Factories where everybody wins

I walked through the main plant of the company I had just repurchased. It was three years since I had left to join the Carter administration as under secretary of commerce. I was startled by the changes I saw.

What had been a quality-conscious, productive, and happy environment was now dispirited, desultory, and unproductive. I stopped to visit one of the old timers. He said, "I would not now buy the product I make." The observation stung but it spoke directly to the problem.

The company's internal social system had changed dramatically. The needs and values of the work force were different, but management did not know it. It had lost touch; it had misplaced its heart. That company could be a metaphor for American industry.

We expend enormous energy in analyzing our lost productivity, in generating new and in revisiting old solutions. There is little to argue with the view that steel mills and other industry must be rebuilt if they are to become efficient again. But we -- unlike some other industrial nations -- determinedly ignore the key to our competitiveness: those who dom the work.

Our industrial ethic has been mire so long in the mythology that an adversary relationship between the workers and those they workd for is productive that we have failed to realize that the work force has changed in composition and role. Where it was once dominated by the white head of family, today its majority is composed of better-educated younger people, females, and minorities.

People on the production lines know very well how to do the job right the first time. When they do it right the first time, they invariably produce a better-quality product at lower cost. They possess an enormous inventory of old fashioned know-how which often eclipses the knowledge of the industrial and methods engineers. Release that know-how, build self-esteem and identification with the company, and the total cost of product or service falls sharply. Share the savings and a new sense of fairness produces a positive sum game. Everybody wins.

I am not speaking about programs aimed at workers "motivation," of "job enrichment" or suggestion boxes, or piped-in music or other paternalistic benefits that "we" in our wisdom and generosity provide for "them." These are seen as ways to increase production and they do not survive worker suspicion. I am talking about workers truly sharing in the decisions that design their lives at work.

At a Harman International plant in Bolivar, Tenn., where active management-labor cooperation had been in effect for several years, early negotiation of an expiring union contract was carried to a successful conclusion.

The traditional negotiating process, conducted in a hot atmosphere, had in earlier years generated deep tensions and excessive manufacturing costs. In the months before contract expiration, expensive inefficient overtime had been worked to ensure an available inventory for customers in the event of a strike. When an agreement wa eventually reached, inventories were too high and workers were put on a short work week.

In 1975, the company approached the union several months early and said, in effect: "Look, we're about to build that protective inventory, and if we have a strike, we're going to go through the same mess we did before. If we can sit down and work out an agreement early, we will put into effect immediately." The union said, "Let's have a go at it."

The contract was settled almost four months early. The wage and benefit increases took effect immediately. The wasteful inventory buildup was averted. The work level remained steady so that the madness of heavy inefficient overtime , followed by sharply reduced work weeks, was eliminated.

That agreement was the product of years in which mutual trust and respect had been built between the workers and the company and between the workers and the union. Workers groups had participated in designing the plant production system and in deciding what health and safety measures were needed. They had even participated with management in developing competitive bids for new business contracts -- and the bids had been successful.

The productivity increases that resulted from all of this were impressive. Workers produced in six hours what had previously taken them 12. As a result, they generated free time and urged that a school be started in the plant. The school offered classes in the arithmetic of business so workers could better understand how costs were determined and what profit and loss meant. Other courses were given in public speaking, welding, music and a variety of popular subjects.

The company has continued to operate that way in the ensuing years and, despite the automotive recession, it has been effective and profitable. When the contract neared conclusion last year, it was renegotiated and settled before expiration.

Harman-Bolivar is a rare but by no means unique experience. Similar programs based on similar values are successfully operating in small and large firms including divisions of General Motors and American Telephone and Telegraph Company.

The common element and the basic point is that people need to know that they really matterm . When the workers are active participants in shaping the conditions under which the work is done -- when they share equitably in the reduced costs and increased profits that result -- trust can build, old values and old practices can yield to new. Everybody can win.