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Unions and Business in the 21st Century

A recent CounterPunch newsletter (late September 2005) chronicled the struggles of the unions with General Motors in Flint Michigan. The emphasis of the article stresses how the strong efforts of the union in the mid-1930's caused the GM executives to recognize the value of their people with the result that by the 1950's Flint was a very prosperous community. GM built neighborhoods and health clinics. Its management recognized its involvement in the community and even included a requirement that its executives live in the city limits.

While I assume the writer wished to emphasize how unions must remain active to keep the leaders of the big businesses beholden to their union members, I get a different perspective. I suspect those were years when everyone in the company and the community were working together to meet common goals. Such unison of purpose is both effective and rewarding - both financially and socially to those participating in the endeavor. The writer noted that during the decline of GM in Flint the executives were no longer required to live in Flint so the implicit linkage between the corporate behavior and the community had been broken.

My first two employers out of college had unions; I was a member of the union during my time with the first company while with the second I was not. While neither experience is anything like that in Flint, both influenced my perspective on unions. My third employer was the biggest of the three and it did not have a union in the facility that I worked at (other facilities had unions). Whether fair or not, these three experiences while in my 20's are the most influential basis for the perspective offered here.

When I was a member of the union in my first job out of college, its primary purpose seemed to be the union contract - that ensured both an agreed upon wage and a schedule for raises during the term of the contract. This was not a big company nor a big union but I discovered that an apparent ancillary purpose was to prevent the company from taking advantage of the union workers, so each person should do only what their position required. Being young and ambitious I was anxious to learn so when my boss asked me to do something that was more for a person of a higher pay grade I was excited to take on the challenge. However the union steward told me that maybe I should not be doing such a job. I was willing to take on the assignment and with such successful efforts I was subsequently promoted to the higher grade. There were no repercussions from my steward at the time but I definitely recognized that restricting myself to only what I was doing at the time would probably never lead to an advancement or challenge. The union seemed to be both helping the members through the wage contract and hindering them through an emphasis on job classifications. I left this company to pursue a better, more challenging job.

I remember that my second employer (around 1980) had a strong apprentice program. To me that program represents an explicit corporate investment in the employees because a well trained employee will be more productive and hopefully more loyal. Both the union members in the shop and the servicemen (those doing machine installations and field work) could participate in this program. I participated in part of the program as a non-union service person so I worked with union people through the program. Looking back I recall absolutely no animosity between servicemen like myself and the union members. Everyone was working together to keep the company successful. There were various employee activities, including such company sponsored recreation leagues like softball and bowling. The notable success of the company resulted in a payback: profit sharing checks, so all the employees could share in the company's success. I recall those initial years for me with this company, when I was in my early 20's, as good times.

Though I was with this company only about 4 years, the second half of my time has a very different retrospection. I remember more frequent discord among the corporate leaders involved in a turf battle, rather than working together on solutions. I participated in a number of meetings where such disagreements were counterproductive. Some of us could notice insights from one group were not being considered by another group which resulted in later mistakes that could have been minimized or prevented. The business took a down turn, as did the national economy in the early 80's, the apprentice program was halted, employee benefits like tuition reimbursement stopped (that I was using) and a strike by the union ensued (not being a member of the union and this being quite a few years later, I do not remember what the list of demands or complaints included). After the resolution of the strike the prosperity of the company did not return. Several executives received lucrative golden parachutes in the subsequent years even as the company remained in financial distress and about a decade later the company was bought by a competitor who soon thereafter closed this facility. While there are no doubt many reasons for such a reversal of business fortune, I could not help but reflect that the company had been successful when all the employees, from top management to the union, were all working together. I left this company to complete my Bachelor's degree to ensure a better, more challenging job upon graduation.

My time with my third employer was somewhat a copy of that with my second. The early years were good times for many reasons. The jobs were challenging. The work environment was great. There was fun camaraderie both in the work group and in the facility as a whole with periodic company picnics and many company sponsored recreation activities like softball and soccer. Both of my children were born at this time. My career also took off with a succession of promotions and pay raises. I even traveled for the company to other facilities (I came from the engineering group and I helped the manufacturing group that was located in another state) and for efforts of cooperation with other companies (our product was integrated with those of other companies into a final assembly). The company was doing well and the reason for that success seemed (to me at least) to be that everyone was working together. That cooperation, either in a work group, in a project group or in a company effort led to success.

In only a few years, a down turn began. The apparent trigger for this business cycle was the merger of our company with that of a competitor. The head of this merged company was promising that the new corporate entity would become very powerful in our industry. It was certainly large enough to have influence! However size does not inevitably lead to efficiency or effectiveness. The business practices for our previously successful groups were changed to that of the competitor. Everything became measured and subject to review. Instead of concentrating on successful project completion the emphasis turned to concentrating on managing the efforts within any project. Whether or not management by objectives is a good business practice I certainly cannot claim being a witness to a successful use of the practice. I will not pass judgment as to what caused what but certainly morale fell, all the company activities like the picnics ceased and the level of our job activities flattened due to the subsequent business conditions, where previously we were challenged to handle many things simultaneously but now there were less activities to be done at the same time.

As the company's financial situation deteriorated, the eventual corporate management solution was the implementation of work force reductions by percentage. This arbitrary guideline led to people being laid off due to their position in a work group within the company at the time of the reduction, not due to the importance of their skills. One of my coworkers was a bit older than myself and though his work experience seemed to indicate to me, as a coworker that could not know all that had passed before we met, a high level of competence he was put into a position of reduced importance that subsequently lead to his dismissal - and we both knew at the time that was the reason for the reassignment. From this dismal work environment, I left to find another job, which actually turned out to be yet another similar up then down - but I think these three recollections are sufficient. (My selection of companies during my career has not been so fortuitous. This facility was eventually bought by another large company.)

Whether my recollections of these experiences is fair to my conclusions is certainly debatable. The success of each business was related to how well everyone at the company was working toward achieving common goals. Unions are really not critical to this success. I feel that at the turn of the 20th century unions were fighting for safe and fair working conditions. Very long work weeks and unsafe conditions are not acceptable for a humane management ethic. By the second half of the 20th century, I expect that most companies offered safe and fair working conditions.

In the 21st century I do not expect that unions provide a way to better jobs and better communities. During the previous century, business management became more enlightened when responding to their employees. A new danger looms for the American workforce. Rather than unsafe conditions, now the new management technique in some large companies seems to be the threat - either work for less or your job will be sourced to a foreign country. With this technique, the top executive is seeking a more submissive workforce and the implementation of that threat (outsourcing) avoids the consequences of a union and its strike.

Managers had discovered in the middle decades of the last century that better conditions and better cooperation with the workers will result in a higher likelihood of business success. Only enlightened business management can find that solution of offering a fair level of compensation to their work force while still generating a successful business. I do not find that unions, in and of themselves, offer a solution because their demands are backed by the only consequence that the union can offer - the withholding of their labor during a strike. While such a threat can make the business executives consider their options (as the GM executive of the late 1930's did), the execution of that threat is unlikely to result in a spirit of cooperation that would have the better chance of prosperity for both company and its union. While the story of the GM strike of 1937 and the subsequent prosperity of the 1950's is perhaps encouraging I suspect that a repeat is improbable. Forcing higher wages without consideration of an accompanying business plan to sustain those expenses will not result in a favorable outcome for the enterprise.

Businesses need to recognize their connection to their work force within their communities. Only a new business ethic that seeks the cooperation between the management and the work force will bring about prosperous communities. Certainly this management ethic is not easy, nor does it seem so common in the big companies of America in 2005. My employer that followed those mentioned above rather quickly resorted to layoffs when business conditions took a down turn. However there must be a way to bring back such a model for business leadership.

The opposition provided by unions is probably not a productive one. Any business owner must be free to hire the employees he/she wants to, whether they are all women (an apparently common practice at Hooters) or all Oriental (apparently common at the small Chinese restaurants I have visited in recent years) or all rather low wage (also common in some restaurants) or diverse (where the desired skills are more important than any other criteria). If no one is available or willing to meet the requirements for employment then the business will undoubtedly fail. The expectation by any prospective employee is that the employee will be treated fairly and not subject to unsafe conditions. Another common expectation is that if the business is doing well that there might be some financial payback to the employees that helped with that achievement. Most people do not condone having their efforts taken advantage of since that is not what most consider fair. When the top executives reap monetary windfalls while the bulk of the workforce gets nothing, the impact on employee morale is rarely positive.

Business executives that outsource their jobs are essentially 21st century pillagers - they take their profits from America while offering nothing in return to their community. If the purpose of a business becomes nothing other than shareholder return then it is only a matter of time before there will not be enough consumers for whatever the business makes.

There is a web page with a similar topic: Human Resource Management. Our management culture accepts poor treatment of employees.

created - Nov 2005
last change - 11/06/2005
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