A UNION PRESIDENT on the company's board of directors? That must be Germany, land of co-determination and 50 per cent worker representation on supervisory boards. No? Perhaps Sweden, social democracy, powerful labor movement. No? Let's start by eliminating the countries it couldn't possibly be--The United States. What do you mean, it is the United States. The Joe McCarthy, Richard Nixon, and Milton Friedman United States?
The very same.
On October 25, The United Auto Workers(UAW) and the Chrysler Corporation reached agreement on a new three-year contract. On the same day, Chrysler chairman Lee A. lacocca announced that Chrysler will nominate UAW president Douglas A. Fraser for election to the company's board of directors at the May 1980 annual meeting.
Is creeping socialism about to pounce? Not quite. In fact, despite the landmark nature of Fraser's likely upcoming appointment to the financially troubled auto-maker's board, the move is most striking for its insignifance.
Admittedly, Fraser's membership on the board has some benefits for the UAW rank-and-file. The union will gain access to financial and other information previously held in confidence by Chrysler's board decisions through his arguments, if not through his vote. For example, he can make the company at least consider preserving jobs when its knee-jerk reaction to financial difficulty might be massive layoffs. More immediately, he may be able to get Chrysler to re-consider the planned closing of its Michigan Assembly plant.
But even if management actually listens to Fraser, his presence on the board will not signal a new age for the management of America's firms.
Musical chairs in Chrysler's board room will not, by itself, alter the daily work routines in the company's shops. The repetitive, broken-down jobs, the hierarchical supervisory structure and the rather complete lack of employee participation in management decisions which intimately affect their work will all remain.
It may be argued that putting Fraser in the board room is not intended to create democratic factories. Indeed, this is the whole point. Unless Fraser uses his new position to begin the process of real, lower-level democratization, he will advance the cause of "industrial democracy" in a very limited way. Employee commitment and motivation to work hard to help the beleagured company will likewise remain largely unaffected.
Efforts at high-level power sharing between worker representatives and management is hardly a new idea. In West Germany, for instance, worker representatives occupy half the seats of supervisory boards in large corporation. These boards have limited jurisdiction, but are responsible for crucial top-level matters such as the appointment of the company management board. Yet workers are neither involved directly as representatives nor, experience shows, indirectly throughcareful examination of both the issues the board faces and the votes of their representatives. A survey taken in the early 1970s showed that fewer than one third of German workers even knew the composition of the supervisory boards.
The Trilateral Commission's recent report on worker participation stated of German co-determination: "It must be admitted that the degree to which the ordinary employee is involved in this type of participation is very limited. Surveys show a low level of worker involvement and a limited satisfaction with the existing system."
The German experience--and others--prove that high-level union-management power-sharing cannot by itself change the character of daily working life. Opportunities for high-level worker influence superimposed on a traditional system which forces workers to shun participation even in the lowest level decisions about which they are most knowledgeable, will have little impact on workers' lives or attitudes.
Fraser and the UAW do seem aware of the limitations of board representation in isolation. Buried inside the stories about Fraser's nomination to the Chrysler board were a few lines describing another union proposal, which would establish joint worker-management committees on all levels within Chrysler. The committees would cover such issues as plant closings and locations, product planning, and pricing. The UAW justifies such a committee structure by claiming that Chrysler has "for too long ignored the potential input of Chrysler employees in favor of the decisions of a few individuals, whose poor judgment repeatedly led to monumental operating losses and a weakened financial structure."
In practice, these committees if formed, would probably be similar to those the UAW has formed with G.M. in certain manufacturing plants. In Quality of Working Life (QWL) programs, additional training, improvements in the work environment, and committee systems have formed the basis of a new atmosphere of union-management co-operation. At Tarrytown, New York and elsewhere the QWL programs have apparently turned hostile working environments into more productive, harmonious factories.
But committee structures directly involve only a fraction of the shop-floor work force. They challenge the hierarchical organization of daily production in only indirect ways. Such committees are potentially a useful adjunct to a union board room seat, but they don't create real shop-floor democracy.
Worker participation programs generally aim to promote increased productivity by motivating workers through involvement in decision-making and taking advantage of their intimate knowledge of the production process. Board room seats and representative committees fall short on both counts, as they involve so few workers and generally leave the real source of "blue-collar blues"--hierarchical management--intact.
The history of work innovation experiments indicates that programs which do involve all workers at the lowest levels are the most dramatically productive. The most famous American experience was probably General Foods' Topeka, Kansas dog food factory. An autonomous team system divided into three areas the entire production and packaging process. Team leaders replaced traditional foremen, acting as co-ordinators rather than intimidators. Workers had responsibility for ordering materials, making changes in the work process, and maintaining equipment. Productivity shot up to over 50 per cent of what industrial engineers expected from their calculations based on traditional work methods.
The Topeka plant was not an anomaly. Others in the U.S. and Scandinavia have also suggested that blue-collar workers may not be as incompetent as is traditionally presumed. Their knowledge and motivation can dramatically improve a company's financial health.
The UAW should lobby vigorously for worker committee sub-structure incorporated into the number three auto-makers' hierarchy. It will have far more impact on workers' daily lives and thus perhaps on productivity and the company's financial health, than Fraser's appointment to the board of directors ever will. A committee structure grafted on traditional factory floor organization will not attack the core problem--a rigid hierarchy of command in which workers are treated like children--told exactly what to do, how to do it, and how fast. Such treatment only destroys worker motivation and cripples productivity.
CHRYSLER NEEDS all the productivity it can get right now. A wise and pragmatic management might well turn to shop-floor democratization--together with joint committees, and union presence in the board room--to create the climate of labor co-operation and effort needed to put the company back on its feet.
American managers pride themselves on their pragmatism. But will they be pragmatic enough to experiment with ideologically explosive concepts like "industrial democracy?"