Reference no: EM13143111

My recollection may be skewed, so for our purposes, consider this example a hypothetical, but this is my recollection of a real case. In the early 80s, in Salt Lake County, Utah, a dispute arose involving the "largest open-pit copper mine" in the Western hemisphere, run by Kennecott Copper Corporation. Kennecott had recently been acquired by Beatrice, a conglomerate of many diversified interests. The collective bargaining agreement between Kennecott and its employees at the mine and smelter was nearing its end date. Negotiations were under way for a new agreement. The United Mine Workers union handled the negotiations on behalf of labor, with national representatives flying in to do so. The talks turned ugly. Neither side would budge. Management stood fast that given the economic climate and their financial condition, hourly wage increases requested were impossible. Union workers were averaging wages in the $25 to $30 dollar range already, and there was no way profit was possible at that rate. The mine would have to be shut down rather than giving in to such demands.

The UMW did not budge. The national scope and interest of other geographic areas was at stake. If the union gave in here, what would the ripple effect be in the North, South, and East? Literally, there was an impasse.

Beatrice made an executive decision. Negotiations were cut off. The mine was closed. The result was that 2,000 workers, on the upper end of the local labor demographic were laid off. Some were able to move to other areas of the country and find work, but most were not. The entire local economy was affected. Workers now had to find work for which they were unskilled, and at a low wage, minimum or just above. According to union rules, the mine had to remain closed for a three-year period, or the labor force must be unionized again. Beatrice did that. They used the hiatus to re-engineer the mine, automated the equipment and operation at the cost of millions of dollars, and opened the mine after the required down time. From then until now, with a labor force of under 600 non-union workers working at medium-level wages, Kennecott has operated a successful "for profit" operation, competing with international companies world wide.

Although this introduction is long, the questions to which I would like comment are,

1. "Who, if anyone, do you think did the right thing, and why?"

2. "Do you think the government (NLRB or another) should have intervened and forced an agreement?"