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A common theme in industrial relations and business policy is the need for increased ‘flexibility’ to maintain or regain competitive advantage. The industrial relationsimplications of this recasting of management strategy — in product, process and work organisation — remain an open question. Importantly, notions of the ‘flexible firm’ with its strategic segmentation of workforces into core and peripheral sectors have already found their way onto trade union as well as managerial agendas. And yet the only attempt to negotiate an industry‐wide enabling agreement which would provide the framework for negotiated trade offs involving productivity, hours and flexibility has received little attention. In large part, this reflects the highly secret nature of discussions in engineering between 1983 and 1987 and their ultimate failure to reach an agreement. This paper examines the complex internal politics of the employers' organisation — the Engineering Employers' Federation (EEF) — and the trade unions which played a vital role in shaping the bargaining process. In particular, we shall argue that it was vital for the EEF to secure an agreed settlement which satisfied the diverse demands of the variegated membership but which also consoladated the Federation's historic role as the coordinator of employers' collective strategy in labour relations. The fluidity of union politics and the symbolic importance of shorter hours for the Amalgamated Engineering Union's leadership exercised an equally profound influence on the bargaining process. It was these complex political and organisational factors which were both the motive force and the reason for the collapse of the search for a ‘flexibility’ agreement.

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