Management Day

Please join me in officially boycotting Labor Day this year. In its place, I propose a day to honor those smart managers who have had the foresight to avoid becoming slaves to labor's demands. Need some proof why this holiday needs to move on? Consider -- at least those in the US -- your newfound investments in GM and Chrysler and how and why you'll probably lose your shirt on it. Along side numerous failed management challenges, we can largely assign the downfall of GM and Chrysler to the inflexibility of labor's demands over the years, demands that created not only high cost structure, but more important, limited the Big 3's ability to find creative ways of tapping innovation in their supply base.

Don't get me wrong here. Organized labor played a huge role in the 19th century -- not to mention the first half of the twentieth -- in standing up for worker's rights (read The Jungle if you need any proof why). But today, organized labor's primary usefulness has been replaced by meddling and machinations designed to protect its own bureaucracy and interests, sometimes legally, sometimes illegally, but nearly always at the expense of shareholders, management and customers.

From a supply chain risk perspective, we should all take the organized labor component of our supply base seriously. I know a good many manufacturers that routinely handicap suppliers in sourcing decisions based on the labor / non-labor questions because of the risk factors of potential strikes (not to mention what can often become a reduction in quality control and oversight). Moreover, from a global sourcing perspective, we must also factor in the risk of the six-figure longshoremen, who have been known to wreck havoc with our ports from time to time when their demands are not met.

Does organized labor have a useful future? Given the models of the Japanese and Korean automotive OEMs in North America -- that pay more than a livable wage to their employees and often fill new positions with former union employees -- I'd argue not, at least in skilled and semi-skilled manufacturing positions. And certainly in the trades (e.g., plumbing, carpentry, electricians), the traditional union service of useful apprenticeship and training is fading fast (talk to any GC or commercial builder in most major cities and you'll readily see that the trade union's "piece of the action" as a monetary end-in-itself matters far more to union management than the actual circumstances of their rank and file membership -- let alone apprenticing future tradespeople). But perhaps in more marginal blue-collar roles, organized labor might have some place. Still, I'd hope that with the Internet, workers now have access to enough material to question the cost/benefit analysis of giving up their individual rights in favor of joining a collective that's first and foremost looking out for its own interests and survival rather than that of its members.

So tonight, raise that last G&T of the summer to management, particularly smart management at companies that have checked the exploitative, disfunctional and self-serving behavior of unions both within their four walls and among their supply base.

Jason Busch

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