Learning from Saturn: Possibilities for Corporate Governance and Employee Relations (review)

With the 1983 announcement by UAW and GM of the formation of "A Different Kind of Company and A Different Kind of Car," the most radical and perhaps most controversial experiment in labor/management relations in the US was launched. Saul Rubinstein and Thomas Kochan chronicle and analyze the Saturn story in a clear, concise, jargon- free and engaging manner. The authors have been studying Saturn for a number of years and have had access to all levels of management, union leadership and the rank and file. Indeed, in one of the most interesting sections of the book, they share the voices of workers gathered from extensive surveys, interviews, and focus groups to describe attitudes towards the partnership and the union.

Kochan and Rubinstein attempt to answer the question of whether Saturn has been successful and why, while at the same time seeking to broaden the definition of success to encompass more than the traditional measurement of profitability and return to shareholders. They argue that along with co-management by the union, the most radical aspect of Saturn is that it is a "stakeholder company," where success rests on the achievement of the objectives of multiple stakeholders, including the union and its members, customers, dealers, and suppliers. Satisfying these multiple objectives has sometimes affected otherwise sacrosanct goals of American industry. For example, during the slack times of 1997-98, productivity fell, partly due to the negotiated no lay-off policy.

The authors examine the labor-management participation structure, the internal union structure developed by the union to deal strategically with the partnership, the conflicts between the international UAW and the local union, and the internal politics of the local. They raise the issue of the role of union leadership and democracy in partnerships and argue that "[l]abor representatives need the knowledge and skills to add value in making and implementing strategic and operational decisions. They need to be willing to be held accountable for decisions reached on a shared basis. At the same time, they must balance their roles as partners with managers with their roles as democratically elected leaders with defined constituencies and independent resources and power."

For those critical of labor/management partnerships, the book can be frustrating because it raises many red flags and more questions than it answers. Still, I would recommend this book to anyone interested in new work systems, workplace democracy, or the role of unions in the economy.

Saturn is a unique experiment that may not be repeated and whose future is far from certain. However, it is useful to examine the extent to which unions and rank and file members can co-manage, and the impact this approach has on a firm's performance, on the union as a representative, and on the union as an institution fulfilling its goals of increasing membership and raising the standard of living and quality of life of all its members.