Unions' racketeering-style campaign v. Rite Aid

As it attempts to boost its two-year old pharmacy benefits management company (Rite Aid Solutions) at the International Foundation Employee Benefits conference in Anaheim, CA, problems continue to plague Rite Aid.

The International Foundation expects to draw some 5,000 participants to its 53rd Annual Employee Benefits conference, held Nov. 3-7 at the Anaheim Convention Center. Most attendees are involved in administering union health care and pension trusts. The labor coalition sponsoring the reception brings together 1199SEIU (Service Employees International Union), the nation's largest health care union; ILWU, the International Longshore and Warehouse Union, and UFCW, (United Food and Commercial Workers).

Peter Olney, of the ILWU told conference attendees, "The workers at Rite Aid's distribution center came to us wanting to organize in March 2006. What followed from Rite Aid was something you'd expect from Wal-Mart, not from a company that's 40 percent unionized."

In the past two months, the Canadian and US media have reported that the new CEO of Jean Coutu Group Inc., who in June sold 1,800 U.S. Brooks and Eckerd stores to Rite Aid, is urging shareholders to be patient after earnings were eroded by $24.8 million from its interest in Rite Aid Corp. Jean Coutu stock has dropped by almost 20 per cent in the last three months, and Rite Aid is struggling to integrate the Canadian chain's former U.S. stores.

Many are concerned that at a time when industry analysts and institutional stockholders are watching Rite Aid closely to see whether it will be able to successfully pull off the integration of the Eckerd/Brooks chain, Rite Aid has made a choice to fight with workers and their unions and in doing so, risk losing business and spoiling the integration of the operations of the drug store chains.

Furthermore, several Rite Aid business practices have been questionable and the company has settled millions of dollars in lawsuits.

- Rite Aid is using the Eckerd/Brooks acquisition to create a second-tier, non-union workforce that will replace union workers. This will cost jobs and depress wages in the affected areas.

- Over the last 10 years, Rite Aid settled more than a half-dozen lawsuits alleging consumer fraud. The charges included selling expired goods, charging higher than the advertised prices at the checkout line and overcharging the elderly and uninsured.

- The most recent consumer fraud suit was filed a year ago by the state of New Jersey.

- The company paid $6.7 million to settle a class action by workers who alleged that Rite Aid forced their pension fund to buy overvalued company stock.

- The company paid $5.6 million to the government and $1.4 million to 28 states to settle charges of Medicaid fraud.


Celebrities in solidarity with striking writers

"The Tonight Show" host Jay Leno rolled up to a picket line on his motorcycle with doughnuts for striking writers at NBC.

Actress Julia Louis-Dreyfus marched with picketers at Warner Bros. in the shadow of a giant billboard advertising her CBS show, "The New Adventures of Old Christine."

Even Democratic presidential candidates weighed in Monday, as writers got a little help from their famous friends during the first day of their strike against movie studios and TV networks.

Barack Obama said he stands with the writers and urged producers to work with them to end the strike. Hillary Rodham Clinton called for a contract that recognizes the contributions writers make to the entertainment industry. Each candidate has received more than $2 million in campaign contributions from the entertainment industry.

In Burbank, Louis-Dreyfus wore a cap, sunglasses and Screen Actors Guild T-shirt as she joined strikers chanting, "Hey, hey, pencils down. Hollywood's a union town. How this is resolved will directly affect our union, too," she said, referring to the actors union contract that expires next year.

In New York, Tina Fey of "30 Rock" joined strikers outside Rockefeller Center, the headquarters of NBC.

Ellen DeGeneres was not spotted on the picket lines, but her publicist Kelly Bush said she took the day off in support of the writers on her daytime talk show.

Noise and other disruptions caused by a picket line interfered with filming at a location being used for the CBS show "Cane."

About 20 writers chanted, screamed and used a bullhorn outside a cafe near the CBS lot in Studio City, causing the production to move back onto the nearby CBS lot.

Tom Hogan, a location manager for the show, said filming began hours before the pickets arrived and involved a script that was finished several weeks ago.

"But you know what? I support them," said Hogan, a member of Teamsters Local 399, which represents truck drivers, casting directors and location managers.

Strikers near Universal Studios marched across a freeway bridge and waved signs at passing motorists.

Outside the landmark gate of Paramount Pictures on Melrose Avenue, drivers honked their horns in solidarity with strikers.

Despite the support, the financial reality of a work stoppage loomed large for many striking writers.

Michelle Mulroney, 40, and her husband both write feature films.

"I'm fortunate. I can strike for a while," she said. "But most people I know will feel the crunch today."

Zoe Green, 26, certainly will. She sold her first pilot, but the strike is preventing her from writing the script.

"It's the worst thing ever," she said. "I'm going to be struggling on $6,000 (€4,141) until this ends."


Navistar increases output during UAW strike

Navistar International Corp. increased output of blast-resistant trucks and met its October production targets even with a strike at the plant that makes engines for the vehicles.

The Warrenville-based truck and engine-maker met its contractual requirement to deliver 140 of its MaxxPro blast-resistant trucks last month for the Pentagon's mine-resistant, ambush-protected vehicle program, Navistar spokesman Tim Touhy said Thursday.

About 4,000 Navistar employees represented by the United Auto Workers went on strike Oct. 23 over what the union called unfair labor practices. But Touhy said Navistar had "contingency plans" for its Melrose Park plant where MaxxPro engines are built, allowing the company to raise truck output for the war in Iraq.

"We are absolutely confident there will be no disruptions to our production for the MRAP program," Touhy said. He declined to provide details on the engine contingency plans. A Garland, Texas, plant where the MaxxPro chassis is built and a West Point, Miss., plant where the trucks are assembled are not unionized and were unaffected by the strike, he said.

Navistar has received orders for 2,971 MaxxPro trucks, more than any other supplier, as the Defense Department speeds delivery to Iraq to protect troops from roadside bombs. Navistar, which began production in August, still hasn't caught up to the delivery pace of Force Protection Inc., which has been shipping its Cougar trucks for combat since 2003.

Force Protection, based in Ladson, S.C., combined with partners including General Dynamics Corp. to ship 195 Cougar trucks last month, Vice President Michael Aldrich said. Force lags behind Navistar in orders, with contracts for more than 2,700 trucks so far.

Navistar's October output almost matched the company's combined total for the first two months of production in August and September, when it shipped 188 trucks.

Navistar plans to build 500 a month by February.

Separately, Navistar said it has agreed to form a joint venture with India's Mahindra & Mahindra Ltd. to manufacture medium and heavy-duty diesel engines. Navistar said the venture, its second with Mumbai-based Mahindra, will receive a combined investment over the next five years of $90 million. Terms of the accord call for Mahindra to own a 51 percent stake, with Navistar the owner of the remaining 49 percent.

Mahindra is a conglomerate that has been manufacturing cars in India for decades. It sells tractors in the U.S., and is planning to launch a line of pickups and SUVs here in 2009.

Navistar and Mahindra already have a joint venture, dating to 2005, which makes commercial vehicles for sale in India and for export.


Picket line violence erupts in writers' strike

A picketing Hollywood writer was injured just hours into the strike.

"The guy basically said, 'Get the 'F' out of the way, and then hit the gas and just plowed into this guy," said writer Linda Berston, who witnessed the incident according to KABC-TV. "The group was just walking across the driveway, and the guy basically started running him over without giving him a chance to move out of the way," said Berston.

KABC reports that police are investigating the incident.

One photographer on the scene told Eyewitness News that he believes that the writer may have suffered leg injuries, but it is not believed to be life-threatening.

The strike began 12:01 a.m. yet writers did not picket until 9 a.m. at Paramount and other studios across the region.

Writers want a bigger piece of DVD and new media sales.

"This is a really easy one. If they make money off our products, we get some of that money," said writer Bernard Lechowick. "We're talking about a revenue-based income from Internet downloads."

Joining the writers, at least symbolically, are the members of the Screen Actors Guild.

"In the long term, it is important that writers get the formula so actors will get a fair formula, and, you know, the rest of the creative talent community in Hollywood as well," said Ray Rodriguez of the Screen Actors Guild to KABC.

"DVD revenues have surpassed theatrical revenues, and that needs to be recognized in a fair and equitable fashion," said actor Judge Reinhold.

A total of 12,000 writers will be involved in the strike.

Studios maintain that writers are getting a fair share of the revenues from television shows and movies.

The Alliance of Motion Picture and Television Producers (AMPTP) did issue a statement regarding the strike: "Notwithstanding the fact that negotiations were ongoing, the WGA decided to start their strike in New York. When we asked if they would 'stop the clock' for the purpose of delaying the strike to allow negotiations to continue, they refused. Ultimately, the guild was unwilling to compromise on most of their major demands. It is unfortunate that they choose to take this irresponsible action," said Nick Counter, the president of the AMPTP in a prepared statement.

The Writers Guild responded in their own statement: "The AMPTP made no response to any of the other proposals that the WGA has made since July. The AMPTP proposed that today's meeting be 'off the record,' meaning no press statements, but they have reneged on that."

The movie studios have stockpiled films in anticipation of a strike.


Unions demand political payback and get it

The State of Labor 2007 report by the Labor Policy Center of the Evergreen Freedom Foundation notes Big Labor's heavy investment in the Democratic Party's takeover of Congress in the 2006 elections has succeeded in buying attention from lawmakers.

The report, released in August, is themed "Unions Demand Political Payback." It reviews significant developments in the labor movement over the past year, analyzes unions' involvement in politics and their subsequent demands for payback, and offers legislative solutions to unfair policies promoted by organized labor.

Unions Spent Big

The Service Employees International Union spent $65 million. The AFL-CIO spent another $40 million, organized 205,000 union volunteers, knocked on more than 8.25 million doors, made 30 million phone calls, mailed 20 million pieces, contacted 93 percent of union members with election information, and reached 13.4 million voters in 32 states.

Overall, labor unions spent an estimated $200 million on the midterm elections.

Unhappy with big-spending Republicans and tired of the war in Iraq, voters gave Democrats the majority in Congress along with 351 state legislative seats and six governors' mansions. Claiming the credit, labor officials were soon demanding political payback.

Union Priorities Get Attention

Grateful Democrats were quick to oblige. On the federal level, four of seven issues in House Speaker Nancy Pelosi's "100-Hour Agenda" were union priorities. Those measures included raising the minimum wage, requiring Medicare drug price negotiations with drug companies, cutting student loan interest rates, and ending tax subsidies for oil companies.

Democrats tried to pass the so-called Free Employee Choice Act, which would have eliminated secret ballot elections currently used to unionize workers and would instead have implemented a "card check" system that subjects workers to harassment, intimidation, and fraud. The bill passed the House but did not come up in the Senate.

In response to union demands, House Democrats also cut the budget of the agency overseeing investigations into union fraud and corruption.

Since 2000, investigations by the Office of Labor-Management Statistics have resulted in 775 convictions and more than $70 million in restitution to union members. Unions want to hamstring this agency.

States Bolster Government Unions

At the state level, unions continue to work with legislatures and governors to increase the size of public-sector unions, thereby increasing union membership and funds.

Democratic control of Iowa's House, Senate, and governor's mansion brought the first serious challenge to that state's right-to-work law since 1988.

Big Labor's political investments last year were no anomaly. Having tasted victory, union officials are hungry for more and are preparing to launch a major political offensive to put a Democrat in the White House.

Spending Transparency Needed

Union officials are certain to spend much more on the upcoming presidential elections than they did last year. Much of it will be without the knowledge or permission of union members. Union representatives simply will not tell workers.

Just as workers should not be forced to pay a union for unwanted services, they should not be forced to pay for a union's politics. The efforts of labor unions to shield themselves from market forces through coercive policies can be countered with several common-sense measures.

States can implement financial transparency regulations such as the federal LM-2 forms that require unions to make public all expenditures of more than $5,000. States also can limit union fees to cover only the costs of representation, not political expenses.

States also can implement paycheck protection, a policy the U.S. Supreme Court just ruled constitutional. Paycheck protection laws require unions to obtain written permission from their members before they can spend membership dues on political causes.


Teachers union auctions embezzled booty, keeps TV

One woman's booty is another's bargain: The ill-gotten treasure chest of former Washington Teachers' Union president Barbara Bullock went on display Saturday in advance of this weekend's live auction of the luxury goods.

Bullock, now serving a nine-year prison term, spent approximately $800,000 on these designer purses, furs and pricey knickknacks with money embezzled from the union. The seized items sat in an FBI warehouse until this past summer, when Stephanie Kenyon of Sloans & Kenyon in Chevy Chase sent a truck to collect them for auction, with the proceeds going back to the union. "This stuff is new, high-end, glitzy, luxury, status-symbol-type of material," she told us. "Some of the Fendi purses are really wild."

The purse-obsessed Bullock spent tens of thousands on Chanel, Herm├Ęs and Judith Leiber handbags, which are estimated to sell for $500 to $800 at auction. (That's about a quarter of their original price; ditto for the minks and jewelry.) The top lot: a 288-piece Tiffany sterling silver flatware service (Chrysanthemum pattern) purchased for $100,000-plus and estimated to sell for $25,000 to $35,000. Too much? Well, the Buccellati sterling wine cooler is expected to bring just $3,000 to $5,000. The feds also seized electronics that will sell at another auction - except for the TV that union officials kept for headquarters.

Absentee bidding already started on eBay; the live auction begins Saturday.


Gov't union grievance: All strikers deserve bonus

Negotiators for one of Vancouver's civic unions are crying foul because some 700 workers didn't receive their full $1,000 signing bonus after returning to work last month.

Representatives for the city and CUPE, Local 15, which represents inside workers, will meet with mediator Brian Foley on Wednesday to hammer out a compromise on the issue, according to documents obtained by The Vancouver Sun on Sunday.

A $1,000 payment to striking workers was one term of a mediated settlement that ended the 84-day strike by inside workers, the second-longest strike in Vancouver's history. But the city says that some employees shouldn't receive the full payment, including workers on leave and workers who performed essential services during the strike.


FedEx settles, Teamsters get election

FedEx Home Delivery and the National Labor Relations Board have reached an agreement awarding more than $253,000 to five present and former workers, a settlement which also clears the way for a union election in February.

Four former workers and one current employee for FedEx Home Delivery’s operations on Lyman Street received compensation as a result of a settlement over complaints the company harassed and fired workers active in a union organizing effort with the Teamsters.

The settlement checks awarded to the drivers ranged from $16,809 to the sole employee still working for FedEx Home Delivery, to $73,197 paid to one of the four who were fired and have declined reinstatement, according to the Oct. 25 settlement. The case was slated to go to trial yesterday.

There were no findings of unfair labor practices and the workers will hold an election Feb. 1 to see if the Teamsters will be the drivers’ collective bargaining unit.

“It’s an important ruling,” said Michael P. Hogan, secretary-treasurer for Teamsters Local 170 in Worcester. “It’s a step in the right direction for these workers. Certainly, we thought a settlement would be reached.”

In bringing the April complaint, the NLRB determined the drivers are company employees, rather than independent contractors as the company has asserted, and are eligible to unionize.

Mr. Hogan said 95 percent of the drivers signed union cards in November 2005. A vote to determine if the Teamsters would be the drivers’ collective bargaining unit, set for February 2006, was postponed after the company began harassing workers, including using some drivers to make an anti-union video, he said.

Former driver Robert V. Williams of Berlin, who was awarded $40,000, said he was pleased with the settlement. He said he had been terminated by FedEx after testifying at an NLRB hearing held in 2006 to determine if the workers were company employees or independent contractors.

He said he is not interested in returning to work for FedEx Home Delivery.

“This backs our original contention that we have the right to have an election,” he said. “The people terminated were made whole. FedEx hasn’t won any of these cases around the country.”

Perry Colosimo, spokesman for FedEx, emphasized there was no finding in the settlement that FedEx engaged in any unfair labor practices at the Northboro facility.

“This matter has been pending for nearly two years and this settlement allows all parties to move forward,” he said in a statement. “We are committed to working with contractors to continue to grow our thriving home delivery business, and to ensure all contractors have the opportunity to succeed — without the interference of a third party. FedEx Ground looks forward to the election on Feb. 1.”

Mr. Hogan said a key finding by the NLRB was that the workers were employees of the company rather than independent contractors.

“If they were not employees, and were independent contractors, the company could do whatever it wants,” he said. “FedEx could terminate them at any time. When these drivers were found to be employees, and then the company appealed, they started to wage this anti-union war against them. Then, when they found they were not making any headway, fired them.”


Writers Guild strike may backfire

As I was leisurely flipping through the papers today, avoiding a math project for as long as possible, I noticed something strange in a small corner of the front page of USA Today’s Life section. Apparently the Writer’s Guild of America has gone on strike. Writer’s Guild of America, you ask? They are the people who write the scripts for the non-reality television shows.

The strike is reportedly the result of union bosses and TV and film producers failing to come to an agreement over royalties for programs distributed over the internet, according to Ireland On-Line. Well, three days into the walk-out – the first such strike since 1988 – it is becoming apparent how little this strike will change people’s everyday lives.

I know that in my dorm, every time I walk past a television an MTV reality show about rich people is playing. Of course, reality shows are not going to be affected by this sad event. The CW – a station with almost no script detectable in their entire repertoire – already has several shows prerecorded for next season. They include some returning shows like “America’s Next Top Model,” “Beauty and the Geek” and “Pussycat Dolls Present,” with some fresh blood in the form of “Farmer Wants a Wife” and “Crowned,” both of which concern beauty pageants.

It seems only television viewers with similar tastes to my own will be affected. Seriously people, think about what kind of intellectually barren and witless world we would be left with when reality television truly takes over: this walk-out could be the death knell for shows from “Late Show With David Letterman” on CBS to “The Colbert Report” on Comedy Central, according to The New York Times. These shows are produced every day they run, with witty writers changing the daily news into something less depressing and extremely entertaining. Go figure, Stephen Colbert may need the job he is running for in the White House if the strike goes on for too long.

But even with dark times ahead, these shows will bounce back without union writers, as they did during the writers’ strike in 1988. The WGA union members may have put themselves entirely out of the picture through their “ill-timed, short-sighted” strike, according to Canada.com. In the aftermath of the strike in 1988, it was somewhat difficult to re-establish the habit of watching television as competition for viewers’ free time was introduced through the new computer-based media. As an even more diverting internet and even better video games lure more and more viewers away from their remote controlled, television-filled environment, the entertainment industry will be hard pressed to find jobs for writers if they strike long enough to break the significantly weaker habit of channel-surfing.

Whatever thought went into this seemingly money-grabbing venture by the WGA needs to be reviewed. A losing battle between television and the internet has been playing out since the advent of YouTube, MySpace and other massively entertaining websites.

I will be sad if I ever have to see the writing of my favorite shows become a fond memory, but it looks like such a reality is upon us.


Board rejects Teachers Union proposal

The strike in the Seneca Valley district will continue as the school board has voted to reject the latest proposal from the teachers.

After six hours of negotiations, both sides reached tentative agreements on four minor economic issues. But salary and benefits remained a problem.

The school board says it just learned today that they are facing a 12 percent hike in health care costs for the coming year, adding up to more than $900,000.

By law, the teachers must return to class on November 15.


Unions, trial lawyers hold Court in PA

Candidates for a pair of open seats on Pennsylvania's highest court are winding up a $5 million-plus race that revealed little about their judicial philosophies, but looked and sounded more than ever like a conventional political campaign.

The Supreme Court race is the marquee attraction in Tuesday's election, which also features a contest for three open seats on the state Superior Court, up-or-down "retention" votes on seven appellate judges seeking additional 10-year terms, and a much longer list of races for county and local judgeships and other elective offices.

Despite mounting pressure for judicial candidates to discuss their political views -- including a federal court's ruling last month that such activity does not violate judicial ethics rules, so long as they don't promise to rule a certain way -- the Supreme Court hopefuls have done so only haltingly. Generally, as in previous judicial campaigns, they have stressed their experience and avoided hot topics altogether.

The race is shaping up as one of the most expensive judicial campaigns in state history. State officials took a Virginia-based conservative group to court in what proved to be a futile attempt to halt a TV commercial promoting one candidate. And activists hoping to exploit lingering resentment over the judges' 2005 pay raise are urging "no" votes against most of the statewide judges seeking retention.

Turnout numbers: Despite that activity, four out five Pennsylvanians who are old enough to vote are expected not to bother - about average for such an election.

"If we get 20 to 23 percent (turnout), it will be large," said G. Terry Madonna, a pollster and political scientist at Franklin & Marshall College in Lancaster. "I don't see anybody coming out just to vote against judges."

Cash has flowed most heavily in the campaigns for Supreme Court, on which this many seats have not been open since 1995.

One of the biggest contributors is the Philadelphia Trial Lawyers Association, which funneled more than $920,000 to candidates for the appellate courts through its political arm, the Committee for a Better Tomorrow. That included $733,000 for the four Supreme Court hopefuls and Justice Thomas Saylor's retention campaign.

The Republican State Committee, which hopes to build on - or at least retain - its one-seat majority on the Supreme Court, provided more than $750,000 worth of services to its two Supreme Court nominees.

Of the Supreme Court candidates, Superior Court Judge Seamus McCaffery of Philadelphia has raised the most - $1.9 million as of Oct. 22. The Democrat received six-digit contributions from the Philadelphia trial lawyers and several organized-labor groups.

Republican Mike Krancer, a Montgomery County lawyer and former chief judge of the state Environmental Hearing Board, raised $1.4 million, most of it from his wealthy family and his personal resources. His father alone contributed $550,000.

Superior Court Judge Maureen E. Lally-Green, a Republican from Butler County, built a $1.2 million war chest, largely with contributions from lawyers, doctors and business people. Lally-Green was the beneficiary of a flattering TV ad that the state tried to block in the closing days of the campaign, although her campaign insists that the ad's sponsor acted totally on its own.

Democrat Debra Todd, also a Superior Court judge from Butler County, relied heavily on lawyers and organized labor to raise $933,000.


UAW turns workers against each other

People are stunned and confused when they learn that big-time unions such as the United Auto Workers (UAW) have agreed to contracts that contain two-tier wage provisions. It was organized labor (and not the Church or the U.S. Congress or philanthropic organizations) who first demanded equal pay and equal seniority for women. Equal pay for equal work was one of labor's fundamental tenets. So, to the casual observer, the notion of a union agreeing to something so unjust is inconceivable.

For those unfamiliar with the concept, a two-tier format requires new employees to earn less money than their senior co-workers. Even when doing identical jobs, even when working side by side. Because these tiered plans generally have no "sunset language" (built-in expiration dates), no amnesty periods, no mechanisms for equalizing pay, the rate discrepancies remain permanent.

Through natural attrition a company can eventually end up with its entire workforce earning substantially lower wages. Worse, the two-tier format doesn't apply exclusively to wages; it can cut into the entire economic package, including benefits. Newbies are commonly locked into lower vacation time, higher medical premiums and smaller pensions. That's why the tiered format is so tempting to businesses.

While the configuration has been around in one form or another for decades, it wasn't until the 1990s that it became a routine agenda item, and it wasn't until fairly recently that companies began treating it as a "deal-breaker." Arguably, the genie was let out of the bottle when companies first began adopting hiring rates (where new-hires aren't paid the full rate until they've been there a year), and when lump-sum bonuses were accepted in lieu of GWIs (General Wage Increases).

To a company looking to cut costs, paying cash instead of a GWI is a sophisticated short cut to achieving it. Because overtime is computed at the (old) hourly rate, as are vacation and holiday pay, sick leave, workers comp claims, and pension formulas, the overall savings to a company can be considerable.

But even with these precursors in play, how was organized labor ever persuaded to accept a provision so toxic and self-destructive as this?

Typically, management comes at the union from two angles, one economic, one cultural. The economic approach bluntly warns that without the adoption of a two-tier format, cost savings will be sought elsewhere. In this context, "elsewhere" is understood to mean benefits and wages, two components of the membership's Holy Trinity (the third is seniority). And the benefit considered most vulnerable is health care.

Since the early 1990s, the threat of unleashing the hounds of medical insurance has been management's most effective scare tactic. Because everyone who follows the news knows that medical costs are out of control and spiraling upward, the fear of a family budget being wiped out by exorbitant premiums and deductibles looms large.

The company begins by bombarding the union with reams of grim statistics: comparisons to other facilities, other industries, other unions, other states, other countries, other eras. In a normal contract negotiation, while economics (particularly wages) are always foremost and omnipresent, they manage somehow to stay muted and unobtrusive, like background music, until crunch time. But in a two-tier wage pitch the demands are unrelenting and merciless, right from the get-go.

The company recites the names of businesses that have already moved to Mississippi or Malaysia, or have shut down altogether because they couldn't compete. They mention the hundreds of thousands of layoffs in the sector; they compare GM's national strike in 1970, where over 400,000 workers walked off their jobs to GM's recent strike, where 73,000 walked out; they note that during their last hiring period, nearly 2,000 people showed up to apply for 44 hourly positions; and they mention that virtually no one in the facility ever quits to seek employment elsewhere, because they're all so well-paid.

It's an assault, an avalanche of bad news. The union is told, analogously, that it can choose to swallow a bitter pill (and maybe choke on it a bit) or it can choose to undergo major surgery. The choice is yours. Do you want your medical plan to remain intact, or do you want your premiums to skyrocket? By giving the company the relief it seeks in the area of future wages, you can hang on to what you have. The choice is yours. That's the economic argument.

The cultural argument is subtler and more tantalizing. Not only is the union reminded that the plan won't adversely affect anyone currently on the payroll, these future new-hires, these people who are going to be making less money than the rest of them, are portrayed as being vaguely culpable, as if their Johnny-come-lately status makes them somehow deserving of being punished.

Current employees-those who've faithfully put in their years and showed their loyalty to both union and company-will continue to be rewarded for that service. Besides being grandfathered in, and having their precious medical insurance untouched, the company will offer them a hefty "signing bonus" for ratifying the contract.

Because this enterprise can be seen as class warfare-once-removed (a case of the working class arranging things so as to form its own sub-class), management reassures the union that the only people who can be "hurt" by this are people who do not yet exist. They are "hypothetical" workers, part of that sea of nameless, faceless job applicants who may one day seek employment in the facility.

Moreover, when these folks move from hypothetical to "actual," they are going to know exactly what's in store for them. The two-tier format will be carefully explained. If the prospect of earning as much as $16 per hour on the bottom tier (as opposed to $30 per hour on the top tier) makes economic sense to them, they'll be welcomed aboard.

But if the deal offends them (if the notion of equal work being rewarded with unequal pay is something they simply can't abide), they'll be congratulated for having a well-developed sense of justice, and cautioned not to let the door hit them on the way out.

And that, more or less, is how the two-tier plan is pitched.

Of course, once these plans are implemented, they're an ungodly mess. The membership experiences an agonizing case of "buyer's remorse." The same members who assumed they could work comfortably with sacrificial lambs now feel pangs of conscience. They blame the company; they blame themselves; they blame the union for bringing it to a vote. And then there's that whole dynamic of the haves bickering with the have-nots; morale plummets, and union solidarity goes out the window.

But as bad as it gets, it's nothing compared to later. The really bad news doesn't come until the next negotiation, after the two-tier format is firmly in place. That's when the company announces that, unfortunately, medical insurance, the one benefit that was to be left untouched, must now be drastically slashed. And when the union screams bloody murder, they're told it's business. Just business.


Unions 'brought fully into the fold'

Winning bargaining power for 32,000-plus state workers has long been a goal for unions in Colorado, and several pieces neatly fell into place this year to bring it about, observers say.

"This is labor being served and labor being brought fully into the fold," political analyst Eric Sondermann said of Gov. Bill Ritter's signing Friday of an executive order giving unions for state workers official recognition and bargaining powers.

After more than 40 years, Democrats finally controlled both legislative houses and the governor's office with Ritter's election last November.

Within his first weeks in office, the governor found himself at odds with the Colorado unions that helped get him elected, when he vetoed the so-called Labor Peace Act.

Denver's selection as host to the 2008 Democratic National Convention allowed national unions to take potshots at Ritter and Denver for a perceived weakness on the union question.

Teamsters president James P. Hoffa threatened that protests could "blow up" during the convention. Hoffa and AFL-CIO leader John Sweeney were critical of the lack of union hotels here for delegates to stay in - there is only one - and of Ritter's veto.

Sondermann and other observers speculated then that the convention and the Democratic takeover of state government would provide the best leverage ever seen in Colorado for collective bargaining for state workers.

But state-level unions even then tried to downplay that leverage, and they downplayed the suggestion after word of Ritter's order was released Friday.

Leaders of the Colorado Federation of Public Employees and the American Federation of State, County and Municipal Employees said they wouldn't strike during convention week and that they resisted the national union saber-rattling as unproductive.

"If they were our members, I would definitely stop them from" protesting during the convention, Jo Romero, leader of the Colorado Federation, said in April, anticipating a visit by Democratic Party chairman Howard Dean in Denver to meet with AFL-CIO leaders.

On Friday, a member of another public employees union also stressed that she saw Ritter's order as focused more on workers and less on the national scene.

"In my discussions with other employees, politics have nothing to do with it," said Maia Whitaker, a member of the Colorado Association of Public Employees, part of the Service Employees International Union. "The conversation was about having a voice."

The executive order did not give state employees traditional collective-bargaining power. It contains a no- strike policy and specifies that the new "partnership agreements" will not result in binding arbitration.

Former Democratic Gov. Dick Lamm on Saturday said the executive order was meant to "appease" labor officials and that the measure "came in" with the Democratic takeover.

He argued that the matter should have been debated in the legislature and noted that executive orders are easily struck down by future administrations, so it is unclear whether Ritter's measure will have any lasting value for employees.

While a supporter of his fellow Democrat, Lamm said Ritter's order lays an extra system atop an existing system he believes is fair and equitable.

Lamm champions collective bargaining in the private sector. But he says that because government has to avoid the threat of a strike - because danger to citizens would result if workers such as prison guards or maintenance crews struck - the civil-service form of employer-employee negotiation makes better sense.

In that system, yearly audits are done to match job categories and pay to private-sector equivalents.

Ritter's order, Lamm says, will give employees an already reasonable base salary from which to bargain higher, which is likely to hurt taxpayers.

The current system already gives unions and employees a voice, Lamm says, and "has served us well. Anyone who changes it does so at their peril."

Ritter's office says even with the "partnerships," the legislature does not give up its authority to set the state budget, which means lawmakers could toss out any agreement that costs money.

Evan Dreyer, a spokesman for the governor, said the executive order gives "the exact same opportunities to state government workers that is available to private-sector employees. It's all about fairness and parity with the private sector."


Andreesen: Suicide by strike

From the New York Times:
A strike by Hollywood writers began in New York just after midnight Monday...

[M]ore than 12,000 screenwriters represented by the Writer Guild of America West and the Writers Guild of America East in the early morning hours in New York began the first industry-wide strike since writers walked out in 1988. That strike lasted five months...

Throughout the weekend, guild leaders held orientation meetings for strike captains, who would supervise picketing teams, and otherwise prepared for an effort to shut down as much movie and television production as possible...

The sides have been at odds over, among other things, writers? demands for a large increase in pay for movies and television shows released on DVD, and for a bigger share of the revenue from such work delivered over the Internet.
So imagine you're a major media mogul, a captain of the film and television business, a shaper of global culture, one of the anointed few who can green-light major entertainment projects.

You're faced with a massive, once-in-a-lifetime shift in mainstream consumer behavior from traditional mass media, including film and television, to new activities that you do not control: the Internet, social networking, user-generated content, mobile services, video games. It's been snowballing since the mid 90's, for like 12 years -- 12 years of denial and obfuscation -- but it's really rolling fast now.

Many of your current lifeblood properties are not growing anymore or are in outright decline, and you don't own enough of the vital new properties to offset that, nor are you certain how you would make money with the new properties even if you did own them. And the consumers you rely upon for revenue are so frustrated with your company's inability to supply them with what they want, when they want it, that digital piracy of your content has become mainstream and socially acceptable behavior practically overnight, and all of your efforts to stop it seem to only make it worse.

And your company's culture is not prepared to deal with the shift. Your company was founded 50 or 80 or 100 or 150 years ago by different people in a different time, and the overwhelming majority of your people now -- smart and well-meaning managers and bureaucrats, but still managers and bureaucrats -- have to be retrained and reoriented toward entrepreneurial thinking in a viciously dynamic and startlingly fast-changing world not of your, or their, creation.

Is this really the right time to pick a fight with the writers over royalties from DVD and Internet sales, leading to an industry-wide shutdown and massive economic pain for all sides in the world of traditional scripted film and television content?


If you're a mogul, the key question has to be, what would the founders of my industry have done in this situation? Really, what would they have done? Thomas Edison, Darryl Zanuck, Jack Warner, Irving Thalberg, Adolph Zukor, David Selznick, Louis Mayer, David Sarnoff, Bill Paley, Walt Disney... presented with such a period of profound change and global market expansion, would they have declared war on the writers of all people or blamed Apple of all companies for their problems, or would they be charging ahead and developing new businesses, new forms of entertainment, new markets, and new sources of revenue?

In a nutshell, would they have crawled into a hole of protecting the status quo or would they be forging a new, exciting, optimistic future through force of will and creativity?

Why aren't you doing what they would be doing?

If you, like me, are just a normal and normally happy consumer of TV shows and movies -- at least when you're not equally happily playing video games, surfing the Internet, networking socially, blogging, or kicking it with your IPod -- then one day your grandchildren are likely to ask you, "Hey, old man, I learned in school today that there used to be these companies called 'studios', and they would actually spend tens or hundreds of millions of dollars making scripted entertainment, and you would actually sit still, in a chair, and watch it -- whatever happened to that?"

And you'll get to say, "Well, it's complicated, but let me tell you a little story about the writers' strike of 2007..."


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