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An appropriate Labor Day question Did the union help to kill Studebaker?

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  • Studebaker Wheel
    replied
    During the Great Depression Studebaker was forced to lower wages and lay off a large number of the labor force. Some weeks the plants were only in operation for a few days a week. Despite this the company tried to shuffle assignments on the line to provide at least one or two days a week for as many as possible. In addition the management set up commissaries and sold food and fuel to employees on credit. They also aided employees in planting gardens on nearby truck farms and provided trucks to haul the produce.

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  • BobPalma
    replied
    Originally posted by Roscomacaw View Post
    I say a ONE on that scale, Richard. Labor may have provided the oar power, but it was management that had a hand on the tiller.
    Well, Bob, that seems like a good analogy on the surface...but both of our experiences in life could probably identify a major flaw in it.

    To wit: You have two union members rowing. One union member shows up on time, sober, rows steadily, does a good job, and is happy to have his job. In other words, a responsible fellow, as both of us have known. Meanwhile, the union oarsman on the other side of the boat has erratic attendance, punctuality, and sobriety, and only rows part of the time and doesn't pull steadily when he does show up.

    Now, obviously, both the good oarsman and the management member at the tiller are going to have one helluva time getting the boat to go in a consistent direction, where they would both like it to go, if one rower is intermittent at best. They both suffer, as does the subject enterprise boat, despite the best intentions of both the good union member and a responsible management man at the tiller.

    Sadly, you and I have both known both types of union members.

    Conversely, we have also both known (OK, I'll speak for myself, but I'll bet you have, too), management members (business owners) who genuinely care for their employees and will go the extra mile for them. Most of the time, the employees respond in kind. Likewise, we have both known management pr*cks who are an embarassment to the title entrepreneur, demeaning and taking advantage of their employees as disposable human fodder.

    So in reality, it isn't the position of oarsman or tiller-operator that is defective per se, but, rather, the constitution and commitment of a given individual occupying either position.

    As difficult as it is to believe, this was a major factor in my Dad and his brother Milton selling their Ford-Mercury dealership in Ottawa IL in 1966.

    Earlier, in 1953, they were struggling along selling Packards, Nashes, and Kaisers at 141 East Court Street in Paris IL in July 1953, when this picture of their entire staff was taken in front of the dealership:



    Although I was only 7(!) years old at the time, I knew every one of those guys by name and, today, can recall all their names except the second man from the left. Uncle Milt is behind the windshield and one after-school wash boy is not in the photo. Their only salesman, Floyd Phillips, is closest to the camera. My father is not in the photo; he probably took it.

    Those guys were family to Dad and Uncle Milt. I've never heard any of them, or their descendants, say anything but good about how they were treated by the Palma Brothers...and I have talked with several of them.

    So, what would be a good day to assume ownership of a Ford franchise? How about April 1, 1964, when the original Mustang was introduced and you could sell them off the transport before clean-up, if not sooner? Well, that is the day Dad and Uncle Milt opened Palma-Riverside Ford-Mercury in Ottawa IL.

    But two years later, almost to the day, they gave the franchise back to Ford and walked away.

    Why? As Dad and Uncle Milt have told me repeatedly, "it just wasn't the same" as being a small-town dealer in Paris. The shop was unionized and Uncle Milt said he could feel the glares as he walked through the shop, trying to be a decent guy (and, dammit, he was!) and get work through the shop in a timely manner.

    Can you imagine that? Dad and Uncle Milt were happier trying to sell 1953 Packards, Kaisers, Willys, and Nashes in a 10,000-population farm town than 1964-1966 Fords and Mercurys in a central-Illinois town with several times the market potential....largely because they couldn't establish the close relationship they had with their employees in Paris.

    Like the man said, some things you just can't make up. BP
    Last edited by BobPalma; 09-04-2013, 05:55 AM. Reason: spelling

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  • t walgamuth
    replied
    The five dollar a day was lauded as a breakthrough for workers, but Ford made sure they gave him $5 worth. They became customers but also paid a price emotionally and physically. If someone did not measure up or quit there was a long line of people willing to jump in the buzz saw for the high wages.

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  • 2moredoors
    replied
    As a previous poster noted, Henry Ford brought in the $5.00 day when the going rate was half that. No union involvement. Henry would not allow unions or real negotiations until just prior to WWII. What is not stated was the $5.00 day had certain conditions and was really a form of "forward" profit share. During the "dirty thirties" that wage was reduced (it had been increased during the roaring twenties). People did not leave Ford Motors because of wages, they left due to working conditions and bullying on the part of "management" (Old Henry and Harry Bennett), some foremen carried side arms. Ford outsourced manufacturing to reduce costs and inventory. The company I worked for at one time was a Ford supplier and was not treated well by Ford.

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  • t walgamuth
    replied
    Originally posted by JimC View Post
    I'm not sure I can believe the statement that everything is always management's fault, period. If that were the case, smear campaigns wouldn't exist. But they do, and often they work. Internal management of a company has little control if an outside force creates a negative public perception. Sure, management can respond to that perception, and combat it with their own efforts, but they truly can't control it. Studebaker was a great example. Even as everyone on earth was suggesting they won't be around much longer, Studebaker management was doing everything to put out the opposite image - that they were there to stay. Despite this, the public perception was already in place, and sales declined, and eventually the journey ended.

    I managed my own home business for years. I ultimately closed the doors on that business. Was it my fault? I don't know. I'm a pretty good manager. I've managed businesses for several others and have been very successful. I've never left a management job where I wasn't asked to reconsider leaving. But my own business folded. Why? Well, part of the reason was that I was selling a boutique, luxury product, and it was Q4 of 2008. The world was going bankrupt, and didn't have money for luxuries. My assistant moved away too, leaving me stuck doing twice as much work as I used to. I also had to weigh my financial options, look at the bank balances, and do what was best for my family. If delivering pizzas and working for the census bureau would bring in money, then the best thing I could do was cut the hemorrhaging business off and put my efforts into a paycheck. Maybe I could have taken out huge loans, driven my family into wild debt, and pulled through. But it wasn't a risk I was prepared to take. So was it my "fault" that I closed my business? Maybe. But was it entirely my fault? I say no, and I'll fight for that belief to my dying day. There were a vast array of issues that contributed to my business' demise. Had the economy remained strong and my assistant hadn't moved away, I'd probably still be doing film & video production for millionaires and CEO's up in Minnesota.

    The thing to keep in mind is that the question wasn't whether the unions were the cause, but rather whether they contributed in some way. To that, I say sure they did. The world was already fretting over Studebaker and the gossip was already going around that they were going broke. And then the union, already one of the best paid of the big 4 automakers, is throwing fuel on the fire, striking, and causing unrest. Did someone out there see that and chose not to buy a Studebaker? I absolutely think that happened, probably several times. The outside influence of the unions certainly played a role, if not to the company directly, then indirectly through people who saw union turmoil and decided to go with a different car company.

    I'm not anti-union. In fact, a couple years ago i was pressuring my mom to join her local union due to unfair management in her workplace. But at the same time, when I drive by a business and see a couple guys holding a giant "Shame on [Company X]" banner, and a giant dirty inflatable rat with the company's name on it being inflated, and upon further investigation find out that the reason this is going on is because Company X decided to hire a contractor that wasn't union, it irks me. Moreso when it turns out that the nonunion contractor has benefits just as good as the union. Even moreso when Company X is a company that generally tries to do the right thing. (True story, the union banner patrol was out protesting the archdiocese here a few months ago.) The protest isn't that workers aren't being fairly compensated. It's that they didn't choose their workers. We live in a free nation. There's nothing wrong with hiring nonunion labor. But when you don't hire union labor, the penalty is that you can be victim of a smear campaign by the unions. And just like it hurt Studebaker, rumors and smears still hurt today.
    I closed my Archtectural business in 08 too. No work to speak of. After over 30 years blame myself. You should not either. Obviously when Studebaker went down people were still buying cars, just not Studebakers.

    Luckily I had accumulated enough income real estate I am survive without the Architectural income...drawing soc sec too.
    Last edited by t walgamuth; 09-04-2013, 04:54 AM.

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  • clonelark
    replied
    Unions are dying, Management Bonuses are up. Just saying.

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  • Studebaker Wheel
    replied
    Many, many interesting comments with lots of opposing views. Pretty much what I expected. I have been collecting and filing information on Studebaker's Industrial Relations for years with the goal of writing a fairly comprehensive article on the topic at some point. I believe I have all the information I need but just need some motivation! I do have some interesting facts re the situation at the factory in 1933-35 that Bob has requested and will post that a little later. I will say that the Studebaker management at that time was very sensitive to the plight of its workers and went out of their way to be accommodating. The period following WWII however was the turning point in what became an ever increasing rift between the union and management that never fully abated. I will post some interesting facts relevant to this later.

    I am attaching herewith a copy of a document that came with hundreds of others that were salvaged from the Administration Building in 1964 that adds a bit of levity to the topic. I think even a strong union man will find the humor in it?

    Click image for larger version

Name:	dogs four joke union.jpg
Views:	1
Size:	190.9 KB
ID:	1683493

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  • doug
    replied
    In the teens, I believe, Henry Ford paid something like $5 a day to non-union workers, making them the highest paid Or among the highest paid) assembly line workers. He made the cheapest cars and made a lot of money at the same time. Just something to contemplate.

    TWA (my employer for 35 years) bought Century 21, Sheraton-Hilton Hotels, Hardy's and Canteen Corp. The company formed a new company TWC and spun the airline off. The Everyone took pay-cuts to entice a buyout and within 10 years the company was Bankrupt and purchased by another airline.

    We did receive some pension benefits due to the pension reform because of the Studebaker handling of pensions.

    Don't really blame anyone from where I sat, except tax laws that encourage this sort of thing. Stuff happens.

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  • BobPalma
    replied
    Well, I've re-read Posts 11 and 35 and do not "see" how they addressed my question to Dick Quinn about what was going on during the circa-1933 Receivership proceedings vis-a-vis labor's assistance / help / attitude, etc.

    Virtually everthing that's been discussed here deals with times long after that era, which is perfectly OK, but doesn't discuss, say, 1933-1935. I don't profess to know much about that period of time as regards the topic de jour, so that's why I was hoping Dick Quinn would contribute some insight.

    Meanwhile, Stu, thanks for the further information about Guthrie...you do learn something new everyday.

    You guys were indeed in a tough spot. Just today, I was describing the 1966 Refreshaire ventilation system to an automotive writer outside SDC, and thinking about Refreshaire being the really last new feature on the final iteration of Studebaker automobiles....and how cheap it was to bring to market. BP
    Last edited by BobPalma; 09-04-2013, 03:26 AM. Reason: spelling: de jour

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  • Stu Chapman
    replied
    Originally posted by BobPalma View Post
    Jeff Rice andf Stu Chapman: Good Posts in #24 (Jeff) and #31 (Stu).

    Stu: I was surprised to see you mention Randolph Guthrie and Byers Burlingame in the same vein. I guess I never knew much about Mr. Guthrie...and already know more about Byers Burlingame than I care to.

    I always had a more positive "vibe" about Hamilton assembly line workers and thus appreciate and understand your assessment. There was a good deal of pride in "Building Studebakers for the World" after January 1, 1964, was there not?

    Dick Quinn: What would be interesting and instructive here would be for you to expound on labor's attitude and role in Studebaker's 1933 / 1934 receivership and reconstruction.

    The company was not unionized at the time, was it? As such, is there a record of workers generally having a positive, constructive attitude toward helping out, going an extra mile (or 30 minutes!) toward helping Studebaker survive?

    Those years were the depth of The Great Depression, so did the Receivership Team enjoy extraordinary co-operation from employess genuinely thankful to have a manufacturing job during that time...or how do you read it? BP
    Believe me Bob, Randolph Guthrie was no help to us at all. Remember, his law partner, Richard Nixon, screwed up the possible agreement with Nissan when he interfered by introducing Toyota to the scenario. That wasn't all Nixon's doing; Guthrie's presence was felt there also. I'm well aware that Guthrie had a responsibility to the shareholders in looking at return on investment but believe me every roadblock possible was thrown at us while we were trying to salvage a company which we believed corporate wanted us to do. My research for my book in 2009 confirmed that.

    Stu Chapman

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  • Dick Steinkamp
    replied
    Blaming the people you hired and the agreements you made with them for the business failing doesn't hold much water with me.

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  • 8E45E
    replied
    Did the union intend to kill Studebaker? NO! Otherwise they would not have built this shiny new Union Hall down the road in 1961. http://forum.studebakerdriversclub.c...ght=union+hall Did their actions hasten Studebaker's demise? Yes, to a degree. There were threats about Studebaker closing operations before, especially in the 1950's, and they once again thought it was another scare tactic. I would rate their actions about a 3-4 on the scale. I wasn't that they were over-paid, but it was too many of them to perform one job it would have taken half the amount at GM or Ford. As someone stated back then, even paying the assembly line workers one dollar an hour would not have saved the company.

    Craig

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  • Roscomacaw
    replied
    Churchill: "It just burns me up that people make that accusation [against labor], because they don't know what the hell they're talking about."

    So what WOULD Church be looking to establish by revising history IF he was wrong here? Of course, all of us who WEREN'T there will be more able to elaborate! LOL.

    I say a ONE on that scale, Richard. Labor may have provided the oar power, but it was management that had a hand on the tiller.

    Leave a comment:


  • JimC
    replied
    I'm not sure I can believe the statement that everything is always management's fault, period. If that were the case, smear campaigns wouldn't exist. But they do, and often they work. Internal management of a company has little control if an outside force creates a negative public perception. Sure, management can respond to that perception, and combat it with their own efforts, but they truly can't control it. Studebaker was a great example. Even as everyone on earth was suggesting they won't be around much longer, Studebaker management was doing everything to put out the opposite image - that they were there to stay. Despite this, the public perception was already in place, and sales declined, and eventually the journey ended.

    I managed my own home business for years. I ultimately closed the doors on that business. Was it my fault? I don't know. I'm a pretty good manager. I've managed businesses for several others and have been very successful. I've never left a management job where I wasn't asked to reconsider leaving. But my own business folded. Why? Well, part of the reason was that I was selling a boutique, luxury product, and it was Q4 of 2008. The world was going bankrupt, and didn't have money for luxuries. My assistant moved away too, leaving me stuck doing twice as much work as I used to. I also had to weigh my financial options, look at the bank balances, and do what was best for my family. If delivering pizzas and working for the census bureau would bring in money, then the best thing I could do was cut the hemorrhaging business off and put my efforts into a paycheck. Maybe I could have taken out huge loans, driven my family into wild debt, and pulled through. But it wasn't a risk I was prepared to take. So was it my "fault" that I closed my business? Maybe. But was it entirely my fault? I say no, and I'll fight for that belief to my dying day. There were a vast array of issues that contributed to my business' demise. Had the economy remained strong and my assistant hadn't moved away, I'd probably still be doing film & video production for millionaires and CEO's up in Minnesota.

    The thing to keep in mind is that the question wasn't whether the unions were the cause, but rather whether they contributed in some way. To that, I say sure they did. The world was already fretting over Studebaker and the gossip was already going around that they were going broke. And then the union, already one of the best paid of the big 4 automakers, is throwing fuel on the fire, striking, and causing unrest. Did someone out there see that and chose not to buy a Studebaker? I absolutely think that happened, probably several times. The outside influence of the unions certainly played a role, if not to the company directly, then indirectly through people who saw union turmoil and decided to go with a different car company.

    I'm not anti-union. In fact, a couple years ago i was pressuring my mom to join her local union due to unfair management in her workplace. But at the same time, when I drive by a business and see a couple guys holding a giant "Shame on [Company X]" banner, and a giant dirty inflatable rat with the company's name on it being inflated, and upon further investigation find out that the reason this is going on is because Company X decided to hire a contractor that wasn't union, it irks me. Moreso when it turns out that the nonunion contractor has benefits just as good as the union. Even moreso when Company X is a company that generally tries to do the right thing. (True story, the union banner patrol was out protesting the archdiocese here a few months ago.) The protest isn't that workers aren't being fairly compensated. It's that they didn't choose their workers. We live in a free nation. There's nothing wrong with hiring nonunion labor. But when you don't hire union labor, the penalty is that you can be victim of a smear campaign by the unions. And just like it hurt Studebaker, rumors and smears still hurt today.

    Leave a comment:


  • sweetolbob
    replied
    Originally posted by SN-60 View Post
    Methinks that You need to re-read post #11 Bob!
    Along with post #35.

    Leave a comment:

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