Accurate Die Casting Co.

284 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Accurate Die Casting Company and Local 491, United Automobile, Aerospace and Agricultural Implement Workers of America Case 3-CA- 12472 January 12, 1989 DECISION AND ORDER BY MEMBERS JOHANSEN, CRACRAFT, AND HIGGINS On May 30, 1985, Administrative Law Judge Harold B Lawrence issued the attached decision On June 24, 1986, the Board, on motion of the General Counsel, reopened the record and remand ed the case to the judge for receipt of further evi- dence and reconsideration I On January 5, 1987, the judge issued the attached supplemental deci Sion Thereafter, the Respondent filed exceptions and a supporting brief, and the General Counsel filed exceptions and a supporting brief, and an an swering 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,2 and conclusions and to adopt the recommended Order of the supplemental decision as modified 3 We agree with the judge that the Respondent unlawfully failed and refused to furnish to the Union financial records, unilaterally changed terms and conditions of employment without a valid im passe in negotiations failed to recall strikers on their application and threatened to replace perma- nently employees found to be unfair labor practice strikers We however, clarify the judge's recom mended Order in several respects The General Counsel excepts to the failure of the judge to order that the Respondent make whole the unfair labor practice strikers from the dates of their unconditional offers to return to work, rather than, as ordered by the judge, com mencing the fifth day after the offers We find merit in the General Counsel's exceptions and shall modify the Order and notice 4 i Not included in bound volumes 2 The Respondent has excepted to some of the judge s credibility find rags 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 3 We do not adopt the judge s inclusion of a visitatortal clause in his recommended Order which we find unnecessary here Cherokee Marine Terminal 287 NLRB 1080 (1988) 4 See Canterbury Villa 273 NLRB 1196 (1984) Additionally, the General Counsel excepts to the failure of the judge to order the Respondent to dis miss strike replacements as necessary to effectuate the unfair labor practice strikers' reinstatement, and to provide for their reinstatement to a position sub stantially equivalent in the event the prestrike posi tions no longer exist We find merit in the General Counsel's exception and shall modify the Order Finally, the General Counsel excepts to the fail- ure of the judge to order the Respondent, as part of the remedy for its unilateral change of terms and conditions of employment, to restore the status quo ante and to make whole its employees for wages and benefits lost as a result We find merit in the General Counsel's exception and will modify the Order 5 THE REMEDY Having found that the Respondent, Accurate Die Casting Company, has engaged in certain unfair labor practices, we shall order it to cease and desist and to take certain affirmative action de signed to effectuate the policies of the Act Having also found that the striking employees were unfair labor practice strikers, we shall order the Respondent to reinstate, or offer immediate and full reinstatement to all of the striking employees to their prestrike positions or, if those jobs no longer exist, to substantially equivalent positions without prejudice to their seniority or any other rights or privileges previously enjoyed, dismissing, if neces sary, any strike replacements The Respondent shall also be required to make whole all employees for any loss of earnings and benefits they may have suffered as a result of the unlawful changes and discrimination practiced against them Kraft Plumb- ing, 252 NLRB 891 (1980) Backpay is to be com puted as prescribed in Ogle Protection Service, 183 NLRB 682 (1970), and F W Woolworth Co, 90 NLRB 289 (1950), respectively with interest as set forth in New Horizons for the Retarded 6 ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge as modified and set forth in full below and orders that the Respondent, Accurate Die Casting Company, Fayetteville, New York, its officers, 5 The judge concluded inter aha that the Respondent violated Sec 8(d) of the Act We note that Sec 8(d) defines the obligation to bargain collectively it is not itself an unfair labor practice section of the Act 6 283 NLRB 1173 (1987) Interest on and after January 1 1987 shall be computed at the short term Federal rate for the underpayment of taxes as set out in the 1986 amendment to 26 US C § 6621 Interest on amounts accrued prior to January 1 1987 (the effective date of the 1986 amendment to 26 US C § 6621) shall be computed in accordance with Florida Steel Corp 231 NLRB 651 (1977) 292 NLRB No 39 ACCURATE DIE CASTING CO agents, successors, and assigns, shall take the action set forth in the Order as modified 1 Cease and desist from (a) Failing and refusing to furnish to the Union, on request, financial records showing the oper ations and complete financial condition of the Company (b) Unilaterally implementing terms and condi- tions of employment at variance with those con- tained in its contract with Local 491, United Auto- mobile, Aerospace and Agricultural Implement Workers of America, which expired June 15, 1984 (c) Threatening to replace permanently, or re placing permanently, employees who went on strike on June 15, 1984 (d) Refusing to bargain in good faith with Local 491, United Automobile, Aerospace and Agricul tural Implement Workers of America, as the exclu sive representative of its employees in the follow- ing appropriate unit All production and maintenance employees at the Fayetteville, New York facility, excluding laboratory employees, draftsmen, office and clerical employees, professional employees, guards, watchmen and supervisors as defined in the Act (e) 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) Restore all terms and conditions of employ- ment to the status quo as it existed before the un lawful unilateral changes were made, to the extent such changes were detrimental to the employees (b) Make whole any employees who may have been detrimentally affected by the changes in terms and conditions of employment, with interest on any monetary losses the employees may have suffered, in the manner set forth in the remedy section of the decision (c) Offer the unfair labor practice strikers who made unconditional applications to return to work, immediate and full reinstatement to their former jobs or, if those jobs no longer exist, to substantial ly equivalent positions, without prejudice to their seniority or any other rights or privileges previous ly enjoyed, dismissing, if necessary, persons hired after June 15, 1984, and make them whole for any loss of earnings and other benefits suffered as a result of the discrimination against them, in the manner set forth in the remedy section of the deci- sion (d) Remove from its files any references to the unlawful reasons for its failure to recall, and notify 285 the striking employees in writing that this has been done and that the reasons for the failure to recall will not be used against them in any way (e) On request, bargain in good faith with the Union as the exclusive representative of the em- ployees in the appropriate unit with regard to rates of pay, hours of employment, and other terms and conditions of employment, and embody in a signed agreement any understanding reached (f) 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 analyze the amount of backpay due under the terms of this Order (g) Furnish the Union, on request and within a reasonable time, financial records showing the op- erations and complete financial condition of the Company (h) Post at its facility at Fayetteville, New York, copies of the attached notice marked "Appendix "7 Copies of the notice, on forms provided by the Re- gional Director for Region 3, after being signed by the Respondent's authorized representative, shall be posted by the Respondent immediately upon re ceipt and maintained for 60 consecutive days in conspicuous places including all places where no tices to employees are customarily posted Reason able steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material (i) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondent has taken to comply ' 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 at 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 post and abide by this notice Section 7 of the Act gives employees these rights To organize To form, join , or assist any union 286 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD To bargain collectively through representa tives of their own choice To act together for other mutual aid or pro tection To choose not to engage in any of these protected concerted activities WE WILL NOT fail and refuse to furnish to the Union, on request , financial records showing the operations and complete condition of the Compa- ny WE WILL NOT unilaterally implement terms and conditions of employment at variance with those contained in our contract with Local 491, United Automobile, Aerospace and Agricultural Imple ment Workers of America , which expired June 15, 1984 WE WILL NOT threaten to replace permanently, or replace permanently , employees who went out on strike June 15, 1984 WE WILL NOT refuse to bargain in good faith with Local 491, United Automobile , Aerospace and Agricultural Implement Workers of America, as the exclusive representative of our employees in the following appropriate unit All production and maintenance employees at our Fayetteville, New York facility , excluding laboratory employees, draftsmen, office and clerical employees, professional employees, guards, watchmen 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 restore all terms and conditions of em- ployment to the status quo as it existed before the unlawful unilateral changes were made, to the extent such changes were detrimental to the em- ployees WE WILL make whole any employees who may have been detrimentally affected by the changes in terms and conditions of employment , with interest on any monetary losses the employees may have suffered WE WILL offer the unfair labor practice strikers, who made unconditional applications to return to work, immediate and full reinstatement to their former jobs or, if those jobs no longer exist, to sub- stantially equivalent positions , without prejudice to their seniority or any other rights or privileges pre viously enjoyed dismissing, if necessary, persons hired after June 15 , 1984, and make them whole for any loss of earnings and other benefits suffered as a result of the discrimination against them , plus inter est WE WILL remove from our files any references to the unlawful reasons for our failure to recall, and notify the striking employees in the writing that this has been done and that the reasons for the failure to recall will not be used against them in any way WE WILL, on request, bargain in good faith with the Union as the exclusive representative of the employees in the above-described appropriate unit with regard to rates of pay, hours of employment, and other terms and conditions of employment, and embody in a signed agreement any understanding reached WE WILL furnish the Union, on request and within a reasonable time, financial records showing the operations and complete financial condition of the Company ACCURATE DIE CASTING COMPANY Thomas J Sheridan and Robert A Ellison Esqs, for the General Counsel William L Bergan Esq and John Gaal Esq (Bond Schoeneck & King), of Syracuse New York for the Respondent Thomas J Giblin Esq , of Cranford, New Jersey, for the Charging Party DECISION STATEMENT OF THE CASE HAROLD B LAWRENCE, Administrative Law Judge This case was heard before me in Syracuse New York, on 21 and 22 March 1985 and in Fayetteville New York on 1 2 and 3 April 1985 The complaint and notice of hearing issued on 8 December 1984 are based on a charge filed on 13 November 1984 by Local 491, United Automobile Aerospace and Agricultural Imple ment Workers of America (the Union) and served on Re spondent by certified mail on 14 November 1984 The complaint was amended on 13 March 1985 It is contended that the Respondent Accurate Die Casting Company violated Section 8(a)(1), (3) and (5) and Section 8(d) of the National Labor Relations Act (the Act) by failing and refusing to bargain collectively and in good faith by discriminatory actions against cer tarn employees and by making threats The case rests on the following specific allegations that Respondent re fused to furnish the Union with its financial records de priving it of information necessary and relevant to the Union s function as bargaining representative that be cause of the Respondents conduct the employees went out on strike on 15 June, the strike therefore being cate gorized as an unfair labor practices strike that Respond ent has failed to recall striking employees within 5 days after they unconditionally offered to return to work and has threatened to permanently replace striking employ ees that on or about 15 June Respondent implemented the terms proposed to the Union during the course of ne ACCURATE DIE CASTING CO gotiations for a new contract in place of terms contained in the contract that had expired though no impasse had been reached The Respondents answer denies all allegations of wrongdoing and alleges that strikers unconditionally of fering to return to work have been offered that opportu nity as soon as suitable positions became available, in ac cordance with Respondents obligations, and that Re spondent implemented terms and conditions of employ ment consistent with its last offer after reaching impasse and following good faith bargaining Four affirmative de fenses are alleged That Respondent bargained in good faith and in accordance with its legal obligations that the Union never requested and is not entitled to financial records that the strike was neither caused nor prolonged by the alleged failure of Respondent to provide financial information to the Union, and that the complaint is barred by the equitable doctrine of laches There is no evidence that supports a finding that either the General Counsel or the Charging Party is guilty of laches The charge was served and filed within the time permitted by law It is unclear in what respect there has been any in equitable delay I have however, at an appropriate point it this decision noted Respondents contention, in its postheanng brief, that November is a late time to begin asserting that a strike begun in June is an unfair labor practice strike The parties were afforded full opportunity to be heard, to call, examine and cross examine witnesses, and to in troduce relevant evidence Posthearing briefs have been filed on behalf of the General Counsel and on behalf of the Respondent On the entire record I including my observation of the demeanor of the witnesses and after consideration of the briefs filed by the General Counsel and the Respondent, I make the following FINDINGS OF FACT I JURISDICTION There is no issue concerning jurisdiction the Respond ent s answer having admitted the allegations pertaining thereto Accordingly, I find that the Respondent is and has been at all material times an employer engaged in commerce within the meaning of Section 2(2) (6) and (7) of the Act and that the Union is and has been at all material times a labor organization within the meaning of Section 2(5) of the Act II THE ALLEGED UNFAIR LABOR PRACTICES A A General History of the Negotiations The Respondent, whose corporate offices are in Cleve land Ohio operates four plants, of which the plant in Fayetteville, New York, is the largest It is in the buss ness of manufacturing metal die casting The Union rep resents the production and maintenance employees at the Fayetteville plant and has been recognized as their rep resentative by the Respondent and its predecessor for I On having read and filed Respondents unopposed motion to correct the transcnpt the motion is granted 287 many years (The Respondent so admitted for the period only back to 1976, when present ownership took over management) The most recent collective bargaining agreement was effective for the period from 15 June 1981 to 15 June 1984 In January 1983 John McGarigal president of Re spondent Charles Rambaldo, vice president for human resources and H Wayne Panciera personnel manager conferred in Cleveland with George Slyman, chairman of the board The meeting was held against the back ground of their failure to bid successfully on several con tracts and the impending loss of several in house ac counts It was decided to improve the Company s com petitive position by eliminating an existing discrepancy between its wage package at Fayetteville and the wage package prevalent among its major competitors in the eastern section of the United States Respondents wage package exceeded that of its largest creditors by as much as $4 02 per hour Inasmuch as the collective bargaining agreement still had a year to run, a request was made to the Union to negotiate regarding modification of the agreement for its remaining term by deferring a sched uled pay increase It was managements stated position that the elimination of this difference was needed to enable the Respondent to compete more effectively against these other companies Three negotiating sessions took place in May and June 1983, but no agreement on modification was reached In the course of these negotiations, Anthony Spoto, the chief union negotiator, who is a representative of the International UAW, advised the Respondents negotia tors (McGarigal and Rambaldo) that if the Company was in financial difficulty the Union should be given access to the Company s books so that they could be audited by UAW auditors and the financial hardship verified The Respondents chief negotiator, Rambaldo refused to make the books available declaring that the Respondent was not pleading poverty but was requesting modifica tion of the contract to improve the Company s competi tive position in the market The Union declined to enter into any modification of the contract and Respondent dropped the matter until the time arrived for the negotia tion of a new contract Negotiations on the new contract began on 3 May 1984 and went through 13 sessions before the employees went out on strike on 15 June Thereafter there were six further sessions three of which involved conference with a New York State mediator without direct contact be tween the two sides The last bargaining session was held on 30 October Throughout all of these negotiations, the Respondents position regarding the wage package re mained basically unchanged although there were some moderate concessions on its part with respect to it At the time the strike started, 15 June, all noneconomic issues had been resolved With respect to the wage package the Respondent ad hered tenaciously to its contention that reduction in the wage package was necessary to improve the Company's ability to compete Specific information was placed on the table to support the Respondent's position (a) the failure of the Respondent to bid successfully on contracts 288 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD that involved almost $2 million worth of business (b) the warnings received from two of the Company s existing accounts that they would shift their business to other companies unless the work could be done more cheaply and (c) an industrywide survey published by the Ameri can Die Casting Institute (ADCI) which showed that the Respondents wage fringe benefits package was consider ably more costly than the compensation packages of its competitors In addition, it was pointed out that the Fay etteville plant was underutilized and that the granting of concessions requested by Respondent would create more jobs and increase productivity The union negotiators showed little interest in the ADCI statistics They viewed the wage question as one of suitability in the area in which the plant was located without regard to the wage structure in the rest of the industry The competitors were all in other sections of the country However inspection of the Company s books was demanded to enable the Union to verify that the Company faced financial hardship that would justify the wage reductions that it demanded Similar demands had been made in 1983 and the Respondent, as it had done at that time, took the position that production of its financial records was unnecessary because it demanded the wage cuts to increase productivity and competitive capability a matter regarding which it had offered to make available to the Union the facts and figures com piled by the industrywide association The two sides remained frozen in this position at the time of the hearing Immediately before expiration of the contract and the commencement of the strike, the Respondent made a final offer which the Union rejected On the expiration of the contract it implemented the terms of its wage benefit proposal in lieu of the terms contained in the ex pired contract It also failed to recall David Deverdorf and Clifford Woodcock, and other striking employees within 5 days from the date that they made uncondition al offers to return to work (asserting in its answer, as noted above, that strikers unconditionally offering to return have been offered that opportunity subject to availability of suitable positions) conditions of employment contained in its last contract proposal 1 Refusal to produce financial records The parties differ sharply on the facts relating to the obligation to produce financial records the times and number of demands for production, and actual produc tion The pertinent legal principles are quite clear The gen eral principle is that a union is entitled to verify an em ployer s contentions made in the course of negotiations to the extent it will facilitate bona fide bargaining The Supreme Court noted, in NLRB v Truitt Mfg Co 351 U S 152 153 (1956) Good faith bargaining necessarily requires that claims made by either bargainer should be honest claims This is true about an asserted inability to pay an increase in wages If such an argument is im portant enough to present in the give and take of bargaining it is important enough to require some sort of proof of its accuracy Under Truitt, if an employer asserts financial inability to meet union demands and thereby creates an issue re specting its financial condition, it must make available to the union the books and records that will disclose its fi nancial condition and enable the union to bargain knowl edgeably See also Graphic Communicators Local 51 v NLRB 538 F 2d 496 (2d Cir 1976), Atlanta Hilton & Tower 271 NLRB 1600 (1984) If an employer asserts that the granting of union demands will adversely affect its ability to compete, that also creates an issue of finan cial ability If the employer couples the contention re specting its ability to compete with an implication of present or impending financial crisis, it is talking finan cial inability to meet union demands and must make books and records available to the extent necessary to show that competitive disadavantage has placed or will place the employer in a position in which it is or will become unable to meet the union demands Ability to compete is not in such cases the only issue the overall financial condition of the employer has also been placed B The Alleged Failure to Bargain Collectively in in issue See Harvstone Mfg Corp 272 NLRB 939 (1984) Good Faith Stanley Building Specialties Co 166 NLRB 984 (1967) enfd 401 F 2d 434 (D C Cir 1986) cert denied 395 Negotiating sessions were held in 1983 on 12 and 26 US 946 (1969) Hiney Printing Co 262 NLRB 157 May and 6 June and in 1984 on 3, 9 10 21 22 30 and (1982) enfd 733 F 2d 1170 (6th Cir 1984) 31 May, 6-7, 8 12-13, 14 and 20 June 3 and 20 July 6 August 7 September, and 30 October By the time the contract expiration date was reached all contract terms of a noneconomic nature had been agreed on Negotia tions were stalled on the Company s demand for conces sions by way of reduction in the wage package Notwithstanding the Respondents rigid adherence to its demand for wage reduction there is no contention that it engaged in surface bargaining The case against the Respondent for failing and refusing to bargain in good faith is based on the allegations that since 7 June 1984 the Respondent has refused to furnish the Union with requested financial records and that on expiration of the contract the Respondent substituted the terms and If the employer does not assert financial inability to meet union demands, or denies it altogether and bases its bargaining position exclusively on its desire to compete more effectively with other business concerns in its in dustry, then the union s right to obtain verification by in spection of the employers books and records is accord ingly restricted and the employer need produce on demand only such data as may be needed to verify its contention that union demands reduce its ability to com pete It need not open its books and records to a general audit Thus though the contention by an employer that there exists a need to remain competitive or to improve competitive capability has been equated with pleading in ability to meet union demands even if the employer ACCURATE DIE CASTING CO denies that he is pleading poverty, the information re quired to be furnished is different Harvstone Mfg Corp, supra, Hiney Printing Co, supra In International Tele phone & Telegraph Co 159 NLRB 1757 (1966), enfd in pertinent part 382 F 2d 366 (3d Cir 1967), cert denied 389 U S 1039 ( 1968) the Board sustained the administra tive law judge s finding that Section 8(a)(5) of the Act had been violated The administrative law judge had for mulated the rule in the following language in his decision (159 NLRB at 1790) While, in the former case the union would be enti tied to an order requiring the disclosure of all books and records relating to the respondents financial status in the latter case it would seem that the ap propriate remedy would be to compel disclosure of only such data as the employer relied on in assert mg that his competitive position had been so im paired by his generosity to his employees that he had lost out on bidding for contracts Empire Terminal Warehouse Co 151 NLRB 1359 (1965), enfd 355 F 2d 842 (D C Cir 1966), is the perfect example of a situation calling for minimal production of data by an employer in the course of negotiations by hm iting it to what was needed for the purpose of resolving questions posed by the actual issues that were raised in the negotiations The employer asserted that it had a lu crative business It refused to meet the union s wage de mands solely on the ground of asserted competitive dis advantage It was held to have satisfied its duty of dis closure by providing proof of its competitive disadvan tage in the form of a wage survey The union was denied access to its financial records The administrative law judge noted that the union either intentionally or unintentionally misinterpreted the nature of the employers position on the wage issue, ignored the disclaimer of inability to pay, and insisted on production of records to establish the company s ability to meet wage demands There was testimony that the employer was losing customers and it was said during the negotiations that things are getting tough This statement was held to be related not to inability to pay but to disadvantage suffered by the employer by reason of the disparity in wage rates which would be aggravat ed by a wage increase It is important to note the consid erations that produced this finding The administrative law judge found that the employer never raised the issue of economic inability to pay it neither directly nor indirectly suggested the possibili ty of going out of business if it gave a wage in crease and it expressly disclaimed financial inability, and the wage survey was not offered to support any claim of inability `to exist [151 NLRB at 1371 1372 ] [Emphasis added ] In affirming the conclusion of the administrative law judge, the Board commented As the trial examiner found the record clearly shows that at no time during negotiations did the Respondent claim that it was unable to meet the 289 Union s increased wage demands Indeed, the Re spondent agreed that it had a lucrative business, and pointed out that it was not pleading poverty or in ability to pay The Respondent s only position on the wage issue was that it was placed at competitive disadvantage, and was therefore unable to get more business because it was paying substantially more in wages than its competitors It presented proof of this The Union not only had independent knowledge of the accuracy of Respondent's position, but it also ignored the presented proof Under these circum stances we find that the Respondent did not violate the Act by refusing to produce the financial records requested by the Union (151 NLRB at 1360) [Em phases added ] The first question to be asked, therefore, is whether the Respondent, in the course of the negotiations with the Union, raised the issue of its economic capability to pay wages at either the existing level or at any increased level which might be demanded by the union negotia tors If it did the other lines of inquiry are as follows Did the Union demand the right to inspect books and records? On the basis of the Employers bargaining pose tion, what books and records was the Union entitled to examine? Did the Respondent produce or make available the requested books, records, and data that the Union was entitled to see? a The issue of financial capability The Respondent contends that throughout the course of its dealings with the Union it repeatedly stated that it was not pleading poverty and based its position regard ing wages solely on its desire, clearly stated, to maintain and improve its competitive position in the industry McGarigal Rambaldo and Panciera all testified that throughout the negotiations the Respondents negotiators based their demand for concessions squarely on their stated objective of improving the competitive position of the Company by bringing the compensation package at the Fayetteville facility into line with the pay scales prevalent among the competition The Union was ad vised that was the objective was informed that it was formulated in response to the loss of existing accounts and the failure to bid successfully for certain new busi ness and was shown a heap of statistics which demon strated the discrepancy in the compensation package be tween Respondent and the competitors to whom it was losing business The compensation package at Fayette ville was even out of line with wages in Respondent s other plants The counsel for the General Counsel argue that the stated position of the Respondent during the negotiations was a mechanical reiteration of a formula the bare asser tion of which is inadequate to excuse Respondents refus al to produce records made necessary by other state ments of Respondents negotiators and other circum stances which had the effect of placing in issue Respond ent s financial ability to meet union demands The General Counsel contends that the Respondent cited the failure of the Company to bid successfully in 290 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD certain instances and its loss of two customers to demon strate that concessions were needed to reverse a down ward trend which could ultimately prove disastrous The counsel for the General Counsel collated a number of statements allegedly made by the Respondents negotia tors which are supposed to show that their mood was one of desperation In these statements, the Respondent s insistence on wage concessions was always couched in terms of "heed ' Because Respondents own argument that the plain meaning of the language employed by it in the negotiations should be honored and that it reflects its bargaining position ( We are not pleading poverty ), the references to need cannot be overlooked and their meaning must be evaluated The statements collected together by the General Counsel are as follows Had to be more competitive we have to control all costs we have to restore Fayetteville to a competitive posture something has to be done there is nothing there the end result has to be a reduction steps must be taken to correct the situation we must address ourselves to negotiating a con tract that Will restore Fayettevill's [sic] competitive pose Lion things have to be changed to retain our compe tttve position (company offer was) what we thought was needed to place our plant in a more competitive posture An assertion of general financial inability to pay wage increases cannot reasonably be read into these state ments On their face, even taken out of context they appear to relate solely to wage disparity as the pertinent competitive factor in context it is plain that they all do (Counsel for the General Counsel and for the Respond ent debated the meaning of the statement There is nothing there I find it referred to Respondents offer not as the General Counsel contended, to the resources from which any wage increase might have been paid ) The General Counsel also pointed to a number of re marks made by Respondents negotiators as statements that expressly raised the Respondents general financial condition as an issue in the negotiations with the Union Testimony was adduced that statements were made by them to the effect that the Company lost several ac counts representing a total of $700 000 worth of business that the Company had lost out on bids totaling $1 9 mil lion in value, that the Company had a monthly break even point of $1 million, that General Motors an im portant customer had mandated a 2 percent cut in its prices and that the Company had had losses in the pre ceding 2 years amounting to $900 000 The Respondent's witnesses emphatically denied making any statements to the effect that the Company had sustained any operating loss and furnished plausible explanations for the other statements which lent them a different interpretation than that suggested by the Gener al Counsel They contended that the references to dollar amounts lost ' referred to the amount of business volume lost, either with the departure of customers or the failure to enter successful bids on contracts, and did not at all refer to an overall operational loss in any par ticular fiscal period They thus plausibly established an ambiguity in the statement (I find similar ambiguity in a reference cited by the General Counsel to an entry in Respondents memoranda, Co losses last FY This normally would mean, to me at least an operational loss in a fiscal year, but an entry of that nature in memoranda of a contract bargaining session could have the meaning contended for it by Respondent when taken in the con text of the discussion that was going on, including the express disclaimer of poverty Consequently I credit Rambaldo s explanation that it was a reference to the loss of the work formerly received from two customers Shop Smith and National Lock which occurred in the fiscal year immediately preceding the 1984 negotiations ) Because the remarks are ambiguous, the burden is on the General Counsel to show, by a preponderance of the evidence, that they should be interpreted in the fashion for which he contends At worst, I read them as an mdi cation of declining profits An attempt to protect declin mg profit into an ultimate operating loss is made ex tremely difficult in this case by the additional testimony of Respondents witnesses to the effect that the Respond ent was not only losing customers, but gaining customers as well that there had been successful bids for new work from new customers, that more work was expected from Fischer Auto Body Division of General Motors which could mean between 100 and 200 additional jobs in the Fayetteville plant that there were plans for expansion of the work force and increased utilization of the facilities of the Fayetteville plant and that all of this was made known to the Union Finally they repeatedly told the Union in plain English that the objective in cutting the wage benefit package was to enable the Company to bid more competitively for new work and thus increase com pany growth The statements relied on by the General Counsel re ferred to above, are ambiguous and there is no evidence in the record that establishes that they mean anything other than what the Respondents witnesses testified they meant Even if the Respondents negotiating position insofar as it pointed to lost contracts and unsuccessful bids as ex amples of the merits of improving its competitive pose tion was susceptible of interpretation as a plea for wage reduction to avoid ultimate disaster and thus continue in business the fact remains that such an interpretation is not the only one that can be made and arguments are not evidence The General Counsel must prove by a preponderance of the evidence that his interpretation is the correct one and that Respondent made an issue in the negotiations, of its financial ability to meet the union demands Almost all the statements attributed to the Re spondent s negotiators have been interpreted by the Gen eral Counsel to refer to financial capability and have with equal ease been explained away by Respondent s witnesses as referring to something altogether different If anything, the Respondent has had the better of the ar gument in every instance, for the General Counsels wit ACCURATE DIE CASTING CO nesses have had to contort the natural meaning of the statements to make them fit the General Counsels case Counsel for the General Counsel have expressly argued that the repeated assertion of the need to obtain wage and benefit reductions in order to be able to compete is clearly and specifically an expression of financial inabil ity to pay the increases and/or freezes sought by the Union The compilation of expressions by the Respond ent s negotiators does not, however, show that at all This is argumentative interpretation, not proof They read the remarks as though the words in order to be able to compete were not invested with any meaning, while the Respondent would put a period after the word compete The General Counsel submits that the re peated assertion of the need to obtain wage reductions is an expression of financial inability to pay the increases of the need to compete in order to stay in business The Re spondent asserts that the repeated assertion of the need to obtain wage reductions is an expression of something that is needed in order to be able to compete more effec tively-period Merely dwelling on the terminology, however, with out consideration of the whole picture misses the point which is whether in the ambience of the discussions that took place, the issue of Respondents financial ability to pay the current or increased wages was raised by Re spondent When all the evidence is considered and due consideration is taken of all the events and statements which together make up the history of the bargaining sessions that took place from May through October 1984, including consideration of the sessions that took place in 1983, I am left with the same impression I had at the conclusion of the hearing the Respondent had gone into the negotiations with the clear and explicit objective of cutting the wage package to bring it into line with that paid by its competitors and thus promote growth of the Company s business, and never based its position on in ability to pay the wage package Counsel for the General Counsel have collated a number of statements and events that they claim indicate that Respondent raised the issue of financial capability but such efforts never graduated from suggestion to proof for the simple reason that every such statement or that which I have credited proved to be capable of more than one explanation, and the Re spondent s was usually more plausible Consequently of much greater relevance to these pro ceedings than the cases relied on by the General Counsel are the recent cases of Atlanta Hilton & Tower 271 NLRB 1600 (1984) and a very recent decision which refers to it Advertisers Mfg Co 275 NLRB 100 (1985) The Board had very clearly stated, in Atlanta Hilton & Tower, that no particular language was needed to express inability to pay but that a finding that it had been ex pressed had to be based on words and conduct that were specific enough to convey such a meaning In Advertisers Mfg Co it was found that, like the Respondent in this case, the employer had expressly and unequivocally dis avowed any plea of financial inability to pay There is a distinction between unwillingness to pay and inability to pay, and the various reasons stated by the employer indi cating unwillingness to pay were held to obviate the ne cessity of production of books and records even though 291 in one instance the employer had referred to its level of business to justify nonpayment of a yearend bonus In a different class are some communications cited by the counsel for the General Counsel that are not at all ambiguous Robert W Barber, a member of the union negotiating team, testified that at the third and last of the 1983 sessions, McGarigal offered to make a profit and loss statement available to the Union if the Union would guarantee the making of concessions, but withdrew the statement when the Union advised that verification would still be needed The production of a profit and loss statement can be interpreted as a contention that the Company s overall finances were being adversely affect ed by the Union s position, as an assertion that it is the profit margin-not just wage-that is sought to be brought in line with that of the competitors In that case, the Respondent would be under an obligation to furnish, in addition to the profit and loss statement sufficient ad ditional information to enable the Union to verify the Respondents total cost of production, its total cost of sales, its total cost of operation including taxes and its income from all sources Barber also testified, with corroboration from Douglas Richer, another member of the union committee, that at this same session McGarigal said the failure to grant con cessions would require Respondent to file, or make it probable that the Respondent would file, a petition under chapter XI of the Bankruptcy Act Of course if such a statement was made indicating the existence of a situa tion of such financial gravity that the Company could not pay its debts as they matured it would by itself settle the question of whether records had to be produced and which records were needed Accordingly, I have consid ered all the evidence regarding the making of such a statement as well as any evidence which would tend to suggest the probability or lack of probability that such a statement had been made by McGarigal In this connection I note and reject the argument of Respondents counsel that the 1983 negotiations are com pletely irrelevant Even though they took place a year before the negotiations in question actions taken and statements made at the 1983 negotiations are admissible to the extent that they explain or clarify the events at the 1984 negotiations However confronted with the testimony of Barber and Richer that some statement about chapter XI was made and the denial by McGarigal, I conclude that no profit and loss statement has been shown to have been offered and no statement about chapter XI is proved to have been made by McGarigal Barber testified that McGarigal offered to show the Union a profit and loss statement but withdrew the offer when the Union took the position that concessions could not be guaranteed on that basis and would depend on what an audit disclosed According to Barber, McGari gal responded with a statement to the effect that the only other way to save the company may be to file Chapter XI That was the last thing he said to them, ac cording to Barber Barber s testimony is surprising to say the least be cause of Barber s own testimony that the company nego 292 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD tiators refused to make the books of the Company avail able because as they said, No we re not having finan cial problems We simply want to become more compete tive At one and the same time Barber testified that the Company took two inconsistent positions but there is a complete absence of testimony that any attempt was made to compel the company negotiators to bridge the discrepancy Barber seemed unaware of the discrepancy The net effect of his testimony, therefore, is that the chapter XI remark was made in a context indicating an absence of financial hardship At best, his testimony is not very persuasive I have considered the corroboration by Richer Richer s testimony also gives the impression that the statement purportedly made by McGarigal was made at the end of the session, for he testified simply that when the request for concessions was turned down, McGarigal said Well I m going to have to file a Chap ter XI The persuasiveness of their account is dimin ished by the discrepancies between their quotations of McGarigal s statement and by Barber s failure to testify that McGarigal had mentioned a wage concession as a way to save the company, which would have been a logical antecedent to the chapter XI remark Barber s testimony loses all of its persuasiveness when it turns out that he and Richer alone, of all the persons in the room, heard the statement and saw the profit and loss statement Nobody else did The chief union negotta tor, Spoto did not see the profit and loss statement and did not hear the remark attributed to McGarigal If Re spondent were pleading poverty or financial distress as the General Counsel contends, the Respondents repre sentatives would certainly have made sure that the chap ter XI possibilities were brought to the attention of the chief union negotiator A remark about filing of a chapter XI petition is not the kind of remark one would expect to be forgotten or misunderstood especially by someone like Spoto an International representative of the UAW and the chief negotiator at the session with greater expertise and expe rience in negotiations than the other members of the committee A remark like that would be expected to be addressed directly to him not to anyone else, and not in an offhand manner and not to the room as a whole Nev ertheless Spoto did not testify to such a statement having been made either before or after Barber s testi mony and made no entries in his memoranda regarding the making of such a remark at any of the sessions There is no testimony by any of the General Counsel s witnesses that the making of the remark was at any time communicated to the members of the bargaining unit or discussed among the members of the negotiating commit tee Until Barber mentioned it at the hearing in this case it disappeared like a stone dropped into a pond, except that this stone did not even leave ripples in the water It cannot be said that Spoto lacked opportunity to quote McGarigal or Rambaldo to that effect if such testi mony had been warranted I asked him about such a remark at another (1984) meeting because I misheard the word sales as failed JUDGE LAWRENCE Mr Spoto at the June 6th meeting, did Mr McGarigal or any other represent ative of the Company say anything about the Com pany failing9 THE WITNESS The Company failing, no sir JUDGE LAWRENCE I thought when you started your testimony on June 6th you used the word failing In what connection did you use it? THE WITNESS I don t believe I said it your Honor If I did-I did mention McGarigal had spoken about the Company sales the general state of the economy In its imputation of various statements to Respondent s negotiators, the General Counsels case thus added up to a number of imputed statements which did not, even when wrenched out of context, add up to a plea of finan cial disability plus an unambiguous statement touching on the Company s financial conditions but which is sought to be proved by testimony that I find impossible to credit I have taken into consideration evidence that was offered as tending to show that the imputed state ment was of such a nature that McGarigal might have been expected to make it This consisted of testimony by Duane Madrzykowski, the Fayetteville plant manager, from May 1982 through March 1984 He testified that prior to the 1983 meetings with the Union, there were several meetings that he attended with top company offi cials regarding the approach to be taken to the Union He testified that the decision to approach the Union was a collective decision of McGarigal Slyman, and Ram baldo The reasons conveyed to him for approaching the Union were he said twofold One was that the competitive stature of the com pany at that time as they felt in relation to National Die Casters that we were not competitive, that our pricing was such that you know we were losing business because of it our costs Two is the company was beginning to experi ence a downturn in profits And we could see that we were gong [sic] to start going into the red you know, within the very near future However, the impression created by this testimony is disspelled by his testimony that in 1984 he attended only one meeting in Cleveland and neither the approaching collective bargaining negotiations nor the future of the Company were discussed at the meeting Q Were you present at any meeting in 1984 in Cleveland? A I was-the only meeting that I was in Cleve land for in 84 would have been January of 84 which was our normal quarterly managers meeting Q And can you tell us who was present? A Well, it would have been the entire board whcih [sic] is Chuck Rambaldo Dave Slyman George Slyman Bob Auer, Frank Ryan, John McGarigal John McDonald myself Joe Swartz the plant manager of the Cleveland operation and Bob Kitzman the plant manager of the Milwaukee operation ACCURATE DIE CASTING CO Q Were the upcoming collective bargaining ne gotiations with the UAW discusser A Not at that meeting, no Q Was the future of the Accurate Die Casting plant in Fayetteville discussed? A Not to my recollection, no Q Were you present at any other meetings where the upcoming collective bargaining negotia tions with the United Auto Workers was discusser A No, I was not I had left in March of 1984 and that was prior to any of the formal meetings In spite of the testimony just quoted, Madrzykowski also testified that early in 1984, prior to the formal meet ings with the Union the possibility of closing the plant was mentioned The ramifications of the Union s failure to grant the concessions were explained to him as fol lows Q Can you answer the question A From time to time, you know I wouldn t say it was ever said in a formal meeting, but from time to time, it was said that if we don t get our act to gether, you know, and the plant doesn t get going there is a potential that it could go Chapter XI or the plant Could close JUDGE LAWRENCE This was said at a meeting with you? THE WITNESS Yes I distrust testimony of this critical nature when the witness to such an important pronouncement fails to identify the speaker until cross examination (He then said it was McGarigal) The tentative nature of the quoted remarks also should not pass unnoticed accord ing to Madrzykowski the speaker ventured the opinion that there was a potential that some terrible things could happen Madrzykowski s testimony leaves us nowhere The statement about filing in chapter XI was never made in a formal meeting The nature of the statement itself is ex tremely general and contingent and there is no evidence in the record of the course which subsequent events took except for evidence that the employment roster climbed from 90 in 1983 to over 100 early in 1984 to 160 by mid June Madrzykowski s testimony was not as positive as counsel for the General Counsel would have it For example it is asserted in their posthearing brief that he testified that Respondent was not competitive due to its costs resulting in the loss of business, and that it was starting to go into the red He said nothing of the kind and in fact may have said the opposite His testimony quoted verbatim, above was that a downturn was start ing and management could see that they were going to start going into the red in the future Although there is no direct evidence on the point, all the other evidence in the case suggests that the Company never went into the red Under these circumstances then why should not Spoto s testimony be credited? He testified that he was told by the Respondents negotiators that the Company was making money and their proposals were not based on economic distress and that he told the union mem 293 bers at their meeting on 14 June that the Respondent was not pleading poverty Spoto s testimony makes it clear that the Respondent s negotiating team never threatened termination of the business of closing of the Fayetteville plant and that he himself recognized that their bargaining stance was not founded on any contention that they could not meet union demands, and that the union members so under stood their position An entry in Respondents memoran dum of the meeting of 6 June 1983, not controverted (G C Exh) quotes Spoto to the following effect People realize times are tough, they d be happy to help the company if they knew the company was really having financial problems but they feel the company is just trying to get Fayetteville wages more in line with the other plants They were right As to the profit and loss statement, there is no testimo ny from any other witness that it was offered, which leads me to believe that it was not offered I do not credit the testimony of Barber and Richer and, accordingly find that McGarigal did not make any statement indicative of an intention to file a petition under chapter XI of the Bankruptcy Act in the event the Union refused to agree to the concessions which the Re spondent was demanding I find that no profit and loss statement was offered for examination by the union ne gotiating committee in exchange for a guarantee of con cessions The General Counsels position cannot be rendered completely plausible without entering into speculation regarding the reasons for Respondents alleged behavior The General Counsels case, considered in its entirety, is that the Respondent raised the issue of its financial abili ty to meet the union demands because it really was in deep financial trouble Under those circumstances, the reason for concealment of that fact from the Union re quires explanation, especially because the Union was inti mating that under those circumstances concessions might be granted Some possible reasons come to mind but in the absence of proof we are left wallowing in specula tion If the General Counsel is going to take the position that the Respondent acted in a fashion that seems to defy reason and logic an explanation should be forthcoming based on solid evidence Instead all we have is Spoto s testimony that on the dates set forth in an affidavit he gave the Board-7, 13 and 14 June and 3 and 20 July- he requested books because the demand for concessions coupled with the statements being made by the company negotiators reminded him of the situation of Chrysler Corporation This was a highly dubious analogy because Chrysler had uncontrovertibly been in clear danger of imminent extinction He continued to be reminded of Chrysler Corporation and continued to request the books even though he was uniformly met with a refusal on the ground that the Company was not crying poverty even though he knew the work force had increased over the last year and even though he was told that the Compa ny had plans for expansion and new business 294 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD The foregoing are the major points that affect the course of my thinking and the outcome that I have reached on this point On all the points raised in this case, I have found that the statements attributed to Re spondent s negotiators which have been proved to have been made were either susceptible of other interpreta tions (which Respondent readily supplied), were too amorphous or unconnected, or simply did not carry the connotations attributed to them by the General Counsel Counsel for the General Counsel have made a strenuous effort to bring this case within that class of cases in which it has been held that an employers contention that it needed concessions to enable it to compete were cou pled with other statements or actions which placed the entire financial picture of the employer in issue and therefore justified an inspection of its books and records The proven facts, however, preclude such a finding in this case In the cases cited by the General Counsel, there are circumstances that are not present in this situa Lion In Western Wirebound Box Co, 145 NLRB 1539 (1964), enfd 356 F 2d 88 (9th Cir 1966), the company took the position that competitive forces made it imper ative that costs not be increased and it was stated by the company s president that failure to bring about a cut in wages would cause the business to operate at a loss and might threaten its existence Later in the negotia tions that position was abandoned and the company as serted that competition was vigorous In finding viola tion, the administrative law judge stated An argument advanced in bargaining that an em ployer cannot grant a wage increase because of competitive considerations does not lead logically always to a conclusion that the employer is finan cially unable to grant it I think it is not improb able that in some situations an employer might ad vance the fact that competitors were undercutting him in the market as a reason for holding fast on wage when his concern is in reality whether he wishes to employ his capital in a venture of reduced profitability So I think it not always inconsist ent for an employer to say that a wage increase will not permit him to stay competitive and at the same time to assert that he is not pleading inability to pay In any event I think it unnecessary to decide here whether the Respondent was in fact telling the Union that it was financially unable to grant a wage rise Certainly it persistently argued that the competition it was encountering made it imperative that it not increase costs Did the Re spondent thus present an argument in bargaining important enough to require some sort of proof of its accuracy? 3 I think it to be clear enough that the Respondents claimed fear of competitive disad vantage should it not cut or at least maintain its wage rates in such an argument and it follows from a reading of the decision last cited that it could be required to offer whatever documentation of that claim it possessed (145 NLRB at 1545) [Emphasis added ] 9 NLRB Y Truitt Mfg Co 351 U S 149 153 In Montague Co, 116 NLRB 554 (1956), the employer asserted that granting an increase would make it difficult to obtain profitable orders The employer was required to produce only such information as will substantiate the Respondent s claim of financial inability to meet the Union s request The employer was not required to produce all of his books or submit to a general audit In Cincinnati Cordage & Paper Co 141 NLRB 72 (1963) the argument was that the company could not stay competitive This was combined with a stand pat approach wherein the company made no modification of its position on wages, even slightly, waiting for sugges tion to that effect to come from the Union In that deci Sion, it was noted that want of good faith was apparent in the company s actions and attitude with respect to the union s wage demands In Peerless Distributing Co 144 NLRB 1510 (1963), the forecast of the end of the business if the union s propos als were acceded to is couched in slightly different Ian guage the company asserted that it wanted to remain competitive, a phrase that was interpreted as a refer ence to financial inability In Charles E Honaker, 147 NLRB 1184 (1964), there were numerous actions by the employer which were seen as demonstrating its failure to bargain in good faith, such as refusals to remain in sessions for reasonable lengths of time and lengthy delays between sessions The refusal to furnish information was a refusal to furnish very specifically defined data the name of the person who conducted the wage surveys, information as to the relation of wage increases as a cost factor to the sell ing price of the company s gasoline and the Respondent s profit and loss statement The employer asserted its in tention to remain competitive In Stanley Building Specialties Co 166 NLRB 984 (1967) enfd 401 F 2d 434 (D C Cir 1968) the compa ny s position was that increased sales do not necessarily mean increased profits or earnings It was asserted that earnings were disproportionately small compared to sales material costs had increased and there had been other expenses with the result that the employer could not remain competitive if an increase were granted To stay in competition the company offered what we felt or hoped that we could overcome or live with Patently more than wage disparity was put in issue The employer was accordingly, required to produce supporting eco nomic data (The data originally furnished had not been from the corporate operating division with which the union was negotiating so there had in effect been no production of records or data whatsoever) In Palomar Corp 192 NLRB 592 (1971) the employer averred that it could not `earn the profit to which we are entitled while paying non competitive rates Fur thermore, the employer expressly stated that the compa ny was losing money Naturally, it was ordered to produce all its records to enable the union to verify the profit situation (The administrative law judge expressly ACCURATE DIE CASTING CO found that the union had not been engaged in a fishing expedition ) In C B Buick Inc, 206 NLRB 6 (1973), profit and loss figures were directed to be disclosed by an employer that had claimed impoverishment and inability to meet union demands (and had committed unfair labor prac tices outside of the conference room) In Hiney Printing Co, 262 NLRB 157 (1982), the em ployer s president said there was some possibility the company might have to close because its wage rates were not competitive In Harvston Mfg Corp, 272 NLRB 939 (1984), the ad ministrative law judge noted that during negotiations one of the respondents concededly raised a plea of pover ty The others said they needed reductions to stay in business and could go out of business and made numer ous statements of similar import In S B Mfg Co 270 NLRB 485 (1984), the company stated that it was in no position to grant the union s de mands concerning holidays, vacation benefits, and pen sion, and that the company was in recession None of these cases require a different result They all follow the basic dictates of the decision in NLRB v Truitt Mfg Co, 351 US 149 (1956), that bargaining be honest and that arguments made be backed up by proof of their accuracy The requests which Spoto claims to have made for access to Respondents books and records were made in response to certain statements and demands made by Re spondent s negotiators Each request was answered by the statement that they were not pleading poverty Pre cisely what such statements were meant to import is what is in issue Throughout the negotiations, the Re spondent demanded a reduction of the employees wage and benefit package and gave as the reason its desire- or, as the General Counsel would have it, its need-to become more competitive with other companies in the industry that were paying lower wages McGarigal and Rambaldo insist that they did not go further than to state that concessions were necessary to improve the competi tive position and that nothing else was said that justified a demand by the Union for a general inspection of the books Cases in which an employers assertion that it is not pleading poverty have been coupled with an express statement or an unequivocal act clearly connoting finan cial hardship, present or anticipated are not in point here This case involves an employers assertion that it is not pleading poverty that is not coupled with such an expression or act but at best with statements or actions that the Union elected to interpret as expressions of fi nancial hardship The General Counsel has attempted to justify such interpretation in the face of other expres sions and actions by the Respondent indicating a future of growth for the Company or even by wrenching state ment out of context or even by reinterpreting the con text Counsel for the General Counsel do this by simply ignoring inconvenient facts such as, for example the utter lack of interest on the part of the union negotiating committee is such data as was furnished by Respondent at the bargaining sessions, the continuation of negotia tions by the union bargaining committee after production 295 of books and records had been declined indicating both ability to bargain without access to the data contained and their relative lack of importance in the overall situa tion the utter failure of Spoto or any other member of the committee to argue protest, or even discuss to any extent at all, the desirability of producing the books once the request by Spoto had been rejected with the state ment that the Company was not pleading poverty the warning by Spoto to the employees at the meeting held on 14 June when he explained the different consequences of an unfair labor practices strike and an economic strike and told them that they could be replaced in this strike and the late date at which the unfair labor practice charge in this case was filed, long after the strike started The Respondent, in its posthearing brief makes an argu ment respecting the motivation underlying the Charging Party s position in this case which I find speculative and unproven but there can be little question that the Charg ing Party s failure to file the charge until 13 November 1984 raises an inference that it only gradually came around to the belief that an unfair labor practice had been committed by reason of the failure to produce books and records and that that failure on the part of the Respondent had not played any significant part in the de cision of the employees to strike on 15 June I emphasized certain portions in the foregoing quota tion from the Empire Terminal case because I think Re spondent has in all important respects acted similarly to the employer in that case In Empire Terminal financial disability was not suggested and the disclaimer of it was express Although mechanical parroting of a phrase such as, We are not pleading poverty is not, to my mind an express disclaimer of dark financial clouds on the ho rizon the statement in the present case was made at ap proprite points in the discussion and Spoto never disput ed it and never once made any comment to Respondent s negotiators indicating any belief on his part that such a statement was inconsistent with any of their earlier state ments or with any information in his possession Further more like the employer in Empire Terminal Respondent never claimed inability to meet the union demands The employer in Empire Terminal affirmatively asserted the lucrative nature of its business, Respondent, even by Spoto s own account stated that it was making money was looking to increase utilization of the capacity of the Fayetteville plant looked forward to new business, and expected to create additional jobs In fact, he conceded that the work force had increased from 90 in 1983 to 160 by June 1984 by increments throughout the period A number of the statements made by Respondents ne gotiators were decidedly upbeat Panciera s uncontro verted testimony was that a reference in Respondent s memoranda of the negotiations to Dies gained/lost in eluded new business Q Now when the phrase Dies gained/lost was used by Mr McGarigal in his remark what did he say? A He was saying we had lost some dies and we had gained some dies you know that we hadn t been as competitive as we liked in the marked place but in some instances we had been successful in get 296 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD ting business and getting additional dies from cur rent customers or new dies from other customers That all was not grim is apparent from the tenor of some of the statements in Spoto s testimony regarding one negotiating session Q Do you recall any discussion with regard to growth at the Fayetteville operations? A When Q During the collective bargaining sessions? A Yes Q And 111 ask you to describe what you recall and who said what A At one of the meetings, John McGarigal had indicated it would be new equipment coming into the Fayetteville operating along with new work from General Motors And he anticipated within the year s time that they would put on approximate ly 200 additional employees In explaining his repeated requests for Respondent s records Spoto testified that he did not understand what Respondent was really saying because they were giving him both good and bad news Such mixed signals are a far cry from the situation of a company that is strictly pleading poverty In the context of all the statements being made the one remark that even remotely ap proaches remarks made in the foregoing cases-that things have to be changed to retain our competitive po sition -does not loom so importantly and even takes on a different connotation sounding as much like talk of staying abreast or ahead of competition in an existing profitable race as of keeping up to survive The only difference between the positions of the em ployer in Empire Terminal and the Respondent is that the former made no claim that any customers had been lost to competitors The General Counsel draws a picture of negotiations conducted in an atmosphere of desperations However the evidence as a whole suggests that such retroactive coloration does not truly reflect the way in which things actually happened There were 13 negotiating sessions in 1984 before the strike All noneconomic items were re solved by 7 June and discussion of the wage benefit package then commenced The General Counsel empha sizes that the position of Respondent regarding wages was the same as its position in May 1983 when it re quested deferral of a wage increase provided for in the existing agreement so that it could better contend with competition In both sets of negotiations however, Re spondent based its request squarely on the dispanty be tween the wages paid by it and by its competitors and asserted its desire-or need-to improve its competitive position By itself a request for a midterm modification need not necessanly be interpreted as a signal that an employer is in, or is approaching serious financial diffi culty In the present case, such an interpretation is un warranted in the face of the evidence that it said it was not pleading poverty, and that new business was expect ed to come in, that while some business was lost other business did in fact, come in and that there were plans for growth and increased utilization of plant facilities Accordingly I find that the Respondent did not raise an issue of its overall financial ability to meet union wage demands at any time during the negotiations The Respondent raised an extremely limited issue with re spect to the competitive disadvantage in which it was placed by reason of the existing disparity between the wage and benefit package enjoyed by the employees at the Fayetteville plant and that being paid to other em ployees in the industry including the employees of Re spondent s competitors and Respondent s own employees working in its other plants b The records that the union was entitled to see and the records that it demanded to see The Respondent having raised an issue concerning the disparity between wages paid at the Fayetteville plant and wages paid elsewhere was obligated on demand by the Union, to produce data that would establish that there existed the substantial wage discrepancy that it de scribed There is no conflict in the evidence regarding the Union s lack of interest in seeing such data because its viewpoint was fundamentally different from that of the Respondent The starting point for its examination of the wages question was the general wage level in the Syracuse area It had its sights set on prevailing wages and living costs in the geographical area in which its members lived and worked, and was not interested in conditions in plants in the same industry in other parts of the country even if their product competed with that of the Fayetteville plant There is an issue whether the Union demanded an in spection of records but I find the evidence clear that it demanded an inspection and asked for a lot more than it was entitled to see The excessive demand resulted from its insistence on either misinterpreting the Respondent s position or extending the Respondents argument to a point beyond that justified by anything that the Respond ent s negotiators had said The Respondent asserts that no demand was made for financial records until 14 June, the last session before the strike Witnesses who were members of the negotiating committee for the Union assert that demands were made on a number of occa sions mostly during the last week of negotiations before the strike There is little question that their production was demanded by Spoto during the 1983 talks and he testified, on the basis of entries in his notes that demands for production of records were made in 1984 on 7 13, and 14 June and 3 and 20 July Committee member Barber testified that such demand was made at least three times before the strike Gladys Taylor another committee member testified to Many times, every meeting and About eleven or twelve times' Gerald Honors testified that during the last week of negotia tions the request was made two or three times in differ ent meetings The testimony of the union negotiating committee members is inconsistent regarding the number of times the request was made but it is apparent that the request was repeated at least several times I see no reason to doubt Spoto s testimony The Respondent argues that the manner in which entries relating to the requests are post ACCURATE DIE CASTING CO 297 tioned in Spoto s memoranda of the meetings raises doubts about their authenticity, but I regard such an ar gument as speculative Nothing was brought out on cross examination or voir dire that suggests that the memoranda may not be relied on to show that records were requested at the times therein indicated In both 1983 and 1984, Spoto couched his oral re quests in terms of references to books and records He had, however during the 1983 negotiations delivered a detailed written request for access to records by the auditors of the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America It was on the letterhead of the Syracuse Office, District 9 of the International, and was addressed to McGarigal The letter set forth two lists, each consisting of nine items The first was a list of summaries of differ ent types of data relating to various financial aspects of the Respondents business, which were to be delivered prior to examination of the detailed financial state ments The second list was an itemization of nine cate gories of financial statements which the auditors wished to examine after which they also wanted to see the books, records and ledger of the plant This was all spelled out with great specificity so that when the re quests for books and records were made by Spoto in 1984 there can be little doubt that Respondent knew precisely what was being asked for It was because Respondent had a true appreciation of the nature of the Union's request for inspection of records that it declined to grant the Union s request It was clearly within its rights to do so The issue raised in the negotiations was whether there existed a substantial discrepancy between the wages paid by Respondent at the Fayetteville plant and those paid generally in the in dustry which discrepancy placed the Respondent at a competitive disadvantage in bidding for business Data that would establish the existence of a substantial differ ence in the price of labor would tend to support the po sition taken by the Respondent at the bargaining table The complete fiscal picture of the Respondent was not germane to that discussion The financial history of the Company during fiscal periods would be germane to its ability to meet union demands but Respondents negotia tors had not raised any issue in that respect The union demand was therefore excessive and was properly rejected by the Respondent c Production of records by the Respondent Had the Union made a proper demand for data to sup port the Respondents contentions at the bargaining table geared to the contentions that the Respondent had actually advanced instead of the distortion of them to which Spoto clung the demand would have sought pro duction of wage data industrywide and breakdowns of fringe benefit packages enjoyed by workers elsewhere in the industry as compared with those already enjoyed by the employees at the Fayetteville plant That is precisely what the Union was furnished with It is undisputed that at the negotiating session of 6 June 1984 Respondent made a presentation by projecting fig ures on the wall and distributing a written chart, based on data contained in an industrywide survey taken by the American Die Casting Institute Its 1984 ADCI Annual Wage Survey and the institutes 1984 Eastern area report were on the table and the union negotiators were invited to examine them A substantial period of time was spent explaining the projected charts that com pared plant labor costs and fringe benefit costs with those prevalent in the industry Respondents negotiators contended that they showed that the wage and benefit package of the employees at the Fayetteville plant was $4 02 per hour higher than the wage benefit package of employees of Respondents competitors I find that, though the Union did not demand the data to which it was entitled in view of the issues raised by the Respondent during the course of the negotiations, that data was nevertheless provided and made available to the Union by the Respondent d Conclusion I find that the Respondent was not obligated to make its books and records available to the Union or to furnish any other data to support its contentions in the contract negotiations in the absence of a proper demand by the Union, but that it nevertheless made available to the Union all the data to which the Union would have been entitled had a proper demand for verification of the Re spondent s bargaining position been made 2 Implementation of Respondents contract proposals The implementation by Respondent of terms contained its final offer to the Union is cited by the General Coun sel as an instance of the Respondents refusal to bargain in good faith The Respondent alleges as an affirmative defense that it bargained in good faith and that an im passe had been reached Whether an impasse was reached depends on whether the Respondent had been bargaining in good faith, for without good faith bargain ing there is no such thing as an impasse The General Counsel did not at any point accuse the Respondent of surface bargaining Negotiating sessions were held on 19 occasions in 1984 At almost all of these, the parties met across the table A few sessions at the end were conducted by a New York State mediator with the two sides separately All noneconomic issues were resolved before the current contract expired Though the Respondent adhered rigidly to its position that the compensation package had to be reduced it modified its proposals somewhat immediately prior to the expiration date of the current contract The factors that I have cited impel me to conclude that the collective bargaining that took place was con ducted in good faith as required by the Act The only aspect of the negotiations that calls for closer scrutiny is the Respondents steadfast insistence on reduction of the compensation package The Respondent insisted on a wage reduction precluded any possibility whatsoever of a wage increase, and, by tying its negotiating position to the compensation level being paid by its competitors in some sense bound that negotiations to conditions set by persons who were not parties to the negotiations These factors do not necessarily show bad faith The entire sit 298 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD uation in this case is utterly removed from the kind of obstinacy, advancement of extremely unpalatable propos als, and other conduct designed to stall negotiations, pre vent the reaching of an agreement and undermine the Union which are characteristic of bargaining in which good faith is lacking In Borg Warner Controls, 198 NLRB 726 (1972), it was observed It is the total picture shown by the factual evidence that either supports the complaint or falls short of the quantum of affirmative proof required by law [198 NLRB at 726 ] See also Herman Sausage Co, 275 F 2d 229 (5th Cir 1960) enfd 122 NLRB 168 (1958) Sweeney & Co, 176 NLRB 208 (1968), modified but enfd as to this point 437 F 2d 1127 (5th Cir 1971) It is clear that the Respondents proposed compensa tion package did not fall into the category of an unac ceptable proposal that would have left the Union no al ternative to a strike Spoto testified that the union negoti ating committee would have been willing to consider it and that the Respondents financial records were request ed to confirm the fairness of the request Though the Re spondent to minimize the importance of the books and records in the negotiations, attempted to prove that Spoto only asked for them once I have credited Spoto s testimony that he asked for them on a number of occa sions There is also testimony that the subject of inspec tion of the Company s books was raised at the meeting at which the strike vote was taken Whatever else this evi dence may be claimed to show it establishes that, under the right conditions a wage reduction would have re ceived serious and possibly sympathetic consideration by the union membership It was not, therefore, a propo sition that can be said to have advanced with the expec tation that it was hardly likely to receive union support Inasmuch as I have found that the Respondent pro duced whatever data the Union was entitled to see in support of the Respondents contentions regarding wage disparity and its effect on competition, the only other facet of this situation that might afford a basis for finding a refusal to bargain in good faith is the Respondents re fusal to back away from its insistence on reduction in the wage benefits package The question is whether the Re spondent was firm, as allowed by law or intransigent to frustrate negotiations I must conclude that, in remaining firm in its basic bargaining position, Respondent was within its rights if I consider the totality of Respond ent s conduct in its bargaining relations with the Union and take some cognizance of the reasonableness of the positions taken by it in the course of the bargaining ne gotiations NLRB v Reed & Prince Mfg Co 205 F 2d 131, 139 (1st Cir 1953) cert denied 346 U S 887 (1953) The measure of an employer's compliance with the stric tures of the Act is the making of some reasonable effort in some direction to compose his differences with the union if Section 8(a)(5) is to be read as imposing any substantial obligation at all The evidence establishes that through the course of the negotiations, the Respondent modified proposals on the wage package in several respects Inevitably in doing so, it was more flexible than the Union, which re fused to consider wage reduction at all The Charging Party denigrates the modified proposals as basically rep etitions of the original position of the Respondent, but the modifications were substantial enough to form the basis for discussions had the Union been amenable Certainly intent to frustrate agreement may be inferred from an intransigent bargaining position taken with re spect to only one subject matter of negotiation, especial ly if it is a crucial one, even if there is willingness to reach overall agreement See Steelworkers v NLRB, 390 F 2d 846 (D C Cir 1967), cert denied 391 US 904 (1968) However, it is well settled as a matter of law that adamancy with respect to a position in collective bar gaining does not by itself constitute a failure to bargain in good faith Chevron Oil Co v NLRB, 442 F 2d 1067 (5th Cir 1971) US Gypsum Co v NLRB, 484 F 2d 1067 (5th Cir 1973), denying enf of 200 NLRB 1098 (1972) The Unions position as I have noted, was not flexible Just as Respondents negotiators kept saying they were not pleading poverty, Spoto kept asking to see the books instead of addressing himself to the proposals In the present case, the Respondent has adhered to a position in negotiations regarding the compensation package that it set forth as a fair response to a business situation making all the details of its problem known to the Union All supporting data which justified its posi tion were offered to the Union at the negotiation ses sions No evidence of animosity on the part of the Re spondent toward the Union is in the record and though there is reference in the testimony to earlier strikes there is no evidence of the commission of prior unfair labor practices by the Respondent That there had been sue cessful collective bargaining between the Union and the current management in the past was evident from the ex istence of a 3 year contract which expired 15 June 1984 See with reference to the importance of the context in which there is insistence on a bargaining position Conti nental Insurance Co v NLRB, 495 F 2d 44 (2d Cir 1974) Architectural Fiberglass 165 NLRB 238 (1967), M System Inc 129 NLRB 527 547 (1960) NLRB v Reed & Prince Mfg Co supra Section 8(d) of the Act requires that the parties meet at reasonable times and confer in good faith and at the same time stipulates that such obligation does not compel either party to agree to a proposal or require the making of a concession The parties are required to ne gotiate in good faith, if they fail to reach agreement the Board cannot pass on the merits of their positions or impose an agreement on them NLRB v Herman Sausage Co, supra Hard bargaining is not outlawed Insofar as the re quirements of the Act are concerned the Respondent has met its responsibilities Having bargained in good faith, it was within its rights when negotiations proved fruitless and reached impasse, to implement the terms and condi tions of its final offer and was no longer obligated to maintain the contract terms in effect Mediation was in yoked and the terms of the final offer were not imple mented until after the expiration of the existing contract ACCURATE DIE CASTING CO 299 No violation of Section 8(d) of the Act has been estab lashed by a preponderance of the evidence C Alleged Discriminatory Action Against Employees The General Counsel alleges a violation of the Act by reason of Respondents failure to rehire striking employ ees, the theory being that the strike resulted from the Respondent's refusal to make its books available for in spection There is no evidence whatsoever to support that contention Spoto testified that the employees voted to strike because they considered the Respondents offer inadequate He coupled this with the assertion that at the meeting at which the strike vote was taken, questions were asked from the floor whether the Company was making its books available and the employees were per turbed when Spoto told them the books were not being made available He never, however, said that the failure to produce the books was the reason they voted to strike The assumption on the part of all concerned that the strike was an economic strike is apparent from the fact that at a union meeting in October, Spoto explained to the members that in an economic strike the employer can replace striking employees, and for that reason they could not expect assistance from the International The testimony of Gerald Honors on this point, if it means anything, confirms what Spoto had testified to Honors testified that an employee, at the strike meeting, asked if the Company had been asked to open its books, and another asked if the Company could be forced to do so Spoto responded that he had been asking for that since 1983 so that the union auditors could ascertain that the Company was in financial difficulty to justify these concessions And in all occasions, the answer was the same we are not pleading poverty Then, according to Honors, they proceeded to take two votes one on the Company's final offer and one on whether to strike I find, therefore, that the members voted to strike on the basis of the status of the negotiations as of 14 June with respect to economic matters They did not strike because the Respondent refused to allow them to prove, by resort to the Company s books, that the Respondent was unable to meet the Union s economic demands In any event a contrary finding would be insupportable be cause of my conclusion that the failure of the Respond ent to make all of its books and records available was not an unfair labor practice and because of my conclusion that the Respondent has not been proved to have been bargaining in bad faith Accordingly I find that the Respondent did not vio late Section 8(a)(3) and (1) of the Act by refusing to re instate certain workers who applied for reinstatement be cause their positions had been preempted by replacement workers D Threats This notification constituted advice to the employees that the Respondent was about to take serious steps to ensure continued operation of its business The law allows an employer to take such action in the circum stances which I have found exist in this case NLRB v Mackay Radio & Tel Co, 304 U S 333 (1938) The Re spondent did not, therefore, by so advising the striking employees, make a threat that interfered with the rights guaranteed to employees under Section 7 of the Act and did not violate Section 8(a)(1) of the Act 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 has not engaged in unfair labor prac tices within the meaning of the Act [Recommended Order for dismissal omitted from pub lication ] Thomas J Sheridan and Robert A Ellison Esqs, for the General Counsel Carl E Worboys Esq (Bogart Associates P C), of Syra cuse, New York for the Respondent Thomas J Giblin and Stephen H Gelb Esqs, of Cran ford, New Jersey for the Charging Party SUPPLEMENTAL DECISION STATEMENT OF THE CASE This supplemental decision is issued after a hearing on remand which was held at Syracuse, New York, on 19, 20 and 21 August 1986 i On 30 May 1985, I issued a decision in this matter in which I found that the Respondent, Accurate Die Cast ing Company, had not engaged in unfair labor practices within the meaning of the National Labor Relations Act (the Act) The complaint filed by the General Counsel had alleged that Section 8(a)(1) (3) and (5) and Section 8(d) of the Act had been violated because the Respond ent had refused to furnish the Union Local 491 United Automobile, Aerospace and Agricultural Implement Workers of America which represented employees at Respondents plant in Fayetteville New York with its financial records on demand made in the course of the negotiation of a new collective bargaining agreement that the employees had consequently gone out on strike, which strike was accordingly an unfair labor practice strike, that Respondent had failed to recall striking em ployees despite their unconditional offer to return to work and that Respondent had implemented new em ployment conditions in lieu of former collective bargain ing agreement provisions though no impasse had been reached in negotiations All of these charges are founded on the contention that during negotiations Respondent s After the collapse of the negotiations, the Respondent notified the employees that if they did not return to their jobs under the conditions embodied in its final offer re placement workers would be hired to fill their positions ' A consolidated hearing was conducted at which evidence was heard relating to Cases 3-CA-12921 3-CA-12998 3-CA-13162 3-CA-13201 and 3-CA-13321 which are not otherwise consolidated with the instant proceeding 300 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD negotiators had made statements indicating financial in ability to meet union demands but refused the Union s request for an inspection of Respondents books with the repeated assertion that the Company was not pleading poverty Respondent conceded having taken the specific actions alleged but the company representatives testified that it had been the Company s stated position during negotia tions with the Union that the Company wished to im prove its competitive position by bringing wage rates at the Company s Fayetteville plant into line with wage rates generally prevalent in the industry and, in fact, in line with rates paid at another plant operated by Re spondent They emphasized their repeated declarations to the union negotiators that they were not pleading poverty The General Counsel relied on (a) statements by Respondents negotiators which were asserted to be ambiguous and that the General Counsel contended should be interpreted as assertions of financial inability to meet union demands and (b) testimony by some mem bers of the employees bargaining committee that the company president had offered to exhibit a profit and loss statement and had averred that the Union s failure to grant concessions might compel Respondent to file a pe tition under chapter XI of the Bankruptcy Act I concluded that Respondents bargaining representa tives had in fact disclaimed financial inability to meet union demands and had bargained on the basis of an ex plicitly stated desire to bring wage rates into conformity with rates prevalent in the industry I found the testimo ny respecting the offer to exhibit a profit and loss state ment unpersuasive and discredited the testimony of sev eral employees respecting remarks supposed to have been made by Respondents president about filing in chapter XI Accordingly, I found that there had been no unlawful refusal to make records available to the Union that the strike was an economic strike rather than an unfair labor practice strike, that Respondent had there fore not violated Sections 8(a)(1) (3) and (5) and Sec tion 8(d) of the Act and dismissed the complaint Approximately 5 months after the decision was issued detailed information respecting the Company s finances became available as a result of court proceedings In September members of the joint management board of the Accurate Die Casting Company-UAW Pension Fund attempted to terminate the pension fund on the ground of its insolvency The Company filed a petition in chap ter XI in the United States District Court for the North ern District of Ohio on 15 October 1985 On motion of the General Counsel the Board re opened the record and by order dated 24 June 1986 re manded the case to me for receipt of further evidence and reconsideration, in light of the Respondents petition for relief under chapter XI of my credibility findings my findings concerning the Respondents refusal to fur nish financial information and my dismissal of the com plaint alleging violations of Section 8(a)(1) (3) and (5) and Section 8(d) of the Act This supplemental decision is issued in accordance with the Board s Order after the hearing on remand The parties were once again afforded full opportunity to be heard to call , examine and cross examine witnesses and to introduce relevant evidence Postremand hearing briefs have been filed on behalf of the General Counsel the Respondent and the Union On the entire record of all the proceedings thus far, in cluding my observation of the demeanor of the wit nesses and after consideration of all the briefs filed by the respective parties in both the original and remanded proceedings, I make the following FINDINGS OF FACT A Information Disclosed Respecting Respondent s Financial Condition Information regarding the Respondents financial con dition before and during the period of negotiations with the Union over a new collective bargaining agreement became available after the issuance of the initial decision from several different sources the chapter XI petition filed by Respondent on 15 October 1985 and the sched ules filed thereafter in that proceeding a petition to ter minate the Accurate Die Casting Company-UAW Pen sion Plan, which covered employees at Fayetteville, re ports by the Respondents certified public accountants consisting of a certified report for FYE 30 April 1983 and a draft report , uncertified for FYE 30 April 1984, the Company s income tax returns monthly statements of income and expense prepared by the Company s own financial officers and a collection of worksheets denomi nated as selected financial data prepared by James Richter the Company s present vice president for fi nance Richter joined the Company on 1 March 1985 In these proceedings Respondent had steadfastly maintained that at all times during its negotiations with the Union it had denied the existence of serious financial problems and had asserted to the Union that the Compa ny was on an even keel-it was losing some business but was also gaining new business , employment was increas ing and there were encouraging prospects for new bust ness in 1984 which were expected to create additional jobs Respondents witnesses who had been the negotia tors vehemently denied having made any statements to the Union indicating that the Company was in serious fi nancial difficulty or that it contemplated filing in chapter XI Their testimony of course implied that the represen tations made to the Union were truthful In its posthear ing brief addressed to me, the Respondent asserted These circumstances hardly depict a Company about to collapse To be sure the Company was concerned over the substantial difference between its labor costs and those of its competitors not be cause the difference was a barrier to survival but be cause it was an impediment in the Company s view to even greater growth The Company was not saying it could not compete it was saying it wanted to be even more competitive It would distort com pletely the teaching of Truitt if good business judge ment and foresight on the issue of cost containment could be converted into a cry of poverty [Empha sis added ] ACCURATE DIE CASTING CO The Company s request in 1983, that the Union agree to deferral of a scheduled wage increase was attributed by its officers to their desire to enhance prospects for continued growth The request was not made in the con text of survival and the Union knew that The Company re peatedly denied that any financial problems existed or that it was pleading an inability to pay, and the Union ac knowledged that as well (Emphasis added ) In Respondents brief in response to the exceptions filed by the General Counsel to my decision dismissing the complaint Respondents counsel cited and relied on testimony by Anthony Spoto the Union s negotiator, that he had been told that the Company was making money and was not pleading poverty Respondent contends that the financial data now dis closed does not contradict its stated position that the Re spondent was in fact, at the time of the negotiations, a viable entity with a promising future and not in serious financial difficulty I must find otherwise in view of con cessions of financial difficulty now disclosed to have been made by Respondent in legal proceedings and in view of the financial data now known to have been in the possession of the Respondents responsible officials at the times pertinent to this case The statement of affairs filed in the chapter XI pro ceeding states CAUSE OF PRESENT FAILURE Twelve month strike at Fayevette [sic], N Y Plant $4 million annual business lost at Cleveland plant, $1 6 million capital improvements at Cleveland Plant for antici pated business that was cancelled Also cancelled $22 million IBM 15 million Fisher Guide This statement misleading inasmuch as the strike at Fayetteville had been in progress for only 4 months when the petition (as compared with the Statement of Affairs and Schedules) was filed concedes that the Re spondent had already sustained heavy operational losses prior to its negotiations with the Union Another assertion made by Respondent literally cor rect but nevertheless misleading, is that the unsecured in debtedness originally listed in the chapter XI schedules dated entirely from 1984 and 1985 The fact is that there also existed significant additional indebtedness which was not listed, which accrued prior to 1984 as a result of the operations of the Cleveland Ohio plant A summary of a portion of that indebtedness extracted from the accounts of the Cleveland operation the accuracy of which is not disputed by Respondent was appended to the General Counsels posthearing brief and is incorporated in and made a part of the record It reveals that accounts pay able by Respondent (inadvertently termed accounts re ceivable by the General Counsel) as of June 1984 and which remained unpaid at the time the chapter XI peti tion was filed amounted to $390 520 The indebtedness consisted of 39 items owed to 10 creditors including taxing authorities and lawyers ranging over a period from 26 July 1982 to 30 June 1984 2 2 I have excluded from consideration a listed item dated 3 November 1984 in the amount of $1642 and reduced the General Counsel s computa tion of the total accordingly 301 Additional prefihng indebtedness existed by reason of Respondents default since 1979 in payment of contribu tions required to be made to the pension plan covering employees represented by the Union at the Fayetteville plant Respondent has asserted that it maintained pay ments on two other pension plans, but from the meager information regarding them which is contained in the ac countants report for fiscal 1983 it appears that contribu tions to them were not as onerous as those required to be made for the Fayetteville pension plan and that one of them covered only salaried employees By 1985 the plan could no longer meet its obligations because of the Re spondent s failure to make required contributions but the union members of the plan s joint board of administration refused to agree to termination of the plan On 9 Septem her 1985, the board members appointed by Respondent unilaterally issued a notice of intent to terminate because of adverse business conditions and asserted The Company has had financial problems at least since 1982 It has been unable to make contribu tions, as a result, the payment of benefits in the or dinary course of operation of the plan have reduced the plan assets to zero The Pension Benefit Guaranty Corporation made ap plication for termination of the trust on 7 October 1985 in the United States District Court for the Northern Dis trict of New York, alleging, inter alia 14 The Company has not made contributions to the Plan since the 1979 Plan year The Company has es timated that the accumulated funding deficiency of the Plan as of the proposed termination date is $242,000 By way of explanation for this staggering default, Re spondent suggests that it was due not so much to lack of cash as to the fact that litigation was pending and Ac curate took the approach of wait and see and [sic] the litigation prior to making contributions and went out of the habit of making these contributions I do not credit that explanation It is inherently improbable and Rich ter s testimony that the Respondent maintained records showing what payments were due precludes any notion that the obligation was overlooked The Respondents certified financial statement for FYE 30 April 1983 certified on 15 January 1984 dis closed an operating loss of $758,990, a net loss of $346,898 and idle plant facilities valued at $574 286 Working capital had been decreased by $399 185 The Company s unprofitable Rockford Illinois facility had been discontinued after having incurred extremely heavy losses With trade accounts receivable of $2 574 670 Respondents total current liabilities amounted to $7 144 445 including trade accounts payable of $2,270,000 and current maturities of long term debt in the amount of $634 219 The report also noted the pen sion fund deficiency of $305 714 up from $133 308 the preceding year and listed extremely high depreciation rates on property, plant, and equipment 302 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Respondents United States corporate income tax return for fiscal 1983 claimed an operating loss deduction in the amount of $306 190 and an overall loss of $85 000 A summary of selected financial data for the 1983 fiscal year prepared by Richter shows that there were operating losses in every month except October 1982 The certified financial statement notes three transac tions involving and arranged by George J Slyman the chairman of the board The chapter XI petition sets forth that he is the owner of 71 percent of Respondents stock and his wife Theresa A Slyman owns the balance and that an affiliate of Respondent Accurate Die Casting Company (ADC) Milwaukee has the same stockholders directors and officers The first of the transactions noted by the accountants was consurnated in December 1982 when the die casting operations of the Respondents Rockford Illinois plant and certain operating assets were sold to the Accurate Die Casting Company Milwaukee Certain other assets according to the report would be refurbished and used in ADC s Cleveland Ohio and Fayetteville New York operations as needed The consideration to be received by Respondent for the transfer of the business and cap ital assets was stated to be a commission on expected purchase orders which the Accurate Die Casting Com pany Milwaukee was expected to complete Respondent (ADC) also acquired the real estate on which the Rock ford plant was located In a separate transaction subsequent to April 30 1983 (see Note 11) ADC purchased the land and building of the Rockford Illinois plant from G Slyman officer and stockholder of ADC The Com pany plans to lease this facility In a note entitled Subsequent Events another real estate transaction is described Effective September 30, 1983 the Fayetteville New York die casting operations building and land were sold to George Slyman an officer and prince pal shareholder of The Accurate Die Casting Com pany for $3 750 000 Consideration received for the purchase price of $3 750 000 consisted of the Rock ford Illinois die casting facility s building and land (see Notes 2 3 and 4) valued at $2 100 000 and cash of $1 650 000 In this agreement certain notes and liabilities related to the Fayetteville New York op eration were assumed by George Slyman in return for a reduction of his advance account All cash re ceived from these transactions was used to reduced [sic] the outstanding debt of The Accurate Die Casting Company as described in Note 4 A term note for $2 250 000 was obtained from a lender by George Slyman to effect this transaction This note is guaranteed by ADC Respondent leased the property back from Theresa A Slyman as landlord at a monthly rental of $43 750 The accountants draft report for fiscal year 1984 gave a different account of the transaction Effective September 30 1983 the Company s Fayetteville New York building and land were sold to George Slyman an officer and principal share holder of The Accurate Die Casting Company for $3 750 000 Consideration received consisted of the Rockford Illinois building and land valued at $2 100 000 and cash of $1 050 000 and assumption of $600 000 of the Company s debt In addition certain advances to George Slyman were repaid All cash received from these transactions were used to reduce the outstanding debt of The Accurate Die Casting Company [Emphasis added ] The third transaction referred to in the certified report was a loan made in February 1982 by Respondent to the Accurate Die Casting Company Milwaukee in the amount of $750 000 The obligation was described as sub ordinated to bank obligations The report also notes that Respondent had paid various operating expenses of the Accurate Die Casting Company Milwaukee and had thereby acquired a receivable in the amount of $290 645 In fiscal 1984 instead of losses in 11 months and profit in I the records showed losses in 10 months and profits in 2 The Respondent however claimed a larger operat mg loss tax deduction for that year this time in the amount of $391 492 A month by month comparison of the figures discloses that monthly losses in fiscal 1984 were higher than those in the preceding year According to data prepared by Richter Respondent had a net loss of $529 679 The accountants draft report for fiscal 1984 indicated the existence of a much greater loss than Richter was willing to concede The draft report indicates current assets of $6 305 000 as against current liabilities of $8 406 000 The assets were stated to include the follow mg Cash $152000 Trade accounts receivable 3 211,386 Inventory 2 127 000 However the listed liabilities include the following Bank overdraft $307 000 Notes payable 2 500 000 Current maturities of long term debt 627 000 Accounts payable 2 807 000 On net sales of $17 604 313 the draft report shows a net loss of $878 563 (The 1984 corporate income tax return prepared by Richter showed net sales of only $17044933) Richter testified that one of the reasons the report was never finalized and certified was that management dis agreed with the accountants over the proper method of accounting for the proceeds of the sale of the Fayette ville property Management wanted to treat the cash portion of the sale proceeds as income to the Company for that year The accountants view was as follows The transaction described above did not result in a gain to the Company due to the restriction that ACCURATE DIE CASTING CO present accounting standards place on such related party and sales leaseback transactions For financial statement purposes the transaction has been treated as a capitalized lease equal to the amount of the term note ($2,250,000) and a contribution of capital equal to cash received by the Company associated with the Fayetteville transaction less expenses Inasmuch as both the accountants draft report and Richter s testimony make it clear that the disagreement between management and the accountants derived from the latter s insistence on applying generally accepted ac counting principles , I adopt the accountants figures in the draft report as the correct measure of the loss sus tained by Respondent in fiscal 1984 Respondents 1984 tax return contained a summary which showed a steady decline in Respondents business volume and receipts during the period from 1979 through 1984 Year Trade Notes and Accounts Receivable Outstanding at Sales on Account End of Year 1979 5 298 033 27 950 290 1980 5 039 757 25 523 254 1981 3 499 988 24 650 459 1982 2 623 537 19 252 536 1983 3 147 115 18 529 907 1984 2 511 952 17044 933 On the basis of all the foregoing I find that at the time of the negotiations between the Respondent and the Union in 1984 and for a significant period of time before that, the Respondents financial condition was consider ably poorer than its negotiators indicated to the Union during the negotiations and to this tribunal in the first hearing Respondent has attempted to lend the figures an opti mistic coloration For example it is contended that the cash realized from the transaction involving the Fayette ville property along with some additional money accu mulated from company earnings was reinvested in the Cleveland and Fayetteville plants demonstrating confi dence on the pa-t of management in the Company s fi nancial conditions and future According to Richter, management was optimistic be cause Fayetteville was continuing to show a profit G and T Slyman put $1 5 million into the business and ap plied operating income in the amount of $300 000 to ex pansion by investing $900 000 in Cleveland and $900,000 in Fayetteville in anticipation of entering into contracts with Fisher Body and Apple Computer Richter claimed that Fayetteville, considered by itself was a profitable operation based on the fact that consid ered independently the operation at Fayetteville in fiscal 1983 resulted in a profit in 4 months and losses in only 7 months (no monthly figures were available for Fayette ville separately for February 1983) The explanation for its gross loss in 1983 in the amount of $496 230 (which grew to net loss of $533 396 for fiscal 1984) was that Fayetteville actually had net income of $303,658 which 303 became converted to a loss only because allowance was made for interest corporate charges, and depreciation These contentions are open to serious question There is no justification for Respondents contention that Fayetteville was a profitable operation that should be considered independently of the rest of the Compa ny s affairs No basis for ignoring properly allocable cor porate charges has been demonstrated they convert a positive cashflow into an overall loss, because those are the verities of the situation Richter s own worksheets in dicate that losses were mounting at Fayetteville as well as elsewhere but even if this were not so it is impossible to justify treatment of the Fayetteville plant as if it were an independent company Wages payable to the employ ees working there were paid by the corporate Respond ent on the basis of the Company s overall financial pic ture The fact that the overall picture was steadily wors ening was patently the controlling factor in the behavior of Respondents negotiators, and this was finally conced ed in Respondents posthearing brief submitted after the hearing on remand, counsel asserted, The fiscal docu ments and Richter s testimony amply demonstrate that the negotiations for reduced labor costs at Fayetteville were only part of a restructuring of Accurate That is precisely the point what was happening in Fayetteville was necessitated by the overall condition of the Compa ny Richter said as much himself He testified that Slyman told him when he was hired that the Company was in precarious financial condition that he explored chapter XI possibilities in May and June 1985, that at that time he met with the Company s smaller creditors to dissuade them from bringing lawsuits against the Company and that his ultimate recommendation to Slyman was to close the Cleveland plant (in which $900 000 had supposedly just been invested) He referred to the Fayetteville oper ation at that time in 1985 as turning around financial ly However, as he himself put it the problem was not just the Cleveland plant but the overall corporation The nature of the special transactions noted in the ac countants report is such that had they been known they could not have had any but a disquieting effect on an interested observer of the Respondents affairs, such as the Union would be They raise questions whether in effect Respondent had not transferred to another corpo ration owned by its principal stockholder whatever was of value in the defunct Rockford Illinois operation for a consideration payable on a commission basis and there fore subject to the vicissitudes of the business, and ac cepted in part payment the land and building from the stockholder obviously of questionable utility inasmuch as the last occupant had failed whether it sold its viable Fayetteville real estate to the stockholder and leased it back on terms extremely favorable to him, whether its assets had been improperly depleted by loans to, and payment to obligations of an affiliated corporation which involved risk because of their subordination to notes payable to banks (it is also unclear whether the subordination was limited to preexisting bank indebted ness) whether Respondents assets had not been impaired by other transactions apparently benefiting the Milwau 304 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD kee company and Slyman which are referred to in the 1983 report and whether the object and effect of any or all of these transactions had not been to jeopardize the Company s financial stability The attempt to depict the transactions as beneficial to the Company was based on scanty and unconvincing evidence For example, Sly mans infusion of cash into the corporations operations as a result of the sale of the Fayetteville real estate, must be considered together with the fact that all of that cash was due to be returned to Slyman within 3 years in the form of rent paid by the corporation to Theresa A Slyman, and was obtained by a bank loan guaranteed by the Respondent itself The real significance of the transactions cannot be as sessed without some information respecting Slyman s personal financial and tax situation regarding which the record is silent These transactions could reflect, not so much optimism in the future prospects of the Company as a solution to the requirements of Slyman s personal fi nancial situation The information now available regard ing them however, would undoubtedly have raised gen uine concern on the part of the Union had it been dis closed during the negotiations B Effect on Earlier Credibility Resolutions Robert W Barber and Douglas Richer testified that at the meeting of the management committee and the union committee in 1983 McGarigal offered to show a profit and loss statement and said that failure of the Union to grant concessions would require Respondent to file or make it probable that the Respondent would file a peti tion under chapter XI of the Bankruptcy Act McGarigal denied it Finding the evidence of such a statement rele vant even though made at the 1983 rather than the 1984 session I nevertheless credited McGarigal s denial and found that no profit and loss statement had been offered and nothing had been said about filing in chapter XI Our present knowledge that the Company was in deep financial trouble affords no basis for believing that McGarigal made such remarks My conclusion that he did not make them was based on factors which are not affected by the present disclosure of the Company s actual financial condition I discredited the testimony of the union committeemen because they had testified to other statements by McGangal which made it improb able that he would have made the critical statement im puted to him Such a statement is altogether inconsistent with the position that they attributed to McGarigal throughout the negotiations and is inconsistent with what I now perceive to be an intent on Respondents part to mislead the Union regarding the Company s true finan cial condition There were also discrepancies between their accounts regarding the point in time at which McGarigal made the statements and in their quotations of the statements purportedly made I was especially in fluenced by the fact that McGarigal s purported state ment about filing in chapter XI which if made would certainly have been a bombshell and generated a great deal of excitement, was not heard by the chief union ne gotiator , Spoto nor by anyone else present Barber and Richer neither responded to it nor reported it to Spoto No mention of it was made in the first hearing by anyone until Barber testified I concluded after the first hearing and still believe McGarigal never made the statements attributed to him Duane Madrzykowski testified that, as Fayetteville plant manager from May 1982 through March 1984 he attended several meetings with top company officials in which approaches to the Union were discussed made necessary by losses of business because of uncompetitive pricing and because the Company was beginning to ex perience a downturn in profits we could see that we were going to start going into the red within the very near future In my earlier decision, I noted my distrust of this testi mony because of the point in the examination of the wit ness at which he first recalled the remarks that he attrib uted to management, and because of the extremely gen era] and contingent nature of his testimony In discount ing Madrzykowski s testimony, I noted the absence of evidence in the record of the course of subsequent events other than evidence that the employment roster almost doubled from 1983 to June 1984, that [W]hile there is no direct evidence on the point all of the other evidence in the case suggests that the Company never went into the red Spoto s testimony had been that Respondent s negotiators told him the Company was making money and that their proposals were not based on economic dis tress I found the General Counsels attempted analogy to Chrysler s situation inapt since Chrysler had uncon trovertibly been in clear danger of imminent extinction Now we know that at the time the Respondents offi cials sat down with Spoto and the union committee the Respondents business volume had been declining for 5 years and the Company had sustained significant losses in fiscal years 1983 and 1984 However even with this in formation in mind I still do not credit Madrzykowski s testimony It is not coherent, specific or related to the financial condition of the Company beyond testimony that top management was demanding better performance in the sales department which is a normal function of top management everywhere He testified as quoted in my initial decision that early in 1984 prior to the meet rags with the Union, the possibility of closing Fayette ville was discussed from time to time (not in any formal meeting) it was said that if they did not get the act to gether and the plant doesn t get going there was a potential that it could go Chapter XI or the plant could close In response to a question from me he stated that it was said at a meeting with him He furnished no de tails whatsoever as to where when, who or names of witnesses He had already stated in testimony quoted at length in my initial decision that the only meeting he at tended in Cleveland was a quarterly managers meeting in January 1984 at which upcoming negotiations with the Union and the future of the Fayetteville plant were not discussed He named all the top officials of the Company as being present at the managers meeting but testified that they said nothing of significance to this case The problems with Madrzykowski s testimony are not eliminated by receipt of the information that we now have I still think his testimony leaves us nowhere Vague and general testimony that it was said is an in ACCURATE DIE CASTING CO 305 adequate substitute for testimony that some specifically identified individual made a remark, quoted with speci ficity, at a stated time and place Teamsters Local 959 State of Alaska (Northland Maintenance), 248 NLRB 693 fn 2 (1980) Accordingly I find no basis by reason of the informa tion now made available to alter credibility determine tions made regarding testimony given at the initial hear ing by Barber Richer, and Madrzykowski C Effect on Interpretation of Statements Made by Respondents Negotiators The justification for Spoto s requests for access to Re spondent s books rested on statements made by Respond ent s negotiators which Spoto, and later the General Counsel, interpreted as placing in issue in the negotia tons Respondents financial ability to meet the union de mands Respondents witnesses denied having intended any such meaning and Spoto readily conceded that re peatedly whenever he asked for the records they told him that they were not pleading poverty A listing of the statements in question appears in my initial decision I found that most of the utterances, whether taken in or out of context related unambiguously to wage dispar ity as the pertinent competitive factor rather than to the overall financial condition of the Company I resolved utterances which appeared to be ambiguous in favor of the Respondents interpretation on the basis that the General Counsel had not met his burden of establishing that they should be accorded the construction for which he contended especially in view of the persistent express denial of financial hardship by Respondents negotiators The information now available compels a significant reassessment of the effect of some (but not all) of the ut terances in question In this connection, it should be em phasized that it is the effect of the statements made that is determinative so this is not a matter of ex post facto attribution to the Respondents negotiators of intentions or meanings that they deny having had at the time The issue as the cases have consistently noted is whether the statements made had the effect of placing the financial condition of the employer in issue Our present knowledge that Respondent at the time was foundering financially compels us to appreciate Spoto s presence and view the statements made by Re spondent s negotiators in the same light that he did I find that he correctly interpreted at least three supposed ly unambiguous statements (emphasis supplied) we have to control all costs something has to be done steps must be taken to correct the situation Each of these statements must now be read as unam biguously putting the overall financial condition of the Company in issue The same is true of the statements that were originally treated as ambiguous These were statements by Re spondent s negotiators relating to loss of accounts repre senting $700 000 worth of business and statements by them that the Company had lost out on business bids to taling $1 9 million in value that the Company had a monthly break even point of $1 million that General Motors had mandated a cut in prices, and that the Corn pany had losses in the preceding 2 years amounting to $900 000 Respondent s witness testified at the initial hearing that these statements referred to loss of prospec tive business or departure of existing customers and they denied that the statements were references to overall operational losses in any particular fiscal period The in formation now available contradicts their testimony as to the meaning of the statements and as to the facts of Re spondent s financial condition In Respondents memoranda of the negotiations, there is a reference to a discussion at a bargaining session of Co losses last FY I accepted Respondents unusual in terpretation of the entry as a reference to lost business opportunities in view of the context of the surrounding discussion at the bargaining table and the express dis claimers of poverty that were repeatedly being made Obviously a literal interpretation must now be accorded it Another utterance which now requires a new inter pretation is the response that McGarigal made to one of the union demands There is nothing there I originally concluded that it referred to the item under discussion rather than to company resources from which it might be paid, but in the light of the new information I inter pret it as a statement that the Company was financially unable to meet the union demand All of these statements are now given a construction which I believe to be inevitable to anyone in Spoto s po sition correctly believing as he did that the Company was in financial difficulty I am not concerned that this reevaluation of the fore going statements might seem to hinge on the correctness of Spoto s original intuitions regarding the Company s fi nancial condition or that it suggests that in all cases of utterances whose meanings are debatable production of records will be required automatically to resist the very demand for their production Production of records can always be obviated by solvent companies because solven cy is too easily demonstrable, as by the simple act of paying debts When however a prejudicial concealment of the truth regarding a company s financial condition is shown to exist, there can be no complaint if the findings of this tribunal are modified to reflect the truth as it be comes available This brings us to the real crux of this case and that is that by virtue of Section 8(d) of the Act, the veracity of critically important representations made by negotiators in the course of collective bargaining is always an issue D Effect on Respondents Obligations Under Section 8(d) of the Act The earlier determination was based on the well set tied principle that when an employer asserts financial hardship as a basis for its bargaining position, the union is entitled to an inspection of the company s books to verify the employers economic situation The case law embodying that principle, however, does not have a mirror image in reverse it does not in all cases compel the conclusion that an employer who asserts economic 306 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD well being may refuse an inspection of the books Section 8(d) of the Act which defines collective bargaining as the performance of the mutual obligation of the employ er and the representative of the employees to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employ ment requires that each case be decided on its own par ticular facts The basic issue in this case is not, and never has been, simply whether the Union was entitled to an inspection of the Company s books The essence of the statutory obligation is the obligation to confer in good faith," and production of records for inspection is a only matter of mechanical implementation From 3 May to 30 October 1984, and throughout the initial hearing in this proceeding, Respondent concealed from the Union and from this tribunal the true facts con cerning the financial condition of the Company At the same time they were making statements in the course of negotiations which I now find placed in issue Respond ent s ability to meet union demands, the Respondent s representatives reiterated that they were not pleading poverty and refused to give the Union access to books and records that would have disclosed the actual finan cial condition of Respondent The actions of Respondent's negotiators were both provocative and misleading Having signaled financial precariousness, they responded to demands for verifica tion by asserting financial stability and optimism for the future Enough was said to make an issue in the negotia tions of the Company s financial condition whereupon the doorway to verification was slammed shut Respond ent misled the Union and later misled me The initial decision was not only based on rejection of the Union s interpretation of the statements which were claimed to have placed the Company s financial condition in issue but on the demonstrated ability of the Union thereafter to bargain without access to the records which it de manded, in my view indicating both ability to bargain without access to the data contained therein and their relative lack of importance in the overall situation Now we know that the information being withheld was of crucial importance in the overall situation It was an essential ingredient in the formulation by the Union and the employees of proper decisions relating to their negotiating positions and their decision whether to strike The actual financial condition of a company becomes the issue when concealment of the truth undermines the union s ability properly to perform its statutorily ap proved function Respondents actions violated the fun damental requirement of good faith bargaining as spelled out in NLRB v Truitt Mfg Co, 351 U S 149 152 (1956) Good faith bargaining necessarily requires that claims made by either bargainer be honest claims It is not necessary for our purposes, however to probe the policies expectations or objectives of management It suffices to know whether there existed facts regarding the financial condition of the Company which ought to have been made known to the Union either on Respond ent s own volition or in response to Spoto s offer to take Respondent's economic difficulties into account if verifi cation by inspection of the books was provided Evi dence now available shows that such difficulties did, in fact, exist A 5 year history of declining sales 2 years of increasing losses, and the development of amounting overall indebtedness, secured and unsecured, are facts that manifestly the Union should have known in order to negotiate responsibly, and therefore should have been made known to the Union in an unequivocal manner Failure to do so violated Section 8(d) of the Act Respondents counsel have urged that the negotiators had no actual knowledge of the data which is now avail able and that there was therefore no motivation for them to mislead the Union The negotiators were John McGarigal, president Chuck Rambaldo, vice president and director of human resources and labor Relations, and H Wayne Panciera personnel manager They were no longer employed by Respondent at the time of the hear ing on remand and did not appear at the remand hearing Richer testified that they did not have the fiscal 1983 fi nancial statement available to them until 15 January 1984 (the date of the report) and did not have the figures for the succeeding fiscal year until December 1984 Insofar as this testimony was designed to create the impression that they were unaware of the financial condition of the Company as reflected in the accountants reports it is neither credible nor conclusive It is inconceivable that when they originally sought concessions in 1983 they did not have knowledge of conditions in the Company In any event, they had the report when they negotiated with the Union in 1984 As the chief operating officers of the Company, along with Slyman they had to have had a fairly good knowledge of how the business was pro gressing They are the persons who fed the data to the accountants for preparation of financial statements and tax returns Richer testified that, as president of the Company McGarigal received daily information on its operations Richter testified that he could not describe with cer tainty the procedures that were followed before he joined the Company but at the time he was there Slyman received daily information with regard to guide lines, cashflow projections daily shipments accounts re ceivable cash collections and other matters Banks were given reports on a daily basis Other officers were kept informed Richer testified And the daily shipments of sales was really the benchmark that the corporate offs cers used to see how things were going The contention that the negotiators lacked motivation to mislead the Union because the Company itself suf fered from its financial losses, reversed simply sidesteps the realities of the situation Richer testified that the Re spondent is a close corporation and the interests of its principals govern its actions Regardless of what the company books showed it is apparent that the principals were not necessarily hurt by the replacement of strikers with nonunion help the scaling down of the corporate oligations in the chapter XI proceedings the weakening of the Union, or any of the other numerous conse quences of the strike I therefore conclude that at the time of the negotia tions with the Union in 1984 the negotiators knew that ACCURATE DIE CASTING CO the Company had been suffering declining sales and fi nancial losses in the preceding several years E Effect on Prior Determination The most immediate consequence of the new finding is that Respondent is precluded from defending its unilater al implementation of terms proposed to the Union on the basis that an impasse had been reached There can only be an impasse where the parties have bargained in good faith, decidedly not the case here All four of Respond ent s affirmative defenses must be dismissed I find that Respondent did not bargain in good faith and in accord ance with its legal obligations , the Union requested and was entitled to financial records, the strike was caused by Respondents failure to provide the information re quested and certainly was prolonged by it , and Respond ent may not invoke the equitable doctrine of laches when it is itself in the position of a flagrant wrongdoer, and I find no evidence of laches in any event , there having been no undue delay in filing charges which resulted in any inequity to the Respondent Respondent has violated Section 8 (a)(1), (3) and (5) by its unilateral implementation of terms offered to the Union, its failure to recall striking workers within 5 days after they unconditionally offered to return to work and by its threats to replace striking employees permanently In my initial decision, I found that the factual basis for the General Counsels allegations had been as alleged I found that the employees voted to strike because they considered the Employers offer inadequate that they themselves assumed that the strike , at its inception was an economic strike, and voted to strike on the basis of the status of the negotiations as of 14 June However I also found that they were disturbed by Respondent's fail ure to make its books available for inspection , that they discussed the subject before they voted and that Spoto explained to them that he had been asking for the books since 1983 to justify the demand for concessions The vote on the Company's final offer and on whether to strike was taken after that discussion The two votes taken by the employees were taken under circumstances in which they had been deprived of information that should have been made available to them as requested so that they could reach a conclusion based on sound exer cise of their rights under Section 7 of the Act The strike action was materially influenced by Respondents com mission of an unfair labor practice The employees voted to strike on the basis of the status of the negotiations as of 14 June with respect to economic matters The true import of the negotiations at that point , was hidden from the employees by Respondents refusal to deal hon estly with them The strike was, accordingly an unfair labor practice strike The prior determination must be reversed Respondent has violated Section 8(a)(1), (3), and (5) and Section 8(d) of the Act CONCLUSIONS OF LAW 1 Respondent is an employer engaged in commerce within the meaning of Section 2(6) and (7) of the Act 307 2 The Union is a labor organization within the mean ing of Section 2(5) of the Act 3 The Union is the exclusive collective bargaining representative of an appropriate collective bargaining unit consisting of All production and maintenance employees at the Fayetteville, New York facility excluding laborato ry employees, draftsmen, office and clerical employ ees, professional employees, guards, watchmen and supervisors as defined in the Act 4 Respondent violated Sections 8(a)(1) and (5) and 8(d) of the Act by (a) Failing and refusing to furnish to the Union, on re quest financial records necessary for, and relevant to, the Union s performance of its function as the exclusive bargaining representative of the unit (b) Unilaterally substituting the terms and conditions of employment contained in its contract proposal to the Union in place of terms and conditions of employment contained in a contract which expired the same date, without a valid impasse having been reached in its con tract negotiations with the Union and without affording the Union, as a result , an opportunity to negotiate and bargain as the exclusive representative of Respondent s employees with respect to same 5 Respondent violated Section 8(a)(1) and (3) of the Act by (a) Failing to recall striking employees within 5 days from the date they unconditionally offered to return to work (b) By threatening to replace permanently employees who went out on strike on 15 June 1984 after rejecting Respondents final contract offer 6 The unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act THE REMEDY Having found that the Respondent has engaged in cer tarn unfair labor practices I find it necessary to order it to cease and desist and to take certain affirmative action designed to effectuate the policies of the Act I shall accordingly recommend that Respondent be di rected to offer immediate reinstatement to all the striking employees who offered to return unconditionally and who have not as of the present been restored to their employment under the terms and conditions of employ ment which existed as of 14 June 1984 and that Re spondent provide the Union with up to date financial records showing the condition of the Company The Union should not be relegated to the reports filed in the chapter XI proceedings The Respondent will be direct ed to make all employees already recalled or recalled pursuant to the Order and all other replaced employees whole for any loss of earnings and other benefits, com puted on a quarterly basis from the date of the 5th day following such employees unconditional offer to return to work until the date of such reinstatement with net earnings during such period deducted and interest al lowed on the sums due as prescribed in F W Wool 308 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD worth Co 90 NLRB 289 (1950), Florida Steel Corp, 231 NLRB 651 (1977), and Isis Plumbing Co, 138 NLRB 716 (1962) The General Counsel has requested a visitatorial clause in such order authorizing discovery proceedingly by the General Counsel under the supervision of the United States court of appeals enforcing the Order to be made This would appear to be an appropriate case for the granting of such a remedy , in view of what I now perceive to be an especially egregious violation on the part of Respondent, and for the further reason that other factors present may require resort to such remedy The evidence adduced at the hearing on remand estab lashes among other things, the ownership by George J Slyman the chairman of the board and admittedly an agent of the Respondent and Theresa A Slyman, his wife, of all of Respondents stock close supervision by Slyman over the affairs of the corporation and its labor relations numerous transactions between Respondent corporation and members of the Slyman family and transactions between Respondent and an affiliated corpo ration owned by Slyman and his wife Accurate Die casting Company-Milwaukee, purchase by Respondent from Slyman of the plant and equipment which Re spondent s Rockville, Illinois division had used (and where it had sustained heavy financial losses ) sale by Respondent to Slyman of its building and equipment at Fayetteville, New York and lease back from Theresa A Slyman for $43,750 per month, the mortgaging of the property purchased by Slyman from Respondent at Fay etteville, with only a portion of the proceeds reinvested in the Company, and payment by Respondent to George J Slyman and David Slyman of large sums of money after June 1985 These circumstances may suggest the propriety of a remedy directed against the Respondent corporation and George J Slyman, Theresa A Slyman, and David Slyman, jointly and severally In addition the pendency of the chapter XI proceed mg may require some adjustment of the remedies direct ed, necessitating a detailed knowledge of the Respond ent's finances and operations during the compliance period The General Counsel should not be compelled to rely on voluntary cooperation from Respondents prince pals [Recommended Order omitted from publication ]