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Forging New Ways To Work
NFC: What have been the challenges for you
as you've moved from a confrontational mode of labor and management negotiation?
we don't usually say collaboration. That word has some connotation in the
union that we don't like. We like the word participation. We actively participate
with the managers to make sure that the division is going to be successful.
Part of that is really trying
to overthrow scientific management and Taylorism. Taylor started his studies
at Bethlehem Steel in 1906. So we are more deeply entrenched in scientific
management than almost any other company.
NFC: Some of the ramifications of
Rosel: That the workers
would check their brains in at the time clock. We didn't have to think.
Management was going to think for us. That's not a really good way to work.
You have to have all kinds of people looking over your shoulder to see if
you're doing what they want you to do rather than have people be self-directed.
Which is what the partnership agreement was saying. We should do workplace
redesigns that would allow the workplace to be safer, fairer, less authoritarian
with more control and influence from the workers, substantially reducing
the levels of management. It was trying to get away from an authoritarian,
scientific management style of managing, to one where the workers have to
take on more accountability and responsibility.
NFC: The plate mill was shut down
two months ago?
Rosel: Well the plate mill hasn't been
shut down. It's still running, but the company's announced that the plate
mill is going to be shut down by the end of the year. In this partnership
agreement we have an employment security agreement. We can put people from
the plate mill into the employment security pool.
NFC: And what's the employee security
Rosel: If people are displaced by technology or
by shutdowns like the one in the plate mill, then we can have them do other
work in other parts of the plant, rather than have them laid off.
NFC: What have been some of the challenges
for you over the past few years with this partnership?
Rosel: There's been the challenge of trying to
communicate to people exactly what this partnership agreement is and why
it's in their best interest. And also educating them about the business,
about the union and about new roles and ways of working that would help
us be successful in the future.
Being an agent of change is not that easy. You have to let people come to
conclusions themselves in some cases. Give them the information, try to
be factual and truthful, and have them come to the same conclusion that
you're coming to.
NFC: How difficult is change from
Rosel: The biggest change that's happened here
in the last 12 months is the union negotiated an agreement to get a new
cold mill in this plant that's worth $300 million by agreeing to $30 million
in cost savings around changing work practices in the plant.
NFC: What are some of those work
practices that have changed to create those savings?
Rosel: Operator assists maintenance, craft-to-craft
lead-follow maintenance, combination overlaps of control tech, instrument
tech and electronics, and a new position in the plant that's a union position
called working coordinator that takes the place of first-line supervisors
- where the union supervises itself.
NFC: And that person's job would
Rosel: Basically they are allowed to work with
their tools and work with the crew, but they are the first-line supervisor.
They take the place of the foreman. This is the union taking over the first-line
supervisory function in the plant and making that a union position instead
of a management position.
NFC: How did management react to
Rosel: At first they didn't react too favorably.
We had NCBA (not covered by the bargaining agreement) positions that were
hourly people the company would pull out of the hourly ranks. The company
selected them without any input from the union and they became the first-line
foremen. They paid union dues, but couldn't do any work with their tools
even though they knew how to do the work. If you have a management foreman,
they're not allowed to work. If they get caught working with their tools,
the union files a grievance for four hours pay. This way (the new agreement)
you have a foreman who directs the crew, but if the crew needs help, they
can be utilized as part of the crew.
NFC: How do you respond to those
critics that feel these kinds of partnerships have basically co-opted the
Rosel: This program is put forth by the union,
not by the company. We developed the training. We developed the education.
We have driven this process. We caucus as a union, so that we don't lose
our identity as a union. To understand, if this isn't in our self-interest,
then we're not going to do it.
NFC: What has been the biggest change
in your way of thinking over the past 10 years in terms of how you approach
Rosel: The biggest change is that the union has
to be part of figuring out how to best manage the plant. In other words,
the management of the plant is too important to leave to the management.
The union has to actually get involved in trying to manage these divisions
for success. And try to do that in a win-win situation where the workers
get paid more money and have a better future, but the performance of the
company is also enhanced.
NFC: What do you see as the challenges
ahead for you?
Rosel: I think that the work that we did already
is going to make our negotiation in '99 a lot easier. We've enhanced performance
and sustained profitability for all the years under the partnership. And
it wasn't because the price of steel went up. It wasn't because the company
put new equipment in the plant. It's because the people in the plant are
working better and smarter than ever before. So, the main thing for us is
to make sure we get our fair share of this new wealth we've created and
that we continue the partnership agreement, hopefully with the no-layoff
clause which has been very successful and was a big change.
NFC: Have you seen management's perspective
of these negotiations changing as you have brought something different to
Rosel: I think before the partnership, management
probably thought the union really didn't care whether the company was profitable
or not. Now they see that there are many people in union leadership positions
who have done things to try to enhance the profitability of the division,
while not really undermining the workforce.
NFC: One of those recent examples
is with the plate mill and the anticipated closing. Some workers had participated
in a plant wide agreement to produce $130 million in savings in exchange
for the $300 million investment in the steel rolling mill, which was going
to cost about 900 jobs.
Rosel: I think of the partnership process when
we're negotiating around the cold mill agreement. The company says to the
union that we don't have any money. We have to go borrow the money from
the bank and the bankers want us to insure that we make this agreement in
a way that we can get an acceptable return.
Through the partnership process and being able to have access to information
and consultants, we can investigate these things. The union never made the
cold mill agreement believing the company didn't have any money. We knew
they had money. That's not why we made the agreement. We made the agreement
because it was in our interest to make the agreement. Because the company
had the option of moving this cold mill to Virginia or some other state
and if they did that was going to be the end of Sparrows Point. So we made
the agreement because it was in our self-interest to do it.
The partnership is not necessarily about trust. It's like what Deming said
about quality, "In God we trust, all others must bring data."
Hopefully the company tells us the truth most of the time, but even when
they don't, we're able to discern for ourselves whether that's factual or
And yes, there are problems in the sense that the Lukens Steel decision
wasn't made by the management at the division level, it was made by the
corporate management. And because that deal involved the purchase of stock
in Lukens, there are confidentiality questions. Having said that, there's
still information that we need. What is the business case behind the company
buying Lukens and how does that affect the long-term profitability and ability
of Sparrows Point to be successful? If our plate mill gets shut down, and
it looks like it will be, there's the possibility of layoffs, but there's
also the possibility that we may not have to lay anybody off. The agreement
represented 900 jobs. One hundred of those jobs are management jobs. 400
of those jobs are ones that are displaced by the technology of the new cold
mill. So, that reduction of 400 was predicated by the equipment. The other
400 jobs were work practice changes that the union agreed to in order to
save $30 million that was part of a whole program to save $130 million.
What happened under the partnership is that we know the nature of the steel
business now. We know that the mini-plants are out there running under a
different paradigm than the integrated steel companies and that we have
to compete with them. The union is still making proposals to create new
union jobs by profitable growth of downstream operations. So all those things
are going on in a partnership that never would have happened before because
we would have never had enough information to try to make these proposals
to correct these decisions.
NFC: You pointed out that the partnership
is not about trust. I'd like you to envision a world where it was about
trust. How would things be different or what would have to change?
Rosel: It would be better if it was about trust.
Maybe over time we will get more trust because trust has to be earned through
experience. When people tell you the truth and when people do what they
say they're going to do, you start to develop trust.
NFC: But why would management not
have trust in you if you're coming up with ideas to help them be more successful?
$130 million in savings is rather significant.
Rosel: Organizations are too big and there are
too many people. Even if I trust the division president, who's to say that
the corporate officers aren't going to decide that the company must move
in another direction. So how do I trust hundreds of people, many of whom
I don't even know? The thing is that people really need to operate in their
own self-interest. You can look for win-win situations, but you shouldn't
do things that are against your interest, hoping down the road, somebody's
going to do something for you. You have to make the company successful and
do it in the interest of the company, but you have to do things that are
in the interest of the union at the same time. It's like a marriage, both
people have to get something out of it.
NFC: How are those two in conflict?
What's in the best interest of the union and what's in the best interest
of the company?
Rosel: If you give the union and the management
the same information, we're probably, in most cases, going to make the same
decision. But if we don't have that information then we're liable to make
an uniformed decision that maybe wrong. So the partnership process gives
us this information and we are able to evaluate this information and try
to make the best decision possible. And sometimes, like the disagreement
around the cold mill, it's not good for the union that we have to reduce
400 jobs by work practice changes in order to get this mill. But if we didn't,
we would've lost all 4,300 jobs in the long run. We had to face reality.
The business is about making money and getting acceptable returns. We're
hoping that through this agreement we can actually grow the business and
get some of those jobs back through profitable growth and downstream operations.
But obviously, if the plant wasn't here, we'd have no chance.
NFC: If you were on the other side
of the table, what kinds of changes would you make?
Rosel: Well, one of the goals would be
order to become a first class company you have to treat all employees as
first class. But too many times in corporations, especially old-line corporations,
there's a cultural division between people based upon their position in
the company. I'd like to break it down so every person is as valuable as
the next person and everybody's input is valued and every person is treated
as first class, not as corporate people being first class, the people in
the division second class, and the union another class. Everybody's in it
NFC: Creating a larger sense of community
in other words. How would you do that? What would be a first step?
Rosel: One of the first steps is for people to
sit down and talk. For the highest ranking people in the company to be willing
to come down and have frank discussions with rank and file workers. Let
them know that they actually care about what they're doing. At the same
time making sure that people are engaged in the processes of making the
union successful, making the company successful and also giving them a clear
set of expectations of how these things are going to be accomplished. I
mean, that's simple.
NFC: Why do you think that it is
Rosel: I think that a culture developed over a
long period of time through Taylorism and other kinds of management styles
that separated people more than brought people together. Instead of engaging
people, it was a command and control situation where the general doesn't
have to take the time and talk to the troops because he could delegate it
down to somebody else.
NFC: What's one of the key things
you learned at the European Institute of Business Administration conference
Rosel: That people are the answer, not the problem.
It has to come from the heart.
You work to have people giving their hearts and minds to doing things as
well as they can because they realize it's in their interest to do that.
That people are the answer to businesses doing better. And the way you do
that is to treat people very well.