Manitowoc Co., Inc.

National Labor Relations Board - Board Decisions

Dec 3, 1970

186 N.L.R.B. 994 (N.L.R.B. 1970)

994 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Manitowoc Company , Inc., and its wholly-owned
subsidiary, Bay City-Manitowoc Corp . and Local
Union No . 1876, United Steelworkers of America,
AFL-CIO. Case 7-CA-7619
December 3, 1970
DECISION AND ORDER
BY CHAIRMAN MILLER AND MEMBERS
FANNING AND BROWN
On August 3, 1970, Trial Examiner Ivar H. Peterson
issued his Decision in the above-entitled proceeding,
finding that the Respondent had not engaged in the
unfair labor practices alleged in the complaint and
recommending that the complaint be dismissed in its
entirety, as set forth in the attached Trial Examiner's
Decision. Thereafter, the General Counsel filed
exceptions, and the Charging Party cross-exceptions,
to the Trial Examiner's Decision, with supporting
briefs, and the Respondent filed an answering brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
powers in connection with this case to a three-member
panel.
The Board has reviewed the rulings of the Trial
Examiner made at the hearing and finds that no
prejudicial error was committed. The rulings are
hereby affirmed. The Board has considered the Trial
Examiner's Decision, the exceptions, cross-excep-
tions, and briefs, and the entire record in this case,
and hereby adopts the findings, conclusions, and
recommendations of the Trial Examiner, as modified
herein.'
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board adopts as its Order the Recommend-
ed Order of the Trial Examiner and hereby orders that
the complaint herein be, and it hereby is, dismissed in
its entirety.
I in affirming the Trial Examiner's dismissal of a Section 8(a)(5)
allegation based on the Respondent's alleged refusal to bargain over its
desire to terminate its Bay City, Michigan, plant, in addition to the factors
cited by the Trial Examiner, we rely on the further fact that the negotiating
session of November 25, 1969, which followed the Respondent's notice of
intent to terminate the operation, did not involve bargaining solely as to
the effects of said decision, but was concerned with again attempting to
reconcile the parties' disagreements in order that an accord might be
reached on a new contract The Respondent provided the Union an
opportunity to make concessions sufficient to alter the earlier decision to
terminate the Bay City operation
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
IVAR H. PETERSON, Trial Examiner: Upon a charge filed
on November 7, 1969, amended on February 5, 1970, by
United Steelworkers of America, AFL-CIO, Local Union
1876, herein called the Union, the General Counsel of the
National Labor Relations Board, by the Regional Director
for Region 7, on February 6, 1970, issued a complaint
against Manitowoc Company, Inc. and its wholly-owned
subsidiary, Bay City-Manitowoc Corp., herein called
Manitowoc or the parent corporation and Bay City or the
subsidiary, respectively, and collectively referred to as the
Respondent, alleging that the Respondent had engaged in
unfair labor practices violative of Section 8(a)(5) and (1) of
the National Labor Relations Act, as amended. Briefly
stated, the complaint, as amended at the hearing, alleged
that the Respondent has, since August 21, 1969, unlawfully
refused to bargain with the Union, the exclusive bargaining
representative of an appropriate unit of the employees of
Bay City. In its answer, the Respondent admitted certain
allegations of the complaint but denied that it had
committed any unfair labor practices.
Pursuant to notice, I heard the case in Bay City,
Michigan, from April 27 through 30, 1970. All parties
participated in the hearing and were afforded full
opportunity to adduce relevant evidence. Briefs have been
filed by all parties and, pursuant to leave granted, a
supplemental brief was filed by the Respondent, which
have been fully considered.
Upon the entire record in the case, and from my
observation of the demeanor of the witnesses and a
consideration of the briefs filed, I make the following:
FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENT
Manitowoc is a Wisconsin corporation , with its principal
office and place of business in Manitowoc , Wisconsin, and
maintains other places of business in various States,
including Wisconsin and Michigan . It is engaged in the
manufacture , sale, and distribution of trucks , crawler-
mounted cranes, and related products . During the calendar
year 1969 it sold and shipped such products valued in
excess of $500,000 from its Manitowoc place of business to
points in States other than Wisconsin . Bay City, a Michigan
corporation with an office and place of business in Bay
City, Michigan , is a wholly-owned subsidiary of Manito-
woc and is also engaged in the manufacture , sale, and
distribution of trucks, crawler-mounted cranes , and related
products . During the calendar year 1969 it manufactured
and sold such products valued in excess of $500,000 from
its Bay City place of business in States other than Michigan.
Manitowoc and Bay City are, I find , affiliated businesses,
with common officers and directors , and operate as a
single-integrated business enterprise . Each is, as admitted,
an employer engaged in commerce within the meaning of
Section 2(2), (6), and (7) of the Act.
186 NLRB No. 145
MANITOWOC COMPANY, INC. 995
II. THE LABOR ORGANIZATION INVOLVED
Local Union No. 1876, United Steelworkers of America,
AFL-CIO, is a labor organization within the meaning of
Section 2(5) of the Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. Background and Sequence of Events
For some years prior to October 1966 Unit Crane &
Shovel Corporation, herein called Unit Crane, had
operated as its Bay City division the plant with which we
are concerned. It was there engaged in the manufacture of
power cranes. Its employees were represented by the
Union, and the latest collective-bargaining agreement was
for a term expiring July 31, 1966. While the renewal of that
agreement was under negotiation between Unit Crane and
the Union, negotiations were simultaneously carried on
between Manitowoc and Unit Crane looking toward the
lease or acquisition of the Bay City plant by Manitowoc
through a wholly owned subsidiary which was to be
formed. Manitowoc did lease the premises from Unit Crane
and also purchased the manufacturing rights to certain
products then being manufactured by Unit Crane. The
lease agreement between Manitowoc and Unit Crane was
for a 3-year period ending October 31, 1969, and provided
that it could not be terminated in less than 36 months and
required a minimum notice of termination of 12 months By
arrangement, requested by Manitowoc, the collective-
bargaining agreement negotiated by Unit Crane and the
Union in August 1966 was for a period ending October 31,
1969. Manitowoc, on behalf of itself and its subsidiary,
assumed the labor agreement as well as a pension plan
agreement as the successor employer to Unit Crane. All
employees continued in employment with Bay City without
interruption or change in status . The Respondent's plans
were to operate the Bay City plant as ajob shop operation,
rather than as a regular production line plant, as had been
the case with Unit Crane.
John West, president of the Respondent, attended the
concluding negotiation session at which the collective-
bargaining agreement was signed, and expressed some
misgivings concerning the terms of the agreement and
stated that the Respondent would probably ask for some
changes in it during the life of the contract. According to
West, by the summer of 1968 the Respondent knew that the
Bay City operation was not "doing nearly as well as we had
hoped " Respondent's financial statement shows that
during the year ending October 31, 1967, Bay City had an
after tax profit of $89,000; for the same period in 1968 the
after tax loss was $753,000 The after tax loss in 1969 was
$327,000. During the 3-year period of operations, sales
increased from $4,061,000 in 1967 to $6,230,000 in 1968 and
$7,407,000 in 1969. Nevertheless, the after tax loss of the 3-
year period was $991,000. The parent corporation did not
charge Bay City with any portion of the general administra-
tive expense, as in the case of its other divisions and
subsidiaries This was done because Bay City was a new
venture and it was recognized that Bay City needed to be
given a "break." Had Bay City been charged for its share of
administrative expenses this would have increased its
operating expenses over the 3-year period by approximately
$200,000. During this 3-year period the parent corporation
had an operating profit of $17,306,000 and an after tax
profit of $8,270,000 on total net sales of $159,856,000.
West testified that in October 1968 consideration was
given to the question whether notice of termination of the
lease at the end of October 1969, the minimum lease period,
should be given to Unit Crane. It was determined not to
give notice of termination but to intensify efforts to get the
Bay City operation under control and to reduce costs to an
acceptable level. Early in 1969 Manitowoc retained the
services of E.A. Cyrol, a management consultant firm,
which made a study of methods and procedures being
followed at Bay City in order to ascertain areas of
improvement. The Cyrol report, submitted in May 1969,
revealed that direct labor costs in the Bay City plant were
excessive and that a reduction in such costs of approximate-
ly 50 percent could be realized over a 2-year period. It also
reported that a well-disciplined work force under a
measured daywork system based on calculated work
standards would produce approximately twice the volume
of work then being produced in the plant. The report also
stated that "many if not all of the practices which have
brought about the very low levels of productivity in the Bay
City plant have their roots" in the collective-bargaining
agreement. It went on to document this with references to
seniority provisions andjob posting requirements.
West testified that in the summer of 1969 the Respondent
and its management gave consideration to the objectives
they would seek in the forth-coming negotiations with the
Union for a new labor agreement. Since the plant was being
operated primarily as a jobbing shop, necessitating that
management be able to have flexible control of the
workforce in terms of assigning employees to jobs and
shifting them from one job to another, the Respondent
determined that it would need a considerably more flexible
collective-bargaining contract than the one then existing.
Moreover, labor costs under the existing agreement as well
as individual wage rates were considerably higher than
those of competitive companies, and in consequence the
Respondent was concerned to hold down the total cost in
any succeeding agreement. In connection with formulating
contract proposals the Respondent decided that the
pension plan, which it had assumed when it took over from
Unit Crane, would be allowed to terminate in accordance
with its terms. Kenneth McCauley, the general manager of
Bay City, in developing the Respondent's proposals for
submission to the Union, attempted to follow the format of
the expiring contract by drafting proposed changes in
various clauses. However, he eventually concluded that this
was not feasible in view of the substantial changes that the
Respondent desired; accordingly he developed an entirely
new draft contract.
In mid-August 1969, before contract negotiations began,
McCauley arranged a luncheon meeting with George
Watts, the International representative of the Union having
responsibility for handling the Bay City contract and
negotiations. McCauley advised Watts that he wanted the
latter to know in advance that the Respondent would be
seeking extensive changes in the contract, that operations at
Bay City during the 3-year period had been very
996 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
disappointing, and that the Respondent did not intend to
continue the existing pension plan. McCauley gave this
advance knowledge of the Respondent's position to Watts
as he felt that with this information Watts might wish to
handle the upcoming negotiations somewhat differently
than in the ordinary case.
The pension plan contained the following provision:
15.1 This Agreement shall become effective as of
August 1, 1966, and shall expire at midnight, October
31, 1969.
The collective-bargaining agreement provided (art. XIX,
sec. 1) that it "along with the Pension Agreement, shall
continue in full force and effect . . . until October 31, 1969
and from year to year thereafter unless either party shall
notify the other in writing sixty (60) days prior to its
expiration of the intention to make changes in, or terminate
this Agreement."
Under date of August 21, 1969, the Respondent wrote to
the Union giving notice of the termination as of October 31,
of the labor agreement and the pension plan, and offering
to meet for the purpose of negotiating a new working
agreement.
The first negotiation meeting was held on September 8, at
which time the Respondent presented its proposals and the
Union presented its desired changes in the existing
agreement Thereafter and until the Union went on strike at
midnight October 31, the parties met a total of some 13
times in an effort to resolve the very substantial differences
between them. These bargaining sessions will be summa-
rized in the succeeding section of this decision. The parties
also met several times after the strike, which began at
midnight October 31 and was still current at the time of the
hearing. In mid-November the Respondent concluded that
it would cease operations at the Bay City plant at the end of
November 1970, and pursuant to this decision, notified the
Union of its intention on November 14, and on November
26, 1969, gave notice of lease termination to Unit Crane.
B. The Bargaining Negotiations
The parties exchanged bargaining proposals at the first
negotiation session on September 8. As stated above, the
Respondent submitted a complete draft contract together
with new job classifications and wage rates and a proposed
set of new job descriptions . The Union submitted proposed
charges in various clauses of the existing agreement and a
substantially expanded medical , health , and drug plan; it
did not make any specific proposals relating to economic
matters, other than indicating it desired substantial
improvements in wage rates.
Briefly stated , the major proposals of the Respondent
were as follows:
(a) The "successor" clause in the existing agreement was
eliminated.
(b) The Respondent proposed a clause disclaiming "all
prior practices of predecessor employers and itself prior
hereto."
(c) With respect to management rights, the Respondent
proposed that this clause read as follows:
ARTICLE I - RIGHTS OF MANAGEMENT
The Company possesses all functions , rights and
discretions of ownership , enterprise and management
except as specifically restricted by the terms of this
Agreement.
Included in this right but in no way limited to (sic) is
the right to hire, transfer, promote, suspend, discharge
for cause, discipline, release employees for lack of work
or other legitimate reasons, establish reasonable rules to
maintain good order and discipline of all employees, as
well as the sole right to set production standards, quotas
and to sub-contract work.
And claim that the Company has exercised such
rights contrary to the provisions of this Agreement may
be subject to the grievance procedure.
(d) The checkoff provision was eliminated.
(e) The proposal permitted the Respondent the unlimited
right to hire or transfer nonunion employees to do
production work in order to gain experience or knowledge
for service and/or positions outside the unit. The expiring
agreement limited the number of such persons to three.
(f) The draft provided for six seniority groups, instead of
plantwide seniority as in the existing agreement. Included,
among other changes, it provided that vacancies having
higher rates of pay would be filled by the employee having
the greatest seniority, but the Respondent reserved to itself
"the right to choose the man who, in their opinion, is the
most capable for the job."
(g) The existing agreement provided for eight holidays
and two half holidays. The Respondent proposed to
eliminate two holidays, Good Friday and the day following
Thanksgiving day; with respect to half holidays (the day
before Christmas and the day before New Years) the
Company proposed that when those days fell on normal
workdays the Respondent would pay an additional 4 hours
pay for each of these workdays to employees who qualified
for holiday pay under the terms of its proposal.
(h) The Respondent's proposal eliminated the rather
elaborate job posting provisions of the expiring contract.
(i) With respect to vacations, the Respondent's draft
proposal liberalized to some degree the length of service
provisions for junior employees, but provided that vacation
pay should be calculated as a percentage of straight time
earnings during the previous calendar year rather than as a
percentage of gross yearly earnings.
(1) The wage rates in the Respondent's proposal were
generally lower than existing rates, but the Respondent
proposed that an employee on the seniority roster as of the
effective date of the agreement "having a wage rate higher
than called for under the appropriate classification in
Exhibit `A' shall not have his rate reduced by virtue of
Exhibit `A' having a lesser rate for that classification."
(k) With respect to employees on military leave the
Respondent proposed that their rights be as defined in
Federal law, thereby eliminating leave-of-absence provi-
sions for study purposes and pay for the difference between
what the employee received while on duty with the
National Guard, or on Reserve Training, and regular
wages.
The principal changes proposed by the Union may be
summarized as follows:
(a) With respect to the performance of unit work by
nonunit employees (art. II, sec. 5-A and B) the Union
proposed that this be limited to cases of "unusual
MANITOWOC COMPANY, INC. 997
emergency." The existing agreement allowed the Company
to transfer up to three employees at its discretion to
different parts of the plant to train for service or positions
outside the unit, subject to the qualification that such
transfer would not jeopardize jobs of unit employees. The
existing agreement also allowed foremen and subforemen
to perform unit work under certain circumstances, but this
provision was omitted from the Union's proposal.
(b) Article 11, section 3-B, was revised to remove the
provision that union representatives would not be paid
during contract negotiations or during the last three days of
the grievance procedure.
(c) Article III, section 3-C, was expanded so as to allow
zone stewards without limitations to attend meetings with
the Company at the request of the grievance committee.
The existing agreement limited attendance to the steward
from the zone where the grievance arose.
(d) Three new sections were added to the grievance
procedure to provide (1) for one chief steward who could
substitute for a committeeman when the latter was not
available on the shift involved; (2) that no docking of unit
employee pay would occur while they were attending
meetings with the Company, and that the grievance should
be taken up during daylight working hours; (3) that in steps
three and four of the grievance procedure either party
would have the right to call in representatives of
management, employees, or union representatives who by
reason of knowledge of the matter might be helpful in
reaching a settlement.
(e) Article IV, pertaining to seniority, was revised in
section 2 so as to provide for dovetailing of the seniority of
probationers who had not completed their probation period
before being released and who were rehired within 1 year.
(f) Article IV, section 3, was revised to provide for the
distribution of a seniority list every 3 months instead of
every 6 months.
(g) Article IV, section 4-E, was revised to provide that a
unit employee transferred or promoted out of the unit
would lose seniority after 60 days, the existing agreement
provided for retention of seniority without limit.
(h) Article V, section 2, was changed so as to add a 15-
minute paid lunch period to the midnight shift in addition,
a provision was added that the midnight shift would work 7
1/2 hours and be paid for 8 and that work over 7 1/2 hours
would be at the overtime rate.
(i) The Union proposed slight changes in the distribution
of overtime (art. V, sec. 6-A and B), and added a provision
(sec. 6-H) that if an employee scheduled for overtime has
more cumulative overtime hours than another employee in
the same classification not scheduled to work overtime, the
latter shall be compensated for the time actually worked by
the former. A provision was also added that an employee
accepting an overtime assignment and failing to appear for
work would be credited (for purposes of calculating
overtime distribution) with double overtime credits.
(1) Regarding article VI-Safety and Health-The union
proposal established a separate union safety committee
whereas the existing agreement provided for a safety
committee composed of three foremen and three elected
employees; also, the Union proposed a joint union-
company safety committee. In addition, grievances involv-
ing safety were to be processed directly into the third step of
the grievance procedure and were made subject to
arbitration.
(k) The job posting article (art. VII) was revised so as to
provide that all jobs, rather than merely jobs involving
"ability," should be posted before the recall of employees in
layoff status or the hire of new employees.
(1) Article VIII, dealing with vacations, was liberalized
both as to the duration of vacation periods and the
percentage of gross yearly earnings payable as vacation
pay.
(m) The Union proposed that with respect to leaves of
absence (art. IX) section 5 be revised to provide that in the
case of absence because of a death in the employee's family
notice be given "if possible" before beginning the leave.
Also, the Union proposed that an employee off work due to
illness or injury would receive bereavement leave with pay
if he had worked during the previous month; the existing
agreement required that he work in the preceding pay
period.
(n) Article XI, holiday pay, was revised in section 1 to
provide that the day before Christmas and the day before
New Years would become full instead of half holidays.
Section 2-A was altered to provide that an employee need
work only the day preceding or following the holiday in
order to qualify for holiday pay, rather than on both days
as in the existing contract. Section 2-B was revised to
provide that an employee was qualified for holiday pay if
absent by reason of sickness or injury if he had worked
within the preceding 60 (rather than 30) days.
(o) Article XIII (Miscellaneous) was revised in section 3
to require that the Company print the agreement in a union
shop and provide copies for employees. Section 4, relating
to rules, was changed so that in rule 15, the penalty for
absence from the employee's department, was reduced.
Section 6 was added to this article and provided that
employees were to be allowed to exercise seniority to obtain
shift preference once each year.
(p) Section 2 of article XIV was revised so as to require
that an employee, in case of disciplinary layoff, suspension,
or discharge, be notified ( as well as a member of the
grievance committee as in the existing agreement), and the
reason be stated in writing.
(q) Article XV provided for entirely new and expanded
insurance provisions, for employees, retirees, and depend-
ents.
(r) With respect to article XVI, wages, section 1 proposed
that the present cost-of-living adjustment be frozen into all
wage rates and in addition that "a substantial wage
increase" be granted. In section 2, instead of a 9-cent-per-
hour differential for the second shift, as in the existing
agreement, the differential for the second shift would be 5
percent and for midnight shift 7 percent. In section 4, an
increase was provided for call-in pay. Section 9 provided
that the cost-of-living adjustment be calculated quarterly
instead of semiannually.
(s) In article XVII, learner program, section 1-D was
deleted, so as to allow learners to exercise plantwide
seniority. Section I-F provided that learner jobs were not
to be posted until a bid for a qualified employee has been
completed.
998 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(t) The Union proposed that article XVIII , relating to
automaticiob progression, be deleted.
(u) A new article providing for severance allowances was
proposed.
Representing the Union in the negotiations was Watts, a
staff representative of the International , accompanied by
an employee committee ; however , Watts played the
principal role and, aside from the brief appearance of one
of the employee members of the committee as a witness,
was the principal witness called by the General Counsel.
The Respondent was represented by McCauley , general
manager of the Bay City plant , aided by one or two other
members of management. President West of the Respon-
dent appeared at the initial meeting and at one other
meeting in the latter part of November . There is virtually
no conflict between the testimony of Watts and McCauley
with regard to what transpired at the various meetings.
However, McCauley testified at greater length than Watts
on the basis of more complete notes taken by himself at the
meetings In the following summarization of the bargaining
negotiations I have relied primarily on the testimony given
by McCauley although , of course, I have considered the
testimony of Watts and , where it appears appropriate to do
so, will occasionally make brief reference to his account of
a particular incident.
Somewhat formal opening statements were made by the
parties at the initial meeting on September 8, at which they
exchanged their contract proposals . President West, as
stated above , attended and made a general statement to the
effect that the Bay City operation , despite efforts by
everyone concerned during the past 3 years, was not in a
healthy condition . He referred to the fact that costs were
too high and too many hours were used per unit , and stated
that , although the Respondent had raised the price of the
product as much as it could , that avenue was not available
for improving the picture , since the Company was on the
verge of being priced out of the market. As Watts put it,
President West stated that the Company was proposing a I-
year contract which was an "austerity contract." West
further stated that since the Respondent was increasingly
going into a job shop operation it was necessary that
management have enlarged rights in regard to the
placement of men in the shop in order to attain the
necessary degree of flexibility . West further indicated that
the Respondent in its contract proposals was seeking to
achieve cuts in both wages and benefits , and that the
pension plan, as previously stated, would not be continued.
The second meeting occurred on September 10. Watts
asked McCauley why the Respondent had left out the
"successor" clause from its draft and McCauley replied that
perhaps that was due to a typographical error and he would
check on the matter . Watts also stated that he noticed there
was no provision in the Company's proposal for dues
deductions and asked why. McCauley replied that that was
a cost item and involved IBM time but that the Company
would be happy to deduct dues if the Union would pay for
the cost .[ The parties spent a considerable amount of time
discussing the Company 's proposal regarding foremen
working and the proposal that management be allowed to
I The Union's dues are based on a formula of 2 hours ' average earnings
over a prior measurable period , with the result that dues vary from
transfer employees and allow employees of affiliated
companies to do production work . Watts expressed the fear
that this proposal might destroy jobs of members and
accordingly felt that it would be necessary for restrictions
to be placed on this right of the Company . The Respondent
had dropped from its proposal the antidiscrimination
clause that was in the expiring agreement ; Watts asked
why, and McCauley stated that the Federal law with
respect to this matter was sufficient . The parties also
discussed subcontracting, the Company taking the position
that the agreement should not contain any restrictions on
this subject . The parties also discussed the temporary
transfer proposal , the vacation pay provision , and the
modifications in the clauses relating to jury duty and
bereavement pay, as well as the military service provisions.
At the close of the meeting, according to Watts, the Union
stated that the employees "couldn 't really afford to take all
the cuts that the Company was proposing and that they
weren't pleading poverty, and, therefore, we weren 't there
to take cuts in this set of circumstances ." McCauley
testified that the Union stated it regarded the Company's
proposal as "a complete flip flop" and that the Respon-
dent's seniority proposals were completely unacceptable.
The Union indicated that the parties were so far apart in
their proposals that negotiations would undoubtedly be
stalemated in a short time.
The parties next met on September 12. At the beginning
of the meeting McCauley stated that the "successor" clause
had been omitted deliberately. The Company stated that it
had no objection to granting superseniority to members of
the bargaining committee but stated that it would like to
have a provision that an equal number of employees could
be frozen in their jobs at time of layoffs and placed in the
plant without regard to seniority . As to probationary
employees , the parties tentatively agreed that the probation
period should be 320 hours. Most of the meeting was
devoted to a discussion of seniority provisions. The
Company's position was that the seniority clauses as they
existed in the present contract and as outlined in the
Union 's proposals unduly restricted the Company's ability
to plan operations and best utilize the skills of employees to
meet work requirements. The Union had requested that a
seniority roster be furnished every 3 months , whereas the
Respondent had proposed furnishing the roster every 12
months. The parties compromised at 6 months . The Union
had proposed that an employee on sick leave or in layoff
status would accumulate seniority for a period up to 2
years. The Respondent was not agreeable to this and the
parties compromised on 1 year. With respect to the Union's
proposal that in the event a foreman was sick or on
vacation employees could be temporarily assigned to fill the
vacancy, the Company indicated that there might be other
reasons for temporarily filling a position and the parties
tentatively agreed that the limitations proposed by the
Union would not be adopted . Article IV, section 7-A, of
the existing agreement provided that employees temporari-
ly working on a job in a higher classification would receive
the maximum rate of pay for that classification. The
Company's position was that such an employee should
employee to employee depending upon individual earnings
MANITOWOC COMPANY, INC 999
receive the minimum rate for that classification. Article IV,
section 7-C, of the old contract provided that temporary
transfers of an employee from one classification to another
or from one job to another job within the same
classification for emergency purposes should be made on
the basis of transferring the junior employee from within
the classification and shift, subject to senior employees
having the right to request preference in the transfer. The
Company objected to this provision, claiming that it had
led to considerable difficulty because the more experienced
employees but not the junior employee were frequently
desired for a particular job and because of the insistence of
the Union and its members that the contractual provision
be followed it was not possible for the Company to utilize
the services of the more experienced employee. As
McCauley testified, this provision in the agreement had
resulted in employees being "inclined to feel that they had a
proprietary right to a job and a machine" and objected to
any attempt on the part of management to change their
work content.
The parties held a brief meeting on September 15 which
was primarily devoted to a discussion of bidding and job
posting procedures. The Company indicated that it
regarded the existing provisions on this subject as providing
an unwieldly procedure and suggested that employees file
with the personnel department their desires for jobs they
would want to be considered for as a means of obviating
the job posting provisions. The Union agreed in principal
with this proposal.
At the next meeting on September 16 the parties
continued to discuss job posting and increases in the work
force. Agreement was reached on the elimination of a
provision in the expiring agreement having to do with the
painter classification. The parties tentatively agreed on the
hours of work provision in the Union's proposal and the
clauses in the Union's proposal relating to maintenance of
overtime records and distribution of overtime.
At the following meeting on September 23 the parties
discussed the checkoff and again the Company stated that
it would be willing to check off dues if the Union paid for
the IBM time involved. Regarding the antidiscrimination
clause the Company stated that it would be willing to
include it in the contract but would not agree that matters
arising thereunder could be arbitrated. Concerning the
insurance program, McCauley stated that the Company
wished to make it contributory and desired that the existing
insurance program should be terminated but in lieu thereof
the Company would pay the cost for a single employee and
contribute $30 on the family plan and permit the Union to
place the insurance wherever it wished.
On September 30 McCauley wrote to the Union
transmitting some additional job descriptions for consider-
ation by the Union and also expressing concern about the
inability of the parties to arrange firm meeting dates for the
continuation of negotiations. In this connection, McCauley
wrote*
In our phone conversation of September 26th you
informed us you would not be able to meet with us at all
the week of September 29 and you reluctantly
scheduled a meeting for October 7th. There are still
many areas of our contract proposal which have not
been discussed and there are many areas that have been
discussed where continued negotiations are necessary.
In view of the scope of the job before us we feel no
fewer than two (2) meetings per week should be
scheduled for the balance of October or until such time
as we can conclude our negotiations and reach an
agreement.
The Company met with the employee committee on
October 3, since Watts was unable to be present, at which
the parties discussed job descriptions and also group
seniority.
The parties next met on October 14, to consider the
Respondent's pension plan pursuant to prior arrangement.
In addition to Watts and the employee committee, an
official of the Union's pension and insurance department
was present on behalf of the Union. President West of the
Respondent and its counsel as well as an attorney for Unit
Crane were also in attendance. The Union's pension expert
recited some figures the Union's research department had
developed showing that the Respondent's profits were
about $12 million for the years 1965 through 1968 and that
its return on net averaged close to 14 percent for this period,
indicating that the Respondent could not have any serious
financial problems if it were to support the pension plan.
The Company, however, stated that it was firm in its
contention to allow the plan to terminate according to its
provisions and that any kind of pension plan for the future
would have to be discussed in the "mainstream negotia-
tions."
The parties next met on October 16 and 17. At the outset
on October 16, the Union stated that in its opinion the
Company was "dragging its feet" and bargaining in bad
faith. In response, the Respondent suggested that the
parties give serious consideration to the Company's
proposals and pointed out that thus far in the bargaining
only the first five or six pages of the Company's draft
contract had been discussed. In reply the Union stated that
the reason it had not given the Company's proposal serious
consideration was that it eliminated gains the Union had
made in prior years, and Watts complained that the
Company was making it very difficult for the Union to deal
with the Respondent's proposals because of the complete
rewrite of the contract, whereas normal practice was to take
an existing agreement and modify specific clauses.
McCauley explained that the Company had adopted this
approach because the existing contract "was a result of 30
years of patch-quilt workmanship." When McCauley
suggested that the parties discuss economic issues, Watts
"off the cuff" stated that the Union wanted a $6.50 increase
on pensions, a 50-cent hourly rate increase the first year, 20
cents the second year, and 20 cents the third year, as well as
all other benefits in the Union's proposal. The parties were
unsuccessful in reaching agreement on any of the
outstanding differences that had previously been discussed.
At the following meeting on October 21, McCauley gave
the Union a revised wage structure and a seniority grouping
of the various jobs in the plant. From calculations made by
the parties on the basis of the changes injob classifications
and the grouping of the old classifications into the new, the
Union calculated that under the old wage structure the
Company was paying an average composite wage rate of
1000 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
$918.22 per hour whereas under the proposed new wage
structure it would be paying $868.04 per hour. However, the
Company's revised wage rate schedule did result in some
substantial increases at the upper level of skills compared
with what the Company had previously offered. In this
connection, Watts asked McCauley about the cost-of-living
provision, and McCauley advised him that the Company
did not want it as such a provision was regarded as
inflationary. Insurance was also discussed at this meeting,
the Company stating its position to be that the Union could
obtain insurance coverage wherever it wished so long as the
company outlay for this item was no more than it had
previously proposed. However, the Company did modify its
position in this regard by stating that it would pay a
maximum of $30 for employees with families. With respect
to pensions, the Company stated that it was prepared to
offer 10 cents per hour to be placed in some type of fund to
be administered by the Union, pointing out that this
represented an increase from the average hourly cost of the
expiring insurance program of 6.6 cents per hour. The
Company made clear that any pension fund should be
funded with fixed contributions and the benefits to be
determined actuarially, stating that one of its objections to
the expiring program was that contributions were actuarial-
ly determined and benefits were fixed. Further, referring to
the proposed wage rates, it was pointed there would be no
red circle rates, and in consequence some employees' rates
would be lowered. Watts testified that he stated the Union
could not take the wage cuts unless the Company could
show that there was a need and accordingly asked if the
Company would be willing to open up its financial records
for examination by the Union. The Company, so Watts
testified, stated that the books would not be made available
as it was not pleading poverty. The Union inquired whether
McCauley believed that the work standards in the
Company's proposal were negotiable; McCauley replied
that they were not, as a standard based on good analysis is a
factual matter and therefore cannot be negotiated.
McCauley also pointed out that the Company felt it had
had a need of a timestudy or some preestablished standards
for some time.
At the next meeting, on October 22, McCauley stated
that the Company was willing to let a certified public
accountant not affiliated with the Union look at the
financial records of the Bay City operation but that any
such examination would not include officers' salaries. The
Union, however, indicated that it desired to look at the
parent company's books as well, in order to ascertain the
distribution of intercompany charges and thus have a better
view of the profit position of Bay City. The parties engaged
in further discussion of the successor clause and the
nondiscrimination clause. Watts stated that until these
matters, as well as present benefits and wages, were back on
the table, the Union did not see how it could engage in any
further discussion. In answer to Watts' statement that he
could not understand the Company's position on these two
clauses, as they did not "hurt the people," McCauley
replied that the Union was asking the Company to agree to
a contract which it felt "would very likely drive us to the
wall, if we weren't successful in our efforts" and yet at the
same time was attempting to restrict through the successor
clause the Company's freedom to dispose of the Bay City
operation. Regarding the nondiscrimination clause,
McCauley stated that this could develop into a very time-
consuming subject. However, he indicated that, in defer-
ence to the Union's strong feeling in this regard and not
desiring to injure the Union's favorable image with the civil
rights movement and minority groups, the Company would
have no objection to posting a nondiscrimination notice in
the plant. This, however, was not satisfactory to the Union,
and the Company then suggested placing the clause in the
agreement in the same words as in the expiring contract,
but with the limitation that matters arising under this
provision would not be subject to arbitration. Following a
caucus of the union representatives, the union group
returhed and Watts stated that, in view of the Company's
position on checkoff, nondiscrimination, management
rights, and its insistence on the right to establish work
standards, the Union felt that no further progress could be
made by engaging in continued discussion.
When the parties next met on October 24 there was
considerable discussion about job descriptions and the
parties reached some agreement with respect to this subject.
At this meeting the Union made a new demand to the effect
that in case of strike the Company would continue paying
insurance premiums for employees. The Company agreed
to deduct such insurance premiums from wages due in the
event of a strike provided the Union was willing to
reimburse the Respondent.
On Sunday, October 26, the membership of the Union
voted to strike at midnight October 31 unless a satisfactory
agreement were reached by that time.
At the next meeting, on October 28, the Company gave
the Union some revised job descriptions and a proposed
booklet containing employee rules of conduct which it
stated it proposed to distribute to new employees. The
Company also submitted to the Union further revisions of
the job classification detail and there was some discussion
of this. Watts stated that on the basis of the employee
population information previously furnished the Union he
had made a calculation and developed a composite rate for
Blue Cross and Blue Shield. He stated that the Union
desired an improvement in this area, including master
medical and a drug program, and that these two items
would increase the composite rate for insurance by $8.79,
or approximately 5 cents per hour. It was at this meeting
that the Company suggested that the parties call in a
mediator in view of the fact that they were not making
significant progress. Watts stated he had no serious
objections to mediators but made clear that it was not his
intent to allow a mediator to negotiate a contract.
The parties met the following day, October 29, with a
mediator from the State Mediation Service in attendance.
The parties explained their positions to the mediator and
also met separately with him. As McCauley testified, the
parties informed the mediator "that we agreed on one
thing, we had agreed not to agree up to this point."
McCauley testified that when the company group met
privately with the mediator they divulged to him the fact
that they recognized there was probably 12 or 16 cents an
hour still not "up on the table" and that the Company
recognized before they were through negotiating it was
MANITOWOC COMPANY, INC. 1001
quite possible "we would have to red circle at least a
majority of the wages." They also disclosed to the mediator
financial statements for the Bay City operation and
indicated to him that the Company could not stand to
increase costs. According to Watts, the mediator reported
to the Union that the Respondent would not move from its
position which, according to Watts, the mediator character-
ized as "out of line." No statement was made by the
mediator to the Union that the Company did not expect to
achieve a renewal contract at less cost in wages than
reflected in the expiring agreement. It is McCauley's
testimony that after the mediator had met with the Union
he told the Company's representatives that he was afraid
the Respondent was in for a long strike, as the Union was
firm and unalterable in the same areas as the Respondent.
To this the Company's representatives replied that perhaps
the Union would be on a long strike but the Company
could not afford to have that experience as it had lost "all of
the money we could afford to lose in this place, and if it gets
to be a long strike, there dust isn't going to be anything to
strike." The mediator, so McCauley testified, then went
back to talk with the union group and upon his return
stated that he could not see where the parties were making
any progress and that he would be in touch with them in a
few days to see if they had been able to make any progress
or felt they needed any assistance. Although McCauley
spoke with the mediator several times on the telephone, the
mediator did not participate in further negotiations.
Under date of October 30, McCauley sent a detailed
letter to Watts in which he stated:
In an effort to resolve the breakdown in negotiations
that occurred between Local 1876 and Bay City-
Manitowoc Corp., the Company is modifying its
proposal as of this date. The proposals the Company is
making are modifications of what has been proposed to
the Union to date. All contract language as proposed
and all rate schedules as proposed are as proposed
unless modified herein.
You no doubt will note that the major changes involve a
revision to Article XI, Section 3 - Existing Rates. We are
proposing the rate schedule as submitted to you on 10-
21-69 in accordance with our Exhibit `A', however, we
are modifying our proposal which will pay the wage rate
equivalent to a man's present rate or in accordance with
Exhibit 'A', whichever is higher, for those employees
assigned to Job Classes with a Code No. of 190 or lower.
You will further note that the Company is offering to
pay the entire cost of the existing insurance program
and has increased the shift premium from 9$ to 124,
per hour.
The Company recognizes there are other areas of minor
change which would have to be made to its proposal
and is ready and willing to discuss these
There then followed 15 specific changes in the Compa-
ny's proposal. The Company's letter concluded:
This constitutes the Company's offer in an effort to
resolve the impasse that has been reached on negotia-
tions and to avoid a work stoppage. The Company will
be available to continue the process of collective
bargaining to the end that a mutually satisfactory
agreement on all issues can be accomplished. We will
arrange our affairs to accommodate your schedule as
you indicate.
The Union, so Watts testified, received this letter at 11
o'clock on October 31. Watts responded by writing to
McCauley under date of October 31. He stated that the
Union was presently reviewing the Company's proposal
and was anxious to meet and discuss the differences of the
parties, but stated the Union found it "extremely difficult to
believe the sincerity of your `effort' and `desire' to resolve
what you characterize as an impasse," in light of the fact
that on Tuesday, October 28, Watts had informed
McCauley that a Mr Schulte from the Union's pension
department and Assistant General Counsel Coyle would be
in Bay City to participate in negotiations if their services
were necessary and both of them spent the entire day of
Thursday, October 30, "awaiting your telephone call to
continue meetings." Watts then continued:
Since our initial meeting on September 8th, the
Union has consistently attempted to negotiate an
honorable settlement of our differences. Unfortunately,
the Company' s actions have not evidenced a similar
desire. Among many,other intolerable proposals, your
desire to cut average hourly pay rates by approximately
16 to 211$ leaves the Union with grave doubts
concerning your sincerity and good faith.
You allege in your letter a desire to resolve the many
problems still remaining i n issue, yet at this crucial hour
you have chosen to offer changes through the mail
rather than across the bargaining table. We again
express to you our sincere concern over the unresolved
issues and pursuant to our conversations of October
28th, are anxious to continue our efforts to resolve these
problems. The Union is ready and willing to sit across
the table and continue negotiations at any time.
On October 31, the Respondent distributed the following
notice to its hourly employees:
To: All Hourly Employees
The Company has participated in 13 meetings with the
Committee in an effort to negotiate a new labor
agreement. We also have obtained the services of a
State Mediator in an effort to solve our mutual
problems. In an effort to resolve the impasse and to
avoid a work stoppage the Company submitted a
modification to its proposals to the Union on October
30, 1969. The Union has not responded to this proposal.
The Company is willing to meet with the Union any
time the Union specifies, to negotiate an agreement that
will be mutually acceptable.
The Company intends to-continue the operation of its
facilities and employees who report for work on or after
Monday, November 3, 1969 will be paid in accordance
with the following: .
1. A wage rate as outlined on the attached schedule or
the employee's existing rate, whichever is higher,
provided he is assigned work covered by a Job Code
Number 190 or lower. For example, an overhead crane
operator would be paid his present rate of $3.68 per
hour while a tool maker would be paid $4.28 per hour in
accordance with the schedule.
2. The Company will pay the same amount as they are
presently paying toward the present insurance program.
1002 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
3. Shift premium for the 2nd Shift will be 12 i per
hour and will be in addition to the rates covered in No.
I above.
Any questions in regard to working conditions or wages
and their effect on an individual employee should be
referred either to his foreman or the Personnel
Department.
The parties next met on November 5. At the outset Watts
complained about the fact that the Company was
continuing to operate the plant, stating that this was
causing a lot of hard feelings. To this the Company
responded that while it recognized the problems mentioned
by the Union it felt that it had an obligation not only to the
Company and to the people that were working but also to
those out on strike, since it felt it was necessary to make
every effort to keep the organization together "so that if
and when the strike was resolved we had the means of a
continuing operation." At this meeting the Union receded
from its position and agreed to the Company's proposal to
eliminate job stewards in the grievance procedure and
restrict the union representation in this regard to commit-
teemen. The Union also at this meeting gave the Company
its answer on each of the proposals contained in the
Respondent's letter of October 30, stating agreement on
some and continued disagreement on others. In particular,
the Union stated the Company's proposal on wage rates
was not acceptable because it involved pay cuts of 20 to 59
cents an hour on some 37jobs having code ratings of 200 to
240. The parties virtually reached an accord on the
grievance procedure, with the exception of the Company's
proposal that it should have the right to file grievances.
There was discussion about this matter and some
alternatives were suggested. In regard to the successor and
management rights clauses the Union asked if the
Company's position was as firm in these areas with respect
to seniority and work standards. McCauley replied that the
Company was "not saying our language cannot be
modified" but said the Company had definite goals on
management rights and recognized seniority rights, "but we
had to have some modification of what currently existed in
the contract which had expired, and there had to be some
semblance of what we had proposed." Watts stated that
even with a 1-year agreement, as proposed by the
Company, the Union could not live without the successor
clause and he also complained about the clause disclaiming
past practices.
The parties met during the afternoon of November 6,
with President West in attendance. At this meeting West
stated that while it appeared to him the parties were "in a
rather serious difficulty" he was hopeful that something
meaningful could occur in the immediate future in the way
of reaching a resolution of the problems. Watts testified
that the Company was insistent that the parties negotiate a
contract in the format as submitted by the Company, and
that West stated that the draft proposal submitted by the
Respondent was the one needed in order for the
Respondent to stay in Bay City No substantial progress
was made at this meeting.
Following the meeting West and McCauley discussed the
situation and West indicated that McCauley had "a real
problem" on his hands and suggested that McCauley meet
privately with Watts. McCauley arranged to meet with
Watts the following day at the Union's headquarters, at
which a Mr. Reinhart, the subdistrict director and the
immediate superior of Watts, was present. McCauley
indicated to the union representatives that the Company
recognized that it would not be able to obtain a contractual
settlement in which the total cost to the Company was less
than the cost in the expired agreement, thus indicating to
the union representatives that there were still some items
that were "not on the table." According to McCauley the
parties "attempted to explore who could do what" and
Watts "picked up his copy of the union contract and tapped
it and said it has got to be this and more and more and
more." Thereupon McCauley stated he was wasting his
time and left.
The following Monday, November 10, McCauley
telephoned West and told him what had transpired in the
November 7 meeting with Watts and Reinhart, and West
requested that McCauley come to Manitowoc. McCauley
did so and in a meeting with West and other company
officials McCauley advised them that unless the Respon-
dent was ready to make "a complete capitulation,"
including accepting the old agreement and further employ-
ee benefits, he felt that he did not want to assume the
obligation of attempting to operate the plant on a profitable
basis. The company representatives concluded at this
meeting that efforts should be directed toward eventually
closing the Bay City facilities.
On November 14, the Respondent sent the Union the
following telegram:
Due to the present work stoppage and the Union's
apparent posture in the current negotiations seeking a
renewal agreement this is to advise of the intention of
Bay City-Manitowoc Corp to take steps to terminate
operations. This program is anticipated to be several
months in duration. At your convenience we will
arrange our schedule to discuss with you the effects of
this termination on the members of Local # 1876 as
well as any matter in dispute.
The parties next met on November 25. The Company, in
addition to McCauley, was represented by Attorney
Mueller. In addition to Watts and the local committee, the
Union was represented by Mr. Charles Younglove, area
director, and Assistant General Counsel Coyle. According
to Watts, Mueller stated that the only problem was that the
Union desired to work off the old agreement whereas the
Respondent must have the proposal it had submitted or it
would be forced to close the plant. Younglove testified that
he expressed himself as dumbfounded that the Company
should propose a wage cut, elimination of the pension plan,
and restrictions on various other benefits. Mr. Coyle had
some prepared written questions concerning the proposed
shutdown of the plant which on request he gave to Mr.
Mueller. After a caucus of the company representatives
Mueller told the Union that he would need some time to
consider the Respondent's response to the questions.
During a caucus of the union representatives the negotiat-
ing committee informed Younglove and Coyle that they
were prepared to recede from their positions on temporary
transfers, work standards and quotas, and the bidding
procedure, provided certain safeguards were included.
MANITOWOC COMPANY, INC 1003
After this caucus Coyle and Younglove, without the local
committee, met with the Respondent's representatives.
Coyle testified that during this session he informed the
Company's representatives that he understood they had a
problem with respect to production standards and work
quotas and indicated that the Union was willing to give the
Respondent the right to set standards and quotas provided
that an appropriate grievance and arbitration procedure
could be worked out. Coyle also indicated that the Union
would no longer insist upon the successor clause. Regard-
ing temporary transfers, Coyle stated that he was aware
that the Company had problems in that area and that he
believed they could be worked out to the Company's
satisfaction. With respect to job posting, the Union also
indicated that it would be willing to work out the problem
and meet the Company's need. The union representatives
asked that the Company consider its modified position in
these four areas and review the bargaining history and their
own proposals, with a view to coming back and hopefully
offering proposals of their own. After an adjournment of
approximately 45 minutes the Company's representatives
returned and stated that in addition to the four areas where
the Union had indicated it was prepared to make
concessions the Company would also have to have the right
to combine the present approximately 120 job classifica-
tions to 42 as it needed the flexibility. McCauley also stated
that the wage rates it had offered would be minimum rates
only and that the Company must have the discretion to
increase individual rates as it saw fit. The Company further
stated that it regarded the pension agreement as no longer
in effect but renewed its offer of 10 cents per hour to a
pension fund to be administered at the discretion of the
Union. Coyle stated that throughout the negotiations the
Company had been pleading poverty and asked why it did
not make its financial records available to the Union.
McCauley replied that the Company had never pleaded
poverty, it had only stated that the Bay City operation was
unsatisfactory by its standards as the return on investment
was inadequate. It was for this reason, stated McCauley,
that the Company could not discuss anything that would
increase costs. At the conclusion of the meeting the union
representatives were given a copy of the Respondent's
notice of lease termination, dated November 26, which it
was intended to send to the lessor, Unit Crane.
At a meeting on January 8, 1970, Attorney Davis for the
Respondent undertook to give the answers to the questions
the Union had submitted at the November 25 meeting. He
stated that the plant would operate until November 30,
1970, and that the Company had no plans or commitments
as to how operations would be terminated. He did state,
however, that the bulk of the machinery was owned by Unit
Crane and that other machinery as well as supplies would
be sold. He stated that production of Bay City products
might be performed elsewhere or the Company might
discontinue manufacturing the product. The Respondent,
so Davis stated, had no intention of using Bay City
personnel in the Wisconsin operation. With respect to the
Cyrol report about which the Union had inquired, Davis
stated that it had commissioned such a study and had
considered the report in reaching the conclusion to close
the plant. Davis proposed that the parties enter into a 10-
month termination agreement under which the Company
would be free to utilize employees strictly on the basis of
skill rather than seniority. Davis indicated that under such
an arrangement the Company would be more liberal on
wages, and in order to avoid employee turnover he
proposed that the increase in wage rates be placed into
escrow until the operation was concluded. Davis indicated
that the Company had not relied on any governmental
reports in making the decision to close the plant. However,
that decision was based on a number of factors: President
West's extensive 45 years of experience, the studies that had
been made by local management and representatives of the
parent corporation during the 3 years of operations, as well
as the report prepared by the outside consultant. He also
said that the labor agreement had contributed to the
shutdown. The Union's major objection to the 10-month
agreement was that it did not include the expired pension
plan, although on this subject Davis indicated that the
Company would be willing to contribute 10 cents per hour
to be utilized as the Union desired. The second major
objection was the duration of the agreement, the Union
stating that it desired a 2-or-3-year agreement. The meeting
concluded with the understanding that the Company would
review the Union's proposal and the Union would review
the Company's proposal on the subject of interim
agreements.
A bi ief meeting was held on February 11 with regard to
the pension plan. The Company reiterated that the plan had
terminated by its own terms on October 31, and all that
remained to be done was to distribute the fund in
accordance with the terms of the plan. The Union,
however, adhered to its position that the plan had not
terminated in accordance with its terms.
Under date of March 2, the Union wrote to the Company
requesting a copy of the Cyrol report. Attorney Davis
replied on behalf of the Respondent stating that he was
refusing to furnish the Cyrol report because he regarded
that to be inappropriate by reason of the pending charges.
The record does not disclose the level of operations at the
Bay City plant at the time of the hearing. The strike was still
in progress.
C. Contentions and Concluding Findings
It is the contention of the General Counsel, as primarily
set forth in the complaint, that since August 21, 1969, the
Respondent negotiated with the Union in bad faith and
"with no intention of entering into any final or binding
collective-bargaining agreement", that during the entire
course of the bargaining the Respondent approached
negotiations "with a closed mind and a fixed and
unalterable intent to reduce wage rates" and to reduce
and/or eliminate other benefits and working conditions
such as paid holidays, vacation pay, paid lunch period,
bereavement pay, nondiscrimination provision, pension
plan, successor provisions, cost-of-living allowance, job
bidding, restrictions on subcontracting, all past practices
and certain seniority provisions. The complaint further
alleged that the Respondent insisted to the point of impasse
and conditioned continuation of its Bay City operations
upon the acceptance by the Union of the wage rate
reductions and reduction or elimination of existing benefits
1004 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
and working conditions described in the preceding
sentence , and further upon the acceptance by the Union of
the Respondent's demands concerning management's
rights, individual wage increases , assignment of employees,
production standards and work quotas, job classifications,
assignment of overtime, subcontracting, filling of job
vacancies, safety conditions, and scheduling of hours, by
which the Respondent "would arrogate unto itself unilater-
al control over virtually all of the wages, hours and other
working conditions." The complaint further alleged that on
October 21, and thereafter, the Respondent unlawfully
refused to furnish the Union requested data relating to the
Respondent's claim that it must reduce wage rates and
reduce or eliminate existing benefits and working condi-
tions. Finally, the complaint alleged that the Respondent
"undermined the Union's status" as exclusive bargaining
representative by bypassing the Union and sending directly
and individually to employees the October 31 notice
relating to working conditions.
With respect to the allegation that the Respondent had a
closed mind and fixed intent , the Respondent in its brief
admits that it went into negotiations with certain aims and
goals, and continues as follows:
It did intend to keep its costs static if it could, and it did
intend to get flexibility of the work force so as to
operate more as a job shop instead of a production
shop . It also intended to shed the responsibility for
time-consuming and expensive checkoff. (T. 151, 153
194, 332, 385, 392) It intended to let the pension plan
terminate in accordance with its terms, but was
prepared to consider any reasonable alternative, e.g.,
the District 29 pension plan, so long as contribution
cost was fixed. It sought to bring vacation and holiday
pay provisions in line with what it considered
reasonable. It sought to disclaim past practices which
were affecting operations and to which it was not a
party and of which it was ignorant. It sought to limit its
non-discrimination liabilities to what are fixed in the
judiciary instead of what could arise through the
grievance procedure. And it sought to eliminate a
successor clause so that if it ultimately desired to seek
out another party to take over its lease it stood a chance
of not having to sell the labor contract also. In short,
Respondent acted like an intelligent management, for
any management that goes into negotiations not
knowing where it intends to be at the end of
negotiations is (1) not real management , and (2)
generally denuded.
In respect to the alleged unlawful failure to furnish
financial data, the Respondent points out that it never
claimed it was financially unable to meet the Union's
demands, that the Union's request for financial data was
never really pressed or made in earnest and stated in
unequivocal terms, and that the Respondent offered to
make Bay City's records available to independent accoun-
tants with the salaries of officers not to be disclosed. As is
readily apparent from the summary of the contract
proposals set forth in the preceding section, the parties were
widely apart at the outset. The Union proposed that
existing benefits be increased substantially whereas the
Respondent came forward with a new contract format
which enlarged the freedom and unilateral rights of the
Company while at the same time reducing or otherwise
restricting various clauses relating to benefits and working
conditions. McCauley, before negotiations began, recogniz-
ed that the Respondent's proposals would quite likely come
as somewhat of a shock to the Union, and accordingly
arranged a private luncheon meeting with Watts to apprise
him of the general areas in which the Respondent felt it
needed to have relief in order to maintain the operation and
continue in a competitive position.
The basic question underlying decision can be simply
stated but it is not susceptible of a short and simple answer:
Did the Respondent negotiate with the Union in bad faith,
and with the intention of avoiding reaching agreement or
conditioning agreement upon the Union's acceptance of
terms and conditions which the Respondent knew or
should have known where unacceptable to any self-
respecting union.
The principles which govern decision need not here be set
forth in exhaustive detail. Section 8(d) of the Act defines
collective bargaining as "the performance of the mutual
obligation of the employer and the representative of the
employees to meet at reasonable times and confer in good
faith with respect to wages, hours, and other terms and
conditions of employment, or the negotiation of an
agreement, or any question arising thereunder, . . . but
such obligation does not compel either party to agree to a
proposal or require the making of a concession .. ." The
yardstick laid down by Section 8(d) for the measurement of
"good faith" is not rigid but, necessarily, is an elastic
concept having meaning "only in its application to the
particular facts of a particular case ." N.L.R.B. v. American
National Insurance Co., 343 U.S. 395, 410. As the Court of
Appeals for the Second Circuit stated in N.L.R.B. v.
National Shoes, Inc., 208 F.2d 688, 691-692, the problem "is
essentially to determine from the record the intention or
state of mind of the [Employer] in the matter of [his]
negotiations with the union In this proceeding, as in many
others, such a determination is a question of fact
determined from the whole record."2 Moreover, as the
Supreme Court stated in American National Insurance,
supra, 404, it is "apparent from the statute itself that the
. . . Board may not, either directly or indirectly, compel
concessions or otherwise sit in judgment upon the
substantive terms of a collective-bargaining agreement." A
necessary corollary to this principle is that, just as the Act
"contains no authority to force an agreement where the
parties have reached an impasse" (N.L.R.B. v. United Clay
Mines Corporation, 219 F.2d 120, 126 (C.A. 6), so also
refusal to bargain cannot be equated with "refusal to recede
from an announced position" advanced and maintained in
good faith . Division 1142,, Railway and Motor Coach
Employees v. N.L.R.B., 294 F.2d 264, 266 (C.A.D.C.).
Applying these principles, I am persuaded that the
Respondent here has fulfilled its obligation under Section
8(d) and that it, in fact, bargained in good faith with the
Union.
2 See also N L R B v Reed & Prince Manufacturing Company, 205
F 2d 131, 134-135 (C A 1), cert denied 346 U S 887
MANITOWOC COMPANY, INC. 1005
Counsel for the General Counsel argues in his brief that
the Respondent violated Section 8(a)(5) of the Act, in that
even before commencing negotiations it "took steps to
terminate the existing pension plan by sending a letter to
the trustees of said plan that the plan would be terminated
as of October 31, 1969." He argues that the continuation of
the existing plan was a mandatory subject of bargaining
and for the Respondent "to unilaterally terminate the plan
without first engaging in good-faith bargaining with respect
to this subject was clearly a violation of Section 8(a)(5)
without even considering the Employer's adamant attitude
toward other mandatory subjects of bargaining." Similarly,
counsel for the Charging Party states that it is clear that
"pension and other welfare plans survive the expiration of
the contract and cannot be altered without bargaining,"
citing Frank Gallaro and Joseph Gallaro, d/b/a Gallaro
Bros, and G. & G. Foods Co, 172 NLRB No. 107, reversed
on other grounds 419 F.2d 97 (C.A. 2). With respect to these
contentions , it is necessary to note that the Respondent, in
its letter of August 21, stated it was giving notice of the
"termination of the following agreements effective October
31, 1969," and then listed the collective-bargaining
agreement, the advance notice agreement, and "that certain
Pension Plan Agreement dated August 1, 1966, which
agreement expires by its terms on October 31, 1969 (see Sec.
15.1)." Section 15.1 of the Pension Plan provided as
follows: "This Agreement shall become effective as of
August 1, 1966; and shall expire at midnight, October 31,
1969." Moreover, the collective-bargaining agreement
provided, in article XIX, section I, that it "along with the
Pension Agreement, shall continue in full force and effect
. . . until October 31, 1969. . ': Thus, as the Respondent
in its reply brief points out, it did not unilaterally or
otherwise terminate the pension plan but by its notice of
August 21, "was doing nothing more nor less than using the
negotiated and prescribed method of preventing self-
renewals of both agreements." Additionally, counsel for the
Respondent states that "it is elementary law under the
circumstances present here that the Pension Plan was part
of the collective-bargaining agreement, and when it
terminates, so does the plan."3
I am persuaded that the Respondent's action in giving the
notice of August 21, without first engaging in discussions
with respect thereto did not breach Section 8(a)(5) of the
Act, under the circumstances here involved. As I view the
matter, the plan, both by its own terms and the provision
quoted above in the collective-bargaining
agreement-which had been fully negotiated between the
Respondent's predecessor and the Union-was to expire by
operation of its own provisions In my opinion, the August
21 letter was no more than an expression from the
Respondent that it held the view that the plan should be
permitted to terminate and was notifying the Union of this
fact. Of course, this is not to say that upon request from the
3 In this regard the counsel cites United Auto Workers v Textron, Inc,
359 F 2d 966 (C A 6), where under virtually identical circumstances the
union there involved successfully sued for immediate distribution of the
funds accumulated under the expired pension plan
4 As detailed above, the parties held a special meeting on October 14, to
consider the pension plan The Respondent adhered to its position that the
plan was expiring by its own terms and all that remained with respect to it
was for the parties to follow the provisions of the plan pertaining to
Union the Respondent would be free to reject out of hand
any proposal by the Union to consider continuation or
modification of the plan. That the Union was anxious that
the plan continue and be improved, and so stated during
the negotiation meetings, is plain. In response to such
proposals, the Respondent adhered to its position that the
plan had expired on October 31; however, it did offer to
pay 10 cents per hour toward a pension plan of the Union's
own choosing. In explanation of this proposal, the
Respondent pointed out that the offer represented an
improvement in terms of cents per hour over the expired
plan, namely from 6.6 cents to 10 cents, and further
justified its position by stating that its objective was to
achieve in this area a situation where the costs were fixed
and benefits actuarially determined, rather than the
converse as was the situation under the expired plan. In
these circumstances, I think it would be strained to
conclude that the Respondent violated its bargaining
obligations in regard to the action and positions it espoused
regarding a pension program.4
Analysis of the 13 bargaining sessions held by the parties
prior to the strike on October 31, and close study of the
proposals made and positions advanced by the Respondent
convince me that the Respondent bargained in good faith
with a sincere intent to reach an accommodation with the
Union. It discussed the various proposals made by itself
and the Union, sought to reach common ground, and gave
reasoned arguments in support of its position. At various
points it altered certain clauses, granted concessions, and
receded from positions originally advanced. I am persuad-
ed that the Respondent did not have a "closed mind" or
participate in lengthy bargaining with the intent of
forestalling agreement or engage in mere "surface bargain-
ing." I credit McCauley's testimony that at the October 29
meeting, attended by mediator Sanders, "[the parties]
agreed on one thing, we had agreed not to agree up to this
point." I am satisfied and find that the parties had arrived
at an impasse after protracted but good-faith negotiations.
In an effort to avert the impending strike, the Respondent
on October 30, wrote to the Union in considerable detail,
clearly stating its position and altering specific clauses and
proposals previously made in regard to 15 items. Thus, the
Respondent offered substantial changes in wage rates, a
matter which had been a principal area of disagreement
between the parties. Also, it increased the shift premium
and offered to pay the entire cost of the existing insurance
program. I am unable to attribute bad faith to the
Respondent by reason of the fact that it submitted these
revised proposals in writing and on the day before the strike
was to begin. On the contrary, it seems to me that the
Respondent acted properly in submitting written revisions
of its previously offered proposals; certainly this method
gave the Union the exact text of the revisions and thus
allowed it to assess them properly.
termination and distribution in this connection, the Respondent, on
October 16. wrote to the trustee, with a copy to the Union, stating that the
purpose of the October 14 meeting "was to solicit suggestions and to
finalize arrangements with regard to the pending termination " of the plan,
but that the Union "was unwilling to participate in any such arrangement"
and, accordingly, the Respondent requested the bank to "administer the
funds on hand as previous to said date until further notice "
1006 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Nor do I find the Respondent at fault, as urged by the
counsel for the General Counsel, because it issued the
notice to employees on October 31. The changes in
conditions of employment made by the October 31 notice
had been offered to the Union in the letter of October 30.
Inasmuch as the Respondent had stated its intention of
attempting to continue operations in the event of a strike, it
was entitled without falling afoul of Section 8(a)(5) to
inform the employees of the terms under which they would
work during the strike. The Respondent did not foreclose
bargaining but stated that it would "be available to
continue the process of collective bargaining to the end that
a mutually satisfactory agreement on all issues can be
accomplished." In its notice to employees it stated that it
was willing "to meet with the Union any time the Union
specifies, to negotiate an agreement that would be mutually
acceptable." I do not view this as an attempt to "bypass"
the Union or "undermine" its status as the exclusive
bargaining representative. While the interval between the
receipt by the Union of the October 30 letter and the
distribution of the notice to employees regarding conditions
of employment was short, in the circumstances of this case I
do not believe that this factor warrants drawing an
inference of a purpose to violate the bargaining obligations
of the Act.
Assuming arguendo that the Respondent's position with
respect to its economic condition was such that it had the
legal obligation to supply financial data upon appropriate
request, I find that its actions in this regard fulfilled that
obligation. It should be noted, in this connection, that the
Union made its request for financial data in a somewhat
casual manner. The Respondent did not reject the Union's
request but offered to permit an independent accountant to
examine the records of Bay City to ascertain its financial
condition. Since the parent company was admittedly in a
position to underwrite any deficiencies in Bay City's
financial posture as well as any increased costs that might
flow from the bargaining negotiations, the limitation of the
proposed examination to the books of Bay City and the
further restriction that the salaries of officers be not
disclosed, were, in my opinion, reasonable and lawful. I so
find. See George Wick, d/b/a Yakima Frozen Foods, 130
NLRB 1269, affd. in relevant part sub nom Fruit &
Vegetable Packers & Warehousemen, Local 760 (Yakima
Frozen Foods), 316 F.2d 389 (C.A.D.C.).
Finally, we consider the Respondent's decision and
announcement to terminate operation of the Bay City
plant. Counsel for the General Counsel argues that the
Respondent on November 12 decided to close the plant
and, by its telegram of November 14 to the Union,
confronted the Union with a fait accompli without having
bargained in good faith with respect to the decision to
terminate operations at Bay City. Upon a fair reading of the
record, I come to the conclusion that this contention does
not withstand analysis. It must be remembered that the
contract expiring on October 31, 1969, had been negotiated
by Unit Crane and the Union; the Respondent assumed
that contract for its entire 3-year term in August 1966. At
the outset of the bargaining relationship between Bay City
and the Union, President West advised the Union's
committee that the Company "hoped the operation would
be successful so we could continue to operate beyond the 3
years, but we would have to be successful to do that."
Moreover, it appears that the president of the Union stated,
at the outset of the contractual relationship between the
Respondent and the Union, that President West stated that
if the Company did not make a profit at the end of 3 years it
might "pull out" of Bay City. Moreover, during the 1966
negotiations between the Union and Unit Crane, the latter
agreed that it would give to the Union during the term of
the contract proper notification as to "any termination of
activities of this plant." This was to be "on the basis of a
minimum of three (3) and a maximum of six (6) months
prior to such closing." From these circumstances, counsel
for the Respondent argues in his brief that it must be
concluded "that at the very outset of Bay City commencing
operations on November 1, 1966, the union leadership was
well aware of the speculative future in the continued
operations in the premises after October 31, 1969."
Additionally, it must be noted that at their private luncheon
meeting in mid-August 1969, McCauley advised Watts of
the serious concessions which the Company would request
in the upcoming negotiations if operations were to
continue; also, President West came to the first meeting of
the negotiating committees on September 8 and advised the
Union that costs were running in excess of what could be
profitably recovered in competitively fixed selling prices.
Information of this character was repeated several times
during the negotiations and at one point, McCauley stated
that losses during the past 2 years had been several million
dollars. After the strike began on November 1, President
West and McCauley met with union officials the evening of
November 6. At that time, West stated that if the Company
were going to continue operations in Bay City it would be
necessary for negotiations to proceed on the Company's
proposal. It will be recalled that McCauley met privately
with Watts on November 7 in a meeting also attended by
the subdistrict director of the Union, Reinhart, in an effort
to obtain a contractual settlement. It was at this meeting
that Watts, referring to the union contract that had just
expired, stated "it has got to be this and more and more and
more." As McCauley prepared to leave this meeting he told
the union representatives that he would have no choice but
to recommend to the board of directors that the Company
take affirmative steps to close the plant.
It is against this background that McCauley on or about
November 12 went to Manitowoc at President West's
request and conferred with West and other officials. As a
result of this meeting the conclusion was formed that efforts
should be made eventually to close the Bay City facilities.
In consequence, the Company sent the telegram of
November 14 to the Union, advising "of the intention of
Bay City-Manitowoc Corp. to take steps to terminate
operations," a program anticipated to last several months,
and offering to "discuss with you the effects of this
termination" on the members of the Union "as well as any
matter in dispute."
While it may be technically true that the Respondent did
not offer to discuss the proposed decision to terminate
operations in Bay City prior to sending the telegram of
November 14, I am persuaded that a fair appraisal of the
entire record and the course of the negotiations from early
MANITOWOC COMPANY, INC. 1007
September until early November supports a finding that the
possible termination of Bay City operations was ever-
present in the minds of the negotiators for the Union and
the Company and that this subject was discussed during the
negotiation sessions repeatedly. In these circumstances I
think it would be exhalting form over substance to hold that
the Respondent violated Section 8(a)(5) of the Act by
failing to discuss its decision to terminate operations in
advance of finally so concluding. Accordingly, I shall
dismiss this allegation of the complaint.
As found above, the parties met on November 25 at
which time the Union tentatively offered concessions in
several areas in an effort to compose the differences. This
meeting proved unsuccessful in arriving at a contract. It
was not until after this meeting that the Respondent, on
November 26, gave Unit Crane notice that it would vacate
the premises at the earliest date it legally could do so,
namely, November 30, 1970. Thereafter the parties met on
January 8, 1970, and February II in an effort to negotiate
arrangements that would be in effect until occupancy was
terminated on November 30, 1970. It is also of some
significance that during this entire period at no time did the
Union take exception to the Company's termination plans
or attempt to dissuade it from proceeding with them. Under
the circumstances here, I think it fair to conclude that the
closing of the Bay City plant was an action dictated by
pressing economic necessity. Cf. New York Mirror, 151
NLRB 834, 841. When coupled with the fact that the Union
exhibited no interest in the subject of plant closing, but
pressed only for the objective of obtaining a new contract
essentially on its terms, the conclusions is warranted that
the Union waived its right to bargain on the plant closing.5
See, e.g., Young Motor Truck Service, Inc, 156 N LRB 661,
662-663. See also N. L. R. B. v. Thompson Transport Co., Inc.,
406 F.2d 698 (C.A. 10); N. L. R. B. v. Transmarine Navigation
Corp., 380 F.2d 933 (C.A. 9); and N.L.R.B. v. Royal Plating
and Polishing Co., Inc., 350 F.2d 191 (C.A. 3).
Upon the foregoing findings and conclusions, I find that
the Respondent has not engaged in any conduct violative of
Section 8(a)(5) or 8(d) of the Act. Accordingly, I shall
recommend that the complaint be dismissed in its entirety.
Upon the basis of the foregoing findings and the entire
record in the case I make the following:
CONCLUSION OF LAW
1. Manitowoc Company, Inc, and its wholly-owned
subisdiary, Bay City-Manitowoc Corp., are employers
engaged in commerce within the meaning of Section 2(2),
(6) and (7) of the Act.
2. Local Union 1876, United Steelworkers of America,
AFL-CIO, is a labor organization within the meaning of
Section 2(5) of the Act.
3. The Respondent has not engaged in any acts
constituting unfair labor practices within the meaning of
Section 8 (a)(1) and (5) of the Act.
RECOMMENDED ORDER
Upon the basis of the above findings of fact and
conclusions of law and upon the entire record in the case, it
is recommended that the complaint herein be dismissed in
its entirety.
5 Indeed, Watts in his pretrial statement to the Board said "My charge
against the Company relates to the position that the Company has taken
up to this point when they advised us about the plant closing I am not
contending that the Company failed to give due notice on their intention to
close the plant or bargain in bad faith about it "