When the United Auto Workers (UAW) union struck a deal with Ford Motor Co. in late February for revised employee benefits, union President Ron Gettlefinger said members demonstrated “solidarity, understanding and patience,” throughout the bargaining process.
When the National Football League Player’s Association (NFLPA) held it’s annual press conference earlier this year, Jeffrey Kessler, a lawyer for the players union, made an interesting pitch for unity between active and retired players who, for generations, have been building a nasty internecine war over salaries and benefits within the football fraternity.
At the core of each of these disputes lives the process of negotiation—a dialogue intended to resolve long-standing debate, to produce agreement, or to craft outcomes that can satisfy the various interests of two opposing sides. Negotiation is comprised of three main elements: The Process, Behavior and Substance.
The process of negotiating refers to how the parties will negotiate. Will they include a trained negotiator? Will a mediator step in? Will the dispute be settled through arbitration that ultimately gets settled in court? And what will be the sequence and stages of which all of these steps play out?
In the case of the Autoworkers and Ford, the two sides reached an agreement to include new buyout offers and revisions to its health care trust for retirees. UAW leaders voted unanimously to approve the deal. Yet, the process also required a majority vote by union members as well as approval from the courts. This stage is anticipated for sometime in early March.
The element of behavior in negotiation refers to the nature of the relationship between the parties. What kind of communication styles will they adopt? How confrontational will bargaining discussions escalate? Will intimidation tactics play a role in swaying outcomes of the process?
An example of how behavior can impact the negotiation process is seen through the on going squabbling within the NFLPA. Sadly, the football fraternity is seeing hollow unity building within the player’s organization along with growing internal concern that corruption is settling in at the helm. For generations active football players have been pitted against today’s retirees over a long-standing dispute regarding compensation and benefit issues. Meanwhile, a search for a new executive director is underway to replace the late Gene Upshaw who died last year. A leading candidate positioned to take the top spot, Troy Vincent, recently came under fire for “improper conduct”. Facing allegations that he has manipulated the selection process in his favor, Vincent is also accused of taking the side of the active players over the retirees, and generating sentiment that he will further intensify internal disputes within the union.
When the owners of the football teams look at the NFLPA’s current disarray, they have to feel most confident that they will get everything they want in the ongoing collective bargaining process with the union. The owners have won three consecutive labor confrontations against the players association and are determined to snatch back more gains. Properly focused and inspired, the behavior of the NFL players will determine whether the union can put up a solid fight that the owners have yet to see.
The substance of each of these two cases of negotiation boils down to the issue of money, as is often the case in business bargaining relationships. The options or agreements reached at the end may leave one side the victor, the other the loser, as has historically been the outcome in traditional union talks. However, a new creative approach is also entering the process of negotiation; a process in which both sides agree to cooperate to make a deal both sides can accept.
For example, Boeing buys composite plastic wings for its new 787 Dreamliner designed and manufactured by Japanese suppliers, and then sells the completed 787s back to Japanese airlines, all with a nice subsidy from the Japanese government. This is what is meant by creativity in negotiations.
Another example of creative negotiation can be seen in the tentative deal struck between the UAW and Ford. One of the key issues between US automakers and the union has been health benefits for retirees and how much car companies should be obligated to contribute. During the current economic downturn, the UAW has been criticized for its high demands on benefit packages that nearly double in comparison to foreign competitors such as Toyota who are situated in the US. Meanwhile, in order to keep $17.4 billion in emergency federal loans, GM and Chrysler are required to modify how they will handle their obligations to the health trust of its retirees.
Because Ford has not accepted any bail out dollars from the government, and because it has managed to work creatively with the UAW, the negotiation has been seen as the model bargaining agreement for GM and Chrysler to follow in how they will meet their health-trust obligations. The UAW and Ford, managed to come to terms by giving up certain demands in the negotiation process. Ford agreed to cut executive salaries for 2 years, eliminate bonuses in 2009, and Ford’s board agreed to give up all cash compensation for the rest of the year. Meanwhile, Ford will offer a new round of buyout options to UAW workers that, if accepted, will eliminate health-trust obligations by the company. No pay reductions will impact workers, but bonuses will also be eliminated for the rest of the year. Under the creative agreement, the UAW would also receive small annual stock contributions over the next 13 years in replacement of health-trust benefits paid by Ford.
The UAW-Ford agreement will enable both sides. By changing the way it meets its obligations to fund the union-aligned healthcare trust, Ford continues to be a competitor with the US operations of foreign carmakers like Toyota. Meanwhile. UAW workers are still employed. As stated by union boss Gettlefinger, “the modifications will protect jobs for UAW members by ensuring the long-term viability of the company," he said.
Perhaps all companies could stand to learn from the UAW and Ford. Certainly the NFLPA is in need of some positive reinforcement if it is to anticipate any favorable gains to its membership. Internal conflict aside, there is always new and interesting avenues to generate fresh ideas towards negotiating what you want.
Here are a few tips you may find helpful
Establish common goals of what this "collaboration" would create. A more workable deal? Some common long-term goals? A closer partnership?
Establish the rules of engagement. The purpose of the process is to resolve differences in creative ways that work better for both parties. All ideas are possibilities.
Trust is key.
Add diversity (gender, culture, extroverts, different work specialties, experts, outsiders) to the group. Indeed, the diversity associated with international teams and alliances is the real goldmine of creativity in negotiations.
Sleep on it. This enables the unconscious to work on the problems, and gives negotiators time to collect opinions before meeting again the next day.
Jenni Monet is a freelance journalist and documentary filmmaker whose work has been broadcast nationally through TV and radio outlets, including CBS affiliate stations, NPR and local PBS networks.
