Doug Fraser is an American experiment, a union director on a corporate board.
When United Auto Workers president Fraser was elected to the Chrysler Corp. board last May, it set off immediate controversy about whether union representation on corporate boards was a great step forward into a bright new future or an incautious leap into a dangerous area that threatened both unions and business.
Fraser was elected as part of a trade in which the union agreed to grant the crisis-ridden auto company $460 million in concessions to keep the company alive.
Although union directors on corporate boards have been fairly common in Western Europe, the notion was not immediately popular here. Corporate executives nurtured fears that the interests of union directors might conflict with the good of the company and that confidential corporate date might be misused.
Union officials and others raised the specter of an unhealthy coziness between labor and management. "I don't think the unions want it," said Ralph Nader. "Labor leaders become more management. Unions retain power by keeping an arm's length, adversary relationship."
In spite of all the handwriting, Fraser and Chrysler seem satisfied by the arrangement. Chrysler chairman Lee. A. Iacocca could not be reached for comment but is said to be pleased with Fraser's presence on the board where he has been well received.
"There is no question that his goals are the same as our goals -- that is, the preservation of jobs for American workers and strong corporation," said a Chrysler spokesman who said his statements reflected Iacocca's views.
"He has outstanding judgement. He is sophistocated, and he is absolutely invaluable to the board in their deliberations," said the spokesman. He also said that Chrysler management hopes Fraser will remain on the board after he retires as UAW president.
For his part Frawer said that he is convinced his presence is helpful to the board as well as the workers he represents. "I think the important thing is I bring a different perspective to the board of this company," he said.
Although Fraser is caught up in a atypical situation at Chrysler, where of necessity the board spends most of its time worrying about survival, the union leader said he has been able to raise broader issues.
"I was able, for instance, in the August meeting to introduce a motion that we should establish a committee on plant closings and economic dislocation," he said. Although some board members were intially cool to the idea, the proposal was eventually adopted, he said. "The importance of the language was that, in addition to the economic decision, the human impact of the decision on the workers has to be considered," he said.
Fraser said he has not found it difficult to get as much information as he needed as a director to make decisions and that the conflicts over which much of the handwringing had not been had not arisen.
"I think there is a potential for that," he said. In late December and early January, he faced a possible conflict but disposed of it. The board was going to talk about the part of the Chrysler plan to go to the loan guarantee board that included age concessions.
"I didn't participate in the discussions of the board vote," Fraser said. Discussing a negotiating issue outside of union channels "would not be right," he said. Although Fraser concedes that the potential conflict may limit his role as a director, he said he thought it was a relatively minor curb. Generally labor negotiating issues would come up only about once every three years, he said.
Although he may be privy to some confidential information that must be kept from industrial competitors, whose workers he also represents, Fraser said it represents no major cause for concern.
As a union leader, Fraser meets with all the companies and often has access to confidential material, he said. "If Ford reveals to us information that is confidential, it remains confidential," he said.
There was a good deal written about Fraser's potential conflicts and how he legally is mandated to act like any other director after his election, Fraser noted. "I view my election as a representative of the workers, that I'm there to represent their interests, and I didn't see any incompatibility," he said. His views were reflected in a proxy statement that presented his nomination to shareholders. "Maybe that's why I got fewer votes," said Fraser.
"As a matter of principle, who has a greater interest in the survivability of Chrysler than the workers?" said Fraser. "The shareholders are only going to lose money. Managers like Iacocca can find other jobs."
The UAW won an early round against those who question the rightness of a union director prevailing when an attorney charged the union with an unfair labor practice. Lawyer Robert J. Hickey had argued that the union could not fairly represent members who work for competing auto companies with Fraser on the Chrysler board.
More reently, however, the Justice Department warned the union of a possible antitrust violation if a UAW representative sits on the board of American Motors Corp. as well as Chrysler Corp. AMC has agreed to nominate a UAW member to its board.
Other unions have not rushed in to follow in UAW's footsteps. But Fraser and attorney Philip W. Moore, who has been advising Fraser, believe they will.
"Unions have got to find new ways to deliver victories to their members and management has got to find new ways to deal with union demands," said Moore. In turn, that will lead to more stock-option plans and then to a more active ownership interest by workers, he said.
"I know a lot of people in the labor movement are cool to the idea," said Fraser. "I think sooner or later -- and unfortunately, probably later -- as times goes on and the complexity of society increases and economic shifts take place more regularly and profoundly, any labor leader has to start thinking it's not enough to be in a position to challenge decisions already made and irreversible."
"The only way workers can have a voice in their own destiny and the future is to have a voice in the decision before -- not after -- it's made," he said.