A few years ago in researching Rebirth of American Industry I read Alfred Sloan’s books and articles in an attempt to understand how the management and employee relationships in this country got so screwed up. Two passages made it crystal clear.
In one, Sloan asks and answers, “What then is General Motors? Is it the 220,000 workers on the payrolls? For me, the essential ingredient – the heart if you please – of our organization is a group of not more than 10,000 workers whose skill in management, engineering and science as well as special crafts make possible the work in which all others are engaged.” In another, he wrote that the worker “accepts the hazards of poor times – the business cycle“.
In the first he makes it clear that it is not the working stiff creating the value, rather it is management. They are the elite group, the special folks. The second passage – the one about workers accepting the hazards of poor times – is absurd, and all the more so because he probably believed it. Where he got the idea that losing one’s job is not as big a deal if you work on the factory floor as it would be if you were in management is an absolute mystery. Lyndon Johnson once said that, “sometimes you just have to hunker down and take it like a jackass in a hail storm.” It is my observation that the average working guy ‘accepts’ the “hazards of poor times” a lot like a jackass ‘accepts’ that hail storm – he hunkers down and takes it because he has no choice – but that doesn’t mean it’s no big deal.
So now we hear a lot about manufacturing suffering from a lack of skilled workers. Lots of reasons behind it, to be sure, but when “Marinette Marine is struggling to persuade people to enter the skilled trades, including welding, pipefitting and electrical work,” it seems that just maybe we are seeing proof of just how incredibly, arrogantly wrong Sloan’s thinking was. “The Milwaukee Journal Sentinel reported Sunday that the company has reached out to nine schools, but only seven recent graduates have applied for the training program.”
Fellow local manufacturing exec Mark Kaiser, president of Lindquist Machine opines, “It’s a tough row to hoe because the bigger issue is with the parents.” Perhaps that is because the parents have been on the receiving end of layoffs at Marinette Marine in 2010 or in 2008, and Lindquist Machine.
The author of the Journal Sentinel article hits the nail right on the head: “But many parents won’t encourage their children to enter the skilled trades. They’ve seen manufacturers cut jobs and wreak havoc in the lives of people who depended on that work.” Mom and dad may have had to take it like so many jackasses in a hail storm, but they aren’t going to see their kids make the same mistake. They are not about to let their children grow up to ‘accept the business cycle’ and be one of the Sloan’s worthless 210,000.
There are no reasons for the layoffs – just rationalizations that, in the end, fall back on Sloan’s self-serving view of people. Why did Marinette Marine lay off those people? Because they didn’t get a Navy contract soon enough. It’s the Navy’s fault – the devil made me do it, or so they would like to believe. No word of any management people being laid off, however, or of any machines being sold off or buildings put on the market. There are lots of costs at Marinette Marine, so why are the hourly production folks cut and not the rest of the costs? Simply because they can and it is very easy to do.
I have a number of clients in similar boats. A history of layoffs driven by deep-seated belief in Sloan’s view makes hiring difficult. All the platitudes in the world can’t mask a basic belief that management is the heart of the business and production folks have to accept the risks of the business cycle. Culture change is usually a long, tough effort to restore credibility – to have anyone believe the production folks won’t be the first expenses to be tossed overboard when the storm comes.
I suspect Marinette Marine is going to have to go through a number of downturns and lose a bunch of Navy contracts without laying anyone off before the moms and dads in northern Wisconsin start encouraging their babies to be welders.