Steelworkers learn finance from a game Beth Steel program aims to show overall corporate picture

Union-company initiative

Consensus, readiness to accept and propose changes are sought


June 02, 1996|By Sean Somerville | Sean Somerville,SUN STAFF

The steep slope on a graph in a Sparrows Point conference room charts the decline of the Bethlehem Steel plant -- from 30,965 employees in 1960 to 7,500 in 1988.

On a table beneath a huge aerial photograph of the once bustling "Point" is a symbol of trouble ahead -- the annual report of rival Nucor Corp., whose new South Carolina plant will make half the steel with one-tenth the employees.

Amid signs of difficulty past and future, mechanic Andrew Bates III plays Zodiak, a sort of souped-up version of Monopoly intended to teach Steelworkers about corporate finance -- from deadbeat customers to demanding investors.

On most days, Bates handles the hot strip mill that flattens huge steel slabs into tiny strips. Today, he's moving quarter-size chips from "customer orders" to "accounts receivable."

"This never would have happened" before the mid-1990s, says Bates, a 31-year employee. "The company would just say we're losing money so we're laying off people."

Every one of Sparrows Point's 5,300 employees will play the daylong game, part of a three-day program.

For management and labor, the program is a recognition that Bethlehem's plant needs workers who understand not only their jobs but also the company's big financial picture, if it is to prosper. The idea is that workers who have a better grasp of the company's challenges will be more ready to make, or even propose, changes.

The training programs at Sparrows Point and other steel plants are the logical outgrowth of "partnership" agreements in 1993 that gave workers job security, board representation and greater access to corporate financial information -- and the tools to interpret it.

"If you don't understand the information, what good is it?" asks Joseph J. Rosel Jr., union partnership coordinator at Sparrows Point who runs the training program.

Adding more urgency is blistering competition from companies like Nucor, whose low-cost minimills use electric furnaces rather than coal-blast furnaces, and scrap metal as opposed to iron ore.

Rosel discovered Zodiak at a conference and proposed using it at Sparrows Point after earlier, more traditional efforts to teach workers the economic fundamentals had failed. Other corporate users of the game include AT&T Corp., Boeing Co. and Harris Corp. "It's a good tool for adults because they don't like to be lectured to," Rosel said.

In the game, participants own, operate and manage Zodiak Industries, a manufacturer of gauges, for three years. On a board about three feet long and two feet wide, players use chips, each of which represents $1 million, to conduct dozens of transactions.

Along the way, they fill out balance sheets that include the figures used in corporate annual reports.

Business decision-making

Zodiak is one of several board games that simulate business decision-making. Others include "In Search of Desert Gold," a game about planning and resource allocation, and "The Accounting Game."

It's not clear how many companies train employees to read their balance sheets and income statements, but experts say it's particularly common in the automobile and steel businesses, once towering U.S. industries that have had to adjust to new competitive pressures.

Nucor, for instance, distributes financial information to its nonunion work force weekly. Some steel companies send employees abroad to see the foreign competition.

Bethlehem Steel's Burns Harbor, Ind., plant, uses the household budget of "Fred and Martha," a fictional family, as a starting point to discuss corporate finance.

"If you're trying to ship a product, you can try to include everybody or you can stand there and say 'I'll make the decisions and you do the work,' " said John Greaves, Rosel's counterpart at the Burns Harbor plant.

The education programs represent a departure from the days when Steelworkers didn't have to worry about assets and equity. Indeed, during its post World War II heyday, the industry never felt the need to educate the workers or try to alter the adversarial relationship between labor and management. And the United Steelworkers of America, which was making unprecedented gains for its members, had little interest in changes.

Then came the assault by foreign producers and nonunion rivals in the 1970s and 1980s, when the industry and workers realized the need to improve quality to survive.

The competition exposed the shortcomings of both management and labor, said Charles Bradford, an industry analyst for UBS Securities in New York.

"When the plant closed down and all the workers were fired, then the union came up with all these great ideas" -- too little, too late, he said.

Management's problem was that it "would tell different things to different audiences" -- one to Wall Street, another to the government and a third to unions, Bradford said. "How's a worker supposed to know the truth?"

Programs like the one at Sparrows Point are intended to address both problems.

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