Ford Motor Co.'s agreement with the United Auto Workers to keep its hourly work force at 95 percent of the current level for three years apparently has stunned industry analysts and Detroit, a city in the midst of a prolonged, bitter newspaper strike. Ford simply had a better idea.
In taking a nontraditional approach with the UAW, the company effectively has acknowledged what most business managers have known for some time. The Alfred Sloan industrial model of autocratic management crafted by the former president of General Motors Corp. and practiced by most of American industry for much of this century no longer works well.
That is largely why GM continues to struggle against the effects of global competition. The elephantine firm is hostage to a bureaucratic culture hostile to change. As a result, GM has not been able to shed its parts manufacturing facilities or reduce its work force as effectively as Ford and Chrysler Corp. have since 1980.
Ford could negotiate the contract it did with the UAW because management has positioned the company well, particularly in the use of outside suppliers and a reduced work force. Promising no job cuts for three years is not a great risk - except to rival GM.
Normal attrition will decrease through retirement the ranks of Ford's oldest workers, and the contract includes provisions to protect Ford against an industry downturn. Also, to encourage Ford to get back into auto parts manufacturing that would generate more UAW jobs, the union agreed to lower wages in new parts business.
The latter incentive provides Ford with even more leverage over parts suppliers, most of whom are nonunion and operate at the competitive mercy of the Big Three. In addition, the agreement allows for lower-cost health-care coverage for new hires during their first 24 months of employment. All workers will get a reported $2,000 signing bonus this year and 3 percent annual wage increases for the next two years.
But Ford and the UAW have made a larger strategic point with this contract, involving the survival of each in an international marketplace. They can either compete together, or face separate hangings in the new world economic order.