Byline: ARTHUR FRIEDMAN With contributions from JOYCE BARRETT, Washington
NEW YORK — The six-week strike by the ILGWU against the The Leslie Fay Cos. ended Monday with a commitment by the company to maintain a portion of its dress production in Pennsylvania.
The three-year contract, reached after months of bitter negotiations, calls for Leslie Fay to retain at its main manufacturing plant in Wilkes-Barre, Pa., 600 of the firm’s 1,200 Pennsylvania production jobs until July 31, 1995.
At the same time, a labor-management committee will be formed to “identify the conditions under which the company can continue to profitably produce dresses domestically and compete successfully in the moderate dress marketplace.”
The end of the strike, which included a series of noisy demonstrations and became the subject of a Congressional hearing, should take some of the heat off Leslie Fay as it tries to emerge from Chapter 11 and shake off the impact of an accounting scandal that is still being investigated by the Securities and Exchange Commission and the Justice Department.
In a joint statement, Leslie Fay and the ILGWU said they “recognize that we must forge a new and different relationship in order to achieve both the union’s objective of increased employment opportunity and security and the company’s need for continued competitiveness and financial stability.”
“We recognize we must work together to improve productivity, training, education and investment in technology and human resources,” the two sides said.
“We commit ourselves to a plan of action to continue domestic dress production in the Wyoming Valley of Pennsylvania and, at the same time, to establish the conditions for the company to emerge from Chapter 11,” the statement said.
The parties said they expect the contract to be approved by the bankruptcy court at a hearing Thursday, at which time the workers will return to their jobs.
The committee will be supervised by Bill Usery, the Secretary of Labor under President Ford who was brought in June 28 to mediate the stalled talks, and it will include two management and two union representatives. As president of Bill Usery Associates, a Washington, D.C.-based consulting and mediation firm that specializes in union-management relations, Usery will direct the committee as a “facilitator” of the agreement.
The committee will examine use of new technologies and production techniques and development of employee skills. The committee’s recommendations, due no later than Feb. 15, 1995, will be binding if they are unanimous. If the committee is unable to reach a consensus, Usery’s recommendations will then be binding.
The agreement also creates a $2.3 million severance fund for workers who either choose early retirement or are laid off.
The balance of the contract concerns wages and benefits and mirrors the agreement the union reached with the rest of the apparel industry in the Northeast in May. The new pact calls for a 4 percent wage increase in the first year and 3 percent salary increases for the second and third years.
It also includes an increase in the firm’s contribution to the union’s health and welfare fund of 1.5 percent in the first two years of the contract, and an additional 0.5 percent in the third year. This would bring the total company contribution to the union’s health and welfare fund to 11 percent of total payroll in the third year from the previous 7.5 percent. Leslie Fay will also pick up a co-payment of $23 a month per individual, which the union instituted in 1993 when the health and welfare fund began to run up deficits in the area of $40 million.
Leslie Fay has also agreed to abide by a code of conduct on oversees labor conditions, and both sides have agreed to drop all legal actions against each other.
Jay Mazur, president of the ILGWU, called the pact a “trailblazing agreement” that “points the way to joint labor-management efforts to preserve American manufacturing jobs even as American companies participate in the global economy.”
John J. Pomerantz, chairman and chief executive officer of Leslie Fay, said the agreement will enable everyone at Leslie Fay “to focus on our common interest, which is to return our company to profitability so that it can emerge form Chapter 11 as a strong and viable competitor in the global apparel industry.”
Leslie Fay has been in Chapter 11 since April 1993, forced there when its credit dried up following disclosure two months earlier of fraudulent accounting that had falsely stated losses as profits.
The strike was highlighted by the largest union rally in the garment district since 1958, the last time the ILGWU had a general strike, with an estimated 8,000 union workers and sympathizers protesting in front of Leslie Fay offices at 1400 Broadway. Additional protests were held in front of bankruptcy court and on Wall Street, during a hearing in which the union objected to the company’s new executive compensation plan, which won approval from Judge Tina Brozman, who is was presiding over the Chapter 11 case.
In addition, leafleting was conducted continuously at 20 Saks Fifth Avenue stores across the country as part of a nationwide campaign asking consumers and stores to boycott Leslie Fay products.
When Leslie Fay opened negotiations with the union in March on a new three-year contract, the company proposed shutting its Pennsylvania dress factories, where it had been operating since it was founded by the late Fred Pomerantz in 1947, saying it needed to turn to importing in order to be more competitive on prices. As the two sides approached the contract deadline, Leslie Fay put a proposal on the table that called for maintaining current job levels of about 1,200 production jobs until May 1995, and to continue 150 production jobs at a quick-turn dress facility for the remaining two years of the contract.
The union rejected that proposal and 2,000 workers went on strike against Leslie Fay production and distribution facilities in Pennsylvania, New York and New Jersey, Georgia, and Florida, and a contractor in Ohio.
Rep. Paul Kanjorski (D., Pa.), whose district includes the area where the plants are located, orchestrated a hearing of the House Subcommittee on Labor Management Relations to explore the reasons behind the proposed plant shutdowns and the overall condition of job loss in the U.S. apparel industry. At the hearing, members of the committee, other Pennsylvania Congressmen and several witnesses attacked the firm’s explanation that it needed to turn to imports in order to be more competitive, saying company executives were profiteering at the expense of the workers and the local community.
Following the announcement that a settlement had been reached, a staff member for the committee, which had set a second hearing for July 21, said it was uncertain whether the hearing would still be held. The panel plans to wait for the decision of the bankruptcy judge on the settlement.
In a statement released by his office Monday, Kanjorski said he was pleased that a compromise was worked out and a majority of Leslie Fay workers in his area will continue to be employed, but he was disappointed that every job was not guaranteed.
He said he would “continue to work to protect local jobs…and ensure that area workers are treated fairly.”
Kanjorski said he would make himself available to provide assistance to Leslie Fay management to help maintain employment and production in the U.S.