Capitalists against Markets: The Making of Labor Markets and Welfare States in the United States and Sweden

By Peter A. Swenson | Go to book overview

2
SOLIDARITY, SEGMENTATION,
AND MARKETCONTROL

In conversations with managementexpert Peter Drucker, during Drucker's time at GeneralMotors in the 1940s and 1950s, GM President Charles E. Wilsononce made a peculiar and extravagant boast. Wilson claimed, as Drucker recalled, “We have the union relations I designed… and they are right for our industry and ourunion. ”

We losefewer days to strikes than any other major company in this country or in any other unionized country. We have greater continuity ofunion leadership. And both the union and we get the things thecountry, the company, and the union need: high discipline, high productivity, high wages, and high employment security. Aunion is a political organization and needs adversary relations and victorious battles. And a company is an economic organization and needs productivity and discipline. At GM we getboth— and to get both we need the union relations wehave. 1

To illustrate unions' need for adversary relations andvictorious battles, Wilson pointed to circumstances leadingup to the company's collectively bargained Supplementary Unemployment Benefits (SUB). GM began paying these benefits in1955 to complement the limited unemployment support provided bytwenty-year-old New Deal legislation. The plan for the company welfare scheme was, Wilson said, worked out under his and boardchairman Alfred Sloan's watch, not by the United Auto Workers (UAW). Instead, the union had long called for a “guaranteed annual wage” connected to work sharingduring production downturns. GM had formulated its SUB scheme, probably early in 1947, as a good place to put some of the autoindustry's increased earnings instead of wages. 2

Intrigued, Drucker asked Wilson when he planned to introduce the SUB scheme. Wilson responded, “I am never going to put it intoeffect…. I grudgingly yield to a union demand for it when I have to. ” The reason: the union

-17-

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