The story of labor relations at the Ford Motor Company mirrors that of labor relations in American in general. The phenomenal rise of the automobile industry in the early part of the twentieth century did more to frame the concept of the labor union in America than any other single industry. As a result, Ford Motor’s success or failure has always depended in large part on how the company has handled labor relations. Following the tumultuous period of upheaval faced by the big three American automakers during the 1970s and 1980s, it was Ford that succeeded most by radically retooling the manner in which it handled disputes between management and employees. Ford Motor Company’s success in dealing with the various issues that have threatened the company has stemmed in large part from its ability to maintain efficient labor relations, but it remains to be seen whether Ford will be able to reproduce that success as it faces new challenges that are putting its work force at perhaps the greatest risk in the company’s long history.
Labor unions have held a large stake in the way that Ford Motor has run its business. Interestingly, company founder Henry Ford was defiantly anti-union despite being revolutionary in his dealings with labor by instituting a forty hour work week and doubling the minimum wage. Although attacked by competitors as sheer madness, the old Nazi was progressive enough to realize that hoardy adage abvout happy workers being hard workers wasn’t just empty words. In effect, then, although Henry Ford would struggle against putting a measure of power into the hands of workers through unionizing, his decisions set the stage for Ford’s historical growth through developing labor relationships. Despite Henry Ford’s best efforts, the United Auto Workers (UAW) was successful in organizing Ford’s employees in 1941. As is the case with all unions, this development resulted in both positive and negative effects on both the company itself and its workers. With the introduction of the UAW came about the breakdown in the old paternalistic structure of Ford Motor. The unleashed power and authority that management had over hourly employees became significantly curtailed, and wage-earners now had access to a process for filing grievances and demanding codified rules for layoff procedures. At the same time, however, a new bureaucratic system was introduced that often was meted by union leaders as a method for controlling and dominating the rank and file. Ford Motor itself has benefited from unionization for the exact same reason it benefited when Henry Ford increased worker wages; a contented worker is a loyal worker. Unfortunately, Ford Motor’s employees have not always been content and the company has also had to deal with labor disputes over the course of its history.
The legacy of Henry Ford has continued through the decades in the form of diversity among Ford’s employees. Once again, Henry Ford displayed a revolutionary vision that was looked upon with doubt by other corporate barons when he not only hired African-Americans but actually paid them the same wages as white workers, effectively creating a middle-class black community that had never existed in Middle America before. Despite the fact that Henry Ford was acting out of business interests rather than engaging in progressively liberal socio-politics, there can be no denying that Ford Motor has consistently been a leader in the area of diversity. This leadership is still prevalent today and extends beyond the workforce to include distribution and supply channels. Former CEO Jacques Nasser clearly was following in Henry Ford’s footsteps of applying progressive social programs to further purely capitalistic motives when he boasted that “The inclusion of minority suppliers in our supply base contributes to long-term economic, political and social stability of our industry by including important diverse customers in its economic activity.” As with any industrial behemoth, social concerns apply at Ford Motor only as far as they don’t inhibit economic growth.
Ford Motor’s track record with less powerful minority forces remains mixed, but contains the hint of promise that many gays and lesbians find encouraging. Allan Gilmour had been twice denied promotion to the top position at Ford Motor and rumors swirled that the conscious oversight may have been related to Gilmour’s alleged homosexuality. Upon his retirement, Gilmour openly acknowledged that he was gay, making it all the more surprising that six years after he retired from Ford he returned to the company, in the process becoming not only the highest ranking openly gay executive in any Fortune 100 company, but also becoming a symbol of hope for gay employees everywhere who hope that Gilmour will be set the precedent that removes the fear of discrimination from homosexuals hoping to climb the corporate ladder.
The new millennium and the globalization of the economy have presented new challenges to Ford’s success in dealing with problems of 80’s and 90s. Globalization is a buzzword, of course, but what it really means is so complex that it defies easy answers. In the case of Ford Motor the challenges of globalization range from maintaining competitiveness with foreign markets to fluctuations in the price of oil as a result of geopolitical instability in the Middle East. Like other American automakers, Ford staked a huge claim on the skyrocketing success of the SUV market, but when gasoline prices topped the $3.00 mark and all indications pointed to very little possibility of gasoline prices heading downward for any significant amount of time the company took a hard hit on both its SUV and light truck line of vehicles. In addition, Ford has lagged far behind its foreign competitors-notably Japan–in controlling both wages and design costs. As a result, the company was forced to announce a drastic restructuring plan in 2006 that will include the eventual closing of fourteen plants across North America and layoffs totaling between 25,000 and 30,000 jobs. These steps come as a result of a precipitous drop in Ford’s share of the US market, which has seen it to drop to historically low levels over the past ten years. These massive layoffs also come directly on top of 35,000 job cuts just four years ago. The UAW responded to this obviously shattering news with promises to their rank and file that they would work hard during upcoming contract negotiations to retain certain worker rights that Ford is seeking to reduce or renegotiate. CEO Bill Ford has indicated a desire to offset the devastation of these announced layoffs by offering buyout and transfer programs that may mitigate the actual number of people standing to lose their jobs. Ford Motor finds itself in the position of scrambling to deal with labor relations once again.
From its founding by its titular namesake Ford Motor has consistently dealt with a variety of issues threatening it economic success by focusing on employee relations. Ford built itself on diversity within the workplace and a commitment to keeping its workers satisfied as a means toward maintaining profitability. It remains to be seen if that course will continue.