how to negotiate with unions -- 12/18/17

Today's selection -- from Insull: The Rise and Fall of a Billionaire Utility Tycoon by Forrest McDonald. In 1903, Samuel Insull, chairman of one of the largest utilities in the country, had to deal with increasingly powerful and militant unions:

"The key to Insull's labor relations was his compound of realism and good sense, and shrewd understanding of men. Privately, he felt strong sympathy for organized labor -- as the only way labor could deal with organized capital or management -- but he was obviously on the other side of the fence. To deal with unions, he viewed them as two kinds, each expressing the character of its business managers. One kind was a shakedown racket, to be dealt with in the most expedient manner -- whether by paying protection to a corrupt busi­ness manager or, if there was a chance of winning, by choosing to fight. The other was the kind dominated by business managers who, after taking care of themselves, sincerely had the interests of their men at heart. These were to be dealt with as equals.

Samuel Insull on the cover of Time, 1926.

"The most important of the second type was Mike Boyle of the International Brotherhood of Electrical Workers. Boyle, who wore the epithet 'Umbrella Mike' for his alleged practice of collecting bribes and graft in an umbrella, was -- no matter what else he might do -- a man who first took care of his workers. Mike was also (1) tough, (2) sensible, and (3) eminently suspicious of bosses. Insull met Boyle in 1905. In an age in which wide gulfs separated rich and poor and unbridgeable gulfs separated capitalists and union organizers, he won Boyle's trust with a dramatic demonstra­tion of respect for Boyle as a social equal and man of worth. Boyle's workers, unrecognized and only loosely organized, had walked out on a construction job at Commonwealth Electric in a dispute involving jurisdiction. Louis Ferguson, who handled such matters, was unable to cope with Boyle and his men, and antagonism on both sides was growing strong. Insull conceived a sensible proposal for long-range peace, one Boyle would welcome, but before he could offer it he had to overcome Boyle's hostility, suspicion, and distrust. To do so, he decided to deal with Boyle personally, a procedure rare enough in itself. Then, instead of summoning Boyle to his office, as most would have done, to be duly impressed, and angered, by the plush offices, Insull went out to the site of the strike to talk with Boyle in Boyle's own makeshift quarters. Most important, and most Insull-like, when Boyle did come to Insull's office, Insull had [his son] five­-year-old Junior with him. After greeting Boyle, he turned to Junior and said, 'Junior, shake hands with Mr. Mike Boyle and remember him. He will be a very important man in your life. Mr. Boyle, I'd like you to meet my son.' Boyle was so pleased by Insull's gesture of respect that he was immediately ready to listen to the proposals Insull was prepared to make.

"The outcome was an agreement that settled the problem to everyone's advantage. Insull agreed to recognize the union on his construction jobs, including the wiring of homes and buildings, and to try to see that only union labor was used on all such construction in the area, even when it was not that of his own companies. The union, once recognized, would be dealt with at arm's length, and Boyle and his union could resort to anything in the labor repertoire, including strikes, without fear of protest from Insull. In exchange for this concession, Boyle agreed to make no effort -- indeed, to thwart any effort -- to unionize the operating personnel of Insull's companies. The rationale for the agreement, on Boyle's side, was that in the electric business far more workers were used in construction than in operation; under this arrangement, Boyle consistently got larger all-union jobs than any man in a comparable position in the United States, and often his union local had the largest closed­-shop construction jobs in the country. On Insull's side, the rationale was that it was vital that the operating personnel be non-union, for his companies were becoming utilities, performing a service that could not be subjected to strike without immeasurable damage to the public interest. The personal consideration, and therefore the more important one, was that the arrangement gave Insull the freedom to manage operating affairs as he saw fit."



Forrest McDonald


Insull: The Rise and Fall of a Billionaire Utility Tycoon


Beard Books


Copyright 1962 by the University of Chicago


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