Labour Relations in the Seventies

DR. CRANFIELD:

Our speaker today is trained in the law and from the brevity of his curriculum vitae as submitted by him is obviously a modest man.

He was born on February 26th, 1917 in Detroit, Michigan and seems to have made his headquarters right here. He attended Sacred Heart Seminary and following graduation from the University of Detroit High School took a year at the University of Detroit then transferred to the University of Notre Dame where he took his A.B. and J.D. degrees. A member of the Michigan Bar Association, our speaker is a past president and director of the Law Association of the University of Notre Dame Law School.

At the age of 24 he joined General Motors as an assistant supervisor of labour relations for the Fisher Body Division in Pontiac, Michigan and in June 1942 on being promoted as one of the four original members of the Division's Industrial Relations Section, joined Central Office in Detroit. Throughout the war his services were in demand in a variety of National War Labor Boards including service in Washington as the General Motors company representative.

By March of 1948 he was appointed to the staff of the Vice-President in charge of Personnel and Labor Relation Now he was involved in arbitration cases with 19 separate international unions. Two years later (1950) the historic fiveyear agreement between G.M. and the United Automobile Workers and other unions was reached. After this, three-year agreements were reached successively right up to the present and he was involved in all of these as a negotiator.

In 1963 six G.M. members began a "G.M.-U.A.W. Study" as a committee to search out the future problem areas about which national collective bargaining negotiations might run aground. For the first time in the automobile industry, plans could be made in anticipation of troubles in labor/capital relations.

A recent local press release was headed "G.M. Chairman takes pay cut of $405,000." Reading further it proved to be the effect of elimination of bonuses to top executives in the world's largest automaker. I judge that our speaker obtained some kudos from the settlement of the '67 U.A.W. strike. Somehow, I imagine Mr. Roche, G.M.'s Chairman, managed to get by on his salary for the tax bite on that $405,000 would be considerable, at least in Canada he would only be able to keep one-fifth of it. So he would be short $81,000 for that is all he would keep of it. Profit losses were blamed on this strike. Just how much of the 1970 lowered income which was in excess of a billion dollars, can be laid to this cause we may find out before this afternoon is over. 50,000 Canadians earn 475 million dollars making cars and if we are vitally concerned that our economy will be preserved, this is not an inconsiderable sum towards it.

So as the man who has specialized with such notable success in resolving the labour problems of the millions employed in the giant automobile business, and who has been doing so for thirty years, he has become expert. Mr. George B. Morris, Jr., Director of Labor Relations for General Motors Corporation, Detroit, has chosen as his topic: "Labor Relations in the Seventies." Mr. Morris.

MR. MORRIS:

Thank you, Dr. Cranfield, and good afternoon, gentlemen.

I'm honored to be with you. The Empire Club of Canada has a reputation of excellence which reaches far beyond Toronto. Actually, I've spent enough time in Canada since 1949--and more specifically in Toronto--to feel that I might qualify as an applicant for a non-resident associate membership. This, of course, is reference to the days, weeks and months spent here bargaining with the U.A.W. During these periodic relocations in Canada I have watched with interest, respect and envy the transformation of Toronto into one of the great cities of North America. With imagination, positive action, faith and courage of conviction, you've turned this city into something special, a city which many others would emulate.

It was just prior to the Christmas holidays when we checked out of this hotel after reaching the agreement that ended the G.M. strike of last fall. Not only has spring arrived since that time, but the auto industry in North America has been doing very well since we got back to the business of building automobiles.

There are many topics of interest which we could discuss today. In fact, business has never known a period like this. Not too many years ago about the only concern was whether a business showed a profit or loss. Today the range of interest is seemingly endless, running the gamut from ecology to equality of employment or from absenteeism to consumerism.

It is my purpose here today to confine my remarks to one aspect only of this broad spectrum of public interest and concern: the ongoing union--management relationship and what we see for that relationship during the decade of the 1970's.

For more than 30 years, the following paragraph has appeared at the front of every General Motors national contract with the United Automobile Workers in the States:

"The management of General Motors recognizes that it cannot get along without labor any more than labor can get along without the management. Both are in the same business and the success of the business is vital to all concerned. This requires that both management and the employees work together to the end that the quality and cost of the product will prove increasingly satisfactory and attractive so that the business will be continuously successful."

We subscribe to this same philosophy here in Canada. That is to say, certainly, that upon occasion we do not differ in our approach to this common objective. We have differed in the past. We will differ in the future. But more times than not we work out our problems peaceably. The strike of last fall was only the second strike in the States over national issues since 1945. The other strike over national issues was for one week in 1964. Unfortunately, our record here in Canada has not been that good.

In our 1970 negotiations with the U.A.W., we emphasized repeatedly that between General Motors and the U.A.W. there is a far greater community of interest than of conflict. This will continue to be the theme that we try to hammer home in the 1970's. The time is now for the parties to focus sharply on the major and many points of common interest--to strive to achieve the co-operation necessary to meet the challenge that lies ahead for our industry. Their very survival depends upon our survival.

There are not many in this room today who do not recall personally--or at least have read about--the early days of the union-management relationship in the auto industry. The sit-down strikes of the '30's made news throughout the continent. The confrontations then were not far removed from some of those making news in our major cities and on university campuses today.

Much has happened, however, since those days in the '30's. International unions today find that their own self-interest in many areas coincides with the interests of management.

In the '30's the then young labor movement was the militant aggressor, struggling for recognition and trying to get a foot in the door. Today the unions are recognized, experienced, successful and solvent. In short, they are establishment. And they, like management, find themselves under considerable pressure from factions and self-interest groups within their membership. Among these special interest groups are the young (G.M. has more than 100,000 employees in the States and Canada under 25 years of age), the older employees, women, minorities and the politically motivated.

The young want more money in their pay checks now. The older employees want higher pensions in their retirement. The women and minority group employees want greater job opportunities. The politically motivated want recognition.

To the extent the special interests of these groups are diverse, or their priorities are not the same, union leaders will be called upon more and more to provide intelligent direction in selecting attainable goals for the membership.

To cater to all pressure groups by simply transmitting all of the respective demands to management is to abandon the leadership role.

It seems reasonable to assume that these pressure points will continue to intensify for union leadership in this decade. So they find themselves with some of the operating problems that management has known and continues to experience.

As a very normal outgrowth of this sort of confrontation, questions are being raised as to the relevance of collective bargaining as we know it in the handling of the union management relationship in the '70s. This is an area where our community of interest is at its greatest.

While collective bargaining as it has matured in our industry may not be ideal, nothing better appears to be waiting in the wings. Neither compulsory arbitration nor labor courts have as much to offer.

Our system provides an orderly process for resolving problems within our industry. And it must be supported. The grievance procedure with arbitration, if necessary, as the terminal point, which was pioneered in the heavy goods industry by General Motors does work when the parties adhere to it. The alternative to the orderly procedures provided for in our contract is a breakdown of authority and resolution of problems by unauthorized work stoppages. The result under those conditions is serious damage to productivity with loss of competitive position in this very competitive industry. And this competition is world-wide in scope.

If we mean what we say in our contract--and I'm talking about management as well as the union--then we must do a better job of resolving our differences through our established grievance procedure.

For example, during the national bargaining in the States last fall, we had approximately 39,000 local demands to be resolved in addition to all the national economic and non-economic demands. There is no reason why these local demands shouldn't or couldn't be resolved under the normal day-today procedures. It should be obvious that if we had 39,000 real grievances in G.M. plants, we couldn't operate. Letting them build up as a pressure point is not in the best interest of all parties.

In my view, the resolution of this problem will come about only when union leaders at all levels--international and local--provide positive leadership. When they do, they must be met by responsive management. This is a priority matter for the '70s.

Now I fully recognize that the union is political in nature and that all levels of leadership hold office through the democratic process of the ballot. However, one of the basic tenets of elective office is to provide leadership in the best interest of all concerned.

Sometimes we complain to international union officers about misconduct or irresponsibility on the part of a local union representative. Too often we are greeted with the reply that there is little the union can do because the representative was elected to office through the democratic process. But the essence of democracy, in our view, is that union representatives are elected to lead and the essence of responsibility under a collective agreement is adherence to the provisions of the contract.

With the new, younger work force of the '70s, this is becoming a more difficult problem. It is through education and training that our objective in this regard can be realized. That is why we agreed in 1970 negotiations to undertake a joint orientation program for new hires. Union participation in this program, we believe, offers some exciting prospects for reducing turnover and for improving attendance--among our most vexing problems today. The idea here is to let the new employee know what is expected of him and of his importance to the manufacturing or assembly process. It presents an opportunity for both sides to impress upon the new hire that there is mutual respect for him underscoring the dignity of the individual; that his own self-respect and the respect of his fellow employees will be enhanced in proportion to the extent to which he individually contributes to the common good.

This leads me to another area where we share the same community of interest and that is the people. Our employees are also the union's members. They have a joint role and one that cannot be viewed as mutually exclusive. This is not a matter of divided loyalties. On the contrary, it is a matter of complementary and inextricable loyalties--like participation in a three-legged race.

Management has the responsibility of providing a safe place in which the people work and the rules of personal conduct--known as shop rules--for our plants. The union has the duty to object on behalf of any employee or the union, through the established grievance procedure, if his or the union's rights have not been honored in the administration and implementation of these rules or the contract. By far the vast majority of our employees and union representatives are good employees. They are at work, doing a quality job, in return for which they receive a fair day's pay.

The problem in this regard is that it is the "squeaky hinge" that gets the union oil. In our shops this represents only about 5 per cent of the work force. The right to represent the people is not, nor has it ever been, in question. At issue in our view is the degree of protestation and, in some instances, the blind defense afforded the troublemaker, while the big majority--the 95 percent of good employees gets minimal union attention. We have suggested that this situation be turned around and the interests of the greater numbers, which are jeopardized by the actions of the few recalcitrants, be made paramount.

Who are these 5 percent and how are they recognized? They are the employees with excessive absenteeism . . . recipients of the majority of disciplinary layoffs . . . the employee who receives garnishments from local business men for failure to meet financial obligations . . . the chronic visitor at the plant medical department . . . the individual who abuses the sickness and accident benefits. In short, they are the individuals who spend more time avoiding work than trying to earn their wages.

A major by-product of the employee who is so motivated is the serious effect on productivity. For there is more to productivity than just quantity. Productivity is reduced fully as much by poor quality output as by no output at all.

In fact, since poor quality often requires that work done once be done again, it is worse than no output at all.

The importance of productivity to the union and to the Corporation--and this is yet another example of community of interest--is found in the tough competitive challenge to the auto industry from outside North America. Foreign producers, with labor costs only one-quarter to one-half of ours, are making important inroads in North American markets and North American jobs.

The Japanese have already taken over a virtual monopoly of the radio and T.V. business. The difficulty of producing radios for our automobiles here in North America is obvious when Japan is contracting for labor in Taiwan at 15 cents per hour and shipping radios to the States for 25 cents. The same is true of bearings and other components which can be bought in Japan for less than we can make them in North America. I don't want my remarks to be taken as a threat. They are not meant that way. But we must have a fuller recognition of this problem and what is required from all concerned to cope with it in the '70s.

Foreign factories are fully as modern as ours, many having been built or rebuilt since World War II. Additionally, we no longer have a measurable edge in technology. These foreign manufacturers have the latest and best in manufacturing methods. And they have volume--an essential of efficient mass production.

Fortunately, for more than twenty years the U.A.W. and G.M. have recognized in writing in our basic collective agreement both in Canada and the States that to produce more with the same amount of human effort is a desirable social and economic objective.

The U.A.W. was far ahead of the union movement in accepting the ideas of better methods, improved technology and work-saving processes. Well, if ever there was a time when our North American industry needs improved productivity to handle more efficiently the foreign competition, it is now.

In the '70s we must undertake an extensive program of educating our employees on the importance of increasing productivity. I was shocked Monday of this week to see the result of a recent study undertaken by the Opinion Research Corporation, Princeton, New Jersey. The question was asked:

"Which do you think is the most practical way for workers to increase their standard of living--by all workers getting more of the money companies are already making?"

More than one-third--34 percent of the U.S. public to be exact, rejected the idea that wage gains for workers need to be financed through higher productivity and only 37 per cent agreed on the need to produce more in order to improve their standard of living. In 1953, 37 per cent of union members said they believed existing business profits could finance wage increases; today 46 per cent do.

While the International Union recognizes in our agreement the necessity for increasing our productivity, there are still too many locations where union representatives at the local level continue to resist new technology and methods.

To state that more accurately, new technology and new methods are not resisted per se. But attainment of the full potential increase in productivity that should result from such changes is too often resisted. This resistence, especially in our assembly operations, many times is reflected in slowdowns and challenges to new production standards established by management. This resistance, too, many times is without reference to the work effort of the individual employee, which, in most cases, is less after the change than before. Here is an area where a more rational approach to what constitutes a fair day's work is sorely needed in the '70s.

Before concluding I would like to read excerpts from two newspaper articles.

The first is written by the Chairman of the Shop Committee in one of our largest operations in North America.

"General Motors has launched a sales campaign to try to sell more G.M. cars and trucks this year than have been sold in any previous year. We support this fully, for very obvious reasons. First, if G.M. sells lots of cars, it makes sense that we will have a lot of jobs. If car sales are down, then we haven't got as many jobs . . ."

He went on to say -

"First, you should check dollar for dollar value; then, take a look at where you are working and earning your wages . . . If, for some reason, all G.M. workers covered by our . . . agreement purchased other than G.M. cars, this would cut off about 25 working days of the production from . . . (our) plant per year. If all G.M. workers in North America purchased other than G.M. cars, this would cut off about 400 days of production from . . . (our) plant. This would equal about 20 months' work."

If that does not express a community of interest between us, consider his conclusion. He wrote:

". . . when you pick up the newspaper and see what's happening in this very competitive world, it makes one think. We have a big stake in this company. . ."

That, in my opinion, is an example of the kind of constructive union leadership we need in our industry. It demonstrates that this prominent union leader understands that between his union, its membership and our company there is indeed an important and vital community of interest "a big stake" in each other's future. In short, we need each other.

And now the second article. It is somewhat lengthy and I beg your indulgence while I read it in its entirety. It is written so well, and to the point, however, that I believe it deserves to be ready in toto and this audience, primarily of businessmen, deserves to hear this enlightened union leader's promise for the '70s. He wrote, and I quote:

"We can't allow our people to continue the old practice of having two years of stability and one year of getting ready for a strike. 'Lasting industrial peace must be found.' We can't allow problems to fester in the plant. Complaints should be resolved on the floor rather than allowing them to drag on and on. Problems and grievances must be resolved fairly and contractually. Personality and political motives cannot and should not enter into legitimate contractual affairs. The negotiated grievance procedure must work. It can't be used as a shuffling device. Each representative at each step of the grievance procedure must assume the responsibility of his office. A grievance that has to be withdrawn by the union at the 3rd or 4th step of the procedure because it wasn't proper or valid should not have been filed and the grievor should be told the reason for not filing."

His article continues:

"Our members respect and deserve straightforward, honest answers to contractual questions. It may be that these answers don't always satisfy the individual, but at least he or she will be told 'the way it is."'

Properly admonishing management, this union leader went on editorially to say:

"The question of solving problems 'as you go' is a dual effort. Local supervision and management must live up to their responsibilities and not fluff the union representatives off."

Then looking to the future, he wrote:

"If a sincere and honest approach is taken by both parties for the next three years, then, when we enter into negotiations prior to September 14, 1973 we will be approaching the company only with demands that can be discussed and resolved during negotiations and not hundreds of items that should have been resolved long before the contract expired."

In conclusion, these words of his offer encouragement:

"These are the aims and goals of this office and also the office of our president. It is going to take a lot of hard work to achieve this. I am confident, however, that you and I, working together towards a common goal will be able to proudly say in 1973 that we have achieved an honorable settlement, without a strike. Industrial peace will prevail for our people, our community and our country."

This article, too, was written by a prominent U.A.W. official. One here in Canada. Would that the Auto Trade Pact could bring about exporting that kind of thinking so that it would find acceptance throughout General Motors plants in North America. Then the prospects for 1973 and, indeed, for the duration of the '70s, would be the brightest in the 34 years of General Motors collective bargaining experience with unions.

The gratitude of the Club was expressed by Lieutenant Colonel R. H. Hilborn.

DR. CRANFIELD:

Gentlemen, I would ask the officers and directors present to remain for a brief acceptance and ratification of the decision of the membership today, and for the appointment of officers and directors of the Club for the period beginning April 30th, 1971.

In World War II the pilot of a hopelessly damaged aircraft over the English Channel, having been forced to prepare to bail out would contact radar ground stations. This would permit a fix on his position and the Air-Sea-Rescue squad would hurry to fish him out of the water after he had ditched. To contact these radar stations the pilot would press Button D of his radio equipment and repeatedly call into a microphone the code message "May Day May Day May Day."

With May Day so imminent and my personal bail-out moments away, may I say simply, "Thank you for your support in this year so memorable to me."

This meeting stands adjourned.