES

OF THE

NEGOTIATIONS EXERCISE

1. Participants must not discuss the exercise with anyone except their assigned team members. 2. Each participant will be assigned a role (organization position) by the instructor. 3. The negotiations must take place within the framework of the present company and union at the St. Louis plant. Creativity is encouraged, but a realistic and pragmatic approach is recommended. 4. Data, materials, and information used for each position or argument on behalf of a proposal should not be falsified. 5. Each team may have as many meetings outside class as are needed and desirable. 6. Team members must follow the instructions of their respective team leaders. 7. All activities of team members should be directed toward negotiating an agreement that is mutually acceptable and that the parties can live with, survive on, and prosper under. 666


APPENDIX A

INSTRUCTIONS

667

TO THE

PARTICIPANT

1. Participants will be assigned to either the management or the union bargaining team. Each team will be responsible for determining the specific tasks or roles assigned to individual team members. 2. The team leaders—the president of the Industrial Workers United (IWU) and the labor relations director of Quality Furniture Manufacturing (QFM) Company—will call separate meetings to discuss and prepare for the upcoming negotiations and anticipate each other’s proposals. Major issues for negotiations could include: a. Union security (e.g., dues checkoff, union shop) b. Wages, job classes, premiums c. Management’s rights d. Promotions and layoffs (use of seniority) e. Grievance procedure and arbitration f. Affirmative action plans g. Pension plans h. Health insurance i. Vacations j. Holidays k. Sick leave l. Other issues allowed by instructor 3. In bargaining preparation meetings, each team should study the present agreement to identify contract language in need of improvement or deletion; identify key subjects not covered by the expiring contract’s terms which should be included in any new (renegotiated) labor agreement; determine relevant information sources and gather materials, data, and information necessary to support the team’s proposals and positions or address bargaining subjects expected to be raised by the other party during negotiations. 4. Based on study and analysis, each team must determine its bargaining strategy and goals. 5. Each team must complete the first four columns of Form 1 (on page 678) and give it to the instructor prior to the first scheduled face-to-face bargaining meeting between union and management teams. (The form should not be shown to anyone else.) 6. The union and management teams will meet at a time and location specified by the instructor for the purpose of negotiating a new agreement to replace the expiring contract’s terms. 7. At the first meeting, the union will present and explain its proposals first. Management will then present its proposals or counterproposals and explain each proposal. 8. Actual negotiations will begin after the proposals are exchanged and will continue until a new agreement is negotiated and signed or the present contract expires. The instructor will specify the current contract’s expiration time and date as well as the schedule for formal bargaining meetings between union and management teams.


668

APPENDIX A

9. On completion of the negotiations, each team will project the total annual costs of the new agreement. If assigned by the instructor, the teams will submit a written agreement. 10. Additional instructions may be given to the participants by the instructor.

SOURCES

OF

MATERIALS

FOR

PREPARATION

Government publications: U.S. Department of Labor, Bureau of Labor Statistics, Area Wage Surveys, Employment and Earnings, Handbook of Labor Statistics, Monthly Labor Review, Characteristics of Major Collective Bargaining Agreements. U.S. Department of Commerce, U.S. Industrial Outlook (published every year). Binder services of Bureau of National Affairs, Inc. (BNA) and Commerce Clearing House. Especially helpful is the BNA Collective Bargaining Negotiations and Contracts. Business publications: BusinessWeek and The Wall Street Journal. Professional labor relations journals: Collective Bargaining Bulletin, Dispute Resolution Journal, Employee Relations Law Journal, Industrial and Labor Relations Review, Industrial Relations, Berkeley Journal of Employment and Labor Law, Journal of Collective Negotiations in the Public Sector, Labor Law Journal, and Monthly Labor Review. Proceedings: Labor and Employment Relations Association, Labor Law Developments, National Academy of Arbitrators, and NYU Conference on Labor. Current labor agreements between companies and unions (as available).

THE FURNITURE MANUFACTURING INDUSTRY U.S. furniture manufacturers generated about $65 billion in sales of all furniture types in 2006—the market for household furniture was $31.5 billion.1 The highly fragmented household furniture industry is segmented into wood furniture (‘‘case goods’’) at 60 percent of sales, upholstered furniture (primarily sofas and recliners) at 30 percent of sales, with metal furniture, mattresses, and other products accounting for the remaining ten percent. Case goods include kitchen and dining room sets, china cabinets, dressers, and home entertainment/media centers. Products are sold either finished or in ready-to-assemble form. Competition in the industry is among purely domestic manufacturers, domestic manufacturers that import specific product lines, and foreign producers.2 Global competition has severely impacted the U.S. furniture manufacturing industry for the past decade. In a near-complete reversal, over half of all wood furniture sold in U.S. markets today is imported.3 Once global competitors began rapidly entering U.S. markets, American manufacturers responded by consolidating or closing U.S. operations, acquiring or building overseas plants, and contracting with foreign companies to produce piece goods for the U.S. market. The number of domestic manufacturers has fallen rapidly as weaker firms have exited the industry or have been acquired by the remaining competitors. Furniture imports into the U.S. market over the last decade have increased at annual rates as much as ten times the increase in American exports to foreign markets even though shipping costs can total as much as one-fourth of the value of the shipped products.4 Labor-intensive production operations have been outsourced to China, Vietnam, Indonesia, Taiwan, Eastern Europe, and Mexico to take advantage of lower


APPENDIX A

669

labor costs. American furniture workers earn an average hourly wage of about $12 while Chinese workers receive less than $1.5 Employment in the industry peaked in 2000 and has declined steadily since.6 Conversely, some jobs in the industry are beginning to go begging. Skilled upholsterers, who can earn $35,000 to $45,000 per year doing piece rate work for domestic manufacturers, are in high demand. Average annual revenue per worker is about $130,000, dropping to only $100,000 per worker in the household furniture segment.7 The upholstered furniture product segment has, for now, been largely unaffected by the competitive forces in the furniture industry. Almost half of all upholstered items are custom ordered. The extended delivery lead times involved in foreign manufacturing cannot satisfy customers who want their furniture sooner rather than later. Competitors in this segment that can efficiently produce and quickly deliver high quality custom furniture at attractive (and profitable) price points will have a sustainable competitive advantage that will be difficult for overseas producers to overcome.8 To control costs and stay profitable, U.S. furniture manufacturers have adopted the lean manufacturing methods of Toyota Motor Corporation’s production system. This system focuses on continuous improvement in production processes, elimination of waste, inventory reduction, and speed of delivery.9 Another challenge for the household furniture industry is the urgent necessity for a radical restructuring of traditional supply and distribution channels to further lower costs as overseas producers continue to improve their product quality and distribution efficiencies. Developing strong brands to sell in branded retail stores will help shield some competitors from direct competitive threats; others will fall victim to the rising industry trend of ever fewer supply-chain intermediaries between overseas manufacturers and domestic big-box and specialty retailers. An accompanying trend is the spreading use of the Internet by furniture consumers, furniture distributors, and manufacturers, and the use of e-procurement between manufacturers and suppliers.10 The household furniture industry is headed for difficult times as the U.S. residential housing market’s boom appears to have run its course. Consumers, when faced with higher mortgage payments as interest rates rise, will likely delay household furniture purchases, and those who do purchase will have become much more price sensitive. Until better economic times return, home furniture retailers are expected to tighten inventories and to narrow product selections to focus on higher-margin quality goods. These actions and the threat of office furniture manufacturers diversifying beyond home office products will create increased competition in the industry’s value/activity chain of vendors, suppliers, and manufacturers. A deteriorating economy and continued increases in better quality imports will put additional pressure on all industry competitors to reduce prices to maintain sales and market shares while simultaneously keeping up capacity utilization of manufacturing assets to reduce largely fixed overhead costs through volume production. If the economy improves, then consumers will once again begin to furnish their homes.

THE QFM COMPANY

AND THE

UNION

QFM Company began in 1820 in Laconia, New Hampshire, as a family-owned and operated furniture manufacturer. It was headed by Herman Sweeny, one of the early settlers in Laconia. The company grew to 30 employees by 1920, but at that time, Ben Franklin Sweeny, Herman’s son, decided to move the firm to


670

APPENDIX A

St. Louis, Missouri—a location more central to the firm’s market. Barely surviving the 1930s depression, QFM was one of the first companies to convert its manufacturing processes to the production of war materials. The company prospered during the war, and afterward, Sweeny decided to expand, sell stock publicly, and focus on producing metal and plastic-laminated furniture. With the production experience it had gained during the war and with its location some distance from the predominantly wood-furniture manufacturers, QFM Company launched a new era for itself in 1946. By 1970 the St. Louis plant of QFM Company had 1,300 employees and was producing 450 dinette sets, 200 sets of lawn tables and chairs, and 300 bar stools and miscellaneous furniture daily. During the 1971–1973 furniture boom with its expectations of continuous growth, QFM’s new president, Gerald Brooks, decided that a new, modern plant and more diversity in the product line were necessary to meet the expected demand. Taking into consideration location, material supply, transportation, markets, labor costs, and other factors, Brooks decided to build the new plant in Dallas, Texas. This plant was to specialize in the new product lines, and the St. Louis plant was to concentrate only on dinette sets. In 1972, 200 employees were transferred from St. Louis, and another 200 were hired from the Dallas–Fort Worth area. The Dallas plant started with no union and 400 employees. In 1993 the founder’s granddaughter, Bethany Sweeny, became plant manager, and the plant size grew to the current 894-employee non-union workforce. The company pays its Dallas employees at least $1 less per hour than it pays the St. Louis employees in comparable jobs which the company has always attributed to the lower cost of living in the Dallas-Ft. Worth area. The St. Louis plant continues to produce 450 dinette sets per day, mostly for chain retailers (e.g., Wal-Mart, Babcock Home Furnishing, Home Depot), and employs about 1,000 employees in the bargaining unit represented by the IWU. During the past year the St. Louis plant has begun producing high-end custom wood entertainment centers designed to cater to consumer demand fueled by high definition, flat panel televisions and home theater sound systems. Initial customer reaction to the new product line has been positive. Employment levels at the St. Louis plant have remained relatively stable over the past 30 years. The company has invested in modernizing plant equipment and production methods at both the St. Louis and Dallas plants since the mid-1980s. The Dallas plant has started producing a new high-end product line—dinette sets under the Eagle brand name aimed at capturing higher income consumer demand. Consumer response has been positive, and the Dallas plant’s future looks very promising. With increasing import competition, the company is investigating the possibility of locating a production facility in China or Mexico, but no final decision has been reached yet on whether to initiate such an expansion. Throughout its history, QFM Company has prided itself on being a progressive employer. The Industrial Workers United (IWU) first sought to represent QFM employees at the St. Louis, MO plant in 1975. The building of the Dallas plant, increasing employment at the Dallas plant rather than at the St. Louis plant, and employee complaints about lower than average area wage rates were all issues in the 1975 representation election campaign at the St. Louis plant. After a heated campaign by both management and the Union, NLRB investigations of unfair labor practices, and challenged ballots, the union lost the election by a vote of 497 to 481. Two years later, the union returned and won an NLRB-supervised representation election by a vote of 611 to 375. The election campaign was bitter, and the negotiations that followed were even more contentious. After a


APPENDIX A

671

six-week strike, the company and union reached agreement on their first labor contract. There have been nine subsequent contracts negotiated between the parties without the occurrence of a work stoppage. The current labor agreement covering the St. Louis plant is close to its expiration date, prompting the union to notify management requesting the company renegotiate the terms of the existing contract. Although company officials have expressed a desire to return to the era when management and labor trusted each other, worked cooperatively, and shared mutual goals and benefits, the union’s leaders are taking a wait-and-see attitude, believing that actions speak louder than words. The company’s insurance carrier recently announced a 15 percent increase in the annual health insurance policy premium cost covering bargaining unit members to take effect on April 15, 2008. The current (about to expire) contract calls for health insurance policy premium costs to be split, with the employer paying 90 percent and the employee the remaining ten percent of the total premium cost. Currently, 75 percent of bargaining unit members are covered under a family health care plan at an annual premium cost per employee of $2,970. Twentyfive percent of bargaining unit members have single employee coverage at a total annual premium cost of $1,412 per employee. Union members believe the company could easily afford to absorb the announced 15 percent health insurance premium cost increase without having to pass any of the increase along to bargaining unit members. The upcoming negotiations will determine the company’s commitment to improving labor relations at the plant. The union believes it is entering negotiations in a strong bargaining position with 95 percent of the bargaining unit now enrolled as union members.

References 1. Fast Facts 2007, http://www.exportvirginia.org/FastFacts/ FastFacts_2007/FF_Issues_Furniture_Lumber_07.pdf 2. Bryson, Lanzillotti, Myerberg, Miller, and Tian, ‘‘The Furniture Industry (Case Goods), The Future of the Industry, United States versus China,’’ Industry Economics: March 7, 2003. 3. Vlosky, Richard, ‘‘Dynamics and Trends in US Furniture Markets,’’ Louisiana State University Agricultural Center, School of Renewable Natural Resources, June 7, 2005. 4. Al Schuler and Steve Lawser, ‘‘The U.S. Furniture Industry: Yesterday and Today Will There Be a Tomorrow?’’ Wood Digest, June 2007.

5. Schmid, John and Romell, Rick, ‘‘Furniture, China, and the End of an Era,’’ The Morning Journal, February 1, 2004. 6. Industry Overview: Furniture Manufacturing, http:// www.hoovers.com/furniture-manufacturing/–ID__49–/freeind-fr-profile-basic.xhtml, last accessed January 01, 2007. 7. Current Trends in Furniture Production and Sales, AKTRIN Furniture Information Center, January 2006. 8. www.duke.edu/web/mms190/furniture/dimensions.html. 9. The Impact of Globalization on NC’s Furniture Industries, (Buehlmann, Urs; Schuler, Al; Nwagbara, Ucheoma) 2002. 10. Jon Chavez, ‘‘Overseas Competition Challenges Furniture Industry,’’ Toledo Blade, Thursday, March 22, 2007.


672

APPENDIX A

THE LABOR AGREEMENT BETWEEN QUALITY FURNITURE MANUFACTURING COMPANY (QFM) AND INDUSTRIAL WORKERS UNITED (IWU), AFL-CIO This agreement is entered into on ________ by the Quality Furniture Manufacturing Company (QFM), located in St. Louis, Missouri, and Industrial Workers United (IWU). This agreement covers employees at the St. Louis plant only.

Article I—Recognition The company recognizes the IWU as the sole and exclusive collective bargaining agent in all matters pertaining to rates of pay, wages, hours of employment, and other conditions of employment for all production and maintenance employees, excluding professional employees, storeroom employees, office clerical employees, guards, and supervisors, as defined in the Labor Management Relations Act.

Article II—Union Security The company agrees not to interfere with the right of employees to join the Union and will not discriminate against employees who are Union members. Employees in the bargaining unit are completely free to participate in the affairs of the Union, provided that such activities do not interfere with their work duties and responsibilities. While no employee will be required to join the Union as a condition of employment, union dues will be deducted from any bargaining unit employee’s pay check, provided proper written notification is given to the Company. At the end of each pay period, the Company will forward the collected dues, minus a three percent administrative fee, to the Union.

Article III—Management Rights All management functions of the enterprise that are not specifically limited by the express language of this agreement are retained by the Company. The functions and rights listed here are examples of the exclusive responsibilities retained by the Company and are not intended as an all-inclusive list: to manage the manufacturing operations and methods of production; to direct the workforce; to decide what work shall be performed in the plant by subcontractors or by employees; to schedule working hours (including overtime work); to hire, promote, demote, and transfer; to suspend, discipline, and discharge for cause; to relieve employees due to lack of work or for other legitimate reasons; to create and enforce reasonable shop rules and regulations; to establish production standards and rates for new or changed jobs; to introduce new and improved methods, materials, equipment, and facilities; to change or eliminate existing methods, materials, equipment, and facilities.

Article IV—No Strike and No Lockout The company agrees that during the life of this agreement there shall be no lockout of bargaining unit employees. The Union agrees that during the life of this agreement there shall be no strike, work stoppage, slowdown, work refusal, delay of work, refusal to report for work, or boycott.


APPENDIX A

Article V—Hours of Work The normal workweek shall consist of eight (8) hours per day, forty (40) hours per week, for a five (5) day week, from Monday to Friday. The starting time shall be made by the Company, and it can be changed by the Company to suit varying conditions of the business. Such changes in working schedules shall be made known to the Union representative in the plant as far in advance as possible. Employees shall be notified by a written bulletin or other communications medium.

Article VI—Grievances and Arbitration Procedures Grievances arising out of the operation and interpretation of this agreement shall be handled and settled in the following manner: Step 1: The aggrieved employee and/or shop steward shall discuss the grievance with his or her supervisor. Step 2: Should the answer provided by the supervisor not produce a satisfactory solution to the grievance, the grievance shall be reduced to writing and shall state the provision of the agreement which has been violated. The department head shall arrange for a meeting of the aggrieved employee, the shop steward, the supervisor, the employee relations supervisor, and himself or herself for the purpose of discussing the grievance. The department head shall provide a written answer to the grievance after the close of the meeting. Step 3: If a satisfactory conclusion is not reached, the grievance can be referred to the plant manager by the Union. The plant manager shall schedule a meeting to discuss the grievance with the Union. The local Union can bring in a representative of the International Union at this step, and the plant manager can bring in anyone who he or she feels may aid in the resolution of the grievance. Step 4: If a grievance is appealed to arbitration, the Company and the Union shall attempt to select an arbitrator. If this attempt fails, the Company and/or Union shall ask the Federal Mediation and Conciliation Service to submit a list of seven (7) arbitrators. Each party shall eliminate three (3) names from the list by alternately striking one name at a time, and the person whose name remains shall serve as the arbitrator. The arbitrator shall render a decision in writing that shall be final and binding upon the parties. The arbitrator to whom any grievance is submitted shall have the authority to interpret and apply the provisions of this agreement, and the arbitrator’s decision must be in accordance with and based upon the terms of this agreement or any written amendment thereto. The arbitrator shall have no jurisdiction or authority to add to, subtract from, or modify any of the terms of this agreement. The Company and local Union shall each pay its own expenses incurred in connection with the arbitration and one-half of the expenses and fees of the arbitrator and the facilities used in the arbitration hearing.

Article VII—Seniority ‘‘Seniority’’ as used in this agreement shall be the period of continuous service in the job or plant from the date of the employee’s appointment.

673


674

APPENDIX A

‘‘Probationary employment’’ consists of a period of one hundred twenty (120) days of employment. Layoffs shall be made in the following order: a. Probationary employees b. Other employees in order of job seniority Recall shall be made in the following order: a. Employees in order of job seniority, given equal job ability b. Probationary employees Promotions shall be made on the basis of qualifications, merit, and seniority. Promotions out of the bargaining unit remain management’s prerogative. An employee who quits or is discharged for cause shall lose all seniority rights. If the Company decides to terminate any operation or job and the employees remain on layoff for a period of twelve (12) months, the employees shall be considered to have been terminated for cause at the expiration of said twelve (12)-month period.

Article VIII—Wages and Classifications Job classifications and a wage schedule setting forth the rates of pay of the various job classifications are included in Schedule A and are hereby made part of this agreement. If and when the Company creates a new job classification or modifies, alters, amends, or combines existing jobs, or revises the skills and responsibilities of a job, job descriptions will be drawn and a wage rate assigned. The Union shall have a maximum of five (5) working days to examine the job description to determine whether it accurately describes the principal functions and whether the pay range is consistent with established job classification pay ranges. If the Union takes exception, it can review both factors with the Company. If the issue cannot be resolved, the Union can take the issue through the grievance procedure. Job classifications are for pay purposes only and do not pertain to whoever might perform the work in that classification—unless modified by the terms of the agreement.

Article IX—Insurance An employee who has completed ninety (90) days of employment is eligible for enrollment in the company group insurance programs on the monthly premium date for each particular insurance coverage that next follows the completion of ninety (90) days of employment. 1. Group Life Insurance $20,000 2. Accident and Health Insurance

Accidental Death and Dismemberment $20,000

Lost income due to a covered condition equals one-half of the employee’s weekly pay up to a maximum of $150. It is understood and agreed that the cost of the hospitalization, medical and health insurance, major medical insurance, accident and health and life insurance will be paid 90 percent (90%) by the Company and 10 percent (10%) by the employee, when subscribed to by the employee.


APPENDIX A

675

It is understood and agreed that in the event that the Company wishes to change carriers, there is no obligation to negotiate with the Union prior to instituting the change. Employees on medical leave for a period in excess of ninety (90) consecutive days may continue to be covered under the group insurance program after the first ninety (90) days, providing the employee pays the total insurance premium.

Article X—Pension Plan A defined benefit pension plan for bargaining unit employees of the company is hereby made a part of this agreement. The normal monthly retirement benefit for all years of service is $30 per month per year of service.

Article XI—Holidays All employees, after completing six (6) months of service with the Company, shall be paid eight (8) hours pay for the following holidays:

New Year’s Day

Independence Day

Labor Day

Thanksgiving Day

Day after Thanksgiving Day

Christmas Eve Day

Christmas Day

To be eligible for holiday pay, the employee must have worked the days immediately preceding and following the holiday. Legitimate excuses for absences will be considered.

Article XII—Vacation Employees shall qualify for vacation with pay in accordance with the following (determined June 1 of each year): Continuous Service

Vacation with Pay

More than 1 but less than 5 years 5 years but less than 10 years 10 years but less than 20 years 20 or more years

1 2 3 4

week weeks weeks weeks

Vacation pay shall be computed on the basis of each employee’s average weekly earnings from June to June. Payment will be made on the work day prior to the vacation period.

Article XIII—Sick Leave A full-time employee is eligible for sick leave after completing six (6) months service with the Company. An eligible employee will accumulate sick leave at the rate of one-half day per month of service from date of hire. Sick leave will not be carried over from one year (January 1 to December 31) to the next, and it


676

APPENDIX A

can be used only for personal illness not covered by workers’ compensation. The Company retains the right to require a doctor’s certificate as proof that an absence was due to a legitimate injury or illness.

Article XIV—Nondiscrimination The Company and the Union mutually agree not to discriminate in making decisions and determinations concerning hiring, promotion, employment termination, transfer, compensation, and terms or conditions of employment. Both parties agree that all such decisions and determinations will be made without regard to race, color, religion, sex, age, disability not related to job performance, national origin or ancestry, or because an individual is disabled or a Vietnamera veteran.

Article XV—Complete Agreement This agreement is complete. It may be amended by mutual agreement in writing. Such amendment may be effective during the term of this agreement and may extend the term of this agreement. This agreement does not operate to include, nor does it obligate the Company to continue in effect, any working condition, benefit or past practice which is not covered or contained in the agreement.

Article XVI—Duration of the Agreement This agreement shall become effective as of _______________________________, and shall continue in effect until _______________________________. Thereafter, it shall renew itself for yearly periods unless written notice of termination is given by one party to the other not less than sixty (60) nor more than ninety (90) days prior to the expiration of this agreement.


APPENDIX A

677

Schedule A: Current Wages and Classifications Wage Grade 1 2 3

4

5

6 7 8 9 10

Job Title Janitor Packer Materials handler Woodworking machine operator B Maintenance worker B Furniture finisher General laborer Team assemblers Industrial truck & tractor operator Woodworking machine operator A Welder Electrician B Tool grinder Wood worker, general Maintenance worker A Machinists Inspector Painter Electrician A Lead person Tool and die maker

Wage Rate $8.65 9.15 10.50 10.75 10.75 10.80 11.24 11.60 12.81 12.65 13.34 13.35 13.45 13.93 15.40 15.45 15.90 17.20 17.50 18.65 19.68


678

APPENDIX A

Form 1: Pre-bargaining Preparation Form Each bargaining team must complete both parts A and B of Form 1. Part A is for each team’s own strategic planning and should not be revealed to any other bargaining team. Part B contains your team’s initial written bargaining proposals to be presented to the other bargaining team with whom you will be negotiating during the first bargaining meeting. Each bargaining team will turn in a completed copy of Form 1 (parts A & B) to the instructor prior to the initiation of faceto-face bargaining between union and management teams. In column 1, briefly label the bargaining subject (e.g., wages, holidays, health insurance, pension, etc.). In column 2, identify the priority rank of that bargaining subject to your bargaining team. In column 3, describe in detail the specific outcome your bargaining team expects to achieve on each identified bargaining subject.

Part A

Bargaining Subject Area

Bargaining Priority (rank in order each subject from 1 to n, with 1 being the highest priority subject)

Realistic Expected Bargaining Outcome


APPENDIX A

Form 1, Part B: Initial Bargaining Proposals Instructions: For each initial bargaining proposal or counterproposal that your team intends to introduce as part of the bargaining agenda at the first joint negotiation meeting, include the complete, specific, and clear wording of each initial bargaining subject proposal. Proposals should be stated using the exact contract language your party would prefer to appear in the labor agreement (contract).

679


680

APPENDIX A

Exhibit 1 QFM Company Balance Sheet, 2007

Assets Current Assets:

Cash Notes and accounts receivable Inventories Prepaid expenses Total current assets

$

2,420,659 55,972,823 70,720,456 927,138 $130,041,076

Fixed Assets: Land Buildings Machinery and equipment Total fixed assets Total assets

$ 11,273,570 28,183,925 22,140,388 61,597,883 $191,638,959

Liabilities and Stockholders’ Investment Current Liabilities Notes and accounts payable Accrued payroll Taxes (local, state, federal) Total current liabilities Stockholders’ Investment Common stock (common @ $20 per share) Earned surplus Total stockholders’ investment and earned surplus Total liabilities and stockholders’ investment

$ 18,611,307 7,440,556 59,749,921 $ 85,801,784 $ 45,095,086 60,742,089 $105,837,175 $191,638,959

Exhibit 2 QFM Company Income Statement

Net Sales Costs of Goods Sold Production (labor, materials, overtime) Administrative Sales Other Total Cost of Goods Sold Income before taxes Taxes (local, state, federal) Net Income

2006

2007

$216,468,226

$238,115,271

$174,515,138 14,792,253 7,215,085 1,831,306 $198,353,782 18,114,444 5,262,503 $ 12,851,941

$182,314,515 15,806,447 9,469,799 2,077,494 $209,668,255 28,447,016 7,015,580 $ 21,431,436

Exhibit 3 QFM Company Net Sales and Income

2006 2007 2008 (estimated)

Net Sales

Net Income

$216,468,226 238,115,271 254,826,000

12,851,941 21,431,436 26,147,000


APPENDIX A

681

Exhibit 4 Number of QFM Production and Maintenance Employees by Seniority in St. Louis and Dallas Plants

Years

St. Louis

Dallas

Less than 1 1–2 3–4 5–6 7–10 11–15 16–20 21–-25 26–30 more than 30 Total

10 45 50 120 165 128 190 105 120 67 1,000

100 150 90 135 165 84 60 58 45 7 894

Exhibit 5 Number of QFM Employees in Each Job Title, by Wage Grade

Wage Grade 1 2 3

4

5

6 7 8 9 10 TOTAL

Job Title

St. Louis

Dallas

Janitor Packer Materials handler Woodworking machine operator B Furniture finisher Maintenance worker B General laborer Team assemblers Industrial truck & tractor operator Woodworking machine operator A Welder Electrician B Tool grinder Woodworker, general Maintenance worker A Machinists Inspector Painter Electrician A Lead person Tool and die maker

12 66 60 85 72 15 56 305 20 45 16 14 5 85 10 15 29 35 15 28 12 1,000

9 54 53 68 68 13 49 295 18 40 13 10 5 78 8 12 25 32 12 24 8 894


682

APPENDIX A

Exhibit 6 Average Hourly Earnings, Excluding Overtime, for Selected Industries (Not Seasonally Adjusted)

NAICS N/A N/A 321 327 331 332 333 334 335 336 337 339 N/A 311 312 313 314 315 316 322 323 324 325 326

Industry

2004

2005

2006

2007

Manufacturing Durable Goods Wood Products Nonmetallic Mineral Products Primary Metals Fabricated Metal Products Machinery Computer and Electronic Products Electrical Equipment and Appliances Transportation Equipment Furniture and Related Products Miscellaneous Manufacturing Nondurable Goods Food Manufacturing Beverage and Tobacco Products Textile Mills Textile Product Mills Apparel Leather and Allied Products Paper and Paper Products Printing and Related Support Activities Petroleum and Coal Products Chemicals Plastics and Rubber Products

15.29 15.92 12.36 15.17 17.26 14.51 15.78 16.52 14.20 20.17 12.58 13.30 14.27 12.25 18.16 11.50 10.97 9.47 11.32 16.83 15.05 22.35 18.13 13.88

15.68 16.41 12.52 15.45 17.65 14.97 16.07 17.61 14.56 20.80 12.92 13.50 14.47 12.30 17.52 11.80 11.04 9.96 11.19 16.88 15.10 22.37 18.65 14.09

15.95 16.78 12.78 15.56 18.05 15.33 16.31 18.71 14.80 21.19 13.28 13.84 14.54 12.39 17.04 11.99 11.32 10.29 10.94 16.89 15.12 22.18 18.69 14.27

16.52 17.43 13.07 15.83 18.49 15.72 16.93 19.32 15.29 21.94 13.75 14.27 14.97 12.82 16.69 12.65 11.40 10.66 11.79 17.33 15.71 23.42 18.65 14.66

Preliminary

SOURCE: Bureau of Labor Statistics, U.S. Department of Labor, on the Internet at http://data.bls.gov/PDQ/outside.jsp?survey=ce (visited October 11, 2007).


APPENDIX A

683

Exhibit 7 Mean Hourly Earnings of Selected Manufacturing Plant Employees in Texas and Missouri, November, 2004

Job Titles Team assemblers Wood worker, general Electrician Inspector Woodworking machine operator Inspectors Industrial truck and tractor operator Furniture finisher Packer Material handler Welder Janitor Laborer

Texas

Missouri

$9.94 $7.93 $17.86 $14.71 $9.57 $14.71 $11.48 $10.10 $8.27 $9.58 $12.67 $8.25 $8.53

$11.90 $14.60 $24.16 $16.23 $11.02 $16.23 $13.00 $11.53 $9.14 $10.95 $13.39 $9.14 $11.97

SOURCE: U.S. Department of Labor, Bureau of Labor Statistics, November 2004 State Occupational Employment and Wage Estimates at http://www.bls.gov/oes/ current/oes_tx.htm and http://www.bls.gov/oes/current/oes_mo.htm.

Exhibit 8 Consumer Price Index (CPI) for Urban Wage Earners and Clerical Workers Base Period: 1982–84 = 100 (Not Seasonally Adjusted)

Index Dallas-Fort Worth, Texas Saint Louis, Missouri–Illinois Area Percent Change in Index from Previous Year Dallas-Fort Worth, Texas Saint Louis, Missouri–Illinois Area

2007

2004

2005

2006

179.0 178.7

185.6 184.9

191.6 188.5

2004

2005

2006

2007

1.8 4.0

3.7 3.5

3.2 1.9

.60 1.3

192.9 190.9

Preliminary

SOURCE: Bureau of Labor Statistics, U.S. Department of Labor, on the Internet at http://www.bls.gov/cpi/home.htm (visited October 11, 2007).


684

APPENDIX A

Exhibit 9 Average Hourly and Weekly Earnings for All Private Workers and for Production Workers (Not Seasonally Adjusted)

Hourly Earnings NAICS

Industry

N/A N/A 3371

Total Private Manufacturing Household and Institutional Furniture

2004

2005

2006

2007

15.69 16.15 12.81

16.13 16.56 13.15

16.76 16.80 13.65

17.63 17.39 14.07

Average Weekly Earnings NAICS

Industry

2004

2005

2006

2007

N/A N/A 3371


529.09 658.59 510.78

544.33 673.37 517.27

567.87 690.83 524.27

602.95 725.16 557.17

Average Weekly Hours NAICS

Industry

2004

2005

2006

2007

N/A N/A 3371


33.7 40.8 39.9

33.8 40.7 39.4

33.9 41.1 38.4

34.2 41.7 39.6

Preliminary

SOURCE: Bureau of Labor Statistics, U.S. Department of Labor, on the Internet at http://data.bls.gov/PDQ/outside.jsp?survey=ce (visited October 11, 2007).

Collective Bargaining Negotiations Exercise: QFM Company

Recommend Documents