The MacNeil/Lehrer NewsHour

MR. MacNeil: Good evening. Leading the news this Tuesday, the U.S. said most American hostages have left Baghdad. The Pentagon said 20,000 more Iraqi troops have been deployed in Kuwait. At least 37 people were killed in factional fighting in South Africa. We'll have details in our News Summary in a moment. Judy Woodruff's in Washington tonight. Judy.

MS. WOODRUFF: After the News Summary, Israeli Prime Minister Shamir talks about the Persian Gulf at his meeting today with President Bush. Next, a documentary report on the battle at the New York Daily News and what it means for the nation's labor movement. Then a look back at the far reaching world view of Armand Hammer. NEWS SUMMARY

MR. MacNeil: The U.S. said today that all Americans who want to leave Iraq and Kuwait have probably done so. Three more plane loads of foreign hostages left Baghdad today. Only eight Americans were on board. Several hundred British hostages were on a flight to London. More than 500 Americans have chosen to stay in Iraq and Kuwait. The State Department spokesman described who they are.

STATE DEPARTMENT SPOKESMAN: The majority of these are American citizen dependents, including a large number of children of Iraqi, Kuwaiti, or other Arab heads of households who have decided not to leave at this time. Undoubtedly, there are cases in which a decision was made because the non-American head of household has been unable to obtain permission to leave. Obviously, the decision to leave is a deeply personal one, but we've made every effort to offer our best advice, as well as a means to depart.

MR. MacNeil: Archer said there will be one more flight on Thursday to make sure nobody's left behind. The Pentagon said today that Iraq is continuing its military build-up. It said 20,000 more Iraqi troops have been sent to the Kuwait front during the past week, raising the total to 1/2 million soldiers. That's about the same number of troops that the U.S. and its allies have in the area. An extra 10,000 American troops have arrived since last week. Judy.

MS. WOODRUFF: The Gulf crisis topped President Bush's agenda this morning. He met with Israel's prime minister, Yitzhak Shamir, in the Oval Office. State Department officials said the President thanked Shamir for Israel's low profile during the crisis. After the meeting, Shamir was asked if he was worried that U.S. cooperation with Arab countries would threaten Israeli interests.

MR. SHAMIR: I trust the President, what he said. He said it several times and he said it to me now again, that there will not be any deal at the expense of Israel.

MS. WOODRUFF: Vice President Quayle said today that Congress's silence on the Gulf meant it was behind the President's policy. Speaking to reporters in North Carolina, Quayle said resolutions of support passed in October had not been changed, "therefore, our interpretation is support." Those resolutions preceded President Bush's decision to double the number of U.S. troops in the region. President Bush's chief of staff, John Sununu, today accused the Democrats of looking for a way to raise taxes and said that they might use the cost of the Gulf crisis to justify it. Sununu said the Democratic Congress forced the President to increase taxes once, but he would not agree to another tax ransom.

MR. MacNeil: The Gulf crisis helped push the U.S. trade deficit sharply up in the third quarter of this year. The gap between imports and exports increased by more than $25 billion, an increase of 14 percent. The government said it was the result of higher oil prices and the cost of sending U.S. troops to the Gulf.

MS. WOODRUFF: Soviet Foreign Minister Eduard Shevardnadze today ruled out a military role for the Soviet Union in the Gulf. He said a peaceful resolution is still possible. He spoke after a second day of meetings in Houston with Sec. of State Baker. Yesterday Shevardnadze asked the U.S. for food aid. The Bush administration is reportedly ready to approve such aid. The Associated Press citing administration officials said the announcement may come tomorrow. The head of the KGB Security Police went on Soviet television today to accuse unnamed foreign powers of trying to de- stabilize the Soviet government through economic sabotage. He said his forces would restore law and order. Soviet President Gorbachev has charged the KGB and other security agencies with the job of stopping the diversion of food and consumer goods from the central distribution system to the black market. The KGB chief said that his organization would stop those who seek "to push the country towards chaos".

MR. MacNeil: In South Africa today, at least 37 more people were killed in fighting between rival black factions. It happened in a black township near Johannesburg called Takoza. We have a report from Takoza by Mike Hannah of Independent Television News.

MR. HANNAH: After an easy peace that lasted less way than a week, Takoza Township has once again erupted. Police say this morning's violence was of such intensity that security forces already deployed on the ground were unable to suppress it. From mid morning, police reinforcements backed up by military and air support began to move in. Cordons were set up around the township in a bid to prevent the violence from spreading to other areas. But law and order minister Adrian Flock has now made clear that no amount of security action will effectively end the violence if, in his words, people wanted to kill each other on a scale already experienced. As in last week's violence, the warring sides in the ground hold each other responsible. Followers of the Zulu-based Incatha movement claimed they were responding to attacks from predominantly Causa speaking supporters of the African National Congress. ANC members in the township are adamant they were the target of unprovoked attack by Incatha. ANC leader Nelson Mandela and Incatha head Chief Buthelesi have been invited to tour the area tomorrow in a peace bid by the South African Council of Churches. The Council argues that only a joint public appeal by leaders can end the violence.

MR. MacNeil: More than a thousand people have been killed since August in fighting between those black factions.

MS. WOODRUFF: In Southeastern Tennessee, at least 15 people were killed today when as many as 100 vehicles collided in heavy fog on an interstate highway. Officials said wrecked cars and trucks were scattered over a five mile stretch of I-75. Many of the vehicles caught fire, including a truck carrying hazardous chemicals. But authorities said the chemical had burned off and no longer posed a threat. At least 50 people were injured in the accident. Several remain in critical condition. The collisions occurred in both the North and South bound lanes near Calhoun, Tennessee.

MR. MacNeil: A New York City jury today convicted two teen-agers in the April 1989 attack on a jogger in Central Park. A 16 year old was found guilty of attempted murder, rape and sodomy, and an 18 year old was convicted of assault and sexual abuse. The 30 year old woman jogger was beaten and gang raped, then left for dead. She's partially recovered from the attack and testified at the trial. Three other teen-agers were convicted in August on similar charges. Another defendant goes on trial early next year.

MS. WOODRUFF: That's it for our News Summary. Just ahead on the NewsHour, Israeli Prime Minister Shamir, the battle over the daily news and Armand Hammer. NEWS MAKER - ISRAEL'S VIEW

MS. WOODRUFF: We go first tonight to a News Maker interview with the Prime Minister of Israel, Yitzhak Shamir, following his meeting today with President Bush. It was their first get-together in a little over a year, and it followed months of strains in U.S.- Israeli relations. Some of the friction stemmed from the crisis in the Gulf and American moves to get closer to Israel's Arab enemies. Some of it from Israel's stance on the Palestinian issue. When I spoke with the Prime Minister today at his Washington hotel, he said he was satisfied after his meeting with Mr. Bush. I asked where he believed matters now stand in the Gulf crisis.

MR. SHAMIR: I understand the position of the President is very firm, very strong, is sure that he is right, and the arguments of the United States upheld the decisions of the Security Council have to be implemented by Iraq and there is not any inclination to give up something or to look for some trade off or some bills. And well, it's very encouraging.

MS. WOODRUFF: But at the same time the administration is saying now that -- first of all, there are going to be meetings between Sec. Baker and Mr. Saddam -- Mr. Aziz is coming to Washington. There is talk of --

MR. SHAMIR: Yes, yes.

MS. WOODRUFF: -- negotiation and --

MR. SHAMIR: After all, you know, it's not simple and after all, it's a matter between countries, between peoples, and nobody is inclined to decide without any hesitation about some military moves. And everyone would like to settle matters without military operations.

MS. WOODRUFF: Well, assuming that the UN -- assuming Iraq did abide by the UN resolution and did agree to pull out mostly, totally from Kuwait, would Israel be satisfied with that as a final solution?

MR. SHAMIR: Well, it's not a final solution, but it is a solution, a certain solution of this confrontation, this conflict about Kuwait. There are other worries and we are facing these worries together with the United States and with all the free world. But first comes first.

MS. WOODRUFF: What are the other worries -- are you referring to --

MR. SHAMIR: There are some worries about the readiness to use military means in order to satisfy some illegal demands, for instance, to invade a country, and it's very important that such a matter is solved and that there is not any silence about it and not any acquiescence about it, and then, of course, we have other matters because we know that this man, Saddam Hussein, is busy with -- there is a build-up of his huge armaments of his country with the same intention, the same goal to utilize it against other countries, for instance, against Israel, and therefore, we will be still concerned.

MS. WOODRUFF: How will you deal with that then? Did you discuss with President Bush today what happens if that --

MR. SHAMIR: Of course. We have discussed it, and the President is aware of it and is very conscious of it and thinks about it, and I think that the international community and with the leadership of the United States will have to find answers and solutions.

MS. WOODRUFF: Future UN resolutions?

MR. SHAMIR: I don't know exactly because, after all, we are not participating in these decision makers, in this group of decision makers.

MS. WOODRUFF: Should Israel be participating?

MR. SHAMIR: I don't think -- after all Israel is its own voice and there is no country and not among the most powerful in the world there are worries and I must say that after this experience until now with the Iraqi affair we rely on the United States and rely on the leadership of this President of the United States.

MS. WOODRUFF: And do you think at this point the United States - - the President, his administration, has a plan for how to -- whether it's disarm Saddam Hussein, weaken Saddam Hussein --

MR. SHAMIR: Saddam's ideas about it and to see if some plans -- it is up to describe it.

MS. WOODRUFF: It has been reported that you and other high officials in Israel have made it very clear recently that if the United States doesn't go in militarily and do something to Iraq, then Israel will.

MR. SHAMIR: No. It belongs, you know, to the kind of rumors that nobody is able to control, that never threatens the United States to do something, the United States doesn't do it. We have a true understanding about all these questions and we will continue to discuss it together and to share our views with the United States and I think that we will keep a common understanding about it.

MS. WOODRUFF: But can Israel feel secure if Saddam Hussein remains in power in Iraq?

MR. SHAMIR: Not entirely. Not entirely. We will not feel ourselves secured and, you know, it's very very difficult to feel secured in our Middle East environment. I think you have to know that we, Israel, we live in such a hostile environment of when totalitarian countries are surrounding us where they don't know anything about democracy, the societies of these countries are influenced by the most fanatical fundamentalism and they possess huge quantities of farms and sophisticated arms, how could you be full secure in such an environment?

MS. WOODRUFF: But meanwhile these very countries you describe, many of them are countries the United States has been dealing with just recently in its effort to have a united front against Iraq, Syria, Egypt, and so on?

MR. SHAMIR: But you cannot settle all the matters at once, and we are making a distinction between the values, members of these coalitions, of this coalition with the United States works now, but it's a matter of convenience, it's a matter of conditions, and of timing.

MS. WOODRUFF: You said yesterday in a speech that you wouldn't be surprised if a number of states, not only Arab states, moved to appease Saddam Hussein at the expense of Israel. Who were you referring to?

MR. SHAMIR: Well, I wouldn't -- I have not said it yesterday -- I will not say it today -- but there is always such a danger, such a danger about I hope and I am now talk with the President, and he assured that it will not happen.

MS. WOODRUFF: As you know, there's this move afoot at the United Nations to have some sort of international conference to talk about the Israel-Palestinian question. The United States doesn't want it linked to Israel, but the United States is now for the first time saying that it's willing to support this kind of a conference once the Iraqi situation is settled.

MR. SHAMIR: Well, I would say it's not correct. The United States doesn't support now the idea of international conference and I understand that the United States support rather the way of negotiations as a way that could lead to peace. An international conference, it's not the best instrument for getting peace between conflicting artists.

MS. WOODRUFF: Well, then why do you think the Bush administration is saying it will support it later on?

MR. SHAMIR: I don't think they'll say it and it's a fact that they don't support in the Security Council now.

MS. WOODRUFF: But they're saying they'll support it at some point down the road.

MR. SHAMIR: At some point. You know, it's rather theoretical, but I don't think they are going to support it. This is my impression.

MS. WOODRUFF: Do you feel -- do you feel increasingly isolated as you watch these events as they've unfolded in the Middle East?

MR. SHAMIR: I wouldn't say it. I wouldn't say it. First of all, having such an ally like the United States we cannot say that we are isolated, not at all, not at all, and you know, this alliance between us and the United States is a matter of many years. I remember that during one of my visits in 1983, in Washington, we concluded such an agreement about a formal strategic cooperation and while it works till this day very smoothly, therefore, I regret to say we are not isolated.

MS. WOODRUFF: But ultimately, getting back to this question of the international conference or however the Palestinian question is addressed, isn't there going to be pressure on Israel, brought to bear on Israel to make some concessions, to make some progress?

MR. SHAMIR: Well, if you see, what it does it mean, pressure? Pressure, you can make pressure on people that are inclined to be pressured. It's not my character and if I don't feel that this is the way that we have to handle such and such, a pressure could be useless, will be useless and if somebody wanted to convince us in choosing a way to do something, they have to convince us, not to pressure.

MS. WOODRUFF: Do you see a role for the Soviets in this? There's talk that you may meet with Foreign Minister Shevardnadze in the next day or so.

MR. SHAMIR: Well, the Soviets are a part of the international community and of course, they are entitled to exercise a certain influence.

MS. WOODRUFF: Will you meet with the Foreign Minister?

MR. SHAMIR: Maybe, maybe. I will be glad to meet with him.

MS. WOODRUFF: To talk about --

MR. SHAMIR: Oh, we have many questions to discuss in common.

MS. WOODRUFF: Do you feel as a result of your meeting with the President, Sec. of Defense Cheney today and others, that we are closer to some sort of military confrontation in the Gulf or moving further away? What is your sense?

MR. SHAMIR: Well, I will not make a guess. I said before that we are not among the decision makers. We are only worried about our own problems and our own concerns and in this respect, I am more quiet, they, after all these meetings you have mentioned.

MS. WOODRUFF: More quiet?

MR. SHAMIR: More quiet.

MS. WOODRUFF: What do you mean?

MR. SHAMIR: Well, I am less for it.

MS. WOODRUFF: Mr. Prime Minister, we thank you for being with us.

MR. SHAMIR: You're welcome.

MR. MacNeil: Still ahead on the NewsHour, the New York Daily News, and the changing world for labor unions, and a memory of Armand Hammer. FOCUS - DAILY NEWS - ON STRIKE!

MR. MacNeil: Now a look at the labor dispute many say will set the tone for worker-management relations for the 1990s, the struggle for the future of the New York Daily News. Many say it's a fight that will prove to be as important for organized labor as Ronald Reagan's battle with the nation's air traffic controllers a decade ago. We'll discuss the national implications of the fight after this background report by Correspondent Elizabeth Brackett.

MS. BRACKETT: In its 70 year history as New York's hometown newspaper, the Daily News has served up a steady diet of local news, heavily seasoned with details of sex and violence, but at the end of October, the tabloid became embroiled in a lurid tale of its own when after 10 months of stalled contract negotiations, a bitter labor dispute erupted. A driver with 23 years' experience triggered the event. Gary Kalinich.

GARY KALINICH, Driver: They saw me sitting down, putting wrappers on a bundle as they go past. I wasn't supposed to be sitting down. I was supposed to be standing up as far as they're concerned. I told them I got a doctor's note. I got a bum knee. I got torn cartilage in it. They don't recognize a doctor's note here either.

MS. BRACKETT: Refusing to stand, Kalinich was suspended. And what's been dubbed "The Battle of the Wounded Knee" quickly escalated to all out war. As with most of the facts in the story, management and labor have very different accounts of what happened in the pre-dawn hours of October 25th. Daily News management says all 260 drivers at the paper's Brooklyn plant in an illegal strike. The unions say that only 30 drivers stepped outside to discuss the situation and were locked out. Within an hour, a bus carrying nine union replacement workers arrived and violence broke out. Buses bringing in replacements were attacked, Daily News trucks set on fire. Later that day, the driver's union declared an official strike and soon was joined by eight of the paper's other unions. But it was a classic situation with a contemporary twist. Those who went out on strike were immediately out of work, permanently replaced by non-union labor. Almost overnight the working man's tabloid had become, in the words of strikers, a "scabloid".

FRANK AMATO, Pressman: What they did was premeditated. It's guaranteed it was premeditated. You don't get a bus load of scabs, and that's what they are, scabs, in ten, fifteen minutes ready to go in the building. I mean, where were they, parked around the corner? That's where they were. They knew exactly what they were doing that night.

MS. BRACKETT: The unions charge that the paper engineered the strike as an excuse to bus the union. Management says they had to be ready for any contingency. The Tribune Company of Chicago, which owns the New York Daily News, reportedly spent $24 million over the last year preparing for a strike. Managers were trained to run presses at the Company's Ft. Lauderdale Sun Centinel. A phantom newsroom was set up at a News Jersey warehouse across the river from Daily News headquarters in Manhattan. Publisher Jim Hoge says the company had no choice but to have a replacement work force on stand-by.

JAMES HOGE, Publisher: We were struck in the middle of the night while our presses were running and we never would have gotten the paper out then or in the days since if we had not had people who were willing to work at the News, ready to work at the News. Now this is a big and awesomely complex business. It has to go from creating a paper late at night to getting it into people's hands early in the morning. You miss any part of that process and you're out of business.

MS. BRACKETT: Business at the Daily News has been sliding for years. In 1970, it was the largest circulation daily in the nation, with 2 million readers. Just before the strike, it had slipped to third place, with a readership of just over a million. Despite revenues of $400 million a year, the paper was in the red. Before the strike, analysts estimated losses of $70 million for 1990. Hoge blames labor costs.

MR. HOGE: We have a set of contracts that have very ancient work rules in them that call for all sorts of practices that add extra jobs, add unworked overtime that has to be paid for, actually adds featherbedding jobs, that is, jobs that people simply don't work. We're talking here about excesses and abuses that were enforced upon us over many years, 16 men to run a press when it takes only half that number. How do we know it takes only half that number? Because while those manning levels were in force, half the work force didn't bother to show up. They had their buddy sign them in, they got their pay. They didn't show up because they weren't needed.

MS. BRACKETT: Hoge says the Daily News had up to a thousand unneeded workers on its payroll, a charge the unions deny. John Kennedy is president of the Pressman's Union.

JOHN KENNEDY, President, Pressman's Union: Featherbedding is really a buzzword and it gets everybody all upset, but that's not the case. Are there people, are there concessions the union can make in terms of maybe somebody working a little harderor working a little longer to put a little more black ink to the News's bottom line? Sure. And as I've indicated, that's on the table. I mean, we're reasonable people. We've had it on the table. I know we and other unions have major relief for the Daily News which they're not interested in. They're interested in what they've done now and that is an attempt to de-unionize the paper.

MR. HOGE: It isn't fair, it isn't reasonable for us to carry all sorts of excess costs that have nothing to do with the operations and will sink the business for everyone. Now that's a fair and reasonable proposal and it doesn't lend itself, in my opinion, to the interpretation that we're out to bust unions. What it says is we've got to get rid of abuses and excesses that are going to kill it for unions as well as for management.

MS. BRACKETT: Positions hardened so quickly that real dialogue between union and management appeared to be one of the first casualties of the strike, both sides convinced that they must hold the line on their position if they are to survive.

JOANNA MULLOY, Striking Reporter: It really reminds me of the Civil War in a way.

MS. BRACKETT: Reporter Joanna Mulloy began working for the Daily News just a month before the strike, meaning she was still on probation. Union rules would have let her keep working under protest, but a week into the strike, she too walked out.

MS. MULLOY: There are principles involved. In New York, the way I was raised you don't cross a picket line and you don't hurt fellow workers, you know, and that's what's happening now.

MS. BRACKETT: As Mulloy was joining the picket line, the columnist she'd been assisting was crossing it.

BETTY LIU, Reporter: Obviously, there was the financial consideration. Secondly, the strike didn't make sense, and I couldn't go along with the strategy.

MS. BRACKETT: Betty Liu Ebran believes it was a mistake for her colleagues to strike when replacements were waiting in the wings for their jobs.

MS. LIU: They made their choice and I made mine. I'm not criticizing them for their choice and they shouldn't condemn the dozens of us who went back for making ours.

STRIKING WORKER: That's a union newspaper. They should be a union newspaper. If they can't be a union newspaper, let it die, let it die!

MS. BRACKETT: You'd rather see it die and have people lose jobs than --

STRIKING WORKER: Definitely. We don't have a job now.

MS. BRACKETT: Although the unions were unable to keep the Daily News from being published, they've been very effective in blocking its distribution. 80 percent of the paper's sales were through newsstands which in the early days of the strike became well publicized targets of violence. Although the vast majority of newsstand owners were never directly threatened, most have refused to sell the non-union paper.

NEWSSTAND OWNER: The people, they're on strike, they broke down one store over there, they beat the people over there, so I am scared too.

MR. HOGE: (At Hearing) The News is a victim of this violence.

MS. BRACKETT: At a state legislative hearing, Jim Hoge said the violence and threats were part of a well orchestrated union campaign, a charge refuted by a police investigation.

ROBERT J. JOHNSTON, JR., Police Chief: To date, our investigations show that acts of violence and other type of criminal behavior are the acts of individuals, and are not part of a coordinated effort.

MR. HOGE: May I respond to that. Violence is violence and there are laws on the books that need to be enforced against it right now.

FRANK BARBARO, State Assemblyman: Mr. Hoge, the use of permanent replacements leads to violence. It is in lay people's term a gross baiting of people.

MS. BRACKETT: With newsstand sales nearly wiped out, management turned to new ways of distributing the paper, including street hawkers. But as the company struggled to get the paper to readers, advertisers fled in droves. By the end of November, with the holiday shopping season in full swing, the Daily News was down to less than 40 of its 600 regular advertisers. Industry analysts and even reporters who have gone back to work wonder how the paper can possibly survive.

BRUCE CHADWICK, Reporter: I think everybody is fearful that if it goes on for a few months and the newspaper can't be sold, then the newspaper will simply go out of business.

MS. BRACKETT: Bruce Chadwick hopes his part-time job teaching journalism will not become his only job. He grew up reading the Daily News and wanted to be a reporter for the paper from the time he was eight years old. Now he says crossing the picket line is like going to a funeral.

MR. CHADWICK: No matter how things turn out, they're going to turn out very badly. If the newspaper somehow continues to publish without its unions and hires replacement workers in months to come, it'll have a very difficult time staying viable and staying in business with that kind of a set-up. Or if the violence that's been going on, which has been deplorable, continues, I'm just fearful that the Daily News will just sit down. But I think that managements and unions have a responsibility to their stockholders and their readers and their members to be flexible and reasonable. In this case, I don't think either is.

MS. BRACKETT: After nearly a decade of defeats following President Reagan's firing of air traffic controllers during the PATCO strike, labor says the outcome here is critical to its future prospects. But already, the unions of the Daily News are bargaining for members who management considers permanently replaced. That is the tactic that American labor has yet to learn how to combat.

MR. MacNeil: Now we get four views on the significance of the Daily News strike for the American labor movement as a whole. Audrey Freedman is an economist with the Conference Board, a New York-based business research group. Joseph Blasi is a professor at Rutgers University's Institute of Management & Labor Relations. Dennis Rivera is president of Local 1199, the Drug Hospital & Health Care Employees Union in New York City and a member of a committee of local union leaders involved in planning strategy for the Daily News strike. And joining us in Washington is Mark DeBernardo, a lawyer who represents management in labor relations cases. Mr. Rivera, how is labor going to deal with the issue of permanent replacements, not just in the Daily News case but generally?

MR. RIVERA: What is at issue is the democracy for the American worker. Right now the employers have been using, particularly after the '80s, after, your piece said after Reagan fired the PATCO controllers, they have been basically using the strike as a weapon to get rid of unions and what we are trying to do is to enact the legislation in Congress that would prohibit that.

MR. MacNeil: Because at the moment, putting permanent replacements in and firing strikers is legal.

MR. RIVERA: That's correct.

MR. MacNeil: Under federal law.

MR. RIVERA: After a decision that was reached I believe in 1935, I believe the McKay vs. Radio in the United States Supreme Court declared unconstitutional or something of that nature by the Congress of the United States. At this moment the legislation by Sen. Metzenbaum and by Congressman Clay from Missouri to basically prohibit such a situation.

MR. MacNeil: So the union organized labor's tactic now is try and get Congress to overturn that law --

MR. RIVERA: That's correct.

MR. MacNeil: -- that permits legal replacement.

MR. RIVERA: That's right. At this moment, many countries have enacted such a law. For example, right now today -- I believe it was yesterday -- the area of the Tribune Company settled in Canada which -- striking employees or paper workers -- that was basically due to the fact that in Canada it's illegal to fire striking workers.

MR. MacNeil: Let me ask Mr. Bernardo, do you think Congress should repeat this law because it's unfair to the unions?

MR. DE BERNARDO: Absolutely not. This has been the law for 55 years. It's fair, it's lawful. It's a reality of collective bargaining that one of the factors that unions take into account when they decide to go out on strike is whether or not those jobs are going to be forfeited. And, in fact, I think what's happening across the country, the decline of organized labor, is symptomatic of what I consider to be ill-considered strategy by organized labor's leaders going out on strike. Ultimately, it's going to cost the members of the union their jobs. Certainly that's what's going to happen with the Daily News. It's an unfortunate situation. I agree with what was said by the commentator earlier, that it's bad for both sides however it's resolved. But the fact of the matter is you have many, many union jobs at a very high wage scale that are going to be gone, lost forever. And those people aren't going to go out, drivers aren't going to be able to go out, and make some of them between ninety and a hundred thousand dollars a year delivering newspapers for other companies. They're simply not qualified to make that type of money -- pressmen making between sixty-five and seventy-five thousand dollars a year.

MR. MacNeil: Mr. Rivera, what in labor's view has the use of this law done to the right to strike?

MR. RIVERA: Well, it has undermined completely, it has taken away the right to strike for American workers. We no longer enjoy the right to collectively bargain as such because we fear the loss of our jobs. At this moment, by the way, 77 percent in a recently concluded nationwide poll of the American people believe that the American worker should have the right to strike, and we believe that at this moment, we're in the '90s, as you properly said, this strike is going to probably define to a great degree what will be labor-management relations trend in the '90s, and we believe that there's a change in the mood of the country at this moment, particularly with the excesses in the '80s. And for example, we just concluded another poll here in New York City. 88 percent of the people who were polled said that they believe that corporations have gone too far in the '80s.

MR. MacNeil: Do you think there's a change in the mood, Mr. Bernardo?

MR. DE BERNARDO: DeBernardo.

MR. MacNeil: DeBernardo -- I beg your pardon.

MR. DE BERNARDO: Yes, I do think there's a change in the mood and I think the change in the mood is against organized labor. You know, if you asked me whether unions should have the right to strike, I would vote yes. I'd be in that 75 percent. But the fact of the matter is that union leaders have lost confidence. Let's look at the public opinion polls. They're always at the very bottom in terms of the confidence, confidence level of the American public. The factof the matter is if the Metzenbaum-Clay bill were enacted, what you would have is you would encourage strike activity in the United States. How can that be a good thing? We saw the tapes in terms of the labor violence along the picket lines. Right now, yes, strike activity is down in the United States, down significantly. But let's face it. The union movement is very significantly in decline. The union movement in the private sector represents just 12.8 percent of the private sector. You take a look at what I call the competitive industries, if you exclude utilities and public transportation, organized labor represents just about 8 percent of the private sector employment. Now there's a reason for that and there's a reason why employment's going down, and that's because when you're paying people 50 percent surplus of the employees of the Daily News in terms of the level of employment at that job, which is featherbedding by any definition, when you're paying people overtime, whether they work it or not, when you have very restrictive job descriptions, yes, that company is not going to be very competitive.

MR. MacNeil: Let me widen this up a little bit here. Ms. Freedman, what does the Daily News strike represent in the new labor-management situation in this country? Where does it fit into the picture, the wider picture?

MS. FREEDMAN: Well, regardless of whether or not this strike was provoked -- and it seems to have been provoked very deliberately on the part of management -- the union did fall into the trap so to speak. And now lines are drawn very clearly, but in the overall situation, I think something has changed and Dennis, I would disagree with you about what has changed. Two things have changed. One is that for employers and for companies, the competitive situation is much harsher than it was in decades before. So their incentive to get rid of a union or to lower wages or to reduce manning scales is much greater than it was ten, fifteen, twenty years ago. Management's incentive to fight is much stronger. Secondly, the public is much less interested in supporting strikers because the public looks at high wages, for example, for production workers, for truck drivers, or deliverers and says, you know, I'm not making that much money, I'm not sure I support that strike; it doesn't seem quite fair. So the backing of the public for strikers, especially when there's been provoked violence, is much less than it was one generation ago and the incentive for management to foment a strike, to get rid of the trouble, is much greater.

MR. MacNeil: Just let me bring Mr. Blasi in here first. What is the relevance of the Daily News situation to the labor picture generally?

MR. BLASI: The relevance generally is that this is a symbol of what's wrong with our whole labor-management system. What created this problem is that both sides have not been talking to each other for years, both sides knew the paper was going down the drain financially. Neither side decided to compromise and they just went to war, rather than trying to cooperate, open the books, and together re-design the paper. This is really what's going to be happening in a lot of American industries that are unionized and that are under competitive pressure and will be under further competitive pressure, for example, after 1992.

MR. MacNeil: Do you agree, Mr. Rivera, that there was a much harsher competitive climate which gives employers employing unionized workers much stronger incentive to fight, as Ms. Freedman said.

MR. RIVERA: I agree with that, and particularly after thetone that was set in the '80s by Pres. Reagan. He basically made acceptable this anti-union, pro-business, anti-worker mentality. I'd like to go back to what Ms. Freedman was saying in the sense that at this moment, the overwhelming majority of people in America are working people. If we are debating right now if the working people of America are going to have a future, it is intimately tied to the future of the labor movement, the depressing of the wages of the people of America cannot go out -- for example, the big challenge that we have right now is that people cannot afford a home, cannot afford education for their kids, cannot afford adequate health care. That's what we're talking about, but depressing the wages and creating growing numbers of homeless in our cities is not going to be the solution to our problem.

MR. MacNeil: But in this climate with management with an incentive to fight harder, and as Ms. Freedman says, the public less likely to support strikers --

MR. RIVERA: I disagree with that.

MR. MacNeil: You disagree.

MR. RIVERA: Yes, because the poll that I have -- I have several facts. One, the first one is the Bureau of National Affairs reported that 77 percent of the employers now are willing to use replacement workers, but on the other hand, more than 75 percent of all those who were questioned said that they believe -- this is the general public of America -- they say that they believe in the rights of American people and American workers, the right to strike. Like I said before, the overwhelming majority of the people in America believe that what happened in the 1980s, those excesses where the rich got richer like Kevin Phillips says in his book, "The Politics of Rich and Poor", it has created a reaction to those '80s, and at this moment, we believe that what we're seeing right now, how this labor movement, how Solidarity help people -- and I believe that the AFL-CIO and some sectors of the labor movement in the past, they were lethargic and they were not getting too -- how may I say --

MR. MacNeil: Activist?

MR. RIVERA: -- activist -- and attuned to the most sophisticated techniques out there, but people are waking up. People are saying that if we want to survive as an institution and I believe that is in question right now, we need to put forth a program in defense of the American worker.

MR. MacNeil: Mr. Bernardo, is a reaction from the '80s going to work in favor of organized labor in the '90s?

MR. DE BERNARDO: No, I don't see that reaction. I'll tell you what. I would hardly characterize $30 an hour is the base play for truck drivers as being depressed wages. I would hardly call the fact that at the Daily News unskilled workers began at in excess of $50,000 per year. These are not very sympathetic people in terms of going out on strike and no, I don't see a rallying behind organized labor. What I do see --

MR. RIVERA: We have -- the Tribune Company last year, we had sales of $2.5 billion across America, made profits of $450 million, so they -- at this moment, what you're talking about is that there should be a fairer distribution of the wealth in our country. And to concentrate the wealth like what happened in the '80s with a limited group of individuals in our society accumulating more and more wealth is not going to produce a better society.

MR. MacNeil: Mr. Blasi --

MR. DE BERNARDO: -- You can't expect --

MR. MacNeil: Mr. DeBernardo, excuse me. Let's go on to Prof. Blasi here. Is a reaction from the '80s going to work to the benefit of organized labor in the '90s, as Mr. Rivera suggests?

MR. BLASI: No, it's not. We have one thing wrong here, which is that all the research has shown that there is no way that unions would be able to organize enough new workers to deal with their decline. Unions will continue to decline throughout the '90s far below 12 percent of the population. I'm sorry that's going to happen, but I think it's really --

MR. MacNeil: Isn't he living proof of the opposite? I mean, he has very successfully organized the hospital and --

MR. RIVERA: Yes, but there's a problem here. The problem is that in the '80s not only they set the tone but they make it almost impossible to organize into -- for example, you take into account the National Labor Relations Board, which is an institution created by the federal government which created it basically in the '30s after years of struggle. Now, for example, it's more convenient to an employer when a group of workers want to organize to fire those employees because by the time that that board makes a decision about the fairness of the process, they basically lose their interest. And if they make a union, they basically throw the workers out on strike and they bring replacements. We need to change the laws that give workers the right to organize and the right for collective bargaining.

MR. MacNeil: Is the -- are the forces working on labor- management relations inside this country from the economy, are they going to produce in the '90s more cooperation between labor and management or more strike, Ms. Freedman?

MS. FREEDMAN: Neither one. I think the labor movement is shrinking and it's weakening, and the only place where it's growing is in the public sector or in the hospital industry, which is essentially not a competitive industry. But in competitive industry, there won't be much confrontation because the unions are shrinking almost out of existence, so there are some battles along the way, but their strength is so weak they cannot battle.

MR. MacNeil: Is that due to the decline in manufacturing industry and the rise of service industries, or what is it due to?

MS. FREEDMAN: No, it's because unions simply aren't able to organize in a competitive industry and they can't promise higher wages because, in fact, the employers can't deliver higher wages. They're in a much different competitive situation than the one 20 years ago.

MR. RIVERA: If our society had different laws, we would be able to, for example, why are competitors, international competitors, like France, like Germany, like Japan, like -- being able to have fair laws, higher levels of unionization and they're basically thinking, there are projections right now all over America that say we are being displaced internationally -- this countries have high levels of unionization with very good civil laws and they're doing a-okay.

MR. MacNeil: What is the answer to his question?

MR. BLASI: The answer is that unions are declining not because it's their fault but because unions grew mainly because the manufacturing industries they organized in the '40s and the '50s grew tremendously. Unions are declining mainly because they can't organize a lot of smaller, smaller businesses. That's the problem. It's not the fault of unions that they're declining. I agree with him completely. One of the reasons why we can't organize more unionized workers in the country is because the labor law is stacked against unions. We have to distinguish between the fact that unions are declining and blaming them for the decline. This is why I disagree with Mr. DeBernardo. It's not their fault that they're declining.It's demography.

MR. MacNeil: Mr. DeBernardo.

MR. DE BERNARDO: Well, you know, I think it's simplistic to say that this happened in the '80s and that it was Pres. Reagan's fault because of the PATCO strike. That simply isn't so. If you take a look at the decline of unions, it began in the '50s in terms of percentage of the work force. It began in the early '70s in terms of absolute members, and, in fact, in terms of de-certifications, union members voting to kick out the union in terms of the percentage of representation elections being won by unions, those have decreased steadily far before when Pres. Reagan came into office.

MR. MacNeil: Let me ask each of you briefly in the last minute we have here how you predict the Daily News strike is going to end, the Daily News situation, which is supposed to be this, I don't know, talisman for union-management relations for the '90s. How's it going to come out?

MS. FREEDMAN: I think ultimately the Daily News will end because it was not in good shape before the strike.

MR. MacNeil: The paper, itself, will end?

MS. FREEDMAN: Yes. It was not good shape before the strike. It's losing -- now it's lost advertising. It's lost distribution. It's been losing readership, and the strike will simply finish it off. I think there'll be a long period of strike, another year, before that's complete.

MR. MacNeil: What do you think, Prof. Blasi?

MR. BLASI: Either senior political leaders in the city and the state pull both sides in a room and reach a compromise --

MR. MacNeil: Because Gov. Cuomo, for instance, has come out on in this case publicly on the side of the strikers.

MR. BLASI: Absolutely. But if they can pull people into a room, there is a compromise between both sides. If that doesn't happen, I think the Daily News will succeed in breaking the union and then I think it will either go out of business or perhaps the union may make a bid for the paper through a worker buyout.

MR. MacNeil: Mr. DeBernardo, what do you think is going to happen to the Daily News?

MR. DE BERNARDO: Unfortunately, I think it's going to go out business. It lost $115 million over the last 10 years. You can't operate like that. Things are only going to get worse -- unfortunate situation.

MR. MacNeil: Mr. Rivera.

MR. RIVERA: I think that the Tribune Company if it doesn't settle here is going to become a pariah across America, because they would become a symbol of anti-worker mentality and we believe, some of us, that at this moment there is a great opportunity here to settle -- the whole thing could be settled in only 24 hours the same way that these same striking unions negotiated a settlement with the New York Post.

MR. MacNeil: Mr. Rivera, Mr. DeBernardo, Prof. Blasi, Ms. Freedman, thank you all for joining us. FINALLY - ARMAND HAMMER

MR. MacNeil: Finally tonight we remember Armand Hammer, the self-made millionaire with a flare for negotiating deals with the Soviets. He died last night at the age of 92. Hammer's deal making began in 1921, when he traveled to the Soviet Union to collect a business debt for his father, the founder of the American Communist Party. Hammer, himself, was a committed capitalist, yet happy to do business with Communism. After the Bolshevik Revolution, he traded surplus U.S. grain for Soviet products and became a Soviet hero for helping to ease food shortages there. In a condolence message today, Mikhail Gorbachev said Mr. Hammer was very close in many ways to the Soviet Union and to Russia. Just how close was evident in March 1985, when I talked with Hammer about the virtually unknown man who'd recently become the new Soviet leader. Hammer's views on the impact Gorbachev would have on his own country and on U.S.-Soviet relations sound startlingly prescient five years later. Dr. Hammer, you have known Soviet leaders going back to Lenin, himself. Is Mikhail Gorbachev the man for real change in the Soviet Union?

DR. HAMMER: In my opinion, yes.

MR. MacNeil: What kind of change?

DR. HAMMER: Well, I think we have a window of opportunity here. He is younger than most of the leaders that have been the head of the Soviet government. He's very intelligent, very pragmatic. He's traveled aboard. He's been to several European countries. He's been to Canada. He hasn't been to the United States, but I hope he will be. And I think that if he and President Reagan meet, they'll like each other. I think President Reagan will charm him and he'll see in President Reagan a man that wants peace and President Reagan will see in him I think likewise a man that wants peace.

MR. MacNeil: Do you think Gorbachev is now going to turn to some private enterprise and modified form of capitalism the way some other East Bloc countries and even China have done?

DR. HAMMER: I think eventually, yes, but I think it will take time. I think he has to solidify himself. You know, there are five vacancies on the Politburo, and I would imagine one of the first things he'll do is to nominate five candidates. Then I think he will be in a strong enough position to put through some reforms. He was a protege of Andropov. And Andropov in turn was a great admirer of Kadar, who was running Hungary, and Kadar was one of the socialist countries you mentioned.

MR. MacNeil: Who's created what they call "goulash Communism".

DR. HAMMER: Yes. They mix capitalism with Communism. But it works.

MR. MacNeil: Some people here, observers, say that some -- they disagree. Some say he's really a man for change, the generation, intelligence, contacts with the West and so on. Others say, yes, including Sec. of State Shultz, yes, but be careful, he's also completely a product of their system, who had to qualify for his leadership position by being a good member of that system and therefore, he's going to be as imprisoned by it as anybody else.

DR. HAMMER: Well, you know, it's all a matter of degree. It's a matter of how you handle the Russians. We don't buy their ideology; they don't buy ours. I'm sure we have enough nuclear power to destroy them perhaps 10 times and they have enough to destroy us 10 times. But neither one of us wants to be destroyed even once. We've got to live together on this planet and I think that even if Gorbachev is indoctrinated by their ideology, he's pragmatic enough, he doesn't want to commit suicide, he wants to give the Russian people a better standard of living. That's the only way he can succeed. Kruschev told me that. He said if we don't give our people in Russia the same standard of living that you give your people in the United States, Communism must fail.

MR. MacNeil: You've been promoting the idea of more trade between the two super powers for a long time now going back to the history you just mentioned. How far -- even if there were a great deal more trade, how far could the two nations with their different systems and ideology really come together in relaxed friendship and relations? You really think they could?

DR. HAMMER: Yes.

MR. MacNeil: You do?

DR. HAMMER: It's going to take time. It'll take several years, and it's going to take very skillful handling. I think that President Reagan is smart enough and if he and Gorbachev meet and they like each other, if there's some modicum of trust between them -- you see right now there's a terrific distrust both on our side and on the side of the Russians. And it's very difficult to negotiate with anybody if you distrust them.

MR. MacNeil: And you think personal contact between Mr. Reagan and Mr. Gorbachev could overcome some of that?

DR. HAMMER: Oh, I think definitely. That's my dream. I'm hoping to bring these two men together. I think this could change the whole situation in the world.

MR. MacNeil: Armand Hammer talking five years ago, dead yesterday at the age of 92. RECAP

MS. WOODRUFF: Again, the main stories of this Tuesday, the State Department said most American hostages have now left Baghdad. The Pentagon said Iraq has increased its military build-up in Kuwait with the addition of 20,000 more troops, and in South Africa, at least 37 people were killed in fighting between rival black factions. Good night, Robin.

MR. MacNeil: Good night, Judy. That's the NewsHour tonight. We'll be back tomorrow night with coverage of food aid for the Soviet Union. I'm Robert MacNeil. Good night.