The Bottom Line

The training game

Deirdre McMurdy August 26 1996
The Bottom Line

The training game

Deirdre McMurdy August 26 1996

The training game

Deirdre McMurdy

The Bottom Line

From the outset, the strike at Boeing of Canada’s Winnipeg parts plant had a nasty tone. Within hours of walking off the job on July 11, members of the Canadian Auto Workers union clashed violently with police. Hostility on both sides escalated. Labor and management met just long enough for workers to reject Boeing’s contract offer. The company soon shipped production and equipment out of Winnipeg to avoid supply disruptions. Last week, its repeated threats to leave town—taking with it about a thousand jobs—finally compelled Manitoba to appoint a conciliator and force a settlement.

Although various theories were floated about hidden agendas on both sides,

CAW officials voiced just two beefs with Boeing: training and pension benefits. They wanted the company to pay for the training and upgrading of its existing workers, rather than hiring new ones. They also wanted an improved pension plan. Boeing strenuously resisted both demands. And three levels of government eventually ponied up the funds for retraining.

This strike turned out to be an especially resonant one. The ill feelings and entrenched positions on both sides epitomized the sour state of labor relations these days. Workers, feeling insecure about their jobs and edgy about the future of the Canada Pension Plan, are further aggrieved by record corporate profits and fat executive pay packets. Job security is the top demand on every union agenda—including the testy negotiations between the CAW and the automakers. Increasingly, employees want the private sector to compensate them in areas where they fear the government safety net is fraying.

Management, on the other hand, feels acute pressure from global competition— as well as from investors—to cut costs and play hardball at every opportunity. Unemployment rates hovering around 10 per cent automatically give companies the upper hand. And it’s become axiomatic that when a firm cuts staff or appoints a kickass chief executive, its share price soars.

Private-sector employers have to take more responsibility for the quality of the labor force

All of this ultimately loops back to the ongoing public debate about the social responsibility of corporations. The debate reached a crescendo earlier this year and has since broken into two distinct camps.

First, there’s the business-is-business school of thought. Those who hold to this view argue that the sacred mission of corporate management is to maximize shareholder value at every turn. Period.

Opposing that is the warmer, fuzzier notion that a company must serve all its stakeholders—with employees at the top of the list. Those who feel secure, the thinking goes, are more likely to take responsibility for the success of a venture. In his book The Loyalty Effect, management consultant Frederick Reichhold insists that instilling loyalty in the workplace improves productivity, nurtures intellectual capital and creates strategic value. And it costs less than the constant employee churn that most companies have learned to live with.

There is, however, at least one way for corporations to win the goodwill of workers and society without compromising the bottom line. Companies such as Boeing rightly insist that they cannot be expected to provide jobs for life in a fast-changing, global market. But what they can—and should—offer employees, is a tool kit of portable skills, a high level of training that allows displaced workers to land new jobs.

Training is something that’s in danger of falling between the cracks as the federal government deconstructs itself. Ottawa is now in the process of shunting greater jurisdiction to the provinces. But the private sector is probably better equipped than any government to provide practical training to workers. At a time when public budgets for training are squeezed, it makes social and business sense for the private sector to take more responsibility for the quality of the workforce. Payroll tax breaks and other goodies would make it tempting, too.

The real challenge, however, is to approach skills development as a partnership—to keep it off the bargaining table and insulate it from destructive, adversarial haggling.