This paper presents a review of the pathbreaking partnership between management and labor union, specifically the unprecedented advances in labor-management cooperation. The central focus of this paper deals with the success of the Saturn car company. However, the paper will also include a detailed discussion of the partnership between General Motors Corporation and the United Auto Workers union, and their struggles and accomplishments along the way.
The American automobile industry is undergoing a transition of immense proportions. This process of change has not been easy, and it is certainly not over. Few organizations in American industry have had the long-term success that General Motors enjoyed. Until much of the 1970s, GM was the industry's low-cost producer because of its economies of scale. With nearly 60 percent of the car market, its most challenging problems seemed to revolve around concerns that the Justice Department would try and break up GM because of its dominant position and market share.
But, in the 1970s, two energy crises, important new government regulations, and significant sales gains by the Japanese were followed by real and far more substantive challenges in the 1980s. During the 1980s, GM tried to capitalize on the weakness of its U.S. competitors, Ford and Chrysler, with unprecedented investments in new products, facilities and advanced technology. However, the path that was charted for GM almost brought the corporation to its knees in the early 1990s. The prevailing view inside of GM was that money and power could solve problems, which was in sharp contrast to the Toyota philosophy, which focuses on solving problems with technology that is cheaply and easily available before spending money on new high-tech equipment.
But perhaps the greatest problem within GM was its lack of urgency, largely as a result of managers perceiving the organization as infallible. While this was not always th...