This is the fourth of a six-part auto-biographical series about the Cape Breton Development Corporation (DEVCO) by Gerald Wright, who was from 1989 to 1992 a senior policy advisor to the federal minister responsible for DEVCO.
We knew from the start that the unions were the major roadblock in our way.[1]Their members earned modest wages (annual pay packets in the vicinity of $30,000 – $35,000 were common) and laboured in harsh and dangerous conditions, a recipe for continual labour strife. The illegal strike in 1990[2] was the thirteenth stoppage since 1976, including one twelve-week strike in 1981 and a thirteen-week strike in 1989. The 1990 strike was provoked by management’s decision to contract out its coal-hauling operation, a move which entailed not a single lay-off of the twenty-five workers employed there but raised the spectre of privatization. The UMWA, in particular, was a tightly knit brotherhood that channelled the miners’ fears and their longings. Decades of being buffeted by circumstances that, as they saw it, were beyond their control, had left them combative, suspicious of outsiders and bereft of vision.
Moreover, the miners or, more likely, their fathers, had witnessed a change from private to public ownership in the sixties as coal was being phased out. At least fourteen coal mines closed on Cape Breton between 1950 and 1966.[3] This period of decline was followed on its heels by the Yom Kippur War, the 1973 Arab oil embargo and a complete turnabout on the part of the federal government, privileging the exploitation of coal reserves over newly expensive oil. Now the miners were experiencing yet another turnabout. Employment in the mines was steadily declining and they were beginning to realize that their livelihoods were tied to a resource once again falling rapidly out of favour.
The unions did not take readily to a disciplined approach. Their highly charged rhetoric contributed mightily to a fraught atmosphere and frayed nerves. Confronted with the implied threat of Lingan’s closure, they complained of “blackmail”, “blatant interference” and having to negotiate with a gun to their heads. One union leader went so far as to lament that DEVCO was turning into a dictatorship just as the countries of the disintegrating Soviet Bloc were opting for democracy![4] Demonstrations triggered by the firing of three miners were held outside the Ernie Boutilier’s home and, in the summer of 1990, miners stormed his office. The strike that followed threw out a budget projection of a $21.2 million surplus for 1990-1991.
DEVCO’s fortunes appeared to have reached a nadir. Then, quite suddenly, in the winter and early spring of 1991, relations between management and unions were set on a new and more promising track. Having first insisted that joint management-workers’ committees didn’t work, the UMWA, with assistance from John Banovic, their International Secretary-Treasurer, agreed with the corporation to bring in William Hobgood, a former United States Assistant Secretary of Labour, to design such a process.
As Hobgood later told the DEVCO board, he found fundamental distrust and extreme class divisions between management and workers, which resulted in a constantly confrontational atmosphere.[5] His remedy was to set up four joint working groups, composed of union and management representatives, to deal with labour relations, finance, communications and safety/health environment. Significantly, the two sides agreed that their objective was “job security for the present workforce and to stay within the current (Ottawa) funding level.”[6] Top and mid-level management, along with district and local union officials and committee members were to be given training in group relations, communications and leadership skills. Corporate plans and revenue projections were to be shared with the unions. The emphasis was on cooperation rather than confrontation.
Tom Hockin was impressed by developing union-management cooperation, but he sent back the DEVCO board’s 1991-92/1995-96 corporate plan. Circumstances had changed since the first version was prepared. The NSPC had abruptly reduced its requirement and insisted on a cut-rate price for 300,000 tonnes of coal, which were in excess of ninety percent of agreed shipments. (This stance was not at all in keeping with the understandings reached between the Power Commission and DEVCO in the aftermath of the first “oil shock”.[7]) Additionally, as originally submitted, the plan retained a requirement for government funding in the final year. That had to go.
The minister was not entirely inflexible. When a delegation of management and all four unions met with him in Ottawa on April 25, 1991, he was receptive to a request for short-term funding, over and above the $31.04 million subsidy[8], to offset shortfalls in sales and revenues. “I’ll consider it,” he said, “but I’m not moving off my objective of self-sufficiency in four to five years.” He undertook to go to Treasury Board if provided with a revised business plan allowing for the possibility of reduced sales and firmly committing to self-sufficiency.
Huge problems remained: depressed world prices, pressure on the NSPC to move away from coal-fired generation and uncertainty created by the advent of Westray. It is a reasonable conjecture that rank-and-file miners were less impressed with Hobgood than some of their leaders. (Indeed, Hobgood’s own view was that it would take seven years to bring about change in a miner’s mindset.) Eventually Phalen Local #2501 of the UMWA would dissociate itself from the joint committees.[9] In general, however, there were at least inklings of a new spirit and the focus was now on the five-year business plan rather than the frictions that had occasioned so much acrimony in the past.
Most encouragingly, operating costs were down and there were impressive productivity gains, though these were offset by lower world coal prices and a higher Canadian dollar.[10] The unions could congratulate themselves that they had gained a right of participation in important decisions affecting the working lives of their members. Indeed, their involvement could potentially go beyond that, to having a say in the corporation’s strategy. DEVCO looked to be pointing the way to employee-driven capitalism.
Particularly striking was a shift of attitude – it would be going too far to describe it as a transformation – on the part of Ray Holland, Joe Burke’s successor as president of District 26 of the UMWA and himself a third-generation coal miner. Initially he came across as a hardened militant, claiming that the corporation had painted an overly dismal picture of DEVCO’s situation in order to get the unions to agree to a four-year contract and avowing that management’s tough talk would have no effect on the workers. One of his wilder charges was that DEVCO’s Christmas Party was intended to buy off miners and their families![11]
Involvement in the Hobgood Process changed Holland’s tune somewhat. He began to stress the dependence of Cape Breton’s economy on the survival of DEVCO. At the same time, he told the minister, “We recognize that the flow of money to DEVCO has got to stop.”[12] In May, 1991 he participated in a successful sales trip to Mexico. He spoke out on the value of cooperation. “We had a choice – to be part of the problem or part of the solution – and we’re glad we’re part of the solution.”[13]
Even hard-bitten actors, it appeared, could be brought to confront their situation and at least begin to change their attitude. DEVCO had long been regarded as an industrial relations wasteland. The modest headway that was now being made could chiefly be attributed to the Hobgood Process, coupled with a dawning realization that this was DEVCO’s last chance and it could only be seized by unions and management working together. The Hockin strategy set the parameters within which some new thinking could take hold. In addition, Tom Hockin’s personality dented the union leaders’ hard shells, which was remarkable considering that he was tougher on them than other ministers had been.
Notes:
[1] DEVCO workers were represented by four unions. By far the largest group of workers were grouped in District 26 of the United Mine Workers of America (UMWA). The other unions were the Canadian Brotherhood of Railway, Transportation and General Workers (CBRTGW); the Canadian Union of Public Employees (CUPE) and the International Association of Machinists and Aerospace Workers (IAMAW).
[2] The Canada Labour Relations Board ruled that the mine workers violated the Canada Labour Code. The Chronicle Herald, August 20, 1990.
[3] Parnaby, A. (2019). “Roots, Region, and Resistance: Facing Industrial Ruin in Sydney, Cape Breton, during Canada’s Centennial Year.” Acadiensis, 48(1). Retrieved from https://journals.lib.unb.ca/index.php/Acadiensis/article/view/28982
[4] “Miners support negotiating team,” Cape Breton Post, December 8, 1989.
[5] Board of Directors Minutes of Meetings, August 21, 1990, Hockin Papers.
[6] Information Bulletin issued by DEVCO and the UMWA, April 10, 1991.
[7] Memorandum to the Minister, March 25, 1991. Hockin Papers.
[8] Due to the government’s across-the-board belt tightening in the 1991 budget, the subsidy was reduced to $31.04 million.
[9] This action may not, however, have been an accurate reflection of Phalen miners’ views. The vote was 44-5, out of a total membership of 600. Ray Holland reportedly did not get along with the Phalen Local president, Dan Jimmy White. Memorandum from Gerald Wright to the Minister, October 29, 1991, Hockin Papers. The Prince local of the UMWA was also reported to have opted out on account of management’s refusal to provide 500 Christmas turkeys to pensioners! If some miners were sceptics, they weren’t the only ones. Michael Cochrane believed that the Hobgood Process was the miners’ tactic to postpone major decisions until the next election. Memorandum to the Minister from Gerald Wright, March 25, 1991, Hockin Papers.
[10] In early 1991, productivity in DEVCO collieries had risen from 7.3 tonnes to 10.1 tonnes per manshift, a 40% increase. “DEVCO’s productivity gains undermined by coal prices,” Cape Breton Post, March 9, 1991.
[11] “Spirit of season seems lost on DEVCO’s negotiating team,” Cape Breton Post, December 12, 1989.
[12] My notes of the meeting between Minister Hockin and a union-management delegation, April 25, 1991.
[13] “Lingan mine to shut down,” The Chronicle Herald, September 24, 1991.
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