Every Worker a Participant
January 1, 1993 -
Ford Motor Company, like other companies open to change, has begun to take a different approach to managing its employees. Traditionally, the automotive industry has been committed to the old hierarchical division between "labour" and "management." But in the wake of staggering losses, Ford management made a simple but far-reaching discovery: changing workers from antagonistic wage earners to respected and coresponsible partners is the key to survival in a new and brutally competitive environment.
On the other side, workers and their unions have had to accept the reality that increased productivity sometimes goes hand in hand with the loss of jobs, especially in a stagnant economy. The combination of increased productivity and thus (sometimes greatly) reduced numbers of jobs historically has been a stumbling block in labour relations.
Given the traditional adversarial attitude on both sides of the bargaining table, it was not surprising that unions insisted on work rules that protected jobs. But such outrageously wasteful rules began to hobble companies, especially in industries such as construction, longshoring, entertainment, and newspapers. In good times, the wastefulness of these practices (both in economic and social terms) can be hidden or absorbedâat least for a time. But in today's economic climate, such make-work practices aimed at protecting unneeded jobs are no longer tenable. The good news, however, is that some companies, their workers, and unions are opting for new and imaginative ways of working together for the wellbeing of the enterprise.
Although Ford Motor Company is still facing serious losses, its prospects have improved substantially as a result of a number of far-reaching changes in its management style. These changes were forced on the company by declining vehicle sales. Between 1978 and 1982, sales dropped 47 per cent and Ford experienced its first loss in 34 years. During the same period, it laid off half of its employees, increasingly relying on outside contractors for many of its parts requirements.
This was strong medicine. The key question was how the unionized workforce responded to these severe measures. After all, the United Auto Workers union is known for its tough stance in defence of jobs. Herein lies the key to Ford's success in making the painful though necessary adjustments. Both sides, hard hit by the recession, realized that adversarial attitudes had to be abandoned. Consequently, instead of treating its workforce as hired hands strictly separated from management, Ford appealed to its workers for their ideas and involvement. Old habits die hard, but since 1982 much progress has been made.
For example, the Walton Hills plant (formerly called the Cleveland plant) was known for its adversarial labour relations. It was Ford's least productive stamping operation, and in 1980 management informed UAW officials of its plans to shut it down. That announcement motivated the union to propose a plan to save the plant, including $15 million a year savings by eliminating wasteful work rules. In a recent article in The Globe and Mail (December 28, 1992), Joseph D'Amico, the local union president, explained: "I opened my eyes and saw what reality was. If we didn't break down some barriers, we'd be history."
It wasn't easy to change attitudes; some criticized their fellow workers for making cost-saving suggestions. Similarly, lower-level managers were suspicious of employee involvement. But management insisted on its new approach, which involved giving more responsibility to the employees. In one instance, the company organized a joint trip of union and management officials to a Japanese plant. Workers were given more autonomy. A press operator assisted with the purchase of a new stamping press and another worker was sent to Japan to observe the operation of a similar press. Employees were rewarded for suggesting ways to improve efficiency. One worker received $14,000 for suggesting a change that saved the company $70,000 a year.
In the old days, the union fought management at every turn. Today William Smith, the plant manager, and D'Amico often work together solving problems. As Smith explained: "I don't see his job and my job as significantly different. I think we both take care of the plant and the people. We just come at it from different angles."
Partnership at GM
General Motors has also instituted a number of drastic changes in the way it manages its employees. It, too, has found itself beset by a sea of red ink and has been forced to close a number of plants and lay off thousands of employees. But in some instances, GM built new plants (notably the Saturn plant in Springhill, Tennessee) in close cooperation with the employees and the union. And in other instances, a new nonadversarial relationship between labour and management helped to turn poorly performing plants around.
In 1986, the General Motors plant in Ste-Thérèse, Quebec, was faced with the likelihood of being shut down. The 3,000 workers, represented by the Canadian Auto Workers union, accepted a cooperative, Japanese-type work concept proposed by management. The vote was close but it marked the beginning of a remarkable change.
Previously plagued by labour hostility, the Ste-Thérèse plant became an outstanding example of the mutual benefits derived from cooperation. Work teams of eight to ten people cooperated on a number of tasks and assumed responsibility for the quality of their work. Management implemented a so-called synchronous manufacturing method, which smoothed the flow of the assembly line and reduced parts inventory.
The key to improvements in morale and productivity was the rejection of the traditional adversarial relationship. Spokespersons for the union explained that they still have differences with management. But whereas confrontation was the style before, now negotiation and compromise are the rule. Last summer, the plant was refitted for the production of 1993 Camaros and Firebirds. Although nothing is certain, especially in the automobile industry, management and union officials have high hopes for the continued operation of the Ste-Thérèse plant. (See Timothy Pritchard, "Blood, Sweat and Gears: GM Reinvents the Factory," The Globe and Mail, June 16, 1992.)