While the question raised in a recent article in TIME magazine’s on-line edition titled “Americans Are Warming Again to Unions. Will the Relationship Last?” is an interesting one, the more pressing question has not so much to do with how unionism fares in public opinion polls, but rather with how the relationship between labor leaders and their management counterparts at unionized companies can be leveraged for their mutual benefit and the good of the country. The future-critical question is: What can organized labor as an institution and their management counterparts do TODAY to restore our nation’s competitive capacity and preserve jobs that fuel our economic engine?
Ford Motor Company and the United Auto Workers have the answer. They are working together.
Ford’s amazing turn-around is nothing short of historic and heroic:
Ford Motor Company Business Results Comparison
|Stock Price||$1.01||over $15|
|Market Capitalization||$5 billion||$60 billion|
|Credit Rating||junk||investment grade ($23 billion in debt repaid)|
|North American Profit||($13.8 billion)||$2.4 billion through March|
|Cash Net of Debt||($7.2 billion)||$8.2 billion|
But the lesser-known part of the story is the one Marty Mulloy, Ford’s Labor Affairs Vice President, and Jimmy Settles, Jr., UAW Vice President, told at the recent Labor and Employment Relations Association conference. “If we hadn’t sat down with the UAW in 2006, there is no way we would be where we are today,” Mulloy said, noting that negotiating breakthrough collective bargaining agreements was one of many painful measures the company had to take to restore its viability, including aligning capacity with demand through plant closures; reducing salaried and hourly employment by approximately 50 percent; reducing the number of dealerships; divesting brands (Volvo, Jaguar, Land-Rover, among others ); selling Hertz; continuing reductions in the supplier base; and leveraging its scale to reduce complexity.
“We used to know that the more we helped the company improve, the more of our members they would lay off. But as time has gone on, we’ve learned how to improve productivity and save jobs,” Settles said, noting that in this restructuring, not a single hourly employee was forced out. “This was a very difficult time, but it was done with humanity; with care for humans. We made sure our people had the opportunity for a soft landing. It was tough, very emotional, but there’s something about the culture at Ford. When its crisis time, we’re all in it together.”
Mulloy said one of the critical ingredients in fostering a culture where real collaboration with the UAW could take hold was sharing business information at an unprecedented level of openness. “I think we share more information with greater transparency than any other corporation,” Mulloy said. “We share full financials; we share Board presentations. Jimmy [Settles] sees things first. Now, it’s just the way we do business.”
“We sit down regularly now and talk about important strategic issues. There is a new spirit of listening to us,” which Settles said helped build the trust necessary for the UAW to fully commit to structured involvement processes in which employees participate on production work groups, mechanical work teams or manufacturing work groups. These groups enable people closest to the work to change the way work is done and even reengineer the product itself. The result is a better product, built more efficiently by a workforce that knows they are respected. “We said, ‘We’re going to drive this thing’ and we got in there to implement. This is the way of moving forward. Our members feel so much more empowered than they ever have before. There’s a sense of ‘We’re in it to win it.’ Morale is very high.”
What Mulloy and Settles’ understand is that true transformative change requires leaders to work collaboratively in removing barriers that would otherwise stifle employees and limit their levels of engagement. These leaders demonstrate their on-going commitment to collaboration and employee engagement not only through words, but also by assuring that appropriate processes, structures and resources are in place and working to sustain improvement efforts for the long-term.
With results like those achieved by Ford and the UAW, the answer to TIME magazine’s question of “Are Americans warming to unions?” might just become ever more evident.
The question is: why don’t more companies and unions follow the model of Ford to seize the competitive advantage that comes when labor and management join forces against business failure, bankruptcy and job loss? We welcome your thoughts.