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Justin Saia

Degree:

Diploma in Strategy and Innovation

Location:

New York, USA

Industry:

Management Consulting

Year:

2016

By Justin Saia

Unions and Management: A Displaced Friendship

As an outgrowth of the Great Depression and subsequently, World War II, Americans were more unionised than ever before in history with one of three Americans represented by unions.[i] Yale University economist Charles E. Lindbloom was one of the first to sound the alarm on what he perceived to be the emergent threat of unionism on capitalism during this period.[ii] He characterised the growing presence of unions in America as “destroying the competitive price system” and a “systematic disorganisation of markets and persistent undercutting of managerial authority.”[iii]

More than 60 years later, U.S. companies and labour unions continue to clash over wages, profits, and politics.  At a time where membership is at an all-time low, the stakes could never be higher for unions struggling to find a footing in today’s modern society. Recent high visibility and increasingly hostile corporate campaigns at Nissan, Volkswagen, Verizon, McDonalds, Walmart, and Uber underscore the growing tensions between American businesses and workers and highlight a need for American businesses to reengage with their workers.

In the face of increasing globalisation over the last half century, companies have resorted to cost cutting measures to remain competitive. Many functions have been outsourced or offshored to destinations featuring cheap labour, such as China, India, and Indonesia. Those who’ve survived have gotten by largely on the backs of business-friendly political climates and right to work states in places like the Southeast. This has become the new frontier for unions longing for a return to a better time where they exercised power and influence over America’s private sector and were flush with friends on K Street and Main Street alike; America’s labour unions have surely seen better days.

Irrespective of your political bent on the topic, one would be remiss not to recognise and pay homage to the significant contributions of America’s labour unions over the last century. The collective effort of America’s labour movement gave us virtually all of the benefits we enjoy in the workplace today – lunch breaks, weekends, holidays, overtime pay, PTO, sick leave, 40-hour work week, 8-hour work day, worker’s compensation, pregnancy and parental leave, and healthcare, dental and vision insurance. Unions fought tooth and nail for child labour laws, workplace safety standards and regulations, equal pay for men and women, minimum wage standards, social security, wrongful termination laws, protection for those with disabilities, and anti-discrimination policies. The success of America’s labour movement is squarely to blame for the protections we enjoy today and the systems of checks and balances that backend these protections.

The enormous influence big labour once yielded has been largely diminished; however, labour still has a significant role to play in modern society, but that role is radically changing. Even now, as union rolls continue their precipitous decline and the coffers run bare, union tactics are growing increasingly antagonistic towards American businesses; perhaps a last gasp to stave off extinction and maintain relevancy. It would be smart for companies to take heed and ensure their house is in order, as these contentious advances are almost certain to threaten enterprise value, reputation or business continuity.

Battle to shape the future

Such is the story of the United Auto Workers (UAW) union and their long and tepid relationship with Nissan in the U.S. The latest tangle between the UAW and Nissan is rooted in a history that dates back to a very divisive national spectacle in 1989 which saw the UAW suffer a resounding defeat at the hands of Nissan workers in the company’s Smyrna, Tenn. vehicle assembly plant.  At the time, representatives for the UAW committed to pursuing Nissan for “as long as it takes.”[iv] True to form, tensions flared in 2001, with the UAW again finding itself rebuffed by Nissan workers in Tennessee by a 2:1 margin.[v] The most recent clash in 2012 between the UAW and Nissan has played out along non-traditional lines. It’s no coincidence the demographics have changed as the UAW shifted its recent efforts away from the backdrop of Nissan’s predominantly white workforce in Middle Tennessee to Nissan’s Canton, Mississippi vehicle assembly plant, where nearly 60 percent of the more than 6,400 employees are African-American.[vi]

African-Americans have been historically more sympathetic to union advances than white workers. The UAW utilised powerfully evocative tactics meant to appeal to the emotions of Mississippi’s racialised past and a time where big labour and civil rights activists stood together in support of racial equality in the Jim Crow South. Demonstrations by union sympathisers at auto shows in New York, Los Angeles, Detroit, D.C., Chicago, and Geneva became commonplace, as did sit-ins by college students at the Canton plant. Celebrities were enlisted to join the cause, including the likes of rappers Sean ‘P. Diddy’ Combs and Common, and actor Danny Glover. Glover and union representatives organised a college tour at historically black colleges and universities to generate support for workers at Nissan and to encourage protests at Nissan dealerships around the country. Most notably, Glover led hundreds of college students in a march and subsequent rally at Nissan’s Canton plant in conjunction with the 50th anniversary of the 1964 “Freedom Summer” activities aimed at ending racial segregation in the South.

To ratchet up pressure on Nissan’s global management team, the UAW launched an aggressive and coordinated international campaign that saw solidarity protests at Nissan and Renault facilities around the globe, demonstrations at international auto shows, meetings with foreign dignitaries, visits to Mississippi by foreign unions, and an appeal for help to the Organisation for Economic Co-operation and Development (OECD) in Paris and the U.S. State Department.

All of these tactics threaten to undercut Nissan’s place on Interbrand’s list of the “Top 100 Global Brands.”

At this point, you are probably wondering how a company that consistently ranks on the Human Rights Campaign’s “Best Places to Work” and Forbes’ “America’s Best Employers” list ended up here.

Out of touch

Early in its lifecycle, the Nissan plant enjoyed considerable success and plenty of attention from the watchful eyes of Nissan CEO and turnaround artist Carlos Ghosn, who had only a few years earlier saved Nissan from the brink of collapse. As time passed, the Canton plant focused inward on churning out high quality vehicles to meet the evolving demands of American consumers. Nearly a decade after the first mustard yellow Nissan Quest minivan rolled off the assembly line in Mississippi, the plant seemed to become semi-detached from the company’s employees, the community it served and Nissan’s North American corporate headquarters just outside Nashville, Tennessee; not a surprising result considering Tennessee, not Mississippi, had become the nexus for Nissan’s operations in the U.S. (corporate HQ’s, engine plant, vehicle assembly plant, battery plant) and the more than 400 mile distance from the land of hot chicken and country music. It is this insouciance and casual attitude that likely contributed to the ire that some workers felt towards Nissan, making them much more prone to advances from union representatives promising a return to days of old.

Even the best of companies, such is the case of Nissan, lose their way from time to time and can find themselves under intense scrutiny from outside groups who profess to have the best interests of workers at hand. But, it doesn’t have to get to this point. Companies can take proactive steps to reduce exposure to advances from powerful interest groups like the UAW.

Is anyone listening?

It starts and ends with establishing a culture of engagement in your organisation, whereby you can facilitate meaningful interactions between leaders and employees, and between employees and relevant stakeholder groups. Engagement and communication with employees should be two-sided and leadership must take the lead in providing the opportunities and the platforms from which to listen, respond, and adapt to employee feedback. A variety of mediums can be utilised to reach people in all work environments across an organisation, including one-on-one meetings, town halls, newsletters, employee surveys, an open-door policy, closed-circuit television, bulletin boards, and employee committees. Focus groups can be a useful tool to conduct internal audits on the effectiveness of internal communications with employees. It is through these mediums that companies must clearly articulate to employees the vision, mission, values and the journey ahead. As employees build their levels of understanding and commitment, they also increase their confidence in the organisation.

Get it done

Companies should consider where (mediums), how often (frequency), and what (messages) they are communicating to employees to ensure the right message is delivered to the right audience at the right time. But, it can’t be all lip service. Listening and measurement is useless without taking action. Many companies take the right steps to hear from employees, but fail to recognise modern, actionable solutions. This can be more discouraging to employees than not listening at all. Employees need to see actionable reinforcement and a link between what they say and what you do as an organisation. It critical at this stage to empower employees to take an active and participatory role in implementation of solutions and to share and leverage best practices across the business.

Let them eat cake

While robust and regular communication with employees and demonstrated follow through is a critical foundation to employee engagement, efforts to celebrate successes and to recognise and reward positive outcomes along the journey can be crucial to lifting morale and instilling pride in both the company and the overall work product. Employee pride campaigns, appreciation barbecues, employee spotlights, and family days at a local amusement park can all serve to motivate and incentivise the right employee behaviours and demonstrate the company’s commitment to its workers.

Fabric of the community

Finally, an often-overlooked ally in creating an engaging culture with employees is the broader community, where thousands of your employees live, work, and play each day. The local community your organisation serves can be a critical constituency in reinforcing many of the positive attributes about work at your company, including economic development, social impacts, training and career advancement opportunities, etc.

It is imperative that organisations are visible in the community and begin to foster relationships with elected officials, local businesses, academic institutions, members of the media, churches, and other non-profits. Invite these organisations in to see the true impact of your organisation and encourage them to be an active participant in the journey. Create partnerships, build coalitions, provide community allies with the opportunities and the ammunition to become champions for your organisation externally, and establish the types of relationships that can provide direct lines of support, advice, and counsel on how your organisation can best serve the community. These types of broad based efforts will pay dividends in the future and can inoculate your organisation from advances by powerful interest groups, as they will be perceived as outsiders seeking to advance their own self-interests and agendas.

Businesses must remain vigilant in fostering a culture of engagement across their organisations. A thoughtful employee engagement program can improve employee performance and retention, customer satisfaction and brand reputation and inoculate your organisation from advances by powerful interest groups looking to disrupt the direct dialogue and relationship you enjoy with your employees.  Unions can and will evolve to survive. Businesses must do the same.

 

 

References:

[i] http://www.nytimes.com/2011/01/22/business/22union.html?_r=0

[ii] Lindbloom, Charles E. Unions and Capitalism. New Haven: Yale University Press, 1949.

[iii] Lindbloom, Charles E. Unions and Capitalism. New Haven: Yale University Press, 1949.

[iv] http://articles.latimes.com/1989-07-28/news/mn-104_1_union-representation-elections

[v] http://money.cnn.com/2001/10/04/companies/nissan/

[vi] http://www.nissan-canton.com/social-responsibility/

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