1. America’s big car firms face lengthy strikes (economist.

com) (This could be linked to conflict and

leadership)

2. Friendships in the office (economist.com): A great topic to further research upon, whether
engaging employees forcefully can produce positive results for companies. The topic this touches
(Values, attitudes, leadership, and/or decision-making)
Business | Strike while the engine is hot

America’s big car firms face lengthy strikes

Detroit’s “big three” v the United Auto Workers

image: ap
Sep 20th 2023
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The car industry faces unprecedented upheaval as the importance of the internal-
combustion engine, which has defined it for more than a century, declines and that of
battery power, which will define its future, rises. The latest reverberation of this historic
shock is now rippling through the four-yearly contract negotiations between Detroit’s “big
three” carmakers and its biggest trade union. On September 15th, for the first time
ever, members of the United Auto Workers (uaw) began simultaneous industrial action
against Chrysler, General Motors (gm) and Ford. (Chrysler is part of Stellantis, whose
biggest shareholder part-owns The Economist’s parent company.) The union’s tactical
change foreshadows a protracted stand-off, the stakes of which are high for union and
carmakers alike.

In the past the uaw renegotiated its contract with one of the big three, with the other two
usually falling into line with any agreements. In 2019 the renegotiation happened at gm,
which reached a deal with the union only after a six-week strike by 48,000 workers had cut
production by 300,000 vehicles, costing the company $3.6bn in net profit. Even though this
time the industrial action is affecting all three companies, it is more targeted. The three
factories affected so far together employ only 13,000 of the uaw’s 146,000 members who
work at the Detroit trio. As a result, reckons Evercore isi, a bank, only up to 20,000 vehicles
might be lost in the first week of the strike.

That could change if the talks do not move fast enough. The uaw has threatened to tighten
the screw considerably if no progress is made by September 22nd. In particular, extending
the strikes to factories making engines could result in 150,000 unmade vehicles a week,
because other plants that depend on powertrains are also forced to stop production.
Hitting the manufacture of lucrative pickups would inflict even more duress on the
companies. The union thinks it can afford to dig in, thanks to an $825m strike fund that
could pay $500 a week to all the uaw‘s big-three members for 11 weeks. It also has the
public on its side; two in three Americans tell pollsters they support unions, almost an all-
time high.

The uaw argues that American carmakers’ recent good fortune should be shared out more
evenly, pointing to record profits and ballooning bosses’ pay. The self-styled “audacious
and ambitious” set of demands from Shawn Fain, the uaw’s newish leader, includes a
cumulative pay rise of 36% over the next four years. Also on the wish list are a return of
more generous pension provisions and a rapid end to a scheme introduced in 2007 after
bail-outs induced by the financial crisis, whereby new workers are paid less than existing
employees.

The car giants have countered by offering a pay increase of around 20% and some other
concessions. They contend that meeting all the union’s demands would frustrate their
costly efforts to turn themselves from manufacturers of gas-guzzlers into software-
powered makers of electric vehicles (evs). Ford says that doing so would more than double
its labour costs. These, the firm adds, are already much higher than at Tesla, a non-
unionised ev pioneer, or at foreign-owned factories with similarly unorganised workforces.
And far from paying the “poverty wages” as Mr Fain claims, Ford says that its offer would
boost average annual pay and benefits from $112,000 to $133,000.

The carmakers are right to worry about rising costs. The uaw, for its part, may well see the
current moment as its last chance to stay relevant before more of the industry switches
to evs, which are less mechanically complicated and so less labour-intensive to make. This
is signalled by another of its demands—the right to strike over factory closures. Its
insistence on that suggests that in four years’ time the negotiations will not be so much
about money. Instead, they could be more like a rerun of 2019, when one of the main points
of contention was gm’s decision to close four plants—but on a much larger scale.
Business | Bartleby

Why it is a bad idea for managers to attempt

to engineer office friendships
Friends make employees more engaged. That’s no reason for
companies to get involved

image: paul blow

Sep 21st 2023
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Scholars of happiness have found that close relationships are one of the critical ingredients of a
contented life. What is true in general is also true of the workplace, according to research
by Gallup. The pollster finds that having a “best friend at work” is closely associated with all
manner of good things, from greater employee engagement to higher retention and better
safety records.

At some level, that is unremarkable. Spending time with people you like makes most things
more appealing, including work. If a job is sufficiently humdrum, camaraderie among
colleagues can be the main draw. The support of friends can also encourage people to try
new things. A study from 2015 by Erica Field of Duke University, and her co-authors,
looked at the impact of business training given to Indian women. Women who attended the
course with a friend were more likely to end up taking out loans than those who came
alone.

The reverse also applies. Antagonistic relationships with co-workers are always likely to
make working life miserable. A study conducted by Valerie Good of Grand Valley State
University found that loneliness has an adverse effect on the performance of salespeople.
Among other things, they start spending more on wining and dining their customers. The
only thing worse than a salesperson who sees you as a way to make money is one who
wants your company.

So friends matter. The problems come when managers see the words “higher employee
engagement” and leap to the conclusion that they should try to engineer work friendships.
In a report published last year Gallup gave the example of an unnamed organisation which
has a weekly companywide meeting that spotlights one employee’s best friend at work. It’s
not known if, in the q&a, others pop up to sob: “But I thought we were best friends at work.”

Startups also offer services to encourage work friendships. One monitors the depth of
connections between people in different teams. It identifies shared interests (gluten-free
baking, say, or workplace surveillance) between employees who don’t know each other and
arranges meetings between them. You thought life was bad? At least you are not making
crumpets with a stranger in finance.

It is a mistake for managers to wade into the business of friend-making, and not just
because it royally misses the point. The defining characteristic of friendship is that it is
voluntary. Employees are adults; they don’t need their managers to arrange play-dates.
And the workplace throws people together, often under testing conditions: friendships will
naturally follow.

The bigger problem is that workplace friendships are more double-edged than their
advocates allow. They can quickly become messy when power dynamics change. The
transition from friend to boss, or from friend to underling, is an inherently awkward one
(“This is your final warning. Fancy a pint?”).

And friendships have the potential to look a lot like cronyism. A clever study by Zoe Cullen
of Harvard Business School and Ricardo Perez-Truglia of University of California, Berkeley,
found that employees’ social interactions with their managers could give their career
prospects a boost relative to others.

The researchers looked at promotions of smokers and non-smokers who worked for a
large bank in South-East Asia, hypothesising that sharing smoking breaks with managers
who also indulged might give workers a leg up. And so it did. Smokers who moved from a
non-smoking boss to a puffer were promoted more quickly than those who moved to
another non-smoker. The authors found that social interactions did not just help smokers;
socialising between male managers and male employees played a large role in perpetuating
gender pay gaps. If firms are going to make friendship their business, they should worry
about its downsides, too.

Companies should facilitate interactions between employees, particularly in a world of

hybrid and remote working. Social gatherings and buddy systems are reasonable ways to
encourage colleagues to meet each other and to foster a culture. But a high-quality work
relationship does not require friendship. It requires respect for each other’s competence, a
level of trust and a desire to reach the same goal; it doesn’t need birthday cards and a
shared interest in quiltmaking. Firms should do what they can to encourage these kinds of
relationships. If individuals want to take it further, it’s entirely up to them.