Management and Labor Unions

Topics: Trade union, General Motors, Ford Motor Company Pages: 23 (8329 words) Published: February 13, 2011


The purpose of this case study is to examine three different industries which are the Automotive, Hotel, and Airline and their relationships between upper management and labor unions. The six companies that were examined are Ford and General Motors, JW Marriot and Hilton Hotels Corporation, and Southwest and Delta Airlines. The history of unions and management will be examined and explained. The study will attempt to explain how three companies have managed to have a successful relationship with their unions, and how the other three have managed to repeatedly failed in their attempt to find a peaceful middle ground.

How are Some Companies able to survive the Demands of Labor Unions and Management… While Others, after Years of Battle Crumble? The recession of late 2007 has affected every aspect of life in America. Over the past three years, the Automotive, Airline, and Hospitality industries have all adversely suffered due negative economic conditions. One common thread that they share is a constant struggle between management and labor unions. Some companies manage to put their differences between executive and union leadership aside in order to work together for the common good of the company. On the contrary, other companies in the same industries cannot seem to make their relationship work. In order to understand why this phenomenon happens, one must examine the positive actions of some companies, such as Ford Motor Corporation (Ford), JW Marriot, and Southwest Airlines. What measures do these companies take to avoid having to accept government bailouts or declare bankruptcy? In comparison, other companies like General Motors (GM), Hilton Corporation, and Delta have dealt with strikes, multiple declarations of bankruptcy actions, and need of financial assistance through federal bailouts. How are some companies able to survive the demands of labor unions and management…while others, after years of battle, crumble? The history and comparison of all six companies may provide some insight into how each business has accomplished or failed over the years. Not all businesses function alike. In all three industries, there exist examples of both substantial successes and massive failures in the relationships between senior management and labor unions. For example, a good evaluation of different companies in the Automotive Industry would be a contrast analysis of Ford and GM. What did Ford do that GM did not? The history between upper managerial and union representatives in both companies may be the answer. The General Motors Corporation was founded September 16, 1908. The company began as a holding company for Buick whose CEO was William Durant. Over the next several years, Mr. Durant managed to acquire Pontiac, Cadillac, Cartercar, Ewing, Reliance Motor Truck Company, and Rapid Motor Vehicle Company; bringing them all under one name, General Motors (GM). GM has had an economically lucrative history. However, the company has also had its share of financial woes. Over the last several decades, GM management teams made several concessions to its union members to avoid strikes. One such act was the implementation of an additional attachment charge of $1600.00 per vehicle to help pay for retiree health and pension benefits (Welch, Beucke, Kerwin, Arndt, Hindo, Thornton, Kiley, and Rowley, 2005). Managers initially viewed this action as a temporary solution for an immediate problem. Unfortunately a questionable management decisions, like the $1600.00 charge per vehicle, caused GM to lose money on a continuous base for the past 40 years. Moreover, the company has not been able to pull itself out of its downward spiral. Presently, GM is at a contractual stand still. Because of its union contracts, they cannot close any plants or lay off workers without...
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