Well, not that this surprises anyone here but, yes, SEIU and the Teamsters have pulled out of the Federation—effective immediately (sorry for the delay—can you believe it, no wireless at the press conference!!!). And I hear from insiders that the UFCW will pull out by the end of the week. As for UNITE HERE, a senior person told me, “that the other shoe doesn’t always drop on the same day.”

I’m going to try to transcribe the entire press conference over the next couple of hours and basically give everyone as much straight info and data; I’ll do analysis and what’s next later today or tomorrow.

But, here’s the most immediate question that the delegates cannot ignore: How does the AFL-CIO replace the $20 million that it will lose with the disaffiliation of these two huge unions? Do the Federation officers have a plan for increasing the per capita taxes at this convention? Because if they don’t, then, severe cuts will need to be made–on top of the large staff cuts that just took place in the past couple of months.

I don’t see how President Sweeney, on the eve of his certain re-election, can avoid giving the convention delegates a straight answer about how the Federation will survive financially without major steps being made. I asked this question more than one month ago after reviewing the proposed AFL-CIO budget and when it was quite obvious that at least SEIU was headed out the door–shouldn’t there be a debate on the convention floor?

The press conference took place at the offices of Local 1 of SEIU, which has, in its entrance on the 25th floor, an amazing black-and-white old photo of 7,000 building service workers from the early part of the 20th century all standing in a hall and facing the camera for a picture….all white guys in those old style suits.

The media event was held in a relatively small conference room but it was packed with reporters from local and national outlets (The New York Times, Chicago Tribune, USA Today, Business Week and the Washington Post); there were nine television cameras. Heck, it’s wild to see that kind of coverage of an AFL-CIO convention. Those of us who call ourselves the “labor hacks” are used to a tiny gaggle.

Jim Hoffa, president of the Teamsters, opened the press conference. You can read his prepared statement here but he didn’t follow the text so here is a lot of what he said…”First of all, on behalf of the International Brotherhood of Teamsters and our General Executive Board, we have voted to disaffiliate from the AFL-CIO. This is a historic announcement, it is not lightly. We have extended a number of propositions and ideas to the AFL-CIO to make sure that we could change the tide of the AFL-CIO. We have been disappointed over the last 10 years that we have seen a decline in membership, a decline in density.”

We realize that there have to be changes. We suggested a number of changes. We said why don’t we change our dues structure, why don’t we have a rebate with regards to our per capita taxes. The Teamsters union spends over $10 million in per capita to the AFL-CIO. We had a simple proposition. We want $5 million rebated to us to invest and make sure that we can organize in our core industries. They said no. Their idea is to keep throwing money at politicians…”

“We do not take this action lightly. We realize that it will have an effect to some extent on the AFL-CIO. The AFL-CIO has many good people in that organization. We have tried to work with them…”

“We will continue to be the backbone of the American labor movement in supporting unions that are out there fighting for the American worker…We also intend to continue to support the CLCs and we’re also going to continue to support the state federations because we believe they play a vital role with regard to state operations. We’re going to continue in the Build Trades if we are permitted. If they throw us out, that is their business, that is their choice. We are a friend of all unions. This means we are going on a different course. It means we will spend our money differently, it means we will mobilize our workforce differently…and have new initiatives. What was being done at the AFL-CIO was not working. We’re going to do something new.”

From Andy Stern: “Last night, we had a discussion with the leaders of our union. Today, we have made the decision to disaffiliate from the AFL-CIO. I want to stress that this was not a happy or easy decision.” The rest of his remarks pretty much followed his prepared statement.

The floor was, then, opened to the press (questions are condensed a bit).

Q: You owe dues to the AFL-CIO. what do you intend to do about that?

A: Stern: I think, as we said yesterday, there are a number of outstanding issues between ourselves…and the AFL-CIO that we have to resolve. We’re going to need to get together when we all get back to Washington D.C. and I feel confident we can settle out all of our issues so that we can move forward with a clean slate.

Hoffa: The same thing is true…the Teamsters union has not paid dues for a couple of months coming up to this convention. That money is outstanding and we look forward and we’ll discuss it with the AFL-CIO at the appropriate time. The money is in escrow so it’s not a real big issue.

Q: Andy, some people say this moment like the 1930s when the CIO broke away from the AFL. You say you can mimic what the CIO did and organize millions of workers. And, Jim, your father was an amazing union organizer. what do you think will enable you to organize more in the Teamsters?

Hoffa: “I think that organizing…we’ve lost the ability to organize. Obviously, the economy has changed, good jobs are being outsourced, union jobs are being outsourced. When jobs are outsourced, they are not outsourcing the $6 dollar jobs, they are outsourcing the high-paying quality jobs that have been accomplished by the labor movement…What we have to do is go out in joint effort. What we find is that there is not enough joint efforts going on. I would point to the Cintas campaign that we have with HERE and UNITE, which I think is a revolutionary way to organize…”

Stern: “The labor movement has a very long history of looking at the future through the rear view mirror. So, I think I’m going to try to look into the future recognizing that we live in a very different era in the world and America. Companies not countries are making the rules, we live in a global, not a local economy, and we’re not so unwise not to recognize that this is not the 1930s anymore. At the same time, we recognize that we can grow in the 21st Century…We talked about forming something fundamentally different, from the kind of loose operation of the AFL-CIO where campaigns have no accountability, where money is given out for political purposes but to really form a center for growth.”

Q: How much have you paid into the AFL-CIO each year and will that impact your political activity?

A: Hoffa–the Teamsters per capita is $10 million per year that is paid to the AFL-CIO. We will not be paying that money anymore so therefore that money is money that will be dedicated to organizing, that is our number one priority, the entire amount of money will go into organizing, perhaps of that will go into the Change To Win coalition and the other half will be invested in core industries of the Teamsters union.

Stern: We spend $10 million a year on the AFL-CIO. We actually spend more money on politics than the AFL does in our own union and that’s no discredit to what they are doing or they intend to do. I think the real question for all of us is we intend to cooperate with the AFL-CIO politically, we hope they intend to cooperate with us,

Q: Will you be signing any anti-raiding agreements? Will you be a rival Federation and how will you raise funds for this?

A: Hoffa–we are not setting up this Federation to go raid the brothers that we have…this is not an operation to undermine the accomplishment that have happened. We are not out to raid people, we will discuss with individual unions the possibility of no-raid agreements…we are open to that.

Q: Support Central labor councils? Would you set up seperate organizations? (two questions)

A: Hoffa–our intentions are, and what we have instructed our local unions out there in the field…is to keep paying dues. We believe these organizations fulfill a vital role. And there is a lot of fear…with our leaving, this could be up to 40 percent of their budgets and we do not want to disrupt this vital function. This could run into a problem because Brother Sweeney and the AFL-CIO are passing resolutions and amendments that say if you are not an affiliate you cannot participate in the CLCs. [on setting up separate bodies]…I will leave that to the CLCs.

Stern: The AFL-CIO and the labor movement in general does really badly when it adopts exclusionary practices. There was a time in the American labor movement, a sad movement in the American labor movement, when lots of unions didn’t let African Americans into this movement. It did not serve the movement well. There was a time when PATCO went on strike in 1981 and because they were not in the AFL-CIO, we didn’t rally to their support and we paid the price. It would be a tragedy if the AFL-CIO again repeats those kind of exclusionary tactics…