If US manufacturing is to survive

The United States is in the midst of a major revolution in the way it manufactures its products. It also now recognizes that it is selling and buying in a world market and that its institutions, its laws, and its people must adjust to this new set of circumstances. One of the most important areas in which the two factors impinge is labor relations.

Developments in international trade make it necessary to eliminate those adversarial relationships between management and labor which defeat the common purposes of the parties. The objective of an increasing number of firms is going to be survival. That survival is at least as important to labor as it is to the owners of capital.

Somehow, both labor and management must recognize that without improvements in productivity jobs will disappear because the firm will disappear. Americans no longer have the luxury of living in an economy where domestic competitors are the only competitors.

We must strive for methods that will enable labor and management to recognize that the goals of each are the same - the survival and the prosperity of the firm. Unless this fact is recognized, neither management nor labor will prosper.

Management must develop techniques, including compensation methods, that recognize labor's contribution, both potential and actual, to the increase of productivity. Labor must recognize that to protect jobs now at the expense of productivity means to lose far more jobs in the future.

In addition to increased productivity, improved quality must be the goal of every firm. Again, foreign competition has changed the rules of the game. It is no longer possible for a firm to turn out shoddy products and survive because the products are as good as the competition's. Foreign competitors, in an effort to break into American markets, have made quality an important characteristic of their products. The improvement of quality requires, among other needs, the cooperation of labor with management. The ideas of labor for quality improvement must be sought by management and implemented by labor.

Improved equipment for inspection and measurement of quality must be purchased and utilized even if it means replacing jobs.

While management must take the leadership in achieving an improved situation, both the union and the firm must work cooperatively to develop new attitudes among the work force and among the supervisory force. An important tool in improving motivation is the reward system that is used in the organization. New methods of compensation must be investigated, including systems tied to productivity; and, at the same time, the worker must be tied more closely to the firm. Ways of making the worker a stockholder of the company must be examined. We must investigate and utilize every method to dramatize labor's identification with the success of the firm as the key to the success of labor.

We propose as one potential approach to these problems a series of seminars at education institutions that would explore the issues with both management and labor participating. Topics might include understanding of financial questions such as investment, trade, and income security, along with other topics. More generally, however, these discussions should explore how to further productivity as a major variable determining the long-run viability of the firm. Often, in the past, short-term interests of labor have been addressed through protecting jobs at the expense of productivity.

America is fighting for its life in terms of its manufacturing industry. While the major direct source of jobs will be decreasing in manufacturing, a strong goods-producing economy is essential to permit the overall advance of the prosperity of America's work force. Without increased productivity and improved quality, there will be no manufacturing industry to speak of in the US by the turn of the century.