The bitter lesson of Linwood What the Emerson plan would mean for South Wales steelmen

HE Steel Company of Wales, it is believed, may introduce a version of the 'Emerson' bonus plan. In this way the company could obtain union and shopfloor co-operation in tying all future increases in wages to an intensified drive for productivity.

Under the scheme, piecework and tonnage rates are abolished and replaced by flat rate wage earnings and a company bonus scheme assessed each month on the total sales of the firm's products.

There is no doubt that the SCOW learned a lot from its conflict with the craft workers earlier this year. It has also been studying methods of production in the American steel mills where collaboration with the unions has been in full operation for many years.

Following the strike

February of this year the company sent its chief personnel officer, Mr. Gerald Dennis, to the USA for several months to study American methods of handling labour. He would be able to make a close study of the type of bonus plan used by Emerson.

The fact that SCOW probably intends to take up this plan is a warning to all factory militants at Port Talibot.

The defeat of the craft workers in February at the hands of Carron and other right-wing officials seriously weakened their capacity to resist plans for increased speed-up in the factory.

Unity damaged The spread of illusions amongst production workers of big increases in earnings from bonus plans could further damage the unity of workers required to resist new demands for redundancy and sweeping modernisation proposals being prepared by the steel monopolies.

Heading the field in spreading the idea that co-operation wis the monopolies can pay off for workers is Harold Wilson, Labour's future premier.

In the Port Talbot dispute he called for an enquiry and he has advocated that a Labour government sponsor the modernisation of British industry to make it more competitive.

Whilst the steel combines make ready to extract huge profits in the form of compensation for any future nationalization measures under Labour, they will not be loath to use Wilson and other right-wing leaders in telling workers that to co-operate is best. What is good for SCOW is good for Britain, will be the slogan used by the employers and right-wing Labour alike in Port Talbot.

The originators of the proposed bonus plan are Emerson Consultants Ltd., an American firm of business experts whose intervention in Britain has already benefited such firms as ¡Esso (Fawley), and Pressed Steel (Linwood, nr. Glasgow).

Scientific exploitation Emerson base their plan on the work of Joe Scanlon, American ex-steel worker who became 'research director' for the American steel workers' union and later worked as a specialist at the Massachussets Institute of Technology.

His accomplishment was to pioneer for American big business the linking of scientific exploitation of labour with union collaboration.

The leaders of the steel workers' union became openly allied with the steel bosses of America and the mills were able to put through extensive Sweeping modernisation is the only answer for many employers who want to rejoin the highly competitive world market in an effort to boost their profits. Many of Britain's vast combines hope to achieve this through schemes like that put forward by the American firm, Emerson Consultants Ltd. —efficiency drives linked with 'incentives' for the labour force. The Emerson plan has already been used successfully in the United States at the expense of the working class. The Pressed Steel Company at Linwood in Scotland has also introduced the Emerson bonus scheme and it is likely that the Steel Company of Wales will embrace a similar scheme. In this article, the Socialist Labour League's Scottish organiser analyses the Emerson Plan and, with the experience of Linwood, what it would mean for the modernisation plans which slashed labour costs and saved them from bankruptcy during the depression days.

The authors of the Emerson plan say that its methods are particularly useful in industries where an expansion of production is expected. It would also be particularly useful for the plans of the steel companies in boosting production during the first 12 months of a Labour government.

Through extensive replanning of production techniques, coupled with an intensive drive to force each worker to produce his maximum on each shift, the Steel Company of Wales expects to be in a position to demand a high price for its products.

Amongst these techniques is the production of steel houses in expectation of a ready market under a Labour minister. A variant of the Emerson bonus plan would be especially suited to step up the daily output of pre-fabricated units where labour costs are relatively high.

Emerson depends for its functioning on selling to workers the idea that automatic wage benefits are gained for each individual by increased output provided this is also accompanied by lowered labour costs.

Maximum effort The drive is therefore created to cut labour costs and the whole machinery of union, shop floor organisation and joint consultation in the factory is turned in the direction of forcing each worker to make a maximum effort during each shift. Strikes, labour disturbances, limitation of production, go-slows, reduce the bonus at the end of the month.

Schemes for increasing production at the expense of labour are welcomed and the shop floor is to compete in sending these in. The factory is 'rewarded', provided the firm's products continue to sell, at the end of each month by a percentage bonus calculated on total sales.

Special production committees are set up with union collaboration. Overall there is the bonus "steering committee which in effect acts as the 'planning' committee for the productive effort in the factory.

Of course, the management give up nothing. All plans for production remain in their hands, the workers have no more say in deciding the level of their own earnings than they have in deciding the yearly dividends to the shareholders.

steelworkers of Port Talbot.

There is no doubt, however, that for the union leaders the scheme offers a means to further discipline the rank and file by pointing to the harm done by strikes to the 'common good'.

For the big monopolies it means pushing through expansion schemes and boosting production at low cost. For Emerson Consultants Ltd., it means a good income in percentage of results obtained.

But for the factory worker it means adding to the foreman's scrutiny of his effort that of the shop steward and production committee, with very little to show for it in the wage packet Workers' organisation in the factory is entirely geared to production and support for schemes to reduce labour costs. The For SCOW the Emerson plan would mean a tremendous speed-up in mills such as this. Workers would be forced to make maximum effort in grinding shifts only to be told that any militancy against such conditions would upset the 'bonus'.

production worker is thrown into conflict with maintenance workers and prospects of a united struggle in a future crisis are severely damaged.

The Labour leaders will no doubt see it as a big step in the fight to "modernise' industry and will give it their blessing.

Labour costs The basis of earnings under the Emerson plan is the bonus pool. A pool is created when actual labour costs for a particular month drop below the figure of allowed labour costs made by the company and calculated as a percentage of total sales for that month.

The percentage used is known as the bonus ratio and is arrived at by taking into account the costing of the company's various products.

From the actual payroll deductions are made for sick time and other non-productive time, holiday pay, etc. The figure the factory's wage and workers, some 4,500.

From the figures it is clear who gains from the Emerson plan.

In the seven months since its introduction the total sales have increased by £164,204 per month. The amount the company allow for wages during this time has dropped £78,034. Recruitment to the factory has been virtually at a standstill. The actual wages total plus bonus payment for any one month can never equal the allowed payroll, since 25 per cent of the bonus pool is deducted for the reserve and a further 25 per cent of the remainder is deducted for the employers' share of the saving in labour costs.

During the time that the [read collaboration] to promote increased productive efficiency.' In February, the management's monthly bulletin complained that only 47 per cent of the productivity committees put in suggestions. In January the sales dropped by 4 per cent. 'When ideas were needed most," said the management, 'we reached a new low in participation.' During the month of February, the coldest and wettest month of the year in Scotland, the bulletin pointed out that absenteeism from all causes had adversely affected production and therefore the bonus.

On reading this some of the shop stewards began some "participation' on their own account -they began an inspection of the men's time cards to sort out the defaulters.

Conditions justified In March the management complained that 57 women had walked off the 'Apex' trim line because of draughty conditions. They said this had lost enough time 'to make 350 complete sets of trim pads and covers'.

Enough information is fed into the factory to cause confusion and dis.

sension and create conditions where nobody dare protest against anything.

The most vile conditions of employment and the fastest possible speed of production are justified in the interests of the bonus'.

The job of the steering comnittee which is made up of presentatives of the manageMonthly Sales To Calculated bonus ratio Total allowed payroll Total actual payrol Improvement in labour costs = bonus pool Set aside for Company's reserve —25% of pool Distributed bonus 75% of pool From bonus distributed deduct company's share Employees' share ‹ bonus distributed Bonus percentage Bonus payment on month's wages These figures show how the Emerst from the October 1963 and April Company, Lir ment meeting with the shop stewards, is that of deciding on the means for increasing production and on the monthly bonus payment.

In fact, its sessions consist of recitals by the management of its decisions to which the shop stewards listen. They are then expected to go into the factory to sell the plan to the men who elect them.

At one such meeting the representative of the management exploded with a complaint of the action of a section of workers who had fixed their production target at what he considered was too low a figure. Stabbing his finger at the convenor and his deputy he demanded that they 'get down there' and tell the men that much greater effort was required.

Driven out Assembly line speed-up is what makes or breaks manufacturers of mass production cars and the worker has to work to the speed of the fastest and most automated line in existence. An employer who lags behind in the race for speed-up and automation is soon driven out of business.

Pressed Steel workers must keep pace with the turn-out of cars at Rootes and other car factories and the assembly track is the master. The bonus plan creates the impression that the speed-up benefits the worker also.

Factory militancy is destroyed by the manipulation of Emerson and the production worker begins to turn his hatred not against the employer but against craft and other workers who exhort him to greater effort in the interest of the monthly bonus.

The craft and staff workers do gain temporarily from the October 1963 :1,256,250 49.1% £617,949 £512,128 €105,821 €26,454 £79,366 €19,842 €59,524 14.58% 2s. 11d. in April 1964 Comment 31,420,45. Increase of 12t% approx.

Decrease due to 38.01% ncreased productivity Decrease of 12% €5.39,915 approx. £511,810 £28,105 To be ssued month bonu: was €7,026 deficit Reserve shared Reser shared out a year £21,079 £5,270 £15,809 3.58% 8td. in f bonus plan works. They are taken 54 calculations at the Pressed Steel ood, Scotland.

scheme, although at Pressed Steel its introduction was preceeded by drastic pruning of the toolroom and other jobs and the dispersal of many craftsmen onto the assembly lines.

The implications of the scheme for unemployed workers and the youth are obvious. Any increase in employment at the factory would automatically reduce the bonus rate through increasing the participating payroll.

Apprentice training becomes an unnecessary overhead to be kept down to a minimum or to be used simply as cheap labour.

Class collaboration It is not surprising that after the introduction of the Emerson plan, the management at Pressed Steel put forward a suggestion for the training of workers in welding and blue-print reading in their own spare time.

Applications to increase wages would be a threat to the bonus since any improvement in basic wage rates would send up the participating payroll.

For all its pseudo-scientific talk, the Emerson plan is straight-forward class collaboration.

The SCOW workers should have no hesitation in throwing it out lock, stock and barrel. Production workers and craft workers must unite to block all attempts to create divisions in the factory which would give the management an excuse to put the plan into operation.

All productivity and steering committees — so-called — should be boycotted and shop stewards instructed to take no part in consultations aimed at 'fixing' earnings.

Steel workers can then clear the way for a united attack on the wage freeze and for all-round improvements in pay and conditions.