-
https://clinton.presidentiallibraries.us/files/original/5dc57aaba10cbe09f947858584764d33.pdf
263e283037efbe5e11789301713c6413
PDF Text
Text
FOIA Number: 2006-0462-F
FOIA
.This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Speechwriting
Series/Staff Member:
Terry Edmonds
Subseries:
10986
OA/ID Number:
FolderiD:
Folder Title:
5116- 8/9 '96Sweat Shops [2]
Stack:
Row:
Section:
Shelf:
Position:
s
0
0
0
0
�v.
. . . 's duty to lead the world
Amenca
•
•
•
VI.
readiness funding
technology
peace keeping
Conclusion
•
. . . ai1 work together.
head
11 we
·
·ca's
best
days
a
Amen
�/
; 1 08/01/9&
!15:46
'5'202 219 9216
· U.S. Department of Labor
OASP
[4]001
·"------······--···---···---
Oflrce or rne Ass1sta,,
Secrerarv tor Pu11cv
Wasn1ngton C C :c:: 10
FAX COVER SHEET
~=
FAX NO:
'1'0:
PBCNE NO:
~=-=~~~{~~L.:.:.;;,:..:'~~~4'_.;:;:/V
F.AX NO:
NCMBER OF PAGES
MESSAGE:
PI!CNE NO:
d ;7?: 6,19~
(202) 219-9216
INCLUD~
COVER:
14
�08/01/96
15:4 7
'5'202 219 9216
TO:
Jason Goldberg:
Terry Edm·onds:
April Melody:
Eric Schnure:
Angus King:
..._______ OASP
·--
456-2604
456-5709
456-6210
456-2685
456-6411
FROM:
Sally Sachar
Phone: 219-61
Attached ar :
1.
2.
3.
4.
DRAFT Fact Sheet on the Apparel Industry Partnership
.Announcement (this is being e-mailed to Angus also),
and we are still trying to punch it up a bit;
Fact Sheet on DOL's "No Sweat" Initiative;
Fact Sheet on the "No, Sweat" Time line;
A DRAFT of talking points for the President's Rose
Garden Announcement to give you a sense of what we
think the President's message should be (this is being email to Terry directly for him to work from.
NOTE:
We think items 1 through 3 above could go in a
press packet. We are still working on company
profiles which will send over as soon as they are
ready.
Please call nie at 219-6197 if you have questions. THANKS.
141 002
�08/01/96
15:47
'8202 219 9216
OASP
14!003
... · - · - - · - · · · - - -
.Apparel Industry Partnership Announcement
At the White House
FACTSHEET.
An seg1nents of the industry recognize the itnportance of producing
goods consistent with acceptable -labor standards and the need to
empower consumers so that they can make responsible decisions.
Leaders from the footwear and apparel industries, joined by
representatives from unions and non-governmental organizations have
come together in partnership to develop options on how companies can:
D
Assure that their products are made in compliance with
acceptable labor standards; and
D
Signal to consumers that the products offered for sale are
produced without exploitative labor.
Participants include leaders from cotnpanies such as Nike, Liz
Claiborne, Warnaco, Phillips Van Heusen, LL Bean, Tweeds,
Patagonia, Timberland, Nicole Miller, Karen Kane, and Lucky Brands,
as well as Kathie Lee Gifford, labor leaders, and non-governmental
organizations.
The industry group will report back to the President of the United
States in six months.
nnr 7/or..
�08/01/96
15:48
NO
SWEAT.~.
'8'202 219 9216
OA~E-........... --···-·-···-··· ·----··----·· -··-·--········-·-
14!004
NO SWEAT INITIATIVE
Fact Sheet
Background
DOL's Garment Industry Strategy
Sweatshops conjure up a vision of dangerous
tum-of-the-century garment factories, of rooms
crowded with immigrant women and children
hunched over sewing machines for a few
dollars a day.
The Department of Labor (DOL) has fewer than
800 investigators to protect the rights of one
million garment workers and the other 11 0
million employees in 6.5 million workplaces.
Enforcement, alone, cannot begin to address
problems rampant in the garment industry.
But, they still exist today.
Sweatshops are an ugly stain on American
fashion, and it is up to all of us to remove it.
America's garment industry today grosses $45
billion a year and employs more than one
million workers.
Retailers dictate to manufacturers what, where,
and when garments are produced. Manufacturers, in turn, purchase material and contract
work among some 22,000 sewing contr~ctors.
Many of t~ese contractors violate labor laws.
Independent surveys as well as federal and
state compliance data show minimum wage
and overtime violations of the Fair Labor Standards Act occurring in 40 percent to 60 percent
of investigated establishments. Additionally,
thousands of these shops have serious safety
violations that threaten the health -- and lives -of their workers.
Many companies in the American apparel
industry provide good jobs, decent wages, and
fine clothing, and they deserve our support
But the firms that utilize and tolerate sweatshop
labor make it harder for honest, law-abiding
shops to compete in the marketplace. Both
industry and labor tiave an interest in making
sure that companies do not mistreattheir
employees.
To bring about change, DOL is..relying cin a
three-pronged strategy of enfprcement, recog~
nition, and education:
·
Enforcement
DOL's Wage and Hour Division conducts
targeted enforcement sweeps in major
garment centers and notifies manufacturers
of the "hot goods". provision of the Fair
Labor Standards Act, which prohibits the
shipment of goods made in violation of U.S.
wage laws.
Recognition
In December 1995, DOL issued its first
Trendsetter list, highlighting retailers and
manufacturers that have assumed responsibility for monitoring the labor practices of
contractors that make their garments.
Firms that are monitored have significantly
fewer violations of labor laws.
Education
DOL is spearheading a garment public
service announcement initiative, which
includes print and radio public service
·announcements and a new Internet World
Wide Web site, to provide information to
consumers interested in helping to combat
sweatshops. No Sweat "Clues for Consumers" have been distributed to more than 50
million supporters of the sweatshop eradication initiative_
For more information about the "No Sweat" sweatshop eradication initiative, contact the U.S. Department of Labor,
Wage and Hour Division at (202) 219-8305 or the Office of Public Affairs at (202) 219-8211.
DOUOPA ·96
�0
SWEAT.su
Garment InitiativeTimeline
June 1995 - August 1996
1 9 9 5
··
·JUNE
June 21
The Los Angeles Compliance Alliance, a
government-industry association was
founded requiring its members to monitor
contractor compliance and assume
responsibility for paying back wages and
civil money penalties if contractors found
in violation.
JULY
. -: ' · AUGUST
August 2
DOL raids sweatshop in El Monte (CA)
and finds 72 garment workers working in
virtual slavery for as little as $. 70 per
hour.
September 12
Secretary Reich, at Retail Summit in New
York, issues call to nation's retailers to
join efforts to eradicate sweatshops.
September 13
August17
Secretary Reich speaks to fashion and
DOL files a civil suit in U.S. District Co·urt ethics students at Marymount University
in Los Angeles seeking to recover $5
and restates invitation to retailing commumillion in back wages for the El Monte
nity to join in sweatshop eradication
sweatshop workers.
effort.
August 23
DOL conducts joint raids with INS in Los
Angeles.
DOLIOPA 7/96
SEPTEMBER
September 14
DOL raids SO garment shops in Los
Angeles area finding 46 shops in violation, owing $568,000 to 600 workers.
Page 1
I~
�0
SWEAT.sM
Garment Initiative Timeline
June 1995 - August 1996
1 9 9 5
NOVEMBER
October 17
Secretary Reich invites manufacturers
to join national effort at a meeting of
the American Apparel Manufacturers
Association. Also announces manufacturers who have signed compliance
monitoring agreements.
November 3
Secretary Reich urges major retailers
and manufacturers to submit information about programs and systems
adopted to help their contractors and
suppliers comply with labor laws.
October 30
DOL conducts week-long garment
shop raids in New York and finds more
than $200,000 due to nearly 500
workers.
November 6
DOL announces New York City .
. enforcement action recovering $30,000
in back wages in record time for 40
employees who produced goods
destined for one of the nation's largest
retailers.
November 6
DOL conducts week-long garment
raids in Los Angeles.
November 7
Secretary Reich orders issuance of
a subpoena against Karman, Inc.,
a Denver manufacturer, to obtain
information about the destination of
"hot goods" made in violation.
Days before, DOL obtained a
temporary restraining order against
the manufacturer to prevent the
shipment of "hot goods" in interstate commerce.
November 17
Maryinount University releases poll
showing more than 69 percent of
consumers polled say they would
not shop at retail establishments
that sell sweatshop produced
goods.
November 20
DOL begins to receive the first wave of
more than 20,000 calls and letters
from customers of Working Assets.
The firm asked its credit card and long
distance customers to contact the
department to encourage efforts to end
garment worker exploitation.
November 21
Consumers' coalition announces
nationwide education initiative to inform
the public about sweatshops.
November 30
U.S. District Court in Knoxville, TN,
grants temporary restraining order
against garment contractor, Hall
Manufacturing, Inc., and Haas Outdoors, Inc., to prevent the shipment of
goods.
1§1
DOLIOPA 7/96
Page 2
0
0
Cll
�0
SWEAT.sK
Garment Initiative Timeline
June 1995 -August 1996
,_.
Cll
Cll
0
1 9 9 5
1 9 9 6
JANUARY
December 5
DOL announces TrendsetterUst, a list
of retailers and manufacturers which
have all pledged to help eradicate
sweatshops in America and to try to
ensure that their shelves are stocked
with only "NO SWEAT" garments.
December 20
DOL announces that GAP, Banana
Republic, Old Navy, and GapKids are
added to the Trendsetter List.
MARCH
January 11
DOL announces that 37 employees of
the Hall Manufacturing, Inc. have
received $11 ,500 in back wages from
Haas as a result of DOL "hot goods"
Temporary Re-straining Order (TRO).
February 16
Secretary Reich announces garment
worker lock-in and other worker abuses
found in enforcement sweeps in Dallas,
New York City and Southern California.
March 11
Administrator Echaveste participates in
a forum sponsored by Congresswoman
Nydia Velazquez to discuss conditions
in the garment industry.
January 25
DOL announces that NFL Properties is
added to Trendsetter List.
February 28
Administrator Echaveste met with a
number of worker advocate organizations
in Los Angeles to discuss strategies for
_ identifying violations in garment shops.
March-18
Secretary Reich announces the signing
of the agreement between Jessica
McClintock, Inc., and the Asian Immigrant Women Advocates, ending a 3year-old dispute.
March 25
On the 85th anniversary of the Triangle
Shirtwaist Company fire, Secretary
Reich unveiled public service announcements to raise awareness of the plight
of sweatshop workers in the U.S.
DOUOPA 7/96
Page 3
�NO
SWEAT.u
Garment Initiative Timeline
June 1995- August 1996
1 9 9 6
MAY
April12
Secretary Reich participates in the
official opening in San Francisco of the
Garment 2000 Teaching Factory.
Garment 2000, a consortium of
contractors, manufacturers, labor,
education and city government officials,
was established to train workers and
shop owners in new technology and
business skills.
May 2
The Department announces that more
than 50 manufacturers have signed
monitoring agreements with the
Department of Labor.
May 3
The Department releases its first ever
national report on garment worker
.abuse. The Department conducted
472 investigations that revealed 222
violations and resulted in the collection
of more than $1.3 million for about
3,600 garment wor~ers.
May 8
· The Department announces the
results of a garment industry compliance survey in the Los Angeles area.
The survey found that monitoring
programs in the garment business
significantly reduced minimum wage
and overtime violations.
DOUOPA 7/96
May 9
The Department announces the results
of a recently completed survey of
garment shops in Southern California,
which found that 48% of the shops
investigated were monitored by manufacturers. Monitored shops were found
to have less than half the violations
found in shops not monitored for
compliance .
May 10
The Department conducts week-long
garment raids in Orange and Riv~rside
Counties, CA.
May 20
The Department announces that some of
the nation's largest retailers received
goods produced at three garment
factories that.have repeatedly violated
the Federal minimum wage and overtime
laws. J.C. Penney, Talbot's, Macy's
East, Specialty Reatilers, Charlotte
Russe, and Claire's Boutiques were
named. Three garment contractors
underpaid 294 workers more than
$245,000.
May 23
Upon learning that the firm had failed to
pay its workers for several weeks, the
Department immediately initiated an
investigation of Sea Fashions in New
York City . The shop was.producing
goods under the "Kathie Lee" label sold
exclusively by WAL-MART.
May 31 ·
The Secretary and Kathie Lee Gifford
announce a Fashion Industry Forum in
July to bring together some of the
biggest names in fashion and entertainment to expand the crusade against
sweatshops. The previous week, a
garment shop in New York City producing goods with Kathie LeecGifford's label
was found to owe its workers more than
$47,000 in back. wages.
'!§I
Page4
0
0
00
�Garment InitiativeTimeline
June 1995 - August 1996
1 9 9 6
.··
- ·. JUNE
June 11
Secretary Reich announces that the
Department is exploring an international label that would assure consumers that goods they purchase have not
been made with child, forced, or
exploited labor_
June 17
Secretary Reich announces that
Talbot's and J.C. Penney instituted new
compliance programs that will require
their vendors to adopt monitoring
procedures that will detect and prevent
sweatshop abuses. K-MART was also
recognized for expanding its policy to
cover not only the compliance of
vendors contracted directly by the
company, but to expressly obligate its
vendors to be responsible for their
subcontractors as well.
- . ·· ·
June 28
Secretary Reich announces that the
Fashion Industry Forum will be held on
July 16th for representatives from all
aspects of the industry to discuss
strategies to ensure that all garments are
made in conditions that are fair and in
compliance with labor laws.
JULY
July 16
More than 300 fashion industry representatives - including retailers, manufacturers, designers, workers, labor,
· _consumer advocates, and celebrity
endorsers·-- participate in a Forum to
discuss the challenges embodied in
eradicating sweatshops and the
importance of working together to
identify and implement solutions.
AUGUST
August 2
Apparel and footwear industry
leaders commit to the President of
the United States to participate in a
voluntary, non-governmental
partnership to develop options to
assure consumers that the items
they purchase are produced under
acceptable labor conditions.
0
>
Ul
-~
1!§;1
DOUOPA 7/96
Page 5
0
0
~
�08/01/96
15:52
'5'202 219 9216
OASP
~010
····--·"""'-------·-------···---·-
President's Rose Garden Statement
Garment. Initiative
August 2, 196
Today I am delighted to announce an extraordinary cornmittnent
by leaders of the apparel and footwear industries-- one that we hope
will lead to a system for assuring Atnericans that the clothes and shoes
they buy are n1ade under decent and humane working conditions.
With me today are representatives of some of the nation's biggest
apparel and footwear manufacturers ...a:as Hta'l a Also here are
representatives of labor unions, consumer groups and other
organizations. Everyone here is cmn1nitted to one task -- to develop a
process for giving consumers the infom1ation they need to avoid
purchasing sweatshop-made goods.
Our hope is that this emerging partnership will become a vital part
of the battle against sweatshops here in the United States and against
abusive working conditions everywhere.
Government can enforce the labor laws, yes. But with the
resources government has at its disposal, we cannot possibly hope to
guarantee that every product sold on every store shelf has been
produced under decent conditions.
Clearly, change is not possible without the industry itself playing a
critical role. The solution to the sweatshop problem 1nust be industrydriven .
.American consumers are going to play a critical role, too.
One year ago today, the discovery of more than 70 people working
in virtual slavery, behind barbed wire, in a gannent factory in El Monte,
California, had many Americans wondering about the origins of their
own gam1ents and shoes.
�08/01/96
15:52
'8202 219 9216
OASP
- -..........................
·-··• ....
___________
~011
American consumers do not want to support sweatshop labor with·
their consumer purchases. In fact, a recent public opinion poll showed
that a large n1ajority would actually pay more for gannents that were
certified as sweatshop-free.
Thus, consumers can be a powerful force for change. But only if
they have the information they need to vote with their pocketbooks and
their wallets.
That's why today's announceinent is so important. Con1panies like
Nike, Liz Claiborne, L.L. Bean, Patagonia and others are here to say
that they will find a way -- a systen1 -- to assure consun1ers that the
clothes and shoes they buy are .not made under abusive conditions.
Perhaps they'll come up with a voluntary label certifying that an
iten1 was not produced in a sweatshop. Maybe it will be system of
monitoring working conditions at the contracting and subcontracting
finns that sew and stitch clothing and shoes. Maybe it will be a
combination of the two-- or another innovation altogether. We don't
know, yet. And we won't know until everyone has a chance to sit down
and work out a plan.
·
What we have here today, though, is a solid conunitment -- from
the major players in the industry-- to come up with options, to develop
a strategy for progress, and to get the job done.
These are companies that believe the future can be a successful
and prosperous one for workers at every level of the industry. Even in
the face of tremendous economic change, they believe in the "high road"
to higher pr?fits, rather than the "low road" of using sweatshop labor.
Quality products and quality labor -- that's what this partnership is
all about. I wish to con1mend each and every one of you for you
commitment to this process. It represents a huge step toward ensuring
that consumers will have the information they need to avoid purchasing
products made with sweatshop labor.
Let me also comn1end and thank Senator Tom Harkin and
Congressn1an George Miller for their leadership on this issue.
2
�08/01/96
15:53
OASP
'5'202 219 9216
··-··--
· · - - - - - - - - - - - 141012
To those of you who have committed to this process, I have
nothing but the highest hopes for your success. I truly believe that this
partnership is going to have a tremendous impact on your industry and
the lives of so many who labor in it.
3
�@013
~---------------
08/01/96
15:53
'&202 219 9216
Qj\.SP_ _ ···-· _ _ - - - -
Talking Points for the President
August 2nd Garment Industry Event
Roosevelt Room
I am delighted that all of you could be here this morning and I
thank you for con1ing.
Gathered here in this room, we have what I believe is the
beginning· of an important partnership -- one that will enable Americans
to have confidence that the clothes and shoes they purchase are made·
under decent and humane working conditions.
Represented here are son1e of the ·nation's largest apparel and
footwear companies, along with leaders from organized labor and
consumer groups. You are the key to the success of this effort. And
your comn1itn1ent to developing options for consumer notification is a
real breakthrough in the battle against sweatshops at home and against
abusive. working conditions everywhere.
Let me e1nphasize the importance this partnership.
Since the day I took ·office, my administration -- and Secretary
Reich in particular-- has sought to vigorously enforce the labor laws and
thereby reduce the nu1nber of illegal sweatshops operating in this
country.
But we know that govern1nent enforcement efforts alone cannot
guarantee Americans that .the gannents and footwear they buy are made
free of sweatshop labor, free of child labor, and free of abusive working
conditions in this country or abroad. Government simply doesn't have
anywhere near the number of inspectors it would require to make that
guarantee.
Fortunately, there is another way. We know that vast majority of
Americans sincerely want to avoid purchasing goods made under adverse
conditions -- in fact, more than four out of five say they would pay more
�08/01/96
15:54
OASP
'5'202 219 9216
for garments that are certified as sweatshop-free.
We also know that there are many apparel and footwear
companies that pay good wages and decent benefits -- and at the san1e
time are offering quality goods at reasonable prices. I'm pleased to see a
number of them represented here today. And I want to commend you
for your commitment to taking the "high road'' to productivity and
profitability.
·
So here we have converging interests. Consumers want quality
garments produced under quality conditions. Workers and their unions
want fair treatment from their en1ployers. The celebrities who endorse
products don't want their nan1es connected to abusive practices. And
companies want a better industry~ one in which decent en1ployment
policies do not put them at a competitive disadvantage.
Sounds like the makings of a powerful coalition for change -- one
dedicated to helping Americans get the information they need to n1ake
the right choice when they purchase their clothes and their shoes.
But, clearly, it could not happen without a strong comn1itment
from the manufacturers and retailers represented here today. You are
critical to this effort. I salute you. And I pledge my ad1ninistration's
best efforts to work with you in the days ahead.
2
141014
--··--····--·----···-···-·-··--··----··--
�\
' ------· -:·: --._~ ~-.-'- '7-~·::-:--_,...--:-:---~.~--. - -
-
-
-:----7 - - -·.-· - ~· . ""-_---:--_,
l.i.
'
::CALLED TO SEE
.
.
-
-~
•
vou.
""
W1Li CALL AGAIN;:
'J' \.
,·
1
Message...,_-,......,.;:-".:'<,..--""·~·
_"'.:. -" '_'~-"'". .,.t._\_.,-':·~r""~·~>-=''....,.,....;..-.;..._,____,::"-;_;_
-.;
\
"\" . f
..,,.__
·.t ..
~·~A-_~--
•
~-
:.·
...
;:-+_
f-
1,;
·-t·
c:
�\
IV: .
; -
~-.~ if;:.~~~~="-'~~~
:.'.".' " ;,;" _~.,;,_..
-~---~-
,--
-
____;
~\
·,,.
�08/01/96
16:31
...
President's Rose Garden Statement
......
Garment Initiative
August 2, 196
Today I am delighted to announce an extraordinary commit1nent
by leaders of the apparel and footwear industries -- one that we hope
will lead to a. system for assuring Americans that the clothes and shoes
they buy are made under decent and humane working conditions.
With me today are representatives of some of the nation's biggest
apparel and footwear 1nanufacturers and retailers. Also here are
representatives of labor unions, consumer groups and other
organizations. Everyone here is committed to one· task -- to develop a
process for giving consumers the information they need to avoid
purchasing.·sweatshop-made goods.
.
Our hope is that this emerging partnership will becon1e a vital part
of the battle against sweatshops here in the United States and against
abusive working conditions everywhere.
Government can enforce the labor laws, yes. But with the
resources government has at its disposal, we cannot possibly hope to
guarantee that every product sold on every store shelf has been
produced under decent conditions.
Clearly, change is not possible without the industry itself playing a
critical role. The solution to the sweatshop proble1n must be industrydriven.
Ainerican consumer~ are going to play a critical role, too.
One year ago today, the discovery of more than 70 people working
in virtual slavery, behind barbed wire, in a gannent factory in El Monte,
California, had many AI11ericans wondering about ~}le origins of their
own garments and shoes.
14!004
�08/01/96
141002
16:35
To those of you who have committed to this process, I have
nothing but the highest hopes for your success. I truly believe that this
partnership is going to have a tren1endous impact on your industry and
the lives of so many who labor in it.
3
�E X E C U T I V E
0 F F I C E
0
T H E
F
P R E S I D E N T
01-Aug-1996 02:25pm
TO:
(See Below)
FROM:
Jason s. Goldberg
National. Economic Council
SUBJECT:
No Sweat Event
FOLLOW-UP FROM CONF. CALL.
1.
Annie: Peter Reinecke called from Harkin's office.
you would call him with details.
2.
Pre-Brief:
I told him that
15 minutes before Roosevelt Meeting.
Participants:
3.
Tyson, Baer, Herman, Sperling, Edmonds, Reich,
Sally Sacher (DOL), Cheri Carter
Meeting:
Cheri will manifest the table:
outside of table.
24 at table.
others around
Cheri, working with DOL will script a very brief agenda
highlighting the first 3-4 individuals POTUS and VPOTUS should
call on.
4.
Paper:
Angus and April will work with Bibb Hubbard at DOL.on the
following:
1.
1 page overview fact sheet
2.
Overview of Administration accomplishments on
this issue -- chronology of DOL's actions.
�3.
Descriptions of participants
4.
Facts on the 1 year anniversary
5.
Between the meeting and the event we will need another 5-10 minute
briefing with POTUS and VPOTUS.
6.
If rain, Don and I are of the opinion that we should strongly consider
just having the large group stand with him in the Oval as he makes this
statement.
7.
We will do a fdllow-up conference call at 7pm. The first focus of that
call will be MESSAGE and MATERIALS, then LOGISTICS!
Distribution:
TO:
TO:
TO:
TO:
TO:
TO:
TO:
TO:
Sarah Farnsworth
Cheryl Carter
Ann M. Cattalini
Julia R. Green
Angus S. King
Anne M. Edwards
APRIL K. MELLODY
James T. Edmonds
cc:
Donald A. Baer
�08/01/96
14!001
16:30
The U.S. Department of Labor
David St John's Office, OASP
200 Constitution Avenue, N.W., Room S-2233
Washington, D.C. 20210
TEL (202) 219-0061 or 219-5109 x178
FAX (202) 219-0344
I
FAX COVER SHEET
DATE:
August 1, 1996
TO:
Terry Edmunds 456-5709
FROM:
David St. John
# OF PAGES (INC. COVER):
6
Terry -- here are a couple of drafts to help you ·along. If you need any help, do not hesitate
to call me (219-0061 xl77).
******************************·************************************************
******************************************************************************
The information contained in this facsimile message is privileged, confidential and protected
from disclosure. If you think you have received this fax in error, if you do not receive all the
pages, or if you have any problem receiving this transmission, please call (202) 219-0061
xl78. Thank you.
�THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release
May 16, 1996
CONFERENCE ON CORPORATE CITIZENSHIP
PANEL I
Gaston Hall
Georgetown University
Washington, D.C.
11:30 A.M. EDT
THE PRESIDENT: Thank you very much, Father O'Donovan, for .giving those
assembled here in five minutes the essence of what I got in four years of my Georgetown
education. (Laughter.) When I was a student I came to this magnificent old hall many times
to hear other people say things I thought were very wise. I never imagined I would be here so
manY. times myself in this position, but I am delighted to be back.
This is a peculiarly American event we're about to have today. And I'm glad that the
business students from Georgetown are here, the law students, the undergraduate students. I
understand this is the day after finals-- that shows the level of devotion to this topic- (laughter)
-- that I hope the rest of us can match.
I also want to thank the business leaders who are here and the labor leaders who are
here. There's a remarkable collection of people here from large, medium and small companies,
men and women, different racial and ethnic backgrounds, people who represent different kinds
of unions and different work organizations -- all committed to discussing this very important
topic today of citizenship in the workplace.
As the nature of work and the nature of the workplace changes dramatically and we move
so rapidly into the 21st century, what do we owe each other in the workplace? What do
employers owe employees? What do employees owe employers? What, if anything, should the
government do to help to deal with the new challenges that we face?
·
We are here today for two reasons: First of all, because there are some very profound
�changes taking place, and if we respond to them properly, we get very good results. But even
in the good results we see some paradox -- our economy in the last three-and-a-half years is a
deficit that's less than half of what it was when I became president; low inflation, 8-and-a-half
million new jobs, a 15 year high in home ownership, all-time highs in exports and small
business formation.
But, still, according to studies done by both the Business Roundtable and the AFL-CIO,
high levels of uncertainty in our workforce, people uncertain about their job security, whether
they can get an increase in income even if they work harder, whether they can maintain access
to health care and retirement for their families. And people wanting more genuine participation
in their jobs, in their work force, in building their own future.
The government plainly has some big roles to play in reducing the deficit, having good
trade policies, promoting our economic interest around the ~orld, investing in technology and
research in areas that it's obviously important for a public investment as well as the private
investment. There are certain tax incentives the government has provided traditionally and that
I hope we'll provide again-- the incentives for research and experimentation, the incentives for
companies to help to finance the education of their own employees - indeed, I would like to see
expanded to give a little extra help to small businesses in that regard.
There are certain regulatory changes the government ought to. make. The Vice
. President's worked very hard to work with our agencies in getting rid of 16,000 of the 80,000
pages of federal regulations and changing the way we work with the private sector to make the
work place safe and the environment clean. There are some things we have to do to help people
to become more employable even if they don't have specific job security, in terms of improving
access to educational benefits and creating greater portability for health care and retirement.
And we know that government should do these things, but we also know that most of the
action has to be in the private sector. Just as I always say when discussing education, the great
magic of education will never be in Washington or any state capitol. It's what goes on in the
classroom between the teacher and the child. The great magic of the American system of free
enterprise is what goes on in the private sector. Indeed, one of the things that I like best about
the job figures of the last three-and-a-half years is that the percentage 9f new jobs being
provided by government is the smallest it's been in' 20 years or more. And the federal
government is almost a quarter of a million people smaller than it was when I became president,
and overall, we are relying more and more on private sector job growth. And that, I think, is
a good sign.
But what that means is that the mutual responsibility that employers and employees feel
toward one another and toward the larger society is becoming even more important.
I would just like to mention a couple of things that I do not think we will discuss today,
because I think they are illustrative of the way that we can deal with these issues. I have been
very, very impressed with the work that the private sector has done with our administration and
especially with the Vice President in trying to find new and economically efficient ways to
protect the environment: the auto companies working with us to develop a new generation of
�cars that can get triple the car mileage that we take for granted as the ceiling today; all the
companies that have worked with us to- in the Project XL where we say you agree to meet
certain high environmental standards, take the thick EPA rule book and throw it away. And
we've got a long line of people that want to get into that particular project.
But it's working. This is exciting. The companies that have worked with the
Occupational Safety and Health Administration say if we involve our workers and ourselves in
a joint effort to· make the workplace safer, we ought to get to decide how to do it if we can do
it more efficiently and get better results. These are achieving good social ends as well as good
ends within the workplace. I want to say a special word of thanks to the entertainment
companies that worked with us and that are now hard at work in developing their own rating
systems for television programs, for violence and other contents that may be inappropriate for
children -- no government involvement at all except our agreement to work with them in the
passage of the law that requires the V chip to go into the television.
These are very encouraging things. We got some indication yesterday that we may even
wind up with an agreement with the private sector in this effort that we've been so intentionally
involved in to try to curb the teenage smoking, when Philip Morris and the U.S. Tobacco
Company indicated that they would agree to legislation to limit sales of tobacco to children and
to reduce advertising of tobacco that affects the nation's children. And I want to thank them for
that.
I have to say, in all candor, I believe we should do. more because, under the proposal,
kids in this country would still be confronted with Joe Camel and the Marlboro Man on
billboards and stores and all the magazines. And we know 3,000 children start smoking every
day and 1,000 of them are going to die early because of it. So I don't think it's enough. But
I do believe that it's an indication that there may be some way that we can agree on legislation
tQ do this. If all of the tobacco companies will voluntarily accept legislation containing the
limits that will be as effective as what we've proposed; I will say again- we believe it's better
to have the companies come forward and ask for legislation. And the FDA has made perfectly
clear that they will stop their efforts to impose regulation if we can have a joint agreement on
a legislative solution.
These are the kinds of things that I want to do more of in dealing with the larger
problems of society.
But to come back to the main point, the workplace itself hC~:s to produce a profit, has to
produce a vibrant free enterprise system for America and what the relationships are in this new
economy between employers and employees will have a great deal to do with that. The business
leaders who came from all over this country today to be a part of this received a letter from me
in which I suggested that there were at least five elements of corporate citizenship that we ought
to consider as we move through this period of dynamic change.
. First of all, since almost all families have all the adults, whether there are two or on~ in
the family working, workplaces should be more family-friendly. We shouldn't ask our working
people in America to choose between being productive workers and being good parents.
�Secondly, health and retirement security are profoundly important. And the nature of benefits,
health and retirement benefits tied to the job has been changing rather dramatically in the last
several years. How are we going to continue to ensure health and retirement security?
Thirdly, safe and secure work places. Fourthly, employees that know that they are
invested in. How can we continue to develop the capacity. of the employees of this country?
One business executive, unrelated to this meeting, wrote me a letter saying that he had gone out
of his way to invest more in the education and training of his employees once he realized they
were less likely to be with him for a lifetime. He said, I felt that I owed even more than I ever
had before to them to make them employable if for some reason they had
to leave our
company.
And, finally, the issue of partnership in the work force. One of our participants said
today, in a very moving statement, that he had talked to a man who worked in a factory -- one
of his company's factories -- who had been elected head of his local PTA and was prominent
in the society in every other way. But he said it was only recently that his company had decided
to let him participate from the neck up. For years and years and years, at work, he'd only
participated from the neck down. Everybody else in his community wanted him from the neck
up, just his company didn't. That was a profound statement, I thought. And more and more
of our companies are looking for ways to let people participate from the neck up. When people
feel that they're on the same team, it's a lot easier to take the bad news along with the good.
So these are the things that I hope will be discussed today. The companies that we will
hear from up here are being showcased for one reason - they have done all of these things in
ways that I believe prove that you can do the right thing and make money, that you can be
successful in the American free enterprise system by having better and stronger relationships and
ties with your employees. Every company represented out here in this audience today had
another story like that to tell.
'
I'm going to do my best just to stay out of the way and let them talk and then let all of
you talk, hoping that some good ideas will come out of this because I believe the power of
example to change the behavior of Americans is enormous. We have seen it in case after case
after case. And I think that the coverage of these issues, on the whole, has been concentrated
in negative examples when something bad happens to people, which then may be translated as
a general rule. What I want to see us do is to elevate the good practices that are going on, show
how they are consistent with making money and succeeding in the free enterprise system, and
hope that we can reinforce that kind of conduct that so many of you have brought to bear in
your own companies and with your own employees.
Let me say that I know that this is not an issue that can be solved in a day or a year, and
that this is not a question of finding an answer. What we have to do is to join together in a
great journey as Americans, to continue to deal with these issues as we go through this dynamic
economy. And I have given a lot of thought to what we could do to sort of signal that we're
going to do this over the long run.
�------------
And today I have an announcement to make that I think reflects the spirit of what we
are doing and will help us to continue to do it year-in and year-out forever. I asked a number
of business leaders, led by John Bryan (phonetic), the CEO of Sara Lee, and Larry Bossidy
(phonetic), CEO of Allied Signal, to come together to develop an award-- totally financed and
operated out of the private sector, not a government award -- to honor every year outstanding
corporate citizenship. It would operate something like the Malcolm Baldrige Award does, that
recognizes businesses for the quality of their. products or services.
This award will celebrate business for the quality of their relationship to their workers
and their communities. The award, as I said, will be created and managed entirely by the
private sector, and its criteria will be based upon the five principles of corporate citizenship I
mentioned earlier. These leaders will seek the advice of members of the business community,
workers and their representatives and others, including educators. It will be presented every
year by the President of the United States, and it will be called "The Ron Brown Corporate
Citizenship Award." (Applause.)
We are honored to be joined here by Alma Brown. Thank you for coming today. Bless
you, my friend - stand up. (Applause.) If there ever was a person who thought you could do
well and do good at the same time, it was Ron Brown. And I can:t think of a better way for
us to honor him by continuing this work.
Let me end by saying now, we're going to spend the rest of this day listening to you,
trying to come to grips with these issues. We know that a lot of them are very difficult, that
the facts will be different from industry to industry, sector to sector, company to company. But
we also know that this country cannot become what it ought to be. We cannot make this
transition into the 21st Century unless we create opportunity, unless we all go forward with a
sense of personal responsibility, as Father O'Donovan said, and unless the end result is the
community of America is stronger.
We have always believed that free markets and free enterprise made our whole country
stronger, and we have always believed as Americans that we can find a way to correct the
problems of the system so that it could thrive. That really is the whole story of the United
States in the 20th Century, and I suppose the conversation we're having today will help to tell
the story of the United States in the 21st Century. We need to give the right answers, and I
think we will. Thank you very much. (Applause.)
Our first panel will deal with a lot of the questions of family-friendly workplaces, safe
and healthy workplaces, and health and retirement security. We'll start with the question of
families, and I'd like to begin by calling on Kenneth Lehman, the co-CEO of Fel-Pro,
Incorporated, a third generation, family-owned automotive supply manufactu'rer in Skokie,
Illinois. I'd like to ask him to tell the Fel-Pro story and why such a small company provides
such extensive family benefits to its workers and whether this undermines or contributes to its
success in the marketplace.
�the great American tradition of entrepreneurship, I saw that there was a great opportunity to help
others manage and support people differently so that there is an unleashing, rather than a
quelling of drive and ambition. But as I built my business, I knew that I could not and should
not advise others if I did not do my level best to manage people well and toward high
commitment.
Work-Family Directions has 400 employees, and about $65 million in revenue and, I'm
happy to say, a healthy bottom line. We are smaller than many of the people here today, and
we are smaller than each and every one of our clients. But it's interesting because we face
similar pressures. Our people have complicated and full lives, and a full range of changing
values and needs that they bring to the workplace, whether we like it or not. Our marketplace
is becoming increasingly competitive, with price pressures brought about by the cost
consciousness of large companies - maybe in this room
- increased quality expectations, technology investments, and rapid change part of the daily
landscape, whether we like it or not.
You may wonder whether a privately held, relatively small company is relevant to the
issues of larger organizations. And I think that it is, in that I have watched many large
companies change and become more supportive and better managed over time. They don't do
it all at once. They transform one plant at a time, sometimes one manager at a time, sometimes
one business division at a time, in every case, taking into account who the people are, what the
community is 'like arid what the business circumstances are.
We started our business believing that effort not made by our people would be our
greatest strain but also our greatest asset to mine. I don't want Work-Family Directions to be
a place ever where people say things like, "Let someone else worry about it," when it comes
to serve a customer. When our clients walk around our offices they tell us that the energy and
commitment to customers is tangible, is palpable, and our quality measures tell us this, too.
What we do to achieve this is not, if you'll excuse the expression, rocket science. It's
dozens of small things, and it is embedded in our culture. When people need flexibility at our
company, we don't make them beg for it;we don't dole it out as a favor, we simply ask them
to show us a way that the work will get done and their any· new arrangements.
On snowy days when we have to open our national service center, the Boston schools
are closed. It's in our interest to provide the child care right at the company so people can get
in and have their children safe. We do the same things to school vacations. We also support
our people with things like college counseling and advice when their children are having trouble
in school. And the reason we do it is because many of the public schools around us have
virtually cut out their guidance departments.
We help pay some of the costs of child care for our lowest income employees so that
they can have a stable experience with us. And when any employee who has to take
out-of-pocket expenses to travel for work, works for us, we help pay for that.
We have a diverse work force, and at the core we trust our people. Even when they
�don't like a decision we make, they tell us that they feel like there is a caring and respect for
who they are. Given my understanding of human nature and my practical immigrant child roots,
it seems like it's just common sense that it's a prerequisite that our people know we care about
them before they can care about our business.
Recently, we worked with one our clients, duPont, to measure the effects of 10 years
of prudent investments in making the workplace more flexible and supportive of family. The
data collected showed a highly significant relationship -as was just described at Fel-Pro -between using du Pont's support and being willing to go the extra mile to do whatever it takes
to make du Pont win in the marketplace. In fact, employees who felt supported were the most
committed group.
I was delighted with these results. But, frankly, while they were counter-intuitive to
some people, as an employer, they were consistent with my experience. At least weekly, an
employee who has changed work hours, taken a leave to care for an elder, or been trusted with
a major business decision where they've been given honest information, comes to me in person,
via voice mail, through e-mail, to say how much the support has meant. And they don't tell me
that we're nice or that we're socially responsible, though I think we are. What they tell me is
that the support offered them a tool so they can work better. They say it helps them contribute
more to the company and to their families and, most important as an employer, they say our
unique environment makes them want to do anything that will make us successful.
In the end, isn't that what we want all our employees to feel? Thank you.
THE PRESIDENT: Thank you. (Applause.)
I'd like to make two brief points. First of all, I think the odd concept of all these things
as tools that other people use to make the most of their own lives and their family lives is a very
helpful way of looking at this, because most people just want you to make it possible for them
to make the most of their own lives.
I also should point out that, since Fran didn't explicitly say this for fear that at this
meeting she'd look like she was hawking business, this company, Work-Family Directions, is
based in Boston, they employ about 250 people and they provide work and family referral
services to larger companies, including child and elder care referrals, adoption referrals and a
number of other services. So she's seen this from the perspective, as she said, of both smaller
companies and larger companies.
We should say the size of each of these companies, because I think that's important.
Fel-Pro has about 1,700 employees, I think - is that right?
MR. LEHMAN: With 2,000 in the Chicago area and 800 in other places.
THE PRESIDENT: Yes, but in the Chicago area it's about 2,000.
MR. LEHMAN: Yes, we have about 2,000.
�THE PRESIDENT: Now, our next panelist is famous to all of us who have children who
love the environment and some of us who like to get out and around ourselves. Yvon Chouinard
is the founder of Patagonia. And among other things, Patagonia devotes one percent of its sales
to environmental projects and initiatives- something which, when Chelsea and I go Christmas
shopping every year she always reminds me when we decide what to do. (Laughter.) So I'd
like to ask Mr. Chouinard to tell the story about his work family benefits program and how it's
worked into Patagonia's history.
MR. CHOUINARD: Thank you, Mr. President. I'd feel a lot more comfortable on top
of a mountain than here right now. (Laughter.)
THE PRESIDENT: Pretend that's where you are. (Laughter.)
MR. CHOUINARD: The mission statement of my company is, "Make the best quality
product and cause no unnecessary harm." Quality is not something you can do piecemeal.
Either you believe in quality or you don't; either it surfaces everywhere and you commit to it
everywhere, or you don't. There's no gray area here.
I don't think it's possible to make a great quality product without having a great quality
work environment. So it's linked - quality· product,. quality customer service, quality
workplace, quality of life for your employees, even quality of life for all living things on this
planet. If you miss any one piece, there's a good chance you'll miss it all.
A family-friendly business tries to blur that distinction between work and family and
work and play. For us, a quality workplace includes one of the best child care centers
anywhere. The law requires that there be no more than four infants for every caregiver. At our
center we have only three infants per caregiver. The law also states that there be no more than
12 two-year-olds per caregiver. At our center there are no more than five.
The center is on-site. Therefore, mothers can continue nursing their children while they
are back at work. Mothers and fathers can take breaks and have lunch with their kids. Some
parents choose to keep their young babies right at their desk. When we began our child care
center in 1984, we were only one of 150 corporate on-site child care centers in the United
States. In 1994, I believe it went up to 1,100.
For us a quality workplace is a flexible one. Our employees work hard and many of
them work long hours. But we're flexible in allowing them to fulfill other interests or
obligations. We have world-class athletes working for us, and ifthey are to stay the best in the
world, they need time to climb or paddle or surf. We give them that time and it shows in our
product.
For us quality of life means strong and healthy families. We give two months' paid
parental leave for mothers and fathers. I don't want employees, male or female, who feel as
if they were forced back to work too soon. I want employees who feel secure enough at home
that they can be creative while at work. I want them to bond with their children. I want them
focused. And ifthey're distracted by guilt, they can't focus. We don't provide these benefits
�because we're nice. We provide them because it's good for our company.
The benefit that any other business should understand is the impact these program,s have
on turnover. It's incredibly expensive to hire and train new employees. At our place it can cost
$90,000 to find a senior manager. After the initial expense, they can spend many months, even
years on a learning curve. This doesn't happen very often at our place. .The turnover rate at
our main offices is 4.5 percent. The average for our industry is 20 to 25 percent. Our
employees stay with us for a long, long time. They don't stay because we pay huge salaries -because we don't. (Laughter.) They stay because it is family.
This part of our mission statement is easy because it's just good business. The other part
-- and this is important to the individuals and families who work for us -- is about causing no
unnecessary harm. No unnecessary harm is also about quality of life, of all life, and it's more
difficult to achieve. We're fortunate in that our jobs don't depend on making land mines or
pesticides, but in making clothing. We do use up nonrenewable resources and we do pollute.
So every day through our environmental assessment, we attempt to do less damage.
We also take, as the President said, one percent of our sales and use it to safeguard and
restore the natural environment. Our customers appreciate our efforts, and all of us feel little
less helpless in trying to leave a habitable earth for our children and other wild things. Thank
you. (Applause.)
THE PRESIDENT: Thank you. Let me ask you, how many employees do you have?
MR. CHOUINARD: We have 750 worldwide.
THE PRESIDENT: And that includes the people that actually work in all the stores
where Patagonia is sold?
MR. CHOUINARD: That's right.
THE PRESIDENT: One of the things that strikes me about- I don't know how many
of you have ever been in one of their stores, but every time I go into one I feel like I'm in an
evangelical mission because all the young people there -- you.'can't get out of the store, it
doesn't matter ifyou don't even buy anything- you get the line, you know, that the company
is really sort of environmentally responsible and you should be, too. And they always give you
something - do you do any work on that? I mean, do you actually work on getting these kids
to learn how to speak that way or do they do it just because you set a good example?
(Laughter.)
MR. CHOUINARD: Well, I think this type of thing can't be done from a desk
somewhere in the part of the company that's called the Environmental Desk. It has to be driven
all the way down to every single employee. It's part of everybody's job. So they were doing
their job.
THE PRESIDENT: Very impressive. Let me also say one other thing that -- some of
�you, if you saw the State of the Union address, you know that I mentioned what is now the very
famous story of Malden Mills, the Massachusetts-based company that had a tragic fire and
afterward the gentleman who owned the company told the workers he was going to keep
supporting them until they got up and going again. His name is Aaron Foyerstein (phonetic) and
he's here today, too, right out there. Stand up, sir. (Applause.)
The reason I brought it up now is that Patagonia had a 15-year relationship with them
and when he made that announcement, Patagonia announced that they would not have any
layoffs as a result of the loss of the customer and that they would continue to support each other
until Malden Mills got up and going again. And I think that is also a very credible thing.
I'd like to ask the Vice President now, before we go on to the next topic, to talk about
some of the things that are being done in the federal government to provide our public workers
with access to family-friendly benefits. I must say that this is an area in which the government
has lagged behind, at least the most forward leaning private sector companies. And we've tried
to do some things in this regard. I'd like for the Vice President to talk about it.
THE VICE PRESIDENT: Thank you very much, Mr. President. And ladies and
gentlemen, I'd like to preface my remarks with a reminder that in our system of government,
the head of state and the head of government .are combined in the person of the President, not
separated as they are in most countries around the world.
The President is speaking here today in this dialogue in his capacity as head of state, in
leading our whole country. But he also has the daily responsibility of managing the operation
of the entire government. We have 3.5 million federal, military and civilian employees --more
than half of them now civilian employees. When we began this task - when the President was
inaugurated three-and-a-half years ago, we found an enterprise that was in the red, so-to-speak,
·
and had a lot of waste and float - and I won't go in to allthat.
But the President asked me to begin the national performance review, sometimes called
re-inventing government. And we went through· a process that included the same kind of
downsizing that many of the corporate leaders here have gone through for many years now. The
government is now 240,000 employees smaller than it was three-and-a-half years ago. But in
the course of trying to figure out how to accomplish these objectives we looked very carefully
at some of the new management approaches that many of the individuals here in this room have
innovated and have used to good effect. And we found that most Americans, either through
their experience in the workplace or their experience as customers, have learned how to
distinguish very clearly between organizations that are managed in the old way and organizations
that are managed in the new way.
The President used the phrase in his opening comments "from the neck down" and "from
the neck up." It used to be, of course, that employees were usually seen as muscles to be given
instructions and asked to do repetitive tasks over and over again. And some have said the single
most important advance associated with the new way of managing organizations is recognizing
that the greatest unused asset in any organization is the unused brainpower and creativity of the
men and women in the organization. And any effort to capture that creativity and intellect and
�brainpower is going to pay dividends for the entire organization.
To take that as a model, I think you could probably say that the movement toward a
family-friendly workplace incorporates the emotions as well as the brain, and sees the employees
as whole people in families whose loyalties will be devoted to an organization that respects their
own loyalties to members of their family and to their community. And in an era when
downsizing has produced a good deal of concern, some of it expressed at breakfast this morning
by corporate leaders who worry that the loyalty given to the corporation or employer may be
diminished, respecting the family obligations and roles of employees is definitely a way to
engender loyalty on the part of the employees.
The National Performance Review began addressing this in our work force in 1993.
This led President Clinton in July of 1994 to issue a memorandum to the heads of all federal
agencies to encourage and expand family-friendly workplace practices. We've made a great deal
of progress; employees in every federal agency are actually making use of the many
family-friendly options to help them meet the demands of both their jobs and their families.
Flex time is very widely used; more than 52 percent of federal employees are now taking
advantage of work week options other than the traditional five-day, 9:00a.m. to 5:30p.m. work
day.
Federal government impacts workers and their families in two ways: through our own
workplaces and other workers and families through federal programs and regulations that have
an impact on the citizens of this nation.
I'd like to tell two brief stories that illustrate how we affect workers and their families
and some of the innovations that are now underway. First, a story from our own workplace.
The Department of Defense faces some unique family-friendly challenges because, at time, their
work force is deployed for long periods of time, such as our soldiers in Bosnia who are there
for a year on that important mission.
Let me tell you about one of our military fathers, Captain Greg Bryant, a Marine. You
remember when Captain Scott O'Grady was shot down over Bosnia and survived by eating bugs
and drinking rainwater. Well, Captain Greg Bryant's unit was the one that rescued Captain
O'Grady and returned him safely. Captain Greg Bryant is a Marine, he is also the father of two
little girls, ages three and one. He wanted to stay in touch with his family while he was
deployed for six months. He recognized the importance of his whole unit staying in touch with
their families, and so he took advantage of an initiative from his employer, DOD, and got video
cameras and audio and visual tapes so the individuals in the unit could keep in touch with their
families.
He personally read stories to his three-year-old on videotape and sent them back home
on a regular basis. He led the entire squadron of 450 Marines in doing the same and similar
things. I saw a film which showed Captain Bryant's three-year-old kissing the TV screen as she
watched her Daddy read one of the stories to her.
This is not the only family-friendly initiative from the Department of Defense. It's doing
�a lot of other things to help the work and family balance, such as enhancing the roles of
chaplains to provide parenting programs, family workshops, and establishing 291 family centers,
recreation programs, youth programs and return and reunion programs.
Now, I want 1 you to understand, the military has been doing this for years. We have
built on some of the work that was underway and, indeed, we've used some of their models in
other parts of the federal government. Military has been doing it because they understand the
importance of secure families to the performance of people who are under a lot of pressure.
They see these initiatives and programs not merely as some side benefits for employees, but as
an integral part of military readiness, because they understand that the soldiers are not only
people who can operate weapons, but have brains and have emotions, and are 'whole people in
families.
I could give you other examples from each of the federal departments, but instead I want
to conclude with a story about how we affect other, nonfederal workers and families through our
programs. In the worst of all worlds, federal programs get in the way and inadvertently cause
problems in the work-family balance. We're aggressively trying to identify these areas and
change them. Here's one example.
Recently, a man named Victor Rush, who directs a family investment center in a public
housing project, was at a gathering of the Charter Oaks Housing Project in Hartford,
Connecticut. A man entered the room, and a small boy rushed up to him saying, "Daddy,
Daddy." "Hush," said his mother, "how many times do I have to tell you not to call him
'Daddy' when people are around?"
Well, the child's mother was afraid that if she acknowledged a relationship with the
father of her child, she would lose her public housing. Rent rules for public housing, originally
set up with good intentions, have inadvertently caused people not to work and not to maintain
or create intact families for fear of losing their housing.
There are public housing projects all over America where there are 200 units or more,
and not a single intact family, and almost no one working. ·President Clinton has insisted that
this be changed at the federal level. With the leadership of Henry Cisneros, we are changing
the rent rules so that no longer will there be situations where residents don't work or fathers stay
out of the family because the rent will go up if the additional income is counted. We're also
supporting programs like that of Victor Rush.
At that family investment center that he runs, incidentally, men are given work in the
housing development effort at $20 per hour, after sophisticated skills training. But in exchange
for this work, they must sign a contract that says they will spend time with their children, attend
classes, attend a work group with other men to support their relationship with their children;
they will not use drugs, they will live up to the responsibilities of their jobs and support their
families financially.
His center has concrete, measurable goals-- namely, to reunite 100 families and increase
those families' incomes by $14 million in five years. There are lots of stories we could relate
�to you like this, stories from more than half of our federal work force now using flex time, from
the thousands who are telecommuting from home or new telecenters, from federal employees
who use one of our 800 on-site child care centers; or from those like Captain Bryant, who are
taking advantage of special initiatives to create a better balance between work and family.
You can probably see that I'm proud ofwhat the federal government is doing in this area
under President Clinton's leadership; and, incidentally, of the five goals that we are discussing
here today, this one, the family-friendly workplace and the work and family balance, is a
challenge that the President and I will be exploring in greater depth over a two-day period in
Nashville June 23rd and June 24th in a workshop on balancing work and family.
I'd like to close by thanking the President for insisting that these initiatives take place in
the country's largest employer. Thank you. (Applause.)
THE PRESIDENT: Thank you very much, Mr. Vice President. Let me just make one
comment here. I'll just invite your best ideas. The military now has about -- I think about 60
percent of our personnel are married, and as we have downsized in the aftermath of the Cold
War we've had to think a lot more about what we need to do to support families. And a lot of
times, you read something and you think, boy, this sounds great. For example, if we reduce
the number of planned aircraft carrier battle groups- great, no Cold War problem, we're going
to save a lot of money.
One bottom line consequence is that we have to extend the average tour of duty of Navy
personnel from six months to nine months- that's a 50 percent increase in the time those Navy
people will be away from their children, and we have to figure out how to deal with that. The
Bosnia deployment --the Vice President said it's a year-- we try to make sure we could get
everybody at least one break and sometimes two if they have family situations and need it; that's
still a long time to be away from home. And this is in a time of peace, when it's hard to create
this sense of national emergency for your children. They wonder, where is daddy and, in some
cases, where is mom?
So this is a big challenge for us and, if any of you have any others constructive ideas
about other things we can do, I'd personally be glad to have them because we're always looking
for new ways to try to support an institution that really tries to live by family values but has
been strained just by their duty to the rest of us as they exercise it.
I'd like to move on now to the second topic, which is maintaining a safe and healthy
workplace, and start with Ralph Larsen, the Chairman and CEO of Johnson & Johnson, the
largest company so far represented here. They have something over 28,000 employees, anyway
- maybe more, including two great plants in my home state. I should say that Johnson &
Johnson has been repeatedly recognized for its innovative, family-friendly practices. But we
want to ask, today, Mr. Larsen, to discuss the safety program and the effort that they've
promoted in employee wellness and what a safe and healthy workplace has done in terms of the
costs to the company and in terms of the benefits.
Mr. Larsen.
�----------------------------
MR. LARSEN: Thank you, Mr. President and I thank you for inviting us here today
and for establishing this very important dialogue.
Johnson & Johnson has had a longstanding commitment to the safety and health of not
only its employees, but their families. We call it Live for Life. And that program really flows
out of a very simple document that we call the Johnson and Johnson Credo, which says that our
first responsibility is to our customers -- to give them high quality products at good value;
secondly, that we are accountable and responsible to our employees and to their families and to
provide them with a sense of security in their job and safe and orderly working conditions.
That document says that we are then responsible to the communities in which we operate
to respect the environment and be a good corporate citizen. And then it ends remarkably with
a statement that says if we do a good job on those three things, the shareholders of Johnson &
Johnson ought to come out okay. And that's exactly what has happened over many, many years.
The shareholders of Johnson & Johnson, over the last 10 years, have seen double digit, in fact
over 20 percent, compounded annual returns. So the philosophy embraced in that credo has
served us very well.
Now, having said that, we're not perfect. We make mistakes, as everybody does, but
we really try very hard to make Johnson & Johnson a safe place to work for our employees and
their families. And I'll talk specifically about safety for a moment. Just a few years ago, we
took a look at our safety record, and we always thought we did a good job in safety. But we
went out and we benchmarked ourselves against other great companies that have done a great
job in safety, and we were surprised because we found that while we were pretty good, we were
nowhere near the best. And so we said to ourselves, we want to be the best in every field, and
we want to be the safest company in America.
So we set that out as an objective. And, frankly, the results have been more dramatic
than I ever could have hoped. In 1981 when we started to get serious about it, our safety
performance has improved by 80 percent. And that's a remarkable improvement. We have a
lot of people around the world. And we did it by following four basic principles. The first is
communication and training, letting everybody in the company know that we were very, very
serious about this. This was not another program of the month, that we were very serious about
this, that I was very serious. My predecessors were very serious about it. And we
communicated that to everybody in a variety of ways.
Secondly, we engaged in a very intensive program of accident and safety prevention.
We don't want to respond to accidents, we want to keep them from happening. And I'll give
you just one anecdote.
As hard as we .tried - we use a lot of high-speed equipment, and no matter how hard
we tried we found that we couldn't prevent people from circumventing the safety apparatus that
we put in. Somebody would remove something and reach into take out a jam, and they'd nip
their finger or amputate their finger. So we moved to something called zero access, and that's
a very dramatic step. But what it says is you can't get into the equipment. You open any part
of the door that gives you access to the equipment, the equipment shuts down, and you can.'t
�circumvent it. And it was through that one act that we really prevented serious accidents and
deaths and injuries from occurring.
Thirdly, we started a very important program on incident investigation and reporting.
When something serious happened, we really went in and looked at it. In fact, for a long
period of time, if anybody in any of our operations in the world had a serious accident -meaning an amputation or a broken bone or something -- they had to fly in to our headquarters
and explain to me and to our executive committee how that happened, and how they were going
to prevent ·it from happening again.
Well, you can imagine if you're someplace in the yvorld and you're flying in to explain
how an accident happened to one of your employees, you don't want to do it again. (Laughter.)
So that had an impact. And finally, we put in a program of measurement and recognition so we
could measure our progress and also recognize and honor those people in our company that
really embrace safety as a value. So that's what we've done.
We've learned three important lessons_. The first, that safety really does represent an
investment in our people. It's an important investment. It's hard. It takes enormous effort at
all levels of the organization to make it a reality. The second thing we learned is you can never
let up. It's a never-ending journey, and the minute that we let up, we find that we start to
decline in terms of our safety performance. So it's a never ending effort, and I guess the third
lesson we learned is it really is a fundamental responsibility, not just of the corporation, but of
every member of the corporation, and it's something that we take very, very serious. It's the
right thing to do. Thank you very much. (Applause.)
THE PRESIDENT: Thank you. Now I'd like to introduce Roger Ackerman, the
Chairman and CEO of Corning, and Larry Benkowski who is the President of the American
Flint Glass Workers Union, which represents the workers at Corning, to talk about their
common experience. In October of 1995, Corning was awarded the Malcolm Baldrige National
Quality Award. It's been recognized in many, many other ways. The company has, I believe,
over 42,000 employees and has a unique perspective on safety and health and a very strong
partnership with its workers. And so I'd like to call on Mr. Ackerman and Mr. Benkowski to
discuss their experience.
MR. ACKERMAN: I think I'll go first because Larry will steal all my thunder.
(Laughter.) First of all, I think, like Patagonia and like J&J, Corning has a total quality
program that we started really when Jamie Hook became the chairman and I was very much
involved with this personally. And he adapted it as a way to change the company. Everybody
who's in our industry-- the glass industry-- knows that it's an unsafe place, inherently. And
you've got to be really concerned about safety and health right up front.
(
The other obvious thing that happens in total quality is you look at everything you do and
examine how it affects your ability to compete.· And the bottom line is to compete. And
Corning as a company has found itself in many, many high technology, very competitive
markets, where you're dealing with international competition. And if you're not good at
everything you do, fundamentally, you're not going to win. So safety and health takes its place
�----
--
-------------------------------
amongst a lot of other things.
We also have, not a credo, but seven values that we've worked very hard at. And I
don't have my grey booklet with me, but everybody in the company is aware of our seven values
that we articulated and worked together to make sure that we all understood them. I think when
we started the effort of articulating our values, we weren't -- you would get maybe, depending
on who you were talking to, you'd get different 'stories. But we adopted seven of them.
And three of them really create, to me, the framework for safety and health. And they
are --the three out of seven-- are total quality, performance and the individual. As a matter
of fact, focusing on the individual, the words paraphrase say that the most important thing we
have are the individuals. Our technology is important, but if our individuals are not empowered,
are not participating, don't feel good about coming to work, and certainly if they come to work
afraid, they're going to get hurt -- in the ultimate form of not being competitive.
And I personally have had some very difficult experiences with safety. This is a very
dangerous environment that we're operating in. We're operating in furnaces that are operating
at over 2,000 degrees Centigrade and one false move and you can be hurt. I, in my early career
with Corning, was in the hospital. I was operating a factory down in Kentucky and one of our
guys got killed. And it made a life-long impression on me as plant manager going in there and
sitting with this man's family as he died.
So that put - if you want to know where my personal emphasis on this subject comes,
it comes from that experience. And I vowed that would never happen again.
Well, we have accidents. The good news is that by adopting this program and integrating
it with the way we do business, we've seen our accident rate go down by 50 percent. And
we're well below the average for manufacturing in this country and well below the averages for
the glass industry. But it's not good enough. And two or three years ago we took a look at it
and said, well, the numbers aren't getting better fast enough; what can we do differently.
Well, one of the things I did is I said, well, I'll tell you what, the top management in this
company is going to go on safety audits. So we took the top 30 people in the company and they
now conduct safety audits at every of our facilities. Every time there's a safety audit in one of
our facilities -and we've got them all over the world -we have a member oftop management.
And it has really focused in on this issue.
We also, as J&J discussed, as Ralph discussed, we have a lot of measuring and display
of our safety data. Every one of our factories, if you walked in, you'll see four or five things
that they're actually connected to their-- every employee in our company can earn a 10 percent
extra pay based on a series of performance factors. And one of the common denominators in
all of our facilities is their safety and health record.
And every quarter we publish a -- what we call the top quartile, the middle quartile, and
the bottom quartile, and we rank all of our factories in safety and health. And then we call the
bottom quartile the "no parking zone." And the fact is that this creates enormous pressure. And
�- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
it comes out every quarter and it's circulated all over the company. So there's just been this
constant pressure on improving safety and health.
But I won't sit here and say we're some paragon of safety and health, because we're still
hurting people. But we're hurting a lot less than we used to and it's wrapped in a-- the bottom
line is if you're going to control your operation and if you're going to win in the marketplace,
safety has got to be a - is a prime indicator of whether you really have process control and if
you really know what you're doing.
Larry?
MR. BENKOWSKI: I'd like to confirm what Roger just said of our experience with
Corning and on safety and health and other issues. We formed a partnership, a formalized
partnership, back in 1989. We had had and continue to have an excellent labor-management
with Corning, Incorporated, we had had over a half a century. When we formalized a
partnership agre.ement, that was a direct lead-off from the total quality approach which we
undertook 12 years ago together, and we began to focus on a number of problems m our
factories - safety and health being a major issue.
Safety and health is expensive if it is not properly addressed and people are not trained
and made alert and focused on conditions in the factory, those that are adverse, and how to cope
with them.
We focused on other issues in the factories, and within a couple of years we developed
what we call a goal-sharing plan, which really puts emphasis and focuses workers' attention as
well as the management attention on the specific issues, because every day there's a
measurement in the plant -- when you walk into a Corning plant you see graphs and charts. I
recall a former New York mayor, he used to say, well, how am I doing -he'd go out in a
crowd and say, how am I doing? Well, in a Corning plant they tell you how you did. And it's
posted so everybody has that information available.
And by focusing everybody's attention on those goals, particularly in safety and health; ·
we've reduced exposure to safety and health problems and incidents by over 50 percent; in some
plants, we've practically eliminated safety and health problems that we had been regularly
encountering in the past.
Now, Corning is an extraordinary company. Roger and his predecessors have been great
corporate citizens of America, and great corporate partners of the American Flint Glass Workers
Union, and the members that the company employs. We work together on many areas. Our
goal-sharing plan -- in every one of our plants we have perhaps five or six mutually-selected
goals we try to achieve that year. And as we reach our goals, there's a financial reward built
into the program, and at the end of the year every employee in that facility is eligible to earn
up to 10 percent in addition to his regular earnings. And that goes to everybody, it's a group
plan.
Now, you know, workers, just like any other person, you get the extra edge and the extra
�attention if you're going to have some sort of financial motivation or reward. And there's
nothing wrong with that. And we have proved in the Corning system and with some other
manufacturers with whom we have similar arrangements that there is nothing wrong with
financially rewarding people for observing safety factors because the cost of not having good
safety practices in the factories is very expensive.
You add the total lost time incidents, the medical care and all the related factors -- the
loss of productivity, the loss in training, perhaps you have to bring people in on overtime and
pay a premium in order to cover for them -- the cost of safety, of not good safety procedures
in the factory can be very expensive. So there's nothing wrong with financially motivating
people or the work force with that consideration. And we've done well at it. We've established
a program that I believe is unique in America for factory workers.
We have a program, for example, we have a continuous joint committee of our union
members and management representatives who travel the country and visit hospitals and medical
facilities to gauge and determine whether or not they provide adequate, good health care,
whether they are the highest-quality provider ofcardiac surgery or lung surgery, or whatever
it may be. And when we discover and mutually agree that this is the finest in the market, one
of our members needs that service, he is sent there - not to his own local community, which
may not have a hospital up-to-date to handle that specific procedure. And he is sent there, and
his or her spouse is sent there. And all travel, expenses, lodging is paid for by Corning,
Incorporated.
And I think that's a fantastic program because I have been the recipient of some rather
sophisticated surgery a couple of years ago. And I know what it means when you have
something wrong with you and maybe, in your small community, it's not available. And many
of our glass factories are in small communities.· So in this partnership we have been working
with this extraordiqarily good company in America, good corporate citizen, we developed that
program, which I think our people appreciate sometimes more than about any other single thing.
We recently negotiated our contract, and I can recall members of our local negotiating
committee standing up and saying, God bless you Larry and the union and Corning for being
compassionate and caring about its employees and working continually all year -- not just at
contract time, but continually all year-- to make certain they're provided with the finest health
care when needed. And we're very proud of it.
THE PRESIDENT: Thank you very much. (Applause.)
MR. ACKERMAN:
(Laughter.)
You know, I didn't pay him to say any of that, by the way.
THE PRESIDENT: You wrote each other's speeches. (Laughter.)
Let me thank you and thank Ralph and Johnson & Johnson for your example and your
words today. We have given a lot of thought to what we might be able to do in a positive way,
�rather than in a kind of a negative way, through the Occupational Safety and Health
Administration, to make it possible for there to be more stories like the two you just heard.
And I'd like .to ask the Vice President to take just a brief minute and explain what we
tried to do with our experiment and with OSHA and what the results have been.
THE VICE PRESIDENT: Thank you, Mr. President.
Companies that take the kind of approach that Roger Ackerman and Ralph Larsen have
just described obviously should not be running into a lot of interference from a public effort to
force them to do the kind of stuff that they're doing. In the federal government, there's always
the problem of distinguishing between actors, corporate or individual, who are taking the high
road and those that are taking the low road. There are a lot of employers that still don't take
this kind of approach. But the safety and health system that's primary designed for them should
not create a lot of headaches and hassles for the kinds of companies that are doing what you
guys are doing.
The President asked our work force in OSHA to come up with a new approach. This
one began in Maine with a fellow named Bill Freeman. He and his fellow inspectors were
getting lots of awards, but the workplace safety record was not improving. They were getting
awards based upon how many citations they issued and how many fines they levied. And so
they said, hey, wait a minute, let's change this. And they developed a new approach, which the
President is now asking OSHA to adopt on a nationwide basis.
One quick example. You have to have under the regulations a big poster describing
what employees can do for redress of grievances on safety and so forth. And they were given
lots of fines whenever the employer didn't have the poster up there. Under the new approach,
they go out to the trunk of the car and get a poster and give them the poster instead of the fine.
But they identified 200 employers who were taking the high road in the state of Maine
with the good record and went to them and said, you work with your own employees to develop
and implement a comprehensive plan that does a good job, and then we'll put you at the very
bottom of the priority list for inspections. And 98 percent of the companies said, yeah, we like
that deal and we'll take that.
During the first 18 months of the program, they identified 100,000 workplace hazards.
That is a rate 14 times higher than what OSHA was getting when they were going the old
"gotcha" route. And among the Maine 200 companies, injuries are down by 47 percent,
productivity is up, S.D. Warren is up 25 percent up in 18 months. Now OSHA is implementing
this approach in nine other states in the next few months, and it will be put into effect over the
next year or so in the entire nation. We're also implementing it in federal agencies, incidentally:
So an additional reward for companies that take this kind of approach will soon be in every
state, freedom from some of the hassle that has been associated with OSHA in the past.
THE PRESIDENT: Thank you very much. I'd like to go on now to the final topic of
the first panel, and that's health and retirement security. And just to note what is obvious, that
�is, that over the last 10 years there has been a steady decline in the percentage of people in the
work force who have been covered with employer-based health insurance; that the decline has
been most pronounced among employees with the lowest levels of education and skills, probably
in companies with the smallest profit margins; that there has been a similar change in retirement,
although very often it was a change in the form of retirement from defined benefit to defined
contribution plans, but there have been other changes and also some loss of coverage.
In 1995, it was the first year in more than a decade that the percentage of people in the
work force with health insurance tied to the job did not decline and that could be in part a result
of the fact that the inflation rate in 1995 in health care insurance plans was below the general
rate of inflation for the first time in a decade.
But, at any rate, this is something that is an issue and a greater issue if you believe that
people will change jobs more frequently over the course of the work life than they have in the
past. So I wanted to call on, first, Howard Schultz, the Chairman and CEO of Starbucks
Coffee, a remarkable Seattle-based company that, doubtless, many, perhaps most of you, have
frequented in some city or another in this country and I think they have -they're growing so
fast. I don't know how many employees they have, but I know they have 9,000, maybe there
are more -- how many do you have now?
MR. SCHULTZ: Fifteen thousand.
THE PRESIDENT: Fifteen thousand? This was put together last week. They're
growing pretty fast. (Laughter.) At any rate, Starbucks has been recognized for its rather
extensive benefit program for the work force, including the scope of its health care plan. So
I'd like for Mr. Schultz to talk about that.
MR. SCHULTZ: Thank you very much, Mr. President. I think the Starbucks story,
we need to go back to 1987. At the end of 1987, we had 11 retail stores, less than 100
employees. We were losing a fair amount of money, like most start-ups. But we were
passionate about the dream we had to really create a national retail company. And for the most
part, I think we were still in the imprinting stages of our business.
At the end of that year we, with great discipline, set out and created a very thorough,
strategic business plan for the company that called for Starbucks to really achieve national
presence by the year 2000. And given that we were in the imprinting stages of our business,
I think we asked ourselves a lot of questions that perhaps most companies don't get to ask
themselves. And I think the key question was, what do we really want to stand for? Obviously,
we have a passionate commitment to the quality of our coffee and serving our customers, but
what is this company really going to be about?
And, for me, I've had a personal experience growing up I'd just like to share with you
for just a few minutes. I grew up in a federally-subsidized housing project in Brooklyn, New
York. And I saw firsthand what a family goes through when there is a series of blue-collar jobs,
not a lot of money to go around, not a lot of health insurance, no pension plan. And it had a
very profound imprinting experience for me and my brother and sister. So in the year 1987 I
�found myself reflecting back on what I had endured as a child and what I wanted our company
to stand for. And it was our values and our guiding principles.
I think, unfortunately, there is a lot of distrust among employees when they go to work
for the first day of any company in America. If there is a lot of cynicism, certainly the media
has hyped this thing up over the last few months, but I think for the most part, people have
distrust, and management is now called on not only to talk about its products and services, but
to talk about its values.
So for us, given the fact that we wanted to grow a company very rapidly and create a
national retail brand, we set out to do something very unusual, and that was to redefine the
paradigm of shareholder value. To look at shareholder value in a very, very different way, and
to make sure that if our shareholders were going to win, and our customers were going to win
because that's what we're in business to do, that we had to link shareholder value, the customer
experience with the reward system for our employees.
And you can imagine, in 1987 we were losing a couple of million dollars a year, we
were seeking new money for capital to grow our company, there was a young CEO who had a
lot of dreams, but not a lot of experience, and we wanted to give benefits and equity to all our
employees -- how that went over with our shareholders at one of our annual meetings.
I think our shareholders and our board deserve a lot of credit for believing that' we could
change the paradigm. And what we've done, first and foremost, is, we've recognized that 62
percent of Starbucks work force then, and even more today was going to be part-time. Our
stores are open for about 20 hours a day, and actually the flip side for Starbucks is that part-time
people are actually more of a premium to us than full-time people, because we have a lot of
different hours for our stores.
So we had to reeducate ourselves and our shareholders to look at our employees, and
specifically our part-timers as equals in terms of the value system and what we were going to
create for them. We became the first privately-owned- company in 1988 to author a
comprehensive medical-dental, 401K, vision, not only to every single employee in our company,
but I think the first company in America to do it all across the board for part~time people.
A year later, we recognized that one of the great aspects of what we were doing is that
we were not franchising our stores; all our stores were company-owned, and the relationship that
we were building with our customers who were visiting our stores sometimes 18, 20 times a
month, in: talking to them, was based on the loyalty of trust and confidence they had in the
equity of the Starbucks brand but, most specifically, the relationship they were building with the
people behind the counter.
If some of you go into a Starbucks store, there's no greater pleasure, I think, that when
you go up there, they know your name, they make you your drink, it's handed there for you
before you can get to the bar, and it's because our people believe passionately in what they're
doing. And what ·we did a year after giving health care to everyone is; we became the first
privately:-owned company in America in 1989 to offer equity to all employees.
�----------------------
--
--
---------------
Now, it's easy to talk about this in a way because we've been successful, we've had a
lot of growth, Starbucks has grown at a rate of 60 percent a year consecutively now for eight
consecutive years. But the reason for that, the absolute reason for that is the relationship that
Starbucks has with its employees, who we call partners, because they are partners in the
business. We've linked shareholder value to every single employee. As a result of that, our
attrition rate in an industry which is sometimes up to 400 percent in retail and restaurants is less
than 55 percent. And if you talk to our people- why they are staying at Starbucks, it's because
of the health care plan, it's because of the values and guiding principles, and it's because of
ownership.
If we win as a company, at the end of the race it was not going to be justifiable to us as
a management team if a group of white-collar workers and a group of shareholders, private then
and public today, won at the expense of our employees, we had to be in a position where we
all won the race together. And the future of our company is bright because we have established
a very strong, competitive differentiation in terms of our competitive advantage, and it is the
relationship with our people. (Applause.)
THE PRESIDENT: I'd like to now call on David Guiliani, who is the Chairman and
CEO of Optiva Corporation _ __:_actually a fascinating company that was started less than a decade
ago with a team of University of Washington scientists who developed a new electronic
toothbrush that uses high frequency vibratiOJfS to remove plaque, something I care more and
more about as I get older. (Laughter.)
Mr. Guiliani.
MR. GUILIANI: Well, it was just three-and-a-half years ago when we started and sold
our first Sonic Air. It was a grand notion to build a company out of such humble beginnings.
We were 10 people, at the time. We had a lot of obstacles. One of those was how to build a
company.
We decided, in the early days, to build our Sonic Air in the United States -- despite, I
must say, lots of advice to the contrary - what, you're going to build it in the United States?·
Because all the competitive products were foreign. But we decided to bet on American
productivity and automation technology. That caused us to face a tight labor market in the
Seattle area. I think Starbucks has taken them all in. (Laughter.)
So it became very clear from the very beginning that we had to be very competitive and
offer an excellent package in order to attract the very best. And the cost of doing that :-interestingly, the difference between an okay package and a good package might wind up being
five percent of the labor cost. It's really very small by comparison to the productivity that can
be gained by choosing, motivating and rewarding the best employees. And as a very small
company-- even at 300 now, after three-and-a-half years- we have lots of challenges as to how
to be effective. There's excellent work done by all companies, many companies throughout the
country, in putting together packages and plans.
�One of the things we've noticed is there's a wide difference in how those plans are
executed. Sometimes relatively small touches really work. Like, once one of our employees
was being hassled by the IRS over something that turned out to be not her problem. So our
CFO called up the IRS and, after a few telephone calls, got it straight. We have a very good
health program, but it's only as good as being implemented. Once, one of our employe·es was
taken in by an unscrupulous doctor, so we called up the doctor and got that straight. When we
chose our health care program we wanted to make that there was language translation services
available for those people who didn't speak English as their first language, in order to make sure
they got the health care they needed. We've also told certain banks that we aren't going to do
business with them because of what we consider to be unfair practices.
So even though we're small, we've found leverage to help get the results· that the
employees really need out of these relatively standard programs. The concept of retirement
security for a company that's as young as we are is a fascinating one. People came to us in the
beginning and said, what's your retirement program? And we went, "Hhmmm." And yve found
that retirement is essential for people to think about because, unless they are feeling that all of
their needs are being taken care of, then they'll be stuck on what is still bothering them. It's
Maslov's (phonetic) Triangle, we need to move up in order to obtain the productivity advantages
that result by unleashing human potential. That gives us a factor of two productivity
improvement that we really need in order to succeed.
So what we've done is to offer stock option programs to all of our employees, even the
elderly ones. The 401K system is beautiful. We do fund it with company profit as we exceed
our profit goals. And a very important part of it is education -- teaching people how to manage
their own portfolio so they can see what they're aiming for and hence, not reliant on Social
Security. Take out the anxiety of what's going to happen to the Social Security system by
building their very own transportable package. Transportable health care that is, of course, still
a problem.
As we think about what remains to be accomplished, it's a huge and long and daunting
list, especially as we look into the rest of the decade. The highest leverages that seem apparent
to us now are all in the form of education. And I think we have to break down some of the
traditional barriers. There's company, there's family, there's the educational system. These are
walls. And I think to the extent we can change them, we will do better. For example, we have
English language lessons on-site, at lunch, for our employees, where they can sit there and learn
about the American culture and its language. That is more convenient than having to go to a
university at night, leaving your kids at home.
We offer people free loans on computers, or low-cost loans, in order to get computers
into their homes, so they can teach themselves these higher skills in the information-rich society,
moving up, out of the ranks of their initial condition.
We also think it's essential to go out into the community by participation, by teaching,
by getting involved, because our educational system is our future and it's also one of the serious
limits that people feel. They can't be productive if they're sitting there wondering if their kids
are on drugs or being properly educated or molested in the hallways. So there are walls to
�break down.
Overall, we're just one of many companies that I'm aware of who think this way and,
more importantly, act this way. It's all in the acting. There is plenty of programs and projects.
There is no real solution except acting. And the acting is as serious for us as it is as we think
about our investors. We are accountable to our investors. They have supplied us valuable
assets, their money, and they want to see a return on that. And so also have our employees.
They have contributed their assets, their education and their skills, their desires and their energy.
And together with them, we will obtain a return on that asset, not only for ourselves but also
for the employee as we work forward -- no matter how long they stay with us because, after all,
the bottom line is that employees are the bottom line. (Applause.)
THE PRESIDENT: You were pretty modest, but tell us how fast you are growing.
MR. GUILIANI: We have been tripling each year, and we're now the number two
brand in America in powered brushes, and we're a major exporter into Europe and Japan, where
our product is marvelously popular.
THE PRESIDENT: And how many employees do you have?
MR. GUILIANI: Three hundred.
THE PRESIDENT: We don't need to discuss this here, but one of things I would like
to know from you, I sent a package of proposed pension reforms to Capitol Hill, basically
designed to make it earlier for even smaller companies than yours to access the 401 K program.
If you or any of the others out here, particularly from smaller businesses, have any
suggestions about what else we can do to make this a more user-friendly option for companies,
I would very much like to have it, because I think it's important. And there are things you can
do that we have asked for Congress to support, and I believe that it has almost unanimous
support, it's just a matter of time working it through. And one of the top three priorities of the
White House Conference on Small Business -- that will make these things ·much more
user-friendly for self-employed people, small businesses, and then also help people when they
move from business to business to maintain the fund, even if they're unemployed for a period
of time. So if you or any of the others here have any suggestions about what further
improvements we can make in that, I would certainly like to have it.
MR. GUILIANI: I'm sure the SBA could do very well with some conferences and
seminars with small businesses participating, because everybody sees the value of starting 401 Ks
early in the workers' life as well as the company's life.
THE PRESIDENT: That's the next question I -- you answered the next question. Do
you believe -then I just want to make it explicit - do you think that the program is a little
more accessible than some people know, and that more people would use it if they knew more
about. it? Do you agree with that?
�Q
Absolutely.
Q
We have no particular issues in setting it up quite early, I think when we were
about a 100 people, probably.
Q
Most of it is teaching people how to use it, understanding it.
Q
Yes, it's the education process, I think.
Q
Part of it is the name. Anything that has a 401K sounds like it's bad. (Laughter.)
Q
It's very bureaucratic.
THE PRESIDENT: I wonder, before we take a brief break
-we're going to take about a-- I'm going to shorten the break, because we started a little late
-- about a 20-minute break. Before we take a break, before we start the next panel, I wonder
if anyone else in the audience would like to make a comment about any of the three topics that
were discussed here. And if you would, would you please ·just identify yourself and say
whatever is on your mind.
Q
(Inaudible).
THE PRESIDENT: Let me ask before you sit down, why don't we just-- we'll take
·about 10 minutes here. There are at least two other companies whose representatives I see out
here who have no-layoff policies. If you can say in a minute or two, I'd like for anybody who's
here who can say in a minute or two, if you have a no-layoff policy, how you've been able to
maintain it-- besides making a bunch of money.
And there is at least another company here that has had wide variations in their orders
and has come up with some innovations in managing that problem to reduce layoffs. If you
could just describe in a minute or two how you manage this problem, I'd - we'll just start with
you, sir, and then we'll go with anyone else who wants to talk for a minute.
Q
(Inaudible).
THE PRESIDENT: Who would like to go next? Yes, sir. Go ahead.
Q
(Inaudible.)
THE PRESIDENT: So as things go down, they share the work that's available with the
same number of workers?
That's right. And nobody gets laid off. Could I just add one thing about 401k's?
Q
They're great, but couldn't we raise the limit a little bit? People could invest a little more.
(Applause.)
�THE PRESIDENT: Thank you. You want to raise the limit. That's what you said?
Okay. I'm told we're going to address some of this in the next panel, but I'll call on another
Mr. Correnti (phonetic).
person or two and then we'll break.
And answer this question right: You can only talk about-- you've got to talk about what
you do in the down times as well as the up times, everybody. It's not fair to only talk about
finding more business.
Go ahead.
MR. CORRENTI: I'm John Correnti, with Newcore (phonetic) Corporation. And we
have a saying that's called, "share the gain and share the pain." We're in the steel business.
We manufacture steel. We have not laid an employee off or shut-down a plant in the past 23
years.
When times get tough, a recessionary period, we like to think we're the low-cost quality
producer. So our employees have a saying, when the good Lord shuts the lights off, the last ton
of steel is going to get shipped out of Newcore Corporation. But when times do get slow, we
go to four-day work weeks, or we go to 3.5-day work weeks. Nobody is worried about their
job, nobody is getting laid off. And when the employees have to share a little bit of the pain,
I can assure you the management and the officers share some ofthe pain, too. They all take a
pay cut. So the boat either rises and everyone goes up together, or when the boat sinks a little
everybody sinks together.
And you sure develop a heck of a lot of employee loyalty and trust. We don't even
measure our turnover in a Newcore plant, it's so minimal. You have to be willed a job in one
of our established plants today. Thank you very much. (Laughter and applause.)
THE PRESIDENT:
(Laughter.)
I can personally vouch for the truth of that last assertion.
I think what we should do now is take a little break. I think the panelists were terrific,
and I think that this is a very good panel. I can't wait for the next one. So I'm going to start
--it's now 1:15 p.m.- I'm going to start at 1:35 p.m., in 20 minutes. We're adjourned
briefly.
Give them all a hand. (Applause.)
END
1:20 P.M. EDT
�THE WHITE HOUSE
Office of the Press Secretary
May 16, 1996
For Immediate Release
CONFERENCE ON CORPORATE CITIZENSHIP
PANEL II
Gaston Hall
Georgetown University
Washington, D. C.
2:00 P.M. EDT
DEAN PARKER: My job is pretty simple, it's to open this afternoon's session. And
I'd like to say good afternoon to you, Mr. President, Mr. Vice President, members of the
Cabinet, business leaders and other distinguished guests that are with us this morning and this
afternoon.
I'm Bob Parker, Dean of the Georgetown School of Business. It's my pleasure to
welcome you back to the second half of this important White House Conference on Corporate
Citizenship.
As Dean of the Business School here, we as a school are committed to value-based
leadership in a rapidly changing global community. And I personally applaud the President's
efforts in convening this critical conference. I also applaud the panelists that were up here
today, and the CEOs, all of you in the audience, for your willingness to spend your time
addressing these difficult business issues.
Before I came here 10 years ago I spent 20 years in business. Most of it was with a firm
called McKenzie and Company. And I understand the tough issues and decisions that you people
are going through to compete in the global economy in this rapidly changing world. And I also
applaud the stories that I've heard here today about caring, about people, and about mixing
together, creating value for the shareholders as well as building a community, and recognizing
not only productivity through people, as McKenzie used to say, but productivity with people.
The Georgetown School of Business has a longstanding tradition of educating students
�--it's our job- in social responsibility of business. We teach students in addition to making
a profit, which they have to do if they're going to be successful, that they should endeavor to
make a difference in their companies, with the people they work with, and in their communities.
And they as students are dedicated to making a difference.
We at the Business School are delighted to host this conference that reflects our missions
as educators of future business leaders. And I'm sure that we all look forward to this
afternoon's panel, Investing iri Employees, which promises to be a continuation of this mornings
productive dialogue.
In getting something like this started, talking to each other and sharing experiences, we'll
all learn a lot and you people - all of you here on the stage as well as you out there - are the
role models for our students and others that are sitting over there.
Thank you. (Applause.)
THE PRESIDENT: Thank you, Dean. (Applause.) Thank you very much, Dean.
The last panel will cover the last two elements in corporate citizenship, training and
investment in employees and partnerships with employees. And so, I'd like to begin here
discussing ·training and investment in employees. And the. first company and the first presenter
will be Mike Plumley, the Chairman and CEO of the Plumley Companies.
Mr. Plumley.
MR. PLUMLEY: Thank you, Mr. President and
to be here today.
Mr~
Vice President for the invitation
I come from a rural town in west Tennessee of about 10,000 people --a rea:Uy nice place
to raise a family, work, send your kids to school. My dad started our company in 1967. In his
first year of operations, we had 25 employees and sales of app~oximately $600,000. I started
to work in the firm in 1972 and my dad had just crossed his first $1-milli()n sales year and had
about 75 employees.
By the close of our business year in 1995, our company had grown to roughly $125
million in total sales and employs approximately 1,400 people right now. We're a manufacturer
of rubber products to the automotive industry. We make rubber fuel hoses, rubber gaskets, and
a variety of vibration isolation type components for automobiles.
In the early '80s, we in the automotive business encountered the competitive challenge
of the Japanese --the Japanese not only selling cars in the United States, but moving their car
plants to the U.S. Suddenly, we found ourselves in a position where the quality of our products
was no longer good enough or acceptable for m~ny of our customers.
Following the lead ofthe Big Three, we began to read about W. Edwards Demming and
�his work in Japan. We thought, as a lot of Americans do from time to time, suddenly we saw
this statistical process control idea and that's where our education and training program got its
start. Before that, the way we trained people was, we put them out on the machine and
som~body worked with them a couple of days, and after that, they were workers. But that was
no longer adequate to produce a good quality product.
So we began teaching SPC. Well, statistical process control requires more skills than
just a person being able to sit in the classroom. We began to find that we had a more serious
problem in training and education than we ever would have thought imaginable. We found that
we had some employees that struggled with basic reading and math skills, basically reading,
writing and arithmetic, and found that even though 70 percent of our employees had a high
school education, 30 percent did not. And the weakest link of the chain is that link that couldn't
necessarily compete at the same level as all others. Today we find ourselves competing with
companies around the world.
As we got involved with this, we just uncovered a mass of problems within our company
-- the level of understanding of many employees in terms of what our business was about, what
we were trying to do, where the products went that we manufactured, the tolerances that they
had to hold. So starting with hiring our local vo-tech school to teach SPC and then realizing
that we had a greater problem just multiplied our efforts over and over again to improve the
quality of training and education within our workplace.
Before long, we started GED classes in our company at night where employees were
encouraged that didn't have a high school education to attend those classes. We hired high
school teachers; they came in, and I'm proud to say today we have - we are nearing 100
employees just in the past seven years that have completed their high school education while in
our employ. And what an uplift for those folks. I don't know how many times someone who
is amongst this group has said to me, I would never have gotten my high school education
without the efforts of the company. And certainly that's rewarding because I think we can all
understand if you don't have a high school education, what a position that puts you in, especially
even just telling your coworkers that you aren't a high school graduate.
Well~ from GED to SPC to 140 courses now that we have either offered in the past
couple of years or presently offer today in both self-study courses and courses with instructors
-- we even bring in college professors from time to time -- we teach everything from geometric
tolerance and blueprint reading, SPC, continuous improvement awareness, to occasionally we
have a Japanese or a German language class for those people in the sales, marketing and
engineering functions who come in contact with people from other parts of the world in those
regwns.
We now .have a corporate goal within our company that every employee will receive 40
hours of training and education per year within the company. And that's a goal we monitor
weekly and chart and watch and encourage constantly to get people involved.
Today, we have 57 employees in our company who are certified professionals. Fifteen
years ago, we had none, no certified professionals. But we have professionals certified not only
�in accounting, but quality and technician work, reliability engineers, and the list can go on and
on.
Along with that, this past year we built a learning center, a whole center dedicated -20,000 square feet -- dedicated to the learning for our employees. And, in fact, at night now
.we have a family night once a week where we encourage employees to bring in wives, children,
whatever to receive whatever training might be applicable to the entire family in the evenings.
We also have a gain-sharing program that goes along with this that's consistent with reward for
improvements within the work we do every day.
I guess in our findings we find that quality really essentially begins with education and
it ends with education. So the beginning of our thrust was not one of something that was just
nice to do, it was out of necessity to compete in a global market. And as time has gone on,
after we had implemented several programs and five or six years later, we found our company
in a position where we had gone from one of the lowest-quality suppliers to the automotive
industry in our products to be perceived by our customers as one the highest-quality suppliers
of rubber products.
In fact, that's witnessed and evidenced by the receipt of four Total Quality Excellence
Awards, and only 20 companies in the world today have achieved that level. We've achieved
General Motors Mark of Excellence, Chrysler's Pennistar, Nissan's Quality Master, and now
have achieved a level of quality that is considered world-class at less than 50 parts per million
defective with our customers. And believe me, just a little while back, that was somewhere
around 20,000 parts per million just five or six years ago.
The bottom line is the ultimate measure of our business success in education and training
has been the continuing effort to improve the quality of our product and process, and it's very
relevant. Thank you. (Applause.)
THE PRESIDENT: Thank you very much. Let me ask you one question. When you
brought the teachers onto the premises of your factory to teach the GED programs, did the
workers, did they take those classes either before or after their shift started? Is that when they
did it?
MR. PLUMLEY: The GED program was after the shift. And it's a voluntary.
THE PRESIDENT:
service?
MR. PLUMLEY:
school.
And did you have to pay for that or did the state provide the
No, we paid the instructors ourselves, the teachers from the local high
THE PRESIDENT: When I was-- back when I had another life, when I was governor,
we started a program where we actually sent GED instructors to any work site with more than
100 employees. And I was stunned by the number of people who wanted it, still needed it, and
it seemed to work very well. But I applaud you for doing that.
�Our next presenter is the Chairman and CEO of Cummins Engine Company, Mr. Jim
Henderson.
MR. HENDERSON: Thank you, Mr. President. I'm pleased to be here to tell you a
little about what Cummins people have accomplished. We're the largest diesel engine producer
in the world. We employ 24,000 people in 40 plants around the world. And we compete with
the very best from not only the U.S. and Europe, but from Japan. And we have competed
successfully in large part we believe because we have invested in our people.
And at the outset, I think I should verify what Ken Lehman said today. Fel-Pro is,
indeed, a fine company. (Laughter.) I can see a discount coming on the horizon. (Laughter.)
Our company was founded on the belief many, many years ago of the importance of a
close relationship with our people. But it was an event of 24 years ago that changed our
thinking from the importance of a close relationship to partnering and investing in our people.
And that was a 57-day strike at our principal plant in our headquarters city.
During the course of that work stoppage, I ended up as a chief negotiator. And I really
couldn't understand how a company that had such fine people relationships could have that
happen. So, when the work stoppage ended, several of us went out on the shop floor and talked
to our people and said, what is this? And what they told us was the issues were not economic
but, in fact, we had grown so fast and had added so many mangers that they felt like, one, they
didn't know the management anymore and, two, they couldn't trust the management. More
importantly, perhaps, they felt like the management did not trust them, and that we didn't want
their ideas.
Well, neither of us liked fighting, so we decided to do something about it. And we
committed ourselves to two principles which have really tried to guide us since. The first is that
we would do our best to establish a relationship with all of our people but, particularly, shop
floor workers based on trust and open communications and genuine problem-solving, and not
only in good times, but in the very tough times. And we're in a very cyclical industry and there
are times our business just drops away quickly and those are tougher times.
The second is that we would invest in our shop floor workers so they could assume
responsibility for planning their own work and for· achieving and improving results for their
customers in a rapidly changing and very competitive world, and that requires an extensive
investment in training. Our objective is that five percent of our people's work time, or a day
a month, is devoted to in-house training, and we also totally reimburse tuition.
I'd like to cite three examples of these two principles. Right after that strike in the
mid-' 70s, we pioneered the first team-based work systems in several plants we opened. And the
idea was for people to organize themselves in groups around a particular task, manage their own
work, largely without traditional supervisors. And we confirmed our belief in that process that
people really want to do excellent work, they like to work in teams, they welcome the added
responsibility, they want the added education, and they're truly committed. And the
commitment was unusual.
�----~-------------
I remember trying to reach one of our plants one whole day on a Friday, and nobody
ever answered the phone. When I finally reached the plant manager on the weekend, he laughed
and said, "All of us --I, the receptionist, the operators --we were all out in the plant helping
to ship engines to meet our goals."
We have two major U.S. plants now, one with over 1,100 people and the other with over
1,500 people, which have been building very high-quality engines this way now for 20 years.
The second example combines both team base working and partnering, which is the next
subject. We went through a very difficult downsizing in Southern Indiana in the late 1980s to
get world competitive, particularly with the Japanese. But we worked very closely through those
difficult years with the Diesel Workers Union.
Fortunately, in the early '90s we were able to reopen a plant that we had mothballed,
and we build smaller diesels for Chrysler there. And my· colleague on my right had something
to do with that, Gerry Greenwald. We agreed with the union leadership to give employment
preference to our people who had been laid off; to make the plant absolutely world-class, the
best in the world; and to build a team-based work system.
To do that, we invested very heavily in training on the front end. We asked each
employee to take 230 hours of orientation and skills training before the plant ever started up.
And the results have been terrific. The plant started up at lower cost and faster than we had
planned, and has never missed a delivery, in spite of the exceptionally rapid volume growth
because of the phenomenal success of the Dodge Ram pickup.
Our workers our very committed to seeing the plant succeed. A young woman named
Patty Morris who's still a member of Team Five said when the plant opened, "I want to give
you gentlemen from Chrysler my personal guarantee that the workmanship from my station on
your product will be perfect every time. And also, I want to say there's nothing that a Japanese
plant can do'that we can't do better in this plant." Well, clearly, our workers see the Japanese
as setting a very high standard.
The final example I want to share is that in 1993 we reached a landmark 11-year contract
with the Diesel Workers Union. It includes a team-based work system which is a virtual, total
change from the way. we had worked traditionally for 75 years, and it will mean much higher
quality and much lower cost. And the union and the management together are jointly leading
the 200,000 hours of training that will be delivered this year.
Now, why so many years? Well, first it takes a long time to make change of that
magnitude. We agreed to wait two and a half years and train people before we started the new
system. But the contract also includes and employment commitment for 11 years. And that's
when the least senior union member employed as of the date of the contract can retire. And this
has permitted employees to focus on improvement without fear. of being let go either because
of productivity gains or a down turn in business.
�--
------------------------------------------------------
We've learned some valuable lessons over these 24 years. First, you can't take trust
for granted, you have to work at it every day. Second, two way problem solving is the
foundation for working together. The third is learning must never stop. And finally, working
together really works. Once people trust management, know they're responsible, and are given
the training, it's astonishing what they can do for customers and ultimately for the shareholders.
I hope that's helpful, Mr. President. (Applause.)
THE PRESIDENT: Thank you. Thank you very, very much.
Our third company dealing with this issue of training and investment in employees is
Cin-Made Company and Bob Frey, the president, is here. I'd like to call on him now to speak.
MR. FREY: Thank you, Mr. President.
\
Our mission is very clear. Our mission is to make more money. In 1984, I bought a
failing company in a declining industry. It had worn out equipment .and it had a worn out
union-management relationship. The union had traded wages and seniority and traded away
responsibility and power. All responsibility, all decision-making rested with the management.
It was perhaps a good bargain in the 1930s and 1940s but a poor bargain in the 1980s and
1990s.
Today, in 1996, our mission, as I said earlier, is to teach the people that work for us how
to make more money for themselves --to empower them to act as company owners; to open the
books, share all information, have no secrets, ask and answer all questions honestly; to share
the risk and rewards that come in the output of any company. Our employees enjoy a
35-percent pre-tax profit sharing plan. Their wages were frozen in their base wages at 1984
levels; there hasn't been a raise since then. The only way you can make more money is
twofold. The company makes more money; you make more money. In our case, we average
over $4,000 a year in profit sharing bonuses.
And secondly, you can make more money with a skill-based pay system. A skill-based
pay system pays for additional skills acquired. It's 100-percent administered by the hourly
workers themselves. Managers aren't involved with them. So the workers basically decide how
to pay themselves. All people that work for the company are expected to be managers. The
word in our company is, don't ask for permission, just go do it. Ask for forgiveness if you
blow it big time, but go do it. (Laughter.)
Now, we're very profitable --we weren't very profitable, obviously, when I bought a
failing company - and we're in a very competitive industry. A few examples of what our
workers do: They hire th.eir fellow workers, and they approve all managers and office workers
that come into the company. They schedule their own work hours, including overtime. They
schedule their own production. They order their own raw materials. They purchase their own
materials. Anyone in the company at any level can sign any kind of purchase order for any
amount without a cosignature. We trust our· employees. The only thing I tell them-- if you're
�going to bet the farm, you might want to talk to me. (Laughter.)
They calculate each day on each of the production lines what the contribution margin
was -- and of course, they have to calculate the variable cost first -- and whether they made
money that day on that line. And, specifically, we break that down to shifts, individual
production units and the like. They see each order as it goes to the operating floor; they notice
the price, they notice the raw material cost, they assume labor costs. And they know in a
heartbeat whether they made some more scrap that day and how much of it came out of their
pockets.
Remember, a dollar of every expense, 35 percent comes out of the employee's pockets,
and a dollar of contribution, 35 percent of that or 35 cents goes into their pocket. And they get
very well acquainted with the bottom line.
We've obviously trained people to be managers. We want all workers to be managers;
we want all managers to be workers. We've tried to blend the work force together so we're one
unit. It isn't managers versus workers, it's one unit.
I'd also say that collective bargaining is an asset. if-- and that perhaps is a big if-- if
you bargain for the right stuff. Now, our management bargained away the management rights
clause and bargained away responsibility; it bargained away power; it bargained away control;
it bargained away secrets. And our union bargained to assume those types of responsibility, so
we became a team.
Now, the power to make these changes rests with leadership -the leadership in this
room. And the most important components of leadership to make this type of change is courage
and tenacity - the courage to let go, the courage to take risk, the courage to manage by the
force of your ideas. and not by your position power; and the tenacity to see it all through.
Because it takes a very, very long time and there's always some backsliding that's going on in
the organization. Even today at Cin-Made there's always somebody w:ho says, gosh, wasn't it
nice-- I just heard this before I came here-- in 1984 when we didn't have to think about what
we were going to do today, somebody was going to tell us. (Laughter.)
Now, we believe Cin-Made makes the five corporate citizenship challenges, and we do
it to make more money. What's good for Cin-Made and like-minded companies in this room
is good for the country. It's good· for the economy, the workplace and the family.
Thank you. ·(Applause.)
THE PRESIDENT: Thank you. I believe you could sell that position. (Laughter.)
Good for you.
Now, moving along in our story of partnerships with employees, we have a particularly
unique example in Republic Engineered Steels. I want to call on Russ Maier, the Chairman and
CEO, and then he'll be followed by Dick Davis, Vice President of United Steel Workers. And
they'll tell you the story of Republic Engineered. It's a good story.
�MR. MAIER: Thank you, Mr. President. I'm quite proud to represent our employees
at today's meeting. Republic is a specialty steel producer. We produce very difficult steels for
applications from automotive to aircraft. So when you land on most commercial aircraft in the
United States, you're probably landing on our landing gear; you hope we made it right.
(Laughter.)
We have about $800 million in sales, 5,000 people, 10 plants, five different states.
We're basically spread out across the Midwest. Our real partnership started with the United
Steel Workers of America. We embedded that partnership in our contract language. It goes to
everything we do. It starts at the board level. There are four· seats on our board that are
represented by the Steel Workers - some right from the plant floor; in fact, three people are
elected from the plant floor.
We have tried to push this partnership down from the board level to every level in the
company. At the corporate planning and strategic planning area, we have joint planning
agreements. At the plant level, the department level, the crew level, all the way through,
self-directed work teams, performance-based pay, all the things that you've heard about today
we've tried to put in place throughout the organization.
But to understand Republic and our unique partnership, I think you need to understand
a little about our history. Some of our plants are over 100 years old. We were part of Republic
Steel and then we were part of a merged company in this merger mania of the '80s called LTV.
We were part of the LTV bankruptcy. And if you could imagine, in November of 1986 the
corporation announced that they were going to exit bankruptcy without us. They didn't say how
they were going to do that or where we were going to go. They just said without us.
And employees came to me and they said, what does that mean. I said I don't think it
means anything good-- (laughter)-- but I said, I know ohe thing-- I don't know what's going
to happen, but I know one thing: If we have value, if our customers perceive that we provide
value, and our investors perceive that we provide value, and we provide good jobs-- if we can
create that, somehow we will survive.
But the short story is, we did survive and we decided that we ought to just buy ourselves.
So in 1989 with the urging, I might say, a real urging and total support of the United Steel
Workers, we bought he asset from LTV, 100 percent employee-owned.
Now, it wasn't easy. We became one of those 1980s highly-leveraged companies. We
went into a downturn in 1991 in the automotive business; by the end of 1991, we had 103
percent debt to equity. That's not good. (Laughter.)
We got through that period of time, however, because we relied on this partnership.
We didn't - one little vignette. In the middle of 1991, I inferred I guess that one of the ways
out of this mess was maybe we'd have to cut employment. That didn't sell so well. Within
about four weeks I came back and they said, okay, we can't cut employment; what we're going
to do is we're going to cut costs and all the employees are going to work on it because we've
got to cut cost.
�And they did that. They took $40 million -- within 18 months it took $40 million of the
cost of doing business. We didn't fire anybody.
Now, as we went through this whole process another kind of interesting thing happened,
because when we became employee-owned we started to give employees, because they were now
shareholders, the kind of information you give share
holders. You give them reports,
you give them earning statements, and you give them balance sheets. And one day they came
to me and they said, you know, in 40 years you didn't give us anything. You didn't even tell
us about the business. Now you give us all this information;. we really don't know how to
interpret it.
That provided a great opportunity again for the steel workers and the management to
come together and create an educational program. We spent over $6 million on that program
to do business education - how to read a balance sheet, how to read an income statement, all
that kind of thing. What is the result? Where are we today?
Well, as you know, we're in a difficult industry. We don't have brand new equipment,
but we have been able to reinvest $300 million in our facilities. We've been able to purchase
and start up two new plants to grow our employment. The average employee in our company
put $4,000 of their hard-earned money up when we started. Last year we paid them back
$10,000. So in addition to having their jobs through that whole period, their investment really
paid off. Today they own 58 percent of the stock.
And another little story: Last year we decided the right thing to do was to have an ideal
- a public offering of some stock. In our charter we were required to get a vote of the
shareholders, the equivalent of 72.5 percent. Now, Mr. President, you know how tough it is
to get 51 percent. (Laughter.)
THE PRESIDENT: Haven't gotten it yet. (Laughter.)
We got 80 percent. (Applause.) We got an 80-percent positive
MR. MAIER:
vote to take some of our stock to the marketplace, because, I'm convinced, education and the
work we did so that everyone understood where their best interest was served in this program.
That's our story from the management side.
MR. DAVIS:
Mr. President, that's a terrible act to follow- (laughter)- but I've
been doing it for a number of years. Russ has described the story of the creation of RES and
why. The alternative for our union and for our members was not a very good one. It was to
let it disappear, and those good well-paying jobs disappear. We helped to engineer a structure
for allowing the employees to purchase and to manage their own company, rather than have it
simply go by the wayside as part of that dramatic restructuring that Russ talked about.
The members of our union who work in that plant are fascinating, those plants are
�.-,
\
fascinating, because they're part of a culture that, quite frankly, was not only hostile, but was
quite violent years ago. The stories of the little steel organizing and all those difficulties is
well-known. To watch the transition, not in a paternal way, but in a smart, practical way, is
amazing. To be told by a 60-year-old, I was really looking forward to my retirement but, for
the first time in a 38-year career, I'm changing where I work; I've got an opportunity to make
it different and better and more satisfying, so I think I' II hang around for a few more years -it's fascinating to learn that people are taking pride in being able to change a system or a process
or a procedure that has frustrated them for years.
But there's never been a mechanism to change it. Russ described the partnership that
literally goes from the board of directors to the shop floor. Decision-making, data-sharing is
the way those facilities are run. There are no more different data bases. When decisions are
made in those facilities, they're made jointly and equally with the same information - all the
information.
An important piece of that -- and it's an important piece of the incentive of our
partnership - is to help create a sense of employment security and employment opportunity
rather than employment threat because of changes in technology and improved productivity.
What we've done is to agree as part of our contract, as part of that partnership as we change
into newer, better, more efficient work systems, there will be no layoffs. We're jointly
responsible for finding alternative methods of using people for training them for doing
·something. There will be no layoffs -once we've jointly designed and implemented a new-whole new work system.
The process of union leaders on sharing in decision-making and becoming proactive
rather than reactive to the acts of management is a novel one for local union leaders as well as
some international leaders. We're learning, we think, to do it better. Clearly, what we did in .
structuring our partnership as part ofthe collective bargaining agreement-- it is not subject to
change
because Russ changes his mind; it's part of the way we do business and it is institutionalized -I think our people take a lot of pride not only in their company, since they are owners, but in
their company because of the way it operates. (Applause.)
THE PRESIDENT: Thank you. I can't let you go- both of you-- without asking you
what is clearly the obvious question which is, do you believe that what you have done and how
you have done it could be made to work just as well in a setting in which the company is not
employee-owned? And if so, would there have to be some other kinds of incentives for the
employees? Would there have to be some other kind of compensation scheme or something that
would help to kind of recreate the conditions which exist from the get-go when it's an employee
buyout on the front-end? I'd like to just hear both of you comment on that.
MR. DAVIS: Mr. President, I think there are models there with other employers. Some
examples of how you drive that had been offered by other members of this panel. Clearly, other
unions and other companies in our economy are developing those kind of models, not out of a
crisis and not out of a total or significant employee ownership, but out of a real commitment to
making it a long-term secure place to work; better, safer place to work; better, more secure
�-----
--------
company. And they're helping to develop those models in a joint design fashion. I think they
exist and I think more will evolve.
MR. MAIER: I think so, too, Mr. President. I would say this: I would love to see
every company in this country have some piece of employee ownership because I think it's
important. It's just an important hook, if you will. But beyond that, I think what we must do
is we must align compensation systems and reward systems.
In our company, for example, in our labor agreement with the steel workers right now
we give pay raises based on how fast we can take cost out of the system. So we hit a plateau,
we give a pay raise; hit a plateau,. and essentially, we're paying for it. Now, what we've then
done is we've aligned the salary pay with that same incentive system so that I can't get a raise
unless they get a raise. I'm incentivized to get cost out and make the company better. I think
you just have to take every facet of what you do and make it work and consistent with what you
say you are going to do. If you do that, people are going to believe you. If you don't do it,
they're probably right, they shouldn't believe you.
THE PRESIDENT: Thank you very much. (Applause.)
The next person I want to call on is a 40-year veteran of a company that may be the only
company represented in this room that I feel comfortable in saying we have probably, every
single one of us, been a customer of. Mr. Arney Langbo, the Chairman of the Kellogg
Company. (Laughter.)
MR. LANGBO: Thank you, Mr. President and Mr. Vice President. I very much
appreciate being here today. And may I say at the outset, Mr. President, that I think this forum
is a very good idea.
I think it's been well-documented here today by many of our colleagues on the panels
that dramatic change is obviously the order of the day today in the global market place. And
I think our business strategies need to be- maybe must be- innovative and flexible if we're
to provide any security for American workers in the very long term context. And as we respond
to global competitive challenges and address work force issues, for me, it is morally right and
it, I think, just makes good business sense to find solutions that are certainly good for our
shareholders, but also good for our people. And as with the case of the Johnson and Johnson
credo, it comes right out of our philosophy and values document.
Now, we've been working our way through a somewhat difficult period in the last year
in the Kellogg Company when we addressed a need to reduce capacity and improve efficiency
in our U.S. cereal operations. And we take great pride that our strategy was implemented
through a consultative process -- a negotiated agreement with our employee union. ·And the
agreement included such incentives as early retirement, of course, and voluntary severance
payments.
But I'm particularly proud that our agreement included a tactic which we thing could
be used to help worker security in a lot of business adjustment situations, perhaps. I'm thinking
�of the opportunity for voluntary large-scale transfer of hourly, on-the-line workers. Now,
transfers in areas such as sales and marketing and finance have always been a part of business
careers. But in today's global economy, every experienced employee including the skilled
production worker is a very important competitive resource.
So when we faced this over supply situation, if you will, of human resources at several
plants, but also had a need for more resources at our other plants in Omaha, Nebraska and
Lancaster, Pennsylvania, we worked with union leadership to include an hourly transfer program
in the agreement that we reached last fall. Our workers had the opportunity to fly with their
spouses to Lancaster or Omaha to visit the plant and the community, and I might say that was
before deciding whether to apply for transfer.
And we ended up with more than 150 people transferring. And we provided each family
with a comprehensive relocation package plus an orientation program in their new plant and in
their new community. The reports from our people and from our plant managers indicate that
the process has gone extremely well. And we have preserved the Kellogg careers of a lot of
good people. And we have helped ourselves by keeping skilled, experienced human resources
on the Kellogg team who, incidently, are recipients of stock options as are all of our United
States employees and, for that matter, our employees in 21. other countries in the world where
we have manufacturing operations.
Now, the other good news is that we actually ended up with more transfer opportunities
available than people who chose to apply for them. So the net effect is that not one person will ·
have left the Kellogg Company - in fact, they had four separate opportunities to apply -- not
one person will have left the Kellogg Company in this program without the opportunity to pursue
transfer .to a full-time, full-benefit union covered position in one of our other plants.
Now clearly, Mr. President, these transfers of this type are not for everyone, and they
don't fit every situation. And I would be less than honest if I sat here today and said that we
still don't have some level of anxiety. But I certainly believe that it's at a significantly lower
level than it might otherwise have been. And I would serve up this concept as an example of
the win-win thinking that can help address the needs of business and the people in the global
economy.
Thank you.
THE PRESIDENT: Thank you very much. (Applause.)
I might say, just sort of by way of information background, that the ESOP concept was
established in 1974, and since then, the number has grown from 200 to over 10,000. And there
are an estimated 12 million ESOP participants that own $60 billion in stock in this country now.
Participation in deferred profit sharing plans has grown from 8.4 percent of the work
force in 1980 to 18.3 percent in 1991. That's the last year for which we have any figures. But
you can see 'that this is not an insubstantial percentage of the American people that are out there
working in these kinds of environments.
�And, again, I think it's important to point out because we nearly never hear anything
about it that there are literally millions of people out there working in partnerships trying to
make their companies more profitable, their lives better, and their country stronger. I think it's
worth pointing out.
I thank you, sir, very much. Ifl might ask you one just brief question because it leads.
in-- I want to ask the Vice President to speak after you about an issue which has been a difficult
one for us, and that is how we handle the downsizing of the federal work force, because I think
it's quite interesting. You hear a lot of talk about downsizing in the private sector and how bad
it is. I guess that the United States government in the last three and a half years has been the
biggest downsizer in the country. And I know that you had to have a modest one at Kellogg.
I'd like you to just explain how you handled it, if you might very briefly.
MR. LANGBO: Well, as I said, we, first of all, sat down with the union leadership
and talked about the need to do what we needed to do -- because a fundamental truism first,
before all of this, is that we must be globally competitive, because that, in the final analysis, is
job security for everyone.
We historically have had a policy of working through attrition. This situation was a little
different in that it was a little-- it involved more jobs than what we've historically done in an
annual context. And so we had to sit down with the union. We worked on an agreement, we
talked about the numbers of people involved and we talked about how we could do this. We
talked about the level of inducements, or I should say, incentives for early retirement. And we
talked about the number of involuntary severances that we might have, and we were hopeful,
frankly, through this voluntary transfer program to other plants that that might overcome the
involuntary transfers, the involuntary severances, l should say.
And so we're almost through it. And as I said, it's been --we've had some anxious
moments through all of this thing and there certainly still is some anxiety there. But I think it's
much less than what oth~rwise might have been.
We were talking at our table this morning, Mr. President, that when we talk about these
restructuring charges, or these one-time nonrecurring charges that we take to accomplish these
things, there has been a change in the accounting laws here over the past year that now no
longer allows us to take the training - or I guess I should change that word this morning -- the
educational component required to retrain, upgrade the skills of our employees. It's no longer
possible to take that charge in the restructuring charge, but rather it's required now that you take
it as you incur that cost over the next year or two.
And I think it's unfortunate because I think, frankly, that's going to have a constraining
effect on the amount of money that we're able to spend in upgrading employees. And I think,
you know, the ultimate answer to all of this, I guess, is along the lines that we talked about,
Ralph Larsen talked about this morning, is that we have to guarantee the employability of
employees going forward, and that is to say they need ongoing upgraded skills - and, of course,
the portability issue, as we talked about, in terms of medical coverage and pension and what
have you. But I think that's what we have to guarantee going forward.
�THE PRESIDENT: Thank you very much for that. I didn't know that.
There's another related issue which is that the tax- the nontaxability to the employee
of employer expenditures on education has historically been $5,250. It lapsed, and it's in the
process, we hope, of being reenacted. But there are certain restrictions on it which I think are
excessive, although they cover most- they .don't cover all of the kinds of educational programs
that employers would like to do for employees, especially if there might be a downsizing,
because the restriction now says that the educational benefits paid by the employer up to $5,250
a year are not taxable to the employee if they're necessary to retrain for the existing job or to
train for another job in the company, up the hierarchy. So there -- if it's sort of an off-line
education program, if you will, it's not covered.
In addition, in the reenacting, if the Congress - the Ways and Means Committee
apparently has proposed to eliminate graduate education, which I think is a big mistake as it
applies to higher-tech companies. I hope we can still get a change in that. But in my view, we
need that reenacted with the broadest possible meaning, because that also really matters to the
employees, especially if they might be facing another downsizing. And we have proposed -we're going to send a note up to the Hill which also gives a little extra credit to the smaller
businesses that may not be able to afford to undertake this, because I think it's a very good -a big thing. And I will look into this accounting tax issue. I didn't know anything about it.
Thank you.
Mr. Vice President.
THE VICE PRESIDENT: Well, thank you, Mr. President.
I want to describe a success story. Before I do, I want to pick up on Mr. Langbo's
comments, and. admit that one of the areas where we're having problems in the federal
government is with the fact that our employees are telling us that across the board, it's very
frequent that when the budget cuts come, training is one of the first things to go. And while I
think we've done a really good job in building partnerships --and I want .to describe that-- I
do think that we need to do a much better job in giving our employees transferrable lifetime
skills.
And I just wanted to acknowledge that we have followed the President's lead in putting
out these initiatives, like school-to-work opportunities and one-stop career centers, and a lot
of things that have assisted this in the private sector. And, yet, I think, just like you were
saying in the private sector, I think we need to do a better job of that here.
On building partnerships, again as with the discussion on the first panel, we in the federal
government have a lot in common with business, but some significant differences. Our board
of directors is 535- (laughter)-- and they all have opinions on how we should manage. Then
there is our budget on the days that we have one -- (laughter) -- and operating and capital are
all lumped together.
In any event, we set out to create or reinvent a government that would work better and
�cost less. And just as many of you have faced the challenge of recapturing market share and
improving the quality of your product at the same time you were going through a downsizing,
we face a very similar challenge.
Again,. in responding to the President's request and challenge, we started by going to
those in the private sector and a few pioneers in the public sector who had been down this road.
And we found 50 previous efforts in the federal government, well-knoWn ones like the Grace
Commission, successful ones like the Hoover Commission 50 years ago and so forth, but 50 in
all. Not a single one of them went to the federal employees for the ideas and the blueprint about
how to proceed. That's where we started. And we had meetings, town hall-type meetings in
every single department, in every agency, and asked .the employees in very lengthy sessions
designed to establish trust and open up the lines of communication about what the changes really
are that need to be made.
As many business leaders often say, the people who know the most about the way to
improve any business are the men and women who are right there where the rubber meets the
road, on the front line. If they will share their ideas and creativity and if they're asked to
participate in the implementation of the ideas, then you can really make progress.
Well, that's what we did, and we asked them to buy into it fully. And the ideas were
very impressive, and things that you would never, ever find out or think about, never would
occur to you unless you had worked there in that same place for a dozen years and learned what
needed to be changed.
So we used their ideas as the basis for the downsizing and the quality improvement.
We have now had a reduction of 11 percent of the work force in just three years -- a little over
240,000 people. We will hit our mark of 275,000 people this calendar year. It will continue
to a reduction of more than 300,000 people. But this calendar year, the federal government will
reach a size that is smaller than it has been since John Kennedy was President of the United
States.
And al! departments and agencies have had significant reductions in force, with exception
of the Justice Department where, of course, the President insisted we're putting more police on
the streets and more crime-fighting, drug-fighting and the like. But all of the others have had
downsizing, the majority by 10 percent or more.
To soften the downsizing blow on employees, we created a buy-out program with cash
amounts up to $25,000. We have had 111,578 federal workers who took buy-outs under that
authority. It expired last year. We're seeking new authority, incidentally.
In addition to that, voluntary retirements, attrition, hiring freezes and programs to put
priority on rehiring displaced employees allowed us to keep involuntary separations to less than
.7 of one percent of the work force. There have been some -- our goal was to have none, but
we have had .7 of one percent of the work force.
We feel that one dedicated public servant out of work is one too many, and so at the
�President's direction, we have stepped up career transition services as well. In fact, here in the
District of Columbia, where the biggest single geographic impact has taken place, we just
opened a new transition center at 800 North Capitol Street that provides services linking federal,
state and local programs.
Now, none of this could have been possible in our wildest imagination without a strong
labor-management partnership. Now, I know that some people will automatically assume, well,
these guys are Democrats; obviously they're going to go to the unions to reach an arrangement.
Well, let me tell you where the initiative for this came from.
0
'In 1993, when we were trying to figure out how to do this, I had a long workshop in
Philadelphia at Independence Hall, and a Who's Who of corporate business leaders, most of
them Republicans, probably like most of this crowd here today -- (laughter) -- sorry.
(Laughter.) There are a couple who don't resemble that remark - but a Who's Who of
Republican business leaders said in Independence Hall that if we were going to make
government work better and downsize it to cost less, the only way to do it was with a strong
labor-management partnership.
And so, by executive order, that year, the President established the National Partnership
Council which called for partnership in all departments and agencies. In some areas it was a
little rough going at first, but you always confront the trust issue. But we got over the hurdle
in most places. At many agencies, the Partnership Councils are working extremely well.
When it takes hold, the results are really astounding. One example -- at the Denver
Mint, disputes were a way of life; customers were an afterthought. The local AFGE President
and the Mint Superintendent agreed to agree. Within two weeks, they resolved 185 disputes,
many of which had been lingering for a long time. A new atmosphere of mutual respect was
born and both productivity and product quality shot way up. The last time I was there, the local
president said that something had bubbled up that both sides got a little hot about, and he
couldn't remember how the dispute mechanism worked anymore. They had forgotten how to
go that route, and that's really a good outcome
As you in business know, the turmoil of downsizing, no matter how well it is managed,
takes a terrible toll in morale. You can recall your own experiences. Just try to -just consider
what you face and try to imagine what the two government shutdowns did to morale, not to
mention the terrible tragedy in Oklahoma City and the hatred and ill will that that kind of
symbolized.
The miracle in government is the resilience of our dedicated employees when they are
faced with this kind of adversity. During the downsizing, they have improved service
measurably. We· have now put out customer service standards throughout the federal
government and we are measuring exactly how close we are to meeting the standard, inviting
feedback, and trying to improve the standards.
We found that in the process of creating the standards, when they began to notice the
standards inside the organization, on several occasions I got calls back from the agency head
�saying, wait a minute, hold up on that standard. And the first time I thought, oh, no, they're
going to say they can't meet this. But in every one of the half dozen times that happened they
said, no, no, we think we can do better than that; we are a little embarrassed to have this
standard go out because our employees have told us they've looked at the share of the task that
they have to do and we think we can shave more off it, and so forth. And when people involve
themselves and give of themselves to the task, it really creates good things.
There are now, believe it or not, many examples of private businesses benchmarking
against parts of the federal government for quality of product, delivery of service. One store
chain that went into the pharmacy business in one state looked for the best in business and
pharmacy to benchmark against, and they ended up going to study the air combat command in
the Air Force because they were by far and away the best.
This past year a private sector survey ranked the best 1-800 service in the entire country.
And the customers didn't pick Southwest or Nordstrom or Fidelity or L.L. Beane or any of the
others that are well-known for high-quality 1-800. They picked the Social Security
Administration. And the employees there are so proud of that. And they have a right to be
because they've worked hard to make it so. And they've since gone back and looked at the only
area in the survey where they didn't get a good grade, and they have dramatically improved that
particular category.
And I was thinking earlier when Jim Henderson described the way his employees use
Japanese products as kind of a mental standard, how that phrase has changed in meaning. Many
here will remember back in the '50s when "Made in Japan" meant shoddy workmanship, poor
quality and all the rest. And now your employees and others sort of routinely consider the
phrase, "Made in Japan" as something that means good workmanship, high quality. And
luckily, we're beating them now. But the change in that phrase is one that we've set as a goal
for another phrase.
Think of the feeling you get when you hear, "good enough for government work."
(Laughter.) It means a little bit what "Made in Japan" meant in the '50s. Well, we believe that
it is not only possible, but likely that sooner than you believe it is possible, the phrase, "good
enough for government work" will mean not just in a few organizations, but in the majority of
organizations, a very high level of quality and service and achievement. And the reason for it
is the commitment of the federal employees to the partnership approach that has characterized
this whole effort.
Now, in closing, we are asking Congress for new buy-out authority to use as we continue
to downsize. And that same bill would extend health care benefits to displaced workers for 18
months and allow co-workers to volunteer to take the place of workers who are being
involuntarily separated. We're using forgiveness coupons and encouraging people to make
mistakes. We're trying to abandon the "gotcha" atmosphere and tell people, look, if you not
making some mistakes you're not trying hard enough. We need to innovate, we need to do it
in a brand new way. And above all, we're trying to establish that level of trust to let them know
that we do trust them. We're not out to just catch them in variations from the routine. But all
of that comes back to a partnership with the employees which is the real key to it.
�Thank you. (Applause.)
THE PRESIDENT: I know you may think that the Vice President sounds like a
shameless booster- (laughter)- but we're pretty proud of what these federal employees have
done. And they did it at a time when they were being routinely condemned and held up as an
object of ridicule.
And I might just say that there are companies -- there are some really successful
companies in this room today that started out with an SBA Loan. So before I sign off and go
to our last participant, I'll just take the SBA -three and a half years ago, they had a loan form
that was an inch thick; now it's a page-long. Three and a half years ago, they took six weeks
to give you answer; now it's 72 hours. Their budget has been cut by something like 25 percent
and they've doubled the loan volume.
So it's simply not true that public service is not capable of operating at a very high level
of productivity and quality based on pride and partnership of the workers. And so I'm very
proud of them. And the Vice President deserves a lot of credit for the work he's done on this.
Our last presenter also has a rather astonishing story to tell. He's the CEO of United
Airlines, Gerry Greenwald.
Gerry.
MR. GREENWALD: Dick, you thought you had a tough act to follow. (Laughter.)
I've been with United Airlines only two years. I've been in the airlines industry only two years.
But I do have a lot of miles on me- (laughter) - 22 years wit}:l Ford Motor Company in four
countries and 11 years with Chrysler - and if you ever want to think of a way that something
could take your breath away, it's a Wednesday and you have 140,000 employees and you're not
sure you can meet the Friday payroll -- (laughter) - and a year trying to help a truck company
in the Czech Republic, which leads me right into United.
I'll never forget this experience. This is right after communism and I was getting ready
to go to United. And there I was in the Czech Republic explaining to them that I would have
to start to phase out because I was going to try to help the employees of United buy 55 percent
of United. And they all looked at me and they said, wait a minute, we just finished with all
that. (Laughter.)
But this experience or experiment at United has nothing to do with what they went
through. I call it worker capitalism. It is an experiment to determine whether employee
ownership can create even more profit. And we've been at it almost two years. We have,
today, over 80,000 employees around the world-- 76,000 of whom are in the United States.
And we're trying to pass a test-- or two of them. One is to become the most profitable
airline in the world. And I'm proud to tell you that, in 1995, United Airlines became the most
profitable airline in the world. Now, we haven't passed the test yet because one year's not good
�.----------------------
-------~~~---
enough. Our second test is we want our company to be a good place to work -- a place that our
people tell us through serious scientific employee attitude surveys that this is a good place to
work. And we think we're making quite a lot of progress in that regard, but we've got a ways
to go.
I'd like to take a moment and describe I suppose what I'll call more questions than
answers, mostly from our two years of experience at United, but in part, I suppose, from all
those other miles I have on me.
The first one is maybe sort of a screen for thought here, and that is I'm uncomfortable
with an acceptance that "employable" is good enough
, that "employed" is lost to our
industrial system. Employable except churning and is counter to, in my view, the opportunity
to have well-:-trained people. What is the best training then if it isn't getting somebody trained
and then they stay? Isn't that worth investing in still? And is employable and churning good
or bad for productivity? And it strikes 'me the answer is, directionally, it's bad. And isn't that
worth dealing with?
We at United have an no-layoff policy. I should say it more strongly. It's written into
union agreements. It goes over five and a half years. We think we're earning some benefits
from that policy, which I'll come back to. Maybe this is easier for me to say because I've been
there. We all talk about this issue of downsizing. None of us want to talk about who let all
those companies get oversized in the first place. And is there something we can learn from that
as we move forward in planning for our companies and the numbers of people needed to get the
jobs done as we go forward?
Now you might say, well, wait a minute, you mean you won't hire as many people?
Well, maybe not. If what we've really been doing is hiring and firing and creating anxieties
throughout our whole industrial system as a by-product.
Don't we in today's modern world of computers have a greater responsibility to use
attrition as a means of getting smaller in population long before even we think of buy-outs, but
certainly before we think of layoffs? Isn't there a pay-off in terms of profits from being able
not to see if populations in a company go up and go down. I think there is. I don't know that
there's any scientific evidence of that. I think maybe it's time we go try to find out.
Can employees and unions and managements accept the fact that we are, in fact, not -that we do not control our destinies, that markets do, and that some of us really are in cyclical
businesses, which means there are going to be times when we've got to get expenses out and
there are going to be better times?
And I'll just relate a story that -- well, I'll restate this. I ask myself a question: Are
relationships among employees, unionized employees, and management at a stage that some are
prepared to say the next time we face a downturn, we're all going to take a 20-percent pay cut
rather than cutting back by 20 percent? I don't know. Some people have said that the bigger
issue isn't management, it's distrust. Unions wouldn't trust management to do the pay cut and
then when times get better give it back.
�And then it got really tough when-- some of us have really gone through this and we've
done employee attitude surveys. And what jumps back at most American companies is that
employees do not trust senior management. That's a pretty tough one. I mean, simply stated,
you could end up telling everybody, we're going to take this hill and you turn around and you're
at the top of the hill and no one's followed because it entrusts you.
The closest answer I can come to and one we're trying very hard to practice at United
is it comes from not enough openness and not enough communication and fundamentally not
enough honesty. Well, one of the ones that keeps bothering me is-- too many of us still use this
term-- they are "our troops." Well, are we theirs, really? Shouldn't we be, the senior people
of these companies of ours?
I'll tell you one that really gets to me. About every CEO in corporate America says this:
Employees are our most important asset. Well, if that's true, why do we invest more in the
overhaul of our machinery than we do in the training and communications of our employees?
And why, as I think, Mr. Vice President, you pointed out it's true even in government, that
when there's a budget cut, the first thing to go is training or communications programs in the
case of companies? Doesn't that say we never really believe that training and communications
were a fundamental part of our companies?
What does employee ownership really do? We have a majority- our company is owned
55 percent by our employees. Well, after two years of our efforts, my answer is, it is a catalyst
for change: Most companies, when wanting to go to a more modern form of management,
empowering employees and all ofthe things we've all been talking today, have to take two or
three years, really, to move out of shake loose the status quo. Employee ownership creates
expectation, virtually the demand for change. And so in our case, the day after the employees
became majority owners, we were on our way.
Now, .I must say to you, neither we nor our employees had a blueprint the next day,
but we sure started running pretty quick with a whole series of all of the things you've been
hearing about today. And, second, it really does draw closer employees and shareholders.
I think we've missed our bet. We should have asked for a big discount on the thousands
of Wall Street Journals our employees buy every day now, checking on our stock price, which
I am proud to say from the day employee ownership occurred in July of '94, the price was 88,
I think it closed at 217 yesterday.
And, finally, I wanted to come back to can a company come close to a no layoff policy,
and what do you get from it. In a cyclical business, you've got to do a lot of things to make
something like that stick, and I doubt you can make that commitment and make it stick to 100
percent of the population of your company. But you can get-- you don't have to go to zero,
and what we're finding is that from that commitment so far, I've seen a few things that I had
never seen in all my years. In my past, to get productivity out of a group of 10 people doing
a job, some supervisor had to -- force is not the right term, but the idea of how eight people
could do 10 people's jobs never came from the group of 10 people, and it begins now, it has
begun at United; we're seeing examples of that, because the other two are going to have two
�other assignments, and everybody knows it; they're not getting laid off.
And the second thing that I have never seen before is that we now have teams of people
- managers, employees, working together to sort out examples of work we do that could be
better done by outsiders -- again, because no one is going to lose their jobs over it -- while at
the same time, we are looking and are successfully achieving lots of examples where we are
bidding for other airlines' business, like maintenance, that we do better than others do- there's
a lot more flexibility in what we do, what we want to do for others and what we want to source
outside.
And, finally, because I may never get this chance again in my whole life-- (laughter)-I do want to take a moment and · say if I could only pick two things that I would ask of
government, the federal government, the first is: ESOPs are wonderful, there are tax advantages
created in the ESOP legislation, but in my mind, there is one flaw, and that is, in order to
qualify for the tax advantages under the legislation, the employees who own stock have only
three ways of eventually converting the stock into cash.
I hope it turns out to be only the first way, but it's retire, die, or quit, which --I mean,
for old-timers like me, that's fine; I'm a few years from retirement and I can smell the value
of my stock, and it's okay. (Laughter.) But for somebody who is 30 years old, they're 35
years away from converting it into more than bragging rights. And if the legislation permitted
- I don't know, after 10 years or something, some ability to get liquid, I think it could be really
a wonderful stimulation for ESOPs effectiveness in America.
And I'll just close by saying we have become a very competitive, world-scale,
competitive company. And we would sure like -- and I'm not suggesting that lots of people in
the federal government aren't trying, but we would sure like as much help as possible to free
us to compete in a free trade way across Asia, particularly in Japan and across the Atlantic,
particularly in the U.K., let us loose and watch us go. (Applause.)
THE PRESIDENT: Let me say, as far as I know, you're the first person who ever told
me that about the ESOP, that ever presented that as a problem, and I'll be glad to look into that.
Secondly, as you doubtless know, our trade office has spent untold hours in airline
negotiations trying to open new routes and be willing, taking on all comers, saying, if you want
more routes in America, let's just have totally open competition; we can't find any takers for
that, because the American airlines are so much more productive and competitive than anywhere
in the world, and it's a real tribute to you and to the others in that business. But we will
continue to work on that.
Let me say, I'd like to --we've got a couple of minutes here and I'd like to open the
floor again to comments, but I do want to say that one of the most heartening things that's come
out of this today for me is to hear so many of you say that the job security of your employees
is a goal of yours, and that you believe in it, and that it matters to you, and that you believe that
you can withstand the cycles of the market and still by and large preserve it, recognizing that
�from time to time, there will be significant problems that will cause some companies to have to
downsize; the fact that it is a goal its companies are trying to preserve and pursue, I think is
very important, and especially publicly traded companies who are under enormous pressure to
keep their quarterly review of their stock prices up; this is very encouraging to me.
Would anyone like to comment on this whole issue of partnership in training and
investment?
Mr. Harman?
MR. HARMAN: I'm Sidney Harman, I'm the CEO of Harman International. We're
a company engaged in industry abandoned 40 years ago by this country to Japan, Korea, we
made marvelous high fidelity audio equipment. I've been active in this field for a lengthy time;
I'm talking of the field we are engaged in discussion about today, and I can remember a quarter
of a century ago when a young journalist with a Tennessee newspaper came to a plant of ours
in Bolivar, Tennessee, and became very interested in our very early experiments.
We must have been doing something right, because we're still here, and he's now the
Vice President of the United States of America. (Laughter.) The central message I hear in
today's discussions is that there are many, many techniques, many procedures that can be
followed in one plant or another; indeed in our own company, we don't follow precisely the
same formulas in each plant.
But the principle that we must be competitive, and to be competitive we must be
productive, there's no way we're going to be productive if our programs are such that the people
who generate that productivity are going to work themselves out of jobs. Therefore, finding a
way to increase. security in the workplace is the central point.
I would finish by making the observation first that in one of our plants in Indiana,
following these procedures, honoring the people who do the work, in just the last five years the
productivity represented by annual sales value produced by each employee has gone from
$165,000 to over $320,000. In that one plant, employment on the direct production lines has
increased from 510 to 712, and sales revenues have gone from $85 million to $320 million.
That is double productivity, 50 percent increase in number of employees and the tripling of
sales. That, for me, is central.
And, Mr. President, I'm really delighted to tell you, sir, that now, some six weeks after
your, for us, historic visit to our plant in Northridge, California, we have recovered the
enormous productivity we lost that day when you were there. (Laughter and applause.)
THE PRESIDENT: All right. I'm going to call on you. Let me just make one very
brief comment-- it was worth it, it was a great day. The thing that I liked about what you had
done is that it seemed to me that you were in a market where you could not possibly control
dramatic fluctuations in the orders that were coming in. And, yet, it was clearly not in your
interest, both from a human point of view and from an economic point of view, to have to keep
bouncing these workers on and off like a basketball, or having them on a yo-yo string.
�-
--------------
And so you were actually able to create a whole alternative way of working for them
that was just purely ancillary to your primary mission, but it had the effect of allowing you to
pursue the goal that the gentleman at Lincoln Electric has set for his company and held to. And ·
I think it's very impressive. And I would think a lot of companies that have similar
circumstances would want to take a look at how you did it, because they would save a lot of
energy and productivity and loyalty for their company if they could do the same thing.
Yes, sir. And then there were two more back here. Go ahead.
Q
(Inaudible) -- once every four years we lose an enormous amount of productivity,
so I can relate to your point. (Laughter.) .
THE PRESIDENT: Especially when I was up there. (Laughter.)
Q
But it was worth it. In the "where do we go from here" category, one thing I'd
like to point out is that quite a number of guests who you have invited today belong to an
organization called Businesses for Social Responsibility. Our co-chair and our president are both
here. And this is an organization - as well as mine, the Social Venture Network - which is
really working on this business of standards.
And, interestingly, one of the things that's happening out there is that Wall Street is
starting to get the story here. There is a plethora- the Business School folks, I think, will back
me up on this -- there's a plethora of data now linking top and bottom line productivity,
correlating top and bottom line productivity to the kinds of best practices that we're seeing
today. And, as a matter of fact, I speak on this topic often and I believe this is still true -there's yet- no one has shown a negative correlation, no one in any academic review has shown
a negative correlation between worker-friendly or employee-friendly or environmentally-friendly
companies and their top and bottom line productivity.
And I say this by way of suggesting something that came up at breakfast again, that,
you know, where the rubber hits the road on all of this is where we can have measurable,
verifiable standards for corporate responsibility or corporate citizenship. Not for use as
punishment, but for what today is all about - for positive incentivizing, whether through tax
relief or low interest loans or other kinds of assistance.
And the one thought that has occurred to me this afternoon hearing the fantastic stories
and the really positive stories that don't get out in the press is that the people who can write
those standards are right here. And I'd like to encourage you, as a thought as to where we go
from here that whether through BSR or Social Venture Network or just this very body here, that
you empower a task force of a number of us CEOs to set about something that, as you said, Mr.
Vice President, both sides of the aisle, so to speak, will agree to. It might be X percent of
profits into training. It might be Y percent into employee ownership or a basic benefits program
for assisted care for elderly or for child care assistance.
But the bottom line is, I have a feeling that while they would be debatable standards, we
�could all probably agree on a very few that would enormously ratchet forward our own
productivity, as well as our economy in general. Thank you. (Applause.)
THE PRESIDENT: Thank you.
Two back here. You, and then you; and then the gentleman in the corner.
MR. DORF: Mr. President, my name is Dave Dorf (phonetic), I'm with Tryor
(phonetic) Companies, we own RC, Diet Rite and the Arby's Roast Beef - we are very
concerned about the security -- either mental, emotional or even psychological security of our
employees and the programs that have been talked about today.
But as the gentleman from Starbucks mentioned this morning, even the best of our
industry-- which is in the quick-service fast food-- 50 percent turnover is a great measurement.
We are, as with the military for many years, the first step out of poverty and the first jobs for
many people. We're the launching pad for the economic American Dream for a lot of people.
And it would· be foolish for us to believe that we're going to offer lifetime employment to
everyone coming out of that segment.
And we appreciate all that you and the Vice President are doing to get government out
of business. But one area that we need government to help us with is providing the flexibility
and the friendly environment that allows of to have a portability of health and pension. and other
programs across, so as they come out of our industry and to others and realize the American
Dream, the don't lose the economic benefit of the years they put with us. (Applause.)
THE PRESIDENT: Thank you very much. (Applause.)
There's a gentleman back there in the corner. While you're passing the microphone
back, I just want to sort of support that and say that, if you look at the Kassebaum-Kennedy bill
which passed the Senate 100 to 0 -- which is the sort of thing we ought to be doing in this
country, I mean, obviously we've got a manifest need like that. It doesn't solve all the problems
but, at least, it will make portability the rule rather than the exception, and it will make available
insurance-- even if it's expensive now- for people who have had someone in their family who
is ill.
(
And then the next big challenge will be to make sure that those of you who are in tough
margin and, particularly, smaller businesses are able to get into really, really large pools of
purchasers so that people who have a pre-existing condition don't have to get soaked on their
premiums because the impact on everybody else is so negligible. And we'll just have to do this
one step at a time, but we've got to pass the Kassebaum-Kennedy bill first so that we can get
to that next step. And when we do, I think it will make a huge difference in stabilizing the
whole work situation for people in these smaller companies and where that job is the first stop
on the way to, hopefully, an even better future.
Thank you very much for what you said.
�Yes, sir.
MR. CUNNINGHAM:
Hi, my name is ·Bill Cunningham, from Trade Investment
Research. One thing I wanted to talk about today, a little bit, were the financial markets. I
mean, we see a lot of the bad corporate citizens blaming the financial markets for lopping off
40,000 people of their work force. They say that Wall Street make me do it. I really didn't
want to do it.
How do you re-engineer the financial markets to be a little more humanistic? Or is that
possible? I mean, you have some experience and expertise on the panel, it seems, people who
really have had to deal with the issues of dealing with the financial markets. Is it possible to
create new financial instruments, for example, that take into account certain social goals?
We, for example, at Trade Investment Research, on the local level, we suggested to one
of the local corporate citizens, Fannie Mae, that they issue bonds to rehabilitate the D.C. public
their local obligations instead of paying local taxes.
schools as a way of meeting
I mean, that's the type of financial instrument innovation and expertise that we'd like to see
developed in the capita~ markets.
If you have any comments, I'd like to hear them. Thank you.
-
THE PRESIDENT: Would anyone like to take a crack at that, what he said about the
(laughter.) Gerry?
I'd like to come back to an earlier point and link this
MR. GREENWALD:
question to it because I do think there's a disconnect at the moment. I think a statement has
been made that there is clear evidence, there is clear evidence that caring for employees, broadly
speaking, avoiding harsh layoffs that create a shock through those who remain and become
disloyal, that there is clear evidence that if you do the right thing, that you become a more
profitable company.
Now let's pause for a minute. I do not believe today that Wall Street analysts or
institutional investors believe that, because if they did, they would not reward instant massive
layoffs which is done today. That's the disconnect. And it seems to me our challenge is to
demonstrate that it's a fact, that if we can do so, Wall Street will respond.
·Q
Instant massive layoffs means that management has failed.
THE PRESIDENT: Let me just follow up on both of those comments. Look-- and let's
talk about this -- people make mistakes. The President even makes a mistake now and then.
(Laughter.) People make mistakes. And sometimes - and the world changes sometimes.
Sometimes a decision that was good this year looks pretty bad next year because things that you
couldn't foresee change.
Now, if that happens and you're running a really big company, and, let's say, two out
of six divisions of it no longer make sense for you to be running and you want to have a
�--
-----~
-
- - - - - - - - - -
no-layoff policy. And maybe you shouldn't have gotten into all these things that you got into
when it looked like a profitable thing, at least from a financial transaction point of view to do.
How do you get the time from the markets and from your board to make the transition? Maybe
if you had three years you could figure out something for all these people and then you wouldn't
·
have to lay them off.
I mean, I think that's the thing that plagues me, you know. I think over the long run the
markets make pretty good judgments. I don't think you can stay very strong in the market over
the long run if you're not producing a quality product or service that somebody wants to buy.
But I think what has happened is, as these markets have become more global and our
ability to move money around just like this -- and the people who are moving it make money
based on quarterly returns and also based on how many transactions are churned, it really forces
people who are in a tight - in the near-term at least, to make decisions that seem draconian.
I mean, at least that's what it seems to me.
And is there a fix for that? I mean, is there something that can be done about that, even
if it's no more than-- to go back to the question the gentleman asked-- even if it's no more than
changing the attitude of the people that are making those judgments? Because my perception is
that some of these managers are under extreme market pressure in a dimension for short-term
results that was not the case even a few years ago.
That's my perception. And I would like is a tough issue.
anybody else want to comment on that? This
Q
I think that's true, Mr. President. And also there are other factors at work, too,
that in this day of increased corporate governance today -- boards, I think, are looking for more
of that, not only the financial markets, but there are higher levels of expectations with boards
of directs. I'm not sure it's all bad. Is it good or bad?
THE PRESIDENT: Well, I think the point they were making is, if you could. be more
reluctant to have layoffs because you knew that these folks could be made productive if you had
time to do it, are you robbed of the time to do it if you're market-dependent on a quarterly
basis? I think that's -- to go back to our friend, again, from Lincoln Electric, if you stick with
your mission and you stick with your mission over decades, and then you broaden your
production line or you broaden your services, sort of flowing naturally out of your mission, this
might not have ever happened to you.
But if, in the last 15 years, you have got into expansions that were basically adopting
unrelated or tenuously related enterprises, then you are liable to get caught on one of these
whipsaws. And I think that's some of what we have seen here in some of the most highly
publicized ones.
Sidney, what were you going to say?
Q
Just a quick comment, Mr. President. I can remember when it would have been
�impossible to assemble a group of chief executive officers such as you have on the stage today
to talk about the material we have been talking about today. It was regarded as kooky 15 years
ago. There is hope in the financial markets. I am not here to shill for Wall Street, but
yesterday I visited with Robert Doran, who is the chief executive officer of Wellington
Management Company in Boston. They have $120 billion under management, and he told me
that they invested in our company because they think we are a model and they see value in what
we're talking about here today. I think there are many people in the financial community who
are coming up behind this crowd, thinking very well of the same point of view.
THE PRESIDENT: If I might just make one other point, then I want to call on the lady
over here in the corner; then we have to adjourn. Earlier today - maybe it was this morning
at breakfast, someone said, the enemy is us. And some of our representatives of the unions here
were laughing about it because, of course, the employees pension funds are among the biggest
investors in the stock markets. And if they invest in mutual funds, let's say, their money
managers are trying to get the highest return they can for the pension, and perversely, they could
be undermining the employment stability of the very people whose retirement they're trying to
protect. At least that is arguable.
But if you want the people who are representing you - this is something, it seems to
me, that would be really a worthwhile discussion and maybe we could put one together for
corporate executives and the union folks and the people in the middle, the people that are
supposed to make these investment decisions that you asked about, sir. You see, you gave us
a topic for a whole other day. (Laughter.)
But, I mean, I think, these markets, on balance, have served us all very well over time.
And so we have to be reluctant to mess them up. But on the other hand, when the incentives
get a little out of whack, we have to - we ought to look at it. And I think -- anyway, I'll
pursue it and I'll follow up with you all.
Yes, ma'am.
MS. REDMAN: Thank you, Mr. President. My name is Deborah Redman, and I'm the
president of the Soho Group, which is a marketing consulting firm. And we work with
companies of all different sizes, helping them improve their practices. And one of the things
that we run into when we're dealing with corporate community programs- we have one called
Suits in the Hood that we introduce educational programs within the company. And we find that
the smaller companies, those with less than a hundred employees, less than $20 million, find
corporate citizenship to be a luxury item, to be something that you can afford as you get to be
bigger. And they don't see it as a necessity.
And ifyou're going to take up on the suggestion made by the gentleman from BSR, that
a task force be assembled to address these issues for all of corporate America, then I think it
would be a prudent move to keep in mind that most companies in this country are small and that
maybe part of the task would be to suggest that corporate citizenship is a necessity for all
companies, regardless of size.
�THE PRESIDENT: Thank you. And I agree with you. And I would, you know, just
point we have had some companies represented on this platform today that have under a hundred
employees. And we have even more in the audience. And all of them have various stories to
tell. So I think that it is rriore important, but that's one place where the government should
come in. You know, if there is a particular policy that is more difficult for a small company
than a large company to implement, then maybe that's the place where we ought to have a little
· extra incentive -- on, for example, extra educational benefits or something like that.
Well, this has been an amazing day for - certainly for me. I hope you think it has been
worth your time. I thank you all for coming. I thank you for your support of the idea that we
do have responsibilities to one other in the workplace, and that if we fulfill them in the
appropriate way, more money will be made, the free enterprise system will be stronger, more
jobs will be created, and America will be a better place.
There will be, I assure you, some follow-up with all of you on this conference, and we'll
try to determine where we go from here. But let me say I called this conference for two
reasons. One is I wanted to change the perception that there were no companies in America that
cared about the employees and that were sticking up for them and trying to do right by them.
And the second is, I wanted to change the reality, where we could, by using the good examples
here to influence people in the rest of the economy.
I believe today we have gone some significant way toward both of those objectives, and
I think there are some other things we can do. I think-- again, I want to thank the executives
who have agreed to serve on the board for the Ron Br9wn award, and we will foilow up on that
as well.
Thank you all for coming, and we will be back in touch.
(Applause.)
END
3:45 P.M. EDT
Thank you very much.
�
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
Terry Edmonds
Creator
An entity primarily responsible for making the resource
Office of Speechwriting
James (Terry) Edmonds
Date
A point or period of time associated with an event in the lifecycle of the resource
1995-2001
Is Part Of
A related resource in which the described resource is physically or logically included.
<a href="http://clinton.presidentiallibraries.us/items/show/36090" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/7763294" target="_blank">National Archives Catalog Description</a>
Identifier
An unambiguous reference to the resource within a given context
2006-0462-F
Description
An account of the resource
Terry Edmonds worked as a speechwriter from 1995-2001. He became the Assistant to the President and Director of Speechwriting in 1999. His speechwriting focused on domestic topics such as race relations, veterans issues, education, paralympics, gun control, youth, and senior citizens. He also contributed to the President’s State of the Union speeches, radio addresses, commencement speeches, and special dinners and events. The records include speeches, letters, memorandum, schedules, reports, articles, and clippings.
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
Publisher
An entity responsible for making the resource available
William J. Clinton Presidential Library & Museum
Extent
The size or duration of the resource.
635 folders in 52 boxes
Text
A resource consisting primarily of words for reading. Examples include books, letters, dissertations, poems, newspapers, articles, archives of mailing lists. Note that facsimiles or images of texts are still of the genre Text.
Original Format
The type of object, such as painting, sculpture, paper, photo, and additional data
Paper
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
5/16 – 8/9 ’96 Sweat Shops [2]
Creator
An entity primarily responsible for making the resource
Office of Speechwriting
James (Terry) Edmonds
Identifier
An unambiguous reference to the resource within a given context
2006-0462-F
Is Part Of
A related resource in which the described resource is physically or logically included.
Box 30
<a href="http://www.clintonlibrary.gov/assets/Documents/Finding-Aids/2006/2006-0462-F.pdf" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/7763294" target="_blank">National Archives Catalog Description</a>
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
Publisher
An entity responsible for making the resource available
William J. Clinton Presidential Library & Museum
Format
The file format, physical medium, or dimensions of the resource
Adobe Acrobat Document
Medium
The material or physical carrier of the resource.
Reproduction-Reference
Date Created
Date of creation of the resource.
12/9/2014
Source
A related resource from which the described resource is derived
42-t-7763294-20060462F-030-009-2014
7763294