Declaring "a new era for American workers," Teamsters President James P. Hoffa prepared his workers Monday for an historic split from the AFL-CIO, labor's umbrella organization representing 56 unions.

The Teamsters and the Service Employees International Union, the largest AFL-CIO affiliate with 1.8 million members, left the federation after failing to reform it.

"In our view, we must have more union members in order to change the political climate that is undermining workers' rights in this country," said Teamsters President James P. Hoffa. "The AFL-CIO has chosen the opposite approach."

Hoffa added that his group's proposals to stop the bleeding of membership from unions were ignored.

"We proposed that the AFL-CIO embark on a new course of action that would not only protect our existing Teamsters members and their families but lead to thousands of new working men and women to have the opportunity to organize into a strong union that would give them the chance to achieve the American dream to own their own home, send their kids to college and plan a strong retirement," he said.

AFL-CIO President John Sweeney said the Teamsters' and SEIU's bolting from the parent organization would be a "grievous insult" to working people and their unions.

"At a time when our corporate and conservative adversaries have created the most powerful anti-worker political machine in the history of our country, a divided movement hurts the hopes of working families for a better life," said Sweeney, who once led SEIU, during his keynote address to the AFL-CIO 50th anniversary convention.

Seven labor groups, including the two who are departing, have formed a separate umbrella group — the Change to Win Coalition — with the goal of reversing declines in union membership. The AFL-CIO has been accused of sacrificing labor union membership for building political clout in Washington, D.C.

Many union presidents, labor experts and Democratic Party leaders fear the split will weaken the movement politically and hurt unionized workers who they say need a united and powerful ally against business interests and global competition.

Two other Change to Win Coalition unions signaled their intentions to leave the AFL-CIO: United Food and Commercial Workers and UNITE HERE, a group of textile and hotel workers. But they were not scheduled to take part in Monday's news conference.

At the convention on Monday, Sweeney, who is running unopposed for a third term as president of the AFL-CIO, said he was "very angry" at Hoffa and SEIU President Andy Stern, who was a protege of Sweeney's when the AFL-CIO chief led the SEIU.

"The labor movement belongs to all of us — every worker — and our future should not be dictated by the demands of any group or the ambitions of any individual," Sweeney said.

"But it is also my responsibility to hold our movement together — because our power is vested in our solidarity. So I want you to know I will overcome my own anger and disappointment and do everything in my power to bring us back where we belong — and that's together," he said.

Lawmakers who spoke at the fractured conference warned that a division among labor will send signals to business interests that the groups are vulnerable when it comes time to bargain for workers.

"We have news for them. It's not going to happen," said Sen. Dick Durbin (search), D-Ill. "Our unity is our strength. We will stand together and fight for working families."

"There are questions of strategy and tactics of leadership and power and I can imagine many of you are anxious about labor's future but, more importantly, you're also anxious about your own futures," Sen. Barack Obama, D-Ill., told workers in the audience.

Obama said the new global economy is pressuring U.S. workers out of jobs, and that means unions need to be more united.

"There has never been a greater need for a strong labor movement to stand up for American workers," Obama said.

Prior to their announcing a split, the four dissident unions, who make up about 5.5 million of the AFL-CIO's 13 million members, said they would not attend the annual convention. The boycott was seen as a precursor to their departure.

"Our differences are so fundamental and so principled that at this point I don't think there is a chance there will be a change of course," said UFCW President Joe Hansen.

The Change to Win Coalition argues that the AFL-CIO is beyond repair since Sweeney refuses to step down and the group spends too much money on political donations rather than focusing on outreach to workers who need help organizing and adapting to the changes in society and the economy, including automation, globalization and transition from a manufacturing and industrial-base economy to a service-oriented one.

Critics say the changes have lowered leverage of Sweeney, who is stuck thinking in terms of the industrial-base rather than considering new approaches. SEIU is one of the few unions where membership has increased over recent years.

"Our world has changed, our economy has changed, employers have changed," said Stern, who said the decision to bolt was neither happy nor easy. "But the AFL-CIO is not willing to make fundamental changes as well. By contrast, SEIU has changed."

Rank-and-file members of the 52 non-boycotting AFL-CIO affiliates expressed confusion and anger over the action. "If there was ever a time we workers need to stick together, it's today," said Olegario Bustamante, a steelworker from Cicero, Ill.

It's the biggest rift in organized labor since 1938, when the CIO split from the AFL. The organizations reunited in the mid-1950s. At that time, one in three private-sector workers belonged to a labor group. Now, less than 8 percent of private-sector workers are unionized.

A divided labor movement worries Democratic leaders who rely on the AFL-CIO's money and manpower on Election Day. Most experts contend the split could weaken organized labor, though some competition may be what's needed to jolt the movement from its slumber.

The convention boycott means the unions will not pay $7 million in back dues to the AFL-CIO on Monday. If all four boycotting unions quit the federation, they would take about $35 million a year from the estimated $120 million annual budget of the AFL-CIO, which has already been forced to layoff a quarter of its 400-person staff.

Two other unions that are part of the Change to Win Coalition planned to remain at the Chicago convention: the Laborers International Union of North America and the United Farm Workers. They are the least likely of the coalition members to leave the AFL-CIO, though the Laborers show signs of edging that way, officials said.

The United Brotherhood of Carpenters and Joiners of America, the seventh member of the coalition, left the AFL-CIO in 2001.

The Associated Press contributed to this report.