Cultures Vary on Whether Management and Labor Goals Need to Be Oppositional in Nature

At the age of 19, I was highly disturbed by a business instructor’s statement, in an Introduction to Business class,  that management’s goals are always in opposition to labor’s goals.  When I asked why the two sides couldn’t work together for common goals and mutual benefit, my instructor replied that the two sides must have oppositional goals in order for each side to be considered to be doing its job well.  While I understood the reasoning he presented, the idea of oppositional labor relations continued to disturb me for many years.

Thirty-seven years later, I find myself reading Working for the Japanese: Inside Mazda’s American Auto Plant, by Fucini and Fucini. What I now realize is that the model my American business professor espoused was based on an American cultural point-of-view, which is most definitely NOT the point-of-view taken by other successful cultures.

Solidarity House, Headquarters of the UAW

In America, unions are not organized by company, but are instead organized broadly through many companies, such as the UAW (United Auto Workers). At the height of their power, they had elaborate work rules, over 100 job classifications (for which workers were not allowed to switch tasks or help out in other areas even if currently idle in their own areas), and an antagonistic attitude toward management.

Mazda Plant in Flat Rock, Michigan

When Mazda decided to open a plant in Michigan (the most heavily unionized state in the United States), they decided to work directly with the UAW by forming “study teams.”  When the workers and union representatives spent 30 days in the Mazda plant in Hofu (near Hiroshima) in 1982, it was the most modern and efficient auto-making plants in the world.  A small number of Japanese workers produced a large number of autos each year with half the number of workers required in an American auto plant.

“As Judson surveyed the plant, he could not help but marvel at its technological efficiency.  There were robots everywhere he looked.  They were welding car bodies and applying primer paint.  They were installing tires and transporting spare parts from the loading docks to work stations on the final assembly line…only 40 Mazda employees oversaw an operation that was as highly automated as anything in the worldwide automobile industry.” (Fucini, p. 20)

Mazda's Hofu plant

“But Judson (UAW representative) was impressed by more than Hofu’s technology.  The workers at the plant went about their jobs with a speed and purposefulness that he and the other American visitors had rarely witnessed.  The movements of every worker were carefully choreographed to avoid wasted time and motion.  The Mazda workers never hesitated when reaching for their tools because every tool was stored in its own specially-designated place close to the assembly line.  They never waited idly, as American workers often did,  for work to come down the line to them.   When a production employee completed his primary job at Hofu, he immediately busied himself with other tasks, until the next vehicle arrived at his work station.”  (Fucini, p. 20)

What was happening here, was that rather than focusing on wages and benefits, as American unions do, this union was focusing on keeping the economy strong in order to protect the job security of union members.  “The Japanese union believed it had a responsibility to help increase Mazda’s productivity, and improve its competitiveness.”  (Fucini, p. 21)

“Under this philosophy, the union and management were not adversaries, as they were in America, but partners, each working to create a successful company.”  (Fucini, p. 21)  The difference was that all Japanese autoworker unions are company unions; thus, their fortunes are linked absolutely to those of the automaker.

Assembly line in Mazda's Flat Rock Michigan plant

Mazda’s Japanese management, in agreeing to work with the UAW in the Flat Rock plant wrested 15% salary concessions from workers for the first three years, as well as the right to transfer workers from job-to-job, to redesign jobs when they saw fit, and to work overtime as they saw necessary.  “Mazda wanted the power to rotate employees freely from day to evening shifts as it did in Japan.”  (Fucini, p. 17)  When the UAW said that morale would be destroyed if workers did not know whether they would be working days or evenings from one week to the next, Mazda management compromised by the right to rotate any employee to a different shift for three months out of the year.   In the Mazda plant, managers would also be allowed to do “production jobs” in peak periods as necessary.  In return, Mazda agreed in a formal contract to not lay off employees unless the circumstances were so severe as to threaten the long-term financial viability of the company’s American plant.  (Fucini, p. 17)

Mazda hired its American workers in a very unusual way.  They had every hourly employee participate in psychological role-playing exercises and group problem-solving sessions.

Participation in role-playing exercises

An example of a problem the groups were asked to solve in the interview process was to develop a plan for counseling an imaginary Mazda employee who was always getting into trouble with his co-workers.  The purpose of these tests was to determine how well an applicant worked within a group, because Mazda wanted people who could become part of a permanent team where manager team-leaders worked right alongside hourly workers.  According to the book’s authors, “Mazda has at least succeeded in its goal of hiring a ‘special work force’ for its American plant. (Fucini, p. ix)

In reading this book, I felt a personal vindication of my question to my business instructor so many years ago.  Although it is unusual, management and labor can indeed work together as a team for the good of all.  American labor-management relations seem to be hampered by a particular cultural perspective that the two must always be always be in opposition.

For more current information on what has since happened with Mazda’s Flat Rock plant, see here.

–Lynne Diligent

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One Response to “Cultures Vary on Whether Management and Labor Goals Need to Be Oppositional in Nature”

  1. Jim Taggart Says:

    Excellent post, Lynne, which comes at a critical time for organized labor in Canada and the U.S. Indeed, that prof’s viewpoint was through an American-Canadian lens. Unionization in the U.S. has fallen to about 13% of the labor force, with the public sector having a distorted high proportion. Canada, I believe, is upwards of 20% of the workforce.

    If you look at the unionization of the Big Three automotive companies (GM, Ford and Chrysler) which through the former U.S.-Canada Auto Pact (which existed for decades), that reigning oligopoly produced weak management, little innovation, low productivity and just all around sloth. Automotive management implicitly colluded with organized labor when it came to collective agreements. Wages, benefits, pensions, etc. exploded, which combined with my earlier points, ended up with a crippled sector, requiring massive bailouts bailouts for GM and Chrysler.

    As much as there is a need for mutual respect between employer and organized labor, there’s an equally important need for the two sides in any given sector, indysurt or company to have a shared vision. In a brutally competitive global economy, companies that are unionized are at a disadvantage compared to firms in other countries whose workers are not unionized – UNLESS you have that mutual respect and shared vision. The GM and Chrysler stories are a case in point. Whether through luck or management strategy, or a combination thereof, Ford has actually improved, though time will tell if this can be sustained.

    Like

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