The confrontational management-labor negotiations that led to the failure of the United States motor vehicle companies and why the Japanese and Germans prevailed

Abstract

The success of the US motor vehicle companies up to 1955 and their subsequent decline is directly related to the management-labor negotiations in the 1930s and the acceptance by both management and the mass union movement of the inherent nature of work in an assembly-line factory. Because the conditions of employment on the assembly line became less and less bearable over time, the negotiations became confrontational ones in which each side tried to get as much as possible from the other in a ?win-lose? setting. This ongoing confrontation let to the continuously escalating labor costs within the US motor vehicle companies that ultimately led to their decline. Unlike the case of Japanese or European companies, the US companies never had a ?win-win? proposal on the table. To understand how this happened, we will first describe how, on three occasions, the motor vehicle industry has changed the most fundamental ideas on how to manufacture things and, what is more important, how humans work together to create value.US motor vehicle companies decline, mass production system, lean production system, reflective production system, confrontational management-labor negotiations