Arrow Automotive Industries, Inc.

ARROW AUTOMOTIVE INDUSTRIES 487 Arrow Automotive Industries, Inc. and Local 1596, International Union, United Automobile, Aero- space & Agricultural Implement Workers of America, UAW. Case 1-CA-18577 25 June 1987 DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS JOHANSEN AND BABSON On 16 August 1982 Administrative Law Judge Joel A. Harmatz issued the attached decision. The Charging Party and the General Counsel filed ex- ceptions and supporting briefs and the Respondent filed cross-exceptions. The Charging Party and the General Counsel filed answering briefs. 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, and conclusions only to the extent consistent with this Decision and Order. The question to be decided here is whether the Respondent violated Section 8(a)(5) and (1) by fail- ing to bargain with the Union before deciding to close its strike-besieged Hudson, Massachusetts plant and to transfer the work permanently to its Spartanburg, South Carolina plant. We agree with the judge that the Respondent had a mandatory duty to bargain about its decision to close the Hudson plant and to relocate the work to one of its other plants. We disagree, however, with his con- clusion that the complaint should be dismissed be- cause the Respondent met its bargaining obligation. The Respondent is a multiplant enterprise en- gaged in the remanufacture, sale, and distribution of automotive parts. Each of the Respondent's plants primarily produces for customers in the geo- graphic area where it is located. The Union repre- sented employees at the Respondent's Hudson, Massachusetts plant, whose market was the North- east. In 1980, the Respondent's other operating re- gional plants were in Spartanburg, South Carolina; Morri1ton, Arkansas; and Vernon, California. On 22 October 1980 the parties conunenced bar- gaining for a new collective-bargaining agreement to succeed the one due to expire on 30 November 1980 The Union pressed proposals for: an annual 65-cent across-the-board wage increase; a substan- tial increase in truckdrivers' overall compensation; retention of Blue Cross-Blue Shield health insur- ance with the Respondent assuming all premium costs; an extension of health insurance coverage to retirees and employees entitled to workers' corn- pensation; several additional holidays and vacation days; an increase in monthly pension payments from $2.45 to $5 over the 3 years of the contract; and increasing both the term of disability benefit coverage from 13 to 26 weeks and the amount of the monthly benefit by $10 per year. The Respond- ent itself counteroffered: a yearly 45-cent across- the-board increase; some improvements in truck- driver compensation and vacation benefits; and an increase in monthly pension payments from $2.45 to $3.45 over the contract's term. The contract negotiations focused on the issue of health insurance, including the Respondent's pro- posal to shift from a Blue Cross-Blue Shield plan to a plan underwritten by Prudential. After nine bar- gaining sessions with little movement, the Hudson plant employees struck on 1 December 1980. The Hudson plant ceased operating and the Respond- ent's Spartanburg plant serviced the struck plant's customers. After two fruitless bargaining sessions during the strike, the employees met on 2 March 1981 1 and voted to reject the Respondent's latest contract proposals. Also in early March, Respondent Execu- tive Vice President Ledbetter asked the Respond- ent's attorney, Watson, how long the negotiations with the Union could "keep going as it is." Ledbet- ter stated that he wanted something done and that closing the Hudson plant was a consideration. When Watson later informed Ledbetter that the Respondent's offer had been rejected, Ledbetter in- dicated that he was serious about wanting to close the plant. During this same period, Ledbetter asked Vice President Koontz to look into the question of closing the Hudson plant. (Koontz had earlier made an informal study in 1978 concerning the closing of the plant which had never been dis- cussed by the board of directors.) On 9 March the Respondent sent the Union the following telegram: THIS IS TO NOTIFY YOU THAT THE EMPLOYER, ARROW AUTOMOTIVE INDUSTRIES, INC., HEREBY WITHDRAWS ALL OF ITS CONTRACT PROPOSALS PREVIOUSLY MADE. AT THIS TIME, THE EMPLOYER NOW HAS UNDER CONSIDER- ATION A DECISION WHETHER OR NOT TO CON- TINUE OPERATIONS AT ITS HUDSON, MA FACILI- TY. BEFORE A DECISION IS MADE IN THIS REGARD, THE EMPLOYER SOLICITS YOUR INPUT AND SUGGESTIONS. FOR THIS PURPOSE WE RE- QUEST A MEETING AT YOUR EARLIEST CON- VENIENCE ON OR BEFORE TUESDAY, MARCH 24, 1981. 1 All dates hereafter refer to 1981. 284 NLRB No. 57 488 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD The Respondent and the Union met on 23 March. At the meeting, Union Representative Cec- caroni suggested that the Respondent not close the plant and asked Watson why the plant was to be closed. Watson attributed the proposed closing to economic reasons, noting that the plant had lost $1,092,000 in calendar year 1980. The parties then broke into caucuses, during which the Union pre- pared a new 3-year contract proposal. When the meeting resumed, the Union orally submitted its new proposal. This proposal placed the Union in effective accord with the Respondent's withdrawn proposals for: general wage increases (the Union reduced its demand by 20 cents); truckdriver com- pensation (the Union accepted the Respondent's terms); vacations and holidays (the Union aban- doned its demands for additional days); health in- surance carrier (the Union agreed to a Prudential plan); health insurance coverage (the Union aban- doned demands for retiree and worker compensa- tion coverage); and initial health insurance premi- um copayment rates. Measured again by reference to the proposal withdrawn by the Respondent on 9 March, the Union continues to differ in its propos- als for (1) pension benefit increases; (2) accident and sickness benefit increases; (3) the elimination of any deductible from a health insurance plan; and (4) the Respondent's assumption of a pro rata share of any health insurance premium increases. The Union did not indicate that its new proposals were a-final offer. After Ceccaroni made his presentation, Watson twice asked him if that was all he had to present in answer to the Respondent's 9 March telegram. Both times Ceccaroni stated yes. Watson did not comment about the adequacy of the Union's ' pro- posals, nor did he indicate at any time during this meeting what cost concessions might be needed to avoid closing the Hudson plant. Watson ended the meeting by stating that the Respondent would get back to the Union in a couple of days with the de- cision. On 25 March the Respondent's board of direc- tors decided to close the Hudson plant and to relo- cate the work permanently at its Spartanburg plant. The parties stipulated that the board made its deci- sion strictly for the economic reasons of declining sales and escalating production costs. Production costs referred mainly to labor costs, especially the cost of health insurance, which was more expen- sive at the Hudson plant than at the Spartanburg plant. The minutes of the directors' meeting, in- cluded in the record by stipulation, reaffirm these decisional factors. They also refer to a discussion of "the impact of shut-down costs at Hudson and start-up costs at the new plant in Santa Maria," stating that "since the cost impact of shutting down Hudson is a net saving, the California situation is not relevant to the decision regarding Hudson." In addition, the minutes state that after the directors formally voted to close the Hudson plant, they dis- cussed the possibility of using this plant's equip- ment at other plants and "deemed appropriate" the transfer of equipment "where useful and economi- cally advisable," but "no final decision was made." The Respondent notified the Union by telegram dated 25 March of its decision to close the plant and requested a meeting to bargain over the effects of the closing. The following day, the Union de- manded that the Respondent bargain with it over whether the Hudson plant was to be closed and stated that it had certain information requests and proposals to present on the subject. During the first half of 1980, the Respondent had decided to replace its facility in Vernon, California, with a plant in Santa Maria, California, the plant referred to in the minutes of the directors' meeting. The Respondent had purchased the necessary land and construction had started on the new plant, with completion scheduled for late 1981. Subse- quent to closing the Hudson plant, the Respondent decided to transfer 85 percent of the equipment from that plant to the Santa Maria facility. The judge found that the Respondent had a duty to notify and bargain with the Union over its deci- sion to close and relocate the Hudson plant oper- ations. He distinguished this duty, however, from the usual duty applicable to other mandatory sub- jects of bargaining. He found that the Respondent did not have a duty to bargain to impasse over the decision, only the lesser duty to notify the Union and to afford it the opportunity to be heard about the closing of the Hudson plant. He also noted that impasse had been reached earlier in the bargaining for a new contract and concluded that the 'Union had failed to convince the Respondent on 23 March that it was seriously interested in bargaining about the decision to close the plant. Accordingly, the judge recommended dismissing the complaint in its entirety. The first issue to be considered is whether the Respondent had a mandatory duty to bargain about its decision to close and relocate the Hudson plant operations. In Otis Elevator Co., 2 the Board held that bargaining about a management decision will be mandatory only when that decision turns on direct modification of labor costs and not on a change in the basic direction or nature of the enter- prise.3 2 269 NLRB 891 (1984). 3 Id. at 893. ARROW AUTOMOTIVE INDUSTRIES 489 Here, the circumstances surrounding the Re- spondent's decision to close the Hudson plant and permanently transfer the work to the Spartanburg plant were as follows: (1) The Hudson plant had been losing money since 1977, had lost over $1 mil- lion the previous year, and was losing more money in 1981 because of the strike. (2) Although the northeast market was declining, the major reason for the Hudson plant's losses was escalating labor costs. (3) According to the Respondent's calcula- tions, the Union's wage proposals alone would have increased those costs by hundreds of thou- sands of dollars a year. (4) The northeast market was being serviced more efficiently and with lower labor costs at the Spartanburg plant. (5) The Re- spondent raised the issue of closing and transfer in direct response to the Union's rejection of its con- tract proposal on March 2. Under these circum- stances, we find that the Respondent's decision to close the Hudson plant and to transfer work per- manently to the Spartanburg facility was a direct consequence of its frustration with the lack of progress in resolving economic issues, particularly health insurance costs, in contract negotiations with the Union. The Respondent has failed to substantiate its claim that other factors determined its decision to close the Hudson plant or made that decision a major change in the scope or direction of the Re- spondent's business. In particular, we reject the contention of a linkage between the Hudson shut- down and the opening of the Santa Maria plant. The record does not support this assertion. The Respondent had made a commitment to open the Santa Maria facility long before it had decided to close the Hudson plant, and there is no evidence to indicate that the continuation of the Santa Maria project was in any way contingent on a decision to close the Hudson plant. The Santa Maria plant merely replaced the Respondent's Vernon, Califor- nia facility. In fact, the minutes of the 25 March board of directors' meeting reflect a concern only that the Hudson plant closing not have an adverse effect on the startup costs of the new plant. Fur- ther, although most of the Hudson plant equipment was subsequently transferred to the Santa Maria plant, the decision to do so was not made until some time after 25 March. Finally, the Hudson plant closing did represent a consolidation of the Respondent's operations from four to three plants, but there was no departure from its existing system of regional production and sale of the same prod- uct line. We conclude that the decision to close the Hudson facility and to relocate the work to the Spartanburg plant turned upon labor costs and did not involve the scope, direction, or nature of the Respondent's business. Accordingly, we find that the Respondent's decision was a mandatory subject of bargaining.4 Having found that the Respondent had a manda- tory duty to bargain, we next need to determine what that duty entailed. Contrary to the judge, we do not draw a distinction between the bargaining obligation in dispute and the general obligation to bargain to impasse prior to making unilateral changes. It is well established that absent extenuating cir- cumstances, an employer must bargain to impasse prior to implementing a unilateral change in man- datory subjects of bargaining. 5 In applying this rule, the Board has not differentiated among the various mandatory subjects of bargaining. It would be anomalous indeed if we were to permit an em- ployer, by raising the issue of plant closing in re- sponse to the Union's demands on mandatory eco- nomic bargaining subjects, to relieve itself of a pre- vious duty to bargain to impasse. The cases relied on by the judge to support his conclusion that an employer is not obligated to bargain to impasse in plant closing or relocation situations are inappo- site. 6 They are concerned with the issues of ade- quate notice by an employer or adequate action by a union within the context of the general bargain- ing obligation defined above. Under the rule stated above, the Respondent was required to bargain to impasse over its decision to close the Hudson plant and to transfer the work to the Spartanburg plant unless exceptional extenuat- ing circumstances existed. There is no evidence of such circumstances. Consequently, we find that the Respondent had a duty to bargain to impasse before making its decision. Having found that the Respondent was required to bargain to impasse, we now consider the last issue—whether impasse had been reached prior to the Respondent's decision on 25 March to close the plant and relocate the work. Whether there is gen- uine impasse in a particular situation turns on the entire collection of facts in each case. The Board in Taft Broadcasting Co., 163 NLRB 475, 478 (1967), stated: Whether a bargaining impasse exists is a matter of judgment. The bargaining history, the good 4 Members Johansen and Babson agree with this conclusion because it is consistent with the Supreme Court's opinion in First National Mainte- nance Corp. v, NLRB, 452 U.S. 666 (1981), and because it is consistent with any of the views expressed in the Board's decision in Otis Elevator. 5 NLRB v. Katz, 369 U.S. 736 (1962). 6 W G. Best Homes Corp., 253 NLRB 912 (1980); Love's Barbeque Res- taurant No. 62, 245 NLRB 78 (1979), and Lange Co., 222 NLRB 558 (1976). 490 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD faith of the parties in negotiations, the length of negotiations, the importance of the issue or issues as to which there is a disagreement, the contemporaneous understanding of the parties as to the state of negotiations are all relevant factors to be considered in deciding whether an impasse in bargaining existed. Applying the foregoing standard to the instant case, we find that the parties had not yet reached impasse. Although bargaining was apparently an impasse prior to 9 March, the Respondent's inter- jection of the possibility of closing of the Hudson plant produced substantial bargaining concessions by the Union. The Respondent demonstrated a lack of complete candor in subsequent discussion. Only one negotiating session was held concerning the possibility of closing the Hudson plant. This possi- bility, with the resultant job loss, was of paramount importance to employees and warranted a sufficient opportunity to discuss the various options available and the economic considerations involved. No such discussion occurred. In response to the Respond- ent's statement that it was considering closing the Hudson plant, the Union on 23 March substantially modified its proposal to the Respondent on wages, benefits, and health insurance. The Union gave no indication that its revised proposals were final. The Respondent failed to make any proposals, to com- ment about the Union's concessions, or to inform the Union that there would not be another oppor- tunity to negotiate. In sum, just as the Union had made substantial concessions in an attempt to meet the Respondent's concerns about labor costs and to break the bargaining deadlock which had provoked the Respondent to consider closing the Hudson plant, the Respondent peremptorily foreclosed fur- ther negotiations prior to impasse. For all the reasons stated above, we fmd that bargaining had not reached impasse when the Re- spondent decided to close the Hudson plant and to relocate the work permanently to the Respondent's Spartanburg plant. Accordingly, we find that the Respondent violated Section 8(a)(5) and (1) by making that decision. THE REMEDY Having found that the Respondent has engaged in certain unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act, we shall order that it cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. In support of exceptions, the General Counsel and Charging Party argue that the appropriate remedy would be an order directing the Respond- ent to reopen the Hudson plant. We find on these particulars that to do so would be unduly burden- some and is unnecessary to effectuate the policies of the Act. 7 We fmd that these policies will be suf- ficiently fulfilled by utilization of a make-whole remedy for this economically motivated, unlawful unilateral decision to close.9 Pursuant to this remedy, we shall order the Respondent to recog- nize and bargain with the Union, on request, about its decision to close the Hudson plant and to trans- fer work permanently to its Spartanburg plant. In order to recreate as nearly as possible the situation at the time the Respondent should have bargained, and to make unit employees at the Hudson plant whole for losses suffered as a result of the unlawful failure to bargain, we shall order the Respondent to pay employees their normal wages from 25 March 1981,9 the date of the Hudson plant's clos- ing, until the earliest of the following conditions are met: (1) the parties reach mutual agreement about the plant closing and work-transfer decision; (2) good-faith bargaining results in a bona fide im- passe; (3) the Union fails to request bargaining within 10 days of this Decision and Order; or (4) the Union subsequently fails to bargain in good faith. 1° Of course, if the Respondent decides to reopen the Hudson plant and offers to reinstate the above employees to their same or substantially equivalent positions, its liability will cease as of that date. Backpay shall be based on the earnings which these employees normally would have re- ceived during the applicable period less any net in- terim earnings, and shall be computed in the manner set forth in F. W. Woolworth Co., 90 NLRB 289 (1950), with interest to be computed in the manner prescribed in New Horizons for the Retard- ed, 283 NLRB 1173 (1987). ORDER Pursuant to Section 10(c) of the National Labor Relations Act, the National Labor Relations Board orders that the Respondent, Arrow Automotive In- dustries, Inc., Farmingham, Massachusetts, its offi- cers, agents, successors, and assigns, shall 1. Cease and desist from 7 See Dextra Industries, 273 NLRB 1660 (1985); Great Chinese Ameri- can Sewing Co., 227 NLRB 1670 (1977). 8 National Family Opinion, 246 NLRB 521 (1979); Winn-Dixie Stores, 147 NLRB 788 (1964). 9 The fact that unit employees were on strike on 25 March does not affect the remedy because it clearly would have been futile for them to request reinstatement after the closing. In any event, the striking employ- ees did unconditionally offer to return to work by telegram dated 8 April. The Respondent's backpay liability would at least begin with this date. " As indicated in fn. 11 of the judge's decision, there is no issue in this case concerning the Respondent's obligation to bargain about the effects of its decision to close the Hudson plant and to transfer work to the Spartanburg plant Our Order shall not be construed to mandate bargain- ing about this subject. ARROW AUTOMOTIVE INDUSTRIES 491 (a) Refusing to bargain collectively and in good faith with Local 1596, International Union, United Automobile, Aerospace & Agricultural Implement Workers of America, UAW, as the exclusive repre- sentative of its employees in the appropriate unit set forth below, concerning the decision to close the Hudson, Massachusetts plant and to relocate the work permanently to its Spartanburg, South Carolina plant. The appropriate unit is: All production and maintenance employees in- cluding group leaders and truck drivers em- ployed by the Respondent in its Hudson plant, but excluding quality control auditors, office clerical employees, salesmen, confidential em- ployees, guards, watchmen, professional em- ployees and supervisors as defined in the Act. (b) In any like or related manner interfering with, restraining, or coercing employees in the ex- ercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action neces- sary to effectuate the policies of the Act. (a) On request, bargain with the Union as the ex- clusive representative of the employees in the above-described appropriate unit with respect to the decision to close the Hudson plant and transfer the work to the Spartanburg plant and, if an under- standing is reached, embody the understanding in a signed agreement. (b) Pay the terminated Hudson plant employees their normal wages in the manner and for the period set forth in the remedy section of this deci- sion. (c) Preserve and, on request, make available to the Board or its agents for examination and copy- ing, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to facilitate the de- termination of the amounts due each of the termi- nated Hudson plant employees. (d) Mail copies of the attached notice marked "Appendix" to all the Respondent's employees employed at its Hudson plant in the appropriate unit at the time of the closing. (e) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondent has taken to comply. 11 If this Order is enforced by a judgment of a United States court of appeals, the words in the notice reading "Posted by Order of the Nation- al Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board" APPENDIX NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board has found that we violated the National Labor Relations Act and has ordered us to mail a copy of this notice to all employees who were employed by us at our Hudson, Massachusetts plant the time it closed on 25 March 1981. WE WILL NOT refuse to bargain collectively and in good faith with Local 1596, International Union, United Automobile, Aerospace & Agricultural Im- plement Workers of America, UAW as the exclu- sive representative of our employees in the appro- priate unit set forth below, concerning the decision to close the Hudson plant and relocate the work to our Spartanburg, South Carolina plant. The appro- priate unit is: All production and maintenance employees in- cluding group leaders and truck drivers em- ployed by us at our Hudson plant, but exclud- ing quality control auditors, office clerical em- ployees, salesmen, confidential employees, guards, watchmen, professional employees and supervisors as defined in the Act. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exer- cise of the rights guaranteed you by Section 7 of the Act. WE WILL, on request, bargain in good faith with the Union as the exclusive bargaining representa- tive of all employees in the above-described appro- priate unit with respect to our decision to close the Hudson plant and transfer the work to our Spartan- burg plant, including any disputes with respect to the effectuation of the remedy set forth in the De- cision and Order of the National Labor Relations Board and, if an understanding is reached, embody it in a signed agreement. WE WILL pay the terminated Hudson plant em- ployees their normal wages in the manner and for the period required by the Decision and Order of the National Labor Relations Board. ARROW AUTOMOTIVE INDUSTRIES, INC. Anthony D. DaDalt, Esq., for the General Counsel. James F. Smith, Esq. (Constangy, Brooks & Smith), of At- lanta, Georgia, and Paul E. Stanzler, Esq. (Burns & Le- vinson), of Boston, Massachusetts, for the Respondent. 492 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Judith A. Scott, Esq., of Detroit, Michigan, for the Charging Party. DECISION STATEMENT OF THE CASE JOEL A. HARMATZ, Administrative Law Judge. This proceeding was heard in Boston, Massachusetts, on March 2 and 3, 1982, on the unfair labor practice charge filed on,April 16, 1981, and a complaint issued on June 18, 1981, which, as amended, alleged that Respondent re- fused to bargain in good faith by failing to negotiate with the Union with respect to its decision to transfer work from its Hudson, Massachusetts plant to its Spartanburg, South Carolina plant, and by declining to furnish the Union certain information requested by the Union and necessary and relevant to the performance of the Union's function as collective-bargaining representative. 1 In its duly filed answers, Respondent denied that any unfair labor practices were committed. 2 Following close of the hearing, briefs were filed on behalf of the General Coun- sel, the Charging Party, and the Respondent. On the entire record in this proceeding, 3 including my opportunity to engage in direct observation of the wit- nesses while testifying and their demeanor, and after con- sideration of the posthearing briefs, I make the following FINDINGS OF FACT I. JURISDICTION Respondent is a Massachusetts corporation engaged in the remanufacture, sales and distribution of automotive parts. At times material, Respondent had engaged in It was alleged in pars. 13(a) through (g) of the complaint that certain information requested by the Union was not provided by the Respondent, in violation of the obligation to bargain in good faith. Although the Gen- eral Counsel maintains its position that the mformation was not delivered in timely a fashion, the parties, for purposes of this proceeding, stipulated that on June 25, 1981, and thereafter, the Union obtained sufficient infor- mation to satisfy the requests referred to in pars. 13(a) through (g) of the complaint. Based thereon, an all-party request to amend the complaint by deletion of par. 13 was granted by me. 2 The complaint as originally issued on June 18, 1981, included an alle- gation in par. 10 to the effect that "the Union requested Respondent to negotiate with respect to its decision to close the Hudson plant." On Feb- ruary 4, 1982, that paragraph was amended to recite that "the Union re- quested Respondent to negotiate with respect to Its decision to transfer work from the Hudson plant to the Spartanburg, South Carolina plant." In its amended answer to the complaint, Respondent urged that this amendatory action by the Regional Director was invalid and that the General Counsel thereby sought to circumvent the Supreme Court's deci- sion in First National Maintenance Corp. v. NLRB, 452 U.S. 666 (1981). In addition, it is argued that the amendment produces a distinct cause of action barred by Sec. 10(b) of the Act. For reasons fully stated at the hearing, which need not be repeated here, it is my view that the instant case of action was maintainable under either of the supporting factual al- legations. Each version was sufficient to apprise Respondent of the un- lawful conduct with which it was charged. Thus, the amendment was viewed by me as providing a dispensable form of additional specificity that in no way influenced the contemplated scope of litigation under the Supreme Court's decision in First National Maintenance Corp., supra. The claim that the new allegation was barred by 10(b) is for this and other reasons lacking in merit. See, e.g., NLRB v. Dinion Coil Co., Inc., 201 F.2d 484 (2d Cir. 1952). 3 The General Counsel and Respondent have moved to correct the of- ficial transcript of proceedings in numerous respects. Consistent there- with, and as tecollection confirms, the motions are granted to the extent indicated on Appendix attached thereto. [Omitted from publication.] such operations from its plants located in Spartanburg, South Carolina; Morri1ton, Arkansas; Santa Maria, Cali- fornia; and the primary location involved here Hudson, Massachusetts. In the course and conduct of the oper- ations, it is a fair inference and I fmd that Respondent annually purchases and receives as its plants goods and materials valued in excess of $50,000 shipped directly from points located outside the States in which they are located and ships goods and materials valued in excess of $50,000 directly in interstate commerce. The complaint alleges, the answer admits, and I find that Respondent is, and has been an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. H. THE LABOR ORGANIZATION INVOLVED The complaint alleges, the answer admits, and I fmd that Local 1596, International Union, United Automo- bile, Aerospace & Agricultural Implement Workers of America, UAW is, and has been at all times material, a labor organization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. The Issues This case arises from an employer's implementation of an economically founded decision to close a unionized plant and to terminate employees at the location while transferring product operations from that facility to an existing nonunion plant. Issue is taken whether the Em- ployer was obliged to bargain in good faith with respect to such a "decision" under the concept endorsed by the United States Supreme Court in Fibreboard Paper Prod- ucts v. NLRB, 379 U.S. 203 (1964), as the General Coun- sel and Charging Party contend, or whether, as Re- spondent argues, no such obligation existed when consid- ered in the light of the Court's more recent pronounce- ment in First National Maintenance Corp. v. NLRB, 452 U.S. 666 (1981). Beyond this legal issue is the factual question, if such a duty is found to exist, whether Re- spondent bargained in good faith prior to implementation of its closedown decision. B. The Basic Facts Respondent's Hudson, Massachusetts plant was estab- lished in 1968. It was the oldest of Respondent's produc- tion facilities. Production and maintenance employees at the facility had been represented by the Union since 1971 on the basis of a certification issued by the National Labor Relations Board. Respondent and the Union, thereafter, had entered into successive collective-bargain- ing agreements, the most recent of which expired on No- vember 30, 1980. Prior thereto, contract renewal negotia- tions opened on October 22, 1980. Agreement could not be reached. On March 25, 1981, the Union was notified that the Hudson plant would be closed. On April 16, 1981, the Union filed unfair labor prac- tice charges alleging that Respondent in this respect failed to meet its statutory bargaining obligations. ARROW AUTOMOTIVE INDUSTRIES 493 By way of background it is noted that Respondent is a multiplant enterprise. At the time of the Hudson shut- down, it functioned through plants located in Spartan- burg, South Carolina; Morrilton, Arkansas; and Santa Maria, California. These latter plants have never been unionized. They are engaged in production of identical product lines which parallel those formerly produced at Hudson. Pursuant to Respondent's distribution and mar- keting practices, each of its respective plants primarily produce for customers in the separate geographic area in which they are located. Prior to announcement of the closedown decision, the parties met in contract renewal talks, without success, on nine separate occasions prior to December 1, 1980, and on February 25, 1981, with few changes of substance in the position of the parties during the interim. 4 On this latter occasion, the Union was informed that the Compa- ny was not certain as how long it could keep its most recent contract proposal on the table, and that the Com- pany was considering two alternatives; namely, resuming operations at the strike-bound Hudson facility utilizing permanent replacements, or closing that plant permanent- 1y.5 Thereafter, a meeting of the union membership was conducted on March 2, 1981, enabling employees to vote on acceptance or rejection of the Employer's last con- tract offer. The offer was rejected. The Company was notified of this development during the same week. Ac- cordingly, the strike, which from its inception effectively curtailed production at Hudson, continued.6 According to the credited testimony of Watson, in early March he had a conversation with James Ledbet- ter, Respondent's executive vice president, bearing on the unsettled state of the negotiations. Ledbetter in- quired, "How long can this damn thing keep going on as it is," and then informed Watson that he wanted some- thing done and that closing of the plant was a consider- ation. Later, when Watson informed Ledbetter that the Employer's contract offer had been rejected, Ledbetter indicated that "he was serious about wanting to close the plant." In consequence, as a first step toward that end, 4 A complete company proposal had been made on November 30, 1980. That, together with the original union proposal made on October 22, 1980, were on the table as of February 25, 1981. Yet, while the strike continued at that time, little movement had been shown on the part of the Union. Indeed, Frank Ceccarom, the Union's chief spokesman in the negotiations and a subregional Director of the UAW, conceded that at the February session the Union failed to liberalize its prior demands. In the course of that meeting, the Company reoffered a previously with- drawn concession bearing upon safety shoes and prescription safety eye- glasses conditioned on the Union's immediate acceptance of the contract. 6 The above is based on the credited testimony of Scott P. Watson, an attorney with the law firm of Constangy, Brooks & Smith. Watson acted as chief spokesman for the Respondent in these negotiations. In this re- spect, he was corroborated by Robert Holzwasser. Although an attempt to corroborate was made through the testunOny of Pamela Armstrong, personnel manager at the Hudson plant, I regard her testimony as unreli- able because I was not convinced that it was based on independent recol- lection. Ceccarom's denial that any such statement was made was not be- lieved. 6 The Hudson plant serviced Respondent's market in the northeast sector of the United States. During the strike, customers in that area were serviced from the Spartanburg facility, with orders of Hudson cus- tomers simply transferred, for production at Spartanburg. Watson drafted a telegram that was sent to the Union on March 9, 1981, and provided as follows: THIS IS TO NOTIFY YOU THAT THE EMPLOYER, ARROW AUTOMOTIVE INDUSTRIES, INC., HEREBY WITHDRAWS ALL OF ITS CONTRACT PROPOSALS PRE- VIOUSLY MADE. AT THE TIME, THE EMPLOYER NOW HAS UNDER CONSIDERATION A DECISION WHETHER OR NOT TO CONTINUE OPERATIONS AT ITS HUDSON, MA FACILITY. BEFORE A DECISION IS MADE IN THIS REGARD, THE EMPLOYER SOLICITS YOUR INPUT AND SUGGESTIONS. FOR THIS PURPOSE WE REQUEST A MEETING AT YOUR EARLIEST CONVENIENCE ON OR BEFORE TUESDAY, MARCH 24, 1981.7 On March 23, the meeting contemplated by said the telegram was held. Attending on behalf of the Company were Watson, Armstrong, and Robert Holzwasser, Re- spondent's new products director. The Union was repre- sented by Ceccaroni, Vincent O'Fria, the president of Local 1596, Attorney Judith Scott, and Robert O'Byck, an International representative of the UAW. At the outset O'Byck and Scott were not present. After a delay, however, Ceccaroni expressed a willingness to meet in their absence. Watson agreed after receiving assurances that Ceccaroni would act as Union's spokesman. The meeting was opened when Federal Mediator James Arthur read the March 9 telegram. Ceccaroni was then questioned about the Union's response, whereupon he simply suggested that the Company not close the plant. At this juncture, Watson asked if he had anything further to say. Ceccaroni responded in the negative, but did in- quire about the Company's reason for closing. When Watson indicated that it was "for economic consider- ations," Ceccaroni said "This is a good point in time to stop and wait for the experts to arrive." Watson agreed but noted that the Hudson plant showed a loss of $1,092,000, in calendar year 1980. At this juncture, the parties recessed until the arrival of Attorney Scott and International Representative O'Byck. Upon their arrival, the Union requested a caucus. The session then resumed with Ceccaroni informing the Company that the Union had prepared a 3-year contract proposal. He presented the proposal orally, there was some discussion in this re- spect, and Watson took notes. On conclusion of the Union's presentation, Watson asked Ceccaroni if that was all he had to present in response to the March 9 tele- gram. The former responded in the affirmative. The question was repeated by Watson and answered in identi- cal fashion. The meeting ended when Watson informed Ceccaroni that the Company would get back with him in a couple of days with our decision." 7 See G.C. nth. 2, App. A According to the testimony of David Koontz, financial vice president of the Respondent, he was asked by Led- better during the first week of March to prepare an economic evaluation, calling for establishment of a distribution center for the New England area to replace the Hudson plant. Koontz completed this report and made it available to members of the board of directors on March 9. The foregoing is based on the credited testimony of Watson Watson was corroborated by Robert Holzwasser and Pamela Armstrong in all material respects. Their testimony was accepted over that of Ceccaroni and Wilfred Lambert, an employee member of the negotiating committee. Continued 494 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Thereafter, on the morning of March 25, Respondent's board of directors convened and elected to accept a rec- ommendation made by management that the Hudson op- eration be closed. In connection therewith, authority was conferred on management executives to do such acts and things in connection with the shut down as each of them may deem appropriate to carry out the mandate of this vote." No final decision was made concerning the dispo- sition of equipment, but it was deemed appropriate to transfer and utilize the machinery and equipment in other plants if economically advisable. 9 Consistent therewith Respondent, through its attorney, immediately sent a telegram to the Union, informing as follows: REGARDING ARROW AUTOMOTIVE INDUSTRIES, INC., HUDSON MASS. AFTER CAREFUL CONSIDERTAION OF THE UAW'S INPUT AND SUGGESTIONS DURING OUR MEETING OF MARCH 23, 1981, AT THE BOSTON, FMCS OFFICES, THE EMPLOYER HAS MADE THE DECISION TO CLOSE ITS HUDSON, MASS. PLANT FACILITY. EM- PLOYER REQUEST A MEETING AS SOON AS POSSIBLE FOR THE PURPOSE OF DISCUSSING THE EFFECT OF SUCH CLOSING ON THE BARGAINING UNIT EMPLOY- EES INVOLVED. SUGGEST SUCH MEETING BE HELD THURSDAY, 3-26-81 OR FRIDAY, 3-27-81. By telegram of March 26, 1981, the Union registered its protest, in the following terms: IN RESPONSE TO YOUR TELEGRAM OF 3-25-81 UAW STATES AS FOLLOWS: 1. OUR DISCUSSION AND THE UAW PROPOSAL OF 3— 25-81 EXPRESSLY BASED ON OUR UNDERSTANDING THAT ANY DISCUSSION REGARDING THE POSSIBLE CLOSING OF THE HUDSON PLANT WAS TEMPORARILY SET ASIDE IN THE HOPE OF RESOLVING THE CUR- RENT CONTRACT IMPASSE IN THE NORMAL COLLEC- TIVE BARGAINING ARENA 2. FACED WITH THE COMPANY'S REJECTION OF THE UAW 3-23-81 PROPOSAL UAW NOW DEMANDS IMME- DIATE BARGAINING OVER WHETHER OR NOT THE PLANT IS TO BE CLOSED. WE HAVE CERTAIN INFOR- MATION REQUESTS AND, PROPOSALS TO PRESENT ON THIS SUBJECT. THE COMPANY HAS NOT YET MET ITS LEGAL OBLIGATION IN THIS AREA 3. IF THE COMPANY DECIDES TO CLOSE THE PLANT FOLLOWING GOOD FAITH NEGOTIATIONS OVER THE DECISION WHETHER OR NOT TO CLOSE, WE WILL THEN DEMAND BARGAINING OVER THE IMPACT OF THE CLOSING ON OUR MEMBERSHIP. WE HEREBY I did not believe that in the initial confrontation of the parties, Ceccaroni asked Watson to put the plant closing aside and afford the Union a chance to caucus to draft a 3-year proposal, which the Union would rec- ommend be ratified. In this respect, the version adduced from Respond- ent's witnesses impressed me as more logical and consistent, which was aided to an extent by Lamberes concession that the idea that the Union present a new contract proposal originated with Mediator Jim Arthur. Lambert's further acknowledgement that Ceccaroni was dubious about makmg such proposal suggests that Ceccarom probably did not broach that possibility to the Company until after consulting with Attorney Scott and International Representative O'Byck. It will be recalled that the par- ties had recessed prior to arrival of Scott and O'Byck. 9 See G.0 Exh. 2, App B. CONFIRM A NEGOTIATION SESSION FOR FRIDAY MARCH 27 81 10AM AT FEDERAL MEDIATION IN BOSTON. The parties again met on March 27, 1981. The Union reiterated its demand for bargaining with respect to the shutdown decision and, in support thereof, requested in- formation arguably relevant thereto. The Respondent at that juncture declined to furnish the requested informa- tion." As for the closedown decision itself, Respond- ent's refusal to bargain further was reiterated by Wat- son's declaration that the decision to close Hudson "was irrevocable." Nonetheless, On inquiry by the Union's at- torney, Watson stated that he could not at that time inform the Union whether work formerly performed at Hudson was going to be transferred. He also denied knowledge about the manner in which the Company would dispose of Hudson's machinery and equipment." C. Concluding Analysis I. The basic bargaining obligation As a general proposition, the statutory obligation to bargain in good faith requires notice to and consultation with exclusive representative prior to management's im- plementation of changes in "wages, hours and other terms and condition of employment" as that standard ap- pears in Section 8(d) of the Act. Bargaining concerning subjects falling within those terms is mandatory even if motivated economically and provoked by considerations unrelated to union activity. In this proceeding there is evidence that Respondent may have fulfilled its statutory obligation to bargain in good faith before deciding to close the Hudson plant. However, before entertaining that question, a threshold issue exists whether Respond- ent held a statutory duty to do so; a question which turns on whether such a decision was within "wages, hours and other terms and conditions of employment "wages, hours and other terms and conditions of employ- ment," hence subjecting management's ability to act Uni- laterally to statutory constraints. It is noted initially that the critical language in Section 8(d) is not to be con- strued literally. "Congress deliberately left the words 'wages, hours and other terms and conditions of employ- ment' without further defmition for it did not intend to deprive the Board of the power further to defme those terms in light of specific industrial practices." 12 Two major decisions of the Supreme Court address the scope of this statutory standard as it influences *hat otherwise might be termed management prerogatives. In Fibreboard Paper Products v. NLRB, 379 U.S. 203 (1964), it was held that a decision to contract out work of employees in a bargaining unit is is mandatory subject of collective bar- gaining in circumstances where management's decision was founded on purely economic considerations. Thus, " The information was not provided to the Union until June 25, 1981. " The Company acknowledged its obligation to bargain about the impact of its decision on Hudson employees The parties met again for this purpose on May 21 and June 26. There is neither allegation nor claim that Respondent violated its statutory bargaining obligation in this re- spect. 12 First National Maintenance Corp v. NLRB, 452 U.S. 666, 675 (1981). ARROW AUTOMOTIVE INDUSTRIES 495 the withdrawal of unit work through subcontracting was viewed as within the mandatory subjects covered by Section 8(d) of the Act, with the Court stating at 379 U.S. at 213-214 as follows: The facts of the present case illustrate the propri- ety of submitting the dispute to collective negotia- tion. The Company's decision to contract out the maintenance work did not alter the Company's basic operation. The maintenance work still had to be performed in the plant. No capital investment was contemplated; the Company merely replaced existing employees with those of an independent contractor to do the same work under similar con- ditions of employment. Therefore, to require the employer to bargain about the matter would not significantly abridge his freedom to manage the business. . . . Yet, it is contended that when an employer can effect cost savings in these respects by contract- ing the work out, there is no need to attempt to achieve similiar economics through negotiation with existing employees or provide them with an oppor- tunity to negotiate a mutually acceptable alterna- tive. The short answer is that, although it is not possible to say whether a satisfactory solution could be achieved national labor policy is founded upon the congressional determination that the chances are good enough to warrant subjecting such issues to the process of collective negotiation. In 1981, that holding was afforded a further perspec- tive when the Court in First National Maintenance, supra, concluded that an employer was free to take unilateral action and to deny the employee representative an op- portunity to consult with respect to a decision whereby a segment of its overall operation was terminated. Viewing such management action as materially distinct from the Court's 1964 treatment of subcontracting, the Court stated as follows: We conclude that the harm likely to be done to an employer's need to operate freely in deciding whether to shut down part of its business purely for economic reasons outweighs the incremental benefit that might be gained through the union's participa- tion in making the decision, and we hold that the decision itself is not part of § 8(d)'s "terms and con- ditions," . . . over which Congress has mandated bargaining." The diverse results in Fibreboard and First National Maintenance were not lacking in common underpinnings. Both involved economically oriented management deci- sions that impacted adversely on the employees. Thus, these elements will not alone foretell what presently might be deemed as within or without Section 8(d). In- stead', the inquiry must focus on competing interest high- lighted by the Court in First National Maintenance through the following statement: 13 452 LT S. at 686. Congress did not explicitly state what issues of mutual concern to the union and management it in- tended to exclude from mandatory bargaining. Nonetheless, in view ,of an employer's need for un- encumbered decisionmaking, bargaining over man- agement decisions that have a substantial impact on the continued availability of employment should be required only if the benefit, for labor-management relations and the collective bargaining process, out- weighs the burden placed on the conduct of the business." Thus, contrary to the Respondent, partial closedown decisions will remain subject to Section 8(d) if the bene- fit for the collective-bargaining process outweighs the burden placed on the conduct of the business. The inter- ests of management were afforded primacy under the facts before the Court in First National Maintenance. There, the employer involved was obligated to perform maintenance at a number of locations including a nursing home. It hired its personnel separately for each custom- er, and did not transfer employees between locations. Its employees at the nursing home were newly organized, but prior to union certification at that location, the em- ployer, in view of an ongoing dispute with the nursing home (Greenpark) over the maintenance fee and other matters, notified the latter of its desire to cancel the con- tract. Later, the employer again notified the nursing home that it would cancel its contract unless the mainte- nance fee was increased. The nursing home declined and the employer terminated the contract, thus ending its op- eration at that location, requiring the discharge of its em- ployees. Justification for the view that interests served by col- lective bargaining would not take precedence over man- agement discretion on such facts was articulated by the Court as follows: In order to illustrate the limits of our holding, we turn again to the specific facts of this case. First, we note that when petitioner decided to terminate its Greenpark contract, it had no intention to replace the discharged employees or to move that operation elsewhere. Petitioner's sole purpose was to reduce its economic loss, and the union made no claim of anti union aniumus. In addition, petitioner's dispute with Greenpark was solely over the size of the management fee Greenpark was willing to pay. The union had no control or authority over that fee. The most that the union could have offered would have been advice and concessions that Greenpark, the third party upon whom rested the success or failure of the contract, had no duty even to consid- er. These facts in particular distinguish this case from the subcontracting issue presented in Fibre- board. Further, the union was not selected as the bargaining representative or certified until well after petitioner's economic difficulties at Greenpark had begun. We thus are not faced with an employer's abrogation of ongoing negotiations or existing bar- 14 452 U.S. at 679. 496 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD gaining agreement. Finally, while petitioner's busi- ness enterprise did not involve the investment of large amounts of capital in single locations, we do not believe that the absence of "significant invest- ment or withdrawal of capital," General Motors Corp., GMC Truck & Coach Div., 191 NLRB at 952, is crucial. The decision to halt work at this specific location represented a significant change in petition- er's operations, a change not unlike opening a new line of business or going out of business entirely.15 This use of language limitation would seemingly pre- clude interpretation that compulsory bargaining was ruled out absolutely, regarding all partial shutdowns re- gardless of form. However, weight must also be accord- ed to the Court's expressed concern that the law develop under conditions affording predictability to managers: The concept of mandatory bargaining is premised on the belief that collective discussions backed by the parties' economic weapons will result in deci- sions that are better for both management and labor and for society as a whole. . . . This will be, how- ever, only if the subject proposed for discussion is amenable to resolution through the bargaining proc- ess. Management must be free from the constraints of the bargaining process to the extent essential for the running of a profitable business." An employer would have difficulty determining be- forehand whether it was faced with a situation re- quiring bargaining or one that involved economic necessity sufficiently compelling to obviate the duty to bargain. If it should decide to risk not bargaining, it might be faced ultimately with harsh remedies forcing it to pay large amounts of backpay to em- ployees who likely would have been discharged re- gardless of bargaining.. . .17 To that end there is evidence that First National Mainte- nance adopted an absolute, per se approach, but utilized language of limitation to confirm that its holding per- tained solely to shutdowns that are accompanied by abandonment of a segment of the employer's oper- ations. 18 In other words Fibreboard remains viable prece- dent with respect to business decisions that curtail an employer's work force where there is no concommitant elimination of goods and services produced or operations incidental thereto. That management action within this latter category remained subject to compulsory bargain- ing was evident from the Court's exclusion from the scope of its holding, as follows: 15 452 U.S. at 687, 688. 16 452 U.S. at 678, 679, 17 452 U.S. at 684, 685. 18 First National Maintenance was not the first case in which statutory requirements were relaxed m circumstances where elimination of work was accompanied by a partial "going out of business." An important dis- tinction was drawn on this very basis m Textile Workers v. Darlington MA: Co., 380 U.S. 263, 273, between subcontracting and runaway shop situations and other management action in which profit is no longer pos- sible on the eliminated busmess operation. In this opinion we of course intimate no view as to other types of management decisions, such as plant relocation, sales, other kinds of subcontracting, au- tomation, etc., which are to be considered on their particular facts. . . .19 Plant relocation, subcontracting, automation, consolida- tion, and other forms of unit work transfer may as an in- cident result in complete shutdown of an operating facili- ty. Yet they have common attributes important to the suitability of collective bargaining as a means of avoiding job loss. Thus, through measures of this sort, manage- ment retains the product line or service in question as part of its overall operation, but, more often than not, seeks to achieve greater efficiency solely through dis- placement of its own employees by means less costly or labor intense. Thus, unlike permanent elimination of a product, business lines or service, as was the case in First National Maintenance, competitive labor costs are inher- ently relevant, if not controlling, with respect to such de- cisions. In other words, enforced participation of the statutory representative with respect to the latter pre- sents a far greater possibility of amicable accommodation than when there is a total or partial going out of busi- ness. Accordingly, First National Maintenance is not viewed as absolutely excluding any and all closedown decisions from the scope of mandatory collective bar- gaining. By restricting the holding to shutdowns, which are incidential to and coextensive with a "going out of business," the action by the Supreme Court is reconcila- ble with both Fibreboard and the Court's declaration in First National Maintenance itself that traditional interpre- tations of Section 8(d) be preserved with respect to plant closedowns if simply resulting from relocation, subcon- tracting, automation, consolidation, or transfers of unit work, in which the scope of the operation remains un- changed, but represented employee interests are seriously impeded.2° Consistent with this interpretation, 21 it is concluded that First National Maintenance is of no solace to Re- 19 452 'U.S at 686 fn. 22. It is difficult to rationalize this class of management judgments, as being "akin to the decision whether to be m business at all." 452 U.S. at 677. 21 Independent research fads to disclose that the Board, to date, has expressed a view as to the scope of First National Maintenance Cf. Park- Ohio Industries, 257 NLRB 413 (1981) (interplant transfer of unit work); and Eastern Market Beef Pmcessing Corp., 259 NLRB 102 (1981) (dis- criminatory shutdown and transfer of work in violation of Section 8(a)(3)). These cases, cited by the General Counsel and Charging Party, fail to disclose otherwise and are superfluous. Entitled to no greater weight is the Respondent's reliance on the action of the Board m Brock- way Motor Trucks v. NLRB, 656 F 2d 32 (3d Cir. 1981). While that case was pendmg on review, the Board consented to the entry of a decree de- nying enforcement of a pending 8(a)(5) and (1) order, which, in turn, was based on an employer's failure to bargain over its decision to shutdown part of its business purely for economic reasons. That step was taken by the Board in view of the supervening decisions by the Supreme Court in First National Maintenance. However, there is no conflict between such a disposition and the interpretation afforded First National Maintenance herein. Brockway involved the shutdown of a service and distribution fa- cility, incidental to a decision by management to abandon in the local market area that segment of its business. Accordingly, Brockway is viewed as distinguishable on material grounds To the same effect is Continued ARROW AUTOMOTIVE INDUSTRIES 497 spondent herein. Thus, at the time of the Hudson close- down, Respondent had at least two other plants engaged in identical production operations. Pursuant to Respond- ent's established distribution policy, each plant primarily produced for the customers in specific and seperate geo- graphic areas in which they were located. Orders from Hudson's customers during the strike were transferred to, and the plant's market was serviced from, Respond- ent's Spartanburg plant. By virtues of the closedown, this temporary measure became permanent. However, after March 1981, the work force at Spartanburg was aug- mented by 100 jobs. Thus, Respondent did not abandon its Northeast market, customers, or product line, but simply serviced that market through consolidated, ex- panded operations at a different facility. In concluding that Fibreboard is controlling and that closure of the Hudson plant was a mandatory subject of bargaining, it is further noted that Respondent's decision did not arise in a context of urgency or in circumstances where delayed implementation through collective bar- gaining would necessarily impose a hardship on the Company. As indicated, because of the strike, operating costs were not accumulating at Hudson, and the North- east market was already being serviced from. the Spartan- burg plant. From the standpoint of disposition of equip- ment, 2 2 real property, 2 3 and administration,24 the deci- sion, when objectively viewed, appears to have been to- tally executory when made and not subject to any form of final commitment for a considerable period of time thereafter. Also of significance, it would seem, is the fact that the decision involved here was provoked solely by what Respondent characterizes as the "Union's intransi- geance" during the contract renewal negotiations. Indeed, on this record, Respondent is in no position to deny that the unresolved state of negotiations, the ongo- ing strike, and its own view as to the Union's bargaining posture represented "the catalyst for the action." It is true that Respondent urges that the closedown was justi- fied by factors independent of these union-related consid- erations. Nonetheless, the precipitant cause was conced- ed and the economic advantages cited by Respondent were merely derivative benefits. Indeed, most of these considerations involved economics in existence and read- ily available to Respondent's managers well in advance NLRB v. Robin American Corp., 667 F.2d 1170 (5th Cir. 1982). In that case, the court, pointing to the supervening decision in First National Maintenance, simply deleted from a Board order provisions requiring the employer to cease and desist from "closing any department or discontinu- ing any operation or type of work without notifying and bargaining with the aforenamed imion." Consistent with the views expressed herein, such an order was broad enough to include nonmandatory subjects of bargain- ing. Respondent also cites NLRB v. Gibraltar Industries, 653 F.2d 1091 (6th Cir. 1981), a case decided only 5 weeks after the Supreme Court handed down First National Maintenance. Although Gibraltar tends to support the view that shutdown-production transfer decisions are not subject to a duty to engage in advance notification, the Board's nonad- herence to that view is evident from its petitions, first, for rehearing, and than for rehearing en banc. 22 Eighty-percent of the equipment was transferred to the Santa Maria plant, 5 percent was sold, 10 percent put in storage, and 5 percent was scrapped. See G.C. Exh. 2, p.4, stipulation 27. 23 Respondent leased the plant from an entity owned by members of the Holzwasser family. 24 The administrative headquarters remained at Hudson until moved to Framingham, Massachusetts, on September 15, 1981. of the negotiations which opened in October 1980. 25 In sum, to bring into true focus the impact of collective bar- gaining on Respondent's action, one need only consider the sequence of events furnishing the foreground of its decision. Thus, undisputed testimony established that at the negotiation session of February 23, 1981, the Compa- ny actively pursued agreement to the point of making concessions conditioned on union acceptance of its com- plete proposal. That proposal was taken by the Union to the membership on March 2, 1981. On March 9, 1981, after Respondent was notified that its proposal had been rejected, it shifted the topic for negotiation to possible plant closure. The sole supervening event was employee rejection of the last offer. According to my interpreta- tion, the issue concerning continued operation at the Hudson location was presented to the Respondent's board of directors on March 27 solely because of the un- resolved state of the contract negotiations, and the direc- tors would not have acted on any of these historic and preexisting economic considerations had that not been the case. The dispute herein was one which would seem "ideally suited" to resolution through collective bargain- ing. Accordingly, it is concluded that Respondent was under a duty to afford advance notification and an op- portunity to bargain to the Union before closing the Hudson plant. 2. Bargaining as to the closedown As indicated, the Union's first information about a pos- sible shutdown did not come in the form of a fait accom- pli. By virtue of Respondent's telegram of March 9, the Union was given both advance notice and Opportunity to be heard with respect to the issue. This was followed by a single negotiating session that was held on March 23. At that time, the Union's position on the telegram was solicited by Respondent's representative. However, it does not appear that the Union, in the 2 weeks, that fol- lowed the March 9 telegram, structured its strategy in specific terms. Eventually, however, it did respond, but did so in form of a contract proposal. Respondent's bar- gaining representatives listened, took notes, and inquired about certain elements thereof. Prior to the close of the session, the Union was questioned twice as whether it had anything further to add. Twice the Union responded in the negative. Thereafter, Respondent was informed that its answer would be forthcoming. On March 25, the Company, through its board of directors, elected to per- manently close the Hudson plant, and informed the Union that its contract proposal had been rejected. 25 It is difficult to imagine that on March 27, 1981, the board of direc- tors was startled with the revelation that as the Hudson equipment was valued at an estimated $900,000, its utilization of the Santa Maria plant would offset capital expenditures and hence the debt required to finance that new facility. Respondent's managers are also charged with long-held knowledge that the Spartanburg plant operated at a higher profit ratio than the Hudson plant, that in recent years sales had ' declined in the northeast and that the Hudson plant had sustained lossess in the past. Al- though it is possible that the directors were not certain prior to the strike that Spartanburg could produce satisfactorily for the northeast market, this consideration would have emerged well prior to consideration of a possible shutdown at Hudson 498 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD The question that arises is whether the consultation af- forded by Respondent sufficed under standards of good- faith collective bargaining. Board precedent regarding the quality of bargaining necessary to satisfy the 8(d) ob- ligation in connection with economically oriented man- agement decisions is less than clear. It would seem, how- ever, that an accommodation of employee interest to tra- ditional management prerogatives would be preserved only if obligations exacted from employers in this area of the law afford opportunity to enhance the competitive' economic posture of represented employees, while doing as little damage as possible to the freedom of manage- ment to run the business. Pursuant to such a guideline, the possibility is diminishesd that Fibreboard will confer on labor organizations "a power that might be used to thwart management's intentions in a manner unrelated to any feasible solution the Union might propose."26 Under such a view, "Dnjanagement . . . [will] be - . . [subject to] . . . the constraints of the bargaining process,"27 only to the extent necessary to "promote the fundamen- tal purpose of the Act by bringing a problem of vital concern to labor and management within the framework established by Congress as most conducive to industrial peace." 28 The Board has recognized the need to avoid an undue infringement of management authority in the area. Thus in Ozark Trailers, 161 NLRB 561, 568 (1966), the Board stated as follows: The argument has been made [that] to compel an employer to bargain about a decision to relocate or terminate a portion of its business would significant- ly abridge his freedom to manage the business. In the first place, however, as we have pointed out time and time again, an employer's obligation to bargain does not include the obligation to agree, but solely to engage in full and frank discussion with the collective bargaining representative in which a bona fide effort will be made to explore possible al- ternatives, if any, that may achieve a mutually satis- factory accomodation of interest of both the em- ployer and the employees. If such efforts fail, the employer is wholly free to make and effectuate his decision. Hence, to compel an employer to bargain is not to deprive him the freedom to manage his business. Thus, unlike principles applicable in the context of man- agement implementation of a negotiated term during ini- tial or contract renewal bargaining, "impasse" is not pre- requisite to management action in this area." Indeed, it has been said that in connection with decisions of the type involved herein, the employer need merely "notify the representative and afford the opportunity to discuss that decision and to consider alternative proposals." See Lange Co., 222 NLRB 558, 563 (1976); Love's Barbeque 26 452 U.S. at 683. 27 452 U.S. at 678. 28 452 U.S. at 678. 29 Cf. Columbia Records, 207 NLRB 993 (1973), in which in dictum an administrative law judge stated that an employer was privileged to close its recording studio "only after bargaining to an impasse." Restaurant No. 62, 245 NLRB 78, 113 (1979). 3° A duty of "diligence" is imposed on labor organizations to en- force its representational rights in such a context. See American Bus Lines, 164 NLRB 1055, 1056 (1967). "The employer's obligation is merely to give the Union an op- portunity to persuade . . . ." W G. Best Homes Coq., 253 NLRB 912, 920 (1980). And finally as stated by the Supreme Court itself in Fibreboard, supra, 379 U.S. 214: While "the Act does not encourage a party to engage in fruitless marathon discussions at the ex- pense of frank statement and support of his posi- tion," Labor Board v. American Nat. Ins. Co., 343 U.S. 395, 404, it at least demands that the issues be submitted to the mediatory influence of collective negotiations. As the Court of Appeals pointed out, "[i]t is not necessary that it be likely or probable that the union will yield or supply a feasible solu- tion but rather that the union be afforded an oppor- tunity to meet management's legitimate complaints that its maintenance was unduly costly." The opportunity to bargain extended by Respondent herein might be viewed as less than a model of indulgent candor. For, Respondent did not volunteer that Hudson production was being considered for transfer to Spartan- burg, did not detail the economic benefits to be gleaned from closing, and did not inform the Union specifically that the latter's proposal delivered at the March 23 ses- sion would be the last considered by management before making the decision. While it might be observed in com- plete honesty that the Union herein was not afforded the time and information required to engage in meaningful bargaining, its own inaction ought be considered before subjecting Respondent to stringent restraints. Indeed, through preparation and inquisitiveness on the part of the Union, any shortcomings in its opportunity to consult might have been averted. Considering the seriousness of the issue, the Union's stance at the negotiations failed to convey a genuine will on its part to submit the close- down issue to the "mediatory influence of negotia- tions."31 It is significant in this respect that the Union 8° CT. Wotn-Dixie Stores, 243 NLRB 972 (1979) (wage increase during contract negotiations). Management decisions to close a segment of oper- ation not tied to contract negotiations, on the other hand, lack the ele- ments of bypass and direct dealing. Furthermore, the exacerbating effects on contract issues may only be averted by requiring "impasse" before im- plementation of a negotiated term. As stated in this regard in NLRB a Katz, 369 U.S. 736 (1972), that: Unilateral action by an employer without prior discussion with the union does amount to a refusal to negotiate about the affected condi- tions of employment under negotiation, and must of necessity ob- struct bargaining, contrary to the congressional policy It will often disclose an unwillingness to agree with the union. It will rarely be justified by any reason of substance. [369 U.S. at 747.] Contrary to arguments made on behalf of the complaint, the bargaining over a new contract which preceded the March 9 telegram did not inten- sify Respondent's obligation in this proceeding. Prior thereto, no conces- sions had been made by the Union since the onset of the strike. At that juncture, the focal point legitimately shifted from the contractual issues to the question of whether business operations would continue at the Hudson location. There being no contention or allegation that prior to March 9 Respondent was guilty of bad faith, upon rejection by the Union of the Employer's February 25 proposal, a bona fide impasse was again reached. 21 379 U.S. at 214. ARROW AUTOMOTIVE INDUSTRIES 499 had been afforded 2 weeks to prepare a counterproposal in support of continued operations at Hudson, but it was obvious that none had been prepared in advance of the session. Indeed, when addressed as to its response to the March 9 telegram, the Union simply stated that the plant should not be closed. Eventually, at the suggestion of a Federal mediator, the Union drafted a new contract pro- posal, its first since October 22, 1980. This gesture would obviously be taken as an effort to shift the focus from dealing with the March 9 telegram on its own terms to a resumption of contract negotiation. When the back- ground is considered, Respondent could rightfully assume that the Union was jockeying for time, still sought improved conditions of work, and was not of a mind to propose the kind of economic concessions that would warrant continued operation at Hudson. Thus, the negotiating history shows that the March 23 session had been preceded by lengthy contract talks in which the Union merely submitted a single comprehensive propos- al. Indeed, on December 1, 1980, when the Union struck, an outstanding offer by the Employer was rejected, and during the next 3 months before notification of the possi- ble closure on March 9, 1981, the strike continued. The Union made no significant effort to break the impasse. Not a single concession appears to have originated from its side of the table during this period. From all appear- ances, the Union had bargained hard and firmly in quest of its demands for a new contract, a stance which con- tributed to an atmosphere of impasse which foreshad- owed the March 23 meeting. The Union's somewhat grudging effort to place the closedown issue into a nego- tiating posture that had proven protracted and fruitless during the previous 5 months imposed no further obliga- tion on Respondent. Having received the Union's pro- posal, Respondent was under no obligation to embark further on step-by-step venture of unpredictable duration to discover how much the Union was willing to pay to preserve the plant. Although the issue is not free from doubt, it is my opinion that opportunity having been extended to the Union to be heard with respect to the possible close- down decision, the Union was charged with responsibil- ity to take the initiative and act with immediacy in con- vincing the employer that the most economically advan- tageous course was preservation of the status quo. Al- though Respondent could have manifested more pa- tience, the issue is what the statute requires, and having given the Union the opportunity to be heard, manage- ment thereafter was free to make a determination based on what it viewed as the most efficacious course. Ac- cordingly, I fmd that the Respondent did not violate Section 8(a)(5) and (1) of the Act by failing to consult in good faith with the Union before the deciding to close the Hudson plant.32 CONCLUSIONS OF LAW 1. Respondent is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the mean- ing of Section 2(5) of the Act. 3. Respondent did not fail to notify and consult with the Union concerning its decision to close the Hudson plant and relocate the work of that facility to its existing plant in Spartanburg, South Carolina, so as to violate Section 8(aX5) and (1) of the Act. [Recommended Order omitted from publication.] 32 the General Counsel and Charging Party contend that Respondent was guilty of subjective bad faith in connection with the clösedown deci- sion I take this as the substantive equivalent of a claim that Respondent was actuated in this respect by a motive proscribed by Section 8(aX3) of the Act. Hence, the argument is no more than an effort to "back door" an issue which was neither alleged nor argued at any time prior to the close of the hearing. Indeed, their claim can not be reconciled herein with the "purity of motive" implicit in the stipulation by all parties that the instant closedown was economically motivated. In any event, Re- spondent was not afforded advance notice of the issue and the matter was not subject to litigation fairly and in a fashion permitting inferences on a fully developed record.