Conversation 473-009

TapeTape 473StartThursday, March 25, 1971 at 3:03 PMEndThursday, March 25, 1971 at 3:55 PMTape start time03:04:59Tape end time03:53:37ParticipantsNixon, Richard M. (President);  Shultz, George P.;  Ehrlichman, John D.;  Hodgson, James D.Recording deviceOval Office

On March 25, 1971, President Richard M. Nixon, George P. Shultz, John D. Ehrlichman, and James D. Hodgson met in the Oval Office of the White House from 3:03 pm to 3:55 pm. The Oval Office taping system captured this recording, which is known as Conversation 473-009 of the White House Tapes.

Conversation No. 473-9

Date: March 25, 1971
Time: 3:03 pm - 3:55 pm
Location: Oval Office

The President met with George P. Shultz, John D. Ehrlichman, and James D. Hodgson

     Executive Branch reorganization
          -President’s meeting with staff

     Construction industry
          -Boards of control
                -Wages
                -Appeals
          -Wage adjustments
                -Factors
                -Equity
                -Limits
          -Role of federal government
                -Executive Order
                      -Effect
                      -Hodgson’s view
          -Wage and price controls
                -Drawbacks
                      -Political considerations
                            -Democrats
                      -Philosophical basis
                      -Complaints, appeals
                -Alternatives
                      -Wage increases
                            -Effects
                      -Davis-Bacon Act
                            -Effects on building trades
                            -Building and Trade Unions
                                  -Forthcoming meeting
                                  -Demonstrations
                            -Collective bargaining
                      -Unions
                            -Administration policies
                -A commission
                      -Recommendations of public members
                      -Recommendations of labor
                      -Public members
                            -Presidential appointees
                            -John T. Dunlop
                            -Recommendations

                  -Executive Order
                         -Wage stabilization boards
                               -Strikes
                               -Wage increases
                               -”Super board” as monitor and appeal board
                         -Enforcement
                         -Davis-Bacon Act
                         -Settlements
                  -Government construction
                  -Enforcement power
-Steel strike possibility
      -Wages
            -Union leadership
                  -Union members’ views
            -Steel compared with copper and aluminum
-Possible stabilization boards
      -Jurisdiction
            -Plasterers, electrician, bricklayers
                  -Union jurisdiction
                  -MDA and Associated General Contractors of America
                         [AGCA]
      -Time to be established
            -”Super board”
      -Possible effects on wages
            -Hodgson’s view
      -Possible effects on relations with labor
            -George Meany
            -Building trades
-Possible response to wage controls as opposed to Davis-Bacon Act
      -Hodgson’s report to the President
            -Administration policy
      -Unions
      -Management
      -Housing industry
      -Unions
            -Contractors
                  -AGCA resolution
      -Housing industry
            -Union’s views
      -Meany
            -Meeting with President

            -President’s meeting, March 24, 1971
      -Housing industry
-Democrats’ legislation
      -President’s position
-Ehrlichman’s previous meeting with leaders
      -Leaders’ view of Administration policy
-Industry
-Wage-price stabilization boards
      -Effects
      -Union response
            -Unemployment
            -Wages
      -Applicability to other industries
            -President’s concern
            -Aluminum
            -Future trends
            -Possible response
                  -Shultz’s view
                  -Steel, longshoremen
      -Industry
      -Members of boards
            -Appeals board
      -Need for wage control
            -Shultz’s view
                  -Compared with Hodgson’s view
      -View of other segments of organized labor
            -Support for President
            -Leonard Woodcock
      -Maurice A. Hutcheson
            -Carpenters’ union
                  -Position
                  -A Florida situation
            -Position
            -Support for the Administration
      -Davis-Bacon Act
      -Business’ position
      -Effects of possible action by President
      -”Ehrlichman group”
      -Position of Romney, John A. Volpe, Winton M. (“Red”) Blount, and
            Arthur F. Burns
            -Volpe’s knowledge of industry

                 -Volpe’s view
           -Ehrlichman’s meeting
                 -Other industries
                 -Paul W. McCracken’s paper
                       -Alternatives
-Possible wage increases and controls
     -Hodgson’s assumptions
           -Reasons
     -Fortune magazine group
           -Meeting with President
-Possible government action
     -Davis-Bacon
     -Contractual considerations
     -Effect
     -Attorney General
           -Possible injunctions
                 -Ehrlichman’s view
     -Executive Order language
     -Enforcement
           -Boards’ authority
                 -Davis-Bacon
                 -Emergency situation
                       -Legal limitations
-Possible meeting with President and Hodgson
     -Volpe
     -Purpose
           -Effect on President’s policy choices
-Public opinion
     -Management, unions
     -”Ehrlichman group”
     -Political considerations
           -Ehrlichman’s view
-Possible speeches by Volpe, Romney, Maurice H. Stans, and Blount
     -Position
           -Support for Administration policies
     -Possible meeting with President, March 26, 1971
-Possible meeting of President and Meany, March 26, 1971
     -Cabinet meeting time
-Possible administration action
     -President’s view
     -Hodgson’s view

      -Romney, Volpe, Stans, and McCracken positions
      -Herbert Stein’s possible response
            -A paper on controls
      -Shultz’s position
      -Hodgson’s work
            -Florida
      -Meany
                  -Support for Administration
            -Relations with Shultz
            -Possible meeting with Hodgson or Shultz
                  -Timing
                  -Meany’s health
      -President’s position
      -Business community’s response
            -Stock market
            -Compared with future response
                  -Shultz’s assessment
                  -Profits
            -Davis-Bacon Act
-12% wage increase
      -Administration efforts
      -Compared with other industries
      -Hodgson’s work
      -Compared with steel and aluminum
      -Publicity
      -Union leaders
      -Davis-Bacon Act repeal
            -Possible time limit
            -Injunction
            -Effect on construction industry
-President’s action
      -Effect on state laws
      -Meetings
            -Purpose
            -Labor unions
                  -Meany
                        -Davis-Bacon Act
            -Cabinet
                  -Purpose
                  -President’s remarks
      -President’s announcement

                          -Timing
                                 -Ehrlichman’s view
                                 -Meetings
                                 -Forthcoming Cabinet meeting
                     -Effect of previous actions

Shultz and Hodgson left at 3:53 pm
     Domestic Intelligence Advisory Board
         -John N. Mitchell
         -Samuel J. Ervin, Jr.’s hearings on domestic surveillance
               -Mitchell’s staff’s discussion with Ervin
                      -Executive Order
         -Message for Mitchell
               -President and Ehrlichman’s discussion

     Ehrlichman’s meeting with Wilbur D. Mills, March 25, 1971

Ehrlichman left at 3:55 pm

This transcript was generated automatically by AI and has not been reviewed for accuracy. Do not cite this transcript as authoritative. Consult the Finding Aid above for verified information.

It was very nice of you to have that movement with your organization here.
They appreciated it.
And I take that back from them today.
So we say there's a lot of hard work, there's a lot of activities in every department.
We say we've got that place buzzing until the construction people on both sides are running out on our ears.
The president gets down to something like this.
The idea of them establishing boards, each branch of the industry,
to keep the strikes from erupting, to keep waste levels moderated, and to bring it to participate in a standing committee of what could be sort of an appeals board for these separate boards that would be smashed to the end stream.
That's all, no problem with that.
There's no problem with the basic kind of criteria that we're talking about, the two-fold idea of one getting back to a basic level of wage adjustment based on a combination of cost of living and productivity considerations that would average out at about the mid-60s levels of 5% to 6%.
That's the first criteria.
And second, that any equity adjustments that are needed beyond that to match agreements that have been made at a comparable craft right store so that one isn't sitting here but the other one is sitting here.
But no going beyond the existing levels.
That's no problem with that.
The idea that the federal government should
The only way that both sides feel that they can do this is to have, instead of being something that they voluntarily say we'll do, they need an executive order that says, here's what you should do.
And what does that mean?
It changes the complexion of it, it seems to me, and I think that's great, but it's, when I say it's the only way, it is the only way that we've got its prayer at this point of going.
And in St. George, it seems to me that there are three considerations we have to think of that are negative to that.
First, it would be the first time we've used the Democrats' ways of price control mechanism.
Second,
It will be the first time we've entered into controls, and that's from a philosophical standpoint.
Do week one, do get into controls anywhere in any way.
It's a major move from that standpoint.
And finally, there will be some settlements as a result of these activities with settlements that can be appointed to by others who say, why did you allow 10% of your government people over here when you're telling us to keep our rates down?
All those have to be balanced against the fact that if we don't do it, wage increases are going to continue between 15% and 25% this year in the industry.
They're going to be a target that will disrupt other bargaining throughout the country.
They're going to infect this whole situation that David's speaking in as a kind of suspension.
In fact, it's going to come for a lot more for the building.
and beyond the building trades.
This is the 17th meeting here in town, let's see, 200, or 1,500 building trades, union leaders, for the location for demonstrations, disruptions, monumental disenchantment with the administration offers.
We generate a lot of attention for the hub.
It will be, in my opinion, a discontinuance of their joint participation in such things as the Productivity Commission, as the Collective Bargaining Commission, and things of that kind.
So these are the two balances.
being the prestige here at the mountains, the medicine family.
I hope that, I would hope that we can see fit to do it because I would like to keep union people at least neutralized.
And I think this would accomplish those two things.
But they said to cost them these other three things.
So that the public members of the commission make a recommendation to the president stating that they have been consulting with the commission as a whole, the labor members and the management members, so this is a recommendation of the labor people.
They are involved.
The President explores finally what they want.
He said it's been explored thoroughly.
We can't say that they've approved it or agreed to it.
That's the thing that was killed over there.
The public members could say that.
The public members, Mr. President, are all your appointees with the exception of John Dunlop, who's an outside person.
Again, what they would, uh, what's personal can be studied.
Okay.
The record says by tomorrow, I've got them this far now.
It's going to be now.
What are the elusive things?
What is the situation?
Again, the public members would recommend that the order be issued.
The order would provide, first of all, that each branch of the industry would establish a...
stabilization boards that would re-reform to function.
Number one, make sure that no dispute erupts into a strike before it is referred to this board for that board's attention and action.
It will have the effect of minimizing strikes.
Number two, these boards will apply criteria that would be established by the order itself to moderate wage increases in the industry.
It would create a tri-partite standing committee that would be a super board over all of these branch boards that would monitor and be a watchdog to see that those boards did their job and would be in effect a fuel board from any one of these boards that felt the need to be established and the criteria, the interpretations
If then somebody, some group, some union management group, should decide for them on their own to go beyond this, there would be some government clout to that.
And government clout would be about three different areas that we've thought of so far.
The other one is that any increases beyond our established criteria
not be used in setting day-to-sleeping rates.
Now, the interesting thing about this is that we're in setting the rate of weight, making weight determinations of day-to-sleeping.
And the reason I'm giving special significance to this is that it is a natural follower of our suspending day-to-sleeping.
We're in fact putting it back, but we're only putting it back if the supplements in
following our revocation of the suspension, are in keeping with established criteria, and if they aren't in keeping with established criteria, we won't use any rates beyond that level in setting, making wage determinations around the country.
in our application of the Davis-Bacon Act.
Act is kind of a complicated thing, as you know.
We go out and set wage determinations based on prevailing wages in the area.
You as a lawyer would understand the term that is thrown at me.
It says that any wages that are set beyond that that is approved by these boards would be considered resumptively non-prevailing.
And so, whereas under the Act you set wages in accordance with prevailing wages, wages set beyond that approved are presumptively not prevailing, so that it ties in with our suspension of the Act, so the logical extension of that.
Secondly, we would identify and publicize the locations of any settlements that exceeded that approved by the Board.
Third, we would
I encourage the various departments of the government not to enter into federal building construction in areas where there are not food wages.
If we ever wanted to, I'm prepared to recommend that we could use the injunction procedures that are listed under the
actual congressional authority that you have.
I don't think so.
And here's the reason why.
I think if there's a steel strike this year, it won't be for economic reasons.
There is a settlement now in Steelworks where it was looted and abandoned.
Well, it was no, actually, because there is a tremendous amount of penthouse hostility
for 10 years, they've developed the last six times that their leadership has negotiated an agreement for them.
They have really done a good job.
They have consulted with the local leadership, and there's just a lot of firmness in there that may cause a strike no matter what the circumstances.
There is a pattern, however, that has developed now in the can industries that I think is very likely to spread to aluminum, copper, and steel, and it averages about 8.8% over the period of the agreement.
It was 13% the first year, 6% the second, 6% the third.
I think that's probably going to be pretty much the pattern this year if I had to take a single cut.
That's what I have to say.
We set up boards across the county.
Right now, many of these have wars, but they're only internal kind of things.
And the electricians have one, the plasterers have one, the bricklayers have one.
It's done primarily on the basis of the union jurisdiction.
in a place where there's cross-employer jurisdictions such as the NCA deals with both the bricklayers and both the NCA and AGC deal with the bricklayers, they would have to have representatives of both of those two employer associations.
That's the way the boards are constructed.
It seems to me it would take probably pretty close to a month to set up the boards.
but we would require that the board should be set up and reported to us.
Any organization did not set up, any branch did not set up the board, the Sputnik industry would flow immediately to the Super Board.
Your judgment first is true.
Would it do some good?
And it would do some good, I think, to lower the average wage sentence, and you take this away from 15 to 20%, down to around 10 to 12.
To do that, and on the other side, the principal thing it would do, it would neutralize this group and their hostility to the administration.
I don't think it would bring them over to our side.
But it would improve that, and it would at least allow as much rapport as we've been able to maintain in the last two, three months.
It would enable us to continue the kind of relationship we've developed, Mr. Meany, on the kind of basis that you have in the past.
It's kind of going off and on again, but what about the recovery of building traits?
That's in regards to the reaction of various people that
building trades as far as it's concerned, would they do that?
No, that's the thing I said the last thing before I came over here.
I said the thing that I have to be able to tell the president is what the devil your response is going to be when this comes out.
Are you going to do, like I said, you would do if it came out this way, freeze, blast, and then quietly accept.
And their response was, we think that we have kept our people down and conducted ourselves with restraint.
So far, it was a mistaken thing, hoping that something like this could work out.
If indeed it does, you can expect us to continue to conduct ourselves with restraint.
So they won't say it's the best thing in the world, but they are kind of also glad to do this.
Another example of how the President of this country did the work, and single out Jackson.
There may be, we're getting singled out, but we accept this as being something that we feel we ought to participate in.
Is this what the leaders of the unions are doing?
They may not want anything, but this is what they're doing.
They're only doing this because they're so upset with this that they just make it and cut their engines.
It's a kind of threat to their existence.
They either do one or two things.
They worry a hell of a lot about this huge gut reaction that they have.
Or they try to negotiate their way out of it.
And this is the best you can come up with in negotiating their way out.
Managing the reaction.
The reaction is surprisingly similar regarding the need for an executive order for different reasons.
They don't think it can be effective.
What are they going to say?
All except the housing industry will say that they're pleased with the step.
The housing industry, I hope, will keep mowing, but they really like the industry.
We can't get ourselves on that.
But anyhow, 20 to 25% of the industry is humanized.
So this place, early this week, had the greatest impact.
It wasn't an impact so much on wings as it was the impact on big prices.
It's all that we would have.
Yeah.
So, what's your impression of the industry?
for us to keep Davis State.
And Davis State has been suspended for three or four years.
The union movement and the construction industry will be seriously shifted.
How many contractors, Mr. President, who are union contractors, and they have the same interests as the union?
The AGC passed one of the damn full resolutions I've ever seen on my San Diego meeting a week before last, where they
started out with kind of geared services that they were glad the president recognized the problems that the industry had, but then he said you have to go both barrels after that for going after Dave's speaking rather than going after Wayne's.
Speaking about the housing notice, and that's the biggest part of it, the home builders, we're talking about the home builders, they're going to be unhappy.
Well,
They would prefer to have data speaking continue, but they were there at the meeting today and my opinion was that they were, felt that inevitably you were going to have to get off data speaking.
And if you're going to get off data speaking, they want you to get off in such a way that you do something about wages.
So they'll reluctantly go along with all of the dear love for data speaking, repealed and never hear it again.
Well, the line was not what we do now, but it's lines that we've been stating before.
He couldn't ask us to agree to follow up.
Yeah, I bet he did.
That's what he told me, and he's told everybody the same thing.
Right, right.
My point is that, yeah.
This is consistent with what you told me.
I can't tell you that I'm going to get a lot of help in my house.
The main thing is, they've been there so far to make people think that everybody else forgets all their enemies.
We've got these people thinking over there that this is very hard, that we're doing this far.
That's why it is.
That's where you can consider it.
It doesn't bother me.
You have the idea that it's a democratic bill and so forth.
That sort of thing doesn't bother me.
So people battle around about that a lot.
I think that construction is such a special case
I think generally favorably.
I don't know what I think it would be because Ronnie is a member of our public group, and he was at the meeting this morning.
Well, what he is for, first of all, he's taking on the unions, bringing them down, giving them hell, and all the rest of it.
But if we can't do that, let's do this.
And he recognizes that he isn't going to get his butt.
I think that's about what it amounts to.
I think they will be glad to see you moving into...
The main problem I have with it is that I think it's likely to work to an extent.
I think that it certainly has to do some terms with the fact that police and police
It may help some of the, I think it will help a little bit with the hard end guys.
I mean, they're going to think about crisis at least.
What are they thinking about?
They're thinking about their unions.
The problem is, as far as their members are concerned, it really doesn't help so much because they're going to think about their weight to do with the debt on the unions.
But who knows?
It depends.
I don't know if that's true of climate change.
Climate change is something.
Yeah.
Yeah.
And it might affect the reason.
The main thing, George, is the operating that we've got here.
I'm just thinking about whether it goes to other areas, how much we go to other areas.
I have a feeling, myself, that you have had, in about this time, pressure surgery.
or a number of reasons are down there anyway.
Which, I mean, despite what happens in Cairn and Mullen and some of the other aspects, part of the great unorganized part is labor, trying to get down to its comfort because it's now a buyer's market rather than a seller's market.
It's going to continue that way for another six or eight months, probably.
But having said that, you know, I'll come to this.
You see us coming under enormous pressures.
This industry and that industry will set a wage price forward for this year.
I think that's what I'm interested in.
I think we'll have lots of pressure on that.
I think we'll have pressure from steel and longshore and others, the construction industry.
It is a special case, and I think you sort of have to play it both ways.
Also, that on the one hand, it has singled itself out by its behavior.
And so we need to point that out from doing this if it's done.
At the same time, you can't play that too much because they feel as though they've been pushed around and discriminated against and so on, so you're hoist by some kind of a baton there a little bit.
Well, I would guess what this amounts to is that that's where the monkey is as the thing works, that is.
It'll be whoever is the public member in one of these industry boards who will have to take a strong position.
Is there one?
On the industry boards, there are.
But on the big board, the appeals board, there's a public member.
All right.
Well, I agree with your observation that the pressures are to moderate these wage increases.
Certainly, our statistics show that's going on in the non-union sector.
And despite what Jim said, I think in the construction industry, they must be under severe pressure in these local areas to be a little more moderate.
And I do think the construction workers are very unpopular with the rest of organized labor.
It may be that they can rally all of organized labor to them, but I think there are a lot of people in organized labor who think that the president must be all right if the hardhats are a little unhappy about this.
You make a phrase from an unlikely quarter to do this letter to the government.
I have one of the things that in the report that I found especially interesting is the fact that Hutchison, the head of the property union, who is very militant against doing anything in Florida, your report was he was ready to blast and refused to cooperate and so on.
has now got a different attitude and is willing to go along with this.
Is that right?
I think it would be very difficult to make it work without the carcass of the biggest engine.
And he's willing, if we give an order, to be reluctant to go along.
That's right.
Are we just catching the biggest engine?
No.
I don't think I can make much of it.
We can't come up with that.
The part of the business that you're concerned with, I'm not going to be satisfied with it.
I'm not going to be satisfied with it.
I just don't want it.
The extent to which we need to make it work.
The extent to which by doing this we can mute some of the
Now, I don't want to do this if it means that we're going to have George Romney, John Bolton, red blondes.
I don't really know anything about it.
It might be in terms of the wall.
I don't know.
Can I say something, Eric?
John will be.
He certainly knows the instruction.
You know, he isn't in the group, but I, because he knows the instruction so well and has the position he has, I can talk to him and he thinks this should be done.
I know, but it seems that what I'm concerned about is something else.
Does he think this would be an advantage and we should get out and fly to the holy mountain?
I say that's what I report.
I haven't been there.
That means what you say.
Now, there were records the other morning that only went this far.
I forced them into discussions of other industries, but they resisted.
I thought they had to confront it.
They're going to bring it all up tomorrow, are they?
Well, the format tomorrow will be for Paul McCracken to review his paper.
It sets out a lot of alternatives that might be available to the administration.
And then, so there will be a discussion by the two of you.
Why do you think some of these things are good or bad?
to look squarely in the eye is that Jim's projection of what might happen, 10 to 12% average increase, which is probably a little on the optimistic side.
Yeah, well, maybe not.
But anyway, certainly, that's as much as you could hope for.
That is higher than, for example, the canned settlements, which is considered by most management to be outrageous.
Although I don't agree with Jim that the LLM copper and steel people are going to have to come up with that.
The management considers it outrageous.
Yeah, they consider it quite... Well, I think my own impression is that the management people have been backing away from that
And I think the reason they've been backing away is that they see 1971 as going to be a very good profit year.
And they also see that somehow or other, if you start into the wage control area, you're going to wind up with a lot of talk about profits.
And they look on it as their year, and they don't want that to happen.
So there's been a noticeable backing off, I think, if you remember the Fortune people.
When you asked him about that about a month ago, he noted that point.
Ask about this.
What happens down the road is, supposing the Civil Rights Council of Phoenix comes in at 14.5% or 15%.
And if you go forward, would you say that's not a long-term violation of criteria?
You publicize that.
You say, all right, the area, we're not going to do any government construction.
It's a violation of the state of the state.
And then you sit back.
They're sitting there with a contract.
But I guess what I'm asking is are our sanctions really any good?
Well, we've only got more if we want to do an injunction.
Yeah.
But you see, we're getting sucked in.
I've never heard a tough situation because then the Attorney General is saying, hey, don't send these over here.
You know, we're going to go out and attack these unions and proceed with injunctions and all that kind of stuff.
And that's to put a book here all over it.
I realize that now, but without that.
And I think that has to be my reaction.
I think the current world, and nobody ever breathes in order to protect you.
It even applies to a guy not allowed.
The only other thing that you might want to do is in the language of the executive order itself, and the reason I'm tentative about this is that we haven't thought this through completely.
state that in the event that these actions that are contemplated in the order are insufficient, the President can add to it.
Well, see, this is where my self-sabotage comes in.
Is there going to be over here on the board saying, yeah, I did it again, I did it again?
I have no answer for you.
Jim, could you rather do a
Say that anything in excess of the board is presumptively not prevailing.
Say that where settlements exceed the board's criteria, the Davis-Bacon Act's operation will be suspended from that area.
I can't get my solicitor to say that's legal.
I'm working on it.
And it takes a hell of a lot of years to test it.
I'm not worried too much about that.
His problem is that it would be, say, one trade in the Phoenix area, and you'd say the data's great, but can you say just one trade in one area?
No, but what you're saying is that they're violating the criteria.
It creates an emergency.
And we were talking about this before, we need to have a geographical limitation on the suspension of the state of that.
Can you penalize all of the extra ones?
Well, sure, if they create an emergency.
Well, that's the thing that probably doesn't make a lot of sense.
Well, I mean, there is a legal theory, you know, enough to probably... Well, I certainly don't know.
I'm certainly not rejecting that.
That's the point here, because I'm not sure...
It's like my usual business in bargaining.
You try to figure out which is the least undesirable deal.
Yeah.
Could I say just one way we might go?
After the fall, open the meeting for a private message.
And then turn it over to Jim for a presentation of this for their conference.
And sniff the wind above it.
It would give you a sense of how much pressure you're going to get from this crowd to move out of it.
It's one of the first things you can do with a hot tub, if I may say so.
And I think there's a chance of going beyond this to something else.
They're going to damn the hell out of this in front of the president tomorrow.
It's not far enough.
Yeah, sure.
Well, I'm not so sure about that.
I'm not so sure.
I'm recognizing the problem created by the Ehrlichman Group.
It seems to me that the real issues are out there in the country in terms of what
is going to happen to wages and what are going to be the reactions of the management around the country and unions around the country and that.
I suppose this group sort of represents the management view, but I don't know that they represent anything beyond that.
My thought is this.
This pattern, as the Secretary has presented, has a lot of sense to it.
But unless it is integral, we can withstand the pressure to go too far from a political standpoint.
The political defenses are not good and strong.
I think we have to acknowledge and understand what the risks are.
And that would be my one concern about it.
And they opened the door back for the, you know, for them to be able to stand up out there, you know, maybe on the balance.
It's all right anyway.
All right.
Just saying, this is a terrible thing that's happening in the construction industry.
We've got to do something and bring it down to the table and that's that.
What I mean is I don't think that, I'm not sure, John, to answer your question.
Their reaction, basically, is not too intelligent.
It's more emotional.
What I've seen is very, very emotional.
I don't think they will come on as strong in the next company, so to speak, as they did over the last month.
I don't know whether it's
He said he wouldn't want to air it unless you wanted to read it.
Because that group will, you know, we'll be out all night talking about it.
Oh yeah, well, I don't want to air it.
I'm just going to go to them.
I'm just going to be there and let them, if they have something to do with it too, that's not a good idea.
Although you should know that now.
I don't know.
It would be helpful to me because I could call a meeting for the group in the late morning tomorrow and then have a meeting with me before 10.
I think, John, the better practice there is to show the same old and new damage to the cabin crew.
And I think that the best thing to do is to decide it and let it be presented to them as if they were deciding it.
and let them all battle around it.
But I think if we're going to do it, the thing to do is to just take our risks.
That'd be my feeling.
I have a feeling that that's sort of ducking around.
So what I mean is if we were going to learn something more,
That would be different, but I think you must have learned by reading and learning.
I'm talking to your people over here.
I've talked to both of you.
I've talked to Stan about it.
He tells me he thinks it's a good idea.
I've talked to McCracken about it, and he thinks on balance it's a good idea, you know, moderately.
Paul has always got both sides, and I'm sure that's one thing he's good at.
I would think that Herb Stein would think it's a bad idea because of control.
Although, Herb wrote this paper that has control all through it.
I hate it.
I just hate it, but I think Jim has got this to a good posture.
I think it's really a better posture than it was in Florida.
And I think that it has been better to let the process unfold.
I could wish that we could persuade George Means at least to make some kind of a signal-type statement that would
I would, if not endorse this explicitly, not damn it, or to acknowledge the necessity of it.
I don't know whether that's possible or not.
I haven't seen George in some time.
I don't have a very good feel for his mood right now.
The latter thing I think is possible.
What I would suggest to George, I'd rather have you...
We decided to just go over and see him immediately.
Ask him.
Well, in that order, I really don't think he's got anything.
He was coming down to the vet hole yesterday afternoon.
I asked him if he'd caught him at breakfast.
And he said, nobody didn't give you a birth today.
We can go to his house and check on him.
In fact, I can see him one way or the other.
Well, the way I would do it is just say that the President has asked you to go over it at the end.
Do you want to do that?
If we did that, I'm just trying to think of the way to posture.
I don't like it at all either, George.
But I can see the... Well, let's look at it the other way.
Maybe we just brace and jerk the elbow.
and stuff hit the fan.
The trouble is, we've got quite a problem, haven't we, in the business community.
We have to remember when we refer to our cabinet group that they're very reflective of the business community.
That's what it is.
They're reflective of their friends.
When I say business community, not all of us, but all of us.
Would you agree or not?
I agree with that.
I do think that the business community will feel much better six months from now than they do now.
because it seems to me the profit picture is that they're right, and the stock market is right about that, that the profit picture is going to pick up.
The business community reflects that as much as they do anything.
So I don't see that this is going to have a big impact on the business community one way or the other.
They don't understand that they can save money.
sort of an obscure thing, and just how it would work isn't direct.
This is direct.
But I do think we'll have a lot of trouble with the 12% wage increase that we throw our hat in the air and say, isn't this great, look what we've accomplished.
And mind you, it is a real accomplishment to get that wage increase down that low in this industry.
Terrific accomplishment that can be done.
It's a big thing, but it's going to look odd alongside the other settlements.
Yeah.
I think we're going to put together as good a package as we can get together.
Well, you have to think about the 12% increases and so forth in this industry.
They're not as heavily publicized as are the increases in steel and aluminum and the rest.
I mean, they're all in local and they're around the country.
It's going to be today.
Well, it gets a lot of publicity, though, because people are so alert to it that they're able to publicize these things.
I think that the union leaders will have a very tough time making this work.
I think they'll... Well, that's what I'm talking about.
A lot of...
This whole interaction... We bow down to what's not working, what we do.
We can't... That's what we do.
We just don't...
Well, I should think that at a minimum, it should be put in terms of, here is this thing.
It goes into effect when they've got it in place, the Davis-Bacon.
It's possible where settlements exceed the criteria, the Davis-Bacon is withdrawn from that area.
And if we find at the end of some period of time
I don't know if it would be wise to specify it or not, that it just isn't working.
But I think we ought to have it clear that if it isn't working, we'll just have to go back to the other tactic.
We'll just quietly resign and go back to David's statement.
That's right, John, I'm sure.
I think the end result is not an injunction.
The thing that does appeal to me about this, and it's a stretch for me to say, I mean it appeals to me about it, but I just believe we're always better off working with people than working against them.
at least assuming they want to have anything to do with it.
Well, that's their, which we know, that's the jugular as far as they're concerned, and they're right about it.
If that stays out of business for a few years, as Jim said, it's going to revolutionize that industry.
I know it.
It's a more important question.
We quite appreciate it, particularly since we have this ruling
that your action preempts the state laws.
I think for a long while we worried about this meeting very much,
because we couldn't quite see how the state laws would be affected by it.
But we have this rule in that there is preemption, and that makes it really quite sleazy.
I think what we will do then, we'll go forward with it.
You get meetings quickly, you can't try to sell him.
I mean, as long as you can just say that I have, that that's my understanding, that that's exactly what he said we ought to do.
And that I, that I would just, it's very important that labor statesmen just got to step in here.
And that's the way it is.
He may say, well, make an absolute commitment about David Spade in person.
He doesn't feel we should ever lie in person.
Nevertheless, without David Spade, we never got this.
I agree.
I agree with you.
Didn't that really matter?
You tried to find what your argument says.
Okay, and what your argument says, they didn't really, wouldn't have taken that kind of deal where we told them.
Yeah, so I think we'll do that.
And then the thing to do is to, in terms of positioning of an argument, I think it's probably good therapy to have the cabinet, I think, have you present that to the cabinet people.
And they all feel that they participated naturally, which they did, and talked to all of them.
They've all had something to say about it.
How's this on you, John?
I was trying to indicate that their deliberations have been in part of you.
I had some notes that are me.
Yeah.
You certainly took their views.
Oh, yeah.
But I meant to ask them how you made your decision on it.
Oh, sure.
I think they wouldn't tell them when we arrived.
Oh, I see.
Oh, I see.
We decided at the end of the meeting.
Oh, we decided now.
They must always think, let them decide.
Certainly then at the end of the meeting, I'll say, well, this has been very helpful.
I think you can wheel this.
We'll go forward on it and make an announcement.
Say 12 in the morning or something like that.
All right.
Let's hold the meeting up until I get back to the Kevin meeting and have one more session with the industry.
Yeah.
Yeah.
Fine.
Fine.
All right.
Good.
I think it would be worthwhile and possible to be sure that it's seen that the time between last February or January, whenever it was, and now has been productive and that these actions have stirred around the
We've gotten to a place now that we feel that despite the fact that it isn't their recommendation, that basically they accept this and they didn't accept it before.
And another thing, when it's presented, of course it goes without saying, don't claim too much for it.
Say that this is only a mitigating factor, that it's not going to solve the problem, that it's at least progressing in the right direction and finally going to turn around this terrible escalation.
Thank you.
Your dad, that you talked to, I don't know if you all have, but the State Intelligence Advisory Board, I did.
The, uh, the department is urging us because the person's hearing, so all this business is about domestic surveillance.
And if we don't snap it up and do something out of it in the next day or so, by the 8th floor, something's the wrong way.
Go ahead.
Let's do it.
Sure.
I know what it is.
You've got it worked out with him, haven't you?
Yeah.
It's people wrong over it.
Good.
We take the order and so on.
Right.
All right.
We talked about it.
It's all worked out.
We have a pretty good meeting.