My last post (Chaos Theory and the Economy) looked at the ripple effect of what might, to the untrained eye, look like isolated events and localized market dynamics. These ripples sweep outwards in ever widening circles, washing over near everything in their paths, capsizing anything not large enough or small enough to ride the waves. The chaos doesn’t just roll outwards, however; it reaches up and trickles down as well. The trickle is, actually, more of a crunch.
There is a story worth telling that speaks to the trickle-down effect. One plain-talking CEO I knew, during a break in a tough round of labor negotiations, decided to get personal. He dropped in on the union leadership and told its members that while the company was owned by shareholders, the plant they were representing ultimately belonged to the workers. The Board was far away. He, as CEO, would likely move on in one year, three years, maybe five at the outside. But most of the workers had been with the plant for decades and few were about to leave any time soon. They had helped build it and they had made it run through the good times and bad.
If these negotiations were to lead to a shutdown, he told them, a strike would impact their future and the future of their families far more than it possibly could him. They had few options now and would have fewer options were the plant to close. In the current environment and with outsourcing now an economically and politically viable option, a shutdown – and even permanent closure – was a real possibility. This little chat was a break in protocol; there were certainly all sorts of reasons why it was a bad idea. At the very least, it could be construed as a threat. I knew this CEO, though. It wasn’t a threat; it was a plea.
As it happened, the union missed his point. The employees walked out. The company then kept them out long enough for it to really hurt.
I tell this story not to decry union tactics in this particular case…or in any other, for that matter. It is not meant as a commentary on the GM/UAW negotiations…which just happened to be mentioned in the first Chaos Theory post. I relate this story because this particular CEO was stating what I have learned over the years to be an important truth. As the economy slowly but steadily sinks, companies will – as they must – rationalize their operations. Plants will close. Workers will lose their jobs. Their fates are inextricably tied. And so, when it comes, the wave will swamp not just the plant, but its workers and their families. The chaos will have become very specific before it inevitably becomes general.
