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August 1998 / Special Feature : An Issue Of Trust

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An Issue Of Trust

In God We Trust, All Others Pay Cash

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In God We Trust, All Others Pay Cash

This less than subtle placard hung over cash registers during the great depression of the 1930s, but its message was hardly universal. So long as stock held out, grocers extended credit to regular customers. People bartered. Family doctors collected stacks of I.O.U.’s. Deadbeats were few; people in the same boat trusted one another.

Trust has always been the moral currency of daily life. Where risk is taken, trust is involved. Willi Unsoeld, one of the mountain climbers who put Old Glory atop Mt. Everest, later said he felt he took his greatest risk getting married. Starting a new life is risky business; marital vows pledge mutual trust in the hope of lifetime benefits.
The United Auto Workers and the Ford Motor Company management came to a mutual agreement in 1979. Their “I Do’s” were exchanged while facing the double-barreled threats of a national recession and stiff foreign competition.

Herb Peters, employee involvement representative for Ford’s National Program Center in Detroit, recalls the problems then facing the auto industry: “The nation was in a recession. Fuel prices were rising due to the oil embargo and deregulation. As the 1980s began, the U.S. auto industry was mired in deep recession. Sales had plummeted and all the domestic producers were experiencing serious financial problems. It was clear—to Ford, at least—that the trouble was not simply due to the business cycle. There was a need for improved quality and greater customer satisfaction. Other factors included lack of trust in the workplace, ill-defined corporate values and decades of adversarial labor-management relations. Above all, there was the explosive growth in worldwide competition.”

“Why is Ford in business? To make money. And money is not a dirty word,” adds Gary Smotherman, international representative on the United Auto Workers (UAW)-Ford staff. “The UAW stands for job and income security, but there is no guarantee. There was a need for improved quality and greater customer satisfaction, and labor and management would have to work together in Detroit and all other U.S. plant locations.”

Company Rights vs. Employee Rights
Peters and Smotherman recently outlined that period of the Ford company transformation. It began with the difficult task of rethinking, redirecting and reshaping almost every feature of the entire organization. Ultimately, everything was altered, from how Ford products look and work, to the company’s fundamental relationships with Ford customers, employees, unions, dealers, suppliers and the rest of the world with which the company does business.
In 1979, a major breakthrough in employee relations was achieved with the implementation of employee involvement, the “E.I. process,” jointly developed by Ford and the UAW. Reduced to its essentials, “E.I. is the process by which employees are provided with the opportunity to contribute their minds, as well as their muscles and hopefully their hearts, to the attainment of individual and company goals. Since 1979, virtually every hourly employee, either directly or indirectly, has been affected by this process.”

“Eighty percent,” Peters hastens to point out, “are good, solid workers. Ten percent are exceptional; ten percent don’t seem to care. Where should attention be focused? On just that last ten percent with grievances? No, we must care for the others, or soon they may care less.”

“People resist change,” Smotherman interjects. “The company has rights; the union has rights. The employees have rights: to be treated with respect, to expect cooperation in safety issues, to be evaluated regularly, to be encouraged in development potential and to share in gains of the company.”

Labor-management relationships were essential to bring about change and to ensure those rights. It was here that risk and trust entered the process.

“In building effective labor-management partnerships, both parties must be willing to take a risk,” Herb Peters stresses. “Parties must be willing to share information, to share decision-making and business strategies, to be open and honest. It is a difficult and critical effort. It must be done gradually.” It involves more than mere empowerment.
“Empowerment to do what?” asks Smotherman. “Partnerships require that boundaries and goals must be determined. Teams must know what they can and can’t do. There must be a steering committee to set the parameters.”

Recipe for Trust
At UAW-Ford, six steps were involved:
• First, the union and management, working together, made a list of areas of concern for each activity of every plant location.
• Next, a five-point scale of goals was set: To advise each other; to become advisors; to aid in development; to influence input; to reach decisions and take corrective action.
• Separate meetings were held to discuss UAW and Ford involvement and to choose their respective union and corporate boundaries.
• The final steps included working together as a steering committee, establishing guidelines and then sharing them with teams at each location.

“In employment security, trust is most important in resolving issues,” Smotherman continued. “It is impossible to succeed in any joint process unless you address trust. There must be clear roles and responsibilities; there must be respect and integrity.”

“There must also be commitment and accountability,” Peters added. “Leadership is more important than managing. Communicate, evaluate yourself and give recognition. If a kid gets all A’s and only one D, we tend to focus on the D. Recognition must be positive. Commend those A’s. Give credit where it’s due.”

Smotherman recalled having heard Desert Storm Commander Norman Schwarzkopf give a speech, after which a Detroit woman thanked him for having brought her son safely home. To which the General replied, “No, ma'am. I didn’t do anything. Thank your son for bringing me home safe.”

In 1990, UAW-Ford issued a letter of understanding incorporating the relationship between the Employee Involvement and Best-in-Class quality programs. An agreement in 1993 gave further strength to employee involvement and a concept of continuous improvement fully supported by the leadership of the UAW National Ford Department and the company.

“For Ford to remain a viable competitor and provide the opportunity for employee job security,” it declared, “every location must improve continuously to enable the company to achieve its objective of ‘being the preeminent producer and marketer of cars and trucks with the highest customer satisfaction in North America by the year 2000.’”

Lessons Learned
What were the lessons learned from the UAW-Ford transformation experience?

First, Peters and Smotherman agree, has been the assurance that employee commitment at all levels is still the bedrock of all corporate strategies.

“Ford has 160 plants on five continents, and we were involved with 61 locations in the United States,” Peters reports. “We found that ninety percent of the workers WANT to be involved.”

To achieve employee commitment, Peters and Smotherman say it is vital that managers recognize that, for the most part, they are dependent upon the power accorded to them by their subordinates. Without this willing cooperation, major projects are surely doomed, and even some of the most routine work will not get done well. Increasingly, power in the workplace must be shared.

Excellence is just as important to employees as it is to management. Whatever their jobs, people want to be part of an organization that is known for being best in its class. The UAW-Ford representatives stress the great value in providing employees with meaningful opportunities for professional and personal development.
In their work with the steering committee and with teams across the United States, Peters and Smotherman also learned that, “By its nature, labor-management cooperation entails a large and constant educational effort.”

Constant Communication —Lasting Trust
“Ford has over 105,000 hourly employees and of this number, 37,000 have seven years or less of seniority,” Peters explains. “This constant stream of new employees demands that communication lines remain open. Older ideas and methods may need reevaluation; new people may provide numerous opportunities for improvement.”

In conclusion, Peters and Smotherman returned to the issue of trust:
“Many changes have occurred since 1979, but some basic issues still are present. A key ingredient to the future success of the relationship between UAW and Ford is our dedication to reinforcing our focus on trust. Both parties are convinced that this is critical to the success of any participative process.

“We continually work on communication, cooperation and commitment; on the sharing of goals and visions, giving recognition, identifying clear roles and responsibilities and finally, on maintaining accountability.”

For UAW-Ford, these are the key elements of trust.

August '98 News for a Change | Email Editor

 
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