unionization – Ferret Research, Inc.

by Mary Goljenboom

Here’s to the crazy ones. The rebels. The troublemakers. The ones who see things differently. While some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.

Apple’s Think Different advertising campaign (1997-2002), used those words to describe 20th century icons—Einstein, Gandhi, Martha Graham, and Martin Luther King, Jr.—whose images were the other integral piece of the television and print ads. Two of the visionaries in this series were business leaders—Richard Branson (founder Virgin Records, Virgin Atlantic Airways, etc.) and Ted Turner (founder CNN and TBS).

Businesswoman Josephine A. Roche was not part of Apple’s campaign but the ads’ description fits her, particularly when she took over the Rocky Mountain Fuel Company and changed its management policies.

Forty-year-old Josephine Roche took her seat in the boardroom after inheriting 40% of the Colorado-based coal mining company’s stock in 1927. She knew her positions on pressing issues differed from those of the company’s other directors and her late father, the company’s former president. She’d been educated at Vassar College and Columbia University and, in her professional life, had instituted progressive policies within organizations where she worked as an administrator: the US Foreign Language Information Service, the editorial division of the US Department of Labor’s Children’s Bureau, and the Denver Juvenile Court System. She expected to be seen as a troublemaker by her boardroom colleagues.

Disputes over working conditions and wages had caused years of labor-management conflicts for all of Colorado’s coal mining businesses. Seen from today, management’s treatment of labor is harsh and unfair. Miners’ wages and hours fluctuated dramatically and they were not paid for time that was integral to the operation but not “mining,” such as loading coal or building support structures. Pay raises frequently were followed by cuts that zeroed the increase. Often miners were paid not in cash but in scrip, which only had value at the company store. Inside the mine, there was spotty compliance with safety and ventilation regulations. Complainers faced instant job loss. These issues, unresolved for decades, led employees to call strikes and for unionization. Management believed in their inalienable right to control their property (i.e., the business). They chose to quash dissent, ruthlessly and unscrupulously, using their economic power to support their business practices, no matter the cost in dollars or lives.

Josephine Roche saw things differently. She believed the company should be managed for the benefit of all stakeholders—employees, customers, managers, and investors—not exclusively for those controlling the capital. She was sympathetic to workers’ demand for union representation because she’d witnessed their deplorable living and working conditions. Her vision for RMFC was farsighted and progressively capitalistic: She believed the company could both make money and improve the lives of her workers and their families.

In order to realize her vision, Roche first needed a majority of stockholders supporting her. According to biographer Robyn Muncy, Roche contacted non-board investors and received enough authorizations (proxies) to fire the current board of directors and re-build it. The president of RMFC was so incensed that he offered to sell his shares to Roche. She borrowed $35,000, completed the deal, and became RMFC’s controlling stockholder.

Roche installed progressive managers to oversee the business, and named herself as vice president (within a few years she became president). She then invited her workers to organize and choose their own representatives for negotiations with management. They chose the United Mine Workers and in the summer of 1928 Roche signed the labor contract she and the union had negotiated. Its provisions—an eight-hour day and six-day work week at $7 per day (the highest coal mining wage in the state), as well as other benefits—won her increased productivity, labor peace, and the support and gratitude of her employees. She needed it.

Her competitors viewed her as a “dangerous industrial radical” according to TIME magazine and started a price war. These coal operators, including Colorado’s largest, the Rockefeller–owned Colorado Fuel and Iron Corp., dropped prices 50 to 75 cents per ton so RMFC’s higher labor costs put the company at a big disadvantage. Some operators gave secret rebates to customers. The predatory practices were designed to force RMFC into bankruptcy and rid the industry of unions.

Roche fought back. She met the competition on price, then, to supplement the loss of income, raised money privately. Six hundred of her workers, according to TIME, voluntarily voted to take only half their wages for three months, thus loaning the company about $80,000. The union-led “Buy from Josephine” campaign to increase sales to households, merchants and manufacturers was pumped up. The United Mine Workers loaned her money, too.

Rocky Mountain Fuel Company hung on, even as the Great Depression added more economic hardship and the newly developed natural gas industry competed for coal customers. Roche was forced to lower wages to $5.25 a day in 1932 but opened company property to farming and provided credit at the company store to help offset the cuts. That same year, the New York Times reported that the company’s costs for digging a ton of coal had steadily declined since the 1928 contract took effect and its sales increased. The company was making money because of the joint efforts of management and labor. In 1935, a nationwide poll of 500 business executives named her the top US businesswoman. By then, all the other Colorado coal mines were unionized.

Josephine Roche was crazy enough to think she could change the world. And she did.

Sources
“A Woman Unravels an Industrial Knot,” by Louis Stark, New York Times, February 7, 1932

Restless Reformer: Josephine Roche and Progressivism in Twentieth Century America by Robyn Muncy

A Wide-Awake Woman: Josephine Roche in the Era of Reform by Elinor McGinn

Regulating Danger: The Struggle for Mine Safety in the Rocky Mountain Coal Industry by James Whiteside

“Rocky Mountain Gesture,” TIME, September 7, 1931

Land Of Contrast: A History of Southeast Colorado by Frederic J. Athearn