THE NEW STRIKE FORCE: Unions have become much more sophisticated in dealing with the media, causing companies and their PR forces to reinvent the way they communicate during labor disputes. Julia Hood reports

Oregon Steel's stock price rose as high as dollars 28 a share in 1997, but in December 2000 it bottomed out at dollars 1. The company hasn't recovered from a 1997 strike by United Steelworkers of America, which levied a major campaign to sway public and shareholder opinion.

Oregon Steel's stock price rose as high as dollars 28 a share in 1997, but in December 2000 it bottomed out at dollars 1. The company hasn't recovered from a 1997 strike by United Steelworkers of America, which levied a major campaign to sway public and shareholder opinion.

Oregon Steel's stock price rose as high as dollars 28 a share in 1997, but in December 2000 it bottomed out at dollars 1. The company hasn't recovered from a 1997 strike by United Steelworkers of America, which levied a major campaign to sway public and shareholder opinion.

'Labor issues have definitely impacted stock,' says analyst John Roger with DA Davidson in Portland. 'While it is hard to pinpoint what the union's PR campaign has cost the company, the disruptions have had an impact.'

United Steelworkers' Web site declares: 'The company's unwillingness to negotiate a fair contract with union workers has coincided with stock prices falling to record lows.' The union has also pressured banks and government agencies not to do business with Oregon Steel.

Welcome to the new labor movement. Technology and research have joined the more traditional tools - placard waving, chanting and fund-raising - yet union PR power is frequently underestimated. 'Companies think, 'Oh, you have no power, you're a worker,' ' says Denise Mitchell, the AFL-CIO's assistant to the president for public affairs.

Labor unions have developed sophisticated research operations and investigate every aspect of a company, from its board members and the other companies with which they're involved, to its major shareholders. Unions are even retaining analysts to scrutinize financial reports and find areas of weakness to highlight to the media.

Picketing has spread beyond the gates of the principal company - demonstrators now go so far as to protest at the annual meetings of board members' companies.

Web sites for airing grievances and passing along information enhance the union's ability to reach far beyond its own membership. And unions excel at cultivating support from third party organizations, such as churches and environmental groups.

'In many cases, management has no concept of how to deal with unions, including how to meet them head-on with communications,' says Mike Dowling of the PR firm Dowling, Langley & Associates. His agency is retained by the Delta Air Line Pilots Association, which is currently engaged in tricky contract negotiations.

Union membership has declined from about 22 million in the 1980s to about 13 million today, forcing the labor movement to be more strategic. 'The unions felt the necessity to become more sophisticated or lose battles,' says Dowling.

As a result, unions have become better media manipulators. 'In the old days they would make a union organizer take on the additional duty of dealing with reporters,' Dowling says. 'Now unions hire people to handle the media, including PR agencies and journalists. The game is changing.'

Unions are also looking for new constituencies. Members of Delta's pilots association, for example, have reached out to travel agents during ongoing contract wranglings. 'It's a different kind of communication,' says Jane Langley of DL&A.

Companies have had to quickly learn about the persuasive power of the labor movement, or risk losing the PR battle when a strike is called.

Dowling says UPS is a company that underestimated the burgeoning sophistication of unions. 'My perception is the union was way out in front in that strike,' he says. 'It looked like UPS was caught unprepared.'



The UPS case

When 190,000 Teamsters nationwide walked off their jobs at UPS in August 1997, the company's seven-person PR department fielded more than 20,000 phone calls over 20 days. Realizing too late that it had not adequately prepared, UPS was forced to operate from a defensive position.

'We had had dozens of negotiations with Teamsters and hadn't had a strike,' says Ken Sternad, VP of PR at UPS. 'We had an attitude that negotiations should stay at the table and not be a public event, and the previous members of the union agreed.'

But Teamsters had changed its strategy and brought the fight to the people. The media, hungry for stories during a slow news period, responded. Opinion polls demonstrated that Americans sympathized with the strikers and could relate to their key issues: part-time workers' rights and wages.

This was a particularly impressive coup, given that Teamsters had suffered serious image problems itself. (It still operates under government trusteeship because of past corruption.) 'For the Teamsters to come out in the public's mind as being on the side of the righteous is very unusual,' says Ray Hilgert, professor of management and industrial relations at Washington University in St. Louis, MO.

The union galvanized public opinion by focusing tightly on key messages.

'UPS had locked so many of its employees in part-time work, and the Teamsters just hammered away at that,' explains Hilgert.

The workers also had the advantage of a personal connection with the public. 'These people are close to their customers,' Hilgert says. 'And so at the grassroots level, there is a lot of support for these employees, and this huge company was seen as exploiting the part-time issue.'

He adds that the company's defensive strategy of citing financial factors for their hiring policies simply did not ring true in the public's mind.

While UPS worked hard to build its internal communications program prior to contract negotiations, it had neglected public opinion. The company also believed that publicly airing problems would prolong the dispute.

'It was attitudinal, cultural,' Sternad says. 'It wasn't part of our DNA to act that publicly. In fact, our chairman and vice chairman combined had probably not made a dozen television appearances in their entire careers.'

Sternad freely admits that UPS lost the battle in the eyes of the public.

'I think it temporarily hurt our brand,' he says. 'There were things that were said that weren't accurate, and they were said louder. Things in the press can take on a life or truthfulness of their own. There was brand damage and a shaking of consumer confidence that we had to aggressively fix after the strike.'



Prepare for battle

Once the strike started, it was too late for UPS to change strategies.

'It was like attempting to turn around the Titanic,' Sternad says.

The dispute forced UPS to completely change not only its PR strategy but its underlying culture. After the strike, the company hired Fleishman-Hillard specifically to help change overall strategy and put together a new PR, media relations and advertising program to redeem the brand.

UPS kept Edelman as its primary agency.

The internal PR team was also overhauled. 'Since then our whole attitude is towards public communications, staying ahead of the curve, more use of research and strategic planning,' Sternad says. He maintains that UPS was already evolving in that direction, but that the strike accelerated the change. The corporate PR office in Atlanta now retains 30 staff members (up from seven) with additional staff in its regional and international units.

Negotiations typically begin two to six months prior to contract expiration, and most PR agencies want to be plugged in early. 'There is a huge difference between the way your company is able to handle communications if you are brought in during the beginning stages of negotiations,' says Brian Delaney, president of Clarke & Company Public Relations in Boston.

Research is the primary PR tool early on, and Delaney advocates several approaches, which include determining which company will be a bellwether for the entire industry. 'For instance, the autoworkers will say the bellwether will be GM, which will determine what strategy they will use with Ford - that's true in a lot of industries,' Delaney says.

Preparation also involves researching the union's recent contract negotiations to understand workers' priorities and to see what rhetoric and tactics it has used before. Operations and human resources personnel must be brought into discussions in order for the PR team to comprehend how well the company can function if a strike is called.

Another priority is defining the most important audiences should negotiations break down. 'One of the most serious flaws that I've experienced is forgetting critical audiences,' says Delaney. 'We'll talk to employees, the media, stakeholders, shareholders, retirees and, one of the most crucial audiences, the government. This is where it gets very strategic.'

Finally, a company must be ready to deliver its message as soon as talks break down, in order to have some control over the direction of the coverage. 'The first message out of the box sets the stage,' Delaney says. 'And often the first message out of the box comes from the union.'

Hanson, Moser & Associates (HMA) had worked with the Phoenix Transit System for 20 years, and in August 2000 it looked likely that contract negotiations with the Amalgamated Transit Union, which represents bus drivers, would sour. 'The company called us into action, and a special events committee of 35 people was formed,' says Abbie Fink, HMA's VP and general manager. 'It was made up of us, operator relations people, customer service and transit management.'

They developed a strategic plan for three possible scenarios - drivers ratifying the contract, refusing to ratify but extending the old contract, or striking. 'We had every possible press release and script ready to go. You have to because the media will be right on you,' Fink said.

When the media got wind of the tumultuous negotiations, Fink's PR team took advantage of the early press inquiries to educate reporters about how a strike would affect the community.

Bus drivers refused to ratify the contract, and a strike was called on October 14, 2000, at 10:20pm. By 11pm, the PR team had conducted interviews with the Associated Press and The Arizona Republic, and details were faxed to area radio stations and traffic reporters. The primary goal was met - the story ran the following day, alerting riders to the problems and making recommendations for alternate transportation.

Spokespeople were on call 24-hours-a-day, sometimes fielding 3am phone calls from the media. It's all part of the game when a strike is on. 'The lesson learned was that we had to be prepared,' Fink says. 'Plan early, get your key people together as soon as possible and plan for the worst.'



The war room

'If a strike occurs, what you have then is truly crisis communications,' says Paul Furiga, VP at Ketchum in Pittsburgh. 'But the big difference is that you have employees of the company at war with the company itself.'

Part of Furiga's job is to advise clients to reign in their combative impulses. 'As a guiding principal throughout communicating, we really counsel companies not to say anything in the moment of a strike that will be hard to amend when you come back,' Furiga says. 'You have to realize there is no enemy in this.'

Furiga believes Verizon did a good job balancing the priorities of achieving its goals and bringing people back to work. The company had only recently rebranded following the merger of GTE and Bell Atlantic when the Communications Workers of America called a strike.

Some 80,000 union members walked off the job after their contracts expired on August 5, 2000. The PR team had planned for a possible strike since May and, 10 days before it happened, set up a war room close to the negotiations in Washington, DC. A second war room was established in New York City, with audio links to DC. Throughout the strike, a union liaison updated PR people on each phase of negotiations.

Verizon proactively kept the public informed about the strike through advertisements and daily press conferences. Eric Rabe, Verizon's VP of media relations, says the union was surprised at how frequently and frankly the company spoke to the media.

The union and the company both succeeded at disseminating competing messages to try to win public support. Verizon appealed to the public by emphasizing its commitment to improving customer service, while the union focused on workplace stress. 'Both sides were successful in selling that message,' says Rabe.

There were benefits to promoting the company's viewpoint, including building awareness of the new brand. In an article following the strike, The Wall Street Journal pointed out that recognition of the company's new name was heightened by the strike.

'Verizon did a lot of things right coming out of that,' Furiga says.

'The company was willing to make trade-offs to move forward, but was very focused on maintaining its new brand.'

But Rabe maintains it is not a good idea to think in terms of victory in a strike environment. 'I'm not sure you win or lose a PR battle in a situation like this,' he says. 'Coverage is going to be a draw. In some ways we got ahead of the union a little bit, and when we did, it was because they had a problem.'



Rebuilding

The Seattle Times emerged last month from a contentious 49-day strike by members of the Pacific Northwest Newspaper Guild. During most of the action, the company managed to keep the presses going.

Rebuilding after the strike has been largely an internal communications issue because the bottom line is getting the company fully operational again.

'People were upset with what was happening,' says Kerry Coughlin, the paper's manager of corporate communications. 'We had people literally in tears to hear what was being said about our company.'

The PR staff organized reorientation programs for people returning to the job. These efforts were designed to cultivate an atmosphere of mutual respect. 'We may have some hard feelings,' says Coughlin. 'But we have made it clear we won't tolerate harassment.'

Nick Kalm, EVP and deputy general manager of reputation management for Edelman, also advocates cultivating a win-win atmosphere.

'In every one of these situations there will be part of the contract that the union likes and the company doesn't, and vice versa,' he says.

Companies and unions will frequently negotiate about the communications strategy following a strike, so that both sides stay on message and generate an atmosphere of cooperation.

Despite the decline in membership over the years, it is wrong to believe that unions are merely a relic. 'A lot of people thought the labor movement was dead,' Furiga says. 'In fact, we are seeing a lot of activity these days.'

Unprepared companies will suffer. 'Right now we are engaged in a major fight, and that fight has unions engaged in PR activities we haven't seen in decades,' Furiga says.

'Companies serious about having a healthy bottom line need to be serious about this.'



AVOID THESE TRAPS AND GET BETTER RESULTS

- Don't postpone planning the PR strategy until contract negotiations break down. Once a strike is called, companies run the risk of allowing the union to manage the message if they are not prepared to explain their position clearly and immediately

- Don't neglect key audiences, such as employees, families of employees, consumers, shareholders, retirees and government officials

- Don't demonize the striking employees or the union, either in the press or to remaining employees. One day the company will come together again, and the transition back to normal can be seriously impaired by negative feelings

- Don't negotiate directly with employees about their contract - it violates the National Labor Relations Act. Always bargain with the union

- Don't get caught up in reactive communications. There is little credibility in constantly denying what the union is saying. Craft positive statements on the company's position.



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