GM Case Analysis

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Effective September 25, 1990, the management of the General Motors (GM) Parma, Ohio, stamping plant finalized another three-year local agreement with the United Auto Workers' Union (UAW), Local 1005. It was the second local agreement they had negotiated together on time and without intervention from Detroit, since Parma's self-described revolutionary agreement seven years previously. It was revolutionary because Parma's management and union had abandoned their old hostilities and incorporated a team-based approach to work, setting Parma in a new direction. The 1990 agreement formally documented their joint priorities of team-based workgroups, extensive employee training, and a supportive working environment. The assistant personnel director for hourly employment, Bill Marsh, felt that, although this was another positive step in their ongoing relationship with Local 1005, the negotiating process seemed more "traditional" than the previous negotiation in 1987. Bob Lintz, the plant manager, agreed. Unexpectedly, the new Shop Committee chairman, who is Local 1005's prime negotiator, had introduced over 600 demands at the start of Parma's local contract negotiation. Even though management and the union were still able to finalize an agreement quickly, the tension created by the enormous list of demands still lingered. It could destroy the collaborative relationship that had been built over the past decade between management and the union leadership as well as the openness that Bob Lintz had managed to foster between himself and the hourly employees.

In the early 1980s, Parma's corporate parent, GM, conducted a capacity rationalization study that concluded that almost 75 percent of Parma's operations should be either eliminated or transferred to other GM facilities within three years. Despite a one-year lapse in formal relations, and with no contract in effect, Parma's management and Local 1005 responded to this threat to plant survival by conducting a joint effort to bring in new business. This joint effort led to a number of competitive assessments of Parma's operations that identified several noncompetitive work practices. To formally acknowledge this new collaborative relationship, a new labor agreement was drafted and ratified in 1983 by Parma's rank and file that resulted in fewer work classifications and emphasized a team-based approach to managing workgroups.

To implement this agreement, Parma's top management and Local 1005 created the Team Concept Implementation Group (TCIG) to introduce this new Team Concept and spent $40 million on extensive training of the entire workforce in problem solving, group dynamics, and effective communication skills. By 1990, the Team Concept had empowered hourly employees to assume more responsibility in their jobs and to focus on problem-solving and work-related matters and to move beyond status differences exemplified by position titles or neckties.

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