‘Cadillac’ of water heaters
New contract delivers gains at Bradford White
The previous relationship between members of UAW Local 1002 and water heater
manufacturer Bradford White was a lot like trench warfare in World War I: a lot
of dirt flying around, many casualties and not much progress.
Competitors, with their cheap water heaters coming in from Mexico and overseas, would use the term “potential labor unrest” to scare customers away from Bradford White products. Health care costs continued to skyrocket. Grievances in 2005 numbered more than 500 at the Middleville, Mich., plant.
The local realized they needed a new relationship with management so they could focus on building the best water heaters – and the only ones made with 100 percent union labor in the United States.
So they took a chance on “interest-based bargaining,” a concept that draws both sides together to seek consensus and build trust. They took the idea to the company, which also realized its days were numbered without drastic change. Both sides agreed to undergo two days of training with the U.S. Federal Mediation and Conciliation Service.
“We knew we had to take a different approach,” said John Tobias, Local 1002 bargaining chairman. “You sit down, and you realize that you’ve got problems and you work things out.”
The result: A seven-year agreement ratified in March that provides: solid wage and benefit gains to the 862 members of Local 1002; protection of retiree health care; stability for the company; reinvestment in the facility; a dramatic drop in grievances; a sharp decrease in lost time; a renewed commitment to training and health and safety; and stability for the company.
But both parties gained something more: a relationship built on trust and communication so they can solve their everyday problems without always resorting to “tit-for-tat” reactions to workplace problems.
“We collectively agreed that we all want to make a good living and have good benefits,” said Eric Lannes, Bradford White’s vice president and general manager.
Or, as Local 1002 President Terry Delp put it, “The only cussing around the table was directed at our son-of-a-bitching competitors.”
That cussing is justified, when you consider that Bradford White’s competition manufacture much of their product lines in Mexico or China with low-wage labor. Health and safety and environmental standards are minor obstacles in these nations.
So what is “interest-based bargaining?” It isn’t passing demands across the bargaining table until one side finally relents. There are no caucus meetings to hash out the latest proposal from the union or the company. The company and union negotiators sit together instead of facing each other at the table.
Everyone at the table gets their say and anyone on the joint committee can stop a proposal. But they had better be prepared to discuss their objection in detail.
“Every person at the table had to say, ‘We can live with that,’” Delp said.
Negotiators set some common standards for their positions on various contract issues and asked questions such as:
• Will members and the board of directors accept it?
• Is it legal?
• Is it affordable?
• Is it practical?
• Is it administratively efficient?
• Is it flexible?
• Is it simple?
A facilitator was brought in to keep both sides on track when the discussions stalled.
The bargaining team also had to have trust in each other. They signed confidentiality agreements so union members could learn the true financial condition of the company. The bargaining committee had to sell a skeptical membership on the contract after years of mistrust. It passed on a 3-to-1 margin.
The company earlier this year won a new J.D. Power award for customer satisfaction for water heaters. And in May the Kalamazoo Area Labor management Committee honored the union and management for their collaborative efforts.
Not all is perfect in the western Michigan plant. The competition has unfair trade advantages, and without a national health care system, the cost of health insurance continues to sap resources that could be used for wage increases, reinvestment or profits. Both sides know they must continue to talk and allow the new relationship to grow.
They realize there will be problems along the way.
But they did reach out to each other, and this time it wasn’t for each other’s collective throats.
