Chrysler Takes a Leap Backward
Union counterrevolutionaries fighting against worker involvement in management decisions lamentably scored a solid hit when Chrysler Corp. decided to dump United Auto Workers’ President Owen Bieber from its board.
Leaders of New Directions, a dissident UAW group, have denounced increased labor-management cooperation, which often results in workers and their union jointly making decisions about the way companies operate.
Those who want to stick to the old-fashioned adversarial relations between labor and management charge that the cooperative system really means co-opting and thereby weakening unions and that any time the mood of corporate officials changes, they will betray unions and workers who do cooperate.
Chrysler executives helped foes of cooperation prove their point.
In 1980, the company was nearly bankrupt. It was saved in large part by the union and its members. The workers in effect bought a seat on the corporate board by giving up more than $1 billion in wages and benefits.
Also, the union’s politically potent president at the time, Douglas Fraser, was crucial in Chrysler’s successful lobbying effort to get massive government loan guarantees from Congress.
As a gesture of appreciation, Fraser was named to the board. When he retired in 1984, he was succeeded by Bieber, both as union president and a Chrysler director.
Once again, Chrysler is in deep financial trouble, and now, as then, it urgently needs the complete cooperation of its workers and their union to survive the latest crisis.
So the mystery is why did Chrysler decide now, after 11 years, to unceremoniously dump Bieber? Guesses range from the theory that Lee. A. Iacocca just doesn’t admire Bieber to reports that the company is involved in some highly secret maneuvers to make a deal with a foreign firm, and Iacocca fears that Bieber may mess it up.
Bieber said Chrysler’s move against his him was a grave mistake, but unfortunately he has made no effort so far to block his ouster by appealing to the shareholders--especially from worker pension funds--who could help override the decision at the shareholders’ meeting next month.
The explanations offered by Iacocca and other company officials are, to put it politely, incredible.
One of their assertions is that Chrysler wants to cut costs by about $3 billion. One cut will come by reducing the number of directors to 13 from 18, and Bieber just happens to be one of that group. That is most unlikely.
Directors are paid $30,000 to $40,000 a year and regularly get two new cars. (Bieber donates his money to universities.) But trimming the board’s size is a deceptive saving because as “retirees,” the ousted directors will get $20,000 a year indefinitely, along with those Chrysler cars. Thus, the savings from eliminating five directors would be negligible for a multibillion-dollar corporation. If Chrysler is looking for targets to trim, how about Iacocca’s pay--more than $1 million last year?
Anthony St. John, the company’s vice president for human resources, says booting the UAW president will not affect Chrysler’s lower-level labor-mangement cooperation. But you don’t have to be a human resources genius to know that even though Iacocca and St. John deny it, cutting Bieber out of the loop at the top sends a pretty clear message to those lesser gods in the company: Cooperation may be nice, but don’t bother pushing it too far.
That may be a good-news message for workers and union leaders who believe that mangement is never to be trusted and that shared decision making is just a scheme to enrich corporations by getting workers to work harder. It is also a message welcomed by many in lower levels of mangement who hate the idea of sharing power with “underlings,” or union representatives.
But it is symbolically a giant step backward for workers and the company. The push for true workplace democracy is painfully slow in this country. Few employers really want to surrender any of their power, and many union leaders are suspicious of the motive of bosses who call for workplace democracy.
Lynn Williams, president of the United Steelworkers of America, and Jack Scheinkman, head of the Amalgamated Clothing and Textile Workers Union, are among the few union leaders pushing, with limited success, for worker representatives on corporate boards. Bieber endorsed the idea, but, like Fraser before him, wasn’t able to persuade General Motors and Ford to follow Chrysler’s example. Now the Chrysler example has been wiped out.
Ford and GM have generally effective worker participation programs without UAW representatives at the board level, although those programs would be strengthened if workers had a voice--even a minority one--in the boardroom.
But since those companies had none, they are not signaling a policy shift as Chrysler is doing by abandoning the idea it voluntarily accepted a decade ago.
Jerome Rosow, head of the Work in America Institute, said many private and government studies prove that worker participation in decision-making processes is valuable for workers and boosts productivity and profits. Letting workers take part at the board level of planning and decisions, even when they have only one representative, helps increase the trust so essential to any program of labor-management cooperation.
Top-to-bottom cooperation is required by law in almost all major industrialized countries in Europe. Chrysler’s move against Bieber shows all too clearly that this country needs some variation of such legislation too.
Chrysler demonstrated that U.S. corporate executives can voluntarily agree to democratize the workplace but that they retain full power to return to their old, authoritarian management system whenever it suits them.
