When Kennecott Copper Co. announced the shutdown of its Utah mining division on March 25, the layoffs of 2,200 workers began within seven days, and most of the veteran workers who were laid off received no severance pay and did not qualify for retirement benefits.
The Kennecott closing was cited at a House hearing yesterday as an example of the severe economic and social disruption to workers and communities that could be partially remedied if a federal law were enacted guaranteeing workers at least 90-day notice of impending mass layoffs.
"We have heard stories of devastation that unexpected shutdowns can bring, of the hardship and confusion experienced by workers and communities because they were blindsided by mass layoffs," said Rep. William L. Clay (D-Mo.), chairman of the labor-management relations subcommittee and a sponsor of the plant-closing bill.
Clay described the bill as a "sensible and humane way" to soften the impact of closings by giving extra time to workers to seek new jobs, retrain for other careers or seek ways to stop the plant closing. He noted that four states, as well as Canada, Western Europe and Japan, have various forms of plant-closing legislation. More than 20 states are considering such legislation.
But major business groups, including the U.S. Chamber of Commerce and the National Association of Manufacturers (NAM), strongly attacked the proposed Labor-Management Notification and Consultation Act as an unnecessary and dangerous government intrusion into business decisions.
The bill, which has 60 cosponsors, led by Reps. William D. Ford (D-Mich.) and Silvio O. Conte (R-Mass.), would require 90-day notice for permanent layoffs of 50 or more employes, unless "unavoidable" circumstances prevent notice.
The bill also would require businesses to "consult" with labor unions to seek alternatives to plant closings and would empower the Federal Mediation and Conciliation Service to extend the 90-day notice period if the employer is not obeying the law. The secretary of Labor also would be empowered to seek an injunction to prevent closings that violate the notification act.
The U.S. Chamber of Commerce called the bill "an assault on our economic system" because it could hamper management's decision-making ability and tie up plant closings in lengthy legal proceedings, said Chamber spokesman Mark A. de Bernardo.
"It puts government where government should not be -- in the boardrooms of America, usurping management's prerogatives," de Bernardo said.
Both the Chamber and the NAM said they believe most employers already provide adequate advance notice and that the bill would provide little benefit.
"Plant closings are a fact of life, and we are kidding ourselves if we think that they can be eliminated" by legislation, said NAM counsel John S. Irving.
But United Auto Workers President Owen Bieber said that in several recent cases, the UAW has been able to postpone or reverse plant-closing decisions when the union had adequate notice and could negotiate cost savings that convinced employers to keep plants open.
Gary B. Hansen, a Utah State University economics professor, said he studied Kennecott and 13 other plant closings in five states and found that when workers were given longer notice, they were much more likely to find new jobs and much less likely to suffer drug, alcohol and health problems.
The bill, a modified version of stronger plant-closing bills that have been unsuccessfully proposed since 1974, also would set up a bipartisan commission to study plant closings.