Tuesday, October 5, 2010

Bad Relationship, Bad Intelligence

Real nice, and very balanced, article from the Atlantic:

The first thing you need to recognize is that the militant unions of the thirties were to some extent made more militant by the abuses on the corporate side--the Battle of the Overpass, for example, where company representatives beat the crap out of organizers who were attempting to hand out leaflets in a public space. Over time, that dynamic evolved into something that was more stable, but also more toxic: a sort of awful marriage between two sides that hate each other, but hate everyone else even more.

One of the most remarkable things I learned in writing about GM was that Ron Gettlefinger was totally blindsided by GM's financial collapse. The UAW had so often convinced itself that the company's dire warnings were simply strategic bargaining claims that it didn't understand how parlous the underlying finances were--and in fairness, in the past, management had often made exaggerated claims when it was bargaining. One former auto analyst I talked to said that the company would routinely claim that anything it didn't want to do was being blocked by the union--but when the rare equity researcher actually talked to the UAW, they'd often find that the union had never heard of the issue where it was allegedly the sole obstacle to change.


First, these were organizations that could never get past their animosity to accomplish anything meaningful to reduce the build up of toxins on the corporate balance sheet. The relationship needed to change, they both knew it, and they couldn't do it.

Second, Gettlefinger's attitude is the opposite of trust but verify -- don't verify your mistrust is rational.

You can achieve objectives, even objectives that take complex and heavy work to accomplish like good paying contract, but end up in the wrong place if those objectives were set wrong because the underlying strategy was wrong.

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