The Drucker Difference

Accelerating UAW's Buy-In at GM


In the mid-1940s, with Peter Drucker serving as a consultant on employee relations, General Motors (GM) President Charlie Wilson became convinced that the automaker needed a new approach to dealing with its workers. He designed an early version of "quality circles" in which the rank and file could, as Drucker put it, "identify themselves with product and company," as well as "be held responsible for quality and performance."

The initiative never even got into first gear. To most of GM's executives, the plan "represented the abdication of management's responsibility," Drucker later recalled. The United Auto Workers, Drucker said, also stood "in violent opposition" to the concept—for much the same reason. Walter Reuther, the union's president, didn't want his members performing what he perceived as a manager's job. In fact, Drucker added, Reuther was leery of anything that created a "common center of interest between employer and employee."

I couldn't help but remember Reuther's adamancy this week when I read of the far-more-collaborative spirit advanced by Bob King, the current UAW president. King—who this year faces negotiations with GM, Ford (F), and Chrysler and is also determined to organize workers at the U.S. factories of foreign companies, including Toyota (TM) and Volkswagen (VOW:GR)—sounds almost like Reuther in reverse.

"We're really committed to the success of companies where we represent workers," King declared in an interview with Bloomberg News. At another point he advocated having his members sit on corporate boards, saying: "The more meaningful voice workers have in all aspects of their employment, the more successful the employer will be."

Partnership in the Employer's Mission

Meanwhile, a set of 11 negotiating principles issued by the union explicitly calls for "partnership in the mission of the employer." It states: "The UAW embraces a performance-based and participatory culture where the union contributes to continual improvement of processes and shared responsibility for quality, innovation, flexibility, and value."

In some respects, we've heard this before. Beginning in the 1970s, unions and companies entered into a range of labor-management participation programs with all sorts of labels: "Total Quality Management," "Employee Involvement," "Quality of Work Life," and so on. The automakers and UAW engaged in more than their fair share of these efforts while experimenting with other forms of teamwork, such as those undertaken at GM's Saturn operation.

But King's vision seems to extend far beyond anything tried before. Earlier attempts at cooperation "were circumscribed by an overall relationship that was more adversarial," says Harley Shaiken, a professor at the University of California-Berkeley who has closely followed the labor scene for many years. King's willingness to have his members weigh in on matters related to productivity—a subject the union has traditionally ignored—is especially noteworthy, according to Shaiken. "We're in new waters going forward," he says.

King is no pushover. He has made clear that the prosperity enjoyed recently by Detroit's automakers needs to flow to those in the UAW, which granted deep concessions to the Big Three to help them cheat their own colossal mismanagement and survive. "We want our membership to share in a very meaningful way in the upside of these companies," asserted King, who was elected union boss last June.

Wealth of Worker Skill and Experience

Still, right alongside this issue of "social justice," Shaiken says, is a companion view that "the UAW in the 21st century means working with the automakers to have successful, competitive firms globally." He notes that Detroit's aging workforce, often seen as a negative, offers a wealth of skill and experience for the companies to draw on.

There are lots of reasons to doubt that King's stance will make any real difference. Many smart people believe that the UAW, whose membership has plunged from a high of 1.5 million in 1979 to about 355,000 today, is ultimately headed for extinction.

Richard Block, a professor at the School of Human Resources and Labor Relations at Michigan State University, sees King's platform as merely the latest in a long line of overtures from the UAW. And he suggests that the best thing to come from any of these labor-management alliances is the union's ability to help coordinate the industry's massive downsizing and "cushion the blow" by ensuring that its members aren't involuntarily laid off and receive buyouts instead. When a business is in serious decline, he says, a kind of "industrial-relations hospice may be the best its workers can hope for."

Perhaps—just perhaps—King can beat the odds. In his 1989 book The New Realities, Drucker again urged the UAW and car manufacturers to join forces in a way they never had. "The union would still have a role as the representative of the employees against management stupidity, management arbitrariness, and management abuse of power," he wrote. Yet things wouldn't get too contentious, for the UAW would also "work with management on productivity and quality, on keeping the enterprise competitive, and thus maintaining the members' jobs and their incomes."

One can only imagine what the situation might look like now had the UAW and the automakers banded together more than a half-century ago, when Peter Drucker and Charlie Wilson first contemplated going down this road.

Wartzman
Rick Wartzman is the executive director of the Drucker Institute at Claremont Graduate University.

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