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Author: HOGridin Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 260  
Subject: the problem with recent UAW/GM deal Date: 10/2/2007 2:27 AM
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In 1946, Peter Drucker's intimate, multiyear examination of Generous Motors, Concept of the Corporation, was published. GM hated it.
Drucker's take—that the then-wildly-successful automaker might want to reexamine a host of long-standing policies on customer relations, dealer relations, employee relations, and more—was viewed from inside the corporation as hypercritical. GM's revered chairman, Alfred Sloan, was so upset about the book that he "simply treated it as if it did not exist," Drucker later recalled, "never mentioning it and never allowing it to be mentioned in his presence."
The United Auto Workers didn't exactly embrace Drucker's thinking either.  Among his specific recommendations was for GM's hourly workers to assume more direct responsibility for what they did, adopting a "managerial aptitude" and operating within a "self-governing plant community." The UAW's powerful president, Walter Reuther, greeted that notion this way: "Managers manage and workers work, and to demand of workers that they take responsibility for what is management's job imposes an intolerable burden on the working man." http://www.businessweek.com/managing/content/sep2007/ca20070930_668408.htm?chan=top+news_top+news+index_best+of+bw

Zoom ahead to 2007 and the recent accord between teh UAW and GM, and the industrial model the pact clings to is already obsolete and ignores what really matters today: what Peter Drucker called "knowledge work"

This week's deal between General Motors and the United Auto Workers is being hailed as a new era for Detroit, and for once that advertising may be justified. The UAW in particular made historic concessions that show a new awareness of global competition. What's less encouraging is how much this reality-based compromise still contrasts with the policies that unions and their political friends are promoting in the unreal world of Washington, D.C.

   ...were Drucker alive to set down the latest chapter in the GM saga, my guess is that, once again, neither the company nor the union would care much for what he'd have to say. At the least, Drucker would surely be skeptical of how transformational the four-year contract reached last week between GM and the UAW
really is.

   ...the agreement clings to an industrial model that is already obsolete. And it
runs counter to GM Chief Executive Rick
Wagoner's
previously articulated strategy of designing new
vehicles so they can be put together anywhere across the globe.

   ...As the company characterized the contract, it "paves the way for GM to
significantly improve its manufacturing competitiveness" while simultaneously
"strengthening its core manufacturing base in the U.S." But these two principles—preparing for the future while locking into a made-in-America mindset—are fundamentally at odds.
As Drucker saw it, huge economic and demographic forces have set the U.S. and other developed nations on a course in which manufacturing jobs are destined to play a lesser and lesser role. Much of this work, he said, will invariably keep moving offshore.
To try to thwart this change through what amounts to bargaining-table
protectionism is folly. The 21st century shift from traditional lines of manufacturing to what Drucker called "knowledge work"—laboratory analysis, software design, and so on—is as inexorable as the 20th century transition from agriculture to manufacturing.
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