Working together is the best way to stay competitive
Are unions good or bad? I think it’s the wrong question. If you study the labor movement, there are instances where unions have done some very good things. There are also, however, instances where what they have done was not so good.I worked my way through college holding a full-time job at night while attending school full-time during the day. When I first joined Andrew Wilson Company, I worked in the factory for three months until they offered me a job in the office. In the factory, I had had to join the union, the United Steelworkers of America.This family-owned company was very well run. They used the Scanlon Plan, which provided monthly bonuses based on how well the company was doing. Once the bonus was calculated, each employee (management and union) received their share as a percentage of their earnings that month.It was not a sweatshop by any means, but workers not doing their share often felt pressure from their colleagues. Lazy workers were not at all popular.As a result, everybody made money, and the monthly bonuses were often the equivalent of an extra week’s pay. These were well-paying jobs, even without bonuses, and the union understood they could only make money as they helped the company make money.Fast forward 25 years later, and Lucent Technologies in North Andover, Mass., was in contract negotiations with their union. At the time, I recall chatting with some of the union people, encouraging them not to push for too much. Lucent was in a very competitive industry, and Cisco was coming up fast and furious. Additionally, President Clinton had signed the General Agreement on Tariffs and Trade and given “most favored nation” trading status to China. Now there was a very real possibility their jobs could move overseas.”You’re crazy! Lucent can’t shut down the Merrimack Valley Works; they have too large an investment here.” They saw making money as Lucent’s problem. They wanted a big raise, and they didn’t care what Lucent had to do to get it. One guy told me, “I f___ ’em every chance I get!”Well, they got what they wanted, but several months after the contract was signed, Lucent announced it was closing this and other plants. That’s right — tens of thousands of jobs went to the Far East.I would contend this union did a lot of damage. Both the union and the management jobs disappeared, and most of these people never found comparable jobs again. I can’t help but wonder how many wish they had their old jobs back without the raise, or even at reduced pay.What is truly unfortunate is many of these folks don’t even understand why they lost their jobs. Given the chance, they would probably do it all over again.Most union contracts reward seniority rather than performance. Senior employees can actually do less while costing more, making it difficult to compete with any competitor who doesn’t have that problem. Whether a company is unionized or not, it still has to compete in the marketplace.Even General Motors learned how difficult it is for its cars to compete with cars not made by the United Auto Workers. There may not be any UAW members who think they are overpaid, but there are an awful lot of them who don’t have jobs anymore. Despite a massive government bailout, GM couldn’t keep all those plants operating.In the public sector, the issue may not be as clear, as governments don’t have to earn a profit to stay in business. Even so, many governments (local, state and federal) are having trouble balancing their budgets with the lower tax revenues of this economy. The choice is often between laying off employees, which could lead to reduced services, or pay cuts, which are very unpopular.Believe it or not, governments face competition too. Governments from all over the world are competing for businesses to employ their people, and they are winning many of ours.Just how many more do you think we can we afford to lose?”A house divided against itself cannot stand.” It’s just as true today as it was 2,000 years ago when it was said by a carpenter from Galilee. Unionized or not, everyone has to work together to be competitive today, and being competitive is the only real job security.Ronald J. Bourque, a consultant and speaker from Windham, has had engagements throughout the United States, Europe and Asia. He can be reached at 898-1871 or RonBourque@myfairpoint.net.