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Unions and Deregulations: Some Lessons for Utilities

Fortnightly Magazine - September 1 1996

the Federal Communications Commission. This investigation led to a $1.4-million fine and a refund of $35 million in allegedly excess profits. In a post mortem of the 1989 NYNEX strike, CWA emphasized the importance of intervention in regulatory proceedings. Of particular significance to utility restructuring, and reminiscent of ALPA's successful pressure on United to return to its core business, CWA also highlighted its opposition to NYNEX's use of the regulated telephone business as a "'cash cow' for its unregulated subsidiaries" as part of "schemes to ... reduce the unionized workforce through attrition, contract labor, and shifting growth to unregulated subsidiaries."3 Bell Atlantic's similar effort to break the pattern in 1995 provoked another CWA corporate campaign and, eventually, preservation of the pattern.

In an ironic twist, NYNEX and Bell Atlantic announced their merger shortly thereafter. In a recent interview, CWA president Mort Bahr indicated that his union would not oppose the merger. However, he also stated that the CWA would seek a successorship agreement and affirmation that the merged company would adopt NYNEX's neutrality agreement. According to Bahr, NYNEX agreed not to oppose CWA attempts to organize NYNEX's cellular business.4 In that same interview, Bahr indicated that CWA was trying to obtain successorship and neutrality agreements with AT&T, which would allow the union to follow AT&T's investment in other businesses. CWA's interest lies in AT&T Wireless, where the union sees growth; meanwhile, the unionized company continues to shrink. Because AT&T has refused these demands, CWA is threatening a campaign of advertising, leafletting, and boycotting focused on AT&T Wireless.

Railroads: A Long Haul

to Profitability

Railroads were substantially deregulated in 1980. As in the airline and trucking industries, the railroad business subsequently became more concentrated. Today, more than 80 percent of the nation's rail lines and employees are found in five carriers,5 which have experienced increased competition both among themselves and from the deregulated trucking industry.

The major railroads have historically bargained nationwide on a multi-employer basis. This bargaining structure has largely succeeded in keeping wages and benefits uniform across the industry. Rather than seeking wage and benefit concessions from their unions, railroads have sought to reduce their labor-cost structure by improving productivity through work-rule relief, buyouts of employees rendered surplus by work-rule changes, and merger efficiencies. These work-rule changes largely were achieved after two brief rail strikes in 1991 and the intervention of Congress to impose labor settlements. Unlike other industries, the railroad industry can seek government intervention under the Railway Labor Act to end or head off a strike.

Beginning in the late 1980s, some regional railroads attempted to break away from the national pattern and negotiate collective bargaining agreements more suited to their particular competitive situations. These efforts caused significant strikes that were resolved only after additional government intervention.

Major railroads have also responded to the new freedoms of deregulation by selling off portions of their rail systems with less traffic to new, largely nonunion, startup railroads, which feed their traffic to the major carrier. The rail unions vigorously resisted these efforts for more than 10 years. In particular, the unions