As the political season heats up, so too does the rhetoric about who’s right and wrong in headline-making labor-management disputes. Recent among those was coverage of the Machinists strike at a Caterpillar hydraulic parts factory in Joliet, Illinois.
And while Caterpillar has a history of taking work out of the domestic workforce to foreign locations, and is frequently credited, or blamed (depending on one’s labor leanings), with having a largely anti-union stance, the media seems far less interested in giving credence to companies that choose an alternative approach—one that recognizes that value in partnering with labor to achieve mutually-beneficial outcomes.
For instance, GE, one of the most admired and emulated corporations in America, has chosen to reconsider its past practice of offshoring jobs. In a recent article in the March edition of the Harvard Business Review, GE CEO Jeff Immelt explains why he believes that the quick decision to offshore jobs based on labor costs alone is myopic.
The real question is not labor cost in isolation. The real question is, what is the net value of a skilled workforce in an innovative and LEAN environment? Labor, and that includes union represented labor, can provide a competitive advantage when involved collaboratively in operational improvements.
One of the parallel cost/value situations many managers and executives experienced in the past occurred when corporations decided to make major IT software conversions based only on promised returns without a full accounting of the true cost to the organization and its customers during the conversion period. Suddenly, inventory was lost; plants shutdown waiting for parts that were warehoused nearby but “unavailable;” customers hung up rather than endure long waits for call center help, etc. Every corporation now understands that a major software conversion is a multifaceted decision that must consider all the metrics, not just the promise of lower cost eventually.
Rarely is considering one factor at the exclusion of many others a fair representation of the whole situation. It would, in essence, be the same as the news media only sharing one side of a story at the exclusion of the other. And that, of course, would be counter to the call of fair and balanced reporting. Kudos to GE’s CEO for having the audacity to pursue an alternative approach-- and to HBR for having the journalistic integrity to cover it thoughtfully.