June 1, 1992 -
There is a weird contest raging at the heart of labour-management relations in Canada between those who want to perpetuate the old class struggle and those who believe that labour and management must cooperate. On the one hand, there is extreme partisanship among both labour and management, while on the other, there is a willingness to accept one another as partners in a joint enterprise.
There are plenty of indications that both sentiments are still very much with us. For example, Bob White's recent elevation to the presidency and Jean Claude Parrot's to the vice-presidency of the Canadian Labour Congress (CLC) was accompanied by militant talk of an all-out attack on the "corporate agenda" of business and the Mulroney government. At the same time, the New Democratic Party government of Ontario, a close ally of the major CLC-affiliated unions, is trying to persuade business that its union-supported labour law changes are meant to bring about partnership and cooperation between the two parties. Who is speaking the truth?
Perhaps the best way to clarify this confusing picture is to turn away from the big picture at the national level and see what is happening in a number of specific, local situations. In doing so, we will discover that despite the tough talk of stepped-up class warfare by the likes of Bob White, a growing number of companies and unions are marching to a different drummer.
A reason to make profits
Algoma Steel in Sault Ste. Marie, Ontario, has undergone a rocky metamorphosis intended to stave off complete collapse. A major money-losing corporation, suffering from appalling labour relations (a damaging strike in 1990 lasted 112 days), declining markets, and a badly matched product mix, it was cut adrift by its parent company, Dofasco Inc. To avoid a disaster for the local community, a consortium consisting of the United Steelworkers of America (USWA), the provincial government, and four major banks, cobbled together a rescue plan that included a substantial cut in pay, the elimination of 1,600 of the current 5,800 jobs, and cutting uneconomical product lines. The result is a 60 per cent employee-owned company facing an uncertain future.
Predictions about the future viability of the restructured company are mixed. Spokespersons for the USWA are confident that the company will prosper under new management. Steve Boniferro, a union representative at Algoma, asserted that the employee-owners would not shy away from making tough decisions. Countering the critics' predictions that a new management would be loath to eliminate unnecessary jobs, Boniferro declared: "We're not going to be carrying people within the organization who aren't needed. We're not going to keep people around to dust bannisters." Much is made of the fact that the employees now will have a direct stake in the operation and will no longer play by the same us-versus-them rule. Said Boniferro, "Things are going to be done much differently. The employees now have a reason to make the company profitable."
At least one observer isn't so optimistic. Jay Gordon, a steel industry analyst, predicts that the newly trimmed company must downsize much more extensively. He compared the Algoma restructuring with the Nova Scotia-owned Sydney Steel Company, which has been a graveyard for millions of tax dollars. Although Gordon predicts that the new Algoma plant will survive indefinitely, it will do so as "an albatross around the necks of Ontario taxpayers."
What makes this rescue operation fascinating is that Algoma's downfall was caused in part by poisoned labour relations. Besides market conditions, the key question for the survival of Algoma is whether the traditionally hostile USWA and the new management, now partially composed of union appointees, will be able to play their partnership role. One indicator is the newly completed collective agreement, containing wage cuts for hourly workers of $2.89 and 14.5 per cent for salaried employees, in exchange for company shares. It also reduces the number of supervisors and redefines their role, upgrades the skill content of jobs, increases the responsibility of the workers, and provides for much more participation in decision-making by the employees.
The restructuring of Algoma is not only a significant effort in salvaging an important business for the well-being of the local community. It is also an important indicator of the prospects for turning adversarial labour relations into a new and promising kind of partnership. (See Daryl-lynn Carlson, "Same Old Problems Seen for New ASC," Labour Times, April 1992, p. 1.)
Crayon plant introduces teamwork
Reports of layoffs and plant shutdowns or transfers to the United States have become drearily common, but at least one Canadian plant has moved in the opposite direction. Binney & Smith (Canada) Limited recently added 50 workers to its Crayola crayon plant in Lindsay, Ontario.
The success of this plant was made possible by drastically changing the way employees do their work. Previously, workers performed simple repetitive jobs and were paid on a piece-rate basis. But now they are organized into work teams, providing them with a much greater degree of flexibility. They are doing a variety of functions and are dependent on each other's cooperation. As one of the workers explained: "People used to say 'that's not my job, so I'm not going to do it.' Now, it's a team effort. They get along better, they ask each other questions, they depend on each other."
The new team-based work was initiated 18 months ago when the company decided that in order to compete it needed to reduce layers of management. The plant director of operations now deals directly with work-team leaders, providing immediate feedback with the people doing the work on the shopfioor. Teams are responsible for the entire process, including scheduling, inventory, maintenance, and cost and quality control. One result of the new approach was greatly increased employee satisfaction. In addition, the old compensation structure, which fostered rivalry and hard feelings instead of team spirit, was eliminated. Now workers receive a straight wage of about 13 dollars per hour. The employer also pays into a matching savings plan, the amount depending on the years of seniority.
Further changes are contemplated, such as having team leaders elected by the workers. When Binney & Smith International had to decide whether to increase production at its American or Canadian plant, it chose the Lindsay plant. This is how 50 more workers were hired and the third shift added, another indication that employment and job security are directly related to teamwork and cooperation. (See John Heinzl, "Crayon Plant a Brighter Place," The Globe and Mail June 18,1992., p. Bl.)
Employees make more of the decisions
Trim Trends Canada Limited is an auto-parts plant in Dundalk, Ontario. Recently, Murray Lindsay, a University of Saskatchewan associate professor, undertook an extensive study of Trim Trends. He was looking for a plant that was in the process of changing from traditional to world-class manufacturing.
Trim Trends has been an important employer for the small town of Dundalk since 1968. Its existence was threatened by recent trends in the automobile industry, marked by intense competitive pressures, especially in product quality and delivery. The plant was running at 79 per cent efficiency and needed to drastically improve its performance. For example, over $800,000 worth of material was wasted as scrap each year.
Jim Preston, general manager of Trim Trends, explained that in the past management did not bother with the people on the shopfioor. He said it was three days before anybody in the plant would even say hello to him. Preston began to meet with small groups of employees to discuss ways in which the company could survive. Gradually the employees' distrust disappeared and they began to submit ideas for improvements. When the workers saw that their suggestions were taken seriously, they realized that the changes were for real, and their enthusiasm blossomed. All kinds of cost-cutting measures led to much improved operations. One of the employees explained, "Management asked for input, and we're helping ourselves and the company by staying competitive. Some of the things have been pretty simple. Just moving one die on a press can save $60,000 a year."
The new teamwork at Trim Trends is enthusiastically supported by the local union and its staff representatives. USWA staff member John Chamelot said that he found the attitude of the new management at Trim Trends refreshing. "It's high time that at least one company started doing this. The old adversarial scenario has got to stop. When you want more productivity, who knows better than the people on the shop floor?"
Currently, there is ongoing discussion about ways to have employees share in the rewards of production improvements. A previous gain-sharing program, based on individual performance, proved divisive. A new program now under consideration would reward the entire workforce.
Professor Lindsay concluded that Trim Trends's change in organization and management has given the employees much more opportunity to assume responsibility in a team setting. Trim Trends provides another example that when people pull together they benefit together, and work becomes a much more rewarding experience. (See Paul Lebel, "Co-Operating to Compete," Challenges, Spring 1992, pp. 38-39.)