The UAW strikes GM; how GM got the union it asked for

I haven’t been following the GM-UAW negotiations, which might explain why the strike that was just called took me by surprise. This strike will probably end up hurting both parties. Sales will be lost, and the launches of the promising new Cadillac CTS and Chevrolet Malibu could be stunted. Many people blame the “outdated” union. But it’s not that simple.

GM’s leadership has long done a poor job of relating to pretty much everyone. While performing research for my Ph.D. thesis inside GM (executive summary), I observed firsthand how poorly GM’s senior management communicated with the rest of the organization. And it did an even worse job of listening to those in the trenches.

Similarly, GM has failed to communicate or cooperate well with suppliers. It has tended to lay down the law rather than listen to suppliers’ suggestions and work together to innovate and minimize costs. This has harmed product performance, reliability, and costs.

Similarly, GM has failed to listen and communicate well with the American car buying public. The Internet offers tremendous potential here. A few teams within GM have tried to connect with car buyers. But in general very little advantage has been taken of this potential.

And then there is the union. Back in the 1950s the basic arrangement arrived at between the GM and the UAW was that in exchange for having absolutely no say in how the company was operated the workers would receive an unusually generous pay and benefits package. Especially the benefits. This was the bargain GM struck. It agreed to pay huge amounts in order to not have to listen to its workers or include them in the business. The UAW we have is the UAW GM asked for, one interested solely in pay and benefits.

Meanwhile, the Japanese took a different approach, deeply involving plant workers in the design as well as the operation of the manufacturing process. GM formed a joint venture with Toyota to study its manufacturing process. And many GM executives learned the Toyota way while at NUMMI. I met a number of them while inside GM. The common report: GM’s management was unwilling to apply the lessons of NUMMI. It would not even listen to GM people who had been there.

Today’s strike brings this long-term process to its head. GM’s management wants to get out from under the labor costs it agreed to in previous decades, but it still isn’t doing nearly enough to involve the workers as true partners in the process of making cars. It still doesn’t want to listen, but it no longer wants to pay for the right to not have to listen.

Not that refusing to listen has ever made sense. It’s hard to listen to others. They might have different ideas, and whatever their ideas are they’re not your own ideas. No one likes implementing others’ ideas. Problem is, the best organizations do this anyway, because it’s a proven way to create a better product.

Whatever the outcome of the current strike, the real fix will occur when GM’s management learns to listen to and cooperate with others.