From International Socialism (1st series), No.20, Spring 1965, p.29.
Thanks to Ted Crawford & the late Will Fancy.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
The Fawley Productivity Agreements
The Fawley ‘Blue Book’ agreements have been widely quoted in management and right-wing Labour and union Circles as the most significant breakthrough in industrial relations since the war. ‘What happened at Fawley’ is of great importance, however, not only for management trainees, but for socialists too: although the only example so far of concentrated productivity bargaining in British industry, its pattern is likely to be repeated. Already  the same approach is being tried out at the Alcan aluminium works at Rogerstone, is shortly to be tested further at the Steel Company of Wales, and may be used at Pressed Steel at Oxford. And various elements of the ‘Fawley approach’ are already familiar in contemporary British collective bargaining.
What happened? In brief, Fawley management (advised by an American firm of consultants, Emersons) offered the workers at their Esso refinery near Southampton a ‘Blue Book’, whose proposals included two main elements: a ‘productivity package deal’ and an extensive reduction of overtime. A 40-hour week plus increases in the basic rate of some 40 per cent were offered in exchange for a reduction of overtime (in the case of the craftsmen, from 18 to 2 per cent), relaxation of job demarcations, withdrawal of craftsmen’s mates and their redeployment, greater freedom for management in its use of supervision, and the elimination of ‘unproductive time allowances’ like tea- and washing-breaks and travelling-time. The wage-rise was to be paid in five instalments over two years. The rationale behind the offer was quite clear. Esso is a wholly-owned subsidiary of Standard Oil, and the rate of profit in the US oil industry was falling from the middle fifties, with the result that Standard Oil began to work for reductions in labour costs – which, Flanders states, represented more than half the controllable costs at the Fawley Esso plant (capital value in 1962, £81.2 millions). Further, the ‘Blue Book’ amounted to a deliberate bid by Esso management to wrest control back from the shop stewards representing the 2,000 workers employed in the refinery. The stewards had come ‘effectively to control’ the distribution of overtime, which represented a shift in authority from management and union officials to the shop floor. More generally, management wished to retain ‘the initiative’ in its labour relations.
It is clear that to a large extent management gained what it wanted, at least in so far as its purely financial objectives were concerned. While Flanders’ figures do not permit of any close analysis, management had no reason to regret its ‘initiative’: ‘The agreements, far from costing the company anything, showed a profit even in immediate terms’ (p.246). Despite relatively large wage-rises, the intensification of effort required of the (reduced) work-force more than compensated the company: labour costs per unit of output were reduced by the agreements (productivity increased by over 45 per cent, take-home pay by some 30 per cent on average).
But Esso management was less successful in its efforts to curtail the role of the stewards. Before the advent of the ‘Blue Book’ the control of overtime had been the stewards’ province, and overtime had been used as a weapon against management, while general wage negotiations were kept firmly in the hands of the union officials; but now, with the increased importance of detailed bargaining about workplace conditions in wage negotiations, the stewards came to occupy a central place in collective bargaining, the union delegates being unable to move without them (p.204). Management’s freedom of action was now more circumscribed than it had been before, by the stewards, who refused to allow management to go one inch beyond what had been formally bargained, despite vain managerial hopes that the agreements would be read ‘in the spirit rather than the letter’ (!). The shift from conventional to intensive plant-level productivity bargaining had the interesting and important effect of enhancing the stewards’ role and making them more central in factory politics.
Flanders was invited by Esso management to carry out this study, so the book’s general orientation should be clear. As might be expected, it is extremely unsatisfactory. The entire text is written in that special style called ‘managerial wool’, and verges at times on the comic: ‘To tolerate a situation in which workers are compelled to be idle or fill in their time with useless trivialities betrays scant respect for diem as persons’ (p.171). Much is unexplained, especially with regard to management policy: why were Esso so keen to maintain plant-level bargaining rather than join in national employers’ federations? Why did management value its ‘cult of informality’ (whatever that means)? Who were the management ‘group’ who pushed for the ‘Blue Book’ against their more ‘conservative’ colleagues? Was there a power-struggle among management? Flanders explicitly notes that in his chapter on The Course of Negotiations he pays little attention to management policies and disagreements – but then of course he wasn’t ‘invited’ to study managers. His remarks are sometimes so general and vaporous as to be effectively meaningless; and who is convinced (apart from the subject – and his wife perhaps) by explanations in terms of the Refinery Manager’s ‘modesty and humanity’ (p.132)? The whole study is biased towards managerial attitudes and values, to an extent beyond even that of Elton Mayo and his associates. It is a pity that the book should be so full of fog, for the subject matter is crucial. An important book, regrettably written.
1. According to a review article in Electron (ETU journal) September 1964, pp.180-181.
Last updated: 14 April 2010