Beyond combative labor relations
Some companies are diluting top-down management to involve workers in decisionmaking
LATE last year was crunch time at Kaiser Aluminum & Chemical Corporation. Its cavernous Trentwood Works - 60 roofed acres in Trentwood, Wash., built to fabricate aluminum for World War II aircraft - was in trouble.
The problem: a downturn in defense/aerospace business coupled with industry overcapacity in beverage-can sheet, which accounts for two-thirds of the plant's output. With Aluminum Company of America (Alcoa) closing a plant in Indiana, and another rival slashing two-thirds of its work force at a Chicago-area unit, something had to change fast at Trentwood.
So instead of imposing a fix from the top, as in previous downturns, Kaiser managers decided to bring the unionized work force into the decisionmaking room. The move puts Kaiser among the growing ranks of American companies that want to replace combative labor-management relations with mutual trust and shared responsibility.
In seminars for all employees, managers described market conditions and the plant's strengths and weaknesses, handing out quiz sheets to make sure ideas stuck.
Then the United Steelworkers union and management formed a ``survival committee'' and agreed to work together to cut $50 million in annual expenses, half by layoffs of both union and salaried employees. By March of this year, the two sides had agreed on steps to meet the goals, including more-flexible job duties proposed by the United Steelworkers. The parties also agreed to continue the process of collaborative change. This marks a contrast with the old game, in which the union and top executives fought to divide up the economic pie.
This new game is about building trust and common goals so both sides can prosper. American industry can offset high labor costs by making every worker more productive and innovative. ``This new, so-called high-performance format - it looks like it works,'' says Anthony Carnevale, chairman of the federal government's National Commission on Employment Policy.
The statement may not sound startling. But it implies that many managers need to scrap an ``I'm the boss'' style and maybe even the view that unions are a hindrance to company performance.
Mr. Carnevale, who is completing a study of 400 United States companies, says his research suggests that ``if you have a union and you work successfully with them, you have a competitive advantage over a company that doesn't have a union.''
``If the workers have a voice, ... it's an advantage,'' he explains.
With union membership at a low point - only 11 percent of the nonfarm private-sector work force versus 35 percent in the 1950s - many business leaders would prefer that ``voice'' to come without unionization.
The Clinton administration formed the Commission on the Future of Worker Management Relations, also known as the Dunlop Commission, in part to sort out this issue. Current labor law prohibits ``company unions'' created by management to block genuine trade unions. Many observers say the law should be loosened to allow for new forms of labor-management cooperation. But others say a retreat from real trade unions will leave workers with no strong voice.
The AFL-CIO this year embraced the concept of ``full and equal labor-management partnerships,'' but rejected initiatives led by management alone.
Whatever form worker empowerment takes, it appears to be a trend that will continue. As nations with lower labor costs industrialize, many experts say American manufacturers can only succeed by raising worker productivity and quality.
Lynn Williams, former president of the United Steelworkers union, praises recent collective-bargaining agreements in the steel, automobile, and telecommunications industries as ``precisely what America needs.'' In some cases, he notes, unions have a seat on the corporate board.
But of all US firms with more than 100 employees, only about 20 percent can be loosely categorized as ``high-performance workplaces,'' with significant initiatives to involve workers, Carnevale says. Tellingly, most of these companies are in manufacturing, the sector most open to global competition. And except for newer, often high-tech companies, the innovators are firms such as Kaiser that faced a crisis.
To succeed, worker involvement has to mean more than just having people work in unsupervised teams, rotate among jobs, or meet in quality circles. Underneath these programs, observers say, has to be mutual respect between workers and management.
``Where there was trust we found that there was fairly high-quality communication,'' Carnevale says. A lack of trust, he adds, explains why some companies looked progressive on paper but weren't achieving high customer satisfaction or employee morale.
``This is not easy stuff,'' says Gary Micheau, labor relations manager at Kaiser's Trentwood plant. He says some managers remain leery of giving up turf to workers, while unions are worried about losing hard-won clout.
Russ Wickam, an elected ``griever'' for the steelworkers at Trentwood, agrees that some of his colleagues worry about union officials getting too cozy with management. He says his willingness to cooperate stems from a simple desire to be able to keep drawing his paycheck. But he is on guard. When the plant manager came to the union and said, ``We need your help,'' his response was, ``Are you going to turn your back on us'' when the crisis is over?
During the first two weeks of work on a labor-management team developing ideas for the casting division, ``there were times when people on both sides got up and walked out,'' Mr. Wickam says. Only gradually did a degree of trust develop.
The progress remains fragile. ``There's always the fear that the company is just giving you what [information] they want to give you,'' Wickam says.
Bill Poindexter, who has worked at the plant 22 years, says he understands that changes, including layoffs, are needed. But he adds: ``I'm only just now catching up to 10-years-ago's pay,'' because of heavy wage cuts when Kaiser was on hard times in the mid-1980s. Now he says managers are asking if he can run his operation, which rolls heavy-gauge sheets of aluminum, with three people on a shift. The staffing has already been cut from five to four. Mr. Poindexter says he worries that safety will be compromised and that finished rolls will pile up at the end of the line.
The tension at Kaiser is common among companies when they try to change their labor-management culture.
When asked what they would focus on in the next 12 months, executives put process-reengineering, customer service, information systems, and quality initiatives ahead of employee training, empowerment, or teamwork, according to a study released this year by Kepner-Tregoe Inc., a Princeton, N. J., management consulting firm.
Creating what Kepner-Tregoe calls a ``peoplewise organization'' can require big investments in communication, training, and time before results begin to show.
Though frought with difficulty, steps to tap the potential of human resources offer what Kaiser lab technician Corky Meyer calls ``our only hope.''