Kawasaki Motors Manufacturing Corp.

KAWASAKI MOTORS MFG. CORP. Kawasaki Motors Manufacturing Corporation, U.S.A. and International Union, United Auto- mobile, Aerospace & Agricultural Implement Workers of America (UAW). Case 17-CA- 11263 23 June 1986 DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS DENNIS AND JOHANSEN On 20 July 1984 Administrative Law Judge Lowell Goerlich issued the attached decision. The Respondent filed exceptions and a supporting brief, and the Charging Party filed exceptions and a sup- porting brief. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge's rulings, findings, I and conclusions only to the extent consistent with this Decision and Order. Contrary to the judge, we find that the Respond- ent did not, in violation of Section 8(a)(1) of the Act, threaten plant closure or relocation at employ- ee meetings wherein its president Saeki and plant manager Hanson spoke and a videotape was shown. On 18 and 19 October,2 as set forth more fully in the judge's decision, the Respondent held employee meetings throughout the workday. These meetings were conducted as part of the Respondent's pree- lection campaign, each following similar formats. 3 Hanson spoke from a written text (with some ex- temporization) about the Respondent's poor finan- cial condition, including the payroll decrease, lay- offs, a short workweek, overstocked inventory, and losses. He displayed charts to support his state- i The Respondent has excepted to some of the judge's credibility find- ings. The Board's established policy is not to overrule an administrative law judge's credibility resolutions unless the clear preponderance of all the relevant evidence convinces us that they are incorrect. Standard Dry Wall Products, 91 NLRB 544 (1950), enfd. 188 F 2d 362 (3d Cir 1951) We have carefully examined the record and find no basis for reversing the findings In its exceptions, the Respondent also contends that the judge was per- sonally biased and prejudiced against its position in this case, and thus could not render an objective decision based on the record herein Based on our careful examination of the entire record and the judge's decision in this case, we find no basis for concluding that the judge demonstrated a bias against the Respondent in his analysis or discussion of the evidence or in his credibility resolutions Accordingly, we reject these contentions as lacking in merit The Respondent has requested oral argument The request is denied as the record, exceptions, and briefs adequately present the issues and the positions of the parties 2 All dates are in 1982 unless otherwise specified 3 The election scheduled for 21 October was canceled pursuant to the Union's request 491 ments. Hanson told employees, inter alia, with sup- porting facts and figures on charts, that the Lin- coln plant had never had a profit since its opening in 1975; and that since 1979 the financial situation had been declining, with 1981 being the worst year for losses. He then introduced Saeki, who essential- ly spoke from a text written in Japanese, which he translated into "broken" English while speaking. Saeki began with: Last August Mr. Ando and I came here. We had some big problems that needed to be cor- rected, a $36,000,000 loss in seven years. At that time we had to make a decision either to change the plant to make it profitable or to close the plant. He, too, spoke of the Respondent's bad financial situation and stated that since the Lincoln plant had become independent in January, the Compa- ny's losses would no longer be subsidized by the parent company; therefore, continued losses would compel the Company's discontinuance. He contrasted the Lincoln plant's productivity with plants in developing countries, such as Thai- land, the Phillipines, and Iran, where he had worked and stated that the 1981's productivity for Lincoln was lower than the plants in other coun- tries. He added that since last year the employees' improvement efforts had resulted in Lincoln's pro- ductivity being the same or higher than the other countries. He further told the employees that the Lincoln plant had never shown profits. The goal for this year, he told them, was to break even or make a profit. He spoke about the poor American economy for 1982 and the corresponding difficul- ties in motorcycle sales which had damaged the Company and necessitated its reductions in person- nel and production. He ended with: "We have many problems in the plant and we must improve more and more. I do not like more new problems. Please understand our serious situation. I think at first we must survive. Survival is the most impor- tant thing." Hanson then stated: As Mr. Saeki said, this plant has to become profitable if it is to survive. The Japanese did not build this plant for the purposes of losing millions of dollars every year. The Japanese did not build this plant so that we could make motorcycles to put in boxes and store in ware- houses. What bothers me the most is that I have heard some of you complain about vari- ous little problems. I am not saying they aren't real problems, but the problems that I have heard about are nothing compared to the very 280 NLRB No. 53 492 DECISIONS OF NATIONAL LABOR RELATIONS BOARD real problem that is facing all of us. We decid- ed to give you these figures and information so that you would know where this plant really stands. Question-and-answer periods were held at the meetings wherein the record reveals, the Respond- ent never stated that it would close or move its Lincoln plant if the Union were voted in.4 A videotape showing strike violence, some not involving the instant Union, was shown at the meetings. The videotape portrayed to employees that the Union had a long and violent strike history and that one-third of its members were unem- ployed due to the Union's stands. The judge found that, under the standards of Gissel,5 "no reasonable employee who sat through the foregoing meetings or viewed the videotape could have been so dense as to have missed the Employer's message that, if the UAW won the up- coming election, the Respondent's plant would close and their jobs no doubt would be moved to Japan." The judge concluded that these were im- permissible representations as they were not based on objective evidence.6 We do not agree with this conclusion.7 Judged by Gissel standards, neither Hanson's nor Saeki's statements were unlawful. The statements of Hanson and Saeki were premised upon undis- puted, objective economic fact. Employees were presented with information and figures on the Re- spondent's losses, layoffs, payroll decreases, short- ened workweek, and overstocked inventory. These figures graphically depicted the Respondent's poor * The Respondent answered such questions with statements indicating that they were "trap" questions which could not legally be answered The record reveals that Hanson told employees, in response to questions, that the Respondent had until the end of the year to make a profit, break even, or close the plant. Hanson also suggested that a union contract with work restrictions would make it difficult to operate, and that the Respondent needed "ver- satility" in moving employees from one job to another 5 NLRB Y. Gissel Packing Co, 395 U S 575 (1969) In G,ssel, at 618, the Supreme Court stated, in pertinent part, that (Aln employer is free to communicate to his employees any of his general views about unionism or any of his specific views about a particular union, so long as the communications do not contain a "threat of reprisal or force or promise of benefit " He may even make a prediction as to the precise effect he believes unionization will have on his company In such a case, however, the prediction must be carefully phrased on the basis of objective fact to convey a management decision already arrived at to close the plant in case of unionization ' The judge declined to find a separate 8(a)(1) violation in the video- tape showings, but deemed it "an integral part of the meetings " T This case is distinguishable from prior cases involving the Respond- ent and the Union and cited by the judge In Kawasaki Motors, 257 NLRB 502 (1981), the statements found to constitute 8(a)(1) threats were direct and specific, not based on objective economic criteria as here In 268 NLRB 936 (1984), the Respondent was found only to have violated Sec. 8(axl) by reprimanding one employee for engaging in protected concerted activity which was not union activity We disavow the judge's comments regarding the appropriateness of is- suing a contempt citation against the Respondent financial situation. The Respondent's officials clear- ly created the impression that any decision to close the plant would be based on its profitability and competitive status in the world market. Their pre- dictions of possible closure were not based on rea- sons unrelated to economic necessities.8 Contrary to the judge, who found the combina- tion of the videotape and the speeches unlawful based on the effect and timing of both together, we find that neither the statements of the Respondent's officials nor the showing of the videotape at the employee meetings constituted a violation of Sec- tion 8(a)(1). Rather, the statements and the video- tape were expository in nature and constituted speech protected by Section 8(c) of the Act. The judge found that the Respondent also violat- ed Section 8(a)(1) by its 19 October letter to em- ployees because it was "obviously read by the em- ployees in conjunction with . . . [the] remarks .. . mouthed by the Respondent in the employee meet- ings of October 18 and 19 , 1982." He cited the fol- lowing part of the letter as evidence: If you attended one of the group meetings you heard and saw exactly how serious our problems have been . . . we firmly believe that the one thing we do not need now or at anytime, but especially now, is the UAW... . You know the facts. You know how serious the situation really is. You will decide the future. For the sake of every person in this plant and their families, we sincerely urge you to vote "No" on Thursday. We all want to be able to say that 1982 was the year that togeth- er we finally put this company on the road to success. We note that the judge did not find the letter to be violative in itself. Rather, he concluded that it was unlawful because of its incorporation of the unlawful statements made at the employee meet- ings. Having found no 8(a)(1) violations committed at the employee meetings, we likewise find no viola- tion in the letter of 19 October. The letter consti- tuted lawful persuasion under Section 8(c) of the Act. Finally, the judge found that at the 18 October (1 p.m.) employee meeting the Respondent violated Section 8(a)(1) by threatening to bargain from scratch if the Union was chosen by the employees. 9 E g , Continental Kitchen Corp, 246 NLRB 611 (1979), B F Goodrich Footwear Co, 201 NLRB 353 (1973); Birdsall Construction Co., 198 NLRB 163 (1972) We also find permissible Hanson's statements regarding the potential impact of union work restrictions See Tn-Cast, Inc., 274 NLRB 377 (1985) KAWASAKI MOTORS MFG. CORP. At the meeting Hanson stated that he thought em- ployee Showalter was right and employee Miller wrong in Showalter's description of contract nego- tiations as follows: I [Showalter] also asked him [Miller] if he un- derstood if the union did get into the company that we would sit down at a table, and it would be a clean table. [I said at one time we would work from scratch on the table negoti- ating.] We wouldn't have nothing. We wouldn't have our wages that we had at that time. We wouldn't have our insurance or any- thing. And that when they negotiate, the com- pany and the union would argue over what would be given, and if the company couldn't afford to give it, there was no other choice- not to be able to pay them." We do not find the above to be an unlawful threat by the Respondent. In Wagner Industrial Products Co.,9 the Board stated: As the Board and the courts have recog- nized in other cases, in the course of organiza- tion campaigns, statements are sometimes made of a kind that may or may not be coer- cive, depending on the context in which they are uttered. "Bargaining from scratch" is such a statement. In order to derive the true import of these remarks, it is necessary to view the context in which they are made. In the instant case, Hanson made no direct remark about bargaining from scratch. Rather, he merely agreed with employee Showalter's state- ment. Contrary to the judge, and unlike the state- ments in the case upon which the judge relied, I 0 Hanson's remark, viewed in context, cannot be deemed a threat by the Respondent of a loss of ex- isting benefits. Hanson's remark occurred in a con- text free of other unfair labor practices and as part of an employee discussion of the give and take of collective bargaining. Hanson did not purport to speak for the Respondent's bargaining posture in any future negotiations. In these circumstances, Hanson's affirmation of Showalter's statements conveyed a message "that the employees' risk of loss stemmed not from any regressive bargaining posture predetermined by the Employer but from the possibility that the Union, in order to secure other benefits, might trade away some existing benefits.11 We therefore conclude 9 170 NLRB 1413 (1968); we also Campbell Soup Co., 225 NLRB 222 at 229 (1976). 10 E.g, Plastromcs. Inc, 233 NLRB 155 (1977); Youngstown Sheet & Tube Co, 238 NLRB 1082 (1977). 11 Campbell Soup Co., supra at 229 Accord- Riley-Begird, Inc, 271 NLRB 155 (1984) 493 that the Respondent's indirect "bargaining from scratch" remark falls within the 8(c) privilege and did not constitute an 8(a)(1) violation. ORDER The complaint is dismissed. Stephen E. Wamser, Esq., and Anne E. Purcell, Esq., for the General Counsel. Charles E. Sykes, Esq., and Arthur T. Carter, Esq., of Houston, Texas, for the Respondent. Irving M. Friedman, Esq., of Chicago, Illinois, for the Charging Party. DECISION STATEMENT OF THE CASE LOWELL GOERLICH, Administrative Law Judge. The charge filed on October 18, 1982, by International Union, United Automobile, Aerospace & Agricultural Imple- ment Workers of America (UAW) (the Union or UAW) was served on Kawasaki Motors Manufacturing Corpo- ration, U.S.A. (the Respondent) on October 19, 1982. A compliant and notice of hearing was issued on December 30, 1982. On December 9, 1983, an order consolidating cases, consolidated complaint and notice of hearing was issued in Cases 17-CA-11107 and 17-CA- 11263. On February 10, 1984, by order, Case 17-CA- 11107 was severed from Case 17-CA-11263 and the allegations in the consolidated complaint were withdrawn insofar as they pertained to Case 17-CA-11107. On the same date an amended complaint and notice of hearing was issued in Case 17-CA-11263. In the amended complaint it was alleged that the Respondent had violated Section 8(a)(1) of the National Labor Relations Act (the Act). The Respondent filed a timely answer denying that it had engaged in the unfair labor practices alleged. The case came on for hearing on the amended com- plaint" in Case 17-CA-11263 on February 21, 22, and 23, 1984, at Lincoln, Nebraska. Each party was afforded a full opportunity to be heard, to call, examine, and cross- examine witnesses, to argue orally on the record, to submit proposed findings of fact and conclusions of law, and to file briefs. All briefs have been carefully consid- ered. On the entire record in this case and from my observa- tion of the witnesses and their demeanor , I make the fol- lowing FINDINGS OF FACT, CONCLUSIONS, AND REASONS THEREFOR I. THE BUSINESS OF THE RESPONDENT The Respondent, a state of Nebraska corporation, is engaged in the design, production, distribution, and non- retail sale of motorcycles and other diversified recre- ational products at various facilities including a facility 1 Certain amendments were allowed to the amended complaint at the hearing 494 DECISIONS OF NATIONAL LABOR RELATIONS BOARD located at 6600 Northwest 27th Street, Lincoln, Nebras- ka. The Respondent, in the course and conduct of its busi- ness operations within the State of Nebraska, annually purchases goods and services valued in excess of $50,000 directly from sources located outside the State of Ne- braska. The Respondent is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. II. THE LABOR ORGANIZATION INVOLVED The Union is now, and at all times material herein has been, a labor organization within the meaning of Section 2(5) of the Act. III. THE UNFAIR LABOR PRACTICES The Employee Meetings of October 18 and 19, 1982: The General Counsel alleges that at certain employee meet- ings convened on the Respondent' s premises on October 18 and 19, 1982, the Respondent violated Section 8(a)(1) of the Act by unlawfully threatening its employees with layoffs, plant closure, and loss of benefits and by means of a videotape shown at such meetings conveyed the im- pression that the employees' selection of the Union as their collective-bargaining agent would inevitably result in strikes and violence. A representation election had been set for October 21, 1982, in which the UAW was the only participating union. On October 18 and 19, 1982, the Respondent conduct- ed 11 employee meetings on its premises during working hours. According to Karen Sue Neal, the Respondent's personnel administrator, who attended each of the meet- ings, the meetings lasted "anywhere from 45 minutes to an hour." Around 20 to 30 employees attended each meeting. These meetings were in response to the UAW's campaign to persuade the Respondent's employees to choose the UAW as their collective-bargaining agent. All the meetings followed the same format which Stan- ley Hanson, plant manager, described: "It opened up with I gave a presentation. I introduced Mr. Saeki [Take- hiko Saeki, president]. He gave his presentation. I gave a short summary of the two. We had questions and answer period and showed the video. And that was it." Hanson followed a written text in his presentation but did not read it word for word. Saeki, in like manner, followed a written text; however, his text was in Japanese which he translated into English, speaking in "broken" English. There were deviations from the text. For instance, Hanson cautioned the employee listeners that there were to be no tape recordings nor note taking at the meeting. In fact after a meeting in which Neal saw an employee taking notes she asked for the notes explaining that "we didn't want the actual figures to be released." The em- ployee gave Neal the notes. Other employees also were questioned concerning the taking of notes. Neal, howev- er, took notes of the question-and-answer period, a tran- script of which was received in evidence. Hanson's remarks generally concerned the financial condition of the Respondent. To this end he mentioned the payroll decrease, layoffs, a short workweek, over- stocked inventory, and losses. Charts were shown to the employees in support of his representations. Among other things he stated that the Respondent has lost $36 million since it commenced operations and had lost $9 million in 1981.2 Saeki also commented on the Respond- ent's losses. He said, "Last August Mr. Ando and I came here. We had some big problems that needed to be cor- rected, a $36,000,000 loss in seven years. At that time we had to make a decision either to change the plant to make it profitable or to close the plant." He pointed out that the Respondent had big problems and had had to terminate more than 100 people. However, he said, since he had been at Kawasaki production had improved. He reviewed the difficulties which the Respondent was facing and ended his remarks thus: "I will continually look for new jobs. We have many problems in the plant and we must improve more and more. I do not like more new problems. Please understand our serious situations." (Emphasis added.) "I think at first one must survive. Sur- vival is the most important thing."3 The General Counsel offered evidence of what oc- curred at a number of the meetings. Evidence, which re- lates to the allegations contained in the amended com- plaint, for each meeting will be reviewed seriatim. Meeting of October 18, 1982, 8.•30 a.m.: Employee Jerry L. Pike, among other things, testified that Randy Fol- kerts asked if the UAW got in "would the Kawasaki close the plant down." Hanson answered "he didn't think the company could stay open with a restrictive UAW contract" or as Pike stated on cross-examination: "[H]e did not think the company would be able to make any money while under a restrictive UAW contract." Fol- kerts testified that Hanson said that "they couldn't work up to their job performance under the restrictions of the UAW contract." Neal, in her notes, recorded these questions: Q. Will the plant close if the union is voted in? A. No, I did not say that. Q. You stated that the plant could not operate with the restrictions that a union contract would have. What restrictions are you talking about? A. I did not say we could not. I said we feel it would be difficult, just read any union contract. [G.C. Exh. 5.] Meeting of October 18, 1982, 9.45 a.m: Employee Linda Jane Pester testified that Hanson had said that "surely with losses like that a company couldn't keep going. I had asked whether or not that meant that if a union got in that would mean that they would return the plant to Japan and he said, `you know that is illegal to say any- thing like that."' Pester also testified that Hanson said that "with the union that they couldn't ... operate with the union like they wanted to operate then because they 2 Hanson commenced each speech with an admonition that some things were being revealed which were known only to top management and he did not want the "information to leave the room." 8 The foregoing is taken from the written transcript of Sacks referred to above (English translation ) KAWASAKI MOTORS MFG. CORP. 495 wanted people wherever and whenever they needed them."4 Lucille Shockey remembered that Pester had asked Hanson whether the Company was going to close. Hanson answered that it was "illegal for him to answer that." Shockey also remembered that after Hanson re- viewed the charts he said that "they cannot handle any- more problems at the present time." Neal reported that Hanson, commenting on union re- strictions, said: "I did not say we could not, I said we feel it would be difficult, we need versatility. We need to be able to use people in jobs where they are needed. Most contracts restrict employees in job classifications." Neal recorded the question, "If the UAW gets in, will you move back to Japan: A. You know that's a trap question, and I cannot answer that. But, no I did not say that." (G.C. Exh. 5.) Meeting of October 18, 1982, 10.45 a.m: Albert Eldon Stege testified that Saeki said that he was "sent over by KHI to either make a profit, break even or shut down the plant by the end of the year." Stege quoted Hanson as saying the employees should vote against the union "because he felt it would hinder production, such as, he couldn't put a welder on an assembly line to build heat- ers, if we had a UAW contract." Stege asked Hanson: "Does all this mean if the union gets in you 're going to close the plant." Hanson answered that "he couldn't answer that, it was a trap question-for legal reasons he couldn't answer it." Stege also asked Hanson how long KHI had given the Respondent to "make a profit, break even or close the plant." Hanson answered, "Until the end of the year."5 Mary Lynn Alber remembered that Hanson answered a question about closing the plant with "it was a trap question" and refused to answer the question. Alber also remembered on cross-examination Stege's question as to how much time the Respondent had to show a "profit or loss." Hanson's answer was, "Until the end of the year." s 4 In a typewritten statement dated October 22, 1982, offered by the Respondent and received in evidence, Pester recorded I asked him [Hanson] if this meant if the UAW got in would the Company go back to Japan Stan said I can't answer that it's illegal to say He said that if the union got in it would restrict us and we couldn't operate He said you know we need to have people where we need them after I asked him what restriction In Pester's statement also appears I was a nervous wreck because I was one of the last ones out be- cause she [Neal] stopped me for my notes and I noticed that Rob Goodwin had on a Company T-shirt after the meeting and he hadn't had one on before. [R. Exh. 24(L).] On October 18, 1982, Stege gave a written statement by the Re- spondent and received in evidence in which he reported , "We were told that if the company didn't break even or show a profit by the end of the year the plant would close. I asked if the UAW got voted in would the plant close? He said that was a trapped question . He wouldn't give a yes or no answer " (R. Exh . 24(b).) Stege ended a typewritten statement dated October 22, 1982, offered by the Respondent and received in evi- dence, "I was behind Shirley Stiles going out of the meeting who had signed a card and she was just white A lot of people were scared I was even shook up " (R Exh 24(k).) In a written statement dated October 18, 1982, offered by the Re- spondent and received in evidence Alber reported, among other things, "Mr. Saeki said when Mr Ando and I came over here last August (1981) we came with the intentions of closing the plant or making a profit " (R Exh 24(a) ) Renee Joy Hall testified that Hanson said that "if Kawasaki did not show a profit by the end of 1982, that KHI would not be able to support us" and "he didn't feel that, if the union was able to negotiate a contract, that Kawasaki could work productively with it." She also remembered Hanson said that "[h]e felt that if a Union contract was negotiated, that we could not work productively, because we would have to put our assem- blers into the assembly lines and our welders on the welding lines and we wouldn't be able to have the man- power when we needed it where we needed it." Hall corroborated other witnesses' testimony concerning the referred-to "trap" question. Among other things, Neal reported the following questions and answers: Q. If the UAW gets in will you close the plant? A. You know that's a trap question and no, I did not say the plant would close. Q. Why would it be so hard to work with the UAW? A. We need versatility. Q. When will you know if we make a profit this year? A. In January. Q. Do you anticipate laying off the 60 employ- ees? A. No. We have no plans for reducing the work force. Q. How long did KHI give KMM to make a profit? A. I know that they have made the decision not to accept any more losses like this [pointing to the chart]. Q. Are you willing to work with employees to get working conditions, pay, benefits, etc... A. I cannot make any promises. You know that is a trap question. Meeting of October 18, 1982, 1 p.m: Paul Arlo Miller testified that he asked Hanson whether the plant would close if the UAW was voted in the plant. Hanson re- sponded that "it was a loaded question and I knew he couldn't answer it." Miller further testified: And there was a couple of questions about job secu- rity and the 100 people that had been terminated. And Charlene Showalter asked me how I felt we were going to have any job security if the plant moved back to Japan. And I told her, "Well, would you rather have them moved back to Japan under your paycheck or to have some severence pay that had been negotiat- ed." And she said, well, there was not any guaran- tee that you would have any severence pay because negotiations would start from zero. I said, "No that's not right, you start from where you're at and bargain up." And we kind of went back and forth on it for a little while and Stan jumped in and said, "Now we don't want to get into that, but you're right back there" pointing in Charlene's direction. 496 DECISIONS OF NATIONAL LABOR RELATIONS BOARD And I said, "Well I don't think so." And he said, "I think so." Christopher Forest McMeen remembered the forego- ing incident and corroborated Miller. McMeen further testified that Hanson, pointing to the charts, said that "we've got a lot of problems and the last thing we need is another problem" and that "he didn't think that a union contract would allow us the flexibility that we needed in order to compete with other companies." McMeen recalled that Miller had asked Hanson whether the plant would close if the Union got in. Hanson re- sponded, "You know that's a trap question and I can't answer that . . . I don't know what would happen." Charlene Showalter admitted that she had argued with Miller and that she had said if the Union won the elec- tion "we would sit down at a table, and it would be a clean table. . . . We wouldn't have nothing . . ." and "we would work from scratch on the table negotiating." Showalter testified that she turned to Hanson and asked if she were "right or if Paul was right." Hanson an- swered that she was "right and Paul was wrong."7 Neal's notes of the meeting revealed the following questions and answers: Q. What are you going to do Paul, wait 10 years for a job that won't be there anymore? S. We could lose everything. S. We can write our own contract starting with everything we now have. S. No, we would start from scratch. A. We are not here to discuss this. I believe she's right and you're wrong and that's it. Q. If the Union gets in will you close the plant? A. That's a trap question, and No, I did not say that. There were 35 employees at this meeting. Meeting of October 19, 1982, 7:30 am: According to Larry Ray Alley, he asked if employees would be placed in different departments if business slacked. Hanson an- swered that "we probably would be placed in different departments unless the union was in and we were under contract, and everybody would be, like, a welder would be a welder, an assembler would be an assembler, so therefore, we wouldn't probably be able to be placed and we might by terminated." When Hanson was asked about "the rumor that had been going around for quite some time about closing the plant," Alley testified that "Hanson got a little upset, he said, 'No, I never started no such rumor about shutting the doors of the plant' . . . or anything of that." Alley further testified that Hanson said, "The company was having lots of problems with making a profit and that's why we were having a meeting and they were showing us that's why Mr. Saeki was there and Mr. Ando ... . Because they had to make up their mind whether or not this company could make a profit and show something or whether to just let it go or whatever you call it." "[W]hen he [Hanson] was talking about the problems r Neal remembers this statement having been made by Hanson. that the company were [sic] having to make a profit by January, they had to make a profit, show a profit of some kind by January. And with these problems and the other problems that they had, that they just didn't think they could handle the UAW problem at that time." Among others, Neal recorded the following questions and answers which transpired at this meeting: Q. Will they take people from the welding shop and put them some place else like they did a couple [of] years ago? A. If we have the versatility, otherwise a welder will have to weld or he goes out the door. Q. Are you saying that if a union gets in then that's it? A. No and that's a trap question. We are saying that we have to make a profit. We do not need more problems. Q. With the union restrictions welders-weld and assemblers-assemble, would you fire the welders and hire assemblers? A. We have several ways to work with that. This plant cannot operate and make a profit without ver- satility.. . . Q. If we show a profit in January, what then? A. I feel we are lucky we have the Japanese over here. If we show an effort they will work with us and not dump us. Meeting of October 19, 1982, 8:45 a.m: Kathlene J. Lowe testified that Saeki said that "he had come to Lin- coln in August to decide whether to close the plant by the end of the year or make a profit. And he said that it was cheaper to produce motorcycles in Indonesia and Twaiwan [sic] . . . ." Hanson said that "a contract with the UAW would be damaging to the company because he couldn't utilize his employees, like, take welders and put them in assembly or vice verse. And that the UAW causes companies to overproduce and that 22 UAW plants have closed.8 Meeting of October 19, 1982, 11 am: At this meeting Hanson announced that the election had been canceled. Between 250 and 300 people attended this meeting-"ev- erybody in the plant." According to Glenn M. Woita, Hanson said that "the union backed out, that we weren't going to have an election. And he said that he was fight- ing for our rights . . . ." Hanson asked for a showing of hands as to how many present wanted an election. Meeting of October 19, 1982, 1 p. m: Norman Everette Decker testified that Hanson said that "if the union got in, he wouldn't be able to move people around the plant on jobs that they needed." Woita testified that Hanson said that he "needed the freedom in the building to move B At a meeting on October 19, 1982, at 2 15 p in , among other things, Neal reported this question and answer Q How come all of a sudden you tell us this now instead of a month ago? A. If you would have listened at the start, you would have known. These are things that most companies do not like to talk about It could be damaging to the company, the employees and have an effect on how people do business with us KAWASAKI MOTORS MFG. CORP. 497 us around where he needed us." Neal recorded this ques- tion and answer, among others: Q. What will happen to the people in Fuel Tank? A. The KLT-110 has a metal fuel tank. We will have to put you in other areas. That's why we need versatility. Hanson testified that he deviated from the written transcript of his speech to inform the employees that ..we feel like any contract with restrictions in it would make it more difficult to operate, and we needed the ver- satility." "Being able to move the people around from job to job, not having them tied right into one job classi- fication, to be able to utilize them through[out] the plant." In answer to the question as to whether the plant would close, Hanson further testified, "I said that is a trap question and no, I did not say that, except for one time I believe I said, no, the plant would not close. And I did not say that." Neal testified that the Respondent's management "anticipat(ed] that there would be some questions of that trap type of questions in which they would try to get you to say something other than what you were actually saying." One of the anticipated questions was whether the plant would close if the Union were selected as the bargaining agent. Neal said that it was not the manage- ment's decision to "specifically" tell the employees that the "plant would not close." Saeki testified that he informed the employees on Oc- tober 18, 1982, that the Respondent was "losing a lot of money," with the explanation "because there was going to be a union election in a few days." Among other things in his address to the employees Saeki said (written transcript) that when he came to Kawasaki there was some "big problems that needed corrected" and at that time "we have to make a decision either to change the plant to make it profitable or to close it," and that if there is a "big loss, like before, we will not be able to continue." There had never been a profit in the Lincoln plant. Hanson, in his remarks , said that the secret information which the Respondent was to impart to the employees was being related to them because "Saeki and I feel you need to know exactly where this company stands be- cause it's your future as well as that of the people in the plant that is at stake," also because some employees "seem to have very wrong ideas about this plant and what has been going on recently." After reviewing the state of the inventory Hanson said, "So as you can see, if the plant were shut down tomorrow, with only three ex- ceptions, it would be a minimum of 9 months before we would even use up the inventory or any of our produc- tion line except, with the exceptions of the Jet Ski and KLT's. On the average, it would be almost 2 years and 8 months before we would run out on the rest of our prod- ucts." After reviewing the Respondent's loss picture Hanson remarked, "You need to know exactly how serious the situation is because, these facts affect all of us tremen- dously." Hanson ended his remarks, "but the [employ- ees'] problems I have heard about are nothing compared to the very real problem that is facing all of us. We de- cided to give you these figures and information so that you would know where this plant really stands."9 III. CONCLUSIONS AND REASONS THEREFOR A. The Meetings and Videotape The General Counsel asserts that the Respondent "en- gaged in a campaign designed to threaten employees with the possibility of layoff and plant closure and the inevitability of strike if the UAW was voted in." In de- termining whether the General Counsel 's assertion is well taken the criteria adopted by the Supreme Court in NLRB v. Gissel Packing Co., 395 U.S. 575, 617 (1969), is the point of departure. In this case the Supreme Court teaches: ... we do note that an employer's free speech right to communicate his views to his employees is firmly established and cannot be infringed by a union or the Board. Thus § 8(c) (29 U.S.C. § 158(c)) merely implements the First Amendement by re- quiring that the expression of "any views, argument, or opinion," shall not be "evidence of an unfair labor practice," so long as such expression contains "no threat of reprisal or force or promise of bene- fit" in violation of § 8(a)(1). Section 8(a)(1), in turn, prohibits interference, restraint or coercion of em- ployees in the exercise of their right to self-organi- zation. Any assessment of the precise scope of employer expression, of course, must be made in the context of its labor relations setting. Thus, an employer's rights cannot outweigh the equal rights of the em- ployees to associate freely, as those rights are em- bodied in § 7 and protected by § 8(a)(1) and the proviso to § 8(c). And any balancing of those rights must take into account the ecomonic dependence of the employees on their employers, and the neces- sary tendency of the former, because of that rela- tionship, to pick up intended implications of the latter that might be more readily dismissed by a more disinterested ear. The Supreme Court further teaches (id. at 618-619): Thus, an employer is free to communicate to his employees any of his general views about unionism or any of his specific views about particular union, so long as the communications do not contain a "threat of reprisal or force or promise of benefit." He may even make a prediction as to the precise ef- fects he believes unionization will have on his com- pany. In such a case, however, the prediction must be carefully phrased on the basis of objective fact to convey an employer's belief as to demonstrably probable consequences beyond his control or to convey a management decision already arrived at to close the plant in case of unionization. See Textile 9 In giving these figures Hanson left out a very important fact, i e., the profit picture for the year 1982. 498 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Workers v. Darlington Mfg. Co., 380 U.S. 263, 274, n. 20 (1965). If there is any implication that an em- ployer may or may not take action solely on his own initiative for reasons unrelated to economic ne- cessities and know only to him, the statement is no longer a reasonable prediction based on available facts but a threat of retaliation based on misrepre- sentation and coercion, and as such without the pro- tection of the First Amendment . We therefore agree with the court below that "[c]onveyance of the em- ployer's belief, even though sincere, that unioniza- tion will or may result in the closing of the plant is not a statement of fact unless, which is most im- probable, the eventuality of closing is capable of proof." 379 F.2d 157, 160. As stated elsewhere, an employer is free only to tell "what he reasonably believes will be the likely economic consequences of unionization that are outside his control," and not "threats of economic reprisal to be taken solely on his own volition." NLRB v. River Togs, Inc., 382 F.2d 198, 202 (C.A. 2d Cir. 1967). The credited evidence in this case reveals that the Re- spondent, by President Saeki and Plant Manager Hanson, the highest authorities in the Company, told the employ- ees for the first time and just before an election" that the Respondent's financial condition was bleak, dismal, and precarious; that Saeki had been sent from Japan either to close the plant or to make it profitable; that al- though the plant has never shown a profit, the plant must show a profit or break even by the end of the year, less than 3 months away; that Kill had made a decision to accept no more losses; that, if the employees showed an effort, the Japanese would work with them and not "dump" them; 11 that with its financial problems, the Re- spondent could not handle the additional problems which the selection of the UAW as bargaining agent would cause at the present time and reach a profitable operation; that the Respondent could not handle another problem and survive; that a UAW contract with its re- strictions would not allow the Respondent the versatility it needed to continue the business; that the plant could not operate and make a profit without versatility; that lack of versatility would cause layoffs; that the Respond- ent's inventory was such that the plant could be closed (except for the manufacture of three products) for an av- erage of 2 years and 8 months before its inventory would be exhausted; that if the UAW were chosen as the bar- gaining agent the Respondent would commence bargain- ing on a clean table from scratch;12 and the very surviv- 10 It certainly was not a coincidence that the Respondent chose a time, 2 days before the election, to reveal its dire financial condition when such revelation would have been most intimidating to the employees. "Timing alone may suggest anti-union animus as a motivating factor in an employer's action." NLRB v. Rain-Ware, Inc, 732 F.2d 1349 (7th Cir 1984) 1 i The implications of these words are clear; i e , if the employees reject the Union the Japanese, who oppose the Union, would be placated and allow the plant to remain in the United States Moreover, it was pointed out that the people in Japan wanted more jobs iz Obviously with this approach to bargaining the Respondent was sig- naling that, if the UAW were chosen as bargaining agent , its bargaining stance would make a strike inevitable al of the plant's operation depended on the outcome of the election.13 Having mouthed these representations the Respondent brought its message of impending doom, if the UAW were selected the bargaining agent, into sharper focus by exhibiting a videotape depicting the UAW as a "strike happy" union.14 The findings above 1 b are similar to the findings in the Gissel case, supra, i.e.: ... that the company was in a precarious financial condition; that the "strike-happy" union would in all likelihood have to obtain its potentially unrea- sonable demands by striking, the probable result of which would be a plant shutdown, as the past histo- ry of labor relations in the area indicated ; and that the employees in such a case would have great diffi- culty finding employment elsewhere. As in the Gissel case, supra, the Respondent "has no support for its basic assumption that the Union, which had not even presented any demands, would have to strike to be heard." 16 The burden in this regard was on the Respondent. In the case of NLRB v. Harrison Steel Castings Co., 728 F.2d 831, 838 (7th Cir. 1984), the court opined: In determining whether an employer's statement is unduly coercive, the Board must evaluate the speaker's intent and the listener's understanding. NLRB v. Gissel Packing Co., 395 U.S. 575, 619 (1969).... Thus, an employer's statement cannot be viewed in isolation; it must be considered in con- junction with those factors which might affect rea- sonably the listener's perception. The same state- ment may be lawful in one context and unlawful in another. Is Saeki said, "I do not like more new problems [the advent of the Union). Please understand our serious situation. . I think at first we must survive Survival is the most important thing." (G.C. Exh 3 ) 14 In addition to motion pictures of strike violence, some of which did not involve the UAW but an Iowa Beef strike, the script with the picture included The UAW's history of long and violent strikes goes back many years. Strikers are not only frequently bitter , stirred by the outside of agitators but many times the strikers also result in permanent loss of jobs and permanently closed plants The UAW proudly boasts that it has often taken a stand but as a result of its stands , a third of its members are out of jobs. In the end it is up to you to decide if you really want to hitch your future to the UAW leadership. In the end its up to you to decide whether they will continue their pattern of striking and clos- ing plants in spite of reality 15 Credibility findings are drawn from the similarities between the wit- nesses' testimony, the notes of Neal , the transcripts of Saeki and Hanson, and the statements of employees Demeanor was also considered. 16 In the case of Starkville, Inc, 219 NLRB 595 (1975), the Board found that the following language used by a production manager "that if the Union went in, it would cause further losses from strikes and so on, disturbance in the work, that they-if they kept losing money, that would make them lose more money They would close the doors" was not a permissible predication of plant closure but actually a threat to close the plant in violation of Sec 8(axl) of the Act In that case as in the instant case there was "no evidence that selection of the Union would cause strikes and further economic losses resulting therefrom " It is further significant that a part of the Respondent's proof on this subject was a strike in which the UAW was not involved. KAWASAKI MOTORS MFG. CORP. Applying such criteria'' it is clear that no reasonable employee who sat through the foregoing meetings or viewed the videotape could have been so dense as to have missed the Employer's message that, if the UAW won the upcoming election, the Respondent's plant would close and their jobs no doubt would be moved to Japan. The representations of the Respondent were not permissible predictions based on objective evidence. The Respondent did not limit its representations to what it reasonably believed would be "the likely consequence outside [its] control."'s Cf. NLRB v. Harrison Steel Cast- ings Co., supra. Thus, it is clear that the Respondent by its threat to close its plant if the Union were selected as its employees bargaining representative was in violation of Section 8(a)(1) of the Act.19 Cf. Nebraska Bulk Trans- port v. NLRB, 608 F.2d 311 (8th Cir. 1979); Louis Gallet, Inc., 247 NLRB 63 (1980). It seems obvious that the Respondent by its captive audience and videotape attempted to use words and pic- tures in such a manner as to escape a charge of intimida- tion yet benefit from the coercive effect on its employ- ees. This strategy was the kind of "brinkmanship" con- demned by the Supreme Court in the Gissel case, supra. B. The Respondent's Letter of October 19, 1982 The General Counsel alleges in the amended com- plaint that the Respondent threatened its employees with layoffs and plant closure by the Respondent's letter of October 19, 1982, signed by Stan Hanson and T. Saeki. Among other things the letter noted: If you attend one of the group meetings you heard and saw exactly how serious our problems have been. . . . we firmly believe that the one thing we do not need now or at anytime, but espe- cially now, is the UAW... . You know the facts. You know how serious the situation really is. You will decide the future. For the sake of every person in this plant and their fami- lies, we sincerely urge you to vote "No" on Thurs- day. We all want to be able to say that 1982 was the year that together we finally put this company on the road to success. [G.C. Exh. 7.] 17 In the case of Florida Steel Corp. v. NLRB, 648 F.2d 233 (5th Cir. 1981), the court said : "The question is not only what the employer in- tended to imply but also what the employees could reasonably have in- ferred." is The Respondent's purpose in planting the idea that the plant would close, if the UAW were selected as bargaining agent, is further manifest- ed in its intentional avoidance of a direct answer to the question, "Will the plant close if the UAW prevails?" Having aroused the employees' fears that the plant would close, the Respondent deliberately refused to specifically answer the question. Moreover, since it was lawful for the Respondent to advise employees that the plant would not close, to tell employees that it would be illegal to answer the question strongly implies that its answer would have been illegal , i e , that the plant would close Thus the employees may well have understood that, if answered, the answer would have been plant closure . Additionally, Hanson's duplicity showed when, as he claimed he answered the question, "I did not say that " 19 The General Counsel has asked for a separate finding that the show- ing of the videotape was a violation of Sec 8(a)(1) of the Act. However, I deem the videotape to have been an integral part of the meetings 499 The letter was an extension of the remarks mouthed by the Respondent in the employee meetings of October 18 and 19, 1982, and was obviously read by the employ- ees in conjunction with such remarks. Thus considered, it falls within the condemnation of Section 7 of the Act as did the messages conveyed through the employee meetings. Hence, by distributing the October 19, 1982 letter to its employees the Respondent violated Section 8(a)(1) of the Act. C. Start From Scratch Bargaining Hanson declared at the October 18, 1982, 1 p.m. meet- ing that employee Showalter was right and employee Miller was wrong, thus affirming the following testimo- ny of Showalter which is credited: I also asked him [Miller] if he understood if the union did get into the company that we would sit down at a table, and it would be a clean table. [I said at one time we would work from scratch on the table negotiating.] We wouldn't have nothing. We wouldn't have our wages that we had at that time. We wouldn't have our insurance or anything. And that when they negotiate, the company and the union would argue over what would be given, and if the company couldn't afford to give it, there was no other choice-not to be able to pay them. It was said in Belcher Towing Co. v. NLRB, 726 F.2d 705, 711 (11th Cir. 1984): The statement that the company would bargain "from ground zero" is a far cry from being careful- ly phrased . "Bargaining from ground zero," like "bargaining from scratch," "is a dangerous phrase which carries with it the seed of a threat that the employer will become punitively intransigent in the event the union wins the election." TRW-United Greenfield Division v. NLRB, 637 F.2d 410, 420 (5th Cir. 1981). In the context of its other representations it is evident that the Respondent "work from scratch " statement was not subject to a reasonable interpretation that any reduc- tion of employee benefits would occur only as a result of normal give-and-take negotiations. Cf. Taylor-Dunn Mfg. Co., 252 NLRB 799 (1980). Under the circumstances the Respondent's representations could have been reasonably understood by the employees only as a threat of loss of existing benefits which left employees with the impres- sion that what they would ultimately receive would depend upon what the Union could induce the employer to restore. By Hanson's representation to employees that, if the Union won the election, the Respondent would start bar- gaining from a clean table from scratch , the Respondent interfered with, restrained, and coerced employees in the exercise of their Section 7 rights and thereby violated Section 8(axl) of the Act. See Plastronics, 233 NLRB 155 (1977); Youngstown Sheet Co., 238 NLRB 1082, 1085 (1978). 500 DECISIONS OF NATIONAL LABOR RELATIONS BOARD D. The Respondent's October 11, 1982 Leaflet The General Counsel claims that the Respondent's dis- tribution to employees of its leaflet dated October 11, 1982, was in violation of Section 1 of the Act. The leaf- let, which was mailed to the employees' homes, was the first election propaganda publication distributed during the election campaign. The leaflet was in response to several publications. The cartoon appearing on the Octo- ber 11 leaflet was borrowed from a union leaflet; howev- er, the words used in the union leaflet were not the same. In the leaflet the Respondent pointed out that on Oc- tober 4, 1982, its production schedule was substantially reduced "which resulted in 20 percent idle man hours. Kawasaki's solution to this problem was to reduce [its] workweek." (G.C. Exh. 6.) In the leaflet UAW volun- teer representative Bruce Berg is quoted as saying, "if the employees had a UAW labor contract with the com- pany . . . there would be specified layoff and recall pro- cedures." The Respondent observes that "Operating with a UAW contract with specified layoff and recall proce- dures on October 4th Kawasaki would have been forced to reduce its workforce by 60 employees." Names of the listed 60 employees were employees , the Respondent de- clared, who would have been laid off if plantwide senior- ity had been applied. The Respondent further wrote, "It seemed preferable to share the difficult time among us all rather than having only a few [60] employees suffer the pain of enduring these hard times." The Respondent fur- ther notes that, had seniority been applied in the layoffs, some of the senior employees, because they would have been reduced to lower grade positions, would have been earning less than they were earning with a reduced week. There was no evidence offered that Berg was mis- quoted. The General Counsel claims that the distribution of this leaflet to employees constituted a violation of Sec- tion 8(axl) of the Act. Although the Respondent no doubt may have persuaded 60 employees to vote against the Union, the leaflet was lawful persuasion . It was a truthful representation of what the effects of the applica- tion of plantwide seniority would have been. In the leaf- let the Respondent neither offered a benefit nor threat- ened a reprisal . It simply stated facts in a permissible manner drawn from a statement of a union representa- tive. By the leaflet the Respondent did not interfere with employees' Section 7 rights. CONCLUSIONS OF LAW 1. The Respondent is an employer engaged in com- merce within the meaning of Section 2(6) and (7) of the Act and it will effectuate the policies of the Act for ju- risdiction to be exercised herein. 2. The Union is a labor organization within the mean- ing of Section 2(5) of the Act. 3. By interfering with,' restraining, and coercing em- ployees in the exercise of the rights guaranteed them by Section 7 of the Act, Respondent engaged in unfair labor practices within the meaning of Section 8(a)(l) of the Act. 4. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Sec- tion 2(6) and (7) of the Act. THE REMEDY It having been found that the Respondent has engaged in certain unfair labor practices, it is recommended that it be ordered to cease and desist therefrom and to take certain affirmative action designed to effectuate the poli- cies of the Act.zo [Recommended Order omitted from publication.] 20 The Charging Party seeks a drastic remedy. Although the Respond- ent is a past violator of the Act (see 257 NLRB 502 (1981), and 268 NLRB 936 (1984)), and it appears that the Respondent has not subscribed to the policies and purposes of the Act, a citation in contempt, rather than the drastic remedy sought by the Charging Party, may be the appro- priate deterrent at this time. This matter is for the Board.