JUNE 1982 - VOLUME 3 - NUMBER 6
Texaco Dispute Sparks New Union Tactics
Having successfully taken on the U.S. textile giant J.P. Stevens, Ray Rogers is hoping to tame Texaco, the fourth largest company in America.
"There is no question Texaco is vulnerable," says Rogers. "It is susceptible to a number of the same pressures that worked against Stevens."
Rogers is the director of Corporate Campaign, Inc., a New York-based organization which plans strategy for labor unions involved in disputes with corporations. By targeting the interlocking directorships of J.P. Stevens, Rogers in the fall of 1980 brought the anti-union firm to the bargaining table (see MM, January, 1982).
Rogers is attempting to use a similar strategy against Texaco, which is involved in a bitter conflict with workers at its Port Arthur refinery in Texas.
Since January 8, the four thousand Texaco workers at Port Arthur - the company's largest refinery - have been on strike over the issue of pension pay.
"We've got an article in our contract stating that the company can make no change in pension benefits without consulting the union," says Larry Stephen, head of the Port Arthur local of the Oil, Chemical, and Atomic Workers. "But the company started making cuts unilaterally."
When workers retire from Texaco, they can take their pension either in monthly installments or in one lump sum, discounted by a certain percentage to reflect pension trust fund earnings lost by the withdrawal of the sum. In the case of the Port Arthur workers, the dispute centers on the percentage the lump sum will be discounted.
Texaco began in February, 1976 to increase the discounted percentage from 4% to its current level of 10.5%. This means that a worker who had accumulated a $100,000 pension would have received $96,000 as a lump sum in 1976, but only $89,500 in 1982.
"From 1976 to 1982, there were 542 people who retired from our group who lost approximately $16,000 each," Stefflen says.
According to the company, Texaco's method of payment "does not change the employees' benefits," says Charles Rentz, Texaco's public relations coordinator for the Port Arthur area. Rentz says the lump sum discount represents an "actuarial equivalence" of the monthly installments.
The union took Texaco to court, and in February, 1981, the federal court agreed with the workers. "The court in effect was saying it was not proper for the company to do this," admits Texaco's Rentz.
Still, the company would not change its policy. Instead, Texaco made its discounting authority a condition for signing a contract with the workers. The company asked the workers to agree "that indeed the method the company was -using was the appropriate one for the best interests of the company and the employees," Rentz explains.
What appears to have rankled workers most of all, however, was Texaco's granting of huge supplementary pensions to its 60 top executives. For instance, if John K. McKinley, chairman of the company, retires in four years, he will receive $467,000 each year for the next 10 years in supplementary pension payments - above and beyond his regular pension payments of $400,000.
Texaco officials "are reducing our pensions and yet they are increasing the supplementary fund for the executives," says Stefflen, adding that this "really got people angry" in the union local.
After making no progress for three months on strike, the union hired Ray Rogers and Corporate Campaign in early April to devise a plan for changing Texaco's mind.
On April 23, Rogers made his first move, bringing in "200 people representing 50 different organizations" to the annual meeting of Manufacturers Hanover in New York, Rogers recalls. "The reason we went after Manufacturers Hanover," says Rogers, "is that the chairman and chief executive officer of Texaco (John McKinley) sits on the board" of the bank.
For three hours, Rogers and the union supporters disrupted the meeting, asking the chairman of Manufacturers Hanover, John McGillicuddy, why he allowed Texaco's chairman to sit on the bank's board of directors. "Mr. McGillicuddy gave a perfectly good answer," says Piers Pottinger, manager of media relations for Manufacturers Hanover.
"He's known Mr. McKinley for a very long time and believes he enhances our board."
Rogers hopes to "embroil" Manufacturers Hanover "in the controversy" so that the bank, which lends money to Texaco, would find its own best interests served if the Texaco strike was settled to the workers' satisfaction. "There is a lot of union money in the bank," says Rogers, and if the strike continues, Manufacturers Hanover may be "facing large sums of money being pulled out" of its coffers.
Four days after the protest at Manufacturers Hanover, Rogers organized another demonstration - this time at Texaco's annual meeting in Chicago.
Bringing about 125 supporters, some with proxies, Rogers tried to get the workers into the meeting and raise a number of questions. Here he was outflanked, as, the Texaco management came well prepared, checking people's identification and shunting the workers into an adjoining room, where they could only ask questions when management called on them through a management-controlled microphone hookup.
In the weeks ahead, Rogers plans to continue targeting banks that "provide the financial base" of Texaco, both in New York and in Dallas. "The key thing is to focus on interlocking directorships in order to personalize the campaign," says Rogers.
The striking workers may also see some action osoon. Rogers has promised to turn them into "a mobile economic and political force," travelling around the state to put pressure on Texaco's board of directors and on local politicians.
Workers "are not much of a force when they are just sitting there" on the picket line, explains Rogers, adding that it is necessary to "take the struggle away from the workers' picket line and bring it to the doorstep of the corporation's power broker."