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Atlantic Baking Group B.C.T.G.M. Local 12 I.U.O.E. Local 95. Bloomfield-Garfield C.D.C. F.M.C.S. – Pittsburgh Steel Valley Authority. APEC SYMPOSIUM. CASE STUDY Mexico City, Mexico. A.B.G. Presenters. William T. Cagney – Business Manager, I.U.O.E. Local 95 – 95A; Pittsburgh, PA

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Atlantic Baking GroupB.C.T.G.M. Local 12I.U.O.E. Local 95

Bloomfield-Garfield C.D.C.

F.M.C.S. – Pittsburgh

Steel Valley Authority

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Mexico City, Mexico

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A.B.G. Presenters

  • William T. Cagney – Business Manager, I.U.O.E. Local 95 – 95A; Pittsburgh, PA

  • James Crawford – Director of Manufacturing, Steel Valley Authority; Pittsburgh, PA

  • Robert S. Ditillo – Commissioner, U.S. Federal Mediation & Conciliation Service; Pittsburgh, PA

  • Ronald Pepperdine – Vice President Operations, Atlantic Baking Group, Inc.; Pittsburgh, PA

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Discussion Agenda

  • General Background

    • Organization

    • Labor-Management relations

  • L-M Cooperative Initiative

    • Initiative objective

    • Promotion of initiative

    • Initiative structure & processes

  • Lessons Learned

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A.B.G. BakeryPittsburgh, PA – U.S.A.

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Steel Valley Authority

  • An intermunicipal public agency incorporated under the Municipal Authority Act of 1945 and governed by a board with representation from twelve member communities.

  • Funded by the Pennsylvania Department of Labor & Industry - Dislocated Worker Unit to avert layoffs and business failures as part of the rapid response program.

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Strategic Early Warning Network

  • A team approach working with public and private economic development groups on business failures resulting in layoffs.

  • Comprehensive Professional Services

    • Business Plans

    • Financial Restructuring

    • Operations Reviews

    • Labor-Management Relations

    • Succession Planning

    • Employee Stock Ownership Plans

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The Labor-Management Problem

  • How to avert a plant closure by developing a new bakery business?

  • How to compete for scarce public and private capital resources as well as managerial resources in a global economy?

  • How to reinvent the daily workplace practices of the bakery to again become competitive in the cracker industry?

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Reinventing the Workplace: Previous Conditions

  • Branded product with a monopoly position in the marketplace commanding very high prices and profits.

  • Multinational, conglomerate, heavily leveraged corporation with multiple tiers of management in the organizational structure.

  • Production heavily managed and controlled by professional, non-union personnel.

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Previous Conditions

  • A top-down, corporate wide attempt to improve the competitiveness of the company through training and a more active labor-management committee process was abandoned. This led directly to the downsizing of the company and the closure of the plant as an alternative means of improving profitability.

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Previous Conditions

  • Very high wages with compressed labor rates such that there was very little differential between the highest and lowest paying jobs.

  • The frequent use of union seniority to seek out the easiest jobs rather than ones requiring increased skill, responsibility, and knowledge of the production process.

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New Situation

  • ABG to manufacture a private label cracker product in a highly competitive market with low profit margins.

  • Start-up company with a large amount of equity investment and a very shallow management structure.

  • Extensive investment in new equipment and product development required.

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  • Traditional high-wage, heavily managed model of labor-management relations?

  • Low-road, low pay, heavily managed model of labor-management relations?

  • High-road, competitive wage, high-performance model of labor-management relations with decision-making and responsibility shared with the workforce?

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Forging a Labor-Management-Government Partnership

  • Maintaining the trust of both labor and management in order to be effective.

  • Providing guidance about public assistance.

  • Providing leadership at critical junctures.

  • Listening to others and attempting to understand the business in historic, economic, and moral terms.

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Training Fund

Local 95 Program

Customized for bakery

“Lead Worker” Training

Benefits of an Internal Work Force

Budget Preparation

Computer Application

Energy Conservation

Health & Safety

Human Relations

Planning & Time Mgt.

Recommended Skill Levels

Record keeping

Reports & Presentations

Initiative - Structure - Processes

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Profit sharing

Lease on Plant





FMCS Grant

Committee Effectiveness Training (C.E.T.)

Initiative - Structure - Processes

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Independent Federal agency

Created by law in 1947

Neutral assistance to L/M community

Dispute resolution



Grant Overview

To joint LMC

Grant Award

To assist in training initiative

F.M.C.S. Involvement

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C.E.T. Assessment

To I.D. skill needs

Training Program development

C.E.T. Focus

Group processes

Joint problem-solving

Team based decision-making

Training Modules

Effective Planning

Effective Meetings

Group Problem Solving

Consensus Decision Making

Effective Communications

Understanding others

Interpersonal Skills

Shared Leadership

In progress

F.M.C.S. Involvement

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Lessons Learned

  • The labor-management committee needed to be more involved in the planning for the production equipment to be installed.

  • Primarily because of the historical association of the labor-management committee process with only daily production activities this was not done.

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Lessons Learned

  • Every aspect of the design and equipment used in the plant as well as the terms and conditions of the labor contracts needs to support the strategy selected to compete in the marketplace to the fullest extent possible in order to be successful.

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Lessons Learned

  • Continuation of government involvement & oversight

    • SVA - FMCS - BGCDC