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Unions and Deregulations: Some Lessons for Utilities

Fortnightly Magazine - September 1 1996

wind up with a greater say over the direction of their employers than their counterparts in any other industry.

Trucking: Confrontation

a Rocky Road

As in the airline industry, trucking once operated under economic regulation of entry, exit, and pricing. Before trucking deregulation in 1980, the Teamsters union had largely succeeded in establishing uniform wages and benefits through national and regional master freight agreements covering most major trucking companies. There were few strikes. After deregulation, the industry faced stiff competition from new, nonunion entrants and from the expansion of existing nonunion firms. Although the Teamsters granted some concessions to failing unionized firms to preserve employment, the 10 years following deregulation plunged hundreds of trucking firms into bankruptcy. Many of these were liquidated. By some estimates, union coverage plummeted from about 60 percent in the 1970s, before deregulation, to about 25 percent by 1990.

Today, all the dominant carriers in the truckload segment of the industry are nonunion. However, in the less-than-truckload (LTL) and package-delivery segments, where the capital requirements of the typical network of hub-and-spoke distribution centers create a greater entry barrier, seven of the top 10 firms of 1979 have disappeared, and five unionized carriers dominate.

The major LTL carriers have sought to improve their

competitive position by seeking more flexible contracts with the Teamsters and by forming nonunion trucking subsidiaries. The major trucking firms (em which bargain on a national, multi-employer basis with the Teamsters (em launched a major push in 1994 to obtain significant contract concessions. This effort led to a 24-day nationwide strike in April 1994, which significantly weakened both the unionized firms and the Teamsters. The carriers estimate that the strike cost them, collectively, $1 billion in addition to market share lost to nonunion firms.

The Teamsters have also launched new organizing initiatives, especially at Overnite, the largest nonunion LTL firm. As the target of one of the Teamsters' first corporate campaigns, Overnite has suffered several union election victories, two changes in chief executive officer, and a worsening financial situation.

Telecommunications: Merger Bends

to Labor's Voice

The telecommunications industry has undergone significant restructuring due to the breakup of AT&T and the emergence of new, nonunion competitors to AT&T's long-distance service, notably Sprint and MCI.

During this period, the principal unions in the telecommunications industry, the Communications Workers of America (CWA) and IBEW, have been able to establish pattern agreements at the Baby Bells and AT&T. Efforts to depart from the pattern agreements have met with stiff resistance. NYNEX, for example, attempted to break away and obtain concessions during bargaining in 1989. In addition to a bitter four-month strike, CWA and IBEW mounted a comprehensive corporate campaign against NYNEX. CWA claimed to have spent $28 million on its efforts. The campaign included harassing company officials and outside directors, organizing consumer boycotts and mass demonstrations, and intervening in legislative and regulatory proceedings, such as opposing a $360-million rate increase NYNEX sought from the New York Public Service Commission. The rate increase was denied.

The unions were also responsible for allegations regarding transactions with affiliates, leading to an investigation by