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Rainville, Don

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Federal Publications Key Workplace Documents 
August 1994 
Statement of Don Rainville on Behalf of the National Association 
of Manufacturers Before the Commission on the Future of 
Worker-Management Relations 
Don Rainville 
Universal Dynamics Corporation 
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Statement of Don Rainville on Behalf of the National Association of 
Manufacturers Before the Commission on the Future of Worker-Management 
Relations 
Comments 
Suggested Citation 
Rainville, D. (1994). Statement of Don Rainville on behalf of the National Association of Manufacturers 
before the Commission on the Future of Worker-Management Relations. Retrieved [insert date], from 
Cornell University, School of Industrial and Labor Relations site: http://digitalcommons.ilr.cornell.edu/
key_workplace/372/ 
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MARTIN P. CATHERWOOD LIBRARY 
NEW YORK STATE SCHOOL 
INDUSTRIAL A N O U P R RELATIONS 
Cornell University 
Statement 
of 
Don Rainville 
Universal Dynamics Corporation 
on behalf of 
The National Association of Manufacturers 
before the 
Commission on the Future of 
Worker-Management Relations 
August 10,1994 
1 Pennsylvania Avenue. NW, Suite 1500-North Tower. Washington, DC 20004-1 
1202) 637-3000 • Fax (202) 637-3182 
f 
Testimony of Don Rainville 
President, Universal Dynamics Inc. 
August 10, 1994 
Introduction 
My name is Don Rainville, and I'm the president of Universal Dynamics Inc., located 
in Woodbridge, Virginia. We design, manufacture and market machinery and software for the 
plastics industry. Our main products are dehumidifiers used to temper the plastic pellets that 
go into every plastic product you see today. 
I am also a member of the National Association of Manufacturers' Board of Directors 
and its Employee Relations Committee. The NAM is a voluntary business association of more 
than 12,000 member companies and subsidiaries, large and smalt, located in every state. 
Members range in size from the very large to the more than 8,000 small manufacturing firms, 
each with fewer than 500 employees. NAM members employ 85 percent of all workers in 
manufacturing and produce more than 80 percent of the nation's manufactured goods. The 
NAM is affiliated with an additional 158,000 businesses through its Associations Council and 
the National Industrial Council. 
Rosemary Collyer, Chester McCammon and myself are joined with representatives of the 
Labor Policy Association whose testimony we support, particularly as it expresses preference 
for administratively revising a hostile or outdated interpretation of Section 8(a)(2) of the National 
Labor Relations Act by the National Labor Relations Board. 
Employee Involvement at Universal Dynamics 
When I joined Universal Dynamics in 1980, it had just 40 employees, a high turnover 
rate and modest profits. Now, with 205 workers, we're the largest industrial employer in Prince 
William County, and we're still growing. We've drastically reduced turnover to the point that 
even though some workers leave for higher wages or more responsibility elsewhere, as will 
happen with any firm, they often come back to us later on. 
This spring, the German firm of Mann & Hummel agreed to buy us out for the price of 
$13.2 million, more than 30 times earnings ~ a pretty high price for a manufacturing company. 
We will finalize the sale this summer. I'll be staying on as president for at least five years. 
This sounds like a Cinderella story, and in a way it is. Only instead of a glass slipper, 
the transformation is due to a lot of hard work, a committed workforce and a workplace 
philosophy that emphasizes trust between employees and management, cooperation, continuous 
change and continuous learning. 
A key part of our workplace operations is what has come to be known as employee 
involvement. At our workplace, employees take part in nearly all workplace decisions and also 
initiate changes in procedures right from the floor. We all work together on everything, and, 
as I've just demonstrated, we get results. 
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Yet I've found that outside our company, there's a real lack of understanding about 
employee involvement and its role in management. People think it's the latest gimmick, or that 
it simply involves meetings once a month to allow workers to vent steam and keep them happy. 
Of course, neither of these is true. 
To understand employee involvement, it may be helpful to talk first about what it is not. 
Specifically, employee involvement is not something that exists in isolation in a plant. It's not 
like buying a new accessory for your car - a radio, say. You don't just slip it in and turn it on 
with the flick of a switch. 
Also, employee involvement is not something that can be legislated, like a tax increase. 
Employee involvement is based on human intangibles like trust and self-motivation. You cannot 
direct someone to trust their employers, or trust their workers. It's like ordering a man to love 
his wife. 
It's not about calling meetings once a month, and then doing whatever employees tell you 
to do - or taking their suggestions down, for show, and then ignoring them. 
Here is what employee involvement is. Employee involvement is part of an overall 
management program. It must be integrated with all the other programs operated in a 
workplace, including quality control, training and education. And conversely, other programs 
are an integral part of employee involvement. 
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Employee involvement is an attitude. It's a relationship. It's a process that has to 
evolve. It's based on trust. You can't say, "You will now trust your employers and your 
employees." It requires time, plus caring and sharing, and an ability to "go with the flow" 
whenever the flow will lead to improved procedures or a better working atmosphere. 
And frankly, it works so well, we wish we could keep it a secret so our competitors 
didn't hear about it. But since many kinds of workplaces could benefit from employee 
involvement, we think it's important to spread the word. Education and encouragement are the 
way to induce more employers to institute employee involvement practices at their plants. 
It might help to tell you how we got into employee involvement (EI) and all our related 
programs, and then to tell you how EI works at our plant. 
• 
Before I became president, Universal Dynamics had a traditional management style with 
an aggressive manager who was more dictatorial than most. Upon becoming president, I 
resolved I was not going to run a company where people don't like working, so I called in a 
couple of consultants. They came up with an EI program with employee groups and a steering 
committee that met as required. The program has evolved since then, although the basic 
structure still exists. 
The workers at Universal are now deployed in teams, and everybody builds machines — 
even the supervisors/team leaders. We have no middle managers. Everyone including the floor 
sweepers is educated to speak up on issues of quality, production and quality of life in the 
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T 
workplace. When the floor sweeper says, "Why am I sweeping away screws? Why did you buy 
five when you should have bought three?" We all go to the bank. And our floor sweepers have 
done things like that! 
The employee groups are constantly changing depending on what's going on at the plant. 
But the rule is: anyone can bring up anything for discussion, and the issue will be discussed. 
We have never turned down any request — every one is considered. 
We also have something we call the green sheet program to insure quality right from the 
floor. The name is sort of a misnomer ~ we actually use three color-coded sheets to categorize 
problems as delays, quality-control-related, or engineering-related. 
v 
But the procedure is the same. A worker who spots a problem or who has an idea to 
improve procedures can fill out a sheet. If a standard that would apply to the problem doesn't 
exist, the worker can suggest one. The sheet then goes to a manager. If the manager doesn't 
accept the recommendation, the worker is given an explanation -- but is never reprimanded. 
We have a big recognition program, and we give out awards. The green sheets get 
graded. The worker who turns in the highest number of points for green sheets gets $50. 
We've been doing it for three years, and I still get a hundred green sheets a month. And I have 
to say that I'm glad! It shows the workers are still involved, still thinking about their work, and 
that as manufacturing and market conditions change, we're keeping up with them. 
We accept good workers who don't want to be involved with the program, however. We 
respect people who just don't want to be decision-makers. They do a great job, too. 
The other important thing is: We have no secrets. We tell the workers practically 
everything - right down to the last nickel we made during the quarter just past. This is not 
standard at many plants, I realize. In fact, our own past president and general manager once 
said, "You can't tell them that we made $65,000 in a quarter. They can't relate to that. They 
make $5.00 an hour." 
I said, "Of course they can relate to that. They can relate to anything if you give them 
the whole story instead of just part of the story." 
So from that day on, we started publishing all our financial figures monthly for the 
employees. How much money I make they have known all along, since the company is publicly 
held. We have a company meeting every four weeks and we go over all the numbers with the 
employees, down to how much we throw away in scrap. We have a bonus plan for the 
employees. We keep them informed about performance throughout the year, and the bonuses 
are tied to profits. 
Here's one example about how the involvement process works. In one of our divisions 
last year, we had to cut expenses. I said we had to lay people off. But the vice president of 
the company came back and said, "We have decided that we would like you to lower all Of OUT 
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salaries by 15 percent, including mine." Which we did. We also let one part-time worker go. 
He has since been rehired full time. That is the kind of relationship we have. 
Here's another. If there was a law saying you had to do whatever your group said, I 
have no doubt the first hundred-degree day they would all vote for air conditioning, at any cost. 
Under a properly running EI system, they would say, "You know, it's really hot. Maybe we 
need air conditioning. Let's get all the facts." And then they'd find out, "Well, gee, we have 
to pay $500,000 for the equipment. Then we have to pay so much money a month! And we 
have to pay for that equipment even in the wintertime, when we're not running it." 
Well, we all know that we get paid out of the excess money that's left after we pay for 
everything else. That's $500,000 less that we can get paid. And it does get cooler in the fall. 
I have no doubt Ihal group would never vote for air conditioning. That group might instead vote 
to insulate the building better. Or get more fans, as we did, along with improved ventilation. 
Employee involvement works because it is mutually balanced by both management and 
the workers' desire to succeed and prosper. I have no doubt in my mind that people will behave 
responsibly if you give them the information they need to make decisions. 
Responses to Questions on Employee Involvement 
The Fact-Finding Report of the Commission on the Future of Worker-Management 
Relations has developed a set of questions about employee involvement, and I would like to 
address these. 
o The first question asks: "How can the level of trust and quality of relationships 
among workers, labor leaders, managers and other groups in society and 
workplace be enhanced?" 
It's simple. Tell the facts. It's simple, yet it's so hard for both sides in a normal 
relationship to do, and disclose information. 
What we find is that we can tell employees anything and if you give them aU the 
information, they can understand it. If you pick what they can have and what they can't have, 
that's when you get into problems. They find out the truth, and they resent very much that you 
haven't told them. 
V 
0 The second question asks: "Whether there is a deep, unrealized interest in 
participation in the American work force? And if so, what keeps these employees 
from taking initiative on these matters?" 
1 would say, yes, there is great unrealized interest out there in employee involvement. 
But the adversarial relationship that exists between labor and management in so many 
organizations is very deep. It takes management to bring that out and take the initiative. It's 
not something that will come out on its own, and you can't legislate it away. It's up to 
management to serve as coach in the process of converting to employee involvement. 
o Question three asks: "Should employees have some voice in initiating employee 
participation and, if so, how should this be done?" 
The answer to this one is simple, too. Employees have to be able to initiate things, or 
you don't have an employee involvement program. How you do it will depend on each 
individual firm, but there is advice available via consultants, associations and business 
organizations. 
o Question four asks: "Should employees have some voice in determining whether, 
once started, a given employee participation process should be continued, changed 
or terminated." And again, if so, how might this be done? 
v. 
If you have an employee involvement program, where people are making decisions, they 
clearly have the decision whether to continue it or not. If a program isn't working and 
management changes it, fine. If management comes in and changes a program that is. working, 
then the managers get what they deserve. 
o Question five asks: "How serious are economic obstacles, such as downsizing 
pressures for short-term results, high start-up costs and lack of understanding in 
the investment community? What if anything, can be done to address these 
issues?" 
There are virtually no start-up costs to an employee involvement program. You could 
say I paid a consultant $8,000 to come in here and set up employee involvement groups, but our 
increase in efficiency was so fast and our improvement in morale was instant, that over time the 
cost balanced out. We always have training anyway in areas such as supervision, how to get 
along with people, total quality and so forth. It takes time. But it saves money inversely to 
what it costs. If I spend $10 on employee involvement, I save $100. And as for downsizing, 
at our shop, if we eliminate one job, we end up creating two others because we're expanding. 
I think word has to be spread that instead of costing more, employee involvement saves money 
in the long run. 
o Question six asks: "How should the legal uncertainties and limits on employee 
participation and labor-management cooperation be addressed without 
discouraging workplace innovations that enhance the competitiveness of the 
modern workplace and without risking return to the conditions that motivated 
passage of these protections?" 
These are two separate issues. One is interpreting the laws so we can legally do what 
we're doing. This is entirely separate from the other issue that this questions raises, i.e., "Do 
we need additional laws to control abuses that may result from this type of a program?" 
Our position on the first one is obvious. Yes, we believe laws should be made more 
permissive to employee initiation of programs such as employee involvement. As for the second 
issue, if a need develops and people need protection, I'd be the first one to vote for it. Our 
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philosophy about government legislation is: Get out of our way and don't do anything until you th 
know you have a reason. Flexibility and performance should be the objectives. ir 
o Question seven asks: "What, if any, government strategies can assist the 
diffusion of employee participation and labor/management cooperation?" 
As I stated earlier, the government doesn't belong here. This is business. It will be 
driven by competition. The government is interfering with my business if it speeds up the 
advancement of my competitors to accept employee involvement. Now, if my competitors learn 
that because I've beaten their pants off that maybe feey ought to do it, that's fair. However, the 
government could safely get the word out that it's working, or encourage it. 
V 
As the Commission stated, the question in respect to legal policy is whether, and if so, 
how, the National I^bor Relations Act should be revised or interpreted to permit nonunion firms 
to develop employee participation plans that have been challenged under Section 8(a)(2) of the 
Act. 
One suggestion is self-managed production teams, particularly if a team addresses not 
only efficiency and product quality but also workplace safety and other matters of direct concern 
to employees. We are in favor of such teams. 
Another is to institute in-house dispute resolution procedures in which employees may 
participate. We don't have disputes at Universal Dynamics. But we have rules, and procedures 
-11-
that are followed if any of these are broken. And yes, we are in favor of employee participation 
in development of these procedures. 
• 
We are not in favor of joint quality of life committees, in which some of the members 
are employees selected by management, and others are selected by employees, simply because 
we don't have permanent, standing committees. Any kind of committees I have six months from 
now I don't have today. You can't legislate something that's permanent. The whole idea of a 
good, working employee involvement system is that it changes to the needs of the organization. 
We are absolutely in favor of no longer limiting the freedom of non-union employers to 
establish procedures by which its employees will deal with (as opposed to collectively bargain 
about) conditions of employment. The law should be interpreted to allow^such. 
The Commission has suggested that further understanding is needed of the barriers to 
starting or sustaining employee participation. The four factors the Commission says appear to 
be important are insufficient trust, inability of employees to initiate participation, economic 
pressures on employers and government policies and legal issues. 
That's an accurate statement for the most part. However, I don't relate to the part about 
"economic pressures." I think companies have to encourage employee participation because of 
economic pressures. 
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In conclusion, I have this to say. Employee involvement, when properly running, works. 
And more and more workplaces are beginning to realize this. I'm certain something momentous 
is happening in U.S. companies. I don't think there's any comparison to what's ever happened 
before. I think it's something new, different from anything I've ever heard of happening before. 
Let's hope, for the future of U.S. business and manufacturing, that it continues. 
•13-


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