|BUSINESSWEEK ONLINE : JUNE 26, 2000 ISSUE|
Hoffa at Halftime
The Teamsters are players again, but problems persist
James P. Hoffa is almost a happy man. From his expansive office at the foot of Capitol Hill--the same third-floor lair his legendary father occupied in the 1950s and '60s--Hoffa can point to an impressive 15 months since becoming president of the International Brotherhood of Teamsters. Flight attendants at Northwest Airlines Corp. just ratified a new contract by an overwhelming 68%. Arbitrators have forced United Parcel Service Inc. to honor a pledge to hire 10,000 new workers. President Clinton is keeping the U.S. closed to Mexican trucks despite NAFTA's call to open the border as of Jan. 1, 2000. And on June 21, George W. Bush, like Vice-President Al Gore before him, will seek the union's endorsement.
It's been a fast ride for Jim Hoffa. Just a few years ago, he was an obscure Detroit lawyer with a famous father. Today, he runs the largest union in the country. Pols are fawning, and employers say they can work with him. Even the union's finances are back in order after Hoffa's predecessor, Ron Carey, spent money like a drunken trucker with a winning Lottery ticket. ''There is a new excitement in the union right now,'' declares Hoffa, 59. ''Any outside observer can see that this union is moving ahead.'' Victor S. Kamber, a longtime union public-relations consultant, concurs: ''People like him. When he speaks, people listen. I'd bet my money on him.''
But while Hoffa successfully played the outside agitator to win the Teamster presidency, he has only 16 months left to persuade the 1.5 million rank-and-file members to reelect him as president. And despite the hosannas from union headquarters, all is not well in the House of Hoffa.
The most recent disappointment was permanent normal trade relations (PNTR) for China. Along with the United Auto Workers, the Teamsters tried mightily to prevent House Democrats from joining with President Clinton and the GOP in extending normal trade status to Beijing--and failed.
CASH-STRAPPED. Also gnawing at Hoffa is his inability to rid the Teamsters of federal supervision. Since 1989, the Justice Dept. has monitored the union's every move through a trusteeship that has cost the union $88 million. Hoffa had hoped to convince the Clinton Administration that the union is mob-free--and that it's time to end the oversight. But as the White House has made clear, that won't happen anytime soon.
Hoffa likes to boast that he has balanced the union's budget after years of profligate spending and a campaign-finance scandal by predecessor Carey, but the union is barely covering its costs. One reason, say Hoffa critics, is head-office salaries and other expenses. While Carey drew a salary of $150,000, Hoffa gets paid $225,000. Hoffa says that is the maximum under the union's constitution--and the same salary his father received in the '60s.
There are other complaints. While Carey all but ended the practice of letting local and regional Teamster officials take two and three salaries at a time, double-dipping has returned under Hoffa. A 1999 annual report to the Labor Dept. showed that 23 officers on the headquarters payroll were also being paid by other Teamster units. Six international officials had such arrangements under Carey in 1996. While Carey was still in charge in 1997, that number jumped to 16--but only after Hoffa loyalists joined the executive board.
Hoffa also takes heat for holding executive board meetings at such posh resorts as Bally's Hotel & Casino in Las Vegas. ''He ran for office on the slogan that he would restore Teamster power,'' says Ken Paff, national organizer for Teamsters for a Democratic Union, an anti-Hoffa reform group with some 10,000 members. ''Instead, he's restored a lot of the perks for himself and his cronies.''
With a 1999 yearend cash balance of $16 million, Teamster finances are certainly better. But that's due in part to help from the AFL-CIO: It has forgiven $1.5 million out of a $5 million loan extended to the Teamsters under Carey and transferred an additional $1 million to help pay for a new anti-corruption drive and to cover benefits for workers on strike against Overnite Transportation Co., based in Richmond, Va.
''CHECKMATED.'' The Overnite situation is another sore point. Now in its eighth month, the strike against the nation's fifth-largest freight delivery company, a unit of Union Pacific Corp., is costing the Teamsters millions in strike benefits but otherwise isn't accomplishing much. ''They're checkmated,'' says University of Michigan labor relations professor Michael H. Belzer. ''The union can't pull back because there's too much riding on the strike, and the company will never agree to a contract.''
And within the AFL-CIO, Hoffa isn't completely accepted. One top labor official says relations are still in tatters from an incident in April. At a mass union gathering in Washington to protest normal trade with China, Hoffa held a separate Teamsters rally, to the chagrin of AFL officials. He also appeared onstage with Reform Party candidate Patrick J. Buchanan, whose views often put him at odds with Big Labor's mostly liberal leaders.
Union leaders agree that the more visible Hoffa becomes, the more he'll be a target within organized labor. AFL-CIO President John J. Sweeney, 66, is likely to retire in a few years, and that could set off a struggle to replace him. ''Hoffa is a future kingmaker,'' predicts Kamber. Hoffa insists that he's not interested in being anything but president of the Teamsters. But try to find someone who believes him.
By Paula Dwyer in Washington
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Hoffa at Halftime
Hoffa: On Free Trade, Election 2000, and Winning (extended)
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