(FORTUNE Magazine) – That's John Sweeney, standing outside a tire factory in Des Moines, oddly formal in his signature black suit. It's 5:30 in the morning. A bright half-moon shines down on first-shift workers going in and third shifters coming out--young men, mostly, wearing shorts and sneakers and black LOCAL 310 windbreakers. Wading into the pedestrian stream, trying to direct the flow toward the man in the suit, is a woman from the Midwest office. "Good morning, brother!" she's calling. "Meet AFL-CIO President Sweeney!"

All this was Sweeney's idea. He flew in late yesterday afternoon on a connecting flight from New Orleans, delivered a speech in a smoky union hall, took a big crowd out to dinner, and didn't check into his motel until almost midnight. His handlers would gladly have let him sleep this morning. But when you're leading an urgent mission to refloat the American labor movement, and you know (because you asked) exactly when and where you can find 200 workers who might like to shake your hand, there's no question; you get up and go.

Would Sweeney's predecessor, Lane Kirkland, have done the same? No, and that's just the point. When Sweeney outpolled Tom Donahue (Kirkland's former deputy) in the first contested election in the history of the AFL-CIO, in October 1995, hope swelled in the labor movement. Sweeney brought qualities to the AFL-CIO's leadership that had been absent for more than a generation: energy, imagination, a sense of urgency, a willingness to change, and deeply felt moral outrage at the excesses of Big Capital. "We've had this great period of a successful economy," Sweeney told FORTUNE. "Productivity is up, the stock market is up, profits are up, CEO compensation is sky-high. For God's sake, share a little bit with the workers."

Sweeney knows in his bones what Kirkland and Donahue seemed to have forgotten: That for all the sag in its paunch, Big Labor can still pack a wallop when it wants to. During his administration, unions have faced down UPS, GM, and US West, and run up a string of impressive political wins. Notably, they stole an increase in the minimum wage ("Over my dead body," Senate Majority Leader Dick Armey had vowed), blocked President Clinton's reach for fast-track trade authority, and defeated California's Proposition 226, which would have drained labor's war chest by forcing unions to seek members' individual permission before committing dues money to political campaigns.

Most important, perhaps, Sweeney focused dollars and talent on the heart of the crisis confronting Big Labor: the erosion in membership. According to the Bureau of Labor Statistics, union membership as a percentage of all wage and salary workers (including public-sector employees) dipped below 15% in the year Sweeney took office, a level not visited since the Great Depression. To reverse the slide, Sweeney turned to a charismatic veteran organizer from outside the AFL-CIO's inner sanctum, Richard Bensinger, 47. By last year Bensinger's efforts had begun to pay off: According to the AFL-CIO, unions signed up almost 400,000 new members in 1997, by far the highest total in recent memory. The volume of recruits came close enough to offsetting attrition that Sweeney could brag, plausibly, about "holding our membership for the first time in many years."

That crucial advance makes Sweeney's move last June all the more bewildering--and to many labor leaders, all the more appalling. On the first weekend of the month, he abruptly fired Bensinger and replaced him with Kirk Adams, a career bureaucrat and former political campaign manager with close ties to Sweeney. Sweeney quickly faced a barrage of heated criticism from union presidents all over the country, questioning the sincerity of his commitment to organizing.

Sweeney denies that his zeal for organizing has weakened, but his critics, many of whom once counted themselves among his strongest supporters, are not backing off. "I think the firing of Richard was an absolute travesty," says a high-ranking official of a major manufacturing union. "It's taking the smartest, most creative person thinking about union organizing and cutting him loose for purely bureaucratic reasons. And it confirmed to me some of my own worst suspicions: that the Sweeney administration is more into symbols and fluff than substance." Other labor leaders now wonder if Sweeney has capitulated to Big Labor's institutional preference for featherbedding at the expense of recruiting. For all his early-morning glad-handing and fine intentions, they grumble, maybe he lacks the spine to lead labor out of its quagmire.

The only man who can settle those questions, John Sweeney himself, hardly looks like someone Big Capital needs to fear. He's an Irish guy from the Bronx, a practicing Catholic, pink-faced, soft-spoken, past middle age, with wiry eyebrows and a lumpy, bald pate. In those black suits he wears all the time, he might as well be a retired priest or, let's face it, a certain kind of union boss who takes excellent care of his own little world and hasn't a radical bone in his body. At 64, his gentle manner and slight lisp play better one-on-one than with crowds. He's the kind of speechmaker whose rhetorical lead-ins--"Are you ready to churn out more cards and more letters and more phone calls and more visits? Are you ready?"--can fizzle out into an embarrassing silence.

Nor does Sweeney's past reveal any obvious revolutionary fervor. A veteran of countless AFL-CIO committees, he served for 15 years as president of the 1.3-million-member Service Employees International Union (SEIU), which during his tenure became the fastest-growing union in America. Sweeney is also president of FABA. That's the Former Altar Boys of America: five union presidents, plus Donahue, who traveled to Central America together in the early 1980s and bonded on the airplane. The club is a joke, but you get the point: Sweeney's one of the boys.

Even so, Sweeney represents a dramatic break from Kirkland, whom many believe was utterly miscast as a labor leader. For 16 years, until he was forced out in August 1995, Kirkland presided over the AFL-CIO as if it were an academic policy institute. Speaking privately, former close associates describe him as someone who "didn't have fun running organizations," who was "disengaged," even "pathologically shy." "He was an intellectual more than an actor and a doer," says Peggy Taylor, the AFL-CIO's longtime chief lobbyist. "He wasn't somebody who loved to go mix up with people."

Under Kirkland, Big Labor squandered much of its political capital on causes, like new laws protecting strikers' jobs, that would benefit no one other than its own dwindling pool of members. Sweeney changed all that. He gets credit for defining a broad new political agenda for Big Labor, encompassing health care, job protection, Social Security, and the growing disparity between rich and poor--issues of consequence to all working families, not just union households.

What really won Sweeney's constituency over, however, was his willingness to confront the mistakes of the past and call union leaders to task. "We have a terrible habit of drawing the wagons and not listening to people that criticize us," concedes David Foster, head of the Northwestern district of the steelworkers union. As an insider and a consensus builder, Sweeney had been able to cut through all that. "Here's a guy who is not a kid, " says John Wilhelm, general president of the hotel and restaurant employees union. "Who was very successful under the traditional system. Who says, 'Folks, we got a crisis here. We gotta change. We gotta do things differently.' John is very kindly and grandfatherly in his manner, but he's tough as hell in his message, and we need that."

Yes, they do. The challenges facing organized labor are enormous. Just for starters, it has a global economy problem; a Republican Congress problem; a problem with job shrinkage in the manufacturing sector; a problem with hostile employers who would sooner break the union than bargain in good faith; and underlying all, a membership base that has shrunk from more than one-quarter of the private-sector work force in the 1950s to less than 10% today. "I don't want to sound defeatist," says Wilhelm, who spent the past ten years in Las Vegas bucking the trend by organizing tens of thousands of hotel workers, "but my view is that if we cannot organize more successfully in the private sector over the next several years...the labor movement in its present form will wither away."

Many in Big Labor's upper echelons agree. Sweeney, secretary-treasurer Richard Trumka, and executive vice president Linda Chavez-Thompson were elected on a platform vowing to commit vast new resources to organizing and urging all member unions to do the same. It is a theme Sweeney pounds home from nearly every podium he ascends. "Most important, we must organize as we have never organized before," Sweeney told a gathering of union activists at Steelworkers Hall in Des Moines last spring, "because if we don't rebuild our membership, we will not have the strength it takes to...complete the job of restoring the voice of working families." One of Sweeney's first actions in office was to create an organizing department within the AFL-CIO--believe it or not, none existed before--and to appoint Bensinger its first chief. The message was clear: Organized labor is back in the business of organizing workers.

Maybe you thought that's what unions had been doing all along. In fact, most unions turned inward long ago and all but gave up trying to recruit new members. Amazingly, the average local spends less than 3% of its budget on organizing, the rest going to services that directly benefit existing members.

Getting locals to shift priorities is a monumental reengineering task--and even the head of the AFL-CIO cannot simply order it done. The reason: Roughly three-quarters of the annual receipts of organized labor stay with local unions (the AFL-CIO ends up with only about 1%). So Sweeney has the bully pulpit, but that's all. "We can move 100% into organizing at the AFL-CIO," Bensinger explained last spring. "But if nobody changes out there, we're dead."

That's why Bensinger was considered so crucial to Sweeney's recruitment plans. Described by his admirers as a "natural rebel," Bensinger spent 15 years in the field as a factory worker and an organizer for the textile workers union before coming to Washington in 1989 to found the Organizing Institute. His role at the AFL-CIO, as he defined it, was part cheerleader, part ass-kicker, and part conscience. Before closed-door sessions of the AFL-CIO executive council, in countless small gatherings with union members across the country, and at private weekend retreats for leaders of big locals, Bensinger and his band of what he called "contrarian bureaucrats" were leading a wrenching internal revolt--an attempt, as Bensinger put it, to "drive a rapid, instant, massive cultural transformation in the labor movement." The challenge lay partly in persuading unions to think more like corporations and invest in growth. "Borders Books pumps every penny back into growth," Bensinger used to tell his audiences. "We take every extra penny and pump it back into our membership."

"Richard does the best job of anyone presenting the reality of the labor movement and what to do about it," says Wilhelm. "He says, 'Okay, what can the labor movement change? Labor law? Nope, not anytime soon. Behavior of employers? No, not in most cases. Labor movement itself? Yes. We need to plow resources into expanding our base. We're stupid compared with corporate America.' That's a fundamentally important message."

Progress was slow but meaningful. "Two years ago only 15 local unions out of the thousands in this country had moved 20% of their budgets into organizing," Bensinger said shortly before he was fired. "Today 150 have. That's out of 3,000 that should be doing it, but we can brag about the 150." He can also point to the 385,000 new members signed up last year. "What 1997 represents is the first move forward," says Kate Bronfenbrenner, director of labor education research at Cornell University. "I have been monitoring election rates, sizes of units, win rates, for a decade, and this is the first time I see significant improvement." Jeff Mintz, a partner in the Atlanta office of Jackson Lewis, a prominent anti-union law firm, confirms the trend. "I'm seeing campaigns run by better-trained and, I would even go so far as to say, philosophically deeply committed organizers," he says.

Sweeney now says that he never intended to drive Bensinger away when he decided to restructure the organizing department. "I wasn't out to lose Richard," he says. According to Sweeney, he offered Bensinger a raise and a promotion to special assistant to the president. But Bensinger, apparently interpreting his dismissal as a verdict against his methods and a sign of Sweeney's wavering support, cleaned out his office.

The reaction was swift and almost uniformly negative. Speaking privately, high-level union officials say they were shocked, angered, and disappointed at Bensinger's sudden dismissal. According to his wife, Bensinger's phone was ringing continuously, with condolences, job offers, and declarations of support. There were at least 70 messages the day the news broke. Bensinger even received a handwritten note from Rick Berman, a powerful Washington lobbyist who used to plan union avoidance strategies at the U.S. Chamber of Commerce. "I told Richard that I think organized labor really made a mistake when they canned him," Berman later explained. "I saw him putting plans in place, and I know he made a lot of people nervous."

One AFL-CIO official who observed Sweeney following the announcement says Sweeney was stunned by the breadth and depth of the backlash. "Sweeney knows he blew it," says this official. "If he could wave a magic wand and go back in time, he would."

Publicly, however, Sweeney is steadfast. "If anyone has any questions about my focus on organizing, they don't know much about me," he insists, adding, "I'm committed to supporting everything that I started. My sights are, if anything, more ambitious than they were two years ago."

So why bump Bensinger now? That was the question put to Sweeney and his chief of staff, Robert Welsh, by top officers and organizing directors of eight major unions who descended upon AFL-CIO headquarters in Washington for two contentious meetings in July. Wilhelm of the hotel and restaurant employees and Mark Fleischman of the textile workers attended only the first meeting; Foster of the steelworkers, Bob King of the auto workers, Larry Cohen of the communication workers, Bob Muehlenkamp of the Teamsters, Paul Booth of the state, county, and municipal employees, and Tom Woodruff of the SEIU attended both. All were fighters on the frontlines of Bensinger's organizing revival.

According to several attendees, Sweeney made no real attempt to supply an answer. Says one, who asked not to be identified, "I don't think there was any kind of explanation that could be spoken that would stand up to scrutiny, and therefore no explanation was given." Sweeney's silence on the matter did nothing to discourage a theory already gaining credence: that Bensinger was the victim of a palace revolt led by Welsh, PR director Denise Mitchell, general counsel Jonathan Hiatt, and other members of Sweeney's inner circle, all of whom have been associated with Sweeney since his days at the SEIU. As one high-level union officer who skipped the meeting later summed it up, "What happened is the SEIU mafia down there convinced John to assassinate the guy."

To be sure, Bensinger made few friends in the upper-level bureaucracy. According to supporters, he failed to hide his disdain for Mitchell's expensive "repositioning" campaign--$10 million and counting--aimed at softening Big Labor's image. Nor, reportedly, was he a fan of the large-scale staff buildup at AFL-CIO headquarters in departments like field mobilization, which some on Bensinger's team derisively nicknamed the "Department of Buzzwords."

At least one attendee was willing to give Sweeney the benefit of the doubt: "I think John sincerely believes that he needed a person who was more of a manager in that position. I respectfully believe that's a misplaced priority." But even this official wanted some assurance that Bensinger's departure did not signal a change in policy. He didn't get it; he says Sweeney did little to allay his "genuine concern...bordering on fear about what Richard's departure signals with respect to the AFL-CIO's intentions on organizing." Another attendee says he was left with more questions than answers about Sweeney's often-repeated pledge to devote 30% of the AFL-CIO's $100 million budget to organizing. Officially, the 30% pledge still stands; "I'm committed to movingus to that," Sweeney later told FORTUNE. But then he was careful to add: "I've never said how quickly we could reach that point."

The dark view, shared by some of those who met with Sweeney after Bensinger's dismissal, is that Sweeney has essentially given up; that barring another social upheaval on a scale with the 1930s, he no longer has confidence that large-scale organizing is a winning strategy; and that he has cast his lot with the spinmeisters on his staff, in hopes, at least, of keeping up appearances--of "making people think we're winning," as one expressed it. ("I'm not going to dignify that with a response," Sweeney said.)

It may really be that Big Labor's problems are insurmountable and its long, slow slide into irrelevance is a process that can be delayed but not reversed. But Richard Bensinger didn't see it that way. Until the moment he was fired, he believed he had a mandate from Sweeney to drive the organizing effort as hard and as fast as he could. In one of the last interviews Bensinger gave before he was fired (and stopped talking to the press), he was still brimming with hope and enthusiasm, describing an American economy "begging for some moral authority to step in and speak to a more equitable system. There's a vacuum there, and it should be filled by us." Then he added, with unintentional irony, "This is the most wonderful chance of a lifetime."