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The ILWU-PMA Mechanizationand Modernization Agreement

By LINCOLN X FAIRLEY

INSITUTE OF INDUSTRIALRELATIONS LIBRARY-

MAY 1 0166KNIVERSITY OF CALlRNIA

BERKELEY

Reprinted from the July, 1961 IssueofLABOR LAW JOURNAL

Published and Copyrighted 1961 byCommerce Clearing House, Inc., Chicago 46*-Ilinois

All Rights Reserved

The ILWU-PMA Mechanizationand Modernization Agreement

By LINCOLN FAIRLEY

Dr. Fairley serves as Research Direc-tor for the International Longshore-men's and Warehousemen's Union.

ON OCTOBER 18, 1960, the Inter-national Longshoremen's and

Warehousemen's Union and the PacificMaritime Association signed a me-

chanization and modernization agree-ment running to July 1, 1966. Theagreement was the culmination, reachedafter five months of intensive negotia-tions, of discussions and planning bythe parties which had begun threeyears earlier in 1957. Union mem-bers gain a unique degree of pro-

tection against layoff and decliningearnings, insofar as these threats are theresult of rising productivity, whilethe employers gain substantiallygreater freedom to mechanize andmodernize. Negotiations were ami-cable, with no strike threat, and were

conducted without benefit of any thirdparty.

The union involved, the ILWVU,represents, with minor exceptions, allthe longshoremen, shipsclerks and re-

lated categories on the Pacific Coastof the United States, the West coastof Canada and Alaska and Hawaii.It also represents warehousemen inthese areas and a wide variety of mis-cellaneous workers. In Hawaii, itrepresents also the vast majority ofworkers in the sugar and pineappleindustries, all the way from field

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laborers through those engaged inprocessing. It is the longshoremenand shipsclerks on the Pacific Coastwho are involved in the mechaniza-tion and modernization agreement un-der discussion. Somewhat similaragreements now apply in BritishColumbia and Hawaii, but these areseparate contracts.Among the Pacific Coast longshore-

men and clerks it is necessary to distin-guish three categories, differentiatedprincipally by the extent of their attach-ment to the industry. Ever since theaward of the National Longshore-men's Board in 1934, the regularlongshoremen have been in the lingo-,of the industry, "registered" men. To )become registered a man must beapproved both by the employers' as-sociation and by the union. Thenumber to be registered in a particularport is likewise jointly determined.Disputes over registration may betaken to arbitration.At the present time there are two

categories of registered longshoremen,those "fully registered" or "A" men,and those "partially registered," knownas "B" men, or "pool men." The fullyregistered men have first preferencefor dispatch. They constitute theunion's membership, though registra-tion is in no way contingent uponunion membership.The partially registered men are

entitled to any work not claimed byJuly, 1961 * Labor Law Journal

the "A" men and, except for benefitsunder the mechanization agreement,are entitled to all contract benefits,including welfare and vacations. Theirtime as "B" men counts toward theirqualifying years of service for pen-sions. The "B" men constitute anentrance classification: they are menwho have decided to be longshoremenand who in the course of time antici-pate becoming fully registered menand union members. They are forthe most part younger men, startingbefore age 40, and willing to put upwith an annual income of $5,000 or soin order to become "A" men who, ifthey make themselves regularly avail-able, earn about $7,500 a year.The third category of men con-

sists of "casuals," who have no recog-nized attachment to the industry andwho work only on peak days whenthe "A" and "B" lists have beenexhausted. The need for an auxiliaryforce of "B" men and casuals arisesout of the violent day-to-day fluctua-tions in the demand for men. Theregular work force of "A" men couldnot handle the work without causingserious gang shortages on busy days,with resultant ship delays., On the other side of the bargainingtable is the Pacific Maritime Associa-tion, made up of several differentgroups of employers with somewhatdiverse interests. There are, first, theWest coast steamship operators, in-cluding Matson Navigation Companywhich shuttles between the coast andHawaii; Alaska Steamship Company,which runs to Alaska from Seattle;American President Lines, which runsto the Orient and around the world;Pacific Far East Line and StatesSteamship Company, which run tothe Orient. These represent themain strength of the association andare the principal policy makers.The second group includes East

coast operators whose ships touch at

IRRA 1961 Spring Meeting

West coast ports, such as Grace Line,American Mail Line and WeyerhauserSteamship Company.There are, thirdly, a large number

of foreign lines-Japanese, 'British,German, Scandinavian and manyothers-some of which are membersof the association and others of whichparticipate only through their Westcoast agents who are members.

Finally, there are the stevedorecontractors who are, for the most part,the direct employers of longshoremenand who work on a contract basis forthe steamship operators. They loadand discharge the ships. Only twoof the steamship companies do theirown stevedoring and hence employlongshoremen directly. There arealso terminal'operators who, like thestevedore contractors, do work onbehalf of the steamship companies,but who are reimbursed on the basisof a tariff, not a contract. They_---dosuch dock work as loading and un-loading rail cars and palletizing ordepalletizing cargo, work which isoften done by the steamship com-panies themselves.

Character and Extentof MechanizationThe longshore industry is techno-

logically among the most backward.An industrial engineer from any oneof the mass production industrieswould be horrified to find sacks ofcoffee on the San Francisco docksbeing handled just as they have beenhandled since sailing ship days. Noone of the many separate corporatelinks in the transportation chain hassufficient interest in greater efficiencyto force the changes in coffee handlingmethods, for example, which, to beeffective, must start in Brazil and becarried right through to Hills Brothersor Folgers in San Francisco.At the other extreme is Matson's

container ship which can be loaded

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and discharged in a single shift ofeight hours using a single longshoregang in place of eight or nine gangsfor five or six shifts just for loading.The specially designed ship carriesnothing but large containers the sizeof truck trailers, hoisted in and outby a specially designed shore-basedcrane. On this operation, productivityof the longshore labor has been in-creased 40 to 50 times. If the wholeoperation from shipper to consigneeis considered, the gain is very muchgreater.The fact, of course, is that the long-

shore industry combines a vast numberof operations which have nothing incommon but the movement of cargoto or from a ship. Ships and piersdiffer markedly in design, the condi-tions of trade routes differ and cargoesrange from bulk wheat, sugar or wineto "plunder," which consists of mis-cellaneous break-bulk items. Thereis little which is comparable betweenpouring bulk sugar into the hold ofa specially prepared ship and stowinglumber piece by piece. It is not sur-prising that technological advanceproceeds by fits and starts, now here,now there.The first big change, accelerated by

wartime demands for greater efficiency,was the use of lift trucks on the docks.This radically changed dock opera-tions and forced the Union to giveup the "long gang" including a dockcomplement attached to the ship'sgang. "Short gangs," or ship gangs,have prevailed since the war.

Since then the important develop-ments have been, first a shift to bulkhandling, a radical improvement inbulk handling methods, for suchcargoes as grain, ore, sugar and scrapmetal; and, second, the increasinguse of unit loads to replace the oldbreak-bulk handling. Instead of sacksor boxes or sticks of lumber beinghandled piece by piece, they are now

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increasingly being handled in unitsweighing a ton or more. The itemsmay be glued together as in the caseof cartons of pineapple or beer; theymay be strapped as in the case oflumber; or they may be put into vansor containers. The containers maycarry anything from household goodsof an Army officer going to Guam tobulk rice from Sacramento.Recent studies, particularly those

by the Maritime Cargo Transporta-tion Conference, a quasi-governmentalunit of the National Academy ofScience, suggest that for the shipoperation alone, savings from handlingsimple palletized loads may equalsavings from the more elaboratecontainer systems. However, con-sidering the entire transportation chainfrom shipper to consignee, whereseveral modes of transportation areinvolved, it seems that containerizationwill become increasingly important. __

It is changes of these types, certainto be multiplied in the future, whichhave begun to reduce the demandfor longshoremen and which havestirred the industry into adopting theprogram under consideration. Howrapidly the changes will occur andhow great will be the reduction inwork opportunity cannot be foreseenwith any great accuracy. Our ownconclusion is that there are enoughdifficulties in the way of progress sothat attrition, as aided by the pro-gram of early retirement incorporatedin the mechanization agreement willcontinue to exceed the drop in workopportunity.

BackgroundThis agreement did not spring full-

blown from the brow of Zeus, orfrom the brain of Bridges. Its genesisgoes back a number of years, butmore specifically to 1957. In April,1957, the problem of loss of work op-portunity due to mechanization was

July, 1961 * Labor Law Journal

discussed at a longshore caucus andthe officers of the Longshore Divi-sion of the union were instructed tomake a report to the following caucuson just what was happening. Thecaucus in our union is a delegatedconvention representing all the long-shore locals which meets at least onceand frequently twice a year to formu-late policy for the division, includingparticularly bargaining demands. Theofficers, assisted by the research de-partment, made a careful survey ofthe extent of mechanization, maderough estimates of probable effectson work opportunity and came upwith recommendations on how toproceed.The next caucus, held in Portland

the following October, was calledspecifically to review the officers' re-port. The problem under discussionwas formulated in this fashion: "Dowe want to stick with our presentpolicy of guerrilla resistance or dowe want to adopt a more flexiblepolicy in order to buy specific benefitsin return?" It was agreed that by theterm "mechanization," the union meantany change in method of work whichwas labor saving, whether any me-chanical devices were involved or not.In the language of the industry:

"We all know what we are talkingabout when we say Mechanizationbut actually it is a whole series, ofthings which are more accurately de-scribed as Changes in Methods ofOperation. We include not only amechanical device like an Aberdeendolly or a sugar leg, but the use ofunit loads whether or not in con-tainers, an increase in the size of theload, any shift of work away fromthe waterfront, any infringement onthe first place of rest, and any reduc-tion in double handling."The reasoning of the Longshore

Division officers as presented to the


caucus delegates was summarized inthe report as follows:"Such research and surveys as we

have conducted indicate that so faronly a relatively small portion of theover-all cargo movement operationsare mechanized. However, the trendis definitely toward greater use oflabor-saving devices and techniques."The present longshore contracts

and working rules offer a high degreeof protection against PMA's adoptingnew methods of cargo handling to thedetriment of the workers in the in-dustry. There is thus every likeli-hood that the union can resist anddelay mechanization within certainlimits. On the other hand, presentcontracts and working rules must bechanged by negotiation or arbitration ifthe employers are to obtain the maxi-mum benefits possible from mechaniza-tion. PMA desires to be allowed fullutilization of labor-saving devices andmanpower. They have indicated will-ingness to share the benefits to theshipping and stevedoring companiesresulting from mechanization."We should decide how the union

will meet the problem. On one handwe have the determination of the rankand file to secure their share of theincreased productivity as the result ofmechanization, by holding tight andkeeping the maximum number of menon the job and, upon occasion, sug-gesting that more men are needed.This approach is fundamentally oneof holding the status quo as long aspossible."The other approach is one which

would modify the present restrictionssuch as working rules, standard gangs,etc., which hamper the maximum out-put and development of mechanizedtechniques."Assuming for the time being that

the union has sufficient strength anddiscipline and the employers (through

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their organization, PMA) have noinclination to force a showdown whenthe contracts terminate next June,then as a result of our ability to holdthe fort, or status quo, the best theunion can hope to come out with isan ever-increasing mechanization withany disputes as to premium wagerates, number of men used per opera-tion, etc., being resolved throughthe grievance machinery includingarbitration.

"Realistically, the specific terms andlanguage of the contract hold littlepromise of permitting the union tomaintain status quo as an answer tothe problem of mechanization. Localstry to avoid using the grievance ma-chinery for fear that decisions will goagainst us. What takes place thenis job action and the economic threatof tying up or delaying a ship in orderto try to keep the usual number ofmen on the job or to force more menon the job along with the introduc-tion of machinery. So far this hasworked fairly well. As to how longit will continue to work in the futureand what it may cost in the way ofoverall improvements in the wages,hours and working conditions to keepit working is a matter that warrantsserious consideration by the caucus.

"On the other hand, the employershave indicated their willingness to sitdown and come to grips across thenegotiating table with the problemsand the benefits of mechanization.Their attitude is not one of insistingthat we do not participate whatsoeverin the results of increased productivityand the savings in money and labordue to mechanization. But they ha0e,stated to. us frankly that they hesitate!to make the capital investment re-quired unless some understandings arefirst reached with the union guarantee-ing against organized harassment andwork stoppages.

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"This is another way of saying thatthey recognize notwithstanding thecontract guarantees of freedom to in-troduce and use the maximum labor-saving devices, that the workers arenot without ways and means of alsoprofiting. There are exceptions, ofcourse. Some companies have goneahead and developed new methodsand techniques. These moves havebeen met by the union's insistence onmaintaining the usual number of menon the job.

"Presently it seems possible for theunion to negotiate a contract embrac-ing the full use of labor-saving ma-chinery with maximum protection forthe welfare of the workers. Such pro-tection can generally be spelled outin the following terms.

"(1) Adequate guarantees againstspeedup of individual longshoremen.(2) Guarantees of safety. (3) Guar-antees against layoffs of the basicwork force; the basic work force hereis defined as the presently registeredlongshoremen, clerks and walkingbosses. (4) No reduction in take-home pay. (5) Shortening the workshift. (6) The possibility of guar-anteed work opportunity to provideguaranteed weekly take-home pay.(7) Improvements in pension, welfareand vacation conditions.

"If the caucus and the membershipdecide that the best program is moreor less the current approach, namely,to meet the mechanization on a givenoperation by resisting, or by keep-ing the maximum number of men onthe job it's hardly lnecessary to try todevelop any alternative program atthe caucus. We can continue as weare until the contract ends, or attemptto negotiate or force by one meansor another, an extension of the con-tract with whatever improvementscan be obtained. Or, if we wish tosit down with the employers now,


some months prior to the contracttermination date, and seek to negotiatecontract rules and guarantees givingmaximum protection to the union inthe matter of mechanization, such acourse is open to us.

"Recommendation: It is the recom-mendation of the International Officersand the Coast Committee that thecaucus empower the International andthe Coast Committee to continue theirunofficial discussions in order to learnhow far PMA will go in giving ade-quate guarantees for the workers inthe industry."

Debate proceeded for three full days.Had a vote been taken the first day,the decision might easily have beento continue to use the union's muscleto preserve the status quo. "We'vegotten along all right so far, so whynot continue ?" But as the discus-sion proceeded, the view graduallyprevailed that the continuance ofguerrilla resistance meant fightinga losing battle, a delaying or holdingaction at best. The pressure to in-crease productivity was growing and,in the future, might be expected toaccelerate. The employers might de-cide to become tough and the generaleconomic picture did not bode wellfor a prolonged strike on an issue onwhich it would be difficult to securepublic support. Arbitrators are- notdisposed to protect the use of un-necessary men so that in the case ofdisputes arising under the grievancemachinery the chances were that wewould lose more cases than we wonand even when winning we wouldonly be hanging onto what we had,not gaining anything. Finally, it wasrecognized that a candid review of thepast several years showed that despitethe militant position of the member-ship, many operating changes hadbeen made and we had nothing toshow for them; no positive benefitsor gains had accrued to the men from


the changes already put into effectby management.The decision was therefore made,

by unanimous action of the delegatesto accept the recommendation to ex-plore further with the PMA the pos-sibilities of some sort of quid pro quo,some specific benefits to the long-shoremen, as our "share of the ma-chine," in return for what the employerswere seeking, namely, a chance toadopt new methods and relaxation ofsuch working rules as required multi-ple handling, set a limit on the sizeof sling loads or called for unneces-sarily large gangs.

If space permitted it could bedemonstrated that each of these rules,when adopted, served an importantfunction in protecting the men on thejob from loss of work, from discrimi-nation or from speed-up. In manyinstances, the original need for therule has disappeared with the adop-tion of other contract provisions orwith the growing use of new methods.Nevertheless, the rule is treasured bythe men because many remember theconditions before the rule was adoptedand the travail involved in winning it.Part of the educational job which hadto be done at the caucus and whichhas had to be continued since was toconvince the men that other formsof protection-such as are now em-bodied in the new agreement-couldbe exchanged for the old rules with-out any sacrifice of security.

It may be interjected at this pointthat working rules in the West coastlongshore industry are agreements,negotiated and administered port byport, specifying for each operationhow work shall be carried on and byhow many men. With the possibleexception of the railroad and printingindustries, less is left to employerprerogative than in other industries.Nevertheless, these are joint rules,they are the result of collective bar-

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gaining and they are beneficial to bothparties by insuring equality of treat-ment among employers, and they havebeen in effect for many years. Theywere overhauled in 1948-1949, buthave been largely unchanged since.The important point here is that

union insistence on the observance ofthe rules made it economically difficultfor those employers who desired todo so to adopt new methods. A six-man gang in the hold is necessarywhen scrap metal is handled in theold-fashioned way, but becomes toolarge when the metal is picked up bya magnet.Pursuant to the instructions of the

caucus, the next step in the develop-ment of the agreement was a resump-tion of informal conversations withthe PMA. These led, in November1957, to adoption, still informally, ofthe following statement of objectives:

"OBJECTIVES""1. To extend and broaden the

scope of cargo traffic moving throughWest Coast ports anrd to revitali7ethe lagging volume of existing typesof cargoes by: (a) Encouraging em-ployers to develop new methods ofoperation, (b) Accelerating existingprocesses of cargo handling, and (c)reducing cargo handling costs in watertransportation, including faster shipturnaround.

"2. To preserve the present regis-tered force of longshoremen as thebasic work force in the industry, andto share with that force a portion ofthe net labor cost saving to be ef-fected by introduction of mechanicalinnovations, removal of contractualrestrictions, or any other means.

"3. To accomplish objectives 1 and2 WITHOUT: (a) Individual speed-up, (b) Breaching legitimate safetyrules and codes, (c) Indiscriminatelayoffs, (d) Bankrupting operations670

which do not lend themselves tochange, (e) Driving away any exist-ing cargoes, and (f) Distorting hourlywage rates of longshoremen in com-parison to rates paid workers of compa-rable skill in the longshore industry.

"4. An additional objective pro-posed by the union is to reduce thelength of the present longshore workshifts."These objectives are, basically, the

objectives which are implemented bythe current agreement negotiated in1960. The union has explicitly re-served the right to raise the questionof a further reduction of hours duringthe life of the agreement.The above review of caucus action

has sufficiently explained the union'sobjectives. It remains to commenton the employers' objectives, eventhough I am not in the best positionto do so. As indicated at the outset,some members of PMA are steamshipoperators while others are stevedorecontractors. The latter work on whatis essentially a cost-plus basis and, inconsequence, have little or no interestin any steps which will reduce thenumber of men they employ. In thepast they have passed along theircosts to the steamship operators who,in turn, have passed them along to theshippers and to the federal govern-ment through the subsidy program.The whole industry, in fact, has beenessentially cost-plus in character. Thisaccounts in part for its extraordinarybackwardness technologically.

Recently, the steamship operatorshave been feeling significant pres-sures from their shipper clients andfrom the federal government to re-duce their costs, particularly theircargo handling costs. To accomplishthis they have been taking a wholeseries of measures to secure greatercontrol over the cargo handling oper-ation and to make it more efficient.They seized upon the union's demand

July, 1961 * LabDr Law Journal

in 1959 for an eight-hour guaranteeto obtain greater flexibility of oper-ation than they had previously en-joyed. Through what is known inthe industry as the "performance andconformance" program in 1960 theyrooted out a lot of extra-contractualpractices which, because of the laxityof the stevedore contractors, had beenallowed to grow up, like early quits,late starts, four-on and four-off. Themen had naturally taken advantage ofthe contractors' laxity, so that the shipoperators' pressures had to be directedboth at the men and the contractors.The elimination of these practices wasreflected in higher productivity rateseven before the new mechanizationprogram became effective.The mechanization agreement is the

!latest step in this process by whichthe operators are developing controlover the flow of cargo and hence overthe cost of its handling. The nature-of the new technology, in particularthe use of containers, not only facili-tates, but requires, this sort of throughcontrol just as it is requiring the de-velopment of through bills of lading.The most successful users of contain-ers are those companies which oper-ate in more than one segment of thetransportation chain.

It was not until the 1959 negoti-ations that any further action tookplace. Meanwhile, how'ever, unionand PMA technicians undertook todevise a method for measuring pro-ductivity change and the savings whichwould accrue to the employers fromproductivity gains, including thosefrom reduced ship turnaround. Theunion had proposed this formula:That each employer contribute to amechanization fund an amount equalto the straight-time wage rate foreach man-hour which was saved inhis operations as a result of improvedproductivity during an appropriateperiod, presumably a year. Since thestraight-time rate is roughly one-half


of total direct labor cost per hour,this formula would mean sharinggains on approximately a 50-50 basis.On the basis of such a formula the

progressive employers would contributemost while those preferring the statusquo would contribute nothing. Whilethe specific amount of contributionwas never agreed to by the PMA, theprinciple of payment on the basis ofmeasurement was generally accepted.A method of computation was workedout, with assistance from the Mari-time Cargo Transportation Conferenceof the National Academy of Science,and the PMA instituted a system ofreporting tons and man-hours, com-pany by company, ship by ship andcommodity by commodity, designedto provide the required information.

In 1959, while there was full agree-ment on the perspectives, the PMAindicated that it needed more time todevelop the necessary factual basisbefore reaching a final agreement.The union, however, was unwillingto defer action for another year. Con-sequently, an interim agreement wasworked out which accomplished thefollowing:

(1) It restated the basic objectivesof the parties including a specificguarantee against layoffs of the fullyregistered men.

(2) It established a mechanizationfund to which the PMA agreed tocontribute a down payment of $1Y2million during the ensuing contractyear, the money to be raised as thePMA saw fit. This amounted to about$100 per registered man, since thereare roughly 15,000 registered long-shoremen and clerks, and to about1 2 per cent of the annual payroll.

(3) It formalized a procedure formodifying gang sizes and other rulescase by case where new labor savingdevices were introduced, but frozeworking rules under all other con-ditions.

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Shortly thereafter, the PMA bor-rowed Max Kossoris from the U. S.Bureau of Statistics to help them workout a more complete and more ade-quate system for reporting tons andman-hours as well as a formula forcomputing the necessary indices ofproductivity. The statistical problemsinvolved are in many respects similarto those the Bureau encounters incomputing the Consumer Price Indexand Kossoris was eminently qualifiedfor the job. Though he was employedby PMA he kept the union informedat all stages.'

The 1960 AgreementThe general nature of the agree-

ment reached in October, 1960, shouldnow be clear. The union won a sub-stantial degree of security for itsmembers; the employers won a sub-stantial degree of freedom to pushfor productivity improvement. Theagreement runs until July 1, 1966, andis not subject to review. The basiclongshore and clerks' agreements wereextended for the same period, but areopen annually on all matters exceptmechanization and pensions, includ-ing reduction of hours.The PMA agreed to contribute $5

million annually for 5j/2 years or about4Y2 per cent of present payroll, be-ginning January 1, 1961, but reservedto themselves the right to determinehow to raise the money. The moneywill go into a trust fund for the ex-clusive use of those men who had fullregistration at the time the agreementwas signed. Three million dollars eachyear is considered to be, in our termi-nology, the men's "share of the ma-chine" and it is understood that theunion will seek in 1966 to continuethis portion of the fund for the pur-

1 Kossoris has described his work andwritten a valuable commentary on the newagreement in "Working Rules in West

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poses for which it is intended, namely,the early retirement, cash vesting anddeath benefit features.The remaining $2 million per year

is what the men are to receive forselling a portion of their propertyrights in the working rules, to useProfessor Gomberg's concept. Theseare rules which they have struggledto obtain and which they are loathto relinquish. It is understood that$10 million is the selling price ($2million for five years) and that by1966 the transaction will be completed.This portion of the fund is to be usedfor the wage guarantee. Men becom-ing registered from now on will notbe entitled to any of this money be-cause they will not have givei upanything.Maximum possible security for the

present fully registered work force isprovided as follows:

(1) There is a flat guarantee againstlayoffs. The parties prepared for thisby freezing registration in 1958 andby making registration coastwide in-stead of port by port, so as to facili-tate shifts from area to area.

(2) There are two cushions whichwill take up the shock as work op-portunity declines due to rising pro-ductivity. Normal attrition is highbecause the average age is well over45 years. Deaths and normal pension-ing remove about 4 per cent a year.And, secondly, the parties have agreedto cooperate in reducing the percent-age of work going to the "B" menand casuals. Together, these groupsdo about 12 per cent of the work.It is anticipated that this percentagecan be reduced to 5. Thus a consider-able decline in work opportunity canoccur before the fully registered menare affected.Coast Longshoring," Monthly Labor Review,January, 1961.


(3) The agreement provides forvoluntary early retirement, at age 62,with a monthly benefit of $220, thesum of maximum Social Securityand the regular longshore pension of$100. At age 65, when Social Securityis payable, the industry pension willdrop back to $100. This early retire-ment provision will tempt some mento withdraw from the labor force, leav-ing more work for the younger men.This is seniority in reverse.

If a man chooses not to retire early,but continues to work until normalretirement, he will receive a lumpsum of $7,920, the equivalent of $220per month for 36 weeks, from age 62to age 65.

(4) If necessary to meet a sharpdecline in work opportunity, the par-ties may invoke compulsory early re-tirement. In this event, the men willreceive $320 a month, the extra $100being intended to make retirementmore palatable to the men.

(5) Finally, if, despite these steps,average weekly earnings fall belowthe equivalent of 35 straight-timehours per week (about $100), theweekly guarantee of this amount willbecome operative. Equivalent hoursare now about 40. Important detailsof the guarantee remain to be workedout: How much pressure will be putupon a man to move from a port oflow work opportunity to a port ofhigher work opportunity? Will theguarantee be payable in a port wherethe local union has persisted in main-taining a large secondary labor forceof "B" men or casuals? Before theguarantee is payable, will the regis-tered men be required to do the hardand disagreeable jobs, like handlingbananas, which they now leave forthe "B" men and casuals? Will theguarantee be payable on a quarterly ora yearly basis? We have tentativelyruled out shorter periods than a quar-ter because of the greater expense.IRRA 1961 Spring Meeting

These questions are still to be an-swered, in part because neither partyanticipates an early need for the guar-antee and both parties sincerely hopeit will never be necessary. The politi-cal problems of putting the guaranteeinto effect are tough from the union'spoint of view. In calculating theamount needed for the guarantee weassumed as an outside possibility arise in productivity of 10 per cent ayear; the actual improvement rate,we anticipate, will be considerablyless. Assuming no change in tonnagehandled, the guarantee would not be-come operative, under these assump-tions, until late in the fourth year ofthe plan's operation. With an increasein tonnage, even a moderate one, theguarantee may not be necessary at all.As indicated earlier, funds for the

wage guarantee will no longer be ac-cumulated after '1966. We anticipatethat once existing restrictive ruleshave disappeared, the rate of pro-ductivity increase due to mechaniza-tion will certainly not be greater thanthe rate of attrition so that by con-trolling manpower intake we shall beable to prevent average work oppor-tunity from dropping below a reason-able level.The wage guarantee does not apply

to a drop in work opportunity due toeconomic decline. This raises a nicetechnical question, of how to distin-guish the causes for an observeddecline and how to determine their rela-tive magnitudes. The question can beanswered by use of the detailed dataon tons and man-hours which PMAis accumulating, but it may have tobe answered nonstatistically, simplythrough the processes of bargaining.What the employers gain is the

opportunity to put in any new ma-chine or method provided they canestablish, through the grievance ma-chinery, that the method is safe, thatthere is no speedup of the individual

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and that the work is not onerous.These safeguards are written into theagreement. The concepts "speedup"and "onerous" are giving us somedifficulty in definition, but interpre-tations are beginning to come out ofthe labor relations committees andarbitrators. Subject to these safe-guards, any existing working rulewhich can be shown to prevent or tolimit more efficient operation, mustbe changed.Under the agreement, the employ-

ers will be under no obligation toperform work with unnecessary men,or "witnesses" as they are sometimescalled. The men necessary to any long-shore operation will be based upon adetermination to be made in accord-ance with the agreement. In this re-spect the agreement takes into accountcontractual provisions for relief and thefact that during many operations allmen will not be working at all timesdue to the cycle of the operation.The old sling load limit (2,100

pounds) will continue to apply to allloads built by longshoremen whereconditions, number of men on thedock, and in the ship, and the methodof operation is the same as when theoriginal sling load agreement wasnegotiated. This will be the stand-ard by which the union can measurechanges which do take place.

Sling load limits are lifted forchanged operations or where newcommodities or operations have de-veloped. For these, loads will be asdirected by the employer, within safeand practical limits and without speed-up of the individual. An increase inthe number of men manhandling cargoor use of machinery to move or stowcargo on docks or ships will be con-sidered a changed operation permittingloads in excess of the standard previ-ously agreed upon.

Past practices which resulted inover-standard loads being skimmedor cargo being removed from pallet674

boards and placed on the skin of thedock while in transit to or from theship's hold are eliminated. This willend unnecessary handling of cargo tothe benefit of the employers; it willeliminate these jobs from the industry.The men so employed in the past

are assured that there will be otherwork for them. Men incapacitated byage or illness and therefore unable tohandle ship work will be guaranteedpriority on the dock work.The hold gang for cargo which

continues to be hand-handled will con-tinue to be at least six men for dis-charge and eight for loading. Theminimum basic cargo gang may bereduced to four men in the hold whenthe employers add mechanical equip-ment, or under other special circum-stances detailed in the agreement.The employer may bring machinery

and machine drivers into the hold andswing out an equivalent number ofhold men, but four basic hold men"must be retained at all times wherjhold men are required.When loads above contractual limits

are moved manually, additional men ormachines will be provided to guaran-tee against onerous individual workloads.

In one respect the agreement pro-vides a direct benefit to both the menand the employers; it protects theindustry's jurisdiction on the dock.The agreement spells out longshore

work between the first and last placeof rest as follows: (a) High piling orbreaking down high piles; (b) Sort-ing; (c) Movement of cargo on thedock or in a terminal or to anotherdock, terminal or warehouse; (d) Theremoving of cargo from longshoreboards; (e) The building of all loadson the dock.The employer is not required to

perform all of the above work, but hemay not use any but longshoremen ifsuch work is done.


In some areas, part of this workhas been done by lumpers, membersof the Teamsters' union, employedby drayage companies on behalf ofthe shipper or consignee. The steam-ship companies desired to have allwork on their docks done by theiremployees, or employees of terminalcompanies operating on their behalf.And the union was, of course, inter-ested in nailing down its jurisdictionover this work.

In addition, the union is guaranteedthat any new equipment used by PMAemployers will be operated by ILWUmembers, trained if necessary by theemployers. Some difficulties have beenencountered on this score with theoperating engineers, but the problemsare being worked out.

Finally, continuing a process whichhas been going on for some years,modifications were made in the griev-ance machinery to insure more ex-peditious settlement on the spot andto provide, when necessary, quickerreference to the coastwide grievancemachinery. Largely because of themany radical changes in operations re-sulting from the adoption of the eight-hour guarantee in 1959 and of thisnew mechanization agreement, bothparties have moved in the directionof greater centralization in the han-dling of grievances. Coastwide rulesare superseding many local rules. Sofar as the PMA is concerned, this issymptomatic of the drive, already dis-cussed, to assume greater control bythe stearnship operators.To provide a financial incentive for

contract observance, the PMA insistedon an abatement provision. This readsas follows:

"In the event that the Union orany Local fails or refuses to follow aCoast Labor Relations Committee orArbitrator's ruling interpreting orapplying the provisions of this docu-ment, or in the event of a work stop-IRRA 1961 Spring Meeting

page in any port or ports in violationof the provisions of this document,payments into the Fund shall be abatedduring the period of such failure, refusalor stoppage in the manner and amounthereinafter provided, and the totalEmployer obligation shall be reducedby such amount."The method of determining the

amount of abatement shall be asfollows:"The total Employer obligation on

an annual basis is at the rate of$13,650 per day. This shall be themaximum amount of abatement perday. Within this limit, the partiesshall agree as to the amount to beabated on a daily basis in each in-stance of failure. refusal or stoppage,whether on a Coastwide, Area, orPort basis, and failing such agree-ment, the Coast arbitrator shall makesuch determination."

Problems Arising in Negotiationor in Application

Brief mention may be made of sev-eral problems with which one or bothparties has had to deal during negoti-ations, since the agreement becameeffective in January of this year orwill have to face in the future.

(1) Should contributions to the Fundbe based on measured improvement inproductivity or should they be a flatamountf Some of the background onthis issue is supplied above, and it isindicated that the PMA preferred theflat amount approach even thoughthey have the statistical data for meas-urement, and even though the unionhad assumed that measurement hadbeen agreed upon.Why did the PMA decide on the

flat amount approach even though itclearly puts the burden upon theemployers? They are now responsiblefor getting an average of $5 millionworth of improved productivity peryear for the entire period of the con-

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tract. No reasons were given in ne-gotiation, so that what follows islargely by way of speculation.One consideration appears to have

been that the measurement methodunder consideration would have in-cluded among causes for increasedproductivity a variety of changes forwhich neither the union nor the menwould be in any way responsible.Employers did not care to put moneyinto a fund, for example, just becausethey built a new pier or a new shipwhich expedited the work, or if theystreamlined supervision.

Possibly more important was thefact that if payments were to be pro-portional to increased productivity,the burden would be greatest uponthose employers whose productivitygains depended in large measure uponcapital investment. Matson, with mil-lions of dollars invested in containers,container ships and cranes, would bepaying at the same rate per man-hoursaved as a stevedore contractor whogained productivity because of a re-duced gang size without any capitalexpenditure. While the union hadnever insisted on a straight propor-tional relationship between productiv-ity gains and contributions and hadrecognized the need to make someallowance for capital investment, ac-tually none of the formulas whichwere informally discussed includedsuch an adjustment.A third factor may have been re-

luctance on the part of individual em-ployers to reveal their productivityrates, not so much to the union as toother employers. A stevedore con-tractor, for example, might fear thatthe steamship operator for whom heis working would discover that an-other contractor had a better pro-ductivity record and could thereforedo the work more cheaply.

(2) How should the money be raised?Once it had been agreed that the PMA

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would contribute a flat amount, thenthere arose this second question of howthe money should be raised. Shouldindividual employers be assessed on.a man-hour or a tonnage basis? Thechoice appears to have been betweenthese alternatives or some combina-tion of the two.The man-hour basis was used in

order to raise the initial $1.5 million.The tonnage basis is being used now:17Y2 cents-per-ton of ordinary cargo,5Y2 cents-per-ton of bulk. Domesticoperators are paying the assessment,and no doubt have amended theircontracts with stevedores accordingly.In the case of foreign lines, the steve-dore pays the assessment and collectsfrom the steamship company.During the periodl when the man-

hour basis was being used, the steve-dore contractors and the foreign lines,who as earlier indicated have little orno interest in increased productivity,complained bitterly that they werebeing compelled to subsidize themore enterprising and progressivecompanies which were pushing aheadon mechanization. The tonnage basisnow in use appears more nearly equi-table though, from the outside look-ing in, it would still appear thatpayment in proportion to man-hourssaved, with an adjustment for capitalcost, would be even more equitable.

(3) Tax problems. The parties haverun into difficulties because the uniquecharacter of the agreement does notfit into existing categories of the In-ternal Revenue Code. The agreementprovides that contributions to the fundshall be contingent upon the employ-ers obtaining Internal Revenue Serv-ice approval for treating contributionsas business expense. To secure ap-proval it may become necessary toincorporate some portions of the pro-gram as amendments to the existingpension plan and possibly to makeother minor modifications in the agree-


ment as originally written. Negoti-ations on this matter are currentlyunder way.

(4) Load size. The agreement per-mits larger sling loads when the con-ditions which governed the setting ofsling load limits no longer apply. Theoperating employers have in some in-stances interpreted this provision topermit enormously increased slingloads without any compensating useof equipment or without adding anymen. The men have balked, protest-ing that they cannot "meet the hook"when the loads are so big, that theyare being speeded up, and that thework is onerous. The original slingload limits were adopted primarily toprotect the men in the hold. If now,without any change in equipment ormanning scale, they have to stow twotons in the same time they formerlystowed one ton, they naturally object.The employers have been told thatunder these circumstances the hookwill just have to hang while the menstow cargo at the former rate. The nospeedup provision governs. Thoughthe Maritime Cargo TransportationConference studies show that consider-able improvement in productivity ispossible with larger hold gangs, noemployers are so far experimentingwith larger gangs.

(5) Multiple handling. It was an-ticipated during negotiations that theelimination of multiple handling on thedock, and the consequent limitationon Teamster jurisdiction, might causecomplications with the Teamsters.When the agreement became effec-tive, the Teamsters were told by ouremployers that they could no longerbuild their loads on the dock; theywould have to build them on theirtrucks. The Teamsters' union ob-jected and picketed the docks first inLos Angeles and then in San Fran-cisco, despite attempts by ILWU andour employers to confine the problem


to a single dock for test purposes.They argued that their agreementsdid not expire until July 1, 1961, andthat until they could renegotiate theircontracts they were not going to per-mit their members to lose jobs.The matter was worked out after

a few days through four-way negoti-ations involving PMA, ILWU, the'Ieamsters' union and drayage as-sociations up and down the coast.Except for San Francisco, the agree-ment reached provides, on a coast-wise basis, for a return to the statusquo prior to the inauguration of ouragreement and for its continuanceuntil July 1. After that date the newmethods will go into effect on thedocks. The Teamsters' union isplanning to renegotiate its contracts,possibly to include some provisionsimilar to ours by which they obtainsome benefits in return for loss ofjobs. Meanwhile, multiple handlingcontinues on some jobs and the PMAis considering whether to demandsome compensating abatement of theircontributions to the fund.

In San Francisco, where this settle-ment was turned down by the Team-sters, the PMA has sued the Teamstersfor damages and has brought NLRBcharges. These actions will be droppedif the local Teamsters agree, mean-while, to go along with the agreementworked out for the rest of the coast.

It is important to point out that inthis industry and in the present in-stance the basic jurisdictional struggleis not between the Teamsters andlongshoremen but between the dray-age companies and the dock oper-ators. What is necessary, by way ofimmediate solution, is for shippers togive different orders to the drayagecompanies. The long run solution,which will prevail whatever the out-come of the present jurisdictional beef,is that technological advance will elimi-nate the work which is now at issue.Most loads will be handled as units,

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with the result that neither Teamstersnor longshoremen will be building loadson the dock. That work will be doneonce and for all by employees of theshipper.

(6) What will be the effect on futurewage negotiations? This is a nice ques-tion. Has the union, by getting a sidedeal on mechanization, deprived itselfof an important argument for wage inscreases? A first answer may appear thisJune when wages are open for negoti-ation and, failing agreement, for settle-ment by arbitration. The union willcertainly insist that the mechaniza-tion agreement is wholly apart fromwages, that employers are recoveringat least the equivalent of their annual$5 million contribution through mechan-ization and rules changes-and if theyare not, that it is their own fault. ThePMA may contend that the mechani-zation agreement costs something like4X2 per cent of payroll, that on top ofthat wages were increased eight centslast June, and that the union has al-ways argued productivity gains in thepast as one basis for wage increases.

Actually in the past, productivity asa wage argument has been accordedrelatively little attention, particularlyby arbitrators. The employers haveon occasion argued that the men werenot entitled to an increase becauseproductivity in the industry was lowand falling, while the union has argued,on the basis of national productivitygains, that unless productivity is takeninto account living standards cannotbe increased. Decisions, as in mostindustries, have been largely made onthe basis of other factors.To hazard a guess, I would say that

if the wage issue is settled in negoti-ations the influence of the mechani-zation agreement will be governedlargely by how smoothly the agree-ment is working. If a lot of difficul-ties are being experienced which thePMA can attribute to the union or to

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the men, the employers will not bedisposed to grant a wage increase, ornot as much as they otherwise might.If the matter goes to arbitration? Whocan predict what an arbitrator will do?

Related Issues(1) Is mechanization a proper matter

for collective bargaining? Though manyemployers consider that mechanizationis wholly an employer prerogative,the PMA never took this position.From the start, they recognized thatthe union had a legitimate interestand they were willing to concede thatthe men were entitled to a "share ofthe machine." It is true that theirposition may have been in part arecognition that without the cooper-ation of the union they could not hopeto accomplish their objective of greatermanagerial freedom and eliminationof restrictive practice, at least with-out a prolonged struggle. Neverthe-less, their position represents a morefarsighted attitude than prevails inmany industries. From the standpointof economics, mechanization and pro-ductivity are certainly proper subjectsfor bargaining. If wage bargaining isrestricted to the amount of paymentper hour, the question of how muchwork is done in an hour remains tobe fought out on the job in those caseswhere the men are in a position tofight, or in the more usual case forthe employer to determine. A com-plete bargain, of course, includes therate of work as well as the compen-sation.

(2) Is third party participation neces-sary or desirable in bargaining over suchissues as mechanizationf Both theILWU and the PMA feel stronglythat on a complicated issue of thissort no outsider can be of any realassistance. If the parties cannot workout a satisfactory solution, a thirdparty is even less likely to be able todo so. Even though at times during


the five months of negotiating thisagreement one party or the other mightin frustration have demanded that thematter be referred to the permanentcoast arbitrator, neither party did so.A representative of the U. S. Mari-time Administration attended the negoti-ations but did not participate in anyfashion. No conciliators were called in.The union, in fact (I cannot speak

for PMA), deplores what appears tobe a trend toward outside partici-pation-we would say "interference"-in matters properly handled throughcollective bargaining. We are opposed,whether the third party be the govern-ment or, begging the pardon of thosepresent, college professors. We thinkthe Bi-State Waterfront Commissionon the East coast was unnecessaryand undesirable, despite some of theserious situations it was designed tocorrect and despite some of the goodthings which it has done. We havestrenuously opposed proposals whichhave been made from time to timefor the establishment in the maritimeindustry of government machinerysimilar to that in the railroad indus-try. We are skeptical of the tripartitebodies set up by last year's steelnegotiations and in the packinghouseindustry. As far as we can learn,they are accomplishing very little, atgreat expense to the parties.So far as our present agreement

goes, we agree with Donald Crawfordwhen he told a conference at theWharton School last December: "MaybeBridges gave away the Union andmaybe the Waterfront Employers As-sociation sold out the stockholders.But of this I am sure: no matter howbad a deal it was, still the Associationand the Union each made a betterdeal for itself than the central govern-ment would provide for them." 2 The

2 de"Industrial Relations in the 1960's-Problems and Prospects," University ofPennsylvania, Labor Relations Council of


essential point is equally valid if onethinks the deal is a good one.

(3) Is an agreement such as this anycontribution to the solution of the prob-lem of unemployment! The ILWUanswer is, regretfully, "Only a verysmall one." We are protecting ourown members to a very considerableextent against the threat of unem-ployment and loss of earnings but byso doing, are closing the door onyounger workers who are seekingjobs in the industry. There is nodifference in this respect betweenwhat we are doing and what happensin any industry as productivity riseswithout a corresponding increase inproduction. The difference lies in thefact that in this case the union is aparty to closing the doors and this hasexposed us to sharp criticism evenfrom some in our own ranks.The "B" men awaiting advancement

to full registration have naturally ob-jected that the agreement discriminatesagainst them and their cause has beensupported by outside observers. Yetthese same observers would not thinkof criticizing the steel industry fornot employing men whom they do notneed. The point, apparently, is thatthe union should not be party to limit-ing the number of workers in an in-dustry, even though the limitation isrequired in the interests of efficientoperation. If the union insists onkeeping unnecessary workers on thejob, it is attacked for featherbedding;if it cooperates to improve efficiencyand the security of the union members,it is being selfish and discriminatory.To those critics with full tenure whocome from academic circles, I wouldput this question: "Do you think ten-ure should be extended to all teachingassistants ?"As I have indicated above, the union

has reserved the right, at any open-the Wharton School of Finance and Com-merce, February 15, 1961, Volume I, p. 28.

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ing during the life of the agreement,to seek a reduction in the work shift.We expect to move in this directionwhen and if the situation is propitious.This, so far as we know, is the onlyway that a union, through collectivebargaining, can help to meet the prob-lem of the displacement of men bynew machines and new methods.We are convinced that national

legislation and national planning willbe required to cope with the chronicunemployment crisis which confrontsthe country.

(4) Can the agreement be applied inother industries? This question can-not be answered satisfactorily withinthe limits of this paper; it would re-quire at least as much space as I havealready consumed and, besides, it wouldrequire another author, one far morefamiliar than I with conditions pre-vailing in other industries. What Ipropose to do is simply to list thefactors which, in my judgment, havecontributed toward making the planworkable in the West coast longshoreindustry:

(a) Productivity must advance ata pace no faster than the work forceis reduced by attrition. Within ourown jurisdiction, the work force in theHawaii sugar industry has been morethan cut in half-with the same out-put-in less than two decades. Itwould have been impossible to negoti-ate a similar agreement under thesecircumstances. There we have ex-perimented with some interesting varia-tions on severance pay, but we havehad to accept substantial layoffs.

(b) The union must have some-thing to sell in the way of work rulesor work practices which the industryconsiders worth buying. Many, if not

most, unions have never achieversuch a position. They do not havemanning scales, or agreea-on workloads, or any say as to'the conditionswhich shall prevail when new equip-ment is introduced. In such cases theunion can seek severance pay, or re-training allowances, or transfer tonew locations, but it cannot bargainaway valuable rules because it doesnot own any.

(c) The union must have the dis-cipline to deliver what it agrees togive up. The process in our unionof convincing the membership that itwas desirable at this time to move inthis direction began as early as 1957and is still going on. Besides severalcaucuses, the matter has been dis-cussed at many union meetings, hasbeen presented in printed form andwas voted upon in a coastwide refer-endum last winter. Without such aneducational process, the men wouldnever have been willing to changeworking conditions which they hadfought for originally and had enjoyedfor years.Without pretending to any careful

analysis of conditions prevailing inthese industries, it seems to us thatthe ILWU-PMA approach might beapplicable, with appropriate variationsto meet different situations, to therailroad industry, to the printing tradesand to some sections of the truckingindustry. We have had inquiries fromthe union side from local officials ineach of these industries but do nothave information as to whether theplan is seriously under consideration.In the mass production industries wedoubt that the unions are in a positionto embrace such a program even ifthey desired to do so. [The End]

July, 1961 * Labor Law Journal680

1761 ilwu-pma mechanization and modernization agreement · the "a" menand, except for...

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