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hour plus very good fringe benefits. I would like to point out that of the 26 employees that were laid off as a result of this change of contractors, 19 of them were black. Of the 121 janitors now working at Cape Kennedy for Pan American, 113 of them are black, the commissary ratio about 50%, and it appears to me that if the same thing happens at Cape Kennedy as happened at Patrick, these people who have fought for years to bring their heads above the poverty level will now be trampled on again, be placed back in the ghetto, all because the Labor Department has refused to have a wage survey run in this area. , The Transport Workers Union also represent the other crafts that work for Pan American in this area. According to the newspapers, the Labor Department has stated that the wages in this area have become inflationary because of the space program. I would like to point out at this time, being as many of the jobs that the Labor Department is talking about, are jobs that until May of this year have been negotiated with Pan American on a nation wide contract. The classifications at Cape Kennedy made the same money as like classifications in New York City, Seattle, San Francisco, Los Angeles, Miami, or any other place within the continental limits of the United States. In May, it was decided that we would not negotiate with the system because of the situation that was transpiring here in the Cape Kennedy area. While the negotiations at Pan American throughout the rest of the nation received very liberal pay increases, we here at the Cape have received none. Therefore, the Labor Department's charges of an inflationary situation are false. We make a living wage and that is all. I certainly feel that the Labor Department is shirking its duty and are bowing to the pressures of the service groups such as NASA and the Air Force, and are taking advantage of an area that is high in unemployment, and pitting worker against worker.

The Transport Workers Union, Local 525, has been in the Cape Kennedy area since July 1957, representing the employees of several organizations. We, along with the United Plant Guard Workers and the Teamsters were the first, and as far as is known, the only unions to sign a pledge in the interest of national defense and other agencies of the United States Government, not to strike the facilities here or at any other locations, regardless of the situation. Enclosed is a copy of this agreement.

Needless to say, the members of the Transport Workers Union, Local 525, are very downhearted at what has transpired, as most of them have been here between 13 and 18 years, and have played an important role in putting this government in the position it is today in both defense and outer space, and feel that the least the government could do for them would be to apply the law and give a wage survey in accordance with the Service Contract Act of 1965. Thanking you for any consideration that you might give to this matter, I remain Very truly yours,

E. D. DISHONG, President.

LETTER OF AGREEMENT The Transport Workers Union of America AFL/CIO and Pan American World Airways, Inc., in the interest of national defense, hereby agree:

1. That the Mechanic and Ground Service employees and Commissary employees will continue to perform all duties which are necessary to enable the Company to continue without interruption its operations at Patrick Air Force Base, Cape Kennedy, Fort Huachuca and any other location at which it now operates or in the future it may operate facilities for the Defense Department or any other agency of the United States Government in the interest of national defense, even though the Mechanic and Ground Service employees and/or Commissary employees withdraw from commercial airline service because of unresolved labor disputes of any type, including disputes arising out of negotiations for a new contract. . .

2. That pay and other benefits for Mechanic and Ground Service employees and Commissary employees who perform duties in connection with such Government facilities pursuant to paragraph 1 hereof, will

1. (a) for any period prior to the opening date of the contract between the . parties be governed by then existing contract unless modified by agreement of the parties and,

(b), after the opening date of the contract be governed by either the contract that existed at or prior to the said labor dispute or the contract nego tiated as a settlement of such dispute, whichever is more beneficial to the Mechanic and Ground Service employees and Commissary employees.

3. That this is consistent with the long-standing policy and performance of the Mechanic and Ground Service employees and Commissary employees and of the Transport Workers Union of America, AFL/CIO.

4. That this understanding constitutes an amendment and modification of the Collective Bargaining Agreement between the parties hereto and, notwithstanding any other provisions of said Collective Bargaining Agreement, this agreement shall continue indefinitely but may be revoked by either of the parties hereto upon two years prior notice. Signed this 14th day of September, 1962.


JAMES F. HORST, International Vice President.

For: Pan American World Airways, Inc.,

Vice President-Industrial Relations Mr. O'CONNELL. It was decided by the administration to carve that unit out of the Pan-American contract and turn it over to small business under section 8(a), and the employees, the janitors, custodial people under that contract, under the TWU-Pan-American contract were making a wage of $3.76 an hour. The custodial contract was let out under Small Business Administration, and it was picked up by a Trinity Services, Inc., of Jacksonville, Fla.

The Air Force used the wage determination that was made in 1967 of $2.45 an hour, so the new contractor is in there at $2.45 an hour.

Mr. THOMPSON. With the same people?

Mr. O'CONNELL. No, sir. The purpose of the Small Business section 8(a) is to give some of this work, Government contract work to the minority people, and with that we have no quarrel.

There were 26 employees there, 19 of whom were Negroes, one Mexican-American and six whites, making $3.76 an hour.

They didn't go to work for the new contractor. The new contractor was paying $2.45, and the work is being done by moonlighters, Patrick aircrew men, servicemen and others who are working off-hours moonlighting on these jobs at $2.45 an hour.

So that is how we have helped the minority people at Patrick Air Force Base.

Mr. THOMPSON. I will certainly concede that the military are largely underpaid, but to make up the difference in what they should be paid as military people at the cost of civilians is really not a reasonable way to do it.

Mr. O'CONNELL. There are also, as we understand, plans to carve out two more units of our group from Pan-American at the Cape. That is the commissary workers, of whom we have 31, and another group of janitorial and custodial people, and we expect that-this will be done under section 8(a) as well-and we expect no differences for the new employees of the new successful bidder, because Pan-Am can't bid in at the rate of pay that they are required to pay our members.

They are just prohibitive, when the wage floor is based at $2.45 an hour. For the commissary employees; it can be as low as the minimum wage $1.60 an hour, and one of our members is sitting here. He has been with us 14 years. He is a head cook in the commissary department down there. He is making $3.87 an hour, which is about the going rate in that area. It is even a little higher at some of the better hotels and restaurants outside of the Cape, and his chances are that he will be,

after July 1 of next year, he will be working at $1.60 an hour, or somewhere between that and $2.45 an hour if he wants to go to work for the new commissary contractor.

He is the head chef, and he happens to be a Negro, too.

So it looks to me, and to the organization, the Transport Workers Union, that it is purely political, that the administration is putting out contracts under section 8(a), and it is for political reasons and for no other purposes.

Mr. THOMPSON. I don't see much political gain in issuing a contract and then offering people the absolute minimum wage and expecting them to be grateful.

Mr. O'CONNELL. At least they did give the contract to a member of the minority.

Mr. Chairman, in Cape Kennedy, the Transport Workers Union has represented the maintenance and ground service people ever since 1956.

Our members, some of whom were there in the very beginning in 1953, are those people whom we are here representing today with any. where from 13 to 17 and even over 18 years of seniority.

The top rate of pay for the most exotic mechanic that we have at Cape Kennedy is $5.25 an hour.

Now, until May 21 of this year, this was the rate of pay of our aircraft mechanics working for Pan American, and no matter where they worked, whether it was in New York, Miami, San Francisco, San Juan, or wherever it was, that was the rate of pay, plus fringe benefits.

In May of this year, the employees at Cape Kennedy, having seen a reduction from $131 million contract to a $78 million contract, and with the loss of membership from 2,700 people, employees, to a little over 1,100 employees, decided that in order to give Pan American a fair shake and a chance of bidding on this contract, that they would forego a new wage increase negotiated May 21.

The Transport Workers Union negotiated a wage increase of 25 percent this year, and if that goes into effect, the mechanic will make $6.63 in December of this year.

Mr. THOMPSON. That is in effect your national wage rate?

Mr. O'CONNELL. Yes. So in effect these people have already taken a 25-percent wage cut and have already frozen their pay at the April 1969 wage rates.

There is also one very important item that has not been touched upon, and that is that in October of 1962, the union and the members entered into a no-strike pledge with Pan American at the Air Force Base.

That strike, pledge has been lived up to to this day. We haven't lost 1 man-hour of work through strikes. We have all kinds of letters of accolade from the Air Force itself, complimenting the members, the officers and the union for peaceful labor management, harmonious relationships, and this is their reward that, come July 1, they can either take from 20 to 50 percent cuts in pay, or they are out of work.

Now, our fight is not with the Air Force. I don't believe the Air Force is unhappy with Pan American employees, or with our members. I don't think the blame can rest with the Air Force. It has to be higher up.

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I think someone has made a decision that this is a way to cut expenditures, and that it is at the expense of these dedicated employees of the Cape who have worked these years, who have given the best in the moon-space effort, and are now being rewarded by this cut in pay.

Mr. Chairman, we would not be here today if we were under DavisBacon, or if this was new construction, but we are under the Service Contract Act.

We thought when Congress passed the Service Contract Act that we had some measure of security that our rates would be in range of the prevailing rates that would be determined by the Secretary of Labor.

We didn't think there was any discretion accorded the Secretary of Labor in making or picking and choosing. We say it is a vicious act of discrimination to have made a wage survey at Vandenburg Air Force Base for the same type of work, the same taxpayers, the same citizens, and not have made one at Cape Kennedy, and it is a disgrace.

We have not had a strike at Cape Kennedy. We have had demonstrations. We haven't been happy, and our members haven't been pleased with that no-strike pledge all the time, but I can tell you this, Mr. Chairman, if the Air Force, and this administration, don't change their minds, and if the Secretary of Labor doesn't make this wage determination, he is going to see some real labor unrest at Cape Kennedy, and that is not a threat. That is an actual fact from the people themselves down there.

They are not going to take this lying down. This is not going to be another TWA-Boeing incident, and that is the fact of the matter and the truth of the matter, Mr. Chairman.

· Mr. THOMPSON. It is a very unhappy situation, and that would be a very tragic thing were it to happen.

However, you gave your word and you kept it honorably, and you have been, I note by the correspondence, commended for doing that, and I think it is only reasonable that you as the representative of a number of workers with a legitimate grievance serve notice that unless something is done to make some sort of redress that they can expect trouble.

I wouldn't be surprised if they get it if they don't. I just hope we can persuade them to do the right thing.

Mr. O'CONNELL. Mr. Chairman, we respectfully request that the committee use its best efforts to try to change Mr. Hodgson's mind and to make this wage determination.

He, in his letter to you and to other Members of Congress, has said that he doesn't have the manpower. Yet, the Department of Defense made a wage survey in November of 1970 at the same area, and it seems to me that this one was readily available to him.

Mr. THOMPSON. You indicate that your members would be satisfied if a determination were made on the basis of that which was being paid up to August 15.

Mr. O'CONNELL. Mr. Chairman, our members would be satisfied with a wage determination of the wages paid in that area, period. We would have to live with it. There may be cuts in some categories. There may be increases in other categories. But at least if there was a wage

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determination, we would have-Pan American and our members would have a crack at the jobs, and Pan American would at least have an opportunity to bid in.

We faced, you mentioned Dynalectron. We represented the employees of Pan American at Fort Wachoukka in Arizona, a contract with the Army for several years."

Dynalectron came in and undercut something like $400 to $600 a month. Pan Am lost the contract, and those people there lost their jobs.

We thought with the passage of the Service Contract Act that that ended, or would end.

Mr. THOMPSON. We expected it would, too.
Mr. O'CONNELL. I guess we were living in hopes, or dreams.

Mr. THOMPSON. The reason for these hearings is to get the facts and give evidence of the committee's concern, and Members on both sides of the aisle on the committee are deeply concerned and are very upset about it.

We intend to do something about it. So I thank you gentlemen very mach.

Mr. O'CONNELL. Mr. Chairman, I wonild like to make one additional point on that, and that is that the Members of Congress, both the Senators from Florida and the other Congressmen from Florida have been very, very helpful, regardless of what side of the aisle they are on, in trying to have the administration make the wage determination in our behalf. · Mr. THOMPSON. They have indeed. They have been very conscientious about it.

Mr. O'CONNELL. Thank you very much.-11.11witilini si * Mr. THOMPSON. Our next and last witness will be Mr. David Sweeney, legislative and political director, of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen, and Helpers of America. · Nice to see you, Mr. Sweeney. We are sorry we kept you waiting.






Mr. Chairman and members of the subcommittee, my name is David A. Sweeney and I am director of the Department of Legislative Affairs for the International Brotherhood of Teamsters. On behalf of our General President Frank E. Fitzsimmons and our entire Teamster membership, I would like to thank you for extending an invitation to us to testify on behalf of our members of Teamster Local 769, Cocoa Beach, Florida.

With the Chairman's permission, I would like Sam Casella, business representative of Local 769, to testify in connection with the problems in that area. Mr. Casella has worked with Pan American employees since 1958 and is familiar with the problems of these employees and the problems of their families in this current crisis.

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