UBC Theses and Dissertations

UBC Theses Logo

UBC Theses and Dissertations

The role of organized labour in the network system of industrial governance Murphy, David G. 1998

Your browser doesn't seem to have a PDF viewer, please download the PDF to view this item.

Item Metadata


831-ubc_1998-345971.pdf [ 18.75MB ]
JSON: 831-1.0099372.json
JSON-LD: 831-1.0099372-ld.json
RDF/XML (Pretty): 831-1.0099372-rdf.xml
RDF/JSON: 831-1.0099372-rdf.json
Turtle: 831-1.0099372-turtle.txt
N-Triples: 831-1.0099372-rdf-ntriples.txt
Original Record: 831-1.0099372-source.json
Full Text

Full Text

THE ROLE OF ORGANIZED LABOUR IN THE NETWORK SYSTEM OF INDUSTRIAL GOVERNANCE by DAVID G. MURPHY B.A., St Mary's University, 1972 M A , The University of British Columbia, 1991 A THESIS SUBMITTED TN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY in THE FACULTY OF GRADUATE STUDIES Department of Political Science We accept this thesis as conforming to the required standard THE UNIVERSITY OF BRITISH COLUMBIA May 1998 © David Gerald Murphy, 1998 in presenting this thesis in partial fulfilment of the requirements for an advanced degree at the University of British Columbia, I agree that the Library shall make it freely available for reference and study. I further agree that permission for extensive copying of this thesis for scholarly purposes may be granted by the head of my department or by his or her representatives. It is understood that copying or publication of this thesis for financial gain shall not be allowed without my written permission. Department of // /I'CCCJ ^ / g n c t r g ' The University of British Columbia Vancouver, Canada DE-6 (2/88) 11 ABSTRACT This dissertation examines the role of organized labour in governing relations in post-Fordist networked industrial districts within the context of three such sector-districts concentrated in the south-west corner of the Canadian province of British Columbia. It discusses the impact of this role on relational structures and behavioural patterns within these industries and on sector-district performance in the marketplace. It thereby builds upon the scholarly research which followed Piore and Sabel's (1984) popularization of the so-called neo-Marshallian Industrial Districts (MIDs) of the Third Italy'. The study begins with a historical review of labour's influence on the evolution of production organization and institutional governance from the initial emergence of production for the market up to the current era. This review both demonstrates the significant influence of labour on the evolution of market oriented production regimes and provides a broader historical perspective for the analysis of the three cases. These case- studies use primary documentation and interview transcripts to expose the historical source and contemporary practice of labour's normative place in production organization and institutional governance in contemporary 'network systems of industrial governance' (Hollingsworth, Schmitter and Streeck 1994). Labour's roles in these three sector-districts are compared with each other and with an idealized network construct, both to further illuminate and explain the variable outcome and to illustrate possible avenues for institutional reform. The insight acquired into labour's role in the network model will contribute not just to a better understanding of the future of industrial relations in this emergent system. It will also contribute to the broader, related study of the nature of socio-political organization and institutional governance in the encompassing community. iii TABLE OF CONTENTS ABSTRACT ii TABLE OF COl^TENTS iii LIST OF TABLES vii ACKNOWLEDGEMENT viii CHAPTER ONE: INTRODUCTION 1. Introduction 1 2. Crisis and Change in Market Production 2.1. Crisis in Fordism and Post-Fordist Renewal 4 2.2. The Network Model of Industrial Organization 14 3. The Study Setting 3.1. The Political Economy of Canada 19 3.2. The Political Economy of British Columbia 24 4. The Cases 28 5. Approach and Goals of the Dissertation 31 6. The Research Programme 6.1. Research Methodology 35 6.2. Research Sources 37 7. Plan of the Dissertation 7.1. Chapter Outline 42 7.2. The Bibliography 44 CHAPTER TWO: ORGANIZAED LABOUR'S HISTORIC ROLE IN MARKET FORMS OF PRODUCTION 1. Introduction 45 2. From Guikhsm to Fordism 2.1. The Re-Emergence Market Oriented Production in Europe 48 2.2. The Guild System 2.2.1. Artisanal Organization 51 2.2.2. Labour Relations Under Guild ism 53 2.3. The Putting-Out System 56 2.4. The Factory System 2.4.1. Introduction 60 2.4.2. The Early Manufactories 61 2.4.3. Factory Mechanization 65 2.4.4. Mass Production 69 2.5. Fordism 2.5.1. Micro-Level Foundation 75 iv 2.5.2. Macro-Level Fordism 79 2.5.3. The Internationalization of Fordism 82 2.5.4. Organized Labour During the Rise and Fall of Fordism in Canada 84 3. Beyond Fordism: Summary and Conclusion 87 CHAPTER THREE: BRITISH COLUMBIA SHIPBUILDING AND SHIP REPAIR: ADAPTING 19TH CENTURY STRUCTURES TO 21ST CENTURY CONDITONS 1. Introduction 90 2. From Paddle Wheel to Catamarans 2.1. The Birth of the Industry in BC and the Organization of its Workforce 91 2.2. War-Depression-War: Labour's Reaction to Crisis and Change in BCSSR 2.2.1. Inter-Imperialist War on the High-Seas, Class Turmoil at Home 100 2.2.2. Peacetime Industrial Retrenchment, Canadian Union Restructuring 107 2.2.3. Renewed War, Shipyard Expansion and Labour's Response 110 2.2.4. A National Marine Industrial Strategy 113 2.3. The Final Slide into Oblivion? 2.3.1. Dismantling the Core-Satellite Complex in BC 118 2.3.2. The Union Response to the Crisis of Survival 121 2.3.2. The Contemporary Union Organizational Structure 3. State Directed Industrial Restructuring: The BCSSR's Last Chance 3.1. The Provincial Strategy for Industrial "Revitalization' 125 3.2. Contemporary Institutional Restructuring and Organized Labour 134 4. Summary and Conclusion 138 CHAPTER FOUR: SOLID-WOOD REMANLTFACTTJRING: INDUSTRIAL INNOVATION VERSUS CORPORATIST INDUSTRIAL RELATIONS 1. Introduction 137 2. From Cut-and-Run Forestry to Institutionalised Fordism 2.1. The Formative Years 141 2.2. Institutionalizing Fordism in BC Forests 144 2.3. The IWA' Response to Crisis 150 2.4. A Corporatist Accord in Solid Wood 160 2.5. Political Consequences of the IWA Alliance with the Majors 162 3. Solid-Wood Remanufacturing and its Challenge to the IWA 3.1. The Emergence and Development of Reman 160 3.2. Functional Organization of the Reman Sector 162 3.3. Production, Skills, and Training 166 3.4. Political Repercussions from the Growth in Reman 169 3.5. Organized Labour Within Reman 173 3.6. Prospects for Organized Labour in Reman 177 4. Conclusion 180 V CHAPTER FIVE: THE BRITISH COLUMBIA MOTION PICTURE INDUSTRY: ENTREPRENEURIAL LABOUR 1. Introduction 185 2. The Development of an International Film Making District 2.1. The Role of Labour in the Emergence of the BC Motion Picture Industry 188 2.2. From Exotic Locale to Regular Service Centre 2.2.1. The Externa] Front: Collective Marketing and Promotion 193 2.2.2. The Internal Front: Production Organization 196 2.3. 'Canadian Dreams, Local Control' 201 2.4. BC Labour's Role in Managing District Growth and Diversification 205 2.5. Mounting Inter-Regional Competition and Inter-Union Discord 211 2.6. Industrial District Institutional Elaboration 216 3. The Contemporary Situation 3.1. The Institutional Structure 221 3.2. Labour's Future Role in District Governance 224 4. Summary and Conclusion 230 CHAPTER SIX: LABOUR'S VARIABLE ROLE IN NETWORKED SECTORS: INSTITUTIONAL THEORY AND PRACTICE 1. Introduction 237 2. The Ideal Role of Labour in the Networked Industrial District 2.1. Labour Skill as a Precondition for Dynamism 242 2.2. Labour Training and the Associational Imperative 245 2.3. The Elaboration of Labour's Organizational Functions 248 2.4. The Structure of Network Labour Organization 252 2.5. Institutionalization in the Ideal-Typical Networked Industrial District 257 2.6. Summary and Conclusion 261 3. Case Study Variation from the Ideal 3.1. Historical Development and Institutional Legacies 259 3.2. Case-Study Variation 3.2.1. BCSSR: The Contradictory Consequences of Historic Resiliency 262 3.2.2. Reman: Corporatised Industrial Relations and Structural Change 269 3.2.3. BCMPI: Regulatory Impediments to Labour Institutional Assertion 273 4. Conclusion: The Ideal versus the Reality of Organized Labour in the Network Model 276 CHAPTER SEVEN: SUMMARY AND CONCLUSION 1. Introduction 279 2. Findings 2.1. From Guildism to Networks 282 2.2. The Network Production Model: The Findings from the Three Case Studies 2.2.1. Labour's Role in Revitalizing the BCSSR and its Relational Structures 289 2.2.2. The IWA's Difficult Adaptation to the Post-Fordist Forest Industry 291 2.2.3. Labour's Institutional Embeddedness in the BCMPI 293 vi 2.3. Labour's Role in the Network Model: Theoretical Ideal versus Institutional Reality 296 3. Organized Labour's Role in the Network Model: Its Impact on Labour, District, and Community 301 4. The Network Model and Post-Fordist Development 304 BIBLIOGRAPHY 308 APPENDICES 334 vii LIST OF TABLES 5.1. BCMPI Output, 1963-1996 234 5.2: BCMPI Project Breakdown by Number and Expenditure in BC, 1985-1996 236 6.1. Sector-District Industrial Relations Institutional Framework 262 6.2. BC Shipbuilding and Ship Repair 263 6.3. The Solid-Wood Industry: Fordist and Post-Fordist Institutions 270 6.4. BC Motion Picture Industry 274 V l l l ACKNOWLEDGEMENT There are many individuals and organizations whom I would like to acknowledge for their contributions to my study. First, I sincerely thank the employers and workers, organizational officials, industry consultants, and academic experts involved either directly or indirectly with the three particular industrial sectors which comprised my case-studies for their generous contribution to me of time and knowledge. The information provided by them in interviews, documents, and correspondence formed the core data base of my study. These busy people volunteered their insights in an open and frank manner. In gratitude, I have striven to be fair, accurate and thorough in my analysis of their contributions. Second, I wish to thank several UBC faculty members for their contributions and insights during the course of my dissertation work. Thanks go to Dr. Phil Resnick and Dr. Trevor Barnes for their help and encouragement during the early stages of the dissertation process. Each of my current dissertation committee members: Dr. Alan Siaroff, Dr. Mark Thompson, and Dr. Joe Weiler also helped prepare and guide me in choosing my study topic and in selecting my case studies. Throughout the course of the dissertation process they provided invaluable feedback on my research direction, findings, and analysis. In particular, I want to thank the chairperson of my committee, Dr. Paul Tennant, for his consistent encouragement, his painstaking editorial work, and his guidance in bringing the dissertation to fruition. Third, I wish to thank my student colleagues, friends, and family for their support during this lengthy process. I am particularly indebted to my wife Lara and my children Erin and Meghan for their encouragement, patience and sacrifice, and for giving me a reason to finish. Finally, 1 must thank my work peers, union associates, and political comrades who during my career as a postal worker provided me with the experiential foundation and the intellectual stimulus to leave the workforce and enbark upon post-graduate university studies. I hope that the fruits of my research will somehow assist them and others in their continuing struggle for economic equity, social justice, and political liberty. 1 CHAPTER ONE: INTRODUCTION 1. Introduction In the wake of the crisis-induced decline and subsequent eclipse of the Fordist 'mode of development',1 alternate models for organizing production, with supportive institutions, have become of interest to economic actors and to students of political economy. One of the more prominent of these models is the so-called network system of production organization, which gained prominence with the publication in 1984 of Michael Piore and Charles Sabel's Second Industrial Divide. Under this revitalized form of craft production, geographically concentrated clusters of specialized yet complementary small- and medium-sized firms collaborate in responding to the more volatile, competitive, and open post-Fordist marketplace (Sengenberger and Pyke, 1992, pp. 4-5). The ideal representative of and theoretical inspiration for this production organizational strategy are the so-called Marshallian Industrial Districts of north-central Italy. The strategic combination of competition and cooperation among these small firm clusters has given them both the flexibility to dynamically adapt to the contemporary market, and the economies of scale and scope to successfully compete against old-style vertically-integrated mass production corporations. Since the discovery of these networked sector-districts, scholarly research has focussed upon uncovering the informal values and norms prevalent among network participants as well as the character of the formal associational structures that serve to stabilize and enforce these relations. The research results from this institutional research highlight the critical importance 'Fordism refers to the political-economic system epitomized by the post-war United States, and other national economies influenced by it, wherein mass-production and mass consumption is institutionally coordinated so as to combine social stability with dynamic economic growth. The nature of Fordism, including its impact on Canada as a whole and on the regional economy of British Columbia, will be discussed further in the body of the study. 2 of trust-based relations among personnel within individual production units, among firm owner-managers in the district, and between the district and public policy-makers and community-based service agencies, in making this production organizational model work so well. Employer-led associations are viewed as being of primary importance in promoting these trustful exchange relations. While labour's objective role as a factor in network production has been closely examined, researchers have only conjectured at its potential role as a collective actor in either inculcating trust-based relational norms or in regulating network institutional structures. Considering the abiding scholarly interest over the fate of labour in the wake of the crisis in Fordism in general, and in the function of organized labour under post-Fordism in particular, I strongly feel that this deficiency should be redressed. Consequently, my study explores and evaluates the role of organized labour in the emergence and institutionalization of the network model of production. For my empirical work on this topic, I examine three networked sector-districts concentrated in the southwest comer of the Canadian province of British Columbia. Before delving into the individual case-studies, I first embark upon a broad-based historical review of labour's role in the initial emergence of production for the market during the feudal era in Europe and its subsequent evolution up to the rise, crisis, and decline of Fordism in the 20th century. The review will focus on labour's role in the institutionalization of each leading stage in production organization as well as the interactive influence of particular production regimes on their encompassing society. This historical institutional survey will help frame the subsequent discussion in the three British Columbia based case-studies which follow: Shipbuilding and Ship Repair (BCSSR), Solid-Wood Products Remanufacturing (Reman), and the Motion-Picture Industry (BCMPI). Thus, each case study traces the historical role of organized labour during the initial emergence and subsequent evolution of the particular industry 3 in the region through to its recent introduction of network organizational characteristics. At this stage, I explore in more detail the ways in which labour in each industry has adapted its individual skill profile and production function as well as its collective organizational structure and relational behaviour to the exigencies of network production organization. I look at the impact of these changes on the internal operation of the sector unions and on the unions' relations with each other (where more than one union is present in the industry), with employers and their organizations, with state officials and agencies involved with the sectors, and with other relevant organized actors in the wider political economy. These empirical findings are then contrasted with a hypothetical study of labour organizational involvement in an ideal-typical network sector-district. Causal explanations for the case-study variation from both the ideal and from each other is sought through a discussion of the influence of industrial relations institutional legacies on labour's organizational response to contemporary exogenous environmental pressures and to endogenous structural contingencies in each of the three sector-district case-studies. The dissertation closes with a summary of the findings and of the conclusions drawn therefrom, as well as a brief discussion of some related issues raised by my study which might inspire future related investigations of governance. In undertaking this study, I have sought answers to several questions raised by organized labour's participation in network production organization. What possible functions can organized labour assume in the network system of industrial governance? What impact might these activities have on the performance of networked sector-districts? And finally, what might be the implications of network industrial relations institutional development for the encompassing society? Following a more substantive discussion of the background to the emergence of the network model and of the literature generated by these events, I will elaborate 4 more upon these research questions and the methodology used, with justification for each, including acknowledgement of methodological restrictions and research limitations. In the meantime, this introductory chapter continues with a review of the academic debate around the crisis and decline in Fordism and of the future prospects and possible replacements for Fordism; the latter discussion provides an introduction to the network model of production organization. Since the economies of Canada and British Columbia have been deeply immersed in these developments, the chapter will also look at the impact of Fordist industrialization on industrial relations at these levels. It closes with an outline of the chapter organization of the dissertation. 2. Crisis and Change in Market Production 2.1. Crisis in Fordism and Post-Fordist Renewal The network model of production organization emerged in the wake of a fundamental structural crisis in the post-World War Two Fordist stage of capitalist development.2 Under this Fordist 'accumulation regime', the ever increasing output of standardized goods from vertically-integrated mass-production corporations had been successfully synchronized with the growing mass consumption capacity of the advanced market economies. Keynesian-inspired counter-cyclical state fiscal policies, formalized producer group bargaining structures, and complementary socializing institutions had created a well articulated 'mode of regulation' to perpetuate this dynamic accumulation regime. Western economies were thereby provided with a 2Marx described capitalism as a specific mode of economic development In his 'prison notebooks', Antonio Gramsci (Forgacs, 1988) transposed the system of production elaborated in Henry Ford's automobile plants to an overall macro-level model of social organization. He thereby isolated Fordism as a specific 'stage' of development within the capitalist era. Much later, the French Regulation School elaborated upon post-war Fordism and its articulated "regime of accumulation" and "mode of regulation" (Aglietta, 1987; Boyer, 1990). The role of labour in Regulation Theory will be discussed in more detail below. 5 stable, reproducible foundation for the three-decade-long period of dynamic post-war economic growth which followed. Of course, the dynamism of Fordism brought about unanticipated incremental changes in the economic structure and socio-political characteristics of both the advanced market economies and the global economy as a whole during the trente glorieux (years). These changes undermined the adaptability and coherence of the Fordist accumulation regime, and weakened the encompassing social, economic, and political institutions which helped to regulate it. The social rebellions of the late 1960s, the recessions of the 1970s, and the political-ideological realignments of the 1980s which swept across the globe were the outward manifestations of a crisis in Fordism. This crisis proved to be especially traumatic for the lynch-pin of the international post-war economy - the United States - and for the mass production industries at the base of its economy. The accompanying social, economic, and political turmoil from the 1960s through the 1980s eroded the institutional foundations of the industrial relations accord established at the model's outset during the Roosevelt era between the American state, employers, and labour. The subsequent abandonment of the foundational rules, norms, and values governing Fordist industrial relations in the United States in particular, and in other associated national economies in general, was given impetus by the concerted de-legjtimization campaign mounted by dominant elites against the core beliefs and principles of the post-war edifice. The crisis in the Fordist post-war development model triggered qualitative changes in the organization, function, and relations of the state, business, and labour in the economic sphere across the globe. Ideologically driven state liberalization of the rules governing investment, sales, and trade exposed business to the harsh winds of domestic and global competition. 6 However, market deregulation also freed business from many of the constraints imposed on it by the state and organized labour in conjunction with the institutionalization of Fordist social accords. Individual employers seeking strategic advantage over competitors added momentum to the process of market liberalization by demanding even more government withdrawal from its market regulatory role, as well as the concomitant removal by organized labour of contractual constrictions on capital's freedom. Hapless legislators rushed to placate business for fear of capital flight from their jurisdiction, now made easier under a liberalized investment environment, while labour mounted a haphazard rearguard fight against the relentless corporate assault on its institutional power and privileges. The collapse of Fordism has been especially painful for organized labour in those sectors of the economy, both public and private, which most benefitted from the post-war institutionalization of this regime. Collective bargaining rights have come under joint attack from employers and the state. The implicit guarantee of an equitable share in returns from productivity increases has been revoked. Expectations of lifetime employment and income security have evaporated. And, the market-insulating social safety net has become more porous. The ensuing weakening of Fordist-style industrial unionism has undermined both the economic and the political efficacy of the post-war labour movement in the western industrial democracies. The failure to establish a viable and humane successor to Fordism is indicated by persistently high unemployment levels coinciding with a vast expansion in so-called 'junk jobs', by anemic economic growth punctuated with increasingly deeper recessions, by political leaders' resignation to 'uncontrollable' global market forces, and by widespread popular disillusionment with dominant institutions. However, the increasing complexity and diversity of the 7 international political economy makes predictions concerning future directions equivocal. The breadth of contemporary analysis, prediction, and prescription regarding the new political economy reflects this uncertainty. The initial onset of a general global crisis in Fordism inspired a search for explanations for the eclipse of what had been a relatively successful model of economic development during the first three decades of the post-war era. The search for theoretical frameworks for structuring this analysis helped to revive interest in the work of Soviet economist Nikolai Kondratieff during the 1920s on economic cycles (1984 [1926]). The apparent exhaustion of the post-WWU boom and the return with a vengeance of the classic capitalist boom-bust cycle inspired renewed interest in Kondratieff s so-called long-wave theory of capitalist development. His research had uncovered a tendency for these "waves' to be of fifty to sixty years duration, composed of distinct phases of growth, crisis, decline, depression and, upon the emergence of a new industrial locomotive, renewed growth. Each of these waves is initially precipitated by the exploitation by new industries of innovative production technologies to serve new markets. The influence of this leading sector, in turn, stimulates the emergence of institutional structures with concomitant changes in economic, social, and political relational behaviour. However, the economic momentum of this wave is inevitably disrupted by rising wages and class conflict at the core of this dynamism. The ensuing decline in growth rates is exacerbated by climbing interest rates, falling investment, layoffs, and war. As if anticipating future debates, Kondratieff emphasized that, while each successive cycle follows this regular pattern, "each cycle takes place under new historical-concrete conditions, at a new level in the development of productive forces, and hence is by no means a simple repetition of the preceding cycle (p. 99)." The influence of Kondratieff is evident in Joseph Schumpeter's Business Cycles (1939) wherein he discusses the important 8 role which 'creative destruction' plays during the depression trough in clearing the way for the Tieroic' entrepreneur to lead the next growth wave through the exploitation of new technologies. Later analysts have drawn from Kondratieff s ideas to explain the source of the crisis in the post-WWII Fordist developmental model. In his discussion of the critical role which innovative technology might play in "sparking" a renewed cyclical upturn, Nathan Mager (1986) rails against the role of resistant corporations, profligate politicians, and rigid trade unions in impeding the innovations critical to economic renewal. Belief in the primacy of technology in driving socio-economic change also resonates in Freeman and Perez's (1988) description of the role of random micro-level innovations in impelling the macro-level establishment of a new "techno-economic paradigm." In his explanation of capitalist development, Angus Maddison (1982) places greater weight on the leading role of state policy-makers in promoting the introduction and widespread adoption of new technologies among domestic industries. He claims this political prescience gives the innovator nation a leg-up on its rivals. The leading state then encourages and helps to stabilize supportive socio-economic institutional structures at the national and international level so as to ensure the full exploitation of the potential of the new technology, thereby creating the stable framework for a "long phase of capitalist development". The innovator nation's dynamism encourages rivals to view its technology, and its complementary ideological and institutional regime, as xjest practice', reinforcing that nation's epochal hegemony. Maddison uses GDP growth rates among the leading capitalist economies to back up his claim that the period from 1950 to 1973 was the "Golden Age" of capitalist development. This era's dynamism was broken by major breaks in American economic policy patterns during the 1970s, supposedly triggered by a series of exogenous "system shocks", which disequilibriated the 9 American domestic economy as well international trading patterns. The end of this particular developmental phase was signalled by the American government's abandonment of the "enlightened" domestic and international policy mix of the 1960s. In a follow-up work, Maddison (1991) argues that the policy initiatives of the Reagan administration had initiated the start of a new growth phase. However, Maddison's work overlooked the onset of decline during the 1960s, long before the system shocks of the 1970s, in the macro-economic performance of America, relative to its European competitors. However, Andrew Shonfield (1965) did detect these symptoms a decade before the putative end of the Golden Age. To remedy America's competitive decline, Shonfield prescribed direct state intervention in economic management and for overt state orchestration of macro-level industrial relations pacts. Similary, Shonfield's prescriptions for sustained, equitable, and non-inflationary growth were drawn from his observation of American practice and its comparison to the more interventionist continental European countries. Shonfield's treatise inadvertently recalled the precautionary advice of J. M. Keynes (1924) regarding the inadequacy of state laissez-faire policies in the context of the more highly organized economic conditions of 20th century capitalism. Keynes predicted that the capital concentration which attended mass production would impel the collectivization of national economies either under a centralized "state socialism" or through state delegation of supervisory oversight to medieval-like "semi-autonomous corporations" composed of organized producer groups in each sector of the economy. Being a liberal democrat, he preferred the latter model. Following experimentation with 'state corporatism' from the 1920s up to the denouement of 1945, many continental European states did indeed opt for a more democratic form of corporatism. 10 The English-speaking world's familiarity with corporatist systems of industrial relations grew following publication of Phillipe Schmitter and Gerhard Lehmbruck's Trends Toward Corporatist Intermediation in 1979. However, despite their advocacy of macro-level producer group concertation under what Schmitter termed "societal corporatism" (1979, p. 20), the crisis in Fordism had probably proceeded too far for the Anglo-Saxon democracies to be able to initiate and stabilize the centralized tripartite governance structures prescribed for the restoration of post-war dynamism. As Christopher Allen (1989) argues, the disintegration of national economies in the wake of economic liberalization has made adjustment problems more region-and sector-specific. However, Schmitter (1989) notes in the conclusion to his retrospective work on corporatism over the last decade that these regulatory changes might induce a major shift in the focus of corporatist bargaining away from the macro-level toward the meso-level. The recent upsurge in interest among both industrial policy-makers and industrial relations scholars in the dynamic performance of networked small-firm sector-districts networks appears to support Schmitter's prediction. However, all of this work does not provide either a completely satisfactory explanation for the crisis in Fordism or a well-founded basis from which to predict what type of production organization and supportive institutional structures might replace it. The continuing economic instability in the global economy and political uncertainty as to an appropriate response undermines the likelihood of Maddison's prediction regarding the viability of a new long-term growth wave triggered by American policies during the 1980s. A deeper examination of the nature of Fordism is needed to explain the underlying basis for the historic cyclical patterns of stability and change. Analysts based in France adhering to what has been labelled Regulation Theory have 11 applied a mixture of Marxian and Keynesian economic theory and indigenous historical methodology to explain the descent of Fordism into crisis and to develop scenarios for renewal.3 French Regulation Theory came to the attention of the English-speaking world with the 1979 translation of Michel Aglietta's A Theory of Capitalist Regulation: The US Experience. In his sweeping analysis, Aglietta described the nature and functioning of the "accumulation regime" underlying the Fordist "mode of capitalist development" in the post-WWII American hegemon. He elaborated upon Fordism's genesis via the institutional linking of mass production with mass consumption, thereby realizing dynamic long-term economic growth. He showed how the development of a complementary "mode of regulation" - comprised of state-supported institutional structures and behaviourial norms - ensured the reproduction of the accumulation regime under stable socio-political conditions. Analysis of Fordism's structure and function by Aglietta and his colleagues at the CEPREMAP and INSEE research institutes in Paris was augmented by other "branches' of the school located elsewhere in France and complementary work in other countries into various aspects of the Fordist phenomenon.4 Despite variations among these various schools in their modelling of Fordism, there has been general agreement among them that there has recently occurred a historic disjunctive in Fordism's dynamism. This "major structural crisis" in Fordism (Robert Boyer, 1990) encompasses its technological foundation, production relations, accumulation regime, and 3The latter reference is to the French Annales school of historical interpretation. See Braudel (1980) for a review of the work emanating from the school journal, the Annales d'histoire economique et sociale, during the 1920s and the application of its longue duree theory to contemporary developments. See Boyer (1990) for a discussion of both the influence of this school and Marxian and Keynesian theory on Regulation Theory. "See Jessop (1990b) for a classification of these schools on the basis of locale and membership, and for a description of the similarities and differences in their ontological approaches to Fordism. 12 institutional supports. In consequence of this historical break, attention has shifted to attempting to predict what development model, if any, is to come after Fordism. However, predictive accuracy requires both a retrospective and a prospective understanding of the causal factors behind structural crisis and regulatory change. Unfortunately, there has been little agreement among regulationists as to the cause of the crisis in Fordism let alone what model could plausibly replace it. Aglietta and his colleague at CEPREMAP, Alain Lipietz, locate the source of the crisis in the institutional inability of capitalism to overcome inherent tendencies to disequilibrium. In his 1979 work, Aglietta pointed to the cumulative impact of an imbalance in the output of producer goods ('Department T) versus consumer goods ('Department IT), an inexorable decline in surplus value in both departments, and the related inability of the working class to absorb the ever-growing output of goods, as causing declining rates of profits and investment, and thus economic growth. Lipietz elaborated further upon the affect of imbalance in the "exoteric" world of prices on the "esoteric" world of production (1985). Despite the French school's focus on such value theory, it did note the role of class struggle in precipitating the underlying crisis in productivity. Thus, attempts by the state to mitigate the disruptive affect of the social conflict accompanying economic slowdown produced mounting fiscal deficits and debt, thereby further exascerbating the underlying structural problem (Aglietta, 1987 [1976]; Lipietz, 1986, 1987). American regulationists in what has been called the 'Social Structure of Accumulation' school (SSA) have focused more intently on the national and international social conflict underlying the profit squeeze plaguing Fordism, especially that between capital and labour. They have identified escalating tension within domestic institutional post-war "accords" as causing the destabilization of American Fordism, thereby undermining American 13 competitiveness during the 1960s and the early-1970s (Bowles, Gordon, and Weisskopf, 1983). They have argued that the decision by American ruling elites during the latter half of the 1970s to opt for "domestic repression" over democratic reform further aggravated social tensions, thereby weakening Fordist institutions and increasing its concomitant "waste" of human and natural resources (Bowles et al., 1990). The classic Marxian structuralism that guides regulationist analysis of the Fordist crisis also shapes its prognostications for the future. However, its practitioners see little prospect for a global proletarian revolution to reverse the teleologjcal imperative of capitalism toward an increasing concentration of wealth and power accompanied by greater socio-economic polarization. Capital will consequently continue under the control of ever more powerful, hierarchically structured trans-national corporations able to dominate not just national but world markets. Under this scenario, the ensuing proletarianization of the world's masses should ensure the extension of low-skill, mass production techniques across the globe. Unfortunately though, it continues, if globalization of the market leads to the wholesale abandonment of Keynesian social accords, we might also see a reversion to a purer, and meaner, form of Taylorism.5 Only now it would lack the welfare-state social cushion which allowed for what Bob Jessop (1990a) calls the "societalization" of Fordism during the post-war era which allowed for a relatively socially peaceful long-term growth era. While the pessimism of Regulation theorists seems inspired by Marx, their proposals for the remedial restoration of social equity are decidedly Keynesian (Hirst and Zeitlin, 1991). Thus, many call for renewed and even more extensive intervention by national governments in 5Taylorism, and its progenitor and proselytizer Frederick Winslow Taylor, will be discussed in more detail in the next chapter. 14 the economy and in social welfare provision, augmented by more effective administrative regulation of international trade and investment In response to widespread labour disenchantment with post-war Fordism, they call for greater labour input into the management of a more flexible mass production model (Aglietta, 1987 [1976]; Boyer, 1988,1990; Jessop, 1992; Lipietz, 1986,1987,1992).6 However, structural change and social uncertainty have also created an environment which is conducive to experimentation with alternative systems of production organization which seemingly transcend both the neo-Taylorist and the neo-Fordist scenarios. Charles Sabel (1982) noticed such experimentation in the course of his examination of labour's role in the Italian version of the civil rebellions that shook the world during the late 1960s. Like other analysts of the Fordist crisis, he noted the micro-level inter- and intra-class tensions underlying the strike-occupation wave in large northern Italian factories during the Autumno Caldo of 1969. More importantly, in conclusion he noted that in the wake of this rebellion many skilled factory workers as well as their employers had forsaken the mass production regime of the so-called First Italy. Instead, labour and investment appeared to be flowing into small firm complexes in the Third Italy, on the periphery of the northern Italian mass production heartland. 2.2. The Network Model of Industrial Organization Subsequently, Sabel and his colleague Michael Piore undertook their more substantive analysis of both this emergent Terza Italia and other similarly organized small firm industrial districts located elsewhere in western Europe (Piore and Sabel, 1984). They found that by 6See Streeck (1991,1992a) for a discussion of what he has termed T)iversified Quality Production' under neo-Fordism. 15 applying the high skills of the local workforce to general purpose machinery, the specialized firms in these districts could quickly pump out short-runs of high-quality goods, either for direct consumption or as input factors to be used by complementary firms, for international niche markets. Collaboration among these specialized firms gave them the flexibility they needed to compete in the volatile post-Keynesian market. These findings prompted Piore and Sabel to declare that "flexible-specialization" marked a fundamental break from Fordism and, more importantly, that these districts were the progenitor of an entirely new mode of production. There followed a veritable flood of empirical studies of contemporary examples of what have since come to be referred to as Marshallian Industrial Districts (MJDs), so named in tribute to Lord Alfred Marshall's (1919) pioneering research on the small firm districts of turn of the century England. Modern MTD's across both the developed and the less developed world were found to be thriving in the midst of the crisis in the Fordist model (Goodman and Bamford, 1989; Hirst and Zeitlin, 1989; Pyke, Beccatini, and Sengenberger, 1990; Pyke and Sengenberger, 1992; Spath, 1993; Storper and Scott, 1992). MTD competitiveness was shown to be based upon the economies of scale and scope garnered though complementary factor exchange among district firms (Sengenberger and Pyke, 1991; Storper and Harrison, 1990). These exchange patterns, in turn, promoted trust among district firms which served both to reduce the opportunity costs normally associated with market-based factor exchange and to insulate individual district firms from the extreme volatility and cut-throat competition of the global marketplace. Relational trust not only enhanced overall district adaptability and dynamism (Sabel, 1992; Storper, 1989), it also created a shared sense of identity in the production community, which promoted even more collaboration (Zeitlin, 1992). Local public and private agencies were often drawn into these networks as providers of services needed by these firm 16 clusters in the production, promotion, and sale of their goods. This cumulative evidence helped to undercut earlier claims from critics of the Piore and Sabel thesis that this new model of production organization was merely an isolated, culturally-specific phenomena which could only take root under conditions similar to those found in the more 'organic' communities of the Third Italy. Moreover, the model did seem to represent a uniquely post-Fordist response to contemporary market conditions. This conclusion followed from the recognition that the success of MJDs was due not to their ability to replicate the internalized factor exchange markets of the old-style vertically-integrated Fordist corporation but rather to the dynamism that comes with the flexible "horizontal' integration of complementary factors produced by independent firms. In contrast to the deliberately rigidified and stratified corporate model, the MfD's structure is more adaptable to contemporary market volatility (Piore and Sabel, 1984), more receptive to technological innovation (Freeman and Perez, 1988), and more promotive of producer group collaboration (Brusco, 1989). A new production organization model, the network, was born. In an early evaluation of the network production system, respected industrial organization analyst Oliver Williamson (1985) initially dismissed it as a sub-optimal, transitional stage which firms might occasionally pass through in their movement along the classic market-hierarchy organizational continuum. He argued that the current economic turmoil had merely lent the model transitory prominence and notoriety. However, Walter Powell (1990) was so encouraged by the model's continuing dynamism, persistance, and dispersion to declare that the network model was not only a viable, competitive form of production, but that it was organized on the basis of principles which were clearly distinguishable from either the market or the hierarchy models. Other observers have supported 17 Powell's thesis with their mounting evidence of a generalized movement among both many of the large, vertically-integrated progeny of Fordism as well as among smaller firms toward the network form of production organization (Kanter, 1989; Sabel, 1989; Zeitlin, 1992). This evidence promoted further research into the nature of relations in these networks. Eminent sociologist Mark Granovetter's (1985; 1990) suggested that the trust-based relations in collaborative networks were a result of serialistic exchange among individuals who are deeply "embedded" in network-based peer associations. Others scholars went on to further describe and explain these institutional structures and their concomitant systems of governance (Hollingsworth, Schmitter, and Streeck, 1994; Scharpf, 1993). While it is claimed that this latter analysis covers the "totality of institutional arrangements...that regulate transactions inside and across the boundaries" underlying network governance structures (Hollingsworth et al., 1994, p. 5), most of the attention is devoted to the roles played by firm owner-managers in network governance. This employer orientation is prompted by the belief that the firm is the locus and inspiration for network organization and production collaboration. The focus of study is consequently on the personal, individuated relations between firm owner-managers and employees, other firm owner-managers, and external service agencies. While it is acknowledged that organized labour should play an active role in the "constitutional ordering" of network relations (Sabel in Scharpf, 1993), little empirical analysis of this role, in general, or its impact on network-district performance, in particular, has been undertaken. This discrepancy is surprising considering the influence which labour had on the institutionalization and regulation of Fordism. Just as labour movement activity during the 1930s and early 1940s helped give birth to the post-war Golden Age of capitalism, so too during this time of uncertainty should labour be actively involved in charting a path for the future. 18 During the hiatus between the passing away of the old regime and the stabilization of a new one, it is timely to investigate the impact of organized labour on emerging economic structures. Consequently, while this dissertation will necessarily touch upon the role of all organized actors in the network model, its principal focus will be on the neglected role of organized labour in the emergence, development, and governance of networked industrial districts. I pursue the investigation through a multiple case-study exploration of labour's influence on this institutionalization process in the network model. These studies focus on labour's response to the pressures for adaptation to the emergent regime and examine the organizational structure, functional roles, and relational attitudes of labour in each networked industry. In the process, I hope to provide greater insight into how labour might simultaneously facilitate the development of an efficient and productive regional economy while simultaneously protecting its particular economic, social, and political interests. My case-study methodology will be in the form of historical institutional analysis (Steinmo, Thelen, and Longstreth, 1992) of organized labour's adaptation to contemporary environmental conditions, specifically the establishment of networked production organizations. An historically grounded study is necessary because the structural regime and behavioural norms that labour carries forward from the past cannot help but have a major impact on its adaptation to the network model. In particular, the post-war industrial relations regime which was adopted across the developed world, with its centralized and bureaucratized institutional structure and ritualized adversarial collective bargaining relations, has become deeply embedded in industrial relations practice. Even though this regime seems at first glance to be antithetical to the decentralized, flexible, informal, collaborative atmosphere which is found in the networked district, comparative studies of the proto-typical MJDs of central Italy, especially the 'red' 19 districts of Emilia-Romagna, have revealed union membership densities far above the national average, despite the Italian labour movement's post-war acceptance of Fordist norms. Even more significantly, labour appears to dominate the local and regional governments from which these districts receive many of their services (Trigilia, 1989,1990). This finding indicates not just that organized labour can operate in harmony with small-firm networks but that, more importantly, the ongoing institutionalization of network relations may provide unions with the opportunity to acquire an influence within the network model far beyond that ceded to labour during the Fordist era. My goal is therefore not simply to describe organized labour's current function in the networked sector-districts but to discuss both the source of this role and its influence on the functioning of the network model. 3. The Study Setting 3.1. The Political Economy of Canada The relatively small, open, and regionalized post-war Canadian economy was not especially conducive to the country's adoption of the more unified and autarkic style of Fordism established in the United States. Heavy dependence upon staple exports, excessive exposure to fluctuations in global market demand and prices, lack of a large, integrated domestic market, and absence of a centralized industrial relations structure all conspired against the adoption of a coherent national economic development strategy. Furthermore, American institutional dominance of both the Canadian economy and its industrial relations system made any precipitous shift to autarkic economic development unlikely. Instead, the Canadian ruling elite opted for junior partnership status with American Fordism. Branch-plant industrialization simultaneously provided Canada with a guaranteed export market and allowed for the 20 emergence of a miniature version of the American consumer economy. A federalized Keynesian fiscal and monetary policy regime complemented by liberal social welfare programs complemented this industrial regime (Brodie, 1990). While stimulating industrial expansion, the linking of our economy with the American's during the period of the post-WWII 'Second National Policy* had dubious long-term consequences for the domestic political economy. Already constrained by the political compromises that came with a federal division of power, the efficacy of Canadian Fordism was further reduced by the spill-over from developments in the American political economy. As in the United States, Canada's minimal-entitlement, actuarially-financed, marginally-targeted social-welfare system did not create a very solid popular base of support to allow the regime to weather the onset of crisis in the 1960s. Furthermore, the southward orientation of our industrial infrastructure served to perpetuate the country's staple-dependence, economic-underdevelopment, and regional disintegration, thereby reducing the efficacy of national economic policies and weakening national unity. The failure to create a nationally-integrated, economically-autonomous country left a weak foundation for maintenance of the impressive economic growth rates achieved during the 1950s an early 1960s. Attempts by the federal government to counteract the negative consequences of this "bastardized' Fordism with supplemental centralist social and fiscal policies during the 1960s merely exacerbated political tensions between Ottawa and Quebec City. Concomitantly, federal efforts during the 1970s to insulate the national economy somewhat from externally generated energy shocks revived Western resentment against the perceived neo-colonial tendencies historically manifested by central Canadian elites. Consequently, conflict arising out of the crisis in the Canadian version of Fordism during 1960s assumed a decidedly regionalist political 21 character (Brodie, 1990). Similarly, wholesale importation of American economic institutions into Canada from the late 19th century onwards also had an insidious affect on the country's industrial relations. The "firm-centred industrial culture" that Canada shared with other Anglo-American countries (Atkinson and Coleman, 1989) was further reinforced by our willing adoption of US Wagner-style plant-based collective bargaining in the 1940s. Furthermore, unlike the American states, the Canadian provinces had been awarded responsibility in the 1920s (with a brief federalist centralization during the WWII emergency) for labour relations in most sectors of the economy. Our branch-plant based production and labour relations structures further decentralized the industrial relations system. In addition, the Canadian labour movement was further fractured by competition between craft and industrial unions, between American, Canadian, and Quebecois union centres, and, after the organization of the public sector, between public and private sector unions. This disintegrated structure proved to be an insurmountable impediment to the federal government's attempt to orchestrate a coordinated response by the state, industry, and labour to the disequilibrium problems besetting the economy in the wake of the system shocks which began in the late 1960s. The 'permeability' of Canadian Fordism (Jenson, 1989,1990) increased our vulnerability to the forces destabilizing the global economy and undermining national economic institutions. Yet, Canada lacked the well-grounded centralized corporatist bargaining structures which many other relatively small, open states, especially in Europe, had put in place to manage the necessary macro-economic adjustments. In lieu of these regulatory mechanisms, Canadian governments experimented with authoritative Keynesian wage and price control strategies during the 1970s and 1980s. However, these interventions proved to be ineffective in the 22 context of an open, internationally integrated industrial economy. Even after wielding this blunt macro-level instrument, Ottawa still could not gain the cooperation of the fractured business and labour community in developing and implementing the more sectorally-oriented, volunteerist strategies that it proposed in the 1980s for re-invigorating the economy.7 The constraining effect on Ottawa of its opportunistic adoption of a continentalist post-war economy policy was reflected in the fate of the Third Option1 trade strategy proposed by the Trudeau government in the 1980s. It was hoped that this policy would extricate the Canadian economy from the crisis which policy-makers perceived to be exacerbated by Canada's over-dependence on the American economy. However, there was insufficient domestic support for this state managed nationalist program. The proposal was quickly abandoned in favour of closer continental integration via free trade economic policies and a closer meshing of social policies with our American partners. Yet, the national government could not suddenly abandon the Keynesian-Fordist social accord for fear of the political repercussions from those victimized by market liberalism and state fiscal retrenchment. Ottawa had good reason to expect resistance from labour's industrial and political wings, as well as political criticism from provincial governments to which Ottawa intended to devolve welfare fiscal responsibilities. The resulting political deadlock caused the symptoms of crisis to worsen through the 1980s. Nevertheless, the groundwork was being laid for a "Third National Policy" (Brodie, 1997) for Canada with accompanying innovations in industrial organization. Continental market integration, international trade liberalization, and the globalization of 7I am referring here to the Tier I and Tier II exercises of 1977 and 1978, and the Major Project Task Force process of 1981. 23 investment capital has put into place insurmountable regulatory and political impediments to any future attempts by Canadian governments to assert economic sovereignty. Fiscal retrenchment has diminished the capacity of the federal government to enforce national social policy standards and to maintain what little remains of national socio-economic coherence. The continuing devolution of policy-making and delivery responsibilities to sub-national levels of governments and to non-governmental actors will further regionalize the economy. The historic role of government in the economy has changed substantially during this process. In the wake of the abandonment of nationally directed Keynesian-inspired demand-stimulation policies, sector and region specific supply-side policies have come to the fore. It has become increasingly common for sub-national levels of government to be included in, or to take the initiative in, forming partnerships with sector-specific producer groups to design, administer, and finance programs aimed at enhancing the competitive performance of industry. In contrast to the macro-orientation of the post-war Second National Policy, these programs are explicitly designed to accommodate the increasingly divergent economies and market environments of the various regions and economic sectors across Canada (Andrew, Houle, and Theriault, 1993; Rutherford, 1995; Thompson, 1993). In so doing, policy-makers are following the advice of American industrial planning advisor Michael Porter. In his report to the federal government, Porter (1991) emphasized the importance of state targeting of locally-embedded yet internationally-focused interdependent firm "clusters", rather than the central-Canadian based 'national champions' which had been favoured in the past. These aggregative clusters have characteristics which mirror those of the MIDs described above. 24 3.2. The Political Economy of British Columbia Since European colonization the economy of British Columbia has remained even more small and open, and dependent upon foreign investment and consumption markets than the Canadian economy as a whole. The economic fate of the province continues to be inordinately dependent upon the extraction and export of minimally processed natural resources by large-scale, capital-intensive and, largely, foreign-dominated corporations. Nevertheless, the province has had some recent success in breaking out of this 'staples trap' and diversifying its economy by striving to creatively exploit a broader range of its natural environmental endowments.8 Furthermore, local resource depletion and increasing competition from other resource-rich regions have prompted a shift in private and public investment into higher value-added resource processing. Finally, concerted investment by the provincial government since the 1960s in capital and human infrastructure has finally begun to encourage the growth of high-technology, knowledge-based communication, information, and entertainment industries (Howlett and Brownsey, 1996; Resnick, 1987; Shearer, 1993). In contrast to the Fordist-like traditional resource sectors, these emergent industries tend to be composed of smaller, specialized, locally-owned and operated firms. In consequence, they are also more deeply embedded in a community network of suppliers, customers, and public and private support services (Barnes, Edgington, Denike, and McKee, 1992; Hayter and Barnes, 1992). This organizational structure provides a good foundation for the emergence of network relations. The historic character of class relations should also allow for relatively active labour participation in this relational network. 8 The environment has helped to attract affluent retirees, alternate lifestyle devotees, and immigrant-investors all of whom have promoted economic diversification. As will be shown later, the natural environment was one of the factors that drew Hollywood north. 25 The birth and the historic evolution of the provincial economy have been shaped by institutions that bear the legacy of a highly class-polarized society. The relative paucity of good agricultural land at the time of colonization forced immigrants to seek wage employment in the trade dependent resource-extraction industries. This relatively large proletarian demographic was disproportionately made up of young, rootless, itinerant labourers. Their predilection for radical class-based politics was fuelled by the kind of cut-and-run employers and compliant governments that typify frontier societies. The relatively modest size of the yeoman agricultural class and the underdeveloped state of the incipient urban middle class left class conflict untempered by more liberal minded political moderation (Robin, 1972,1973). The international labour mobilization that accompanied industrialization therefore found fertile ground in the province during the first half of the 20th century when the institutional foundation of the contemporary resource-based economy was being laid. Consequently, the region witnessed recurrent bouts of industrial conflict and civil strife. In consequence of the socio-economic flux which was common to frontier societies, the electoral arena was characterized by an unstable and shifting alignment of bourgeois-populist parties on the government side and socialist-labour parties on the opposition side (Woodcock, 1990). This atmosphere was not conducive to the implantation of the moderate party system typical of the older parts of the country. Furthermore, this polarized social structure and unstable party system probably discouraged business investment in the more labour-intensive secondary manufacturing which was emerging in the longer-settled, more socially stable regions of Canada. After World War Two, a right-of-centre populist provincial government under Premier W. A. C. Bennett promoted Fordist-style industrialization of the resource-based economy in the 26 hope of spurring lagging economic development. It undertook a furious program of state-financed and controlled infrastructure investment during the 1950s and 1960s in areas such as transport, communication, and power-generation. However, these efforts initially served to stimulate even more private investment in capital-intensive, export-oriented resource extraction industries. Furthermore, the province's control over access to the resource base allowed it to favour investment by very large and well-financed corporations with well established international marketing networks over the small, family-owned operations which had dominated the economy up until then. Vertically-integrated, mass production facilities employing minimal numbers of high-paid, low-skilled workers were established to process resources into primary commodities for the export market. The provincial state complemented wage and profit subsidization in these industries with a carrot and stick approach to restive social groups in order to ensure both international competitiveness and domestic social stability. This resource-export based version of Fordism was established in a setting with highly organized producer groups: a legacy of the industrial conflict of the pioneer era. Labour in the major resource sectors had been organized into fairly centralized industrial unions. In response, firm owners joined province-wide sectoral associations. Sector-level collective bargaining between these blocs soon became the norm in many industries. Furthermore, both sides complemented their economic strength by allying with political parties: labour with the provincial branch of the social democratic Cooperative Commonwealth Federation and its successor, the New Democratic Party; and employers in the 'free-enterprise' coalition led by Social Credit. Union organization of the provincial civil service in the 1960s gave labour the political momentum to help propel its political allies into government briefly in the early 1970s. This 27 period also witnessed a dramatic, albeit brief, expansion of the provincial social-welfare state. Unfortunately, the left's capture of the legislature also coincided with the first major post-war recession in the provincial economy and the onset of crisis in international Fordism. This developmental crisis was especially traumatic in British Columbia due to the extreme sensitivity of resource exports to the inherent flux in international demand for primary rnanufacturing inputs. The ensuing disruption of the provincial Fordist social accord precipitated intensive industrial and political conflict during the late 1970s and 1980s. However, the ensuing stalemate between capital and labour within the province which ended this overt conflict has promoted the formation of more collaborative bipartite and tripartite industrial policy-making forums in many sectors of the economy involving diverse branches and levels of the state, business, and labour. While the most prominent arena of corporatist collaboration has been in the core primary forest products sector, other areas, including all three of the case-studies, have been affected by this new style of meso-corporatist industrial relations. The liberalization of global markets has also seen an increasing divergence between the performance of large, foreign-owned, capital-intensive corporations and that of smaller, locally-based, more labour-intensive firms. The former sector has reacted to the accompanying profit-squeeze, market instability, and demand diversification by shifting investments offshore and further automating their indigenous operations. The latter group has exploited the latent potential of the indigenous human capital base and to concentrate its efforts on the production of high-quality, specialized goods for emergent niche markets. This smaller-scale, labour-intensive, high-skill sector of the economy has provided a foundation for the formation of the networked industrial sectors under study. 28 4. The Cases Each of the three sectors of the British Columbia economy chosen for analysis and comparison - Shipbuilding and Ship Repair (BCSSR), Solid-Wood Remanufacturing (Reman), and the Motion Picture Industry (BCMPI) - manifest characteristic features of network organization. Thus, each is dominated by relatively small, interdependent, spatially concentrated production units. In consequence, they share a common geographic, political, economic, and social locale from which they compete in (or are preparing to enter) the international market. However, each sector was born during different eras of economic development and, consequently, they have different industrial relations institutional origins which, in turn, influenced their subsequent historical evolution and, especially, their adaptation to the network model. While the province has jurisdiction over labour relations in all three of these sector-districts, each taps into the services on offer to business from various other levels of government in Canada, from national to local. Similarly, while each sector-district has its own distinct internal institutional structure, its component organizations are also affiliated with larger, external representative bodies. In consequence of both features, all three sectors and their labour and management organizations are influenced by a variety of policy-making strategies emanating from local, regional, national, and international levels of the political economy which are nevertheless influenced by similar overriding structural changes in the global market. Local shipbuilding and ship repair facilities were first established in the mid-19th century to support the sea-borne colonial assault on the coastal resource bounty. BCSSR's subsequent evolution was heavily affected by the resource booms, war emergencies, and state industrial development programs which followed, up until the 1980s when all three opportunity sources 29 simultaneously evaporated. With the industry facing oblivion, the provincial government initiated an industry "revitalization" program in the early 1990s involving the concerted effort of the crown ferry corporation, the handful of remaining shipyards, and the assorted shipbuilding unions. The goal was to meld these firms and their unions located on either side of the Georgia Strait into an integrated production network possessing the capacity to turn-out competitively priced high-technology passenger ferries for, first, the ferry corporation and, eventually, an emerging international market for such vessels. For such a strategy to succeed, labour must undergo a major change in its skill composition, production organization, and relational behaviour. The shipbuilding unions have been invited to participate in designing and managing this workforce transformation. However, outcomes could vary depending on labour's response. On one hand, a vigorous response to this renewal process could open up new functional and operational venues for labour in this industry and related sub-sectors. On the other hand, union lassitude might push labour to the margins of district governance. The ensuing labour disenfranchisement might undermine the revitalization strategy, precipitating the demise of this historic industry, and with it, a pioneering section of the provincial labour movement. The dynamic Reman sub-sector of the provincial forest industry emerged following the provincial government-engineered post-war re-organization of the primary solid-wood processing industry. During this re-organization process, the primary sector was transformed into a highly concentrated, vertically-integrated manufacturer of standardized commodities for the burgeoning North American consumer market. Relations between the state, employers, and labour took on a classic Fordist character. However, independent entrepreneurs took advantage of the opportunity provided by the narrowed focus of the primary sector to establish small 30 operations to 'remanufacture' waste and surplus lumber discarded by the 'major1 processors into specialty wood products for neglected local and international niche markets. This sub-sector has since grown in size and diversified in output. There are now over one hundred remanufacturing facilities in the province, half of them concentrated in the Lower Fraser Valley. In the early 1980s, the primary forest sector went into a deep recession, causing the mass closure of commodity mills and displacement of their workforce. However, in the midst of this crisis, the dynamic Reman sector flourished, expanded, and diversified. Its dynamic performance brought it to the attention of the principal actors in the forest industry, then embarking upon a debate over the future of the primary industry. As the principal union in the solid-wood sector of the provincial forest industry (pulp and paper being the other major sector), the IWA-Canada has been rocked by the ensuing effort to adapt the forest industry to new conditions and to reform the forest regulatory regime, which has been at least in part stimulated by the dynamism of Reman. Although it represents labour in only a small fraction of Reman plants, the union's powerful position in the forest industry's corporatized policy-making regime gives it significant indirect influence over Reman's future. How well the union accommodates itself to exogenous and endogenous pressures on the industry will consequently have long-term repercussions not only on Reman, but also on the forest industry as a whole and on the entire provincial economy which it fuels. Motion picture production in British Columbia began its meteoric climb to prominence during the 1970s in the wake of the dismantling of the Fordist-style Hollywood-based studio system'. From its modest beginning as an exotic 'foreign' film shooting locale for Hollywood, the BCMPI has since grown into the largest film production centre in Canada, pumping out over half a billion dollars worth of video product annually. While the industry still specializes in sub-31 contract work for American TV producers, an increasing volume of locally initiated multi-media film projects is being initiated, financed, and produced by a myriad of small locally-based production companies for a diverse international market. Local film production unions played the leading role in the birth of the provincial industry and in guiding its subsequent development. They are now deeply involved in the web of relationships within and among local film companies, with various state agencies servicing the district, and between the district and other film production centres. However, labour management of its ubiquitous functions in these complex relational structures and its strategic dominance of the district's evolutionary development has sorely tested its strategic mettle. This case-study, as well as the other two, will examine how labour attained its present status in these networked districts, the nature of its governance roles in them, and the prospects for its future in institutional governance. 5. Approach and Goals of the Dissertation In order of presentation, the major components of this dissertation are descriptive, analytical, theoretical, and hypothetical. However, in order of importance, the theory building process is primary. The first two components lay the groundwork for the theoretical elaboration which will, in turn, allow for the development of predictions regarding the affect of network organization on the encompassing society. These findings and conclusions should contribute to the international research and debate now underway concerning the future of the network model of industrial organization and governance. The descriptive stage, embodied in the three case studies, explores the role of organized labour in each of the three sectors examined. In the process, I identify the various unions 32 involved in the networks, elaborate upon their organizational functions in each sector-district, and discuss the means by which they carry out these functions. I will, of course, explore the role the unions play in traditional union functions such as representation and collective bargaining. Their exercise of these duties will be elaborated upon so as to distinguish current union practices from those under earlier production organizational models. More importantly, though, the case-studies will explore new (or renewed) activities undertaken by the unions on behalf of their members as well as the unions' external relations with other unions, employers and their organizations, various state policy makers and agencies, and other interests. Thus, the case-studies will serve to uncover and clarify the nature of the new industrial relations patterns the unions are establishing in their industries. While this aspect of my research treats organized labour as the respondent to change in the external environment, I am also interested in the impact of union activity upon the character and performance of the sector-districts. How has union activity shaped such things as individual worker's skills and functions, district production organization, and intra- and inter-firm relations? Furthermore, what has been the affect of union participation in district governance on each sector-district's overall relationship with the state, other sector-districts in the same industry, and the industry's market as a whole? The answers to these analytical questions should provide the means to determine whether union activity in each sector-district detracts from or contributes to their overall viability and performance. The study also seeks to explain how and why the unions acquired the roles they now have. In addressing the first question, I undertake the systematic construction of an idealized networked industrial district. In describing an optimal role for labour in this hypothetical model, I assume that labour is unencumbered by disadvantageous historical or political impediments to 33 its development of network adhering organizational structures and of status enhancing functional roles. This ideal-typical construct will then be contrasted with the actual historical development of the three sector-district examined in the case-studies. Their variation from the ideal will be explained through schematic illustrations showing the specific influence of environmental pressures, technological changes, and institutional structures on the evolution of each sector-district into the network model. Exploration of historical institutional legacies will help to explain the variation in union relational outcomes among the contemporary practicioners and between them and the ideal-typical construct. More importantly, it can provide insight into the comparative role of structure and agency on production organization, labour skill and function, institutional stabilization and change, and overall governance in the network model. Thus equipped, I postulate upon the optimal feasible (proper) institutional role which organized labour can and should aspire to in governing network systems of industrial organization. The accumulated knowledge of Fordism gained so far has clearly demonstrated that unions have played a critical role in the performance of this particular model of development. Collective bargaining has provided a legitimate continuing institutional medium for labour to garner an equitable share of the returns from productivity increases and management to gain long-term predictability, and a founation upon which the state can provide economically and politically stabilizing social-welfare programs. Unions exercised their functions under Fordism through the negotiation of long-term labour contracts and by participating in the administration of labour relational dispute settlement processes. These functions were important as, above all else, Fordism required predictability of both production and consumption patterns under a system of centralized, concentrated, and hierarchically ordered control. In the wake of the crisis and decline of Fordism, it is incumbent to explore the 34 possibilities for future industrial relations regimes in general, and labour's role in the encompassing political economy in particular. Contemporary firms are driven by imperatives fundamentally different from those during the Fordist era. In order for them to survive in a more volatile and less integrated marketplace, they must become both more specialized and more flexible. Empirical studies of these firms has attributed their success to their owner-managers' cultivation of both a more cooperative work environment within the firm and collaborative exchange networks with other complementary firms. These informal producer partnerships are supplemented with favourable policies from local and regional governments, 'real services' from public and private agencies, community building by civic associations and, sometimes, collaboration from labour unions. Investigation of organized labour's actual role in these networks has been limited to the impact of the unions' imposition of traditional master collective agreements. On the negative side, their imposition of Fordist-inspired contracts on these firms is seen to reduce production flexibility. On the positive side, by 'taking wages out of competition', they remove a potential impediment to inter-firm collaboration, thereby inadvertently helping to forge trust-based inter-firm networks. However, the emergence of a fundamentally new model of production organization should also lead to the creation of innovative new labour relational structures with complementary industrial relational practices and behavioural norms. Consequently, I have undertaken to examine this industrial relations institution building process in three actual cases. My study has four goals: to explore the roles garnered by organized labour in each sector-district; to uncover the causal factors behind the unions' assumption of these roles in each particular case; to understand the impact of this labour activity on production relations and performance within each sector and, finally; to create an empirical foundation upon which 35 postulations can be made concerning the possible impact of this production organization model on the encompassing society. 6. The Research Programme 6.1. Research Methodology I have chosen the (multiple) case study method for my research as it provides the best means to investigate contemporary phenomena not subject to control by the investigator (Yin, 1990), which is the situation with regard to the emergence of networked industrial districts. This methodology also follows generally adopted by other analysts of this production organization model. I have also been impressed by the insights of analysts now associated with historical institutional research methodolgy.9 My case studies consequently trace each sector's industrial relations institutional development from their inception up to the present. This process better illustrates the relative influence of institutional structure path dependency versus industrial relations actors' free agency in explaining contemporary outcomes. It also gives both observers and practitioners of industrial relations policy a better idea of what institutional reforms ought to and can be undertaken to improve these and other networked districts' industrial relations and market performance.10 'Like others before me, I have been inspired by the pioneer of this methodology, Polanyi (1944). More contemporary inspirations include Boyer (1988), Campbell, Hollingsworth, and Lindberg (1991), Hollingsworth, Schmitter, and Streeck (1994), Katzenstein (1984,1985), Piore and Sabel (1984), and Streeck (1992a). See Thelen and Steinmo (1992), for a review of some of this literature. l0See Robert Putnam's Making Democracy Work (1993) and work prompted by its publication such as Genschel (1993) and the "Special Section" in Politics and Society. Volume 24. Number 1 (March, 1996) critiqueing Putnam's work. See also Jessop (1996) for a discussion on the 36 Nevertheless, the long-term outcome of the institutionalization process is uncertain as it is occurring in the context of an unpredictable transition from Fordism to post-Fordism. Relatedly, the three sector-districts under review are still in the initial stages of structural and institutional formation. The elaboration of production organization, relational structures and norms, and institutional governance in these sectors is fluid. Furthermore, as in all intermediate level institutional processes, causal chains are complex. The historical institutional case study method allows investigation of the dynamic and interdependent unfolding of the global order and the concomitant local reaction of these three industrial communities. The character and function of the organizational actors, including labour, in these three networked structures is similarly indeterminate, subject as they are to both inter-organizational struggle and environmental pressure at this nascent stage of institutional development. The fluidity of the contemporary process of global change and local institutional development makes it difficult to clearly isolate the influence of factors exogenous to the unions from that of deliberate union action. Nevertheless, case study analysis facilitates the identification of organized labour's role in network development and the means labour uses to exercise its prerogative. We can thereby reach some tentative conclusions regarding the influence the unions may exert on the future performance of networked industrial districts. In contrast to the single study, the multiple case-study format provides both a broader range of data with which to build theory and a better means to identify probable causal chains. Since the three cases in this study share a common locale, it is easier to isolate the contemporary market factors and institutional legacies behind the variation in labour's response to challenges in each case. One can then catalogue both the limiting and enabling factors affecting labour's interaction of structure and agency inspired by Regulation Theory. 37 adaptation to environmental change. By contrasting and comparing the cases, one can begin to see patterns of network structure and operation, develop some generalizable explanations for its peculiar nature, and provide a firmer foundation for further studies in this area. Since organized labour has played an influential role in the emergence, institutional elaboration, and competitive performance of various modes of production organization, increased understanding of the network model should prove useful for industrial relations policy-makers in developing policies which balance institutional stability with dynamic industrial performance. In particular, the case studies can provide insight into what labour gains from this experience and the corresponding affect on industrial relations. The nature of and motivation for labour's participation in this institution-building process not only affects the competitive performance of particular industries in particular settings. It also should help determine the long-run durability of the model and, in turn, its impact on the society in which it operates. 6.2. Research Sources My sources for information on the three sector-districts consist of scholarly literature, industry journals, primary documentation, the print news media, interviews, and direct observation. While I set out to exploit these source categories in this sequence, specific sources often provided supplementary leads to further research in the source categories. Scholarly books and articles on the network phenomenon provided an introduction to the subject, a focus for my inquiry, and an inspiration for the formulation of research questions. While quite a few empirical studies of networked industrial districts have been undertaken recently, no work has been published on contemporary industrial relations in the sectors chosen 38 for my study. This research gap provided further impetus for my undertaking. There is quite a lot of scholarly material available on the British Columbia forest industry due to its historic importance to the provincial economy and society. However, only one academic study, a masters thesis (Rees, 1993), has been undertaken on the Reman sector and this work did not delve into labour relations. The paucity of material on Reman is indicative of its still marginal importance to the principal interests involved in the provincial forest industry. There is a long history of ship building and repair in British Columbia. However, its sporadic impact on the provincial political-economy has limited scholarly attention to those periods when the sector boomed. The BCSSR's recent decline, and its possible resuscitation, remain unaddressed. Finally, academics have tended to view the Canadian film industry through the lenses of cultural (bi-) nationalism. Consequently, their work on the industry has focused on the heavily subsidized and protected film production centres concentrated, respectively, in Ontario and Quebec. Despite its phenomenal growth, the internationally-integrated and export-oriented BCMPI has been totally neglected by academic political-economists. I therefore relied extensively on national and local professional industry journals for information on the three industries, whether originating from industry associations, individual firms, unions, government agencies, or commercial publishers. The film industry journals proved to be especially useful sources of historic and contemporary data on the international, national, and local levels of the industry. Similarly, since British Columbia dominates the Canadian forest sector, national industry journals as well as those produced by BC-based firms and unions provided extensive coverage of events in the province. However, very little journal attention is devoted to Reman despite its dynamic growth; this finding prompted a search for 39 explanations. The recent dramatic contraction in the size of the national shipbuilding industry has also seen the demise of most of its journals. The only industry-based publication remaining is one produced by a shipbuilding union. Incidental material was extracted from other marine-related publications. Of course, the nature of the generative source and of the intended audience for these industry journals tended to bias their editorial content. Furthermore, the absence of a formal peer review process exacerbated their lack of objectivity and balance. Extensive research of administrative documents and correspondence, consultant reports, and the minutes of industry-based meetings helped to offset this shortcoming. Primary documentation provided further data on the three sectors as well as insider information on contemporary industrial policy developments emanating from the state. The recent upsurge in government interest in the performance of the three sector-districts has increased the flow of this material. However, access to some of it could only be obtained through 'freedom of information' channels which often resulted in exculpation by zealous bureaucrats of potentially important documentary text considered by them to be of a sensitive nature. This limitation was somewhat offset by a careful survey of the news media and personal interviews of key personnel involved in the industry. The news media proved to be quite useful for garnering up-to-the-minute information on industry developments and state policy pronouncements. The print media also generated names of key organizations and officials for possible personal interviews. I interviewed seventy-three employer and union representatives, concerned government officials, informed academics, and industry consultants and professionals. Each interview, of 40 roughly forty-five minutes to an hour in length, commenced with questions drawn from a standardized questionnaire which I designed specifically for this project (Appendix I). However, as the interviews unfolded and particular lines of questioning proved more or less fruitful, I tended to shift to a more 'open-ended' interview technique. Several subjects were interviewed more than once, in which case later questions were more sharply focused. While the content of these interviews was confidential, I was permitted to include the names and positions of my interview subjects in the Research Sources listed at the end of the dissertation. These interviewees provided me with background on each industry's historic development as well as the contemporary situation. They helped clarify and flesh-out details on such things as the organizational structure and production technology of the particular industry; information that was missing from the primary and secondary documentary sources. Furthermore, the interviewees' aspirations and expectations regarding particular sectors provided valuable insight into the current tenor of inter-organizational relational activity. Finally, they often provided me with further documentation as well as leads to other information sources, including interview subjects. Unfortunately, some officials that I would have liked to have questioned were either unavailable for interviews, despite several attempts, or outrightly refused my requests, despite written and verbal assurances of confidentiality. The latter response was especially common in the case of government officials. Thus, no ministers or deputy ministers were interviewed. Furthermore, the bureaucrats that I did manage to interview were often obfuscatory and guarded in providing information and extremely hesitant to volunteer opinions. On the other hand, industry officials were remarkably forthcoming. Furthermore, some 41 of them invited me to observe production activity at industry work-sites. Consequently, I had the opportunity to tour two remanufacturing sawmills operated by the majors and the two shipyards still operating on Burrard Inlet. Although I visited a film studio complex in North Vancouver, the opportunity to observe a film shoot did not arise. The subjective bias of interviewees was compensated for by my gathering of opinions from a broad spectrum of industry participants. Similarly, careful research of industry documents helped to offset the inherent limitations associated with interviewees' spontaneous recollections. Consequently, the content of interview transcripts was treated more as qualitative than quantitative material. Although the multiple-case study method served my purposes in this project, there was an obvious trade-off in not choosing to do only a single-case study instead. Naturally, in keeping to one case, one can gain a deeper understanding of the subject within the equivalent time through taking general surveys of ordinary industry personnel, for example. Thus, in my study, I could only infer workers' attitudes toward their jobs and the industry as a whole from their leaders' responses. However, my purpose was to gain a general understanding of the network model as it functions in this region so that, among other things, the findings might be generalizable to other sectors in the region or even to other regions of the country, continent, or globe. Beyond this outcome, I hope that my findings will contribute to the empirical and theoretical work on the network industrial model, thereby providing a basis for further research in this area. 42 7. Plan of the Dissertation 7.1. Chapter Outline Chapter 2 begins with an historical examination of the role of labour in market-oriented production systems from the feudal guildist era through the putting-out, manufactory, factory, and mass production stages, up to the institutionalization of Fordism. This retrospective survey traces the critical technological and social innovations in the dynamic economies which led in the subsequent international adoption of these particular developmental models. It concludes with the impact of Fordism on the political-economies of Canada, as a whole, and British Columbia, in particular. Of course, the role of labour in production and its organizational activity at each stage of development is central to the survey. I explore the reciprocating impact of labour on the evolution of production for the market, and labour interaction with employers, community, and state. This review is intended to provide both contextual background and historical insight into the emergence of the network model in the three sector-districts chosen for analysis. Chapters 3,4, and 5 contain the individual case-studies of the three sector-districts chosen for analysis. Each case-study chapter opens with an introduction to the sector-district and the major current issues facing organized labour in it. The individual chapters then trace the history of the particular industry in the province starting at its inauguration, looking at the environmental conditions at birth and the institutional character of the nascent industry, including production organization and industrial relations, from the perspective of labour. Each case-study then proceeds through the particular sector's development up to the present, especially focusing on the impact on labour and its organizational response to change. An in-depth analysis of the contemporary situation in the sector-district is then undertaken. Each study 43 closes with a discussion of the outstanding challenges facing the particular sector-district and labour's possible role in their resolution. Chapter 6 strives to explain the reasons for the variation among the case-studies in labour's organizational response to contemporary conditions and in its adaptation to the institutional imperatives of the network model of production organization. To this end, it proceeds with my construction of an ideal-typical networked sector-district, focusing on the role labour might play in the process, and its organizational function in the resulting model. Next, the institutional evolution of each of the three cases is illustrated using an industrial systems framework that I have adapted from classic industrial relations methodology. Comparing and contrasting each sector-district with the other two, and with the ideal-typical network model, will help to clarify the interactive influence of institutional legacies and contemporary environmental pressures on labour adaptation to change, especially with regard to the introduction of network organization. By way of conclusion, Chapter 7 summarizes the findings from the historical review of labour's role in the evolution of production for the market, the case studies of the three networked sector-districts, and the comparative analysis of the impact of historical legacies and environmental pressures on the institutionalization of network relations in the three cases. By applying the insights garnered from both the historical and the contemporary analyses of labour's role in production organization and governance, we can better predict the possible impact of network industrial organization on the encompassing economic, political, and social environment. Just as the diffusion and broadening of Henry Ford's innovative production organization stimulated and, in turn, was aided by complementary changes in society, the diffusion of network organizational patterns to other economic sectors and regions should induce a commensurate re-organization of the economy, re-configuration of state structures and functions, and reconstitution of social institutions, possibly, ushering in another 'Golden Age' only with, hopefully, broader prosperity and deeper equity. This prognostication will complete the study. 7.2. The Bibliography Echoing the research plan, the "Research Sources" are divided into separate sections for the listing of published documents, unpublished documents, industry journals, and interview subjects. The first section includes academically-oriented books and journal articles as well as government publications. Industry and government documents either unpublished or with limited circulation are grouped in the next section. Since I undertook extensive surveys of industry journals, these sources are listed in another distinct section. Last but definitely not least, my case-study informants are grouped together under one section heading, because some provided me with information on more than one industry. I am especially indebted to these individuals for the data that they volunteered, their insights into industrial relations practice, and their invaluable help in undertaking my research. 45 CHAPTER TWO: ORGANIZED LABOUR'S HISTORIC ROLE IN MARKET FORMS OF PRODUCTION 1. Introduction The last few decades have witnessed a widespread abrogation of the post-war Fordist industrial relations system's core principles, especially so in its heartland, the United States, and by implication in its 'junior partner', Canada. The abrogation of national Fordist relational accords has been accompanied by the state's deregulation of domestic markets, abandonment of Keynesian fiscal and monetary policies, and retrenchment of complementary social welfare programs. This neo-liberal onslaught has, in turn, weakened normative societal bonds and mores, and increased public alienation from traditional political structures and processes. The pre-eminent regulatory role of the nation-state has been further eroded by an insidious devolution of its sovereign authority to inter- and sub-national bodies. The generalization of these changes across the globe indicates that we may not be simply abandoning the post-war Fordist development model but also undergoing a fundamental global change in the modern political economic system which emerged out of the feudal era. The nature of the rise and the subsequent fall of Fordism reveals the inter-dependence of economic, political, and social institutions. Consequently, the emergence of the network model of production in the wake of the demise of Fordism may therefore be both symptomatic and indicative of broader changes in the modern global political economy. Insight into the organizational structure of the network model, its institutional governance system, and the nature of social relations within it may provide some clues as to the nature of the overall political economic system presently taking shape. Consequently, the role which labour is able to forge for itself within this emergent organizational model may, in turn, indicate the future place of 46 labour in the emergent society which encompasses this production regime. In order to better understand the impetus behind contemporary political economic changes, as well as their possible ramifications, we need to go back to the origin of the modern market-based economy and explore its development up to the present, focusing especially on the socio-economic nature of production during each stage of this evolution. The social organization of goods production for the market has gone through a number of different forms since it re-emerged in Europe during the late feudal era. The character of the encompassing labour market has been one of the major factors determining the nature of each of these forms. Such features as labour accessibility and cost, its skill range and adaptability, and producer group relations have had a significant influence over production organization and industrial performance. Furthermore, these features have helped shape labour's organizational structure and its role in the institutional structures governing market relations. In turn, these features have affected labour's ability to respond to subsequent changes in the market environment (Fulcher 1991). Therefore, before embarking on the contemporary case studies, we will review labour's historic influence on and response to changes in the system of production for the market from the feudal guildist era up to the Fordist era of development. In focusing on labour's behaviour, answers to three inter-related questions will be sought: How did labour precipitate change in production organization? What production functions and organizational forms did labour assume during particular stages of this evolution? And, what influence did organized labour have on encompassing social and political institutions? In answering these inter-related questions, this historical survey will provide some sense of organized labour's role in the institutional development of the market-based political economy. 47 The historical review will begin with the rebirth of the market in medieval Europe, which saw the rise of commercial cities, the organization of artisanal systems of production, and the formation of craft guilds. In examining this era, we will look at the organizational character of craft production, the nature of relations in the work-shop, and the role of craft guilds in the political economies of urban communal governments. We will then proceed on to subsequent developments in the organization of production for the market, from the putting-out system which superseded the urban craft-guild system, through the rise of and evolutionary development in the various stages of the factory system of industrial production, and the accompanying emergence of the nation-state political economic system, continuing up to the creation and institutionalization of the Fordist system for regulating production and consumption in the post-World War II international market economy. In gaining an understanding of how labour garnered its distinctive role at each stage of development, we will look at several causal factors: the principal technology distinguishing each stage of development, the organizational structures and behavioral norms characterizing the dominant industrial relations institutions, and the nature of political economic development model adopted by the encompassing society in which these production regimes operated. The knowledge garnered from this review will, in turn, provide some indication of the impetus behind the emergence and development of the contemporary network model of production organization. Furthermore, the review will also provide a better means to predict the possible long-range impact of the network model of production organization on the provincial political economy in general, and labour's role in shaping the development of the provincial institutions governing industrial relations, in particular. 48 2. From Guildism to Fordism 2.1. The Re-Emergence of Market Oriented Production in Europe The economic, social, and political structures and norms underlying feudalism were antithetical to market-based commodity production and exchange. The feudal estate deliberately strove to promote social continuity and economic autarkism in order to better survive the anarchy which prevailed outside its borders during the Dark Ages. Within the estate, economic functions were inter-generationally immutable, social structures were rigidly hierarchical, and political relations were modelled on the authoritarian patriarchal family. Commodity production was primarily for internal consumption with some external bartering of surplus goods. External trade was of marginal importance, with some local exchange of primary goods and longer range trade in luxury items. Nevertheless, developments within feudal Europe during the late medieval era stimulated the emergence of a new model of socio-economic organization. However, rather than centring on the isolated feudal manor, this regime would be based in the city, where commodities would be produced for exchange, entrepreneurial initiative and social mobility would be prized, and political rule would become more explicitly based upon popular consent. Eventually, this dynamic regime would come to dominate and, eventually, replace the feudal system which provided its incubus. Changes in the larger political, economic, and social environment of Europe set the stage for the social revolution that was about to unfold. The attenuation of barbarian invasions of continental Europe, on the one hand, and the increasing lure of foreign lands and their wares in the wake of the Christian crusades, on the other hand, served to open feudal Europe to both 49 internal and external trade. Simultaneous innovations in European farming technology produced growing agricultural surpluses which the inhabitants of the feudal estate could offer in trade for the more exotic goods which began to appear in the local market. Enterprising merchants exploited this opportunity to profit from the buying and selling of goods which they could now more safely convey along the transportation corridors opening across, and extending beyond, Europe. Permanent market centres soon emerged at the confluence of the inland commercial corridors and at entrepots along the coast. As trade blossomed, these centres precipitated the rebirth of the urban life which had withered across Europe in the wake of the collapse of the Roman Empire. However, unlike their historic predecessors, these towns were not primarily administrative centres, like those of imperial Rome, nor were they primarily reliant on the plunder of foreign lands, as had been the earlier warrior city-states of classical Greece (Weber, 1978, p. 1352). They were first and foremost commercial towns. Furthermore, unlike their predecessors, they were not initially structurally integrated into the dominant, land-based feudal political-economy. They, consequently, developed their own distinctive institutions. These historically unique urban enclaves, and their commercially-oriented denizens, represented an implicit challenge to the ossified, autarkic, agricultural patriarchies which surrounded them. Nevertheless, the landed aristocracy tolerated them as they provided an outlet for surplus agricultural produce, offered exciting new imports in exchange, and presented opportunities for aristocratic investment in commercial property and trading ventures. Many aristocrats established town residences to better satisfy their appetite for the goods, services, and social activities which the towns had on offer, and to oversee their commercial investments and urban political affairs. Feudal strictures and hereditary wealth gave these oligarchs and their 50 commercial partners initial political control over town affairs. However, the compounding profits which the merchants garnered garnered from intra-and inter-urban trade soon gave them the wealth and the incentive to largely displace the feudal rentier class from urban political power. Furthermore, by financially underwriting the incessant wars of the aristocracy and the state-building efforts of the monarchy, they also helped to augment the commercial freedom and the political power of the cities. Behind their sturdy walls, the burghers established autonomous, self-governing city-republics, in the process discarding remnants of the anachronistic social constraints which the landed gentry had attempted to transpose to the city. The 'free-air' of the urban commercial centres were also a beacon to the serf bonded to their manors. Upon entering the towns, the liberated rustic discovered opportunities for the application of their craft skill to the processing of commodities imported from adjoining agricultural lands or from abroad. In the process, these incipient artisans helped to diversify the city economies from being simply commercial entrepots into being thriving processing centres as well. This activity not only further stimulated trade, it also provided another source of profit for the merchants who had the capital and the experience to import and export commodities for value-added processing. The complementary relationship of artisan and merchant provided the structural foundation for the emergence of modern capitalism. The artisan's purchasing of unprocessed commodities from the merchant, his transformation of it into consumable goods, and the sale of these goods on the open market represented the money-commodity-money production side of Marx's classic accumulation cycle. The merchant's importation of raw materials, their sale to the artisan for further processing, and the use of the returns from this sale for the renewal of the 51 cycle represented the commodity-money-cornmodity financial side of this equation. The open question was over who would bring these cycles together and, by joining them, dominate the evolution of production for the market. 2.2. The Guild System 2.2.1. Artisanal Organization Like the merchant-trader, the craft-artisan enjoyed considerable market autonomy. His workshop was both production centre and sales outlet. The more ambitious shop owner hired apprentices in order to expand his output. The merchant-traders were eager to assist with the financing of the expansion of work-shop capacity as the expected increase in production output provided an additional source of profit. Furthermore, local commodity processing reduced the risk associated with the long-distance importation of processed and, consequently, more valuable goods across sea-borne and land-locked 'pirate' infested trade routes. The symbiotic relationship between artisan and merchant enriched the towns, increasing their economic and political power relative to the encompassing feudal agricultural economy. Urban development brought further elaboration of communal social structures. In imitation of the merchants, artisans involved in the same trade soon associated to exercise more control over market activity in their sector and more influence over the town councils regulating the urban economy. Each craft guild assumed responsibility for setting standards for production output level, quality and price, overseeing recruitment, training, and credentialling of work-shop apprentices, and providing input into communal governance of both intra- and inter-communal market activity. In the process, the craft guilds became the principal institutional medium for labour socialization into both commercial and civil activity within the 52 medieval city-states (Black, 1984). In order to ensure regulatory control over the their specific trade and to nourish its economic dynamism, craft-artisans developed the classic apprentice/journeyman/master status-function hierarchy. Apprentices were bonded to the work-shop master-owner for the duration of his training period. In return for his deference and loyalty to the shop-master in the performance of his trade, the apprentice was guaranteed remunerative employment and room and board in the master's residence until either his full trade accreditation or his marriage. The accredited journeyman was then free, indeed obliged, to subsequently seek his fortune on the open labour market, in the hope of eventually accumulating enough money to open his own shop. This social-occupational conveyor system promoted not only inter-generational craft continuity but also intra- and inter-communal craft dynamism. Work-shop ownership lent the artisanal-masters superordinate authority within the shop and within the guild. This position gave the master pre-eminence in representing the shop in his guild and, in turn, the guild to the communal town council. However, this intra-guild economic, social, and political power imbalance was somewhat mitigated by the reciprocal duties and obligations among the functionaries within the work-shop and within their respective craft-guild. The socio-economic interdependency within the work-shop and socio-economic mobility within the craft thereby attenuated the potential for a structural polarization in wealth and power within the trade-occupational hierarchy (Weber, 1978, p. 1984). While artisans initially organized in order to exercise collective influence over the market, we know from Max Weber's seminal work on the 'plebian city' that the craft guilds soon became involved in political matters (Weber, 1978, pp. 1302-3,1345). In many towns, they used their market influence to garner corporate representation on the town councils, alongside the 53 merchant guilds and other urban notables. After helping the merchants to overthrow the landed patriciate, the craft guilds' went on to demand a more popular, representative form of government. Thus, craft guild values of brotherhood, obligation, and equity provided the normative foundation for both the reciprocity-based economy and the republican civic culture which came to characterize many medieval communes. However, these values went into hiatus during the centuries-long transition from city-state to nation-state republicanism. Society would have to go through a long period of turmoil and conflict before civic republicanism would once again re-emerge. During this period, labour would be on the defensive as it sought to preserve some of the status it had garnered under the guild system. Despite this setback, the institutional legacy of the medieval Kaiif-system would provide a source of inspiration for the reciprocal corporatist political economies which would be established during the Fordist era of the nation-state system (Black, 1984; Putnam, 1993). 2.2.2. Labour Relations Under Guildism Despite the organic harmony within the guild structure, there is extensive evidence that the subordinate guild members, especially the journeymen, took independent action to protect their status. The temptation for the master to exploit his authority within the work-shop, to ignore regulations concerning subordinates' working conditions, and to skirt conventions governing the ratio of lower-paid apprentices to higher-paid journeymen prompted wage labourers to associate informally in defence of their traditional rights. However, the higher mobility and skill of the journeymen gave them a much greater capacity than the apprentice to lever concessions from or check the power of an over-weaning master-shopkeeper. Their independence also gave them a greater impetus for collective action. Proof of this associational 54 activity comes from the record of strikes mounted by German Gesellenverbande, French compagnonnager, and English journeymen associations against their employers half a millennium before the industrial revolution ushered in the modern labour union (Lis, Lucssen, and Soly, 1994). Guild masters, of course, resented labour insubordination and vigorously opposed its autonomous organization. As workshops grew in size due to an increase in both the division of labour in certain industries and in the size of markets, trade 'chapels' were established with guaranteed representation for apprentices and journeymen. These corporate bodies arbitrated work-shop labour relations and financed social service programs. Relational harmony was reinforced through chapel provision of social insurance against loss of earning capacity among members and of loans to journeymen seeking to establish their own shops (Materne, 1994). The 'stick' complement to this paternalistic 'carrot' came with the masters' exercise of their representational prerogative on town councils to bring down official opprobrium on the labouring classes whenever they dared to assert their particularistic interests. However, their "property in skill" (Lis and Soly, 1994, p. 17) together with their employment mobility gave journeyman some freedom from the restrictions emanating from guild masters and their allies on the town-councils. Informal socialization and occupational commiseration among journeymen 'tramping' from town to town in pursuit of their livelihood encouraged collective organization. The pubs and hostels which they frequented became regular meeting places and dispatch centres for labour. Formal organization soon followed, giving these proto-trade unions a collective means to exert some influence over employment placement as well as a vehicle for the negotiation of terms of employment and remuneration with employers. The inter-communal links forged among journeymen helped to mitigate guild-instigated 55 regulatory restraints on autonomous labour organization within the cities. Guild masters, however, responded by using their influence with the emerging regional commercial leagues -initially formed by the merchant class to regulate inter-city trade - to re-assert their socio-economic authority over labour. Thereafter, these inter-urban confederations dominated trade across Western Europe up until the Treaty of Westphalia (1648) officially ushered in the nation-state political-economic system. This pre-emptive move by merchants was the forerunner of a continuing see-saw struggle between capital and labour for ascendancy. The dramatic increase in regional trade promoted by such commercial federations as the Hanse gave the merchant-traders increasing leverage over the goods-producing classes. Many artisanal shops were reduced to a sub-contractual relationship with the merchants due to the tatter's monopoly over inter-city trade. The ensuing competition between sub-contracting work-shops eroded craft solidarity and increased shop-masters' predilection to exploit labour. As the larger work-shops displaced the smaller, the socio-economic gap between employers and labour grew. Extra-communal market power and the capital accumulation which this allowed soon translated into greater political power for the commercial class. The merchant-trader guilds reasserted their earlier dominance over town councils. Merchant-bankers forged strategic alliances with the new national monarchies whose aspirations they shared and financed. The subsequent supersession of the city-state system by the nation-state system ushered in the next * stage in the evolution of the market economy. Guildism would be displaced by the putting-out system of production organization; the social reciprocity of guildism would be displaced by social polarization; and, civic republicanism would be replaced by national absolutism. In organizing itself in the nascent market economies of the emergent medieval towns, 56 artisanal labour had acquired an important institutional role in the social, economic, and political life of the city-republics established thereafter. In these roles, labour thus helped to establish the normative foundations of modern western society: individual freedom, market-based production, and responsible government. However, major changes in the environment would bring about a gradual long-term erosion of the collective rights and status acquired by labour during the guildist period. 23. The Putting-Out System As had been the case with the guild system, the interdependent impact of a series of political, economic, social, and technological changes in certain parts of Europe stimulated the emergence of the putting-out system of production. The political rise in the power of national monarchies relative to that of local feudal-era authorities helped remove some of the barriers impeding urban commercial intercourse with proximate rural regions. The ensuing re-integration of town and country economies encouraged the commercialization and mechanization of agriculture. This change, in turn, increased and diversified the flow of local factors involved in both production and consumption of fabricated goods. These regulatory and commercial changes encouraged entrepreneurial investors to attempt to bypass craft guild restrictions on production and trade. While some attempted to negotiate some relaxation in guild restrictions on commodity production and sales, others simply skirted these restrictions by sub-contracting various material processing functions to rural labourers with family-based workshops in their homes. The commercialization of the countryside was a vital step in the consolidation of territorial markets. This process, in turn, was critical to the emergence of modern national 57 economies (Kriedte, Medich, and Schlumbohm, 1981). Similarly, the imperial ambitions of the new national monarchs also brought distant regions of the globe under the influence of aspiring nation-states. The convergence of interest between the state and merchant capital was concretized under the mercantilist doctrine; its use at this nascent stage of national industrial development helps to explain its continuing application by developing states up to today. The sub-contracting of various stages of the production of some more complex goods -cloth for example - to specialized work-groups had not been unknown during the guildist eras. However, the importance of the putting-out (Verlags-) system grew immensely under the favourable conditions which existed for its exploitation in the commercially oriented economies which had emerged on either side of the English Channel, around the 16th century. The dominant authority of national monarchies (Spanish, French, and English) over these lands encouraged the emergence of integrated economies sooner than was the case in regions dominated by local urban and rural authorities. The imperialist ventures of these sovereigns further enhanced their economic development. The Low Countries were particularly adept at exploiting the opportunity provided by their strategic position where the Rhine River met the Channel. They fed off the commerce between various regions of continental and northern Europe, and the Atlantic basin and beyond, which flowed by their ports on the river delta. The booming market for the fine fabrics made in these lands provided the financial base for budding capitalists to invest in other manufacturing and commercial ventures. The liberation of the Northern Counties from Hapsburg rule and the subsequent establishment of the Dutch Republic, during the 17th century, made the Netherlands the first market based national economy in the world. The Netherlands used this lead to rise to a dominant position in the emerging world economy during the next century (Wallerstein, 1980). 58 Dutch commercial hegemony, in turn, encouraged the diffusion of many of their economic practices to follower nations across Northwest Europe. Thus, cloth manufacture and export, the former using the Verlags-system, the latter chartered trading companies, was to become the primary means by which rivals in other emergent nation-states attempted to achieve economic success. The Verlags-system also stimulated the emergence of industrial capital. By contracting-out the processing of their imported raw materials to rural labour, the merchant-contractor retained a degree of control over the accumulation cycle not possible under the feudal guildist system. The financial returns from raw material importation, from the processing stage, and from final sale to the consumer could now be concentrated in the hands of the merchant. This activity also helped to develop the merchant's entrepreneurial and managerial skills, which would further spur on the development of industrial capitalism. The 'farming-ouf of fabrication stages among sub-contractors also allowed the merchant-contractor to elaborate upon the functional division of labour in the production process. This organizational method would continue to be used to good effect as it allowed for the hiring of less skilled labour in the production process while increasing returns from scale economies. Finally, by further undermining the power of the craft guilds and increasing the contractors' economic leverage over labour, the putting-out system brought social-production organization a significant step closer to contemporary employer-employee relations under capitalism. In conclusion, this new model initiated an inexorable widening of the economic and social divide between capital and labour in carrying out production for the market (Durkheim, 1984 [1893]). While it seriously weakened the craft guild, there was some confluence of interest between the merchant-capitalist and the cottage-labourer under the putting-out system. 59 Domestic mdustry' provided rural workers with a lucrative outlet for that portion of their labour rendered surplus by the concurrent commercialization and mechanization of agriculture. By entering the cash-labour nexus, rural labourers could simultaneously supplement their agricultural income and reduce their subordination to and dependence upon the land-lord. This activity further weakened the lingering feudal institutional bonds of hierarchy and paternalism which continued to impede economic and social modernization. This 'proto-industrial' stage of economic development thus played an important role in the transition from feudalism to modernism (Ogilvie and Cernan, 1996). Nevertheless, associational patterns forged during the preceding guildist era were not entirely abandoned. For example, the merchant trading companies were simply larger-scale versions of the feudal era merchant guilds. The monopolistic rights granted to them by national authorities were little different from those granted by feudal town councils to local merchant-traders. Similarly, domestic workers responded to the merchant-contractor's market power in much the same way that urban craftsmen had during the initial emergence of the market system during the feudal era. Like their urban artisanal predecessors, they formed rural labour associations to "secure the 'livelihood', regulate training, enforce quality standards, and implement their interests vis a vis the entrepreneurs and putters out (Mager, as quoted in Ogilvie, 1996, p. 32)." Domestic workers' continuing ownership of both their tools and place of work also gave them some economic autonomy from the merchant-contractors. Where merchants did not enjoy inordinate political influence over regional regulatory authorities, some domestic workers were able to form rural producer co-operatives. Like the feudal guild workshops before them, these co-ops could bypass the merchants and gain direct access to both up- and down-stream commodity markets (Mager, p. 33). 60 Of course, rural workers' individual control over their production activity and their collective organization negated some of the initial labour cost and control advantage to the merchant-contractor of the Verlags-system. However, during the intervening years of its operation, competition from this system had substantially eroded the influence of the urban based craft guild system while the market regulatory power of the national state had been further consolidated. These changes in the overall labour market allowed investors to seriously consider a re-concentration of production in the towns; only now production would be under the complete and unquestioned control of the employer. 2.4. The Factory System 2.4.1. Introduction Merchant-financiers' sub-contracting of raw material processing functions to rural domestic labourers under the Fer/agy-system allowed them to bypass the urban craft guilds, giving them greater control over the goods production process and the returns there from. However, the attendant replacement of the organic guildist era social bonds between employer and labour with a purely monetary relationship between contractor and sub-contractor also had negative consequences for incipient industrialists. There were attendant costs to this opportunistic production-contracting system. Contractors lost the guild shop-master's immediate and continuous control over the fabrication process. For example, deficiencies in output quality would only come to light after the delivery of completed goods. Rectification of these problems through the negotiation of new contracts with sub-contractors entailed additional "knowledge costs' and did nothing to mitigate risk. The budding industrial capitalist's desire for direct control over both the production 61 work-force and the fabrication process gave impetus to the adoption of the factory system of production for the market It can be distinguished from other production technologies by its concretization of two inter-connected principles: the spatial concentration of production activity, and the detailed division of labour functions. The consolidation of the returns from each stage of production in the hands of the factory owner that was realized under the factory system provided the basis for further capital accumulation and expansion. These features were also attractive to national leaders embarking on a race for competitive advantage over other states. These factors help to explain the factory system's pre-eminence among the developmental strategies chosen by later industrializes. The trajectory of this new production technology saw it evolve through several stages, beginning with simple manufactories, proceeding through mechanized factories, and culminating in the automated assembly line. The following sections will explore this evolution focusing in particular on labour's reaction to this capitalist-driven developmental imperative. We will see how, despite its victimization, labour did have some influence over the evolution of factory technology, and over the organization of functional relations within the factory, social relations within the encompassing community, and the political economic policy of the state. 2.4.2. The Early Manufactories Increasing competition and rivalry among the new European nation-states stimulated development of certain heavy industries, such as mining, metallurgy, shipbuilding, and armaments, which were critical material bulwarks to imperial assertion. Large fixed investements requirements, the complexity of the production process, and the high premium placed on output quality in these strategic industries predisposed them to capital centralization, 62 production concentration, and hierarchical management. Other activities closely associated with internal nation-state consolidation, such as printing and publishing, mass education and scientific research, and government operations in general, also fell under the influence of this organizational logic. This new production model provided an inspirational alternative to merchant-contractors still chafing under the profit-eroding problems associated with the dispersion of processing functions across the countryside under the putting-out system. Re-concentration of consumer goods production under one roof would reduce processing time, transportation costs, and sub-contractor pilferage. Employer ownership of both input materials and tools would give him greater direct control over production performance and output quality. Perhaps most critically, the transformation of the workforce from part-time rural sub-contractors into full-time urbanized factory employees would facilitate an increase in the rate of labour exploitation through the employer's ability to insist upon longer workdays and workweeks and more consistent labour output and effort (Schlumbohm, in Kriedte, Medich, and Schlumbohm, 1981, p. 108). The establishment of these 'manufactories' was abetted by new industrial policies emanating from national governments attracted by the political and economic returns which this accumulation regime promised to generate. England led the way in removing lingering impediments to the development of this production system. One critical step was Parliament's passage of the Statute of Artificers in 1563 which effectively ended local statutory control, and craft guild exercise of this control, over the labour market by shifting regulatory power to the national government. Those workers displaced by either the decline of the guild workshop or by the commercialization of agricultural were subsequently obliged by the Poor Law of 1601 to seek alternative work or face imprisonment. The subsequent displacement of small farmers 63 from their land by landlord-Parliamentary connivance during the 'enclosure movement' following the fall of the Stuarts freed-up additional hands for the processing of the wool and grain now grown on the former commons as well as the staples flooding into Britain from its overseas plantations. The iron rule of the factory manager over his charges was unrestrained by either feudal social obligations or craft guild regulations (Simon, 1994, p. 124). Yet, while the employer was unburdened of reciprocal obligations to his employees, the law continued to vest in him the rights and privileges of shop-masters. Collective resistance by factory labour was rendered moot by the enactment of laws restricting their association by a Parliament effectively dominated by an alliance between the urban bourgeoisie and the rural gentry. Nevertheless, wage labour continued to retain some leverage over employers in the factories. Manual production techniques allowed the worker to exercise some discretion over the performance of his or her task. Through informal collaboration, factory hands could still make or break an employer through minor, hard to detect variations in output intensity and quality. Furthermore, the old guild system continued to have some influence over the external labour market which the factory employer had to troll in search of fresh hands to replace those quickly broken in the 'satanic mills'. The craft guilds' continuing responsibility for skill inculcation and occupational credentialling gave them some residual influence over the price which craft workers could command on the open market as well as some indirect influence over the organization of production functions in the workplace. Even when managers divided and simplified production tasks in order to reduce the need for skilled labour, they continued to need qualified technicians to perform more complex processing functions, supervise the less skilled, 64 and repair and service machinery. Consequently, some semblance of the old inter-craft demarcational system and the intra-craft skill hierarchy continued to be imposed on the manufactory (Simon, 1994, p. 117). Moreover, the establishment of manufactories in competition with traditional craft work-shops was not entirely unwelcome by skilled labour. The manufactories' domination of the growing market for standardized goods and the absence of restrictions on the employment of low-paid, unskilled workers allowed employers to pay a premium for skilled workers. Craft journeymen were attracted by both the relatively high pay and the job security on offer in the factory. They consequently pushed for a relaxation in whatever guild restrictions remained on both their occupational freedom and their organizational activity, in order to better exploit the competition between guild-masters and industrial-capitalists for their services (Lis and Soly, 1994). Nevertheless, with the concomitant decline in guild power, autonomous journeymen's associations were established to try to retain some collective labour influence over job placement, remuneration, and production organization. The widespread outbreak of general strikes by journeymen across Europe during the 18th century attests to their willingness to flex their newfound collective muscles against employers (Lis and Soly, 1994; Simon, 1994). Despite legal prohibitions and employer opposition, labour organized within the work-place as well. Journeymen organized to retain formal and functional demarcations between the trades, and between them and the unskilled. Their organizations also broke new ground with their demand for collective bargaining rights in the negotiation of contracts governing hiring, production organization, working conditions, and wages (Simon, 1994). Nevertheless, developments in the organization of production and in the regulation of the market were conspiring to further erode both skilled and unskilled labour's power at both the 65 point of production and in the larger labour market. Concentration of production in increasingly larger factories encouraged elaboration of a even more finely detailed division of labour. The ensuing deskilling of factory hands inexorably increased the ratio of untrained and unorganized labourers to skilled and organized craft-workers. More ominously, the simplification of individual production functions opened the door to their full mechanization. The complex social continuum inherited from the guild era was giving way to a more starkly polarized social stratification between capital and labour in both the workplace and society at large (Durkheim, 1984 [1893]). 2.43. Factory Mechanization Industrial capitalists gained control over the production process by concentrating it under one roof. As their share of the emerging consumer market for standardized goods increased, factory owners were encouraged to further break down and simplify individual production functions in order to better exploit economies of scale and to decrease dependence on skilled labour. They garnered increasing absolute profits from both the ensuing productivity gains and the employment of less skilled and, consequently, relatively cheaper workers. The advantage accruing to factory size increased as owners invested their profits in the new steam-powered machinery which an obliging scientific community invented to perform the increasingly simple fabrication processes. Mechanization of production initiated a productivity leap far beyond anything imaginable under craft production. Britain's seizure of the lead in technological innovation allowed its factories to flood consumer markets at home and abroad at a faster rate and at less cost-per-unit than its more technologically backward competitors. This advantage, in turn, prompted the 66 British state's strategic shift away from imperial protectionism to its promotion of international market liberalism early in the 19th century. While Britain's pioneering role in the mechanization of production gave it an economic leg-up on competitors, the attendant political and military benefits of mechanization were first demonstrated on an extensive scale in the United States of America during its climactic Civil War. The ability of northern factory managers' to fully exploit semi-skilled 'free' labour in the production of massive quantities of standardized military ordinance with interchangeable parts helped turn the tide against the slave-driven agricultural-based Southern economy. The decisive victory of the North and the subsequent dramatic expansion of the integrated American economy provided tremendous momentum for the spread of what would come to be known as the 'American system of manufacture' (Tolliday and Zeitlin 1991). The increasing volume of inexpensive, modern convenience goods coming out of these giant factories stimulated the popular appetite for their products over the more expensive and less consistent output coming out of the artisan's shop. The replacement of both labour's power and its skill by the machine meant, among other things, that the production tasks still delegated to humans could be accomplished by even more narrowly skilled, less robust, and cheaper labour.1 The competitive incentive for all employers to replace the skilled, organized craftsmen with the less skilled, unorganized labourer picked up speed. Displaced labourers from foreign lands, southern plantations, and northern farms flooded into American factories, fuelling the nation's industrial dynamism. Skilled labour's attempts at collective resistance to this implicit attack on their status and lExcept in the southern United States and in less developed countries, the repercussions from labour displacement in the factory and on the farm through mechanization were largely dissipated by the absolute expansion of the American market for manufactured goods. 67 income were stymied by a concerted anti-labour campaign by employers and the state during the late 19th and early 20th centuries. While autonomous craft organization continued to be tolerated, employees were effectively prohibited from organizing within the workplace, bargaining collectively with employers, or mounting job actions to back up their demands. While it showed little hesitation in aiding employers in violently suppressing labour attempts to gain collective influence over the labour market, the state largely deflected public pressure to slow the concurrent dramatic centralization and consolidation of production undertaken by capital in its attempt to control its markets (Laurie, 1989). The bourgeoisie's political destruction (or co-optation, as in Britain) of the remnants of feudalism combined with its economic subjugation of labour to ensure that state legislators and the courts favoured the rights of capital over the rights of labour. American courts were especially zealous in restraining labour combinations while doing little to impede capital concentration during the Gilded Era, an ironically eponymous reminder of a more equitable era. Later-developers seeking to emulate the American industrialization process would pursue similar political economic strategies with varying success (Gerschenkron, 1962). Labour adopted a two-pronged political and economic response to the disempowering affect on it of rapid industrialization, hoping to stem its seemingly inexorable slide into proletarian servitude. Political parties were established to articulate labour's class interests in the legislative arena. This partisan activity helped to gradually attenuate the state's bias against labour in its regulation of the economy and to bring about the gradual recognition of labour's rights to collective organization and bargaining during the late 19th and early 20th centuries. Simultaneously, the informal and, often, clandestine journeymen's associations carried over from the guildist era were transformed into genuine labour unions. As industrialization spread and 68 mechanization deepened, labour continued to doggedly organize itself despite continuing resistance from employers and the state. The increasingly marginalized craft union model was augmented by larger and more encompassing sectoral industrial, and multi-sectoral 'material'2 and general union organizational types. Local, regional and national labour associations were established to complement their political arms' contestation of elections at comparable levels of the state. In consequence, 'new model unionism' and working class political mobilization slowly, but inexorably, was able to limit capital's more socially destructive tendencies. The dissemination among the industrial proletariat of revolutionary explanations for, and predictions concerning the implications of, the polarization of power and wealth accompanying capitalist industrialization and, especially, exhortations directed at labour concerning its potential vanguard role in rectifying the accompanying social injustices spurred on its organization. However, labour's effectiveness in both the political and the economic realms continued to be hindered by lingering ideological and interest-based divisions carried over from an earlier era of membership exclusivity and hierarchical internal structures among the craft guilds. Furthermore, both arms of the labour movement, political parties and trade unions, continued to be dominated by the skilled trades with their quaint notions of the enduring dignity and honour of labour, despite the relentless erosion of their numbers and influence and the related increase in the ranks of the unskilled under mechanization. The ensuing competition between the skilled and the unskilled was exacerbated by the disruptive effects of rapid urbanization, mass immigration, and absolute expansion of the working class which accompanied industrialization. Nevertheless, the homogenizing affect on 2This term is used to refer to such unions as the iron/steel/metal or wood/pulp/paper-workers, etc.. 69 labour of industrialization would eventually bring about its organization under more encompassing economic and political structures. Labour exercise of this power would, in turn, lead to the formal incorporation of its interests into the political economy of industrial states (Gordon, Edwards and Reich, 1982). However, it would take several more decades of struggle, an unprecedented economic depression, and a catastrophic war between contending socio-economic blocs to bring this social compromise to fruition. 2.4.4. Mass Production Adam Smith's The Wealth of Nations (1986 [1776]) contained the first systematic elaboration of the principles underlying the mass production model. He argued that labour productivity could be increased by breaking down labour tasks into their simplest components, concentrating the production process under one roof, and mechanizing as much of the process as feasible (Smith, 1986 [1776], pp. 112-115). However, manufacturing employers applied these principles principally as a means to increase their control over and to capture the returns from the production process. Returns to scale were a derivative benefit. Regardless, the pursuit of this logic took industrial development through the putting-out system, the primitive manufactories, factory mechanization, and on up to full production automation. This progression, in turn, provided the technological groundwork for the eventual emergence to dominance of the mass production corporation. It is also significant that the publication of Smith's work on the technological and institutional foundations of capitalist industrialization coincided with the founding of the American Republic; for it would be in the US that his ideas concerning the productivity potential of a detailed division of labour in the capitalist's factory would be most fully realized. The 70 United States led in this process due in large part to the foundational hegemony in that country of such important values as liberal individualism and the rule of law, the timely political and geographic integration of the country under a strong central government after its Civil War, and the relatively large size and dynamism of the post-war domestic economy. The increasing homogenization of its domestic markets under industrialization created an ideal environment for the growth of the mass production-consumption developmental model. In the wake of the institutionalization of this model, small scale producers would be relegated to serving marginal niche consumer markets or to fabricating technologically sophisticated, dedicated capital goods for the mass production factories. However, specialization and flexibility did allow the small workshop sector and its skilled workforce to survive in the shadow of the mass production system through the tatter's heyday during the 20th century. Nevertheless, the interactive effect of changes in economic, social, and political organization during the era when mass production techniques were being introduced and refined led to the privileging of its production organizational and social relational conventions during most of the century (Piore and Sabel, 1984; Fulcher, 1991). The complementary corporatization of business organization in American industry began with the "consolidation movement" of the 1890s among American firms (Brody, 1993). The desire for input and output predictability among firms with large investments in fixed capital encouraged them to pursue backward and forward integration of sectoral markets. The potentially disruptive effect of competition on production among sector rivals prompted inter-firm collusion in the division, organization, and exploitation of consumer markets. The drive for vertical and horizontal integration of production activity through corporate mergers was little impeded by American courts. They shared industrial capital's concern over the potential for 71 organized labour to interfere with the functioning of the 'free market', while largely ignoring corporate capital's concerted attempt at vitiating competition among themselves. The immense capital requirements accompanying production consolidation and mechanization of production prompted many private concerns to float company shares on the stock market in order to raise funds. Efficient management of these more complex public firms encouraged the hiving off of the management function from that of ownership. Impersonal bureaucratic hierarchies came to replace the old proprietorial firm governance structure. The extinction of the old paternalistic employer-employee relational culture only widened the chasm between capital and labour under capitalism. Even though the market power of the mass production corporation allowed it to provide relatively greater employment stability and higher wages to production functionaries than could the small firm, evidence mounted of increasing alienation of both individual and collective labour from the degrading conditions in these plants (Montgomery, 1987). This alienation is evident in the extraordinarily high employee turnover rates among the low-skilled which plagued the big firms, reaching a peak just prior to WWI. There were also repeated attempts at autonomous organization among production workers, but these were crushed by the coordinated repression of industrialists and the state (Laurie, 1989). The organized crafts also attempted to stem the corrosive affect of industrial 'modernization' on their skills, status, and power. The craft unions hoped that by organizing the new factory functionaries into the traditional trades, they could slow the mechanization process and, thereby, preserve the influence of skilled labour, maintain control over the production process, and stem the organizational challenge from the more inclusive wall-to-wall industrial unions that repeatedly sprang up during this era. However, they failed to stem mechanization 72 and, more ominously, the lesser-skilled remained unorganized. Following a series of labour movement defeats, culminating in the Haymarket Square massacre of 1886 and the subsequent state offensive against labour, the crafts retrenched into the exclusivist business unionism of the newly formed American Federation of Labour. American labour organizational density would thereafter fail to breach the 10% density mark until the 1930s. With the organizational and technological adaptation of the American corporation to the vicissitudes of mass production, employers could turn their attention to the task of'incorporating' their workforces into this regime. Corporate management was well aware of the capacity of both the individual worker on the shop-floor and the unions clambering at the factory-gate to sabotage or disrupt the smooth operation of the highly integrated mechanized production system. Employers therefore embarked on a concerted strategy to overcome both collective and individual labour resistance to mass production. During the early 1900s, employers in Chicago started the 'Open Shop' movement in response to the organizing drive of the International Association of Machinists. The employers' campaign was soon expanded to other industrial cities by the National Association of Manufacturers. They established and funded popular front groups purporting to represent small business, concerned citizens and, even, labour. The campaign succeeded in creating a hostile climate among the public against the organizing drive of the craft unions. The Machinists, and other crafts similarly inclined, were stopped in their tracks. The craft unions' continuing membership exclusivity, jurisdictional divisions and rivalries, and alienation from and distrust of the lesser skilled rendered their rearguard efforts largely futile in preserving the organizational structures and production practices of old. Similarly, the political efficacy of the labour movement during this era was minimal, especially 73 in North America, due to the partisan neutrality, ideological agnosticism, and political isolation of the craft unions. Modifications in the production functions of labour and in the management of the workforce under the corporate model would further erode the power of the craft worker. With organized labour stymied in its attempt to enter the factory, individual employers turned their attention to labour power at the point of production. The discretionary influence of production functionaries over the production process increased management's receptivity to Frederick Winslow Taylor's 'scientific' techniques for transforming labour into cyborgs. Taylor's time-and-motion methods provided corporate production engineers with a technique for breaking down production processing into its most basic components, to then reorganize production on a more systematic and mechanistic basis and, then, to re-integrate labour into the production process on the basis of this logic. In the process, oversight would be delegated to management appointed line supervisors. Taylor and his followers zealously promoted their ideas to managers during the tumultuous second decade of the 20th century.3 Despite the movement's progressive, rationalistic pretensions, the implicit goal of Taylorism was the complete usurpation by employers of whatever discretionary control labour exercised over production organization and commodity output within the factory. Managers were, of course, especially attracted by this promise (Bendix, 1974). The systematic transformation of production workers into adjuncts of the machine further alienated them from both the job and the company. Labour alienation was exacerbated by the additional layers of employer-aligned supervisory and administrative buffers between the 3 Proselytization was done through such bodies as "The Society to Promote the Science of Management", established in 1911, and renamed "The Taylor Society" in 1915, following Taylor's death. 74 production-floor and the head-office which were added during the process of corporate rationalization. This alienation was a major contributing factor to the so-called turnover crisis' of 1911-13 mentioned earlier (Montgomery, 1987, p. 240). The corporations responded to the increasing alienation of employees from the production process by establishing so-called 'Sociological Departments' within their plants. They were charged with explaining the subjective basis for labour's lingering discontent, identifying and recruiting employees who might be more amenable to these new working conditions, and developing social programs to bind these employees to their employer. To the latter end, they instituted employee welfare programs and established shop-floor representational bodies which would nurture and sustain employee loyalty. 'Corporate welfarism' was quite effective during the booming 1920s at winning labour over to the promise of paternalistic capitalism and keeping the dreaded unions at bay. American capital's tri-level campaign successfully negated labour resistance to the construction and elaboration of the industrial infrastructure for a mass production economy. Mechanization of production and deskilling of labour had simultaneously whittled away labour control over the fabrication process in the factory and its bargaining power on the labour market. However, welfare capitalism attenuated individual resistance to labour dehumanization, while concerted opposition by industrialists and the state blocked autonomous labour organization. Nevertheless, 'American Plan' labour relational policies only served to mask the mounting threat during the 1920s from the demand-side of the economy to the continued expansion and prosperity of the supply-side of the economy. While American productivity increases surged ahead at an average five percent per annum during the decade, labour income grew at only half this rate: a dubious achievement unmatched during the 20th century (Vittoz, 75 1987), at least until recently.4 The Stock Market Crash of 1929 starkly revealed the unsustainability of this widening gap between production and consumption capacity. Despite the best efforts of some of the larger practitioners of welfare capitalism in the United States, their oligopolistic influence over the economy could not insulate the mass production corporations from the consequences of macro-economic collapse. Concomitantly, without autonomous trans-firm organization, labour was unable to resist the mass layoffs and pay cuts which followed as the slide continued to its trough in 1934. The recovery programs mounted during the late 1930s, in the United States and other countries, coupled with various labour relations reform programmes stemmed the economic and social slide. However, the massive demand for goods and labour brought on by the subsequent world war was the principle main behind the revival of national and international economies. The post-war institutionalization of capital-labour productivity accords among organized labour, business, and the state in the market economies sustained growth, at least in the developed world, for several decades to follow. Before proceeding to the institutional features of this accord, we will first explore its technological foundations. 2.5. Fordism 2.5.1. Micro-Level Foundation Henry Ford's technological innovations and his economic insights inspired the naming of the dominant post-WWII economic development model. His perfection of earlier American mass production techniques, production organization, and labour relations, of course, helped 4If the income patterns which we have seen during the 1990s continue to hold through the rest of decade, this unusual divergence may be repeated again, portending equally disastrous consequences. 76 make him an icon among industrialists striving to emulate his success at creating a mass market for his products. However, it was his public acknowledgement of the dynamic complementary relationship between mass production and mass consumption which was his most important legacy. He helped to inspire state authorities to institutionalize macro-level regulatory structures which would eventually serve to substantially mitigate the inherent crisis-inducing disequilibrium tendencies of mass production capitalism. Yet, he also gained notoriety from his stubborn refusal to accept the Wagnerian labour relational reforms which were integral to the proper functioning of macro-level Fordism, until long after his peers had succumbed to formal collective bargaining. Interestingly, decades later, American regulatory authorities would also be reluctant to accept organized labour as a full partner in managing the next big crisis in mass production, despite the general practice among other advanced nations of incorporating labour into their macro-level regulatory regimes. Ford's initial business success came with the launch of the rugged, utilitarian, and inexpensive Model T, in 1908. His nurturance and exploitation of a mass consumer market for this vehicle gave him a critical competitive advantage over would-be rivals. The ensuing financial returns from scale production provided the means to further reduce product prices and, thereby, increase sales and, subsequently, invest in even more advanced production technologies than his tardy competitors. The opening of Ford's new automobile assembly plant at Highland Park, Michigan in 1910 introduced the world to his most famous technological innovation. In designing the plant's production layout, Ford followed the practice of other 'progressive' manufacturers in using Taylorist techniques to disaggregate and simplify the steps involved in vehicle assembly. However, the critical innovation came when he re-integrated labour into the production process 77 by means of a chain-driven conveyor belt which carried the vehicle-platform to the particular functionary at each successive stage of assembly. The accompanying delegation of full control over the layout and speed of the automated assembly-line to management-aligned supervisory personnel completed the historical process of removing discretionary power from labour first instituted with the initial introduction of the factory model in the early modern period. The simplification and automation of production functions allowed Ford to hire unskilled novice workers for work in his plants. Their lack of manufacturing experience and skills meant that they were unlikely to bring to their new jobs the traditional working class social identity and independent-minded behavioral proclivities that would be normally inculcated into craft workers during the skill acquisition and apprenticing process. Building his new plant in what was then an agricultural-based region of the country helped ensure the 'greenness' of these new hands. By coupling relatively high wages for production functionaries with American Plan labour relations, Ford managed to keep his company union-free longer than his competitors. This autocratic paternalism was the basis for the notoriety mentioned earlier. Just as its mechanized predecessor had during the American Civil War, the automated assembly line demonstrated its mettle during the next military crisis when it proved as capable of mass producing miliary vehicles as of Model T's. The production technique's satiation of World War One demand prompted the feverish post-war capital investment in the American consumer goods industry which epitomized its Roaring '20s. Rather than resting on his laurels though, Ford used the profits earned from his operations to finance construction of what was the most ambitious automobile production complex seen to date. The completion of the vast River Rouge complex on the outskirts of Detroit in 1926 allowed Ford to consolidate in one location the entire automobile production process from raw 78 resource input through to final vehicle assembly (Zieger, 1987). This integrated complex could process raw materials; smelt, roll, and mill structural components; machine-tools the myriad parts; and assemble all of these components into a finished product, ready to be driven out of Ford show-rooms. As with the pioneering corporate giants who preceded him in their integration of production in other primary sectors of the American economy, Ford now had much greater control over both the organization of the production process and the returns from each stage of this process. The seamless incorporation of labour into this integrated structure entailed concomitant innovations in human resource management. As noted earlier, the automated assembly line gave management exclusive control over the configuration and speed of the conveyor system, as well as the assignment and organization of assembly line tasks. Ford's well publicized introduction of his mythic five-dollars-a-day wages in 1913 (rising to seven dollars by the end of the 1920s) for his more experienced, family-supporting fabricators, and of the eight-hour working day and employee profit-sharing in 1914, helped to further stabilize and pacify his work-force. The company's 'Sociological Department' augmented this control over the workforce by monitoring employees' lives both on and off the job, ensuring that their expenditure of time and money redounded to Ford's benefit. Nevertheless, circumstances beyond even the capacity of Ford to control forced him to lay-off staff and reduce wages following the 1929 Crash. Despite his prescient insight into the need for an institionalized linking of production and demand, Ford resisted the combined efforts of the New Deal's National Labour Relations Board and the CIO's United Automobile Workers to introduce formal collective bargaining structures into his domain. He managed to forestall the attenuation of his exclusive managerial prerogative until 1941, when he reluctantly granted his 79 River Rouge employees collective bargaining rights. Despite this evidence that he may not fully deserve the praise heaped upon his vision, Ford did leave a number of enduring legacies. His Model T helped to transform what had been up until then a marginal luxury good into a basic consumer necessity. The motor vehicle industry would go on to become the core of the post-World War Two economy of both America and its imitators. His company and its philosophy provided the micro-level model for the macro-level solution to the conundrum of mass production. Thus, Ford not only created a mass market for his motor vehicles, he also paved the way for the transformation of American and other societies into consumer cultures, only with the state rather than individual corporations assuming the key coordinative role of managing the accumulation cycle. We will now explore the institutionalization of Fordism in the United States. 2.5.2. Macro-Level Fordism The logic of mass production entailed a steadily expanding mass market to keep pace with the growing output of standardized consumer goods. With industrialization, factory labour was becoming a significant component of this consumer market. Its ever-expanding purchasing power was critical to the dynamism of the mass production accumulation cycle. However, as assembly line production became the standard across the American economy, competition inclined corporations to be less generous to their workers as the innovative Ford had been able to be with his. Yet, labour was too weak to extract its fair share of productivity gains from mass production. The joint campaign by capital and the state against labour during the late 19th/early 20th century era of capital consolidation, combined with continuing craft-dominated union structural and political weakness to leave labour incapable of reversing the growing portentous 80 gap between production and consumption capacity. With individual employers unwilling and labour unable to keep wages, and purchasing power, at par with productivity gains and rising output levels, the gap between investment and consumption grew during the 1920s. Without autonomous trans-firm organization, labour was unable to resist management assaults on their jobs and wage packets after the market crashed in 1929. Wages, employment, consumption, and investment levels fell simultaneously. Furthermore, the anticipated rebound predicted by neo-classical economic theory failed to materialize because, as Keynes argued, oligopolization of industry had eroded the self-equilibrating capacity of the market. Structurally incapable of reducing fixed costs, lowering prices, or shifting production to alternate goods, the rigidified corporations cut production and wages, and laid off staff. The seemingly relentless downward spiral of the American economy after 1929 convinced reformers in the Roosevelt administration that American Plan labour relations, with its firm-level welfare-capitalism and captive employee associations, did not provide a sound basis for national economic revival and sustained dynamism. Government would have to intervene authoritatively to restore labour's wage bargaining power and, thereby, its purchasing power. While Section 7(a) of the short-lived National Industrial Recovery Act of 1933 did facilitate the organization of the unskilled, it also permitted their continued fragmentation under the 'federal union' structure of the AFL craft unions. The lessons learned from this court-vetoed experiment were subsequently incorporated into the more durable National Labour Relations (Wagner) Act of 1935 (Brody, 1993; Zieger, 1987). NLRA provisions encouraged the consolidation of semi-skilled industrial workers into the sector encompassing unions established by the AFL's new Congress of Industrial Organization. The National Labour Relations Board 81 then ensured that employers engaged in meaningful plant-level bargaining with which ever autonomous industrial union enjoyed majority employee support at the work site. While the foundations for a new state-regulated collective bargaining regime were initiated during the latter half of the 1930s, it would be another decade before their relational norms would be firmly entrenched. Before this happened, WWII intervened to end the Depression. More significantly, the war emergency provided a critical demonstration of how state planning could both revive the economy and sop up idle human resources. The latent power of the new industrial unions to influence economic performance prompted government planners to include labour leaders, along with employers, in the administration of war-time industrial strategies. As a responsible partner with employers and the state in focusing resources on the military struggle, labour could legitimately claim a fair share of the returns from the dynamic mass production model which emerged out of the ruins of war. However, the role of organized labour in post-war American Fordism was severely restricted. Its designated function was to bring peace and stability to the workplace by negotiating and policing collective labour agreements. The Wagner Act left control over capital investment and production output, and job design and work organization, under the exclusive purview of management. Consequently, unions could do little to stem the spread of Taylorist organizational and relational norms to other sectors of the economy and society. The passage of Taft-Hartley in 1947 further limited any possibility of an expansion in the economic and political power and scope of the American labour movement. Even its historic role as a legitimate critic of American-style liberal capitalism was substantially abridged with the purging of the left from the unions during the McCarthy era. The American labour movement's progressive development and the concomitant improvement in the working conditions of 82 American workers virtually ceased during the 1950s. However, the diffusion of Fordism beyond the borders of the United States would show that it was possible for organized labour both to capture a more substantive institutional role in regulating the economy and to increase its share of the benefits accruing from mass production than had been accomplished under American-style Fordism. 2.53. The Internationalization of Fordism The leading economic role of the United States served to rapidly spread the fall-out from the 1929 Crash to other countries. Subsequent misguided national pro-cyclical monetary and fiscal policies exacerbated by reactive national economic protectionism merely deepened and lengthened the ensuing depression. As its repercussions spread to the political arena, national governments were forced by domestic pressure to intervene to save capitalism and the state from mounting rebellion. While there were variations in the national character of the ensuing attempts at economic revival, all governments recognized the need for the state to assume the principal role in restoring and maintaining the kind of macro-level growth dynamic which the mass production corporation had striven for at the micro-level. Similarly, these new economic regulatory regimes would also strive for the same kind of socio-political harmony at the national level as the American-style mass-production corporation had striven for within their plants. The political models used to re-establish order varied from liberal to social democratic, and from fascist to communist dictatorial. However, the decisive defeat of fascism allowed the democratic model to triumph in the West. More particularly, its impressive industrial performance during WWII, its emergence relatively unscathed at war's end, and its subsequent leadership of the West-bloc during Cold War, helped America and its Fordist 83 ideology assume hegemony over the capitalist democracies during the post-war era. American financial assistance to and political supervision of post-war reconstruction ensured that American inspired mass production technology and organizational norms were introduced into its allies' war-battered economies. Complementary industrial relational institutions focused on productivity based collective bargaining were superimposed on these states' traditional institutional structures. Central state administrations assumed primary responsibility for guaranteeing these industrial relations 'accords' through supportive fiscal, monetary, and international trade policies aimed at keeping the industrial engine ticking over on a sustainable basis. Despite variations in their socio-economic make-up and in their particular political institutional structures and practices, each national regime professed a commitment to rapid GDP growth, low unemployment and inflation, and an expanding social wage. Elite consensus around these policy programmes and widespread support of the institutional structures overseeing their implementation helped to sustain international regime legitimacy in what nevertheless remained a class-stratified economic model. America's role as banker, mentor, and guardian to its allies promoted the development of these economies in ways which complemented that of America. Similarly, American inspired and enforced international economic agreements helped to increase trade and investment flows among the developed economies. Nevertheless, continuing sovereign control of national market regulatory structures insulated each country somewhat from other nations' political-economic policies (Aglietta, 1979, p. 117). Furthermore, each nation could vary the character of its institutions from that of its mentor in accordance with local conditions. Thus, while the United States, and its closest ally and economic partner Canada, maintained their highly decentralized and 'private' industrial relations systems, other countries established more centralized and 'public' 84 relational regimes. Under the latter model, the unions were better able to force employers and the state to agree to policies which insulated labour more from the exigencies of the market, than their counterparts had done in the liberal welfare states (Esping-Anderson, 1985,1990). In some cases, particularly in continental Europe, organized labour was included along with other powerful producer groups in quasi-statist corporatist structures charged with regulating collective and connective bargaining around the distribution of the returns from social production. These variations from the American Fordist standard were consequential to particular nations' adaptation of their historic industrial relations structures and relational norms to the new development model. Later on, this institutional variation would have a significant influence on how particular countries dealt with the domestic repercussions from the global crises in Fordism. We will conclude this review with a brief examination of Canada's brand of Fordism, focusing on the ramifications in Canada of the recent international crisis in the model and, in particular, the affect on organized labour. 2.5.4. Organized Labour During the Rise and Fall of Fordism in Canada The integration of the Canadian economy with that of the American during the process of industrialization helped promote the parallel development of the organizational structure and the collective behaviour of Canadian labour with that of the American labour movement. This institutional tracking had been ensured by the American movement's organizational dominance of private-sector unions in Canada, almost since their original inception (Craig, 1990; Forsey, 1982). Consequently, the fortunes of the Canadian labour movement have tended to ebb and flow with that of their American counterparts, so long as this institutional subordination has 85 continued. Canadian's labour organizational integration into American union structures had mixed consequences. On the one hand, affiliation with American-based international unions provided tangible benefits to Canadian workers. Prior to the imposition by the two countries of limits on cross-border labour mobility, Canadian craft unionists had access to affiliates' hiring halls in both countries. Even the mass labour movements which rose up in Canada during the late 19th and early 20th centuries to briefly challenge the dominance of the craft unions were American inspired. Subsequently, during the industrial unionization drive of the 1930s and '40s, Canadian workers drew upon the resources and experience of their pioneering brothers and sisters in the American-CiO unions. This fraternal aid was essential since the passage across Canada of enabling Wagner-inspired labour relations legislation lagged a decade behind its passage in the US (Jenson and Mahon, 1993). On the other hand, the Americanization of Canadian labour served to impede the latter's adaptation to the peculiar features of the Canadian political economy. The imposition of a fractured and decentralized American union structure on a work-force one-tenth the size of its American counterpart severely limited Canadian labour's collective bargaining power. The historic persistence of indigenous rivals to American branch-plant unionism only exacerbated labour organizational fragmentation and collective inefficacy. Furthermore, the ideological pre-eminence of American-style "business unionism' in the Canadian movement, in conjunction with organizational decentralization, delayed the emergence in Canada of an effective political arm of labour and, subsequently, fettered the party's success at corralling the labour vote (Brodie and Jenson, 1988). In consequence of its economic and political weakness and its inculcation of Anglo-American ideological values, Canadian labour had considerably less success than other 86 national labour movements at either being incorporated into central quasi-statist regulatory structures or at ensuring the deep entrenchment of the welfare state in Canada (Esping-Anderson, 1985,1990). While organizational inter-dependence did help Canadian labour garner a stable share of the material benefits of the post-war Fordist boom, the onset of crisis in North American Fordism threatened Canadian labour with the same sorry fate which befell American workers. The American trade union movement's failure to expand much beyond its core constituency among white-male, blue-collar, private-sector workers following the political retrenchment of the late 1940s led to a seemingly inexorable decline in its size and influence in tandem with a relative shrinkage of its economic importance from the late 1950s on (Rogers, 1993). Thus, only one-tenth of the non-agricultural American work-force is organized; American labour's voice during the present period of structural transition has been equally marginal. The Canadian labour movement largely avoided this marginalization in consequence at least in part of the massive expansion of the Canadian state during the 1960s on the eve of the international crisis in Fordism. Labour benefitted from the market insulating effects of the more generous welfare regime which accompanied this expansion. More importantly though, public-sector workers took to unionization with unprecedented zeal upon the granting to them of full collective bargaining rights. The consequent growth and Canadianization of labour unions helped them to develop strategies better suited to domestic conditions which, in turn, helped them to better resist the joint assault by government and employers against them during the crisis which followed the ebullient 1960s (Jenson and Mahon, 1993). Canadian-based unions have also responded to the crisis in Fordism by diversifying their membership base, building political alliances with other popular sectors, and developing a distinctive position on broad public policy 87 issues. As a result, in contrast to the situation in the US, the proportion of Canadian workers represented by unions has stayed relatively constant through this era of mass unemployment (McBride, 1992), state retrenchment on labour's collective bargaining rights (Panitch and Swartz, 1988), and employer reneging on its post-war accord with Canadian labour (Jenson and Mahon, 1993). The tenacity of the Canadian labour movement has allowed workers in many cases to bring their unions along with them as the economy moves away from Fordism and new sectors emerge under post-Fordism. Retention of its collective identity has thereby given labour some collective influence over the development of the institutional structures and relational norms in these emergent sectors. Furthermore, labour has continued to wield considerable political influence on the various levels of government in Canada, especially at the provincial level, in their management of accompanying changes in the market, society, and politics. The case studies which follow this chapter explore organized labour's adaptation to these changes within three selected industries in one region of the country. The information gleaned from these studies should find application to the broader spectrum of labour activity within the province, country, and world, as we move beyond Fordism. 3. Beyond Fordism: Summary and Conclusion Henry Ford's technological innovations realized two capitalist dreams: the inexpensive mass production of what were once luxury goods, and the complete elimination of labour discretionary control over the production process. The contradictory impact of these two accomplishments became tragically apparent after 1929. Following fifteen years of social and military strife, a workable solution to this dilemma was found through the institutionalization of 88 Fordism at the macro-level of national economies. The ever increasing output of standardized goods produced by oligopolistic corporations was successfully synchronized with the growing consumption of a mass domestic market. Keynesian-inspired state fiscal policies as well as complementary socio-economic institutions helped to regulate and stabilize this dynamic accumulation regime; and social resistance was muted by incorporating organized labour into the regulation of this dubious regime. Western economies went on to enjoy a two-decade long period of economic growth unprecedented in the history of international capitalism. However, incremental changes in national and international economies, and in attendant societal structures and institutions would soon undermine the functional performance of Fordism. The social rebellions of the 1960s, the economic shocks of the 1970s, and the political realignments of the 1980s which swept the globe were the outward signs of a profound crisis in what had been a fairly robust mode of economic development. The turmoil which accompanied these crises undermined the institutional foundations of the post-war "historic compromise' between the state, employers, and labour which had helped to launch and, afterward, to sustain this Golden Age of capitalist development. The inability of Fordist institutional structures to adapt to these challenges led to the wholesale abandonment of the rules, norms, and values governing this industrial relations 'accord' right across the globe. The collapse of Fordism has been especially painful for labour: the implicit guarantee to the working class of a share in productivity gains has been withdrawn; the social welfare provisions which partially insulated labour from the vicissitudes of the market have been eroded; the job and income security guarantees which employees garnered under Fordism have been withdrawn; and, finally, the bargaining power of the industrial unions at the core of Fordism has been dramatically reduced in the wake of deregulation, privatization, and market liberalization. 89 Having been systematically deskilled and disempowered over the course of the evolution of the factory model of production organization, labour now finds itself with very limited means to exercise even marginal control over the market While Fordism has collapsed, it is unclear whether we have made the transition to a new dynamic economic development model; continuing anemic and unstable economic growth, persistently high levels of unemployment, and a growing gap between profits and wages indicate that we have probably not. Since we are still in the midst of a fundamental, globe-spanning transition to an unknown future, it is also uncertain as to how these changes will affect industrial relations. Nevertheless, as we have seen in our review, an era of transition provides economic actors with a window of opportunity to experiment with alternative technological systems and for socio-political actors to build new institutions to complement these assorted production regimes. Our investigation into the historic role of labour in the evolution of production organization revealed how labour individually and collectively both precipitated the emergence of and adapted to new production systems. Through collective organization, labour was able to play a role in institutionalizing successive relational regimes and, then, in using these structures to maximize its economic, social, and political gains during the process. The review of preceding systems of production organization for the market, and of labour's role in these structures, will help focus the examination of labour's adaptation to the development of the three industries under study. More particularly, we can use this historical institutional perspective to better reveal the challenges and possibilities for labour during the development of the next industrial relations regime. 90 CHAPTER THREE: BRITISH COLUMBIA SHIPBUILDING AND SHIP REPAIR: ADAPTING 19TH CENTURY STRUCTURES TO 21ST CENTURY CONDITIONS 1. Introduction. The social and economic development of British Columbia, on the one hand, and of local shipbuilding and ship repair (BCSSR), on the other hand, have been interlinked since European colonization.1 The transportation requirements of coastal resource industries, and of the scattered resource-dependent communities that they spawned, have historically been serviced by locally manufactured marine vessels. Correspondingly, distance from and lack of competitiveness in major external markets has rendered local shipyards almost wholly dependent on indigenous demand. Therefore, while it has only accounted for a small share of provincial economic activity during most of its existence,2 the industry and its industrial relations have been deeply integrated with the overall development of the provincial political economy. Thus, changes in the industry, especially the most recent transformative one, are usually indicative of and have a bearing upon larger changes in the region in which it is embedded. This most recent change came about after a dramatic decline in demand from the local resource sector, a complete withdrawal of national state protection, and the opening of the local market to international competition combined during the late 1980s and early 1990s to threaten the industry's continuing existence. The ensuing crisis brought the closure of the last two large shipyards in the province, leaving only a handful of small yards struggling for survival. 1While they are distinct processes, shipbuilding and ship repair are undertaken within the same yards and labour is drawn from the same unions. Therefore, they are treated by the industry, the state, and me as one industry. 2The exceptions were during wartime, which will be discussed in the course of the case-study. 91 However, in 1995, the provincial government embarked on a plan to "revitalize" the industry and, thereby, hopefully prevent its demise. As part of ten-year plan for upgrading the crown ferry corporation fleet, a new provincial corporation was established to forge a collaborative partnership with the remaining yards and their unions in building three technologically advanced "fast-ferries". Upon completion of this contract, the partners were expected to enter the international market for such vessels. In the process of fulfilling this mandate, production organization and techniques as well as industrial relations practices and attitudes in the local industry will have to be substantially modified in order for this new network-style industrial arrangement to succeed. Since the BCSSR workforce is entirely unionized, the response of organized labour to the revitalization strategy will be an important determinant of the program's success or failure. In turn, the outcome in this regard will likely have important implications for the provincial labour movement as a whole due to the historic institutional linkages between it and shipbuilding labour. Before proceeding to a discussion of these current issues, I will review the industry's historic development, especially the evolution of its industrial relations, in order to gain some perspective on the impact of this institutional history on its current circumstances. The reader can thereby acquire a better understanding of the problems shipbuilding labour faces in adapting to contemporary challenges. 2. From Paddle Wheel to Catamarans 2.1. The Birth of the Industry in BC and the Organization of its Workforce The origin of shipbuilding and ship repair on the west coast of British North America coincided with European settlement of the region in the mid-19th century. Marine vessels were 92 the only means of contact with the outside world as well as the only link among communities along the rugged coast where early colonists concentrated. At first, British manufactured TJOttoms1 were adequate for servicing these colonial outposts and binding them with the metropole. However, the discovery of gold in the colony in 1858 precipitated a dramatic increase in indigenous demand for marine vessels. The hordes of prospectors drawn by the Fraser River Gold Rush required boats that were able to convey them and their supplies from Vancouver Island across the Georgia Strait to the mainland,3 carry them up the fast flowing Fraser River, and then land them along the river shore at locations that were reasonably close to its gold bearing tributaries. Flat bottomed paddle wheelers, rendered surplus by the exhaustion of the earlier California gold rush, were brought north to meet this demand. Subsequent gold discoveries further inland, in 1860, and a general increase in metal prospecting activity across the mainland colony4 brought a demand for even more specialized vessels capable of manoeuvring narrow coastal inlets, rivers, and lakes, and of landing at will on sandy or gravelly shores to dispatch their freight. Enterprising craftsmen, enticed to the colony by this mineral stampede, discovered a more reliable source of wealth in contracting with boat owners to convert the side-wheelers into more suitable stern-wheelers with reinforced bows and bottoms. However, the end of gold fever saw the abandonment of most of their make-shift conversion facilities in the colony. Nevertheless, local shipbuilding had been initiated along with its dependence upon the highly cyclical resource economy. Subsequent booms would set this pattern for the industry's entire 3Colonial authorities required sojourning prospectors to register with and obtain their supplies in Victoria, the colonial capital on Vancouver Island, before departure for the mainland. "The separate mainland colony of New Caledonia was created, alongside Vancouver Island, in 1858. 93 history. Although short-lived, the gold rush stimulated economic development on Vancouver Island, bringing with it a demand for more functionally specific vessels, better suited to local conditions. Following Governor Douglas' award of a shipbuilding monopoly for boats serving the coastal trade to Victoria-based investors in 1864, the first permanent shipyard facilities were built on Victoria Harbour. These commercial yards, and the British naval base established in the same year in the Victoria suburb of Esquimalt, stimulated related ship repair and marine supply activity in the region. The discovery of coal (which the British Navy relied upon for fuel) up the Island's east coast in Nanaimo soon after, brought sea-going traffic and related service and supply facilities to that town's harbour. This activity saw the gradual expansion over the next few decades of a local iron molding and ship repair facility, opened there in 1861 during the gold rush, into one of the largest such complexes in Canada. It serviced not only locally based vessels but also foreign ocean going traffic plying the coast, until its displacement during the next century by facilities on the mainland. In the interim, the development of the industry remained concentrated on Vancouver Island. As part of its terms of union with Canada in 1871, British Columbia5 had been promised a transcontinental railway linking it to the rest of the country and a dry-dock capable of servicing the largest vessels then afloat. The belated inauguration of work on the rail link stimulated marine repair and refit work on Vancouver Island. The promise of inter-continental trade upon completion of the line in 1886 spurred federal construction of the promised dry-dock at its terminus on the Island. With its opening the following year, the Esquimalt Graving Dock became the largest shipbuilding and repair facility on the Pacific Rim. By 1894, there were six 5The two coastal colonies were united as the United Colony of British Columbia in 1866. 94 shipyards operating around Victoria's harbour, with numerous other smaller facilities in other Island communities (Macintosh, 1976). In conjunction with auxiliary supply and service firms, the regional industry was now able to both build and service the wooden hulled, steel ribbed, steam powered vessels then plying the oceans. However, the termination of the mainland portion of the transcontinental rail link at Burrard Inlet on the mainland shifted the greater portion of future growth in marine trade, industrial activity, and shipbuilding to the soon to be dominant Lower Mainland region of the new province. Nevertheless, the industry continued to be subject to the cyclical demands characteristic of a provincial economy overwhelmingly dependent upon resource exploitation. The character of the workforce which was hired to build and repair local vessels was also fundamentally shaped by this flux. While the industry's craftsmen enjoyed a rather high status among their labour peers, employment and income in the local industry was extremely precarious. Consequently, shipyard workers had to be able to move easily among local yards, between coastal shipbuilding districts, and even to other sectors of the economy in order to make a decent living while still holding on to their specialized skills. This combination of high skill, job mobility, and employment instability encouraged local shipbuilding labour's organization into craft unions. This organization followed almost immediately upon the birth of the industry during the first gold rush. The craftsmen drawn to the colony from more established shipbuilding regions in Britain and the United States brought their organizational predilections along with their skill. In 1861, the British-based Journeymen Shipwrights Association of Victoria and Vancouver Island was established: one of the first two labour unions formed on the west coast of British North America. Their craft status and organizational prescience gave shipyard workers a far 95 greater degree of influence within the early provincial labour movement than their modest numbers might otherwise have warranted. Subsequent economic booms brought further elaboration of shipbuilding labour organization. The spurt in provincial economic activity following the initiation of commercial sealing in the Bering Strait during the early 1880s saw the founding of Knights of Labour chapters in Victoria, in 1884, and in the Lower Mainland towns of Vancouver and New Westminster, in 1886. These sector and trade inclusive 'mixed' union organizations reflected the continent-wide upsurge in class-based labour militancy and organization occurring at this time. Not surprisingly, these American-based advocates of craft pride included many shipbuilding workers among their ranks. However, alongside the inclusive Knights' locals, more traditional, exclusivist craft unions were also formed: locals of the (American) Iron Moulders were chartered in Victoria, in 1885, and in Vancouver, in 1890. Their organizational base was in the local shipbuilding industry which by this time was using more iron in hull fabrication. The influence of the international Knights movement began to fade with the continent-wide subsidence in labour militancy during the late 1880s. However, similarly inclusive and more class conscious labour bodies continued to spring up periodically in BC, and in its shipyards, in response to both external political developments and changes within the province. During these times of crisis, they have temporarily overshadowed the more durable craft union organizational model, right down to the present. Despite the reversion to the traditional craft organizational model, BC shipbuilding-based craft unions were not immune to change. Technological innovation and unanticipated booms in local shipbuilding stimulated organizational change. In fact, rivalry among local, national, and international union bodies during these episodes brought a pluralization of labour 96 representational formations in shipbuilding. The fracturing of shipbuilding workers among competing ideological, political, and functional labour organizations would henceforth be a permanent feature of the BC industry. One of the most enduring inter-craft union rivalries within shipbuilding arose with the stimulus provided to the local economy by the next resource boom on the north-west coast. The Klondike Gold Rush of 1898-99 prompted a flurry of labour union organization among BC shipbuilders. Locals of both the International Shipwrights and the Ships Carpenter Unions (American Federation of Labour [AFL]) were chartered in Vancouver in response to the growth of the Lower Mainland portion of the regional industry during the previous decade. The subsequent formation of International Boilermakers locals in both Vancouver and Victoria, and of a Blacksmiths local in Vancouver, increased the rivalry between wood- and metal-workers' bodies for organizational dominance among provincial shipbuilders. This rivalry was exacerbated by technological changes in the international shipbuilding industry. Steam-boilers and propellers had decisively displaced wind and sail, and iron was beginning to replace wood. However, BC shipyards would continue to turn out wooden-hulled, steel-ribbed ships, both sail and steam, well into the next century due to local access to local high quality, inexpensive timber and the absence of a local steel-making facility. Neither the carpenters nor the metal workers' union had any compunction in venturing beyond their traditional 'material' base to raid each other's turf in an effort to increase their respective local membership rolls and thereby dominate collective bargaining in the industry. Further complicating labour politics, the boom accompanying the Klondike Gold Rush again brought young labour militants to the province from across the Pacific Northwest, this time associated with the anarcho-syndicalist International Workers of the World: the Wobblies. 97 In contrast to the craft-oriented Knights, the Wobblies targeted the transient, semi-skilled workers in the labour camps that were springing up around new mines and mills, who had been long ignored by the more stable, complacent, and elitist urban-based craft unions. Their occupational flexibility and mobility coupled with ideological commitment spurred Wobbly organization of workers not only in the mines and mills, but also in the forests and on the water, and in the towns as well as in the hinterland. Furthermore, rather than follow the traditional locally- and functionally-based craft union model, Wobbly units were organized on the basis of region and, sometimes, industrial sector. While their influence waned with the end of this latest boom, their arrival nevertheless signalled the onset of broader, more enduring changes in industrial processing and, concomitantly, in labour organization that would sweep across industrial relations during the 20th century. As the 19th century came to a close, the 'manufactory' mode of industrial production, characterized by the small-scale production of highly skilled craftsmen, was being displaced in many industries across the province by larger scale mechanized production, entailing a finer division of labour using less skilled workers. The eclipse of the paternalistic workshop by large enterprises also attenuated the traditional vertical socio-economic mobility of craft workers and, in its place, introduced more rigid and enduring social divisions into industry. This change was reflected in the brief but brilliant arrival of the Wobblies on the local labour. Their militancy prompted even the craft-dominated Vancouver Trades and Labour Council-VTLC to pass a resolution endorsing the 'industrial union' principle, in 1903.6 In turn, the size and influence of 'The VTLC had been established in 1889 and Victoria followed with formation of its own in 1890. These bodies gave local labour unions a forum for discussion as well as a collective conduit to other labour centres and political authorities (see Phillips, 1967b for a detailed history of these bodies). 98 the V T L C helped to legitimate a general shift of the provincial labour movement toward this new organizational model. In response to these technological and organizational innovations, one might have expected shipyard owners to adopt a more integrated manufacturing model, and shipyard labour to assume the concomitant industrial union organizational model. However, the slump following the end of the Gold Rush brought a dramatic decline in yard activity. Technological innovation was aborted. Younger workers, who might be less committed to the old model and more open to the new, were laid off first. The fall in shipyard-generated employment also renewed worker appreciation for the mobility and the greater occupational security which came with membership in craft unions whose jurisdiction transcended the firm, the local shipbuilding district, and the industry itself. The regional hiring halls of the shipbuilding-based trades could despatch members to any firm or sector needing their skills. Furthermore, as these unions were 'international', members could move across the then more open Canadian-American border in search of work in other shipbuilding districts down the coast. By the turn of the century, the B C Shipbuilding and Ship Repair industry had taken on its defining characteristics, which were reflective of its distinctive market environment. The unpredictable demand accompanying cyclical resource swings affected business organizational structure and behaviour. These family-based firms dared not risk bringing under company control the production of the myriad components that went into a marine vessel. Thus, the more flexible 'manufactory' mode of production that had been initially adopted by the nascent industry in the mid-19th century was retained well into the 20th century, long after the global shipbuilding industry had generally shifted over to mechanized production (McClelland and Reid, 1985). Similarly, privately-owned, single-yard firms continued to predominate in B C 99 shipbuilding long after other shipbuilding districts around the world, as well as other industries in the province, had converted to the publicly-traded, vertically-integrated corporate model. Concomitantly, these small, conservative, family-owned firms were not eager to venture beyond the insulated market of coastal BC; and, reciprocally, the small size of the local market discouraged foreign firms from investing here either. Short-lived surges in demand also discouraged investment in more advanced boat-building facilities since yards were often mothballed and production factors shifted elsewhere during the long intervals between booms. Insulation of the inwardly focused market from foreign competition also slowed the local introduction of innovations in production technology. Thus, wooden hulled freighters continued to be built locally up until World War II, and the rivetting of plates for steel hulls continued well into the 1950s, decades after the more efficient and durable technique of welding steel plates had become the standard in the international shipbuilding industry (Taylor, 1986). The district's retention of traditional production organization and technology impelled complementary labour market organization. The mobility provided by the organization of the shipbuilding labour pool into skill-based, industry-transcending craft unions suited both employer and labour interests. However, the disintegrated nature of the manufactory organizational model helped to exacerbate a division of interest and identity between the hull fabricators, employed on a semi-permanent basis by individual yard-owners, and the specialized craftsmen, hired on a contractual basis to outfit the ship hulls. The ensuing combination of a disintegrated business structure and craft chauvinism encouraged multiple-unionism in shipbuilding. The assorted unions would then engage in furious competition over new recruits brought into the industry by surges in production activity or, relatedly, the introduction of new 100 production technologies. This organizational pluralism would become more pronounced by the effects of the series of international crises which occurred in fairly rapid succession during the first half of the 20th century. 2.2. War-Depression-War: Labour's Reaction to Crisis and Change in BCSSR 2.2.1. Inter-Imperialist War on the High-Seas, Class Turmoil at Home The outbreak of World War One precipitated an unprecedented increase in economic activity in BC. Both traditional resource extraction and processing industries as well as secondary manufacturing and transportation sectors expanded. The concentration of massive numbers of new labour recruits in war-swollen production locales brought about a sudden growth in union membership and changed the character of the local labour movement. As the war dragged on, labour began to chafe under both wartime austerity and martial restrictions on union activity. The revolutions that broke out in Europe toward the end of the war emboldened Canadian labour; union demands took on a more explicitly social and political tone. The forces that propelled the ensuing labour rebellions across western Canada also challenged the organizational structures and strategies that the movement had carried over from the preceding century. The heretofore dominant business-oriented, politically-quiescent craft unions were overwhelmed by growing class consciousness and its organizational expression. Although subsequent state repression and post-war economic recession effectively squelched this upsurge in labour activity, the new ideas and innovative organizational models continued to influence labour during the inter-war period. BC shipbuilders were caught up in these changes. The enlistment of the BCSSR in the cause of keeping the Empire's war effort afloat had a dramatic affect on the industry. At successive stages of the conflict, three different levels of the 101 state took the lead in expanding and transforming the BC shipbuilding. First, the provincial government intervened in response to the upsurge in offshore demand for war-related local resources. The BC Shipping Act of 1916 provided for low-interest loans to local shipyard owners for facility expansion, and loans and subsidies to locally based exporters for the purchase of the ships produced in these expanded facilities. Provincial subsidization was impelled by the need to replace the British registered cargo ships that had formerly been used to carry BC goods to market but were now requisitioned by the British Admiralty for the imperial war effort. Local yards responded to this incentive with increased production of the auxiliary powered wooden sailing schooners in which they specialized. As the war in the Atlantic depleted Britain's ocean-going freighter-fleet, the Imperial Munitions Board in London began to scour the Empire for shipyards capable of augmenting the output of over-extended British yards. While Eastern and Central Canada had larger and more modern yards, west coast yards were less vulnerable to enemy attack and BC's temperate climate allowed year-round fabrication and launching of vessels. Consequently, in 1917, local yards were contracted by London to build the steel-ribbed, wooden hulled cargo ships with which they were more familiar. As both demand and local expertise expanded, local shipbuilders shifted to the fabrication of more technologically sophisticated, labour and capital intensive, all-steel hulls. Looking beyond the war, local manufacturers were encouraged to believe that the local industry might find commercial markets for their product beyond their traditional coastal base. This belief was reinforced when, with the end of war in sight, the federal government set its sights on creating a domestically controlled ocean-going fleet In 1918 it established the Canadian Government Merchant Marine (CGMM) to build, own, and operate a domestic merchant fleet. Initial freighters orders directed to BC by the new crown corporation would later 102 be supplemented by orders from other countries which took advantage of the new facilities to restore their shipping capacity lost to war. The post-war promise was reinforced with the integration of the CGMM with the new Canadian National Railways as a marine subsidiary of the transportation crown corporation, in 1919. By the time the war ended, seventeen new yards had been opened in the province and 135 ocean-going ships (a third of the total built in all of Canada during the war) valued at over $100 million had slipped their ways in BC waters. At its peak, the local shipbuilding and repair workforce approached 15,0007 with innumerable others working in related service and component supply firms. Successive state-initiated marine programs had been critical in developing the local capacity to fabricate up-to-date hulls in district yards, in expanding the technical skill among local secondary manufacturers to build power componentry and navigational equipment, and in increasing the ability of tertiary service suppliers to respond to the industry's demands. Despite its potential, shipyard activity in BC was checked by the evaporation of new orders a few years after the war ended. During the 1920s, the CGMM shifted new build-contracts to Eastern Canadian and British yards. In the 1930s, the whole fleet was sold-off to the private-sector, whereupon British built and registered ships re-entered the Canadian export trade. Other nations soon reverted to protectionism of domestic shipbuilding capacity, thereby drying up potential export markets for BC yards. The absence of a local steel-making facility and relatively high labour costs also rendered local yards uncompetitive in the buyers' market that This number, and subsequent figures, includes staff at government-owned repair facilities operated by the navy, coast guard and fisheries, unless otherwise specified. Employment in the public sector component, which has been far less volatile, has historically ranged between 1000 and 3000. 103 prevailed during the inter-war period Finally, the reversion of the provincial resource sector to peacetime output levels compounded the drought in local vessel demand. In consequence, no ocean-going ships were manufactured in BC yards again until the late 1930s. Meanwhile, shipbuilding labour went through equally tumultuous changes.8 Huge, new yards employing unskilled, non-traditional workers had been built to mass produce vessels for the war effort. The conservative craft unions that had dominated the modest pre-war industry were incapable of absorbing these changes. Their related failure to establish an industry-wide organizational and bargaining structure before the outbreak of war aggravated the war-related drift in wages and working conditions among crafts, yards, and districts. The ponderous labour relations regulatory regime of the period further impeded union organizing efforts. War-time prohibitions on industrial job action further exacerbated labour market anarchy. Similar growth-related problems down the entire west coast of North America prompted the AFL's shipbuilding based metal trades to federate into regional councils. Thus, their affiliates in Vancouver and in Victoria formed their own local Metal Trades Councils (MTC's), in 1911? Reflecting the high degree of inter-district mobility among shipbuilding labour, delegates to the first MTC international convention in Portland, Oregon, in the Fall of 1917, pledged to work toward establishing parity within and among shipbuilding districts along the west coast. BC-based MTC's on either side of the Georgia Strait took their first step toward this 8Much of what follows on BC labour relations during and shortly after WWI is drawn from Lees (1987). 9While the unions in the Councils are trans-sectoral, they were and continue to be shipyard-based entities. Furthermore, the Councils were not restricted to metal workers but were open to all shipbuilding related craft locals, including carpenters, ship painters, electricians, plumbers, etc. However, historic rivalry between the metal- and wood-related trades generally kept the latter from joining the Councils. 104 goal by demanding that shipyard employers sign sector-wide "Blanket Agreements" during 1918 contract negotiations. Despite war-time restrictions on labour action, labour occasionally carried out accompanying threats to disrupt war production to realize this collective bargaining breakthrough.10 Shipbuilding unions were also confronted with the corrosive affect on inter-union jurisdictional boundaries of the blurring of functional demarcations brought on by the new, mass production techniques introduced by hard-pressed yard employers during the war. The traditional response of unions, particularly craft unions, to such implicit technologically induced threats to labour job control was resistance and, when overwhelmed by the force of change, to vie with union rivals for jurisdictional hegemony over the ensuing new work categories and the potential members which they might bring. However, delegates to the 1918 Pacific Coast Metal Trades Councils Convention chose a more progressive, solidaristic response to technological change. They called on the AFL to amalgamate the metal trades into one organization. Despite its veto of this request, the union centre was unable to suppress the growing debate within the labour movement around craft versus industrial labour organization and business versus class unionism. In BC, the struggle over the organizational structure and social identity of the labour movement was undertaken both on the streets and on the convention floor. On August 2,1918, following passage by the VTLC of a enabling motion from the Vancouver-MTC, labour mounted a 24-hour city-wide general strike to protest the police murder of the Wobbly-aligned labour 10Then Labour Minister Mackenzie King's Industrial Disputes Investigation Act, which served to forestall job action by channelling the parties into conciliation, had been extended to shipyards in 1916. Furthermore, job actions were entirely prohibited by Privy Council Order 1743, of July 1918. 105 organizer Ginger Goodwin. With Canada's first general strike under their belts, VTLC militants led BC Federation of Labour (BCFL) delegates to the Fall 1918 Trades and Labour Congress (TLC) National Convention in Quebec City, hoping to transform Canada's labour movement into a force for political-economic change. Despite support from the majority of Western Canadian delegates and sympathy from the Convention chair (J. C. Watters, former Victoria Boilermakers Lodge President and first President of the BCFL), the BC militants saw both their action program and their nominees for executive office rebuffed on the convention floor. The westerners were consistently outvoted by the more conservative Eastern and Central Canadian majority bloc. Coinciding with this setback, a federal order-in-council that Fall effectively outlawed western-based labour parties as well as the reinvigorated IWW. In defiance of both their conservative eastern colleagues and the federal state, the BC caucus initiated a process leading to the formation of the Wobbly-inspired One Big Union (OBU) at a meeting of Western Canadian trade unionists in Calgary in June of 1919. To accommodate this change, the BCFL dissolved itself at its next convention, in 1920. The shipyard-based Vancouver Metal Trades Council was re-constituted as Unit 1 of the OBU immediately thereafter. The concerted attack of the state, employers, and the international craft unions on the OBU combined with the onset of a post-war economic slump lent the movement a short life. The arrest and, in the case of non-citizens, deportation of labour militants weakened and demoralised the syndicalist leadership. Employer black-listing of OBU members and their refusal to recognize OBU shop committees eroded rank and file support. The AFL-TLC rallied by reconstituting craft-union locals to gather in demoralized workers drifting away from OBU branches, and it instructed affiliate unions to prohibit returning members from holding dual 106 membership in the OBU. The receding from the labour movement's horizon of labour-led revolution, in consequence of post-war repression and recession, brought to the fore suppressed contradictions within the OBU. The attempt to incorporate two labour movement functions within one organization proved to be the OBUs ultimate undoing. Because labour has to wage battle with capital on two fronts, the primary-class front and the secondary-labour market front, it usually divides these functions between the labour party and the trade union branches of the movement (Offe, 1985). The 'division of labour' among these strategic allies helps to prevent disputes over structure, ideology, and focus from destroying the movement. However, revolutionary syndicalism abjured legislative-oriented labour political activity, opting instead to wage the political struggle though economic action. This strategy explains the organization of OBU units on the basis of territory. When members of the BC-based Lumber Workers Industrial Unit insisted on retaining their industrial-sectoral structure, the OBU executive suspended them, in late 1920. The loss of its largest unit sent the OBU into rapid decline. By this time orders in the shipyards were drying up and the workforce had begun to shrink back to pre-war levels. After Metal Trades Unit 1 was dissolved, the craft internationals forbade reconstitution of both the two BC Metal Trades Councils and the Vancouver Trades and Labour Council, at least until labour radicalism was decisively snuffed out. While industrial unionism persisted among workers in other more vibrant sectors of the provincial economy, such as in the forest industry but also among marine workers such as ships' crews and stevedores, shipyard workers reverted to their earlier craft union organizational structure. Nevertheless, international headquarters kept their BC locals under trusteeship for several more years. 107 2.2.2. Peacetime Industrial Retrenchment, Canadian Union Restructuring A combination of factors conspired against construction of ocean-going vessels in BC yards from 1922, when the last war-generated orders were completed, until the eve of World War II. Duty-free access to Canadian waters by ships built by signatories to the British Commonwealth Shipping Agreement effectively shut BC-built and registered ships out of the international trade. The dismemberment of the CGMM in 1936 foreclosed any foreseeable respite emanating from the federal government. The return to local waters of vessels requisitioned during the war and the subsequent collapse of world trade after the 1929 stock market crash depressed inter-war demand for locally built commercial vessels. By 1938, total employment in BC yards had shrunk to 3000, with the majority of these jobs in the publicly-owned repair yards. Despite the slump, core shipbuilding capacity, and the diversified auxiliary service and supply sector, was preserved. Sustained demand from the resource sector for small coastal vessels (fishing boats, tugs, barges) and increasing demand associated with population growth along the coast (small coastal steamers, patrol vessels, pleasure craft) kept at least some local designers, fabricators, and outfitters busy. Also, the erection by local firms of large dry docks during the 1920s, in Burrard Inlet on the Lower Mainland and in Esquimalt on Vancouver Island, attracted some repair and refitting work from transiting ocean-going ships. Adjustment of labour to the return of the pre-war norm of short-term, intermittent work was eased by the re-establishment of the craft-union structure. Not only did it continue to allow movement among the struggling yards, it also facilitated member movement into other more vibrant economic sectors where their specialized skills could find application. Nevertheless, memories of the innovative war-time organizational structures had not been completely 108 eliminated by the post-war slump. The lessons learned by those involved in the associated intra-labour struggles found expression in the formation of new union bodies during the inter-war period. This activity was reflective of two lingering impulses: the desire for local labour organizational autonomy and the need for more inclusive organizational structures. Furthermore, as borders became less porous for labour through the 20th century and as the nation-state became the focus of class politics, national union structures became increasing important in local labour consciousness. The first major indication of these changes came in 1927 with the establishment of the Boilermakers and Iron Shipbuilders Union of Canada (BISU), by BC workers. Its first bargaining unit, Local I, was chartered in Vancouver the same year, followed in 1930 by Local 2, in Victoria. The BISU was affiliated with the All-Canadian Congress of Labour (ACCL), which had also been established in 1927. While the inter-war slump inhibited BISU growth (Local 1 had only two hundred members when World War II started), a foundation had been laid for subsequent growth of an autonomous sectoral union, based in the region. The name of the new union reflected an underlying organizational innovation on the part of the BISU. The first part of its name alluded to its craft origin and reflected an experiential recognition of the need for trans-sectoral labour mobility in consequence of historic shipyard employment volatility; the second part of its name was inspired by a desire to include within its scope all yard hull fabricators: the core of the industry. However, as long as ship production organization in the region remained disintegrated and output remained one-off, the specialized outfitting crafts would remain outside the purview of the new union. Despite the paucity of new recruits during the inter-war years, the new hybrid craft-industrial union was nevertheless well positioned to absorb the impact of the next war emergency and the subsequent effects of peace. 109 The onset of the Great Depression precipitated changes in labour's political-ideological consciousness which would eventually have a major impact on labour organizations in BC shipyards. Invigorated by the economic crisis, the Workers Unity League (WUL) of the Communist Party of Canada (CPC) established labour recruitment branches in what it deemed to be strategic sectors of the national economy. Thus, shipyard recruits were placed in its Marine Workers Industrial Union, set up in 1932. However, following a dramatic turnaround in national party policy, prompted by strategic shifts within the Comintern in 1935, bewildered members were ordered by the Party to seek membership in AFL-TLC craft unions. From here they assisted the AFL's new Committee on Industrial Organization (CIO) organizing campaign among semi-skilled workers in the emerging mass production industries. While communist-aligned unionists were going through their organizational gyrations, members of the nationalistic ACCL were undergoing equally wrenching turmoil. In 1936, building and metal trades affiliates, including the BISU, seceded from the ACCL and then regrouped as the Canadian Federation of Labour (CFL).11 In 1940, the Canadian branches of the CIO unions, which had been expelled along with their American counterparts from the AFL-TLC, merged with the ACCL to form the Canadian Congress of Labour (CCL). The new national federation, which now included both Canadian and American based industrial unions, established provincial union centres to rival those of the TLC. In 1943, the BISU affiliated with the CCL. The duplication of regional union federations was sorted out in the 1950s when, following the lead of their American counterparts, the competing industrial and craft union centres merged into the Canadian Labour Congress (CLC). In the meantime, BC shipbuilding "In a dispute over delegate allocations at Canadian Labour Congress conventions, the same craft bodies seceded and revived the CFL in the early 1980s. As before, the crafts are now negotiating terms of re-entiy. 110 workers would undergo a major long-term change in labour relations organization and practice with the resumption of international conflict. 2.23. Renewed War, Shipyard Expansion, and Labour's Organizational Response As had been the case during the World War One, there was a time lag before the stimulus to industrial output brought on by the outbreak of World War Two impacted BCSSR. Similarly, once industrial mobilization was underway, war-related demand brought significant changes in shipbuilding capacity and technology, and in labour union structure and relational behaviour. However, the magnitude of war-related shipbuilding on the coast was much greater this time around with concomitant impacts on industry structure, labour demographics and skill composition, and union organization and relations. Furthermore, developments in the Canadian political-economy between the wars brought about changes in the composition of organizational actors involved in the industry during this war. For one thing, responsibility for organizing the domestic war effort fell principally on the national level of government. Similarly, national labour movement politics had a determining affect on BC shipbuilding union organizational activity. The differences in the impact of the two wars on the industry presaged both more long-lasting changes in BCSSR itself this time around and a more important long-term role for national institutions in the local post-war industry. War-time mobilization of the national shipbuilding industry commenced with Ottawa's incorporation of two marine crown corporations: Canadian Wartime Merchant Shipping Limited, which placed build-contracts for freighters, and Park Steamships Company Limited, which then operated them. As was the case during the previous war, BC's temperate climate and relative security from attack served local shipbuilding well; BC was responsible for 244 of the I l l total 400 merchant ships built under the federal industrial program. In addition, local yards built seventeen frigates for the Canadian Navy; one third of the total in this class. While fewer than 1000 workers were engaged in shipbuilding when war broke out, 31,000 workers were so engaged by 1943, when war-time demand reached its peak, making BC briefly the largest shipbuilding region in Canada. The industry's wartime output and employment even surpassed that of the forest sector, the historic backbone of the provincial economy. The sudden, massive influx of new labour recruits into local yards encouraged the simplification of production techniques and the serialistic manufacture of a limited variety of vessel types. The resulting lesser skilled shipbuilding workforce was more suited to the industrial union organizational model than to craft unionism. BISU Local 1 was the major beneficiary of this change. By 1943, it represented around half of the total workforce in BC yards; a dozen other unions accounted for the rest. Since it now dominated yard-based labour on the west coast, Local I was targeted as the most coveted prize among contenders for political dominance of the national labour movement. Shortly after a communist backed slate won the Local 1 executive elections, in the Fall of 1942, the social-democratic aligned national leadership of the CCL placed the union under trusteeship. However, the CCL appointed trustees' subsequent attempt to break down Local I into shipyard based units was frustrated when 6000 members re-elected the original slate during a massive outdoor labour rally the following Spring. While it was forced to recognize Local I autonomy, the CCL would still not countenance the spread of communist influence to the rest of the shipbuilding industry across the country. To this end, the CCL national office established a local federative union body, in January of 1944, to act as an organizational buffer between the communist-aligned west-coast local and workers in shipbuilding districts elsewhere in Canada (Logan, 1948: 134). Local 1 and eleven other BC-112 based shipyard affiliates of the CCL were then instructed by the CCL to join the new Shipyard and General Workers Federation of BC. While this political stratagem slowed the spread of the communist virus among labour, it did little to resolve the structural issue of what union model, craft or industrial, would best represent BC shipbuilding workers during the post-war era. Local I's choice in this regard was to continue to work toward uniting shipbuilding labour in BC under one union. In 1945, it and three other affiliates of the Federation merged into the Marine Workers and Boilermakers Industrial Union-Local 1. However, by this time a precipitous decline in employment in BC shipbuilding and a concomitant shift away from mass production techniques was already well underway, which precluded further labour organizational consolidation in BC shipbuilding by the consolidated union. Furthermore, personnel among the auxiliary marine service firms and component manufacturers continued to remain outside the purview of both the new industrial union as well as the traditional craft union group. By war's end Canada was ranked fourth in output among shipbuilding nations. However, this strength would soon dissipate with post-war shifts in marine policy emanating from Ottawa. Canadian war production, in general, and shipyard activity, in particular, had already started to wind down following the 1943 Quebec Conference of the Allied Powers. By 1944, employment in BC yards had decreased by a fifth; by the time the war ended, it was down to 6000. Perhaps influenced by the industrial relations conflict in the national merchant marine during the immediate post-war era, the federal government began liquidating the Park Steamship fleet in 1947.12 There then followed a series of legislative acts from Ottawa related to the domestic 12See Stanton (1978) for more on this industrial relations conflict As in the yards, the struggle between communists and social-democrats for control of the merchant seamen's union was at the core of the dispute. 113 marine sector which served to reopen the ocean-export trade to British registered ships.13 It appeared that, once again, the west coast industry might revert to the peacetime norm of one-off production of specialized vessels for the small west coast market, supplemented by intermittent repair work, and punctuated by frantic resource-fired booms. The end of the serialistic production of freighters and frigates and the departure of less-skilled workers from the industry decimated the ranks of Local 1. By 1950, provincial shipyard employment had declined to 4000. The industry's reversion to historic norms, and the concomitant revival in the importance of shipyard labour mobility, reinvigorated the craft model. Nevertheless, unlike the situation following WWL post-WWlI political considerations prevented the shipbuilding industry from fully reverting to pre-war form. Local 1 as well as all of the other assorted unions won a reprieve from the anticipated organizational shake-out 2.2.4. A National Marine Industrial Strategy Total post-war collapse of the domestic shipbuilding industry was pre-empted, although not altogether avoided, when domestic and foreign political pressures combined to elicit a relatively more enduring federal government intervention in the industry. A series of subsidy and procurement programs sustained the industry for several decades. However, this passive industrial policy did little to either modernize or to rationalize the national industry so that it could stand on its own in either the domestic or the international market. Political equivocation at the centre over competing visions for the national economy, aggravated by partisan-inspired l3Under a federal marine legislative package, which included the Replacement Plan of 1948, the Transfer Plan of 1949, and the Canadian Vessel Construction Act of 1949, the domestic merchant fleet was liquidated and British registered vessels invited back to serve domestic exporters. 114 shifts in federal industrial policies, would typify national industrial policy in the shipbuilding sector for the next few decades. This policy served to delay and, perhaps, exacerbate the impact of the crisis of survival which hit the international shipbuilding industry during the 1970s. The federal government's unanticipated intervention in the domestic shipbuilding sector was initially prompted by mounting Cold War tension, in general, and the outbreak of the Korean War, in particular. It commenced with the Defence Department's St. Laurent class anti-submarine destroyer procurement program of the mid-1950s. Electoral considerations, regional development imperatives, and pressure from the big shipyards' lobbying arm, the Canadian Shipbuilding and Ship Repair Association (CSSRA), founded in 1944, combined to imbue subsequent federal shipbuilding policies with archetypically Canadian political sensibilities (de Silva, 1988; Wilson, 1994). Thus, work on the anti-submarine program was dispersed among each of the country's four major shipbuilding regions: the Atlantic, Quebec, Ontario, andBC. Each of the large regional yards represented by the CSSRA was awarded primary contracts, and each of these core yards, in turn, subcontracted work to smaller satellite yards in its district. However, without a diversification of the industry into commercial markets, the shipbuilding sector faced the prospect of inevitable decline once the naval program was completed (de Silva, 1988, p. 62). Fortuitously, by the time the destroyers were finished around 1960, other political considerations had developed which served to continue federal support of domestic shipbuilding. Recurring minority governments, mounting political pressures from the regions, and nationalistic-inspired concerns over foreign (read US) dominance of domestic manufacturing combined to persuade federal authorities to follow-up the naval program with a series of subsidy programs, punctuated by periodic procurement orders from government agencies. The subsidy 115 programs commenced in 1961, with the Ship Construction Assistance Regulations (SCAR), which provided reimbursements to shipbuilders of35-50% of production costs. Subsidy levels under subsequent programs (with similar acronyms) were incrementally ratcheted downward until they reached 9% by 1985, at which time they came to an end. During this quarter century-long period, over $1,029 billion was channelled to domestic shipyards in the form of a variable combination of export assistance, tax incentives, shipping allowances, procurement programs, and tariff protection, in the hope of making the industry self-sustaining (de Silva, 1988, p. 130). However, passive protection and subsidization did little to encourage the restructuring that was needed to save the industry from the repercussions from the subsequent federal retrenchment in industrial support programs and the opening of domestic vessel markets to foreign competition. Canada was not alone in facing an imminent crisis in its domestic shipbuilding industry. The collapse of the oil tanker construction market following the oil crises of the 1970s and a concomitant decline in international ocean-going trade, together with rising competition from the shipyards in the newly industrializing countries (NICs) and mounting aversion to subsidies among Western electorates, combined to trigger the systematic dismantling of much of the 'standardised' shipbuilding capacity of the more developed countries (Strath, 1987; Todd, 1991). Domestically built and controlled commercial fleets were no longer viewed in the West as the best means to assert national strength; one only had to look at the marginality of the countries currently used as flags of convenience. In the wake of the winding down of their traditional shipbuilding activity, some countries have turned their sights to the production of specialized, internationally competitive, technology-intensive vessels, both commercial and military (Todd, p. 244). While it was relatively tardy, Canada could not forever avoid grappling with similar challenges to what was being increasingly viewed as a sunset industry. 116 With the end of the subsidy programs, and acting on the advice of the Joint Federal Government/Shipbuilding Industry Working Group, Ottawa embarked on a program whose intent was to reduce shipbuilding capacity to one core yard, with their sub-contracting satellites, in each of the maritime regions. A Special Capital Recovery program was established to funnel federal procurement orders to anointed shipbuilders, while those yards deemed surplus were offered rationalization grants to encourage departure from the industry. While the policy intent was simply to reduce capacity, the result was considerably more dramatic. Shipbuilding activity ceased entirely in the Great Lakes region with the closure of Collingwood Shipyards in 1986. The intervention of provincial governments in other regions prevented similar outcomes elsewhere. Thus, Nova Scotia and Newfoundland established subsidy programs for surviving medium- and small-sized yards. Quebec, through its Societe general de financement, consolidated its three remaining large yards into Marine Industries Limited; nevertheless, two of its yards have since closed and the third is foundering.14 The BC regional industry had also been the recipient of federal largesse under the series of post-war federal assistance programs discussed above, albeit with a relatively lower lever of procurement and subsidy money than the other more politically powerful regions.15 However, provincial government involvement in this strategic industrial policy realm made up for the deficit from Ottawa. The federal SCAR subsidy of 35% of domestically built vessels' selling l4Davie Shipyard was sustained into the 1990s with work on a Canadian naval program, which it shared with St. John Shipbuilding in New Brunswick. With the program now complete, both yards are in serious difficulty. 15Due to post-war resource sector vibrancy, BC yards had a fairly healthy local commercial market. Thus, from 1961 until the programs ended in 1985, the bulk of subsidy money went to Quebec and Ontario yards. Only when Burrard-Yarrows closed around 1990 did substantial funding come to BC in the form of redundancy payments (see de Silva, 1988, and Wilson, 1994, for details on this financial disbursement). 1 1 7 price encouraged the new British Columbia Ferry Corporation (BCFC) to tender a major portion of its fleet building contracts during the early 1960s to BC yards. Similarly, SCSR program subsidies of 25% on exported vessels helped provincial yards win contracts to build twelve offshore oil-rig supply vessels for foreign buyers during the late 1960s. The STAP program stimulated a significant local yard expansion in the size of the BC coastal resource fleet during the 1970s. Under the final SIAP program, BC shipbuilders embarked upon the construction of technologically sophisticated Arctic-class exploration, extraction, and supply vessels. In consequence of the cumulative boost from federal subsidy programs, the BC government's 'province-building' initiatives, and the cyclical robustness of the regional resource economy, BC shipyard employment reached a post-war peak of 5000 by 1982. Unfortunately, the end of the federal subsidy programs coincided with a deep recession in the BC resource sector and the provincial government expenditure 'Restraint' program, during the early 1980s.16 By 1986, yard employment had declined to 2000, a post-war low. This decline hurt the two core yards located on either side of Georgia Strait particularly badly due to their relatively high dependence upon federal support, as compared to the less politically powerful medium- and small-sized yards. The ensuing closure of these two yards would devastate the local industry and, with it, shipbuilding labour. We will now explore the consequences of this crisis on the industry, and look more closely at the situation with labour at this time. 'There is more discussion of the politics of the Restraint program in the next chapter. 118 2.3. The Final Slide into Oblivion? 23.1. Dismantling the Core-Satellite Complex in BC The combination of the withdrawal of federal support and a depressed local market plunged the post-war industry from its peak in activity, during the early 1980s, to its nadir, by the late 1980s. However, contemporary observers thought that the expected closure of the two principal yards on the west coast might be averted when, on the eve of a federal election, the Tory government awarded a massive ice-breaker contract to the owner of the two yards, Versatile Pacific Corporation (VPC), in 1987. Although the work-force in both yards had been reduced to skeleton crews by this time, the promise of future work on the $400 million Polar 8 following completion of design work provided at least a psychological boost to industry spirits. Furthermore, there was talk that this project would open the door to similar contracts from other Arctic nations, such as the USSR. Alas, this dream evaporated when the re-elected Tories cancelled the contract in the post-election budget of 1989. The potential Soviet market similarly disappeared in the wake of Glasnost. The final closure of Versatile's Burrard yard in Vancouver and its Yarrow facility in Victoria seemed inevitable. The fate of the rest of the regional industry rested with them also. From early in the century, the Burrard and Yarrows yards had dominated the west coast shipbuilding industry. Their amalgamation, in 1947, under the control of the locally-based Wallace family, consolidated this primacy. With the retirement of the dynasty's founder in the early 1970s, the complex fell into the hands of investors bent on using the yards as a base from which to build a continent-spanning multi-sectoral conglomerate. Buoyed by vessel orders derivative of the Trudeau government's National Energy Program (NEP) of the early 1980s, the politically sensitive Versatile Corporation purchased two large yards in Quebec, no doubt 119 anticipating capture of a larger share of regionally targeted federal shipbuilding subsidy money. Unfortunately, the defeat of the Trudeau Liberals by Mulroney's Conservatives in the 1984 federal election led to the dismantling of the NEP and the discontinuation of national shipbuilding subsidy programs, thereby precipitating the collapse of Versatile's core shipbuilding business. The by-now diversified Versatile quickly sold its Quebec yards to the province's Marine Industries Limited holding company. Perhaps anticipating the cancellation of the Polar 8 contract, the west coast yards were spun off to a merchant banking group in 1988 which put its BC shipyard holdings (since renamed VPS1) into receivership following the 1989 federal budget. With a provincial election in the offing, the BC Ferry Corporation awarded a major ferry vessel contract to VPSI in 1991. While work on the two 'Super Ferries' kept the Yarrows yard busy, the Burrard facility was closed that Fall. Shortly after completion of the ferry project, the Yarrows complex followed its sister yard and was demolished and the site ploughed under by 1994. Without further state assistance, it seemed that the traditional shipbuilding industry in BC was about to suffer the same fate that had befallen its counterparts in other Canadian maritime regions and in most other western countries. With the closure of the Burrard and Yarrows yards, there remained no single facility in the province capable of building large ocean-going vessels. Consequently; the closure of many small- and medium-sized yards which depended on sub-contract work soon followed. The negative impact on the BC industry of the withdrawal of federal succour was exacerbated by the slowdown in coastal resource activity in the 1980s. The 1970s subsidy program had resulted in the overbuilding of the resource fleet; now much of it lay idle. Furthermore, advances in marine technology made the hulls and machinery of these boats more 120 durable, leaving little work for even the repair portion of the industry.17 Despite the recent signing of the Canada-United States Free Trade Agreement, there was little opportunity in the neighbouring American market either. The Jones Act, which prohibited foreign-made vessels from engaging in commercial shipping between American ports, remained in force in the US 1 8, and American Defence Department regulations ensured continuing subsidization and protection of its domestic shipbuilding industry.19 Facing a bleak future, the few remaining owners of shipyards located on Vancouver and Victoria's harbour were tempted to follow the example of the merchant bankers who owned Burrard-Yarrows and sell their prime waterfront property to land developers. Subsequent attrition in the BC industry resulted in the reduction in shipbuilding capacity to four yards by the mid-1990s: two each on either side of Georgia Strait. The largest, a facility on Burrard Inlet, survived on work from its parent, a major towboat firm on the west coast. The others subsisted on infrequent repair contracts and the occasional modest new-build proffered by various government agencies. An attempt to attract repair and refit work on foreign registered deep-sea vessels to the two large drydocks in the region - one on Burrard Inlet jointly owned by the two yards remaining there; the other in Esquimalt rented out to private repair firms by its owner, Public Works Canada - met with little success. l7The introduction of rust-resistant aluminum and stainless steel hulls and improvements in diesel-engine design had lengthened the service life of vessels. 18The Act requires that all sea-borne commerce between US ports be undertaken in US built bottoms. ,9The preservation of domestic ship manufacturing capacity is considered to be a national security issue, and the military must favour domestic manufacturers in procuring equipment. 121 23.2. The Union Response to the Crisis of Survival One might have expected the closing of the two principal yards on the west coast to galvanize the organized shipbuilding workforce into action. However, apart from Local Is public demand that VPSL, prior to its final closure, be made public property, the other shipbuilding unions appeared to be resigned to the industry's retrenchment to employment levels not experienced since before WWI.20 Even before the closure of VPSrs Burrard facility, the shipbuilding unions had focussed on negotiating orderly reductions in workforce levels in response to the crisis. They joined employers and federal and provincial government representatives on the Shipbuilding Workforce Industrial Adjustment Committee (SWIAC), which had been formed in February, 1990, to design and administer labour redundancy payments, early retirement, and retraining programs. While passively acquiescing to employer and state downsizing, the fractious unions engaged in an internecine scramble for dominance over whatever remained after the closure of the core yards. Decades of complacency had left BC shipbuilding labour too organizationally divided and unfocused to mount a concerted counter-campaign to save the industry when crisis threatened its very survival. Things might have been different if the labour reorganization and consolidation underway at the close of WWII had not ceased with war's end. Furthermore, post-war federal subsidization and patronage had served to diminish the need for the industry to rationalize and modernize its structure and methods and, consequently, the unions felt little pressure to reorganize themselves. The myriad assortment of unions that emerged from the war had not only survived the anticipated post-war shake-out but had proliferated under benign state 2 0 A tripartite industry study advised restructuring policies which would hold employment in the BC industry at 1800 person years (British Columbia, Shipbuilding Action Group, 1990). 122 patronage and supervision. Thus, there were twenty three autonomous labour bargaining units at the VPSI yards just prior to their closure. This organizational structure is an especially egregious illustration of BC shipbuilding labour's fractiousness. The traditional unions still involved in the contemporary industry after the closure of the two core facilities can be grouped under two functional categories. The first group, the shipyard unions, which includes the Marine Workers and Boilermakers Industrial Union-Local 1, the International Boilermakers and Iron Shipbuilders-Lodge 191, and the Marine Shipbuilders-Lodge 506, are responsible for hull fabrication. The other group includes the various construction and metal trades affiliated to the BC Metal Trades Council which are responsible for the final outfitting of marine vessels. As was previously explained with regard to Local 1, the shipyard unions' organizational structure is a hybridization of the industrial and craft union models. While it was once dominant in its category, the closure of VPSI's Burrard facility deprived Local 1 of much of its membership base. Subsequent closures of other yards in the Vancouver region have reduced the union to a single stronghold at the smaller of the two yards remaining on Burrard Inlet. Local l's historic counterpart on the Island, Local 2, left the parent Shipyard Workers Federation in 1945 and, after joining the national TLC in 1950, re-emerged under the long dormant Lodge 191 moniker. It has since won exclusive bargaining rights with two ship repair firms in Esquimalt. Lodge 506 is a shipwright local of the International Carpenters and Joiners Union and it holds bargaining sway at the larger of the two yards remaining on Burrard Inlet. From here, it competes for whatever repair work comes to the region with, among others, workers at the Esquimalt branch of this same firm, who are represented by Local 191. With their retrenchment to their single-yard fortresses, the yard unions are consequently more easily induced to sacrifice 123 historic contractual standards in hope of out competing other yards for this dwindling trickle of work. Any impulse to eliminate this type of insidious inter-union competition through shipyard union merger is impeded by historic competition and lingering mistrust among the locals, their parent unions, and their federal umbrella organizations.21 As mentioned earlier, the relatively paltry amount of outfitting work on one-off contracts generated for the metal trades is compensated by their easy mobility across both shipbuilding firms and industrial sectors. This trans-sector mobility results in their contracts for yard work being led by the wages and benefits negotiated in the construction industry where the largest portion of their employment originates, in contrast to the shipyard unions. This situation led some industry observers to blame the collapse in shipbuilding during the 1980s on the wage-push generated by the 1970s BC building boom (interviews with industry officials). As one might expect, the local business agents managing the trades' dispatch halls place a low priority on the work emanating from the near moribund shipbuilding industry. Nevertheless, jurisdictional suzerainty is jealously guarded, with the durable Metal Trades Councils policing and preserving the fractured bargaining regime still in place on either side of Georgia Strait. In the wake of the survival crisis in the industry and the resulting restructuring of the industry, other shipyard employee formations have made their debut in the yards, joining the traditional unions in further fracturing shipbuilding labour organization. A public sector union, the BC Government Employees Union, took over employee representation duties at a Victoria-region yard after the staff bought out the failing firm.22 An Island firm which does repair work 2lThis impression was garnered by the writer from interviews with the various unions officials in the industry. ^The union has since changed its name to the BC Government and Service Employees Union since provincial government down-sizing forced it to expand into the private sector. 124 out of the Esquimalt Drydock has its own company union: the Nanaimo Shipyard Employees Union. Having spurned Local I's attempt at organizing them, employees at a small yard in the Vancouver region opted to exercise influence on firm management through their Musqueam Indian band council which owns the yard. The emergence of these alternative formations seems to be driven by fears among both management and labour in these firms that collective bargaining under the traditional shipbuilding union regime might jeopardize their chances of survival. Whether or not this strategy staves off individual firm failure, it does serve to further dissipate the collective strength and voice of labour at this critical juncture in the industry's history. Organizational impediments to shipbuilding labour unity are fAirther aggravated by the disunity that has long been characteristic of the Canadian labour movement. These divisions have arisen from the historic struggle between craft versus industrial unionism and between international versus national versus regional labour affiliation (the latter refers primarily to Quebec union federations). This lack of consensus over organizational models has been further aggravated during the 1980s by the transformation of many single-sector industrial unions into multi-sector general unions, and by the departure of the international building and metal trades from the Canadian Labour Congress.23 The BCGElTs certification of shipyard workers is reflective of the former development; the internecine competition among BC based shipbuilding unions is consequential to the latter. Although the ensuing confusion over union jurisdiction weakens labour unity, international, national, and provincial union centres lack the authority to As mentioned earlier, the international craft unions broke away from the CLC in the early 1980s and formed the Canadian Federation of Labour. They are currently negotiating over terms of re-affiliation with the CLC; the delicacy of these negotiations would tend to inhibit union centres from promoting union merger or restructuring. 125 effect a rational reorganization. 3. State Directed Industrial Restructuring: The BCSSR's Last Chance 3.1. The Provincial Strategy for Industrial 'Revitalization' By the mid-1990s, employment in private-sector yards had fallen to fewer than 1000 workers, the lowest level since the Great Depression.24 Without a core contractor, prospects for the survival of the remaining small- and medium-sized yards were dim. Auxiliary parts and service supply firms in the region had also lost a primary market for their wares. If decline continued, future industrial spin-offs derivative of servicing sea-borne commerce and transportation activity would likely be lost to other shipbuilding and repair districts. Perhaps more significantly, the loss of large ship fabrication capacity would serve to limit the possibility that the local region could quickly revive the industry in response to either an emergency or a coastal resource booms, as it had repeatedly in the past. There would be broad-ranging, long-term repercussions for labour as well should local shipbuilding die out. The ensuing loss of a major source of relatively highly-skilled, well-paid, unionized jobs would be sorely missed by a local labour movement that has suffered from the structural and political fall-out from the 1980s recession and the coincidental assault by the provincial state and employers on labour. In particular, the collapse of the sector would leave a gap in the traditional range of jobs available to the metal trades unions, whose certifications in the labour intensive construction sector have been severely eroded by a more hostile union climate and the concomitant proliferation of union-shunning building contractors. Furthermore, ^Two thousand personnel continue to be employed in other parts of the marine industry, including the publicly-owned service and repair yards, and among component manufacturers, design and engineering firms, and consultants. 126 the enrollment of workers and the subsequent certification of bargaining units among the more dynamic, emergent marine vessel sectors would become more difficult in the wake of the closure of the traditional industry. The enemies of organized labour would not hesitate to blame the industry's demise on the short-sighted greed and narrow self-interest of the shipbuilding unions, thereby further encouraging union avoidance by marine industry employers and others. More broadly, the ensuing weakening of the provincial labour movement would further bend state industrial planning toward a 'low-road' strategy of economic development based on low-cost/-skill labour exploitation. The burden of adapting to post-Fordism in the region would thereby be shifted disproportionately and unfairly to workers and their communities. Nevertheless, the sudden and complete loss of a relatively technologically sophisticated industry would be a serious setback to post-recession attempts by provincial governments, whether aligned with employers or labour, to diversify an economy considered to be over-dependent on primary resource extraction and processing. With little sign of any initiative forthcoming from either the industry itself or from Ottawa, provincial governments of whatever partisan stripe could still draw upon the honoured tradition of state-initiated 'province building' to justify intervention. The current NDP administration under Premier Glen Clark was further moved to action by concern over the negative impact on the provincial labour movement of the demise of this historic bastion of trade unionism. Thus, on the eve of a provincial election, the province stepped into the breach in 1994. Under the aegis of a comprehensive provincial ferry service expansion-upgrade program, the government announced an $800 million, 10 Year Capital Plan (BC Ferry Corporation, no year). As had been the practice during previous such programs, the new vessel construction portion of the program was to be channelled to local yards. However, the most intriguing part of 127 the plan was the bold initiative to locally procure vessels unlike anything previously built in BC or anywhere else in the world for that matter.25 The hope was that after building three technologically advanced, 1000 vehicle capacity, aluminum clad, catamaran hulled, High Speed Ships' (HSS) initially built, other markets would be found offshore for similar vessels. In order to ensure the completion of this high risk venture, the provincial Ferry Corporation (BCFC) would partner with local private sector firms in building the vessels. To effect this collaborative undertaking, BCFC incorporated a wholly owned subsidiary, Catamaran Ferries International (CFI) in early 1996, to oversee ship fabrication. CFI immediately signed contracts with associated firms to build vessel components and constructed a huge shed for final assembly. CFI was also directed to work closely with the principal private-sector contractors in managing continuous improvements in production techniques. These incremental changes were necessary in order to effect the productivity improvements during the sequential 3-vessel construction which were needed to complete the whole project on the target budget. Upon their completion, CFI would turn the vessels over to the parent ferry corporation. However, this learning process was also intended to help fulfil the government's long-term goal of eventual consortia exploitation of, what was predicted to be, a burgeoning global commercial market for HSS. In imitation of the strategy of other revivified western shipbuilding industries noted earlier, the infrastructure and expertise created under the provincial fleet expansion program was to provide a base for future exports into a specialized niche market. Success in this endeavour entailed transformation of the remnant shipbuilding industry into a horizontally integrated complex of specialized firms collaborating on vessel design and "Smaller versions of these vessels were being built in Australia, and a couple larger versions were underway in Finland. 128 engineering, workforce training, construction, and marketing of technologically sophisticated passenger-vehicle ferries. In July, 1994, the province established the British Columbia Council of Marine Industries (CMl) to oversee this industrial reorganization and workforce rejuvenation. It included both provincial government representatives and union and management delegates from the industry. For its first endeavour, CMI took representatives from local ship architectural firms and the shipyards and their unions to tour foreign yards where other aluminum hulled ships had been built. Since then, the Council has worked with local community colleges to establish new ship building vocational training programs for the HSS program. Formation of both private-public production partnerships, such as that overseen by CFI, and of tripartite industry councils, such as the CMI, had been recommended by industry consultants since the original onset of the shipbuilding industry crisis (Province of British Columbia, Ministry of Regional and Economic Development, 1990, July; Province of British Columbia, Ministry of Advanced Education, Training and Technology, 1994, June; Sandwell, 1993). Thus, with its workforce reduction program largely completed, many of the interests involved in the SWIAC adjustment program, with the exception of the federal government component, simply transferred their resources over to CMI. However, while it is touted as "representing British Columbia private sector shipyards, shipyard workers and related marine suppliers", initially only management and labour representatives from yards directly contracted by CFI for the fast ferry fabrication and superstructure installation have been involved in the Council (Enright [interoffice memorandum], 1995, December 13). Before work on the aluminum ferry hulls could commence, the CMI had to both revive the traditional shipbuilder apprenticeship programs which had withered during the 1980s and inaugurate new vocational training programs to accommodate the new technology. The Council 129 was also charged with creating new trade certificates for the graduates from the latter program and, then, overseeing the integration of these new "ship fabricators" into the old production system and the extant labour jurisdictional regime. Successful integration is expected to necessitate changes in traditional work practices, reconfiguration of the extant tunctional demarcations, adjustments in jurisdictional boundaries among the various unions, and negotiation of enabling addenda to outstanding collective agreements. Furthermore, the Council will play a major role in nurturing the collaborative working environment among the various contracting firms and their assorted unions which was mandated under the CFI charter. Collaborative production will also impel freer movement of labour between participating firms, which is presently impeded by union organizational pluralism. Obviously, labour's inclusion on the Council entails a major, difficult change in its traditional role from one of passive respondent to industry initiatives to active initiator of institutional change. As can be seen from the Enright Memo cited above, the role envisioned for CMI went beyond overseeing the industrial adjustments commensurate with completion of the ferry project and the revitalization of the traditional shipbuilding sector. It was also to include promotion of other sub-sectors of the provincial marine vessel industry. While the conventional shipbuilding sector was entering its critical crisis in the 1980s, other more vibrant and competitive sub-marine and motor-yacht industries had begun to emerge in the region. These new sub-sectors have little connection to the conventional shipbuilding industry. In the wake of a more liberalized international trading environment, they have enjoyed dynamic growth by designing, manufacturing, and selling specialized, unique, technologically sophisticated marine transportation products which are in high demand across the globe, but especially in the United States. 130 While the performance of these firms has been impressive, their continued dynamism is hampered by the inherent limitations of modest firm size upon product and market research and development as well as by the under-development of local support services and infrastructure. In response, provincial agencies have offered assistance in such areas as managerial and labour skill development, product promotion and marketing, and export financing. More significantly, the province is encouraging collaboration among complementary firms in each of these sub-sectors in identifying common needs. Once the province has them up and running, the administration of these jointly financed programs will revert to the industry. The industry-based, collaborative network approach being applied to the broad provincial marine industry has had some success beyond the traditional shipbuilding sector. Firms in the motor yacht sector have informally associated to develop training-apprenticeship programs for their industry, similar to that already seen among shipbuilding interests involved in the HSS project. Also, at the urging of trade officials, several marine engineering and design firms, left in the lurch with the cancellation of the Polar 8 project and closure of the core shipyards in the province, have formed an export focussed consortium. In collaboration with BC Trade, the consortium has successfully sold the expertise developed servicing the traditional indigenous shipbuilding industry to several foreign countries (B.C. Exporter. 1993/94 [Winter], p. 1). It seems probable that industry interests involved in these and other similar state-industry partnerships will either join the present Marine Council or gravitate to more sector-specific industry councils. In either case, the question remains open as to what role organized labour might play in the governing councils. In consequence, shipbuilding labour unity and union organizational consolidation has become much more urgent in the wake of both the provincial government's revitalization of the traditional industry and the emergence of the new sub-sectors. 131 3.2. Contemporary Institutional Restructuring and Organized Labour The current establishment in BC of marine industry associations reflects the increasing influence of network-style production organization and industrial relations. Vertical disintegration of corporate ownership, formation of inter-firm production partnerships, and collective provisioning of sector-wide services in collaboration with locally-based state agencies has spurred the formalization of these new industry relations to facilitate long-term adaptation to a more open and competitive international market. The conjuncture of structural change and industrial adaptation provides organized labour with a window of opportunity to undertake fundamental changes to allow it to both benefit from the industry's changes, in general, and gain entry into the institutional structures managing the evolution of industry during this transitional phase, in particular. So far, the shipbuilding unions do seem to be cognizant of the need for their adaptation to the fundamental changes impelled by the quest to save the BC shipbuilding industry. The shipbuilding unions' active participation in SWIAC has continued on into CMI, at least during the training, certification, and jurisdictional adjustment stage of Council activity. The appointment of Local l's President as interim chair of the Council is a positive sign that both the state and employers understand the importance of labour participation in managing the necessary changes in production organization. The unions also understand that their future in shipbuilding rests primarily on the success of the HSS program. As vessel construction gets underway, the role of the CFI will become critical in coordinating and integrating the production activity among the sub-contracting firms. The provincial government's recognition of this role is reflected in its creation of a bipartite board composed of top executives from the Ferry Corporation and local notables with connections to 132 the regional business community. However, while the business, legal, and academic fields are represented on the Board, labour is not. This "oversight"26 is significant as the province envisions transference of ownership and control over CFI to the private sector once the crown ferry order is filled and attention is shifted to the global commercial market. Perhaps, the state and business vision of the role organized labour is to play in future shipbuilding industrial governance does not include involvement in strategic corporate planning. The historic lack of interest among North American unions in business, reinforced by the 'management rights' norm sanctified in post-war industrial relations regulations, no doubt explains this 'oversight'. As for the other, emergent marine sectors: their workforces are not represented by shipyard unions, or by any other recognized unions for that matter. Consequently, the assembly crews, technicians, professionals, and others working in the design, engineering and service sub-sectors, in the submarine vessel sector, and in the luxury motor yacht sector do not have a distinct collective voice either at their workplaces or on the new industry associations. Even within the traditional shipbuilding oriented CMI, the potential influence of the shipbuilding unions is dissipated by labour fractiousness. Without a sector umbrella labour organization, the shipyard-based unions are more inclined to promote the particularistic interest of their yard - likely as interpreted by firm executives - over that of the industry in general. Furthermore, the active participation of each of the relatively small shipyard unions in the CMI is limited by the modest financial and staff resources of each unit. While the training-apprenticeship programs and the production organizational changes associated with the fast-26It was viewed as such during private interviews with officials from the government, BCFC and CFI. 133 ferry project should help build a common labour identity among shipbuilder, it will not necessarily lead to union re-organizational to eliminate the jurisdictional duplication and overlap which precludes the building of trust and cooperation among the shipyard unions. Unlike the yard unions, the craft unions (responsible for vessel outfitting) have no presence whatsoever on the CMI; and little interest has been expressed by them in becoming involved anytime in the near future. While their abstention may be explained by the relatively small amount of employment generated recently by the sector for their members, their absence does nothing to contribute to the industry's revival as a job generator. Furthermore, their lack of participation on the Council indicates that they will also be unlikely to acquiesce to recommendations emanating from the Council if they are seen as impinging upon traditional craft union jurisdictional rights. If the shipbuilding unions fail to remedy these organizational problems, labour will continue to defer to the state and employers in both developing policies for the industry and in governing network relations. To prevent this marginalization, they should undertake a number of initiatives. They should all strive to participate in the CMI either individually or through joint labour representatives. To effect the latter, they should establish a shipbuilding union council. Beyond its activity on CMI, this labour council could also coordinate collective relations with employers, the state, and others. The shipbuilding unions' previous experience with the 'poli-party' negotiating committees at the Burrard and the Yarrows yards could serve as an initial impetus for inter-union collaboration. Finally, if CFI has a life after the completion of the ferry contract, the council unions ought to rationalize their organizational structure and consolidate under some kind of federative structure. While unifying shipbuilding labour, this organizational structure would continue to recognize and respect each trade's distinctive character and interests. 134 While the unions seem at present to lack the capacity to engineer these changes, their organizational inertia could be overridden by the state. The current NDP administration has both the jurisdictional authority and the partisan incentive to orchestrate shipbuilding union organizational restructuring in the interest of strengthening labour influence in the industry. Shipbuilding employers would be unlikely to oppose such a unilateral action if the government held out the prospect of more simplified and orderly collective bargaining. Furthermore, an inclusive sector-wide union structure would provide an additional forum for the promotion of district-level collaboration in both production and other policy areas. The government's current attempt at revitalizing this highly unionized industry and the reservation of an important role for the unions on CMI indicates that the present administration may be willing to entertain just such an initiative in the long-term interest of labour and the industry. 4. Summary and Conclusion There has been continuous shipbuilding and ship repair activity in the south-west corner of British Columbia since European colonization. The industry's role in supplying vital marine vessels at significant stages of the region's development as well as during periods of national emergency encouraged state authorities to shelter the industry's indigenous market since its inception and, during the post-WWII era, to channel subsidies and procurement contracts to domestic yards. However, benign state protection and over-dependence on highly cyclical local demand discouraged capital investment, technological innovation, and institutional modernization in the BC industry. When the federal government withdrew its support and the local commercial vessel market went into a recession-induced slump, during the 1980s, local shipbuilders were unfit for survival in the now more open and highly competitive international 135 market. However, the provincial government's 'revitalization' strategy has given the industry an opportunity to adapt to and thereby survive under these new conditions. This history has also affected shipbuilding labour's contemporary organizational structure and relational behaviour. Vulnerability to highly cyclical demand and the related durability of craft-style production organization encouraged labour alignment under sector-transcending craft unions. Yet, periodic booms in demand, often accompanied by episodes of international labour militancy, prompted shipbuilding labour experimentation with other more inclusive, sector-based organizational models. However, rather than shift over to the new models, the remnants from these innovative periods were simply appended to labour's in situ organizational structures. While this mixture of tradition and innovation helped labour and the industry adapt to environmental changes, it has also left shipbuilding labour with fractious and complacent organizations. Consequently, labour cannot optimally participate in the current revitalization process. It also risks marginalization from the associational bodies currently being established in both the traditional and newer marine vessel sectors in BC. Nevertheless, some of the historical legacies of shipbuilding labour may positively contribute to both the revitalization effort and labour's collective involvement in its realization. For example, shipbuilding labour's traditions of high skill, functional flexibility, and occupational mobility is especially suited to the flexibly-specialized small-firm network production model currently under development in conjunction with the fast-ferry project. These characteristics helped to induce the state and employers to invite labour participation in planning and administering the changes in production practices and organization deemed necessary for the success of the revitalization program. Furthermore, the relatively prominent historical role which shipbuilding unions have played both in the shipbuilding industry and in the provincial 136 labour movement helped to elicit the invitation for them to join the sectoral governing council. Yet, shipbuilding labour must rationalize its organizational structure and become more institutionally assertive if it hopes to not simply maintain its historic status but increase its role in governing the future marine vessel building industry, commensurable with labour's abiding interest in economic development. 137 CHAPTER FOUR: SOLID-WOOD REMANUFACTURING: INDUSTRIAL INNOVATION VERSUS CORPORATIST INDUSTRIAL RELATIONS 1. Introduction Due to its relatively disintegrated and decentralized organizational structure, the affects of the recent eclipse of the Fordist mode of development on the Canadian economy have tended to be specific to particular sector-districts. In order for them to survive and prosper under the emergent market regime, each sector-district must undertake unique production organizational and relation institutional changes. Structures and behaviours that once provided a foundation for the efficient management of the production cycle and for regulating the encompassing industrial relations regime must be r