Harvard Business School

9-396-326
Rev. February 18, 1998

Adam Baxter Company/Local 190 Debrief and Endnotes
These negotiation exercises are based on management-labor relations at Hormel Foods Corporation’s main plant in Austin, Minnesota. The local union was Local P-9 of the United Food and Commercial Workers (UFCW) Union. The simulations are intended to portray events that occurred at Hormel, rather than to reflect precise details in Hormel’s history. The company and union were intentionally disguised, with the aim of preventing possible bias in role-playing the exercises. The 1978 negotiation role-play presents a fairly accurate portrayal of management/labor relations at Hormel in 1978. The building of the new plant and the
In December 1984, a federal arbitrator agreed with Hormel’s argument and ruled against Local P-9. Consequently, in March 1985, wages were set at $8.75, to be increased to $9.25 in July. According to the 1978 contract, Local P-9 could not strike until the current contract expired in August 1985. In defiance, the Local P-9 president, Jim Guyette, hired labor consultant Ray Rogers to help rally a campaign against Hormel. The campaign was a movement that, in Rogers’ words, would “shake U.S. organized labor into a new vitality.”2 Rogers was a charismatic and powerful force, and

2

Sarah Smith, “The Labor Rebel Leading the Hormel Strike,” Fortune, June 9, 1986, p. 105.

2

Adam Baxter Company/Local 190 Debrief and Endnotes

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Guyette was confident that Rogers would be successful in gaining leverage for Local P-9. Rogers inspired Local P-9ers with a sense of pride and responsibility to unions throughout the country. He told them that if they backed down, everyone would point to Austin as the site where unions had failed. In the spirit of the campaign, Rogers and Guyette decided to pressure Hormel’s creditor, First Bank. The goal was to have the depositors pressure First Bank’s leadership, since Hormel’s president and chairman, Richard Knowlton, was on the First Bank’s board of directors. First Bank might then pressure Hormel to provide concessions. The tactics had no effect on either First Bank or Hormel. In May 1985, Hormel said it