Where Do Detroit's Inefficient Work Rules Come From?

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Dec. 12 2008 4:06 AM

Where Do Detroit's Inefficient Work Rules Come From?

Friday, December 12, 2008  

Why have unionized Detroit auto manufacturers manifestly lost out to their non-union Japanese competitors, even when it comes to building cars in the United States--to the point where Congress is presented with a choice of bailout or bankruptcy? 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. 

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Now that everyone is criticizing work rules, it's easy to forget that they don't represent a perversion of the collective bargaining process--they are the intended result of that process , and were once celebrated as such. Here's an excerpt from a 1983 article by Robert M. Kaus:

[R]igid work rules are not a mere by-product of unionism. They are central to the collective bargaining system and in fact have been praised by labor scholars as one of its great strengths. During the postwar era of prosperity, they were thought to dovetail nicely with the form of business organization that seemed destined to rule the world, the large corporate bureaucracy. [snip] ...

The fertile marriage of business bureaucracy and collective bargaining soon produced a large family of rules whose complexity was the subject of rapturous admiration. A textbook written by Clark Kerr and John Dunlop in 1964 noted with pride that "the web of rules becomes more explicit and formally constituted in the course of industrialization. ... The continuing experience of the same workplace tends to result in customs and traditions which begin to codify past practices. Eventually, these may be reduced to writing. ... The statement of rules then becomes more formal and elegant, particularly as specialists are developed in rulemaking and adminstration. The process of industrialization thus brings more and more detailed rules and a larger body of explicit rules. ... "

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."

Yes, faced with successful Japanese rivals, Detroit and its union have been trying to reduce the number of work rules--but the process has been slow, like pulling teeth, especially because the UAW defers to its locals, New Republic' s Jonathan Cohn:

"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."

Cohn's trying to put the best face on things. But of course it would be much simpler to wipe out work rules in one national agreement--if Ford could do it. Thanks to the UAW's structure, it has to negotiate plant-by-plant. Who's going to win the race--Ford, or a foreign carmaker that can set up a factory in a green field and not have to deal with any of the UAW's preexisting work-rule chazerai ?

That's why Democrats are deluding themselves if they think they can save Detroit by mandating that GM and Ford built high-MPG small cars in the U.S.--thanks to inefficient work rules, they'll be overpriced high-MPG small cars, and badly built high-MPG small cars. That's why Republicans are deluding themselves if they think a wage cut that saves Ford and GM $800 per car is going to make all the difference--it won't, if the trim still falls off and the carpets bunch up.

Sen. Corker's proposed bailout compromise apparently did try to tackle the issue of work rules . But the UAW balked at the Corker requirements (which would also have cut pay to parity with Toyota and Honda's U.S. factories) and the deal collapsed. That shouldn't be a surprise. A "web of rules" is what adversarial Wagner Act unions were designed to produce. ... 1:54 A.M.

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