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Atlantic Baking GroupAtlantic Baking GroupB.C.T.G.M. Local 12B.C.T.G.M. Local 12

I.U.O.E. Local 95I.U.O.E. Local 95

Bloomfield-Garfield C.D.C.

F.M.C.S. – Pittsburgh

Steel Valley Authority

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APEC SYMPOSIUMAPEC SYMPOSIUM

CASE STUDY

Mexico City, Mexico

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A.B.G. PresentersA.B.G. Presenters

William T. Cagney – Business Manager, I.U.O.E. Local 95 – 95A; William T. Cagney – Business Manager, I.U.O.E. Local 95 – 95A; Pittsburgh, PAPittsburgh, PA

James Crawford – Director of Manufacturing, Steel Valley James Crawford – Director of Manufacturing, Steel Valley

Authority; Pittsburgh, PAAuthority; Pittsburgh, PA

Robert S. Ditillo – Commissioner, U.S. Federal Mediation & Robert S. Ditillo – Commissioner, U.S. Federal Mediation & Conciliation Service; Pittsburgh, PAConciliation Service; Pittsburgh, PA

Ronald Pepperdine – Vice President Operations, Atlantic Baking Ronald Pepperdine – Vice President Operations, Atlantic Baking Group, Inc.; Pittsburgh, PAGroup, Inc.; Pittsburgh, PA

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Discussion AgendaDiscussion Agenda

General BackgroundOrganizationLabor-Management relations

L-M Cooperative InitiativeInitiative objectivePromotion of initiativeInitiative structure & processes

Lessons Learned

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A.B.G. BakeryA.B.G. BakeryPittsburgh, PA – U.S.A.Pittsburgh, PA – U.S.A.

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A.B.G. ProductsA.B.G. Products

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Steel Valley AuthoritySteel Valley Authority

An intermunicipal public agency incorporated under the Municipal Authority Act of 1945 and governed by a board with representation from twelve member communities.

Funded by the Pennsylvania Department of Labor & Industry - Dislocated Worker Unit to avert layoffs and business failures as part of the rapid response program.

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Strategic Early Warning NetworkStrategic Early Warning Network

A team approach working with public and private economic development groups on business failures resulting in layoffs.

Comprehensive Professional Services Business Plans Financial Restructuring Operations Reviews Labor-Management Relations Succession Planning Employee Stock Ownership Plans

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The Labor-Management ProblemThe Labor-Management Problem

How to avert a plant closure by developing a new bakery business?

How to compete for scarce public and private capital resources as well as managerial resources in a global economy?

How to reinvent the daily workplace practices of the bakery to again become competitive in the cracker industry?

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Reinventing the Workplace:Reinventing the Workplace: Previous Conditions Previous Conditions

Branded product with a monopoly position in the marketplace commanding very high prices and profits.

Multinational, conglomerate, heavily leveraged corporation with multiple tiers of management in the organizational structure.

Production heavily managed and controlled by professional, non-union personnel.

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Previous ConditionsPrevious Conditions

A top-down, corporate wide attempt to improve the competitiveness of the company through training and a more active labor-management committee process was abandoned. This led directly to the downsizing of the company and the closure of the plant as an alternative means of improving profitability.

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Previous ConditionsPrevious Conditions

Very high wages with compressed labor rates such that there was very little differential between the highest and lowest paying jobs.

The frequent use of union seniority to seek out the easiest jobs rather than ones requiring increased skill, responsibility, and knowledge of the production process.

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New SituationNew Situation

ABG to manufacture a private label cracker product in a highly competitive market with low profit margins.

Start-up company with a large amount of equity investment and a very shallow management structure.

Extensive investment in new equipment and product development required.

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ChoicesChoices

Traditional high-wage, heavily managed model of labor-management relations?

Low-road, low pay, heavily managed model of labor-management relations?

High-road, competitive wage, high-performance model of labor-management relations with decision-making and responsibility shared with the workforce?

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Forging a Labor-Management-Forging a Labor-Management-Government PartnershipGovernment Partnership

Maintaining the trust of both labor and management in order to be effective.

Providing guidance about public assistance.

Providing leadership at critical junctures.

Listening to others and attempting to understand the business in historic, economic, and moral terms.

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Initiative - Structure - ProcessesInitiative - Structure - Processes

Training Fund Local 95 Program Customized for bakery

“Lead Worker” Training• Benefits of an Internal

Work Force• Budget Preparation• Computer Application• Energy Conservation• Health & Safety• Human Relations• Planning & Time Mgt.• Recommended Skill

Levels• Record keeping• Reports & Presentations

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Initiative - Structure - ProcessesInitiative - Structure - Processes

Buy-inProfit sharingLease on Plant

LMCFormationStructureGoalsFMCS GrantCommittee

Effectiveness Training (C.E.T.)

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F.M.C.S. InvolvementF.M.C.S. Involvement

F.M.C.S.Independent Federal

agencyCreated by law in

1947Neutral assistance to

L/M community• Dispute resolution

• Training

• Grants

Grant OverviewTo joint LMC

Grant AwardTo assist in training

initiative

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F.M.C.S. InvolvementF.M.C.S. Involvement

C.E.T. AssessmentTo I.D. skill needsTraining Program

development

C.E.T. FocusGroup processesJoint problem-solvingTeam based decision-

making

Training Modules Effective Planning Effective Meetings Group Problem Solving Consensus Decision Making Effective Communications Understanding others Interpersonal Skills Shared Leadership

In progress

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Lessons LearnedLessons Learned

The labor-management committee needed to be more involved in the planning for the production equipment to be installed.

Primarily because of the historical association of the labor-management committee process with only daily production activities this was not done.

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Lessons LearnedLessons Learned

Every aspect of the design and equipment used in the plant as well as the terms and conditions of the labor contracts needs to support the strategy selected to compete in the marketplace to the fullest extent possible in order to be successful.

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Lessons LearnedLessons Learned

Continuation of government involvement & oversightSVA - FMCS - BGCDC