Recently I tweeted an article about the legal action taken by the government's National Labor Relations Board (NLRB) against Boeing for wanting to build a plant in union-free South Carolina rather than use union workers in Washington state. I also tweeted an article about a Teamsters rally in California over BMW's decision to go non-union at the end of their local contract. More than 60 union jobs will be lost.
I have mixed emotions about unions and I want to give two sets of comments, first to the unions and second to the management of companies.
To Unions
I think that if you wish to be an operator in the economic arena, like companies, governments and non-profit organizations, then you should be able to stand on your own and fight your own battles. Meaning that you are an operator in the labor market and if you cannot convince your potential customers that your product is valuable enough for them then you should suffer the consequences, just like any other economic operator (yes, your members are your customers and non-members are your potential customers). If you cannot unionize workers in South Carolina, that is your problem. Not Boeing's and not the government's problem. You forget that in the end the owners of the company have the ultimate power: they can close the company or move the operation overseas, out of your reach and out of the reach of the government. How does that help anyone? It's time to wake up to the global marketplace and decide how (and if) you fit into that marketplace in a valuable way. Otherwise, our whole country will suffer for it; like it already has suffered so much. Ask the workers at BMW. Their contract ended and BMW made a business decision to release the workers. And they're shocked about it?! Not only are their members their customers, the business with which the unions work are key stakeholders in their organizations. If they cannot convince their customers or stakeholders that they bring value then what other decision is there to make? Unless of course you can convince the government to help you....
To Management
Now it's your turn. Do you know why we have unions in the first place? Because a long time ago (but even up to the present day) the management of companies treated their workers as less-than-human and degraded them. Degraded them through ruthless policies, through dangerous work environments, through unfair labor practices. Management brought the unions upon themselves, they have no one to blame for their creation and their continued existence. If you want to read a searing example of this in the automotive industry, read A Savage Factory the first-hand story of a foreman in a Ford transmission plant in the 70s and 80s. Believe it or not, the kinds of issues detailed in that book happen today. Yes, even today. I've seen it with my own eyes. As I mentioned above to our colleagues in the unions, businesses have ultimate power in labor market as they can close or move their operation out of the country. However, that also means that businesses have the ultimate responsibility toward their employees.
Closing
Ten years ago I visited the Toyota assembly plant in Canada. I was there for a week, sorting parts as a Quality Engineer. During that time I talked with several of the line workers, the non-union line workers. I asked them why they didn't want to have the union in their plant. They told me that Toyota treated them fairly, paid them a good wage and gave them all of the benefits that they would have with the union. Why would they want to have the union? This is a lesson both to the union and to management. If the unions want to be more successful they need to show their potential customers and the businesses the additional value that they bring to the market. If the businesses want to keep the unions out then they need to convince the same people (potential union members) that the business can provide good or better circumstances for them. Either way, this is a win for the working man and woman in the U.S. and hopefully can keep more of our jobs here.
Tuesday, June 21, 2011
Thursday, October 7, 2010
Inequality at the top
Former GM CEO Fritz Henderson gets the axe from GM in December, 2009 and immediately started consulting GM as an outsider. In September, 2010 he finally quits the consultancy. The consultancy where he was paid $59,000 PER MONTH to work for 5 HOURS per week. Here's the story. http://bit.ly/bz785q
I am a native Michigander and it pains me every time I saw/see another automotive company fold or layoff 30% of its employees. After I left the U.S. in 2007, my own plant was closed down and most of the people with whom I worked were laid off. This pattern has been repeated countless times over the past years.
To me, this topic is the perfect example of what is wrong with Detroit and this industry (it's just too easy to blame GM). How can this guy sleep at night with Michigan and Detroit's unemployment rates leading the nation due to, in part, the profound and undeniable incompetence by the leaders of his industry over the past, oh, 30 years or so? Tens of thousands of people were laid off, had their retirements destroyed, and generally lost their livelihoods in Michigan and this guy gets fired and then makes more money in a month than many people make in a year. For doing 5 HOURS OF WORK PER WEEK. That's one hour per day. ONE HOUR PER DAY. $2,950 PER HOUR. What kind of "work" can this guy do for one hour per day? And consulting? Consulting for what? How to fail as a car company? (Yes, he was CEO for only a short time but he was CFO for 3 years before that and in various positions since 1984).
Not only was this whole fiasco disappointing and just sick, it all took place during the time of Government Motors with the, at least implicit, approval of the Obama administration.
If you want to know what has been wrong, and what is still wrong, with this industry look no further than this. Folks, we have a long way to go before American automotive can be taken seriously again.
I am a native Michigander and it pains me every time I saw/see another automotive company fold or layoff 30% of its employees. After I left the U.S. in 2007, my own plant was closed down and most of the people with whom I worked were laid off. This pattern has been repeated countless times over the past years.
To me, this topic is the perfect example of what is wrong with Detroit and this industry (it's just too easy to blame GM). How can this guy sleep at night with Michigan and Detroit's unemployment rates leading the nation due to, in part, the profound and undeniable incompetence by the leaders of his industry over the past, oh, 30 years or so? Tens of thousands of people were laid off, had their retirements destroyed, and generally lost their livelihoods in Michigan and this guy gets fired and then makes more money in a month than many people make in a year. For doing 5 HOURS OF WORK PER WEEK. That's one hour per day. ONE HOUR PER DAY. $2,950 PER HOUR. What kind of "work" can this guy do for one hour per day? And consulting? Consulting for what? How to fail as a car company? (Yes, he was CEO for only a short time but he was CFO for 3 years before that and in various positions since 1984).
Not only was this whole fiasco disappointing and just sick, it all took place during the time of Government Motors with the, at least implicit, approval of the Obama administration.
If you want to know what has been wrong, and what is still wrong, with this industry look no further than this. Folks, we have a long way to go before American automotive can be taken seriously again.
Sunday, October 3, 2010
Volkswagen: two steps forward, one step back
See this article from the "Hindustan Times" on October 4. http://bit.ly/9K2S5y
I think that Volkswagen is probably the most shrewd of the automakers right now, in their pursuit to beat Toyota as the biggest in the world. Not only are they holding their position in Europe and China, they are now teamed up with Suzuki and Maruti Suzuki to dramatically increase their position in India. Maruti already commands around half of the market there and even though they face tough competition they are backed by Suzuki which is a small-car specialist in Japan and around the world (their well-regarded recent U.S. mid-size Kizashi notwithstanding). Tough market small-car leader (Suzuki in Japan) owns tough market small-car leader (Maruti in India) and now with the engineering and production horsepower of Volkswagen, looks to be the best example of a three-way win in the automotive world. I think that the possibilities of VW and Maruti in India, and VW and Suzuki everywhere else, will surpass the last great, successful union of Renault-Nissan. Certainly they will do better than Fiat-Chrysler (the great unknown), the current Renault-Nissan (middling), and the handful of Chinese partnerships (which VW already commands a strong position with its current Chinese JVs).
VW's heady pursuit of Toyota is reminiscent of Toyota's pursuit of GM only a few years ago. Toyota passed GM in 2007 but it was a Pyrrhic victory as the Recession and a spate of quality problems caused them to stumble immediately afterward. They're destructive "crush" on Porsche and slinking after Alfa is surprising for a company which seems to otherwise "get it". Not to mention that VW is rather weak in the U.S. The recent "cost optimized" 2011 Jetta runs the risk of turning off those Americans who want German engineering and performance on-the-cheap (but not too cheap). They have invested in a new plant in TN to make a new, American version of the Passat (or something) but they need to be careful to not lose their identity in the critical North American market (e.g. what is the "CC" anyway?). The only way they can pass the newly dusted-off Toyota is to increase their U.S. position. India will certainly help, but they would do well to find such a "wow" opportunity in the U.S. as well. Can they do that? We'll see.
I think that Volkswagen is probably the most shrewd of the automakers right now, in their pursuit to beat Toyota as the biggest in the world. Not only are they holding their position in Europe and China, they are now teamed up with Suzuki and Maruti Suzuki to dramatically increase their position in India. Maruti already commands around half of the market there and even though they face tough competition they are backed by Suzuki which is a small-car specialist in Japan and around the world (their well-regarded recent U.S. mid-size Kizashi notwithstanding). Tough market small-car leader (Suzuki in Japan) owns tough market small-car leader (Maruti in India) and now with the engineering and production horsepower of Volkswagen, looks to be the best example of a three-way win in the automotive world. I think that the possibilities of VW and Maruti in India, and VW and Suzuki everywhere else, will surpass the last great, successful union of Renault-Nissan. Certainly they will do better than Fiat-Chrysler (the great unknown), the current Renault-Nissan (middling), and the handful of Chinese partnerships (which VW already commands a strong position with its current Chinese JVs).
VW's heady pursuit of Toyota is reminiscent of Toyota's pursuit of GM only a few years ago. Toyota passed GM in 2007 but it was a Pyrrhic victory as the Recession and a spate of quality problems caused them to stumble immediately afterward. They're destructive "crush" on Porsche and slinking after Alfa is surprising for a company which seems to otherwise "get it". Not to mention that VW is rather weak in the U.S. The recent "cost optimized" 2011 Jetta runs the risk of turning off those Americans who want German engineering and performance on-the-cheap (but not too cheap). They have invested in a new plant in TN to make a new, American version of the Passat (or something) but they need to be careful to not lose their identity in the critical North American market (e.g. what is the "CC" anyway?). The only way they can pass the newly dusted-off Toyota is to increase their U.S. position. India will certainly help, but they would do well to find such a "wow" opportunity in the U.S. as well. Can they do that? We'll see.
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