The "Corporate Campaign" Strategy
Helping Labor Unions and Public Interest Groups Confront Unbridled Corporate and Political Greed since 1981
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Helping Labor Unions and Public Interest Groups Confront Unbridled Corporate and Political Greed since 1981
THERE ARE MEANS other than long, costly strikes and boycotts to challenge powerful institutions that are irresponsible in their social and economic policies. I am referring to a "corporate campaign," an approach that should become as important a confrontation strategy in the future as strikes, boycotts, and other forms of protest have been in the past.
A total corporate campaign considers all avenues of pressure and would include the possibility of a strike, a boycott, and other traditional tactics. However, these would be timed and coordinated as part of an overall conceptualized strategy to maximize their effectiveness. A corporate campaign attacks a corporate adversary from every conceivable angle. It takes on the power behind a company. It shows clearly how to cut off the lifeblood of an institution. Its proponents recognize that powerful institutions are both economic and political animals and must be challenged in both the economic and political spheres. It moves workers' and poor people's struggles away from their own doorsteps to the doorsteps of the corporate power brokers.
The original corporate campaign aimed at helping workers represented by the Amalgamated Clothing and Textile Workers Union (ACTWU) gain union contracts at J.P. Stevens & Co. This campaign focused on the company's corporate headquarters and on those institutions heavily tied into Stevens interests through interlocking directorates, large stock holdings, and multimillion-dollar loans.
In the Stevens campaign we wanted to cause those institutions heavily tied in with Stevens interests to exert their considerable influence on the company to recognize the rights and dignity of the workers and to sit down and bargain in good faith. We realized, however, that the "targeted" institutions and individuals would exert their influence only when they realized it was in their own primary self-interest to do so. To make it in their primary self-interest we had to draw these institutions into the Stevens controversy-so that their own image, reputation, and credibility were seriously jeopardized with large segments of the population important to their overall growth and prosperity. The ultimate goal of the corporate campaign was, if necessary, to polarize the entire corporate and Wall Street community away from J.P. Stevens, thereby pulling that company's most crucial underpinnings out from underneath it.
A company like J.P. Stevens cannot survive in a vacuum; it must be able to continue to spread its influence within the corporate and financial community if it is to maintain a stable level of business, much less grow and prosper. Once corporate and financial America turns off against a company like J.P. Stevens, unless that company is bent upon its own self-destruction, there is no place for it to go but the bargaining table. None of the big institutions that fight organized labor wants to face extinction. They only have to be convinced that unless they recognize the legitimate concerns of the labor movement, they will lose a great deal more than they have to gain.
We must recognize that banks and insurance companies have great influence over other corporations. First of all, banks and insurance companies control enormous amounts of stock in other corporations. They have voting power over this stock and can vote against management if they do not like the direction a corporation is taking. They can initiate stronger action by dumping large amounts of a corporation's stock on the market. When major financial institutions hurriedly sell a company's stock, it signals to the rest of the financial community that there is something wrong with the policies and direction of the company. The stock will probably decline in value, and no one else will be in a hurry to buy it. Banks and insurance companies also have a critical influence over other corporations when they decide to extend credit, or tighten credit terms, or deny credit entirely. Finally, big banks and insurance companies influence corporate America as well as each other by having their directors sit on the boards of other corporations. In this fashion they can have direct say over the policies and actions of these companies, or they can threaten to leave the board. On the other hand, officials of a company serving on the board of a bank or insurance company can have tremendous pressure exerted on them to change their policies or face being pushed off a board.
What were some of the successes of the J.P. Stevens corporate campaign? Early in the struggle two of Stevens' chief officials, including its chief executive officer, were forced off the board of the fourth largest bank in the country, Manufacturers Hanover Trust Company. A complex power play took place in forcing the J.P. Stevens directors off the Manufacturers Hanover board. It took place because a large number of community, political, and religious organizations, with organized labor leading the way, confronted the bank in the strongest terms possible over the issue of its interlocks with J.P. Stevens. The bank realized that organized labor and growing segments of the public were being turned off to it because of its deep involvement with the J.P. Stevens Company. Tremendous pressure was exerted by the bank on Stevens to sit down and bargain. When that pressure didn't bring results, the bank simply said to Stevens, "We don't want to have anything more to do with you."
A couple of weeks after the two directors were forced off the board of Manufacturers Hanover, the chief officer of the Avon Products Company also resigned from the J.P. Stevens board. In a press release, he indicated that he could not continue his association with the J.P. Stevens Company and allow Avon Products' name to be drawn further into a controversy which could seriously affect his own company. When these directors resigned, it indicated the beginning of a growing alienation of the corporate and financial community from J.P. Stevens.
After ACTWU's success with Manufacturers Hanover and Avon, The Wall Street Journal wrote an editorial denouncing the corporate campaign and accusing ACTWU of "terrorizing businessmen who do business with Stevens." Textile industry executives were quoted in industry papers as saying that we were using "blackmail tactics;" they insisted that we must be stopped. Our response to allegations of our injustice toward Stevens directors was that we were more concerned about workers in Stevens plants who were suffering from brown lung, workers whose bodies were being maimed and whose whole lives and futures were being destroyed because of a long history of irresponsible company policy. Furthermore, we said, our tactics are legal and ethical, unlike those that were being used by J.P. Stevens and some segments of corporate America in their assault on labor unions and workers' rights. And every time defenders of the status quo would squeal and cry foul, we knew that our tactics were having a profound impact.
Those same allegations of employing unjust tactics were again aimed at ACTWU and the corporate campaign after September 12, 1978. At that time, Stevens' chairman and chief executive officer was forced to resign from the board of directors of the New York Life Insurance Company, and the chairman and chief executive officer of N.Y. Life resigned from the J.P. Stevens board in order to keep N.Y. Life from becoming more deeply embroiled in the Stevens controversy. Again, as with Manufacturers Hanover and Avon, a strategy had been set in motion which exposed N.Y. Life's intimate links with J.P. Stevens, leading to enormous friction between N.Y. Life and large sectors of the population.
The insurance industry's support of J.P. Stevens did not end with the severing of N.Y. Life's interlocks. Powerful sectors of the insurance industry still had strong ties with J.P. Stevens. We realized that the insurance industry wielded tremendous influence over future policies at Stevens. Out of $230 million in loans outstanding to Stevens credit that the company needed to survive-$190 million came from the insurance industry. Also, a significant amount of Stevens stock was held by insurance companies. I concluded early in the campaign that if a situation could be created where it was either J.P. Stevens or certain insurance companies, those insurance companies had the power, when push came to shove, to wield deciding influence to bring Stevens to the bargaining table. After intense confrontations that took a heavy toll on officials of The Seamen's Bank for Savings and Sperry Corporation, because' of their ties to J.P. Stevens, the final blow came when pressure was exerted on Stevens by Metropolitan Life Insurance Company, the major Stevens lender. Metropolitan acted in response to a threat to run two dissidents as candidates for its board. This would have meant an embarrassing and costly struggle for the insurance company, and it would have opened a pandora's box of issues throughout the entire insurance industry.
J.P. Stevens was so frustrated by these tactics that the company had the following paragraph included in its settlement with ACTWU:
"Subsequent to the date of the Agreement the Union will not engage in any 'corporate campaign' against the Company. Accordingly the Union will not in any manner attempt to effectuate the resignation of members of the Board of Directors of Stevens, or to effectuate the resignation or removal of Stevens executives from the boards of directors of other companies, or to restrict the availability of financial or credit accommodations to Stevens, or by deliberate conduct to affect materially and adversely the relationship between Stevens and any other business organization."
People have asked me why corporate America, particularly the banks and the insurance companies, can't band together to put a stop to a corporate campaign. Indeed, up until now banks and insurance companies have seemed to be impenetrable bastions of power. There is no doubt in my mind that when Manufacturers Hanover was being confronted by the corporate campaign all of the other banks got together and said, "Look ... don't you give into those damn unions. Don't get rid of the directors on your board, because if you do you are going to set an awful precedent." I have no doubt in my mind that the Manufacturers Hanover board of directors said, "Don't worry, because we will never give in." Manufacturers Hanover was figuring that the whole thing would blow over.
We never asked any labor union or anybody else to threaten to boycott or to pull a penny out of Manufacturers Hanover. However, we did create a campaign that we knew would create enormous friction between Manufacturers Hanover and large segments of the population. When a series of strong communications went out to the labor unions exposing the intimate links between Manufacturers Hanover and J.P. Stevens, they did what they thought they had to do. Newsweek and other publications mentioned that the bank was facing a $1 billion pullout of union funds. That was raw economic power. We were confronting power with power, and that is what unions have to do with these big financial institutions.
Manufacturers Hanover officials got to a point where they must have said to themselves: "Even though J.P. Stevens is an important and profitable relationship for this bank, it is only a pebble on the beach compared to our overall business." They recognized that their image, reputation, and credibility were being seriously jeopardized in large segments of the population that were important to their overall growth and prosperity. They were not about to put the well-being of a $38 billion institution on the line for J.P. Stevens, when they could get rid of the Stevens directors.
The elite of the big banks, insurance companies, and corporate America are power hungry. It is good they are so power hungry, because this is another reason why they are inherently weak and why they can have their power pitted against them. The power elite has taken all the power it can from the poor. The real poor in this country have no power whatsoever; otherwise they wouldn't be in the situation they are in today. Working men and women have some power; they are not dirt poor. And what makes the power elite so vulnerable to counterattack is that they are so power hungry that when there is no other place to go to get more power, they then try to steal from each other. That is called competition. And it is because of competition and corporate greed that unions can pit one big financial entity against another and can defeat them.
Manufacturers Hanover got to the point where I am sure it said to all the other banks, "You are telling us not to set a precedent, not to give in; all right, but you also must realize that we are facing a $1 billion pullout. Some unions are already taking deposits out. You tell us not to give in; but money from our bank is going to our major competitors. You tell us not to give in, but we are getting the hell kicked out of us in this thing--and you are all benefiting from our losses. So if you don't want anyone to give in, then don't you give in. Right now we are getting out of this thing." And that is exactly what they did! .
Power gravitates toward and emanates from concentrations of money and people. Organized labor could make much more effective use of its people power with a better understanding and use of the most advanced organizational technologies. But the issue I want to stress here is the vast potential economic clout organized labor has never really used. It's one thing to have a vast source of potential power lying dormant waiting to be mobilized, but it's quite another matter to have that very same source of power being used against you.
There is a great deal of proof today that workers throughout the nation, rather than using their vast economic clout, have instead been subsidizing their own demise and that of their communities. Just give these facts some thought; they were highlighted in a book published in 1978, entitled The North Will Rise Again: Pensions, Politics and Power in the 1980s, by Randy Barber and Jeremy Rifkin: "Pension funds are a new form of wealth that has emerged over the past 30 years to become the largest single pool of private capital in the world. They are now worth over $500 billion. They own 20-25% of the equity in American corporations and hold 40% of the bonds." For the most part these funds are controlled by a handful of money managers representing the interests of the banks and insurance companies. Of course, when money managers control union pension funds and other assets, they have a responsibility to manage union money in the unions' interests. But when union interests are not the same as that of the banks and insurance companies, the money managers forget union interests. Much of these pension funds are union funds and they are being used to transport jobs overseas, to finance antiunion companies, and to finance dictatorial regimes like South Africa and Chile-while entire regions of our country are being redlined and obliterated.
Ownership without control means nothing. The great struggle ahead should lie in gaining control of these vast capital resources--which are the deferred savings of millions of American workers and union members. In addition, workers and their unions must seriously grapple with the idea of setting up their own financial institutions and pushing for greater democratic input and control over established institutions. When unions with responsible leadership really begin to control their monies and move to invest them in a socially responsible and meaningful way, they will help create a much greater dispersion of power. No longer will the powerless poor be pitted against the powerful rich, because control of capital and thus the control of power will be decentralized. Meanwhile, if unions and their members begin now to collectively organize all their financial resources-their billions of dollars in strike and welfare funds, payroll accounts, and savings and checking accounts-they can win many battles without resorting to long strikes and boycotts. American workers must develop modern strategies to make their power felt. Unions must confront giant corporate capital with workers' capital. They must confront interlocking corporate power with interlocking workers' power.
Unions must use today's highly sophisticated computerized systems that corporations use against them. The unions must use these systems to store vital information on their own members and their financial resources, so that they can most effectively mobilize and channel their collective economic and political power. If unions follow this course, no corporate or political system will be able to stop organized labor from protecting the interests of poor and working people.
What I'm talking about may appear to be very complex but is actually very simple. After we removed the directors from Manufacturers Hanover, I was asked by someone in the press: "You must have an incredible insight into the working and decision-making process of that bank; will you tell us what you know?" My response to that was, "Quite frankly, I know no more about the decision-making process of that bank than I ever knew."
In no way am I an expert in finance or business. In fact, I am probably less knowledgeable of economics and business than most people, but I do understand what makes corporate America and the financial world tick. I do understand what greed they have and how to use it against them. Once organized labor begins to deploy its own vast economic and political power and begins to understand how to pit one part of corporate America against another part--the way corporate America has pitted the workers against themselves and the poor--there could be a truly nonviolent social, political, economic revolution in this country