The answer to labor-management conflict is productivity

Journal Record, The (Oklahoma City), Jul 31, 1998 by John Cunniff

NEW YORK (AP) -- If resolution of the General Motors strike is to have long-term benefits for both company and union, it will require a new level of creativity and cooperation in labor relations.

Even now, the two sides are dug deeply into opposing interpretations of what is good for industrial America, and the differing viewpoints seem likely to lead to further confrontations.

GM's priority is to reduce costs, and it cannot hide the reality that cost-cutting is most directly accomplished by closing inefficient plants and moving production to lower-wage areas, such as Mexico.

While GM in effect argues that it is fighting for survival in a highly competitive global economy, the United Auto Workers is fighting for its own future by keeping plants, wages and benefits where they are.

How the two resolve their differences will mean cooperation rather than confrontation, and a mutual respect and understanding that so far has been more in the form of words than deeds.

The assignment is a difficult one: Unions seek the most for their workers; businesses seek the most for their investment dollar. And while they are not opposites, the two goals do not squarely meet.

In the past, such confrontations have often eroded into situations harmful to workers, employers and entire communities, as when the textile industry migrated from New England to the South over several decades.

That industry, and its base in the South, now fights a similar battle with Latin American, Asian and other foreign producers who pay lower wages and benefits and tolerate inferior working conditions.

Later, the U.S. steel industry went through similar years of conflict and anguish as third-world nations, not burdened as were U.S. companies by antiquated factories and work rules, stole their markets.

As in the rest of life, but perhaps more so in business, change is a constant which, nevertheless, is resisted by both business and labor until there is no alternative but for them to confront their mutual problems.

Too often, they do not, often with disastrous results. Inevitably, the most productive -- the organization that produces most efficiently -- wins. This is well known by all parties, but understandably resisted.

The local savings and loan associations resisted being swamped by larger institutions. The pharmacy and grocer hold out against the chains, the department stores against the discounters, the small farmer against the corporate behemoth.

Not all of these had a chance to accommodate themselves to the changed conditions, but the autoworkers and the automotive industry might have that chance. The most hopeful sign is that both recognize it.

About time. Each side helped grow the issues that now divide them, management by allowing its costs to get out of hand (always certain in the past that it could raise prices), the union through its demands.

"I hope in the near future that General Motors and the UAW can sit down and find a different way of doing things," said UAW president Stephen Yokich.

For his part, GM vice president Gerald Knechtel noted the "constructive focus by both of us to work very hard to avoid these kinds of situations in the future."

The key, of course, is for each to make enhanced efforts to raise productivity, GM by having faith enough to plow capital investments into its plants, the workers by recognizing that their jobs depend upon it.

Neither will attain the ultimate; each must give a bit, recognize the realities, acknowledge their mutual obligations and accept results that are less than satisfactory.

Further conflict may be inevitable, but closed plants, unemployment and devastated communities need not be.

John Cunniff comments on economic trends for the Associated Press.