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Nearly
300 people turned out Feb. 21 to witness a mock wedding
between giant puppets representing Michael Powell and Larry
Longshore. Michael Cannarella, an organizer for the International
Warehouse and Longshore Union, promises more pro-labor demonstrations.
"Without public participation we'll never have a contract,"
he says.
The
ILWU's organizing drive wasn't the first attempt at unionizing
Powell's. An effort by the Oregon Public Employees Union
failed in 1991.
Powell
and his father bought the Burnside store from Bob McMenamin,
the father of the brewpubsters. They moved in the week Mount
St. Helens blew her top.
Last
year, Powell's sold nearly 3.7 million books, racking up
revenues of $36 million. About 10 percent of revenues came
via the Internet. Used books account for about half the
value of books sold.
"Every
dime of profit in the history of this company has been plowed
back into inventory or capital investments; it's never paid
me a dividend," Michael Powell says. "Had I not made long-term
investments, we'd still be in 3,000 square feet with three
employees."
Two
disclosures related to this story: First, Powell's is a
major WW advertiser. Second, employees in WW's
production department belong to the Communication Workers
of America #7901.
The
restructuring was an efficiency move, Sontz says. Management
wanted to get books labeled and on the shelf faster and
cross-train more employees.
The
ILWU has branched out from its core longshore business.
Today only 10,000 of its 60,000 members work on the docks.
The union also represents workers at Stacey's bookstore
in the Bay Area.
Powell's
employee Doug Brown voted against the ILWU last April and
remains skeptical. "I regard unions as being like the Easter
Bunny," he says. "The burden of proof is on those who believe."
Union backer Carol Edwards was named employee of the month
at the Burnside store last April, the same month workers
voted 161-155 to be represented by the ILWU. She says managers
dramatically revamped employees' jobs without consulting
them. "They never asked us, 'How could we do this better?'"
she says. "That's absurd when you consider the talent of
the people who work at Powell's."
A
survey of Powell's bargaining unit members showed that 60
percent are college graduates and another 30 percent attended
courses but didn't graduate. Nearly two-thirds of survey
respondents were under 35.
On
the Saturday before Valentine's Day, supporters of the union
drive gathered at Powell's Burnside store. Employees later
delivered Valentines to their boss's home.
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What's the Hold-Up?
the stalemated issues
Last November, busloads of Portland union
members, progressives and lefties of every stripe rolled
into Seattle to take on the World Trade Organization. Marching
under banners and giant street puppets, the protesters vented
their displeasure with multinationals such as Philip Morris,
Weyerhauser, Monsanto and Nike.Three months later, many
of the same people hit the streets here in Portland, complete
with drummers, choruses and giant puppets. This time the
puppets didn't represent death merchants, lumber barons,
genetic alchemists or slave-driving sneaker makers. Instead,
protesters on Feb. 12 hoisted an effigy of Portland bookseller
Michael Powell.
Ironically, Powell, a man vilified by leading
Oregon Republicans as liberalism incarnate, is now regarded
with equal distaste by some employees, who mention his name
in the same breath as Bill Sizemore's.
Over the past 20 years, Powell's bookstores
have come to embody Portland's values: a shabby unpretentiousness,
retro chic, recycling and small-d democracy (all present
in used books). Powell's Burnside store even represents
a triumphant example of the local obsession with long-term
planning--what other business could expand floor space by
a factor of 20 without moving?
"There's a point where a business goes beyond
being a business and becomes an institution," says Jim Kelly,
owner of Rejuvenation House Parts. "That's Powell's."
Yet last April, employees at this oh-so-Portland
institution voted to sign on with one of the most aggressive
outfits in the labor movement--the International Longshore
and Warehouse Union.
Since the election, tension reminiscent of
the Cold War has gridlocked the company. Last October, management
canned one of the ILWU's leading supporters and has tightened
its notoriously lax attendance policies. Employees have
fought back, slapping management with five accusations of
unfair labor practices, engaging in an ongoing slowdown
and staging increasingly large work stoppages.
Contract negotiations, now in their seventh
month, are going nowhere--which only intensifies the spotlight
on the store. This week's Sunday Oregonian, for example,
includes a Page 1 Metro column by Steve Duin updating readers
on employees' efforts to pressure their boss, and the Business
Journal has carried lengthy op-ed pieces on the stalemate
the past two Fridays.
"It's fascinating to me how interested the
city has become in this union drive and how passionate people
are who aren't involved," Kelly says. "I told Michael the
reason this is such a big story is because he's known as
such a good guy."
Most union drives are barely a blip on the
public's radar screen. Powell's is different--not only because
more than a million book buyers, many of them devoted regulars,
shopped there last year. No, what gives this union drive
its edge is watching the company and its owner struggle
to live up to the reputation they have earned for activism
and benevolence. At 59, Michael Powell, a very private man,
is being forced publicly to come to grips with who he really
is. The process isn't pretty.
Over the years, Powell has led the charge
for causes ranging from the renovation of the downtown library
to gay rights. He has showered the SMART literacy program
with books, and in the past six years his company has donated
more than a quarter of a million dollars to local schools.
"For its size, Powell's gives as much money as any business
there is," says Ron Saxton, former School Board chairman.
In addition to cash, Powell gives his time
and energy to civic causes. "Others will write checks but
they won't roll up their sleeves," says Cynthia Guyer, director
of the Portland Public Schools Foundation, of which Powell
is vice-president. "Mike has been there every step of the
way with us."
Eight years ago, Powell jumped into the middle
of one of the ugliest fights in recent Oregon history. For
most retailers, mixing business and politics is taboo. But
in 1992, Powell's Burnside store became a giant billboard
against Measure 9, the anti-gay ballot initiative backed
by the Oregon Citizens Alliance. An army of employees wore
"No on 9" pins, a level of expression few other store owners
would tolerate, let alone encourage.
Powell's progressive views have earned him
enemies along the way. In 1993, Gov. John Kitzhaber thought
enough of Powell's business acumen to nominate him as a
commissioner to the Port of Portland, normally the turf
of industrialists. Four years later, senate Republicans
blocked Powell's reappointment because of his politics,
rather than his performance. "Most of us don't even know
what the job is," Senate majority leader Gene Derfler admitted
to The Oregonian after the vote.
Another reason Powell's labor problems seem
incongruous is that most of his employees love their work.
With its combination of books, activism, indulgent bosses
and subsidized coffee, the company has replicated campus
life--minus tuition and tests. "One of the great things
about Powell's is the collegiate atmosphere," says Carol
Edwards, 27, who started at the Burnside store in 1996,
the week she graduated from Reed, and is now a leading union
spokesperson. "Here, I'm allowed to be intelligent at my
own pace. I get to learn and be around books."
Despite near-record low unemployment, job
seekers still swarm Powell's like ants to a sugar cube.
For each opening, company officials say they receive between
25 and 100 applications. Turnover is relatively low, averaging
26 percent over the past two years, about a third of the
rate at specialty retail stores.
Aside from the atmosphere, Powell's employees
stick around because the compensation is good by bookstore
and retail standards. Chain booksellers pay minimum wage
($6.50 per hour in Oregon) or slightly more. The average
Powell's bargaining unit member, according to union figures,
gets about $9 per hour. And for each dollar Powell's takes
in, according to an industry study, it pays out about twice
as much in wages as most independents. The company also
offers a range of benefits extraordinary in the book business,
including a childcare subsidy, tuition reimbursement and
free counseling. "My parents work for the City of Portland,"
says Ryan Smith, an employee at Powell's technical book
store, "and my medical benefits are better than theirs."
It's easy to see why organizers target Oregon's
migrant farm workers. They bust their humps in herbicide-soaked
soil for peanuts and don't know their benefits from Ben
and Jerry's.
But Powell's City of Books is a world away
from Willamette Valley dirt farms. Employees are well-compensated
and well-educated, and they like their jobs. There aren't
many companies Powell's' size at which the boss lets his
employees use his beach house, as Michael Powell does. And
although he's consistently battled censorship, Powell in
1997 ordered a photo exhibition of racists titled Angry
White Men removed from the Burnside store when African-American
employees complained. "He took a lot of flack for taking
those photos down," recalls Marti Michael, one of the employees
involved. "But he was sensitive to how we felt."
So what's with the puppets and comparisons
to Sizemore?
Part of the answer lies with Michael Powell
himself. Day-to-day, employees rarely see him. "Michael
looks out the window and thinks," explains Miriam Sontz,
manager of the Burnside store. All that thinking has led
to successes ranging from the Burnside store's organic growth
to the emphasis on highly profitable used books to Powell's
Internet effort. The problem, however, is not what Powell
has done but what he has not done: For a man who owns literally
billions of words, he's a lousy communicator.
With his bristly mustache, sparsely landscaped
scalp and dour expression, Powell resembles an abridged
version of the actor Dennis Franz and is about as approachable
as Andy Sipowicz, the character Franz plays on NYPD Blue.
By his own admission, Powell is more comfortable with books
than with people. He's happiest when diving into the hundreds
of thousands of unsorted, used volumes at his Hoyt Street
warehouse. On a recent day, his discovery of a 17th-century
Greek text in a shipment from the U.C.-Berkeley library
evoked a rare smile--it might fetch $500 on the shelves,
Powell thought. "I love handling books," he says. "That's
what I like to do."
Powell's lack of interpersonal skills is legendary
among workers. One day in the Burnside store he spied someone
up high on a ladder used for retrieving books. He stopped
and told the person the ladder was for employees only. The
person said he was aware of the restriction--after all,
he was a longtime employee.
On the eve of the union vote, Powell held
a series of meetings to allow workers to ask questions.
At one meeting, Edwards recalls, Powell misidentified Dave
Tracy, an employee who has been with the company for more
than 10 years. "He's terrible at recognizing people and
remembering names," concedes Powell's wife of 31 years,
Alice, a clinical social worker.
Last Christmas, employees say, Powell threw
a $10,000 company party at the Tiffany Center, then spent
most of the evening wandering the floor by himself. "He
was a stranger at his own party," recalls Stephen Strausbaugh,
28, a five-year employee at the Burnside store.
Powell's conversational style adds to the
impression that he's off in his own world. Words tumble
from his mouth in a monotonal stream of consciousness, rarely
punctuated with eye contact. "He's genuinely shy," his wife
says. "When he doesn't look you in the eye, it's not because
he doesn't like you."
The bookseller admits he's not a big talker.
"Am I the most gregarious guy in the world? Probably not,"
he says. And he's finding that things aren't getting any
easier. "I'm almost 60 years old and I've got a lot of smart
Gen-Xers working for me, and I don't know how to talk to
them," he says. "Or maybe that's a self-serving answer."
Powell's reticence might not be such an issue
except that employees say other managers are also poor communicators.
"Powell's management is like Plato," says Chris Faatz, a
20-year veteran of the book business. "They float beautiful
ideas out there but fail utterly to fit abstraction to reality."
Still, almost everyone agrees that the union
would not be in place today if not for a series of events
that individually may seem small but, taken together, suggest
the management team was out of touch.
In the spring of 1998, Sontz presided over
what employees now refer to as the "infamous restructuring."
At that time, the Burnside store was divided into more than
100 content sections (feminism, anthropology, France, etc.),
each with its own specialists who ordered, shelved and handled
returns for that section. Every section was a mini-bookstore,
with all the benefits that implies--and much of the duplication.
In the restructuring, Sontz eliminated the section assignments,
reassigning specialists to 15 newly established teams.
Even staunch union opponents such as Doug
Brown, 35, a seven-year employee at the Burnside store,
think the move was a mistake. "The restructuring devalued
the knowledge base of the staff," Brown says. Pro-union
employee Edwards is blunter: "I don't think the union vote
would have passed without the restructuring," she says.
For her part, Sontz defends the concepts behind
the plan but admits it was implemented poorly. "I totally
underestimated the response," she says. "I certainly didn't
realize that I was touching a chord that was so fundamental
to my staff."
Employees say Powell appeared to be out of
the loop. Edwards recalls a meeting at the Hawthorne store
at which Powell made statements about the restructuring
that indicated to her and others that he wasn't fully informed.
"There was a breakdown in communication," Edwards says.
"The discontent never got from us to him."
Powell argues that he got little input from
employees. "None of these issues were brought to me personally,"
he says. "If they had been, maybe we could have turned things
around."
In any case, management compounded widespread
anger over the restructuring by moving forward with the
sensitivity of a wrecking ball. Employees were still steaming
when, in September 1998, corporate manager Ann Smith sent
workers e-mail saying that even top workers would get raises
of 3 percent annually for "the next few years," and most
people would get less.
Accustomed to raises of 6 percent, employees
hit the roof. First their jobs had been downgraded, now
their pay was being capped at a time when management was
spending $3.5 million to expand the Burnside store and investing
heavily in the Internet. "It doesn't upset me to be paid
a low wage if necessary," Edwards says. "It upsets me if
I'm being taken advantage of."
Days after receiving Smith's e-mail, workers
began interviewing union organizers.
In many ways, the Powell's union drive is
part of a growing restiveness in service industries. "It's
often not at the worst places where unions are cropping
up," says Barbara Byrd, director of the University of Oregon's
Labor Education and Research Center, "but rather where people
are better educated and have higher expectations."
Cal Hudson fits that description pretty well.
After being a "not-too-successful" jazz musician and taxi
driver, Hudson, 43, a graying, soft-spoken union steward
with a math degree from PSU, found happiness at Powell's--but
says he can't afford to buy a home or a dependable car.
Hudson and other pro-union employees argue that they are
in the knowledge business, performing duties more like workers
at Intel or Hewlett Packard than retail clerks. "There's
a growing sector of the work force stuck in what people
don't consider real jobs," he says. "We're trying to make
this a real job."
Brown, who works in computer support, thinks
Hudson and other union supporters expect too much. "We're
in low-end retail," he says. "There's no money there. If
you feel you're entitled to more, go work in an industry
that can afford it." (Powell's earned $2.2 million pre-tax
last year, good for a bookseller, but chicken feed compared
with earnings at high-tech companies.)
Just what the company can afford remains a
point of contention. While Michael Powell disputes some
of the union's numbers--they've distributed reports clearly
distorting the company's growth in profitability from 1996
to 1998, for instance--he doesn't deny that his company
is healthy. Powell's gross profit margin, the difference
between sales price and cost, was 52 percent last year--significantly
higher than the average independent's, at 33 percent, or
Barnes & Noble's 44 percent.
Not surprisingly, Powell prefers to focus
on the competition rather than his company's relative strength.
The Internet is changing the rules of bookselling, he says,
and chain stores continue their McDonald's-like expansion.
In truth, being a heavyweight among independent booksellers
is like being the healthiest man in the cancer ward. Over
the past decade, according to industry figures, a third
of the nation's independent bookstores have closed. And
even with large investments in computerization and e-commerce,
Powell's sales per employee are down. "We face a very uncertain
financial future," Powell says.
As it stands today, after seven months of
contract talks, the sides have made progress on money and
benefits, but none at all on three major non-monetary disagreements
(see box). It's clear that those disagreements are all about
control. "We're close on wages," Edwards says. "The real
issue is partnership. That's where the feeling of lack of
respect comes in."
Management has proposed bringing in a federal
mediator if significant progress isn't made by the end of
this month, while the union prefers to keep talking directly.
If there's no contract by April 29, anti-union employees
could ask for a decertification vote, which, if successful,
would mean the ILWU gets tossed. Many union supporters believe
that's Powell's aim; he denies the charge.
Perhaps because Michael Powell is so closely
identified with his company, the negotiations have taken
on a highly personal tone even though Powell himself does
not participate in bargaining sessions. After the giant
puppet demonstration in February, a busload of employees
delivered 400 Valentines to Powell's Mount Tabor home. Although
the messages were light-hearted, Powell and his wife weren't
amused. "It's painful to me that people came to my home
and tacked signs to my door," he says.
At a Port of Portland commission meeting last
week, Powell's union representatives took the floor and
asked why he approved labor contracts at the Port that contain
provisions, such as the right to a union shop, he won't
give his own employees. "Michael Powell has taken an extremely
conservative stance," says Ian McCullough, 28, a used-book
buyer at the Burnside store. "When it comes to the issue
of union shops, he's right there with George W. Bush and
Bill Sizemore."
With Hefty-sized bags under his eyes, Powell
looks the part of a man under siege. "Sometimes, at 2 a.m.
I despair," he says. "I haven't slept well for two years."
He still can't quite seem to accept that workers have turned
against him. "It's clear that somehow I failed in deed or
in words to convince employees that their working conditions
were the most important thing to me--that's hard to internalize."
For Powell's customers and even for those
who just like knowing that the City of Books is there, the
question is what unionization--or even its failure--will
mean to the store.
Michael Powell fears that rigid work rules
will hamstring operations. Union supporters, such as Carol
Edwards, believe that the ILWU will allow them to make the
company a better place than they found it.
Regardless of how contract negotiations conclude,
however, nearly everyone involved thinks relationships at
the stores will be slow to mend. "The polarization is creating
an 'us' and a 'them' that I don't like to see," Doug Brown
says. "There was a rift before. Now, it's an abyssal trench."
In the end, Powell's will probably survive,
but its culture may not. "What made Powell's great was multitudes
of creative and energetic minds dedicated to making it the
best bookstore on the planet," says Chris Faatz. "It would
be a shame if we lost that."
What's the Hold-Up?
After seven month of talking, management and
employees are stalemated on three crucial issues:
* Union shop: The ILWU wants all employees
to pay dues, because the union is legally bound to represent
them all regardless of whether they support the union. Citing
his belief in freedom of expression, Michael Powell wants
employees to have a choice. (Powell is on shaky ground here--most
new contracts contain a union shop provision.)
* Successor clause: The union wants language
that would preserve its contract if ownership changes. Powell
says that lessens his flexibility. (This issue is fuzzier;
some contracts contain such clauses and some do not.)
* Management rights: Union members want to
be management's partner in all major decisions, while management
wants to retain all rights not specifically addressed in
the contract. (Powell owns 100 percent of the company, which
means he bears all risks. He says he shouldn't have to negotiate
every management decision.)
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Willamette Week | originally
published March 15,
2000
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