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United Auto Workers Are Everyman; The American Experience

copyright © 2007 Betsy L. Angert. BeThink.org

The morning broke. There was a momentary blip in the air as broadcasters spoke of the pending United Auto Workers potential strike. Was the short and sweet General Motors walkout the topic of discussion, or perhaps, the work stoppage at Chrysler was the focus. No matter; neither was of interest to Jack, a corporate executive. He received word from his accountant hours earlier; health care costs are too high. We must cut benefits. Perhaps it would be better if we eliminate a large portion of the workforce. Certainly, that would save us much money. The company must consider the stockholders. Individual buyers and brokers look at earnings and expenses.

The USA In Our Chevrolet Looks Bad. Ford Did Not Have A Better Idea ©

For years, we have heard General Motor’s executives complain of costs. They say the cost of doing business in America is too high. According to corporate administrators, American laborers insist that employers cover health care expenses. Companies must honor pensions awarded in the past, and then there are those wages, oh, those wages. The management has cried out; they cannot continue do business under these circumstances and still make a profit. General Motor’s bosses plead for understanding and ask their workers to sacrifice their wages and benefits. Even when the laborers comply, it is never enough.

Chief executives at General Motors, and in other American companies, ultimately take control. They cut and cut; overhead must go. Production and producers be damned, the bottom line lies with the shareholders. To boost the numbers corporations have reduced the workforce. They have decreased the dollars paid out for health care. They have eliminated many sick days and are unwilling to provide benefits for families. Now, they are “Offering [a] Buyout Deal to More Than 125,000 Workers.” Though not all news reports mention this, if the employees accept the deal they must forego once expected health benefits.

The New York Times article, G.M. to Offer Buyout Deal to More Than 125,000 Workers, seems to paint a rosier scenario than some other media sources. They quote Robert Betts, president of the U.A.W. local at the Delphi plant in Coopersville, Michichan, as saying “the offers were attractive.” Mr. Betts claims, "If someone is going to give you $35,000 to take your pension, that's good," He continued. "I think a whole lot of people are going to hit the road over this."

“Wonderful” said stockholders; shares of G.M. rose shortly after the news was released. Is the action good; or is it only one more blunder in a longstanding series of shortsighted solutions?

HIP, HIP HOORAY, HEWLETT PACKARD CUTS COST ©

Today, on Tuesday, July 19, 2005, Hewlett Packard did as expected; they announced that they would distribute 14,500 pink slips. The company will reduce one-tenth of its worldwide work force over the next 18 months. HP claims this restructuring plan will result in a $1.9 billion annual savings. Shareholders applaud the decision; employees do not.

The company also made known, as of January 1, 2006, it would no longer contribute to the pension plans of its domestic workers. Oh joy, oh bliss. Newly appointed, company President, Mark V. Hurd is following the lead of other corporate heads. Hurd saw GM Chairman and CEO, Rick Wagoner do his dance and he thought he would join the hustle.

President Hurd declares this move will create “a simpler nimbler company.” Schticks are simplistic and shortsighted. Yet, they are the preference of American corporate leaders.

US companies cut cost to garner gains. They do not consider that while there may be short-term increases, in the long run, the global community will suffer. It is people that purchase printers; consumers buy computers. Cars cannot leave the showroom floor without a driver and drivers need cash to claim their vehicle. Without jobs, without income, even without a sense of security, shoppers do not shop.

American firms concentrate on the immediate future, and then, ultimately, they flounder; many fail. Companies dismiss or diminish the importance of their own employees; they cater to Chief Executive officers. It seems, for a time, that these measures are winning strategies. However, they are not. These tactics bring in profits, though these earnings are short lived.

Toyota can claim a business-intelligence that reaps greater rewards. Their corporate culture, kaizen, or the Japanese business philosophy demands an attentiveness that differs from that of American organizations. Kaizen requires obsessive cost controls, relentless thoughtfulness, and equality. Executives are not considered greater than employees; they share. Japanese industrialists care. Rather than cut labor and benefits, they build relationships. Wow, what a concept!

This way of thinking is contrary to that found in American industries. Sharing status, ideas, and revenues is not the American way. Yet, it is the standard in Japan. Businesses such as Toyota are successful; their success is substantial. If only Hewlett Packard, General Motors, IBM, and other American capitalists would consider similar strategies. They too might harvest greater manufacturing health!

AS GM GOES. CUTS, THE INEFFECTIVE CURE ©

Many recall the old adage, “As GM goes, so goes the nation” and General Motors is going, going, and some fear it may soon be gone! General Motors has a habit of cutting costs, jobs, and benefits. Throughout their history this strategy has proven to be ineffective and yet, only weeks ago, they announced that they would continue to do as they have done.

As GM cuts, so too do other American industries and institutions. While investors temporarily profit from this ploy, little else does. Let us look at the legend of this corporate giant, its philosophy, and practices. Then compare and contrast these with those of Toyota. Let us hope that one day, General Motors will do the same.

The decline of General Motors began long ago. During the energy crisis of the 1970s, America changed. GM did not lead the cultural shift, nor did it swing with it, though they may have lead what followed.

The public and foreign industries alike, realized that the Earth could not and would not provide an endless supply of petroleum. Adjustments must be made; dependency on fossil fuels had to stop. Citizens concluded that they could no longer drive gas-guzzling engines; they would prefer economical automobiles. Consciously, people chose smaller cars. Yet, General Motors did not make these. They delayed. Customers went elsewhere.

General Motors acted as though there was ample oil; availability was merely a political ploy. They believed or hoped that consumers would come around. Then, GM would be ready to deliver. GM would ride-out the energy storm, and they did, or so it seemed. Slowly, they realized that times had changed and they needed to change with the times. However, it took this corporate giant time to turn left, right, or even to move straight ahead. Once they did move, they were lumbering. General Motors did not deliver as quickly as other automobile makers did; nor did they deliver as well. [The same could be said of many American industries and institutions.]