1979–1980 International Harvester strike
[4] The 1950 master contract also codified an existing practice whereby a worker could transfer to any other job in the company provided he or she was the most senior applicant for the position.
[4] By the late 1970s, International Harvester had come to believe that unlimited transfer rights were being abused and creating productivity problems.
[4][10] The proposals were aimed at largely ending job transfers and seniority, adding five shifts a week, and instituting a mandatory overtime scheme; the company claimed it had lost $1.3 billion over the previous three years over these issues.
[5] Surprisingly, however, IH agreed to match the pay increase pattern set earlier in the year by automobile manufacturers in Detroit.
[16] Less than a week later, International Harvester reported on August 15, 1979, record sales and earnings for the first nine months of fiscal 1979.
[22] Another 17,000 Caterpillar workers struck on October 28, and IH officials suggested that the UAW would be too financially exhausted and organizationally stretched too thin to engage in a third strike.
[1][7][26] But McCardell was not alarmed, seeing the strike as a way to challenge the union's power in the workplace[1][25] and as an opportunity to improve efficiency by regaining concessions the company had made in the past.
[31] Days later, International Harvester announced a year-to-year increase of 98 percent in its profits for the entire fiscal year.
[31][33] To help weather the strike, International Harvester's top 25 officers took 20 percent salary cuts, travel expenses were curtailed, meetings were cancelled or moved to company offices, the budget for the annual stockholders' meeting scaled back, advertising spending curtailed, capital spending slashed by $100 million (to $400 million),[25] and a new line of credit established to provide access to emergency funds (if needed).
[4] The memo outraged the union, which felt the company had intended to bargain in bad faith over its contract extension proposal.
[25] While International Harvester was forced to cut costs, the United Auto Workers improved its financial position.
The United Auto Workers, which owned six shares of Harvester stock, accused the company of deliberately selecting a meeting hall which was too small to accommodate the number of union members who would be voting those shares and issuing too-few tickets to permit admission for the union members.
[38] The union filed an injunction in United States district court to force International Harvester to admit its members.
"[40] On February 20, the union obtained a court order requiring International Harvester to set up closed-circuit television facilities so members of the UAW and other shareholders could observe the meeting.
[41] But when the meeting opened with about 200 seats still empty, McCardell delayed proceedings for an hour as 175 UAW members were brought from the hotel to the First Chicago Center.
[45] In yet another cost-cutting move, 8,000 of the company's 10,000 salaried and management employees were forced to take a week's vacation due to low workloads.
[46] Rumors of yet another management pay cut came amid signs that the company was planning to sell its construction equipment business to raise money.
[46] Mounting losses and the arrival of farm implement sales season kept the company at the bargaining table and led to agreements on a short-term layoff provision and the job-transfer issue.
According to the Associated Press, full-time workers and retirees could volunteer to become part of a special overtime pool which could be drawn from to fill vacant weekend work shifts.
[12] Amid calls to submit the unfinished tentative agreements to the membership for ratification and halt the strike, the 300 members of the International Harvester council of 51 local unions overwhelmingly rejected any such proposals.
[13][49] Because the job transfer, new plant contract extension, and the piece worker issues were all still outstanding,[13][50] the council felt it could not recommend ratification.
[13] The company agreed, feeling the six large locals—located in East Moline and Rock Island, Illinois; Fort Wayne, Indiana; Springfield, Ohio; and Louisville, Kentucky—were "the key" to ending the strike.
The day after the decision, Cletus Williams, chairman of the UAW bargaining council, announced that his union—Local 1357 in Canton, Illinois—would take a non-binding vote on the unfinished contract by the end of the weekend.
[57] After two days of bargaining, International Harvester and the United Auto Workers reached a tentative agreement on the national master contract on April 16, 1980.
[12] The contentious issue of limitations on the number and type of job transfers was dropped from the master contract and addressed to varying degrees in plant-level agreements.
[65] Several small UAW-represented craft unions which were not part of the master contract talks continued to strike at IH's Louisville plant.
[65] The large blue-collar locals refused to cross the picket line (which was their right under the contract), keeping the plant shut.
[7][66] The company confirmed earlier rumors and put its Scout utility vehicle division up for sale to help cover the losses,[66] and by the end of April 1980 was forced to take out loans which increased its short-term debt from $442 million to a staggering $1 billion.
[2] Rising interest rates, demand weakened by the early 1980s recession, and high manufacturing costs pushed the company's total debt to a whopping $4.5 billion.
[2][6] On January 20, 1982, the UAW rejected Harvester's request for concessions because McCardell had just given $6 million in bonuses to salaried employees.
