Honda or Jeep?

The following excerpts from an article in Forbes discuss the labor relations climate at two different auto plants. One epitomes the high-conflict employer, the other provides an excellent example of the low-conflict employer. Note how both the union and management in the high-conflict firm view the employment relationship as a zero-sum game, and how in the end both sides lose.


For one factory, these are the best of times. The plant is happy, hiring and turning out a product of remarkable and consistent quality.

For the other factory, it is quite a different story. While the plant’s product, a natural in today segmented auto market, is selling briskly, its habits and hardware are old, morale is sagging and management threatens to close the place maybe by the end of this year if the union doesn’t make concessions.

This two different worlds are in fact a mere hundred miles apart. One, the Honda of America plant of Marysville, Ohio, stretches across a rural landscape of grass and wood lands 30 miles, north of Columbus. The other, the Jeep division of Chrysler., lies two hours by car farther north in Toledo, the very geographic center of the Great Lakes industrial belt. The factory outwards appearance has not changed much since it cranked out Jeeps during World War II, and it remains an enormous, inner-city like industrial warren of old buildings and parking lots. Honda and Jeep have one thing in common: output. Each working day Honda turns out 875 four wheel passenger vehicles powered by internal combustion engines, Jeep produces 750 of the machines. Beyond that similarities end. Honda produces its vehicles in 1.7 million square feet of tightly organized floor space, while Jeep fills more than three times that amount. Honda needs 2,434 autoworkers to produce its cars. Jeep requires slightly more than twice that number.

Some of the difference is attributable to American car manufacturer’s habit of offering so many options. Much of Hondas shop floor equipment is also newer and more sophisticated than Jeep’s. At both Honda and Jeep, relative levels of investment are not only a question of available capital however but perhaps even more important of the attitudes of the workers themselves.

At Jeep a management is frustrated by union intransigence regards such investment skeptically. After all, why continue to upgrade a plant if union work rules frustrate cost savings?

But past Chrysler managements have not covered themselves with glory. It was they, after all who permitted labor relations to get as bad as they did. A member of that management told us: ‘The union merely exists to protect guys who try to screw the company.’ Even if that is true the statement betrays an attitude that bodes ill for employee morale.

Last year tension built to the point where a group of shop floor workers abruptly began sabotaging the assembly line, bashing Jeeps with welding tools. The line was intermittently shut down during the week that followed, costing more than $1 million in lost wages.

By contrast, at Honda workers are persuaded that automation will not eliminate jobs but improve quality control, with the result that workers see it as an investment in their own job security. Thus many new automation ideas at Honda came right from factory floor.

With management and labor so tightly knit at Honda, the United Auto Workers hasn’t been able even to come close to getting its foot in the factory door, despite continued efforts. What bonds the company together and helps generate its growth is a kind of corporate chemistry - an environment that encourages both labor and management at the firm to regard themselves collectively as ‘us’ rather than as ‘us versus them.’

Results? Honda’s shareholders have seen their stock rise 220 percent in the last 3 years. In the same period starting wages on the factory floor have risen 78 percent, not counting bonuses. And Honda is still building, still hiring.

At Jeep, management has failed to improve a bad situation, which is growing worse with each passing month. As for the union, charged with protecting its members jobs, it is actually doing the opposite, leaving the management no choice but move production elsewhere. Now you as a member, if you were to chose between Honda and Jeep what would be your preference? TWU Local 100 which model does emulate Honda or Jeep?