7. Hours-reductions

7.4 Understanding the positions of the parties

reductions? The following section offers a closer look at how hours-reductions were discussed between company and union and within these organizations.

With regard to demand, the answer is probably no. Today, large companies generally use considerable resources to analyse and forecast the size of the future market. This cannot be said about the Tobacco Monopoly during the inter-war years, as was mentioned in section 5.2. Overall, the development of demand received surprisingly little attention at the meetings of the company board.

With regard to mechanization the answer is less clear. The management was aware of the new technology in 1915, hesitated for some years and ordered machines from the United States in 1920. When individual members of the company board brought up hours-reductions as an alternative to layoffs in the spring and autumn of 1921, their idea was rejected by management representatives. Holsti explained: “With increased machine production of cigars the labour demand will undergo a steady decrease”.34 The great scope for mechanization was at that time beyond doubt, but the limits of the new technology, and how fast it could be implemented, were not known. The management refrained therefore from laying off male hand cigar makers in Malmö in the summer of the same year. In the autumn of 1923 the management established that it would be unwise to release 50 female cigar workers currently employed in preparation work, even though there was a surplus of prepared tobacco. It was explained in a memo that:

The division of labour is still not fully implemented as it should be. A part of the mechanization of work is still awaiting its solution. One therefore cannot yet definitely determine whether these workers can be employed in their original jobs.35

The union leadership’s knowledge of the new technology came from the management and from colleagues in other countries. These sources did not deliver clear-cut messages about the merits of mechanization. In December 1921 a management representative informed the union that “[…] machine production

34 Swedish: “Med stegrad maskinell drift inom cigarrtillverkningen, komma nämligen arbetstillgången inom cigarrindustrien att underkastas stadigvarande minskning”. SM, STM, Styrelsens protokoll, 14 March 1921; ARAB, STF, Inkomna skrivelser från Tobaksmonopolet, E03: 1, 15 July 1921, E03: 1, Svenska Tobaksindustriarbetareförbundet, ARAB.

35 Swedish: “Arbetsfördelningen är ännu icke fullt genomförd på sätt, som bör ske. En del av arbetets mekanisering väntar ännu på sin lösning. Man kan således ännu icke definitivt avgöra, huruvida dessa arbeterskor icke komma att användas i sin ursprungliga sysselsättning.” SM, STM, Styrelsens protokoll, 17 September 1923, Bilaga C, “P.M. angående cigarrarbetet”.

was still in an experimental stage and that definitive decision about future acquisition of machines yet not had been made”.36 In order to get more information on the matter the union’s executive committee sent a letter to its sister organization in the United States. The reply, which arrived in autumn 1922, was a testimony of technological regression.37 After having introduced automatic machines for cigar production before World War I, many firms returned to older technology, even to hand and mould work, in the period of unemployment after the war. Automatic machines were only used for producing cheap grades.

Expectations of future demand and production technology were essential for how the management and the union viewed the trade-off between workers and hours, but the parties also made other considerations. Fixed labour costs were not frequently discussed in the material reviewed for this study.

Nevertheless, when Wallenberg pleaded for the creation of a personnel reserve in 1928, he reminded the company board that having too many workers employed was associated with costs of supervision and book-keeping.38 Another circumstance for the management was that hours-reductions were generally followed by compensation demands form the union.39 This was a recurring pattern during the first years of the downsizing process. For example, in 1920 the union, on behalf of the workers in Arvika and Härnösand, argued that it was not possible to survive on only a half-day wage and that the company had a certain obligation toward its workers.40 Compensation demands following hours-reductions were also made during the summer and autumn of 1921, before the plant closure over Christmas the same year and in the spring the following year.41 Most often, this union strategy was fruitless.42 The management thought

36 Swedish: “[…] maskindriften ännu stod på ett stadium då man fortfarande experimenterade och att något definitivt beslut om anskaffande av maskiner som framledes skulle användas ännu icke fattats.”

ARAB, STF, Styrelsens protokoll, A02: 5, 29 December 1921.

37 MS, FHK, Cirkulärskrivelser, F8B: 3, 15 September 1922.

38 SM, STM, Styrelsens protokoll, 20 August 1928.

39 SM, STM, Styrelsens protokoll, 23 March 1922.

40 ARAB, STF, Cirkulär, B03: 3, 5 March 1920.

41 ARAB, STF, Cirkulär, B03: 3, 15 July 1921; ARAB, STF, Utgående skrivelser, B04: 5, 23 August 1921; SM, STM, Styrelsens protokoll, 23 March 1922, Bilaga B.

42 An exception was in December 1921, which probably was due to a tradition according to which the management handed out Christmas gifts to the employed.

that it had made enough concessions by accepting hours-reductions instead of layoffs, referring to the fact that the measure originally had been a union idea.43

From a theoretical perspective short-time working may be viewed as a way to attain employment stability at the price of income stability. This was not the way the issue was initially perceived by the union. The union wanted both:

hours-reductions were preferred to layoffs, but at the same time the company should compensate the workers whose hours were cut.44 We cannot know exactly what the union leadership was thinking when pursuing this strategy.

Probably it reasoned that the Tobacco Monopoly, with its high profitability, could afford to bear higher labour costs. However, after having put forward compensation demands on repeated occasions without success, the union leadership realized the potential drawback of such a strategy; that it could induce the management to conduct more workforce reductions than necessary. This was, as mentioned in section 6.6, the case in the summer of 1927.

Apart from the compensation issue, there is also evidence of union demands for the burden of short hours to be shared equally by all workers. This came about in connection with the temporary layoffs of male cigar workers in Malmö during the summer of 1921. The Malmö branch of the union proposed that the production of more demanded cigar brands should be transferred from other locations to Malmö. This idea was accepted by the union leadership and presented to the management. After some consideration, Wallenberg rejected the proposal and informed the union that the number of hand cigar workers had been too high for a long time and that further layoffs were planned. At that point, the company employed 240 male hand cigar makers and the long-run personnel need in this occupation was estimated to be 100 workers. A part of the redundancy could be solved by attrition but 100 cigar workers had to go, Wallenberg explained. The union representative argued that the company had made bad forecasts before and repeated the proposal to move brands produced in Stockholm and Gävle to Malmö. The management reply showed that it was not opposed to temporary hours-reductions in principle. The difficulty was that it involved transfers of workers, with associated problems in wage setting. The management feared that the hand cigar workers in Malmö would not accept

43 SM, STM, Styrelsens protokoll, 23 March 1922.

44 It is worth noting that the workers at LKAB, another state-owned enterprise, also wanted compensation when hours were cut during the Great Depression in the early 1930s. Eriksson 1991, pp 230-232.

lower incomes and that the cigar workers at the other locations would not accept lower wages than the Malmö workers.45

Unlike some other unions, cutting working hours temporarily was an uncontroversial strategy among the tobacco workers. There is no evidence of conflicts between senior and junior workers. The congress decision in 1906 in favour of hours-reductions in recessions was not preceded by lengthy discussions. In fact, no counter arguments are mentioned in the congress records.46 Nor were there any principal discussions at the meetings of the executive committee about the trade-off between workers and hours. There were no demands during the post-war depression for some workers to be laid off in order to secure stable incomes for the rest. This consensus on hours-reductions is probably a reflection of the high union density in the industry. The union was not just a small clique but a majority of the workforce and it strived to protect the employment of as many as possible. There were also other potential factors of importance. One was the gender composition of the members, which clearly mattered with regard to overtime work but no explicit references were made to gender in discussions about the use of short hours. Another potential explanation was the relative political unity among the tobacco workers. There was no organized radical opposition within the Tobacco Workers’ Union, as was the case, for example among the miners in Kiruna, described by Ulf Eriksson.47

Although the union clearly preferred hours-reductions to permanent layoffs, it ought to be mentioned that the union’s unemployment scheme was not designed to comply with such a strategy. Workers who were temporarily laid off for long periods were eligible for benefits.48 For those who were laid off every other week or who worked shorter days it was another matter, and these workers did not get any benefits from the union.49

45 ARAB, STF, Cirkulär, B03: 3, 15 July 1921; ARAB, STF, Inkomna skrivelser från Tobaksmonopolet, E03: 1, 30 July 1921.

46 ARAB, STF, Kongressprotokoll, A01, 1906.

47 There was some tension in 1920 when a syndicalist group was formed at a snuff factory in Stockholm. This group managed to gather around 30 workers and did not have any lasting impact.

Lindbom & Kuhm 1940, p 253. For the controversy between reformist and communist miners over hours-reductions, see Eriksson 1991, pp 230-232.

48 It is somewhat unclear whether this was in accordance with the statutes of the union. A discussion at the union congress in 1923 indicates that it was a matter of implicit practice rather than a formal right.

ARAB, STF, Kongressprotokoll, A01, 1923, p 14.

49 Here it ought to be noted that the union did not regard temporary layoffs as a form of short-time working.

If there was consensus regarding temporary hours-reductions in situations with shortage of work, there were different opinions about the treatment of part-time unemployed members. This issue became urgent during the autumn of 1921. First a proposal came from the Malmö branch, whose male members had been temporarily laid off during the summer, that the union leadership should start collecting money from branches all over the country to support the affected Malmö workers. This proposal was turned down by the union board without much discussion. It was deemed inappropriate that the board should take action for a particular group of workers when there may have been other members also affected by hours-reductions.50 Somewhat later the Stockholm branch proposed increasing the membership fee with the purpose of supporting those who were part-time unemployed.51 In reality this group mainly consisted of female cigar-cigarette workers. The proposal caused a lengthy discussion where some of the members of the executive committee were very sceptical. It was decided to postpone the issue, pending an inquiry into the opinions of the members around the country and about the present extent of part-time unemployment. Such an inquiry had been carried out before the executive committee met the next time on 1 December. Generally, the local branches were opposed to raising membership fees.52 All in all, slightly less than two fifths of the workers were affected by reductions in working hours, either in the form of temporary layoffs or shortened working days or weeks.53 After realizing how many members were affected by hours-reductions, the union leadership decided not to accept the proposal from the Stockholm branch. Contributing to this decision was probably the fear that demands for changed benefit rules could be followed by demands for retroactive compensation and the fact that the union leadership at this point had also been informed that all cigar factories were going to be closed from 14 December to 10 January. This measure affected 3,000 members and supporting all these for the one month during which the factories were going to be closed was deemed impossible.54 Another possible reason, although not explicitly

50 ARAB, STF, Styrelsens protokoll, A02: 5, 5 September 1921.

51 ARAB, STF, Cirkulär, B03: 3, 24 November 1921, B03: 3, STFs arkiv, ARAB.

52 ARAB, STF, Styrelsens protokoll, A02: 4, 1 December 1921.

53 ARAB, STF, Cirkulär, B03: 3, 8 December 1921, B03: 3, STFs arkiv, ARAB.

54 In normal years the unpaid vacation lasted from 22 December to 7 January. A temporary unemployment support was paid in order to compensate for some of the income loss caused by the extended closure. Male workers over 21 got 100 kronor and female workers in the same age group got 75 kronor. SM, STM, Styrelsens protokoll, 12 December 1921, Bilaga E. After demands from the union the management also decided to hand out extra support to workers with maintenance obligation;

20 kronor for a wife and 10 kronor for each additional family member that the worker is obliged to

stated, for rejecting the proposal to make part-time unemployed eligible for benefits may have been that such a move would have undermined the union’s attempts to get the company to compensate income losses associated with hours-reductions. If the company saw that the union was supporting its own members there would be no reason for the company to take such a responsibility.

In document Downsizing: Personnel Reductions at the Swedish Tobacco Monopoly, 1915-1939 Karlsson, Tobias (Page 153-159)