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Daniel Akerson: How to Fix American Manufacturing


It’s going to take a combination of innovation, which leads to productivity gains, and new ways of helping labor understand the challenges that a company faces in the marketplace. For example, we can’t repeat the mistakes of the past by burdening ourselves with structural costs that aren’t flexible and aren’t manageable. Do we want a bonus- and profit-sharing plan with the union? That’s a different construct and something that they wouldn’t have listened to 10 or 20 years ago. You have to look for new business-industrial relations and different types of compensation practices.

Look at what the union did at Lake Orion, where General Motors (GM) and the United Auto Workers agreed to lower wages so the company could make subcompacts profitably in the U.S. That’s a case of a good and healthy industrial relationship that would have been unheard of prior to the bankruptcy.

Both labor and management have to look for a new model. You have to evolve. You have to adapt to new circumstances. Darwin said you have to be strong, fast, and smart. Everyone forgets the fourth one: You have to be adaptable. I talk to our team. The only organization I ever worked in that looked at adaptability was the U.S. Navy. In terms of officer fitness, they graded you on adaptability.

We’re in a war. I don’t mean that in a bellicose way. It’s a very competitive situation. If you don’t prize adaptability, whether it’s industrial relations or it’s in how you view, perceive, and react to your competition, you’re going to be a dinosaur. You’re not going to survive.

Akerson is chief executive officer of General Motors.

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