INTRODUCTION

“General Motors’ plan to eliminate 30,000 hourly jobs by 2008…”

Such statement can probably be the best hint, glimpse and gist that we can give in

the case entitled Winning the Battle but Losing the War –and probably, the most

astonishing one as far as America and Canada’s employment status is concerned.

The aforementioned case tells us the considered most important strike in the United

States of America’s labor history. The feisty and outspoken United Auto Workers (UAW)

launched the history’s first sit-down strike against their employer which is General Motors

Corporation at Fisher Body Plant No. 1 in Flint.

Such strike was further followed by other series of strikes and in June 1998, such

union, the UAW, had threatened to shut the metal-stamping plant. In June 5, 1998, GM

started to endure one of the costliest strikes in the history – a strike wherein 3,400

members of UAW walked-out from their work and 25,000 workers from the firm’s Flint,

Michigan plants went on a strike.This 44 day strike had a severe impact on GM, having

an estimated lost of $2.2 billion in sales not to mention other losses in terms of market

shares. But what are the causes of such strike? First, workers at Flint have worked at a

manic pace through breaks and meals, so they could get off work a few minutes early

when their production quota was filled and in return, company promised, it would bring

new machinery into the plant, making it as productive as its newest factories in Mexico

and Brazil. But despite its promise, new investment never materialized. Second, massive

lay-off. Yes,massive – a lay-off of 17,300 workers in just one day and further announcing

lay-offs every day, a statistical data which can then, justify the usemassive
of lay-offs.
 What is the effect of such strike? Neither parties, the GM and the UAW can be held

victorious, on who really had won. The only clear effect of this is that the relationship

between the UAW and GM had been greatly damaged and it is very much uncertain on

whether or not such relationship can be improved.

BACKGROUND

There is no greater misfortune than underestimating your enemy

Underestimating your enemy means thinking he is evil
Thus you lose your three treasures
And become an enemy to yourself
- Tao te Ching, by Lao Tsu
-
General Motors Corporation (GM) is the world’s largest car manufacturer. It do

employs an approximate number of 327,000 people around the world. In fact, it sells cars

and trucks globally under well-knowned brands like Chevrolet, Pontiac, Opel, Hummer

and has collaborations with Toyota, Isuzu, BMW, Daimler Chrysler and Suzuki Motor

Corporation. However, are these triumphs of GM can be considered as their greatest

asset? Isn’t it that every company’s greatest assets are their employees? But in GM it is

very much evident that their employees are not their greatest asset because if such

employees are really assets then, they could not have resorted on conducting series of

strikes, there will be no UAW having walk-out from work and a sit-down strike.

But what is UAW? What are the immediate issues in their strike ? The United Auto

Workers (UAW) is the union who had a strike against the General Motors. It is officially

known as United Automobile, Aerospace and Agricultural Implement Workers of America

International Union which has 500,000 members all over US, Canada and Puerto Rico.
 Their immediate issues in the strike include health and safety, speed-up, outsourcing,

staffing and lay-off.

Based on the maxim of a certain Lao Tsu, GM hence, can be considered to be the

unfortunate one who underestimated its enemies, and enemies can be considered as the

UAW. It ignored such strike conducted believing that they can continuously gain profits

and still manage to have a successful corporation but it overlooked that it is already

losing a lot of its treasures, and it is already losing billions of its assets. It had mistaken

on its employees’ treatment. It further overshadowed the local and UAW’s issues by

continued threat to wipe out jobs in Flint. The two parties aforementioned are the

concerned parties in this case, they are the two opposing parties, with opposing views

but ironically, working on the same workplace and working for the same purpose.

PROBLEM IDENTIFICATION

GM’s attitude: ”If you don't do it our way we will close down and move to Mexico. It would
probably take something big, like what happened in Indonesia, for things to change."

UAW: “Here we are in an economy they tell us is flourishing and every day we are losing jobs.
The rich keep getting richer."

1) EXTERNAL PROBLEM

a) Whether or not the relationship as between the GM Corporation and UAW is

changing

2) INTERNAL PROBLEM

a) Major Problem:Will GM’s action of downsizing its employees/workers really

bring success and improvement to the corporation?

 b) Minor Problem: Will GM continue its plan to close its corporation’s own

birthplace – Flint Metal Center?

ROOT CAUSE(S) OF THE PROBLEM:

• When the company promised that it would bring new machinery into the plant,

making it as productive as its newest factories in Mexico and Brazil but the

promised new investment never materialized; hence, a 44 day strike from June 5

to July 28, 1998 took place.

• When GM planned to close the Flint Metal Center (the birthplace of UAW)

• Continuous lay-off / downsizing of employees

• GM’s outsourcing and staffing

STATEMENT OF THE OBJECTIVES

The main issue surrounding the case is the nature of the relationship between the

management and the union. As what the case states on its face, the real issue is whether

the relationship between unions and management is really changing. The latter for the group

is the external issue that this paper wishes to resolve. The internal issue however,

surrounding the case can be further sub classified to the major and minor problems.

Considering all the issues and controversies herein laid, this paper desires to attain

the following objectives:

1. To identify the procedures of the General Motors with respect to the handling of its Labor

union; that is, the United Auto Workers.

2. To ascertain the internal and external factors that contributed to the labor dispute.

3. To lay down an objective assessment of the sides of the two parties.

4. To justify the importance of determining the roles of a company and a labor union in

settling labor controversies.

5. To prove that the relationship between the unions and the management is really changing.

6. To lay down other related cases

7. To consider some legal jurisprudence governing the case

8. To lay down the impact of the case in Labor relations.

9. To establish an attainable action plan.

10. To recommend a SMART recommendation.

AREAS OF CONSIDERATION

1. The Nature of the work

Strength: It provides the cause of the conflict and can explain the behavior of both parties. It

also seeks to stabilize the balance of this paper. If this will be considered, the question of the

changing relationship between the company and labor union may be answered.

Weaknesses: We don’t see any conflict if the nature of the work will be considered

Opportunities: It will provide a simple yet well-related solution not only to this case but to the

others with the same nature as well

Threat: If this area will going to be abused, it may harm both parties and their market

2. The Constitution and by laws of the Union

Strength: It determines the bargaining power of UAW

Weaknesses: If not properly used, it can dominate this paper and will then result to a

subjective one

Opportunities: If found to be unsound, it will result to amendments of provisions therein that

caused the conflict

Threat: The possible alternative that can be drawn herein may not last taking into

consideration the changing nature of union and company’s relationship

3. The nature of the agreement of the company and the union

Strength: This constitutes an objective pattern to determine the real cause of the controversy

Weaknesses: If the research is ineffective, inaccurate and insufficient data may be used

Opportunities: It can propose revisions on the aforementioned agreement that may be used

not only within the company but with the market and other related businesses

Threats: If inaccurate data will be used, it will harm this paper

4. The behavior of the union

Strength: It answers the question “why”. Hence, this will lead to a concrete answer to the

question “why UAW acted in that manner”.

Weaknesses: Behavior varies, hence a collective behavior does not necessarily implies that

the whole behave in such manner.

Opportunities: It identifies the psychological element of the case, hence it will justify that

behavior is a good tool for labor dispute fixing

5. The reason behind lay-offs

Strength: It determines the side of the management

Weaknesses: Subjective to management’s part

Opportunities: Procedures with respect to employment termination may be revised or be

strongly implemented

Threat: It is subject to legal interventions

6. The continuing concern of the company in retaining its leadership in its field

Strength: It provides the mission-vision of the company; their continuing concern and their

desired results

Weaknesses: We don’t see nay weaknesses in this area

Opportunities: If proven to be unjust, the same may be amended and new company rules will

as a result be produced

Threats: The market to which GM caters will be subject to adjustments.

7. External and Internal environment affecting the real score between GM and UAW

Strength: It is an objective way of ascertaining the solution to the case

Weaknesses: An extensive will be undertaken, and therefore will prolong his case study

Opportunities: The Company’s image to its environments (whether internal or external) will

be enhanced

Threat: This area prolongs the ascertainment of solution and attainment of the objectives

that this paper seeks to provide

ALTERNA TIVES AND THEIR ANALYSIS

Considering the aforementioned areas of consideration, the following alternatives are herein

suggested:
1. Revive the damaged relationship of GM and UAW through the enhancement of their

agreement with respect to bargaining power. The rights that were prejudiced shall be

cured through the reinstatement of the worker who previously suffered forced lay-offs

and in the same manner that the industrial espionage suffered by the company shall

be if not absolutely diminished, be pre-conditioned to some requisites and as much

as possible be lessened.

Advantage: It shows that the company gives importance to their assets and capital; that is,

the labor.

Disadvantage: The Company is not financially and morally ready to readmit the workers

previously terminated.

2. The company shall stick to its vision to retain its leadership. The prejudiced

workers shall not be reinstated but to be given a just benefiting capable not only of

the sustenance. After the same were settled, discussions with respect to the sides of

both parties shall be conducted. The bargaining power, vision-mission of the

company and benefits system shall be justified.

Advantage: It justifies the company’s vision-mission. The company will gain the trust and

recognition of their external environment specifically the industry to it is attached for the

reason that former will be viewed as a company which adheres its vision-mission.

Disadvantage: First is that will threatened the company. The workers who were previously

terminated may possibly perform an industrial espionage to the detriment of General Motors

by way of transferring to the latter’s competitor and thereby transmit the knowledge that they

contributed and gained to the General Motors. Second is that, the company’s image will be

harmed. The market may view them as a company who doesn’t value their workers.
3. Change the company’s goal and favor the laborer, anyway human resource is

treated as asset and capital of the former.

Advantage: It will regain the trust of the market to which GM caters to. It is also a good moral

booster for the workers.

Disadvantage: Apart from those two advantages is a multiple complication that this

alternative may produce. Changing the company’s mission-vision is a crucial step. It affects

not only the internal management of the company but the leadership and image that the

same wishes to adhere. The change in the mission-vision cannot be demanded specially

that General Motors is in the process of regaining the leadership in their industry. If the

company will change their goals, it will impliedly result to an absolutely reformation of all the

aspects of the company such as the production, human resource, sales, marketing etc.

4. Same in number 1 except that the reinstatement shall be conditioned that the

workers shall be admitted when the company finally regained its leadership. In the

meanwhile, benefits shall be given to them, that is capable of sustenance.

Advantages: This alternative totally diminishes the disadvantage laid in ACA no. 1; that is,

the questionable financial capability of the company in reinstating the 30,000 workers laid-

off. In the same manner, it produces the following result:

- the company value their best asset and that is the labor

- the condition herein stated is not prejudicial to the terminated workers for they will

be given their respective benefits capable of reasonable sustenance during the

interval of their probation

- the company’s image will be greatly enhanced

- it is a good step for a rehabilitating company

 - the possibility of regaining GM’s leadership and financial capability is assured

Disadvantages: We don’t see any disadvantages except with respect to the worker’s

acceptance of this alternative. However, we are in the belief that the same will not be

rejected for the reason that the same is not unreasonable for in this alternative, the

possibility of regaining GM’s leadership and financial capability is assured.

5. Seek legal interventions

Advantages: It benefits both parties since legal dispute will be settled.

Disadvantages: The same is not conscionable for it doesn’t provide a specific solution to the

problem. Moreover, seeking legal intervention is costly. Most importantly, there is a conflict

between the company’s advocacies and legal provisions for the same does not assure the

attainment of company’s objective of regaining it financial status and leadership in their

chosen field.

6. Close the company’s own birth place, the Flint-Metal Center

Advantages: This provides a quick escape to the controversy the company is dealing with.

Disadvantages: It is prone to legal dispute and claims. It provides no solution to the problem.
BIBLIOGRAPHY
1
Wikipedia, Flint, Michigan Auto Industry

http://en.wikipedia.org/wiki/Flint,_Michigan_Auto_Industry

2
World Socialist Web Site, Metal Center strike in sixth day; New GM strike threat in
Flint, Shannon Jones, 11 June 1998

http://www.wsws.org/workers/1998/jun1998/uaw-j11.shtml

3
World Socialist Web Site, Court threat to General Motors strike, Martin McLaughlin,

17 July 1998

http://www.wsws.org/workers/1998/july1998/gm-j17.shtml

3
World Socialist Web Site, GM job cuts will devastate North American cities, Joseph

Kay and Barry Grey, 23 November 2005

http://www.wsws.org/articles/2005/nov2005/gm-n23.shtml

4
How Industrial Unionism Was Won: THE GREAT FLINT SIT-DOWN STRIKE

AGAINST GM 1936-37, Walter Linder

http://www-rohan.sdsu.edu/~rgibson/flintstrike.html
5
New York Times, Jobless Claims Rise; G.M. Strike Is a Factor, Saturday, March 3,

2007

http://query.nytimes.com/gst/fullpage.html?
res=980CE0D61E3DF93AA25755C0A96E958260