Germany as a good example for the USA

I grew up with a stereotype of the Germans as prisoners of hierarchy, bureaucracy and rules, who would never be a match for us democratic, freedom-loving practical Americans.

But if that ever was true, our two countries have since traded places.

Thomas Geoghegan, a Chicago labor lawyer whose writings I admire, wrote a book in 2010 entitled WERE YOU BORN ON THE WRONG CONTINENT? How the European Model Can Help You Get a Life about how Germany is an economic role model for the United States.

He still says so in his newest book, ONLY ONE THING CAN SAVE US: Why America Needs a New Kind of Labor Movement.

In Germany, Geoghegan wrote, the laws, strong labor unions, worker representatives in management make it difficult to fire anybody.  So layoffs are a last resort, not a first resort.

German management is forced to concentrate on figuring out how to get the most out of the work force, not on making workers powerless and replaceable.   The result is that German corporations invest in lifelong learning for their workers, on the justified assumption that they’re going to remain with the same employer and become permanent assets to the firm.

Eastman Kodak and the idea of loyalty

I don’t know if there was ever was a Fortune 500 company more paternalistic than Eastman Kodak Co., and I am certain there never was one that enjoyed greater loyalty from its employees.

When I first came to Rochester, N.Y., in the mid-1970s, Kodak seemed more like a cult than a company.  Kodak never asked its employees to sing a company anthem or do gymnastics in the morning, as Japanese companies of that era did, but if it had, I am sure they would have been glad to do so.Kodak was one of the last examples of the age of the “organization man,” in which security was given in return for conformity.

I wouldn’t really want that era to return, but I don’t regard the age of the disposable employee as an improvement.People in Rochester said that once you were hired by Kodak, you were set for life.  There were people who were the second or third generation in their family to have worked all their adult lives at Kodak.  There were people whose whole lives revolved around Kodak.  They spent their spare time at the Kodak recreation center, they attended plays at the theater in Kodak Building 27, they banked with Eastman Savings and Loan Association (not actually a part of the company) and saved up for retirement in the Kodak Savings and Investment Plan.

All this security was repaid by a devotion to the company that is hard to understand in the light of the way things are today.  In 1980, Kodak announced a new consumer product – a snapshot camera with film on a disc instead of a roll.  We reporters at the Democrat and Chronicle naturally wanted to find out in advance what the announcement was going to be.  All of us had friends and neighbors who worked for Kodak (one in eight employed persons in the Rochester area worked for Kodak), and thousands of them knew what the announcement was going to be.  But nobody said a word.  The Kremlin-like secrecy was complete.

I had just started to cover Kodak for the D&C.  The company gave me a Disc camera to try out, and, as luck would have it, the camera short-circuited and melted the internal parts.  I wrote a light-hearted article about it, treating it the subject fairly gently, I thought.  Kodak loyalists in the community didn’t think so.  I was inundated with angry phone calls accusing me of playing into the hands of the enemy, Fuji Photo.Kodak Disc 4000

The Disc didn’t turn out to be as successful as Kodak hoped and, for that and other reasons, the company began layoffs a couple of years later than continued for more than a decade.  Kodak employed 50,000 people in Rochester through the 1970s, and in 1982 employment here shot up to 60,000.  The following year Kodak began a series of layoffs that have continued ever since.  Employment locally is now below 7,500 and falling.

By the time I left the Kodak beat in 1992, the feeling of loyalty had been replaced with a sense of betrayal.  The angry phone calls came whenever I wrote anything that reflected favorably on the company.

A friend of mine, a Kodak patent attorney who lost his job in the downsizing, said he came to realize the profound ambiguity of the idea of loyalty to a corporation – or any other organization.  You can be loyal to people, and you can be loyal to ideas, he said.  But if the people change, and the ideas change, what are you being loyal to?

Business executives such as CEO Jack Welch of General Electric – called “Neutron Jack” because, like the neutron bomb, he made the people disappear and left the buildings standing –  said that companies such as Kodak did their employees no favor by holding out the false hope of lifetime employment.  The employees were set up for a worse fall than if Kodak had been tougher all along.

I think there is truth in that, but there is a middle ground between treating employees as children and treating them as commodities.  A business corporation can’t be like a Mommy and Daddy to its employees, but it doesn’t have to follow Welch in terminating the supposedly worst-performing 10 percent of employees every year.