# American Company Unions/Chapter 3

III
WHY COMPANY UNIONS ARE INSTALLED.
The Chief Aim.
The aim of the company union, expressed in the very broadest sense, and in the language of the employers, is to secure some kind of "cooperation in management" between workers and employers. There may be a score of subsidiary aims and objectives but the average employer hopes to gain some sort of cooperative relationship with his workers when he puts in a "plan." In dealing with his workers in this way the employer naturally has no use for a real labor union, in other words, a union over which he cannot have complete control, For ​a trade union, no matter how conservative it may be—and no matter how reactionary its leaders,—may, upon occasions, make wage demands or ask for hours and conditions which the employer refuses to grant. The struggle for the surplus value of labor's toil is always implicit in any "employer-employee situation," as it is called. A union, not under the thumb of the employer, cannot always be depended upon to obey his commands and carry out his wishes. Hence his preference for his own kind of committee. Hence the opposition of trade unions to company unions. Hence the efforts of the employer when confronted with trade unions, to try to break them to pieces and to introduce his "functional" company committee.
In this section we shall examine some evidence which will help to explain why the employer installs company unions and why he uses them to undermine every other kind of union organization.
One student of the problem, E. J. Miller, of the University of Illinois, explaining the rapid increase in the number of plans in 1918–1919, says:
"Labor problems were becoming more and more acute all thru the country. Industrial unrest was at its height, and the number of strikes was increasing rapidly. Labor turnover was a serious problem to many concerns."
This observation has been made by others including a dozen or so college professors who have looked into the development and growth of company unions during this period. Underlying all other motives ran that common fear of labor organizations and a desire to find a substitute that would, the employer hoped, satisfy the restless workers.
The Employers' Interests Primary.
Certain unmistakable assumptions underlie the company union, They appear again and again in the literature describing it. For example in A Works Council Manual, issued by the National Industrial ​Conference Board, we read that "the company's interests are of primary concern in the joint meetings, and accordingly compensation of the employee representatives by the company may be reasonably expected." The "company's interest" is thus frankly stated to be the first concern of these "mutual arrangements" and "industrial democracy" plans. It is only natural that the workers should be compensated for working in the company's interest. The significant fact is that so completely are they hypnotized by the catch-phrases of the company's "human relations" salesmen that they perform their committee service gratis, or at least for no higher compensation than they receive on their regular jobs.
To Offset the Union.
"A large employer of labor who organized a shop committee has told me recently that the whole aim of the shop committee movement is to head off unionism. That, he pointed out, was its principal merit," writes John A. Fitch in his Causes of Social Unrest. The same writer, who has had some opportunity to know the mind of the employer in its franker moments, records an incident which is typical:
"In a meeting of employment executives … the director of personnel of a large employing concern advised his fellows to encourage the formation, of apparently democratic organization of employes. 'But of course,' he said, 'never let these organizations get out from under your control. Let the employees think they are running them, but be sure always to keep them in hand'."
Still another instance, cited by the same social investigator, will throw light on the motives of employers when they turn to "shop committees" to save themselves from labor unions:
"The supervisor of welfare work in another large institution once said to the writer in speaking of the election of representatives. 'Of course we let the workers think that ​they are selecting their own representatives, but actually we select them'."
Rubber Stamp Committees.
Says W. D. Moriarity, professor of economics. at the University of Washington, who has apparently looked into the shop committees with some care: "It is one of the triumphs of the employers' unions (that is, associations confined to one concern or one line of business, and fostered by the employers as a way of getting their men out of control of the American Federation of Labor) that they have been able to use the shop committee … to get more and more control over their labor"” He says further that the committee is often "just a 'rubber stamp' to satisfy the men that they are having something to say about things and a way of meeting their employers to present grievances or requests."
Another student who made a survey of some 175 plans in operation concluded, after he had weighed the evidence from all the companies, that "employee representation systems are not organized to give employees means for exerting economic pressure. When they take advantage of the opportunity to do so, the plan is usually abandoned."
It should be observed also that many of the plans lie more or less dormant when there are no strikes on the horizon, but in time of industrial disturbance they are revived and dressed up to fool the worker again and keep him away from the real trade union. Should a strike come before the plan has been installed; it will frequently be introduced immediately after the strike is broken, with the strikebreakers as charter members! One company, the Standard Gas Engine Company of San Francisco, after inaugurating such a plan after a strike had been smashed, reports that its shop "is now` ​being operated under the American Plan manned by clean-cut and loyal Americans of a high order of intelligence." Other company superintendents have in public and private described the company union "as an excellent buffer against organized labor."
A Bit of Oil History.
Mr. B. H. Sinclair, an officer of the Midwest Refining Company, told a conference of employers in 1924 why he thought their representation plan, installed in 1919, had been such a "wonderful success." The anti-union role of the company committees is illustrated in his remarks:
"We had a great deal of trouble in the Midwest Refining Company with unions up to two or three years ago. An international president of the oil field workers' union then came into our field, containing probably 4,000 oil field workers, and set up shop with two assistants. At the end of three months he had 388 members and those 38 were out of it in three or four months. That is an indication of what the plan will do." (Emphasis mine—R. W. D.)
Employers as Labor Leaders.
The Chief Engineer of a large machine manufacturing company also expresses this common object of the company union:
"It may help in keeping out outside professional agitation; anything that will counteract that kind of a force is worth trying."
The same engineer goes on with brutal frankness to show just how the committee can be used to suit the employer's purposes:
"The committee will not do much harm because after the first outburst of enthusiasm has worked off its steam, the committee will be indifferent as all committees are, and like putty in the hands of a clever leader. Then it is up to you (he is addressing the employers—R. W. D.) to lead the leader—in other words, see that he realizes what the business is for and what is best for it."
"Passing On" the Wage Cut.
An Interdenominational Committee on Industrial ​Relations which studied the company unions in several plants in 1924 found among many of the workers a strong feeling against the works council. The workers told this committee in many instances that wages and conditions were still determined exclusively by management and that the only function of the company committees was to pass the wage cut on to the men, with the least disturbance. As one worker expressed it: "The company will give us just what it wants to give us, councils or no councils." We shall note later how really practical and useful the company association has been, in dozens of instances, in inducing workers to take wage reductions without resistance, if not without complaint.
Strike-Breaking—Union-Smashing.
All thru the literature dealing with the company unions we read of workers who, because of a "plan," refused to strike or, if they had struck, returned to work sooner than the rest of the workers in the community. The Goodyear Tire and Rubber Company's company union, which calls itself a "Republic," and its citizens, "Industrians," holds its meetings in a million-dollar club house. It reported some years ago with enthusiasm, "When a machinist strike was called in Akron recently, only 40 per cent of the Goodyear machinists responded. In a few weeks they returned to work." The "Republic" had functioned efficiently as a strike-breaking machine.
Indeed, so well is the main purpose of the company union understood to be the liquidation of labor unions and labor union strikes that a scribe for the New York Trust Company, commenting on the growth of the company union, said in 1925, "The rapid growth of works councils suggests the possibility that their development, by recognizing the ​mutual interests of employers and employees, has to a great extent removed the necessity for unionism." And where labor unions have to be destroyed, the company association has proved of great value to the employer. Scores of "plans" have been installed during or at the close of unsuccessful strikes. Refusing to deal with the trade union, the employer must frequently offer his workers a substitute "collective bargaining" on another platter. The Western Union Telegraph Company, the Pennsylvania Railroad, the Amoskeag Manufacturing Company, du Pont de Nemours & Company, Washburn-Crosby Company, Westinghouse Electric and Manufacturing Co., and the leading meat packing companies are illustrations of the types of corporations, the shop committees of which have been used as effective instruments in "liquidating" trade union organization among their workers.
"Promoting Efficiency."
In the shops where the presence or threat of unionism is absent, the chief general purpose of the company union is to promote efficiency and get more work out of the workers. The tendency is for a large number of grievances to be settled soon after the introduction of a plan, but these gradually recede in importance. This tendency is described by the Assistant to the President of the Bethlehem Steel Corporation, writing in Factory, in 1925:
"Grievances, in importance, are rapidly being replaced by constructive operation problems, covering such subjects as increased production, better quality and service."
And Harold Swift, Vice President of Swift and Company, writes in the same journal, that:
"the attitude of our assembly has broadened so as to include practically all matters of interest to employees' welfare without undue prominence to wages, hours, or grievances."
​While the President of the Knox Hat Company brings out the same development:
"Grievances of the personal type such as those having to do with wages, hours of work, working conditions, and so on, have practically ceased. Those that the council now discusses are more likely to do with tools and machinery of production. … That, of course, suits us perfectly, for it means greater production and lower costs."