I have dug heavily into the labor history of the automotive and aviation industries from the 1900s to the 1950s. As a new labor movement gains momentum, I have 4 hard lessons for today's companies.
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1. American Entrepreneurs and executives allowed themselves to get too emotional about labor unions. American businessmen overestimated their status in society during the labor union rise from 1920 to the 1930s. These businessmen used violence to fight union organizing, often by building their security operations or controlling local police. In retaliation, unions were forced to fight back, even using the mob [1]. For example, America's first Billon Dollar Entrepreneur Henry Ford almost destroyed his company over his inability to give workers the right to organize. He was so paranoid and tried to control everything, including how his worker's homes[2]. He built the world's largest private security force to prevent the Union from organizing the Ford Motor Company (FMC). There were literal battles fought between the company and the newly formed United Auto Workers (UAW). The UAW responded to the violence by creating a flying squadron, which defended labor organizers.
FMC also used African American Workers' loyalty against the union movement. In 1941, the UAW set a strike at FMC's biggest plant, the Rouge Plant. FMC used African American strikebreakers, which caused racial violence at the plant that only ended when Clare Ford (Henry's wife) stated she would leave him if he didn't stop this. FMC was an essential part of the military production for WWII, the federal government thought about taking over because of Henry Ford's poor management, fearful of how it would affect the production of military equipment. Two years later, Henry Ford II (Henry's grandson) became the company's CEO. He had to give the Union some of its best contracts in the industry to build a better relationship between management and the Union.
2. Corporate ignorance of a changing society leads to bad decisions: Alfred Sloan[3] was GM's brilliant CEO who developed one of the most sophisticated systems to understand market trends. The system was so insightful, he successfully ensured GM made profits through the Great Depression. Part of GM's Great Depression success was leveraging high unemployment to increase the speed of the assembly line with little worry of exhausted workers quitting. His political biases would blind him from adjusting to the new political wave from pro-business Republicans to worker-supporting Democrats of President FDR and a new Michigan governor Frank Murphy. The Democratic wave came from an angry America Public against corporate executive greed that contributed, in part, to the Great Depression. GM's unique systems or Sloan's brilliant mind could not correctly evaluate these societal and political changes and adjust.
Although Sloan was brilliant, he was very biased and thought successful business was the driver of America's success, not the American worker, voting public, and politicians. He was great at motivating the managers who worked for him but had no compassion for workers in the factory. He saw the factory worker as an extension of the machines that controlled their tasks. Sloan would fund many political advocacy groups to fight FDR and the union. In the mid-1930, a weak UAW kept trying to organize workers to negotiate for better working conditions at GM factories, and Sloan and GM kept ignoring them. Sloan and GM had no system to see the workers' frustration with the back-breaking speed of the assembly line and how the desperate workers felt they ran out of options. With no progress, the UAW joined with the more militant CIO and staged the 1937 Flint Sit-In with massive political, media, and public support. The automotive giant would lose thousands of work days as the market started to pick up for automobiles. Still, this strike caused by management’s ignorance would create a distrustful Union and management relationship full of conflicts well into the 1950s.
3. Some American unions and companies successfully aligned Interests: The book's uniqueness is that I compare how cities, industries, companies, entrepreneurs, managers, and labor leaders; desires, decisions, and outcomes. I compare Boeing to FMC and GM and the UAW with IAM 751. The labor relations between Boeing[4] and the Machinist Lodge of IAM 751 differed significantly from automotive companies and the UAW. It was a relationship that started with trust and understanding of each party's interests. There was no violence or even name-calling. Boeing and IAM 751 aligned their interests, and there were no strikes for the first decade of the relationship. IAM 751 always knew a successful Boeing would ensure its workers better pay and work, and Boeing executives wanted to be fair with its workers, who were the key to its success.
4. In the end, markets rule, and unions need to consider them: The founders of the UAW had a deep socialist history and always saw labor and corporations fighting about how to slice the pie. The UAW tried for too long to build political relationships for U.S. government intervention in business instead of trying to help the auto companies to become more competitive. The UAW never took any responsibility for the success or failure of the auto companies, even though they were an essential part of it. Ultimately global automotive makers from Japan and Germany with stronger labor productivity and products would take market share away from FMC and GM, which lessened labor influence. IAM 751 was very concerned about Boeing's competitiveness and would often advocate with the government for them, ensuring Boeing's success was the Union and the worker's success.
The book will have more insights into how labor-corporate relationships lead to an uncompetitive automotive industry and a competitive Boeing that outcompeted the better-supported LA Aviation firms. Sign up here to be the first to know when the book is coming out. https://www.ecosystemmike.com/upcoming-book
[1] More on violence in Unions can be found here https://muse.jhu.edu/book/10740
[2] More can be found here on Henry Ford trying to control his workers here https://sunypress.edu/Books/T/The-Five-Dollar-Day
[3] More on Alfred Sloan can be found here https://press.uchicago.edu/ucp/books/book/chicago/S/bo3618412.html
[4] Most of my research had focused on Boeing when it was a Seattle-based company before the merger with McDonald Douglas, which helped to create many of the current issues at Boeing.
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