Saturday, December 13, 2008

Detroit's 'Rules' Problem

Kaus has a very brief essay on another Detroit problem.

There are some obvious culprits: shortsighted American managers, schlocky designers, an insular corporate culture. Here's another: the very structure of Wagner Act unionism. The problem isn't so much wages as work rules--internal strictures that make it hard for unionized competitors to constantly adapt and change production processes the way the Japanese do.

We had mentioned 'work rules' a while back, for a reason. They cause massive inefficiency.

Kaus also gives a sample of the complexity of the problem.

Under the Wagner Act, management manages. What the union does is complain, and negotiate for a rule limiting management's right to do what the union doesn't like. A worker protests that his job should be classified as "drilling special and heavy" instead of "drilling general." The parties butt heads, a decision is reached, and a new rule is deposited like another layer of sediment. At some GM plants, distinct job categories evolved for each spot on the assembly line (e.g., "headlining installer"). In Japanese auto plants, where they spend their time building cars instead of creating job categories, there is only one nonsupervisory job classification: "production."

That's not the worst part; once any of 'the rules' are negotiated in ANY plant, they tend to become national; that is, used at ALL plants of a given manufacturer.

Ford Motor was smart enough to use that 'local' provision to gain a few points in efficiency.

"Ford led the way years ago by reaching site-specific "competitive operating agreements" with locals at different plants, rather than sticking to one national agreement."

That happens to be a recognition of the 'law of subsidiarity,' which postulates that problems should be resolved at the lowest-possible level.

And it may (partially) explain why FoMoCo can take a pass on the "bailout."

3 comments:

Disgruntled Car Salesman said...

Assets, daddio. Scratch that... valuable assets.

Mazda, Volvo, Jaguar and Land Rover. The latter two sold 6 months ago.

Mazda all but liquidated(they held on to 11% only because they NEED Mazda platforms and motors to be competitive in the smaller car market).

Volvo now on the block. First $6bn takes it.

That, and having a little better union rules probably helps too...

Deekaman said...

My employer has been very successful at getting the UAW to understand that it's either change or go without. It's not perfect, but there is much more flexibility in our workforce than there was 6 months ago. Local leadership "gets it" (mostly).

It can happen for the big 3, but will it?

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