LABOUR AND CAPITAL

Taranaki Daily News, 23 November 1926, Page 10

LABOUR AND CAPITAL

RELATIONSHIP IN AMERICA COOPERATION IN MANAGEMENT. WHY INDUSTRY THERE SUCCEEDS. Co-operat'on between Labour and Capital is the reason for the success of so many large industries in America, according to the address given New Plymouth Rotarians yesterday by Mr. C H. Haddrell, of Swampscott, U.S.A., who occupies a high position in the Lynn works of the General Electric Company. Every effort is made to adjust complaints happily, to give the employee an interest in his work and to reward him for special services. “The great secret is to rid the workers of the idea that they arc not being given a square deal,” said Mr. Haddrell. ‘American prosperity is due to the co-operation and to the spirit between the two sections.” The guest had been in the States for about 25 years, said Rotarian Walter Penn in some introductory remarks. He was a sou of Mr. W. H. Haddrell. an old and respected resident of New Plymouth, but was really a Christchurch boy. Rotarian Penn mentioned that he had met Mr. Haddrell and his wife in Boston six years ago, and they had been very kind to him and to Mrs. Penn. During the past 25 years there had been a gradual change of attitude between Labour and Capital, in the United States, at any rate, said Mr. Haddrell. The old-time capitalist ruled like a czar. He knew his business, but did not have the necessary knowledge of human nature to get the best from his workers. The result was strikes that were of ultimate benefit neither to one aide nor the other THREE FACTORS OF INDUSTRY. There were three factors in industry —capital, labour and management. The last was the braius and was entirely responsible for the results. It was equally responsible to Capital and Labour and needed a heart, as well as brains. The principal idea in industry was to give a square deal; in other words to apply the Golden Rule. Andrew Carnegie had onee said that it was a mighty poor business that a man could not make something out of it. The General Electric Company employed over 80,000 persons in its various factories, and it manufactured half the incandescent lamps used iu America. Great improvements had been made in the manufacture of these goods during the past 15 years. The quality had been raised and the price very much reduced. Up to 1914 the Lynn works were managed by a man who had begun in 1894. Ho was one of the old type who ruled like a czar and he did very well until 1914, when the jvar started. Then the cost of living went up rapidly and wages did not keep pace. The manager had not the least idea there was anything in the nature of unionism operating at the works, but one fine morning the discontent among the workers exploded and as a result the administrative head was displaced. His successor worked out and introduced to the works a plan of representation, a type of cum-unionism among the employees of the factory itself. In each of the several departments the workers were divided into groups of 100, each of which elected a representative to act for them if anything required it. SHOP AND GENERAL COMMITTEES. After the elections the representatives themselves met and chose three of their number as members of a shop committee, and they were paid for the time they spent at the weekly meetings. The management appointed three of the executive staff to this body, but they received no remuneration for their attendance. There was also a general joint committee composed of three employees elected by the workers as a whole, and three from the executive. The work of the shop committee included the settling of disputes. For instance, if a satisfactory conclusion were not reached in trouble between a foreman and a worker under him, the matter was referred to the shop committee, which adjudicated on the case. If the commrttee's decision were in favour of a worker a majority verdict was accepted, but. if it were against him the members of the committee had to bo unanimous in their opinion. In the latter event the worker could still appeal to the head of his department. Au adverse decision from that quarter might be taken for review to the general committee, whose judgment had to be unanimous. And if this were still against the employee, he could refer his complaint to tbe general manager. Very few cases got that far, however. This system had been working satisfactorily since 191-5 or 1916. SUGGESTIONS AND REWARDS. Employees could make suggestions for the improvement of working methods and these could be placed in boxes in various parts of the building. Without the originator’s name being disclosed, the idea was referred to the man whose work it affected. An engineer investigated the proposal and, if it proved feasible, it was referred to a suggestion commit! If that body accepted the iuea the man responsible tor it was given an award equal to 10 per cent, of the estimated annual saving. If the engineer’s report were not favourable the suggestion might be referred to the shop committee, and so on through the usual channels for complaints. The minimum award was five dollars. If it were found at the end of the year that the estimated savings had been exceeded an additional award could be made. There was also the Coflin award for improvement in methods. It was named after a president of the company and comprised a medal, a framed certificate and 200 or 300 dollars. As an inducement to remain with the firm, the company paid every half-year a bonus of 5 per cent, of the wages earned to those of its employees who had betm in the service five years or longer. A free life insurance policy up to an amount of 300 dollars, was given after three years’ service. Under a group system additional insurance could be taken out at a much cheaper rate than usual, and if an employee left the company he could continue the policy, without medical examination, on payment of premiums. BONDS IN THE COMPANY. The General Electric Employees’ Security Association issued bonds in tne company, up to 500 dollars’ worth, which bore interest at 6 per cent. These could be turned in at any time, or banks would

lend up to 10 per cent, of their face value at 6 per cent, interest—with some It was 51 per cent. The company did everything in its power to encourage the workers to save these bonds and no. to spend them on current expenses. Under an old age pension scheme a man who was disabled after 20 years iu tlie service could secure a pension equal to 11 per cent, of his average earnings for ten years, multiplied by the number of years worked for the company. Otherwise the employee could draw- a pension on retiring at the age of 70. There were pensions for women, too, and they could retire at 65 years of age. It was hoped in time to reduce the ages to 65 and 60, as it was desirable that a worker should be able to retire before he reached 70 years. Quite a number of the workers had been in the service for 40 years or so, under the scheme, could retire on two.-thirds of their pay. The company had a dispensary with dental clinics. Different dentists came on certain days and the workers could choose to whom they should go. Their pay was not stopped during the time they spent in treatment. An optician was also available. TO KEEP WORKERS IN SERVICE. The employees had their own newspaper, issued every two weeks. It contained news about the different departments. and of a social character. All the representatives of the shop and general committees were invited by the management to dinner once a month. The gathering was held at five o’clock and there would be a speech indicating what was going on. The idea behind all these things was to make the employees content to stayin the service. One of the greatest expnses in industry was the cost of labour turnover. It cost never less than £2O in the Lynn factory to break in a new man. It was a tremendous price and it was worth while to the company to go to the expense of the organisation mentioned in cider to keep its workmen. The company never dismissed an employee. If he did not make good at one type of work he was tried at another. The men were taken off the street and trained and it was up to the management to discover the work for which they were best suited. If -a man failed at one thing he was always tried at several jobs before he was given up as hopeless, and the man usually went himself if he were not suitable. The Fold Company made the claim that it never “fired” anybody. KEPT ON IN SLACK TIMES. When work was scarce the company did not dismiss its staff, but gave work for three days a week rather than lose trained men. Piecework was the general method of pay-ment and any readjustment of rates came before the general joint committee. Psychologists were in the employ of the firm, but this branch was not very advanced yet. The company was conservative and did not need to adopt any unusual methods to attract sales. Some of the patterns in its possession were valued at very small amounts in the balance-sheet, and the speaker mentioned that the furniture in the office at Chicago was allowed for in the balance-sheet at no more than one dollar. Yet a rental of 30,000 dollars a year was paid for the premises! An enormous amount was spent yearly on adjusting complaints in order to maintain goodwill. Regarding labour conditions generally, Mr. Haddrell said the American Federation of Labour was a reasonable body and to show the attitude common in the States he related that the Brotherhood of Locomotive Engineers had gone into the banking business. NASH COMPANY’S SUCCESS. The success of the Nash Clothing Company was quoted as an example of the application of improved methods. This was Mr. “Golden Rule” Nash’s firm. It was started in 1918 with a capital of 60,000 dollars and the business than that year amounted to 132,190 dollars. In 1919 it was 525,678 dollars, and there were 100 employees. In that year Mr. Nash put his “Golden Rule” methods into operation and the next year, despite troublous times in other industries, the business rose to 1,580,000 dollars. In 1921 it was 2,077,559 dollars, and in 1922 3,751,181 dollars. By then there were 3000 employees and the works covered several acres of floor space. There were 31 branch factories and of the capital of 1,000,000 dollars a large proportion was owned by the employees. The company made men’s suits only and the price was something like 23 dollars 50 cents. The great secret was to get rid of the idea among the workers that they were not to be given a square deal, said Mr. Haddrell. American prosperity was due to co-operation and to the spirit prevailing between the workers and their employers. PART OF BRITISH WORKMAN. Not all of this was due to Americans. Many of the best men were British, and England was losing their services. Several years ago 12,000 trained British mechanics landed in New York. They would never go back, because in America they were given more opportunities and encouragement in their working conditions. “He profits best in industry who serves best, and that is the ideal of Rotary,” said Mr. Haddrell in conclusion. In moving a vote of thanks, Rotarian Cl aries Bellringer, M.P., agreed with Mr. Haddrell in what he had said about the success of British workmen in America. The very pick of the men were leaving Great Britain and the great problem confronting the Mother Country was that she had to meet the competition of Britons working under American conditions.