Big Momentive Labor Strike Shows Basic Negotiation Problem

In business, negotiation is everything. It’s a major part of how you get more revenue for your company. If you do it badly, things can go wrong, as can be seen in the new Momentive Performance Materials labor strike in New York and Ohio chemical plants involving at least 700 employees. After a period of tense negotiations, union workers walked yesterday and management began to bring in replacements.

Some ideas of successful negotiation tactics, like Donald Trump’s reliance on unpredictability, have become widespread. But these often are misapplied or miss something fundamental about negotiation — that if you can’t work with the other side, you probably can’t negotiate effectively.

There’s evidence from the outside that the Momentive strike has come after typical approaches to negotiations between management and a union. In other words, a confrontational approach in which one or both sides tries to impose its will and interests on the other.

The usual approach has led in this case to the strike and use of replacement workers. Why assume an antagonistic approach? Corporate management reportedly mailed information to workers on how to quit the union, according to the Albany Times Union, claiming they were only providing information and not trying to convince workers to quit the union. That would be illegal under federal labor law.

I grant that negotiating labor contracts is difficult. Labor and management often have significant areas of difference as each side tries to maximize the benefits it sees. Also, enough union members have to ratify a contract. Negotiators could come to agreement only to see the deal rejected.

In addition, as negotiation expert and author Jim Camp has repeatedly noted, a win-win strategy often fails because the approach is unilaterally implemented. Being able to say no is a necessary step in forging any agreement, and can lead to success.

But the process of saying no assumes that both sides see some possibility of an agreement and are trying to work toward one. You say no and explain why something is a deal killer. Then you suggest an alternative and see if that works for the other side. If not, you walk away and even then you may hear back because the company hoped you would fold and give in more, but the value of the agreement was more important.

Agreement doesn’t happen by accident. Both sides have to work together. That means communications and pointing out what you either need or cannot support.

In this case, there was an offer of a pay raise and bonus for employees. But the union didn’t like a change to a high-deductible healthcare plan reduction of retirement benefits.

For management, working to a resolution might have included showing the exactly how much health insurance costs were increasing and the degree to which it increased compensation costs beyond a sustainable point. Of course, it may turn out that the claims are flimsy and the real interest is to increase profits. Working together means admitting what is actually going on.

There’s no guarantee that you and someone on the other side of a negotiating table can reach an agreement. It’s why you need alternatives to an agreement, and in a labor negotiation, that can get pretty tricky for either side. Suddenly getting replacement employment or employees is by no means easy. But trying to twist arms is only likely to make things worse.