When good times roll in...

Thursday, January 1, 2009

Strikes are a company’s worst nightmare. Look after your people in bad times & they’ll return the favour when the tide reverses


All the Saas Bhi Kabhi Bahu Thi addicts heaved a sigh of relief when on 19th November the industry workers called off their strike. Federation of Western Cine Employees (FWICE) had called for the strike demanding higher wages, better work conditions, and more. As a result, TV channels were forced to begin repeat telecasts of various shows. Of course, not everyone heaved a sigh of relief. Some wished that the strike would go on forever, as they had just about started sharing some family time. And then TV was back! Whatever the feelings – a strike is not one of the best things to happen. It hurts everyone – workers, company and customers. Yet, incidences of strikes and lockouts abound in corporate history.

Paradise Found, Paradise Lost

If there is one place where many dream of working, it’s in a Ferrari factory. It’s ‘Paradise Found’ for many when they get recruited by Ferrari. The ‘Great Place to Work Institute’ named Ferrari as the Best Place to work in Europe 2007. The company worked hard to win this accolade. It built the ‘Maranello Village’ and revitalised all facilities in and around the factory and spent close to €200 million. However, just because you spend your day at the ‘Maranello’ crafting F430s, 599s and your heart swells with pride as you hear the engines roar and watch the beauty come to life, doesn’t means all’s well. It was in 2007 itself (the year Ferrari was voted the best place to work in Europe), that Ferrari workers went on a strike! ‘Paradise Lost’ for the management probably! The reason for the strike was unusual. The workers felt unhappy with the fact that the quality of Ferraris was declining since Fiat was trying to make too many of them, and it was not possible to maintain the necessary quality standards. Of course, among other things, the workers also wanted higher bonuses. But this was a strike with a difference. It had a unique style. The workers would only strike on Saturdays and that too not all of them at one time! Their aim was not to disrupt production, but to just slow it down a bit and make the management see their point of view.

Even Japanese workers had a similar style. A strike in a Japanese shoe factory saw workers making shoes for the left foot only. They never stopped work, but only after the management understood their point of view and solved the problem did they start making the right foot shoe. The best part was that it was a win-win deal. No production hours or man-hours were lost and worker’s demands were fulfilled. However, strikes like these happen only when there is “passion” in workers; and when they take pride in the company they work for. It is only then that they strike not to hurt but to be heard!

It’s a ‘lose-lose’ option

Not all strikes are compassionate though. Most are destructive in nature and cause a lot of loss. Look at Boeing. It ended a scorching 58 day strike in November this year, causing a lot of delays, resulting in losses for the company. The 58 day machinists strike is not the first one that Boeing experienced. In fact, Boeing has been plagued with rocky labour relations. In 1948, workers went on a 140 day strike, again in 1995 for 69 days and in 2005 for 24 days. The most recent strike resulted in Boeing failing to deliver more than two dozen planes on schedule. According to analysts the strike might have cost the company a loss of $110 million a day. When strikes happen in such giant organisations, it not just causes a loss to the company but to the country as well. The Boeing strike harmed US exports too. The strike, which started on Sept. 6th, saw Boeing’s third quarter profits drop by 38 percent. Boeing is now seriously contemplating moving out of Seattle and settling in southern states where unions are weak and ‘right-to-work’ laws are not so rigid. Something similar happened in Detroit when a lot of automakers moved out due to troubled labour relations. And then again in India, when Tatas moved out of West Bengal. Not surprising then, that West Bengal has the highest amount of production related losses due to strikes. In 2006, India as a whole lost 13.75 million man-days and Rs.181 crore.

Dysfunctional unions have always created havoc in the past, as they are doing now. According to some, it’s the unions that have been responsible for the downfall of Detroit by increasing the cost of labour that has resulted in massive outsourcing and offshoring of jobs. With the global economy wilting under pangs of recession, strikes seem to be getting more rampant. In Germany, 8,000 workers participated in strikes at 17 companies. Germany’s largest union IG Metall launched a series of coordinated strikes – fighting for wage increase. Similarly in 2007 a wave of unprecedented strikes swept Egypt. The ‘shut off’ button was pressed for the first time in 50 years at the Shebin–Al-Kom Spinning Weaving Company (SSWC) just before the company changed ownership and became the property of the Indian company, Indo Rama.

In all the above cases, the workers never once felt that they were wrong. In Egypt, the workers went on strike after 50 years because they were loyal, good and committed people who were wronged. In Germany, the union IG Metall said its wage hike was justified because the company’s profits increased 220 percent between 2004 and 2007, while wages effectively increased by only 8.7 percent. Workers at Boeing felt they had made Boeing the company it is today and had every right to be a part of its future. They simply wanted their share of the extraordinary success that this company had achieved over the past several years. The moral of the story seems to be – share your success fairly with the workers and during failure, chances are they will stand by you. When workers are wronged they go to any extent. When 35,000 workers at nearly a dozen textile, cement and poultry farms in Egypt went on strike, people were confused. For this was a nation where strikes were illegal and even the smallest public protest is squelched with police truncheons.

Modern Day Strikes

In the past, strikes had always been bloody and scary. One of the bloodiest strikes in Australian history was nick- named the “Battle of Rothbury” when on a cold December day in 1930, police opened fire on locked-out miners at the Rothbury colliery. A 15-year-old boy survived and this witness of the bloodiest event in national industrial history penned down his thoughts at the age of 92 in a book called Lockout. He gave a detailed account of the conflict and the betrayal felt by workers.

Today, memberships of unions are falling. The economic downturn has reduced the bargaining power of many unions. Yet, workers are becoming smart and finding innovative, effective and quick ways to get their rights.

When some members were fired by the Toronto postal station the workers were angry. Instead of striking, they decided to lock-out their boss. After a lot of TV news coverage, the firings were eventually stopped for some time and the boss removed to another position.

Teachers in New York joined hands with the organisation Living Wage Coalition (LWC) and organised a large number of public events – rallies, marches, vigils, et al, where teachers got a chance to describe their problems at work. After 18 months of community pressure, the teachers won raises of nearly 50%.

In San Francisco, companies guarantee deliveries in under an hour. This urgent-delivery market also has strikes, which last for a few hours. The San Francisco Bike Messenger Association (SFBMA) just makes members park their bikes for a few hours until their demands are met! In 1995, Oregon’s farmworker union used rolling strikes to increase their wages by 20%.

Just before the strawberry season began, they started to publicise about the upcoming strike. To prevent loss of crop and money, some growers raised the wages before the strike started. The State saw its first wage gain in a decade. If employers are smart, then workers are getting smarter and more intelligent. There is no solution to strikes – it’s only prevention. Managers need to understand that suppressed complaints are like a volcano. Don’t wait for it to erupt, it could be too late. When asked how to handle strikes, Professor Hadley said that CEOs should not train people to become “leaders of money” rather “leaders of men.” The bottom line: There is indeed no short cut to avoiding strikes. If your employees feel that they are well taken care of, they will take care of you too. In case of strikes, the old adage rings true: “Prevention is better than cure.” Especially during these tough times – be just and fair to your people during the downturn and they will repay you with their blood, sweat and loyalty, allowing you to reap rewards when good times roll in.