Hearing that GM and Ford are planning to cut 60,000 jobs over the next six years, my heart goes out to the families and manufacturing communities that will be affected. At the same time, I can't help but feel that this passage from Wednesday's Wall Street Journal op-ed by John Schnapp, who formerly led the auto industry practice at Mercer, rightly suggests that the entire American auto industry, from the boardrooms to the union halls, is to blame:
[In the late 1970s, when Nissan opened the second Japanese-owned auto assembly plant in the U.S., they] chose to reject UAW overtures to unionize its new Smyrna, Tenn. plant... Nissan also adopted a number of important symbolic gestures. All employees, including top executives, wore identical work uniforms. Production workers were empowered to stop the assembly line if they perceived any problem affecting quality. There were no reserved parking spaces nor was there an executive dining room. Smyrna quickly became the most productive auto plant in the U.S., with the highest level of objectively measured product quality, an eminence it continues to enjoy.
Three separate UAW organizing efforts have all foundered at Smyrna. No later Asian auto maker plant unaffiliated with the Big Three has ever been organized either.
Walter Reuther [president of the UAW from 1946 until his death in 1970] was an undoubted great man. However, the persistence in the contemporary UAW of his intractability, understandable though it may have been in his own time, ensures a continuation of the worst of all outcomes--a shrinkage of employers and the disappearance of jobs.
Schnapp alludes to the U.S. auto industry's violent history (including 1937's "Battle of the Overpass," shown above), which insured that labor and management would regard each other with distrust at best and outright hatred at worst. No one ever figured out how to bridge that gap, and for decades it was simply accepted as part of the natural order. It was a less than desirable state of affairs, but acceptable as long as Americans were buying enough American cars.
But that gap between U.S. labor and management is what allowed Japanese manufacturers to do things differently--and allowed them to demonstrate that an organizational culture that works to bridge, rather than reinforce, such a gap contributes to better results: more profitable companies, happier (and employed) workers, and most significantly, better cars.
The Big Three have worked hard to improve quality and enliven their designs in recent years, and they've met with some success...but not enough. And this week's dramatic announcements are an explicit admission that in a predominantly healthy, growing economy, the U.S. auto industry is a dysfunctional relic of the past.
Although I don't define myself as liberal or conservative today, I come from a liberal background and over the years have often supported union causes. Many, if not most, of my colleagues and friends will side with a union in any dispute with management. But I've come to believe that the antagonistic stance between labor and management that we see in the U.S. auto industry (and throughout the public sector--witness the recent New York City transit workers' strike) is part of the problem and is a major barrier to creative solutions.
I'm not suggesting that the Japanese model should be adopted wholesale--the promise of lifetime employment in exchange for total loyalty to the company hasn't worked out so well for them, and many of its elements are totally inappropriate for our much more heterogenous and independent society. But American labor and management need to recognize that they need to work in concert rather than in opposition to each other--and that an organization's culture will play a key role in creating that solidarity.
I don't have much hope for the public sector. Those bureaucracies have a monopoly stranglehold on the services they provide, and they'll never face competitive pressure sufficient to induce change. But the private sector is a different story, and I am hopeful that the Big Three and the UAW will work together to save their industry from the ash heap of history.
