Students in Free Enterprise (SIFE) and Boeing

The first thing you might ask yourself is what  does SIFE and Boeing have in common? The obvious involves free enterprise and capitalism. The less obvious involves social business. I am an advisor for SIFE students at Warner Pacific College. I am on a plane in the air somewhere between Denver and Portland, reflecting on the last three days at the National SIFE Convention in Minneapolis.

161 teams and several thousand college and university students were presenting their SIFE programs. Round one is made up of several leagues with about eight schools in each league, with each team presenting their program. The judges then look at how the presentation was organized, how rich the content was, and lastly how well it was delivered.

We had four students on our presentation team, and they did a great job. However, we did not make it to round two. Twenty schools, or teams, moved on to the second round. Schools such as the University of Arizona, Seattle University, and Oregon State University, and I watched all of their presentations and they were excellent.

From those twenty, four are chosen for the finals. This year Drury University, Syracuse University, Texas, and Flagler College were chosen for the final four. The last competition involved those four teams. The grand winner was Texas, who did have a great program and presented it well.

Each of these schools, all 161, were using the power of business to make a difference all over the world. It really was amazing. Central America, Navajo Indian Reservations, and Cuba were just a few opportunities that were presented. Each of these events was used to improve the lot in life of people by teaching them how to do business better.

What does all this have to do with Boeing. In today’s Wall Street Journal there was another opinion page arrticle on the NLRB complaint between the IAM and Boeing. This time it wasn’t Jim McNerney attempting to justify the company’s actions, it was a philosophical discussion about the bigger issue, one that unionism in general needs to pay attention to or it may become irrelevant.

As of right now there are 22 right-to-work states in the US. This means there are 28 union shop states. Over the past decade the right-to-work states have had their gross state product increase by 54.6%, while union-shop states grew 41.1%. If we look at personal income right-to-work states grew 53.3%, while union-shop states grew 40.6%. The WSJ goes on to say that population in right-to-work states grew by 11.9% while union states grew by 6.1%. This last statistic could mean anything, but it could mean that people are moving from northern states to southern states to get more sunshine.

Another indicator that right-to-work states are profiting at a higher level than union shop states resulting in a per capita income growth rate of 23% higher than union shop states, which equates to a $2760 increase in income. Not too shabby.

What do these two events have in common? Both of these events are a result of free enterprise. SIFE is encouraging social business, which is investing profit to improve the quality of life for those less fortunate. SIFE is taking ingenuity and innovation to a level of servant leadership so desperately needed in this world. Free enterprise can make a difference if we pursue it.

Boeing and the IAM is also a positive event. This synthesis will ultimately be good for the relationship between business and people. In Marxist writings we learn about dialectic materialism. If we apply this to our Boeing/IAM event we see to opposing forces. This would be the thesis and antithesis. The slamming together of these two forces will create a new synthesis. This synthesis will be good for all, at least in my opinion.

And that is my thought for the day!

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Boeing Pro Growth?

I think Mr. McNerney at Boeing is starting to feel the heat. McNerney gives the indication that Boeing’s customers are not happy with him in an article he wrote for the Wall Street Journal. He quotes Richard Branson from Virgin Atlantic as saying that “If Union leaders and management can’t get their act together to avoid strikes, we’re not coming back here again. We’re already thinking, ‘Would we ever risk putting another order with Boeing?’” So if this is an indication of how all of Boeing’s customers feel, then Houston we have a problem.

This blog is not antiunion, nor is it pro-management. The purpose of this discussion is to demonstrate that good business, which includes good decision-making while enhancing people’s lives, is of strategic importance for the US economy. With the McNerney article I’d like to comment on a couple of things he says. And, I hope the union comes back in print with a response to the WSJ article, and I hope it is in the WSJ.

McNerney states that the NLRB action is a “fundamental assault on the capitalist principles that have sustained America’s competitiveness since it became the world’s largest economy nearly 140 years ago.” McNerney goes on with what could be conceivably a threat. He stated, “The NLRB’s overreach could accelerate overseas flight of good, middle-class American jobs.”

McNerney did mention the attempt to negotiate a “no strike clause” that would ensure a stable production schedule. The last McNerney point I’d like to discuss is his statement about communication. He stated, “ Before and after the selection, we spoke openly to employees and investors about our competitive realities and the business considerations of the decision.”

First of all is the union’s complaint an affront on capitalism? I think that McNerney’s comment is a hyperbole. He is making a statement trying to institute fear in the reader’s heart. We must remember that this complaint is a part of how our capitalist system works. The US is not a true capitalist system, it is a hybrid which is a mixture of free enterprise and government mediation. What this event involves is government intervention.

As to jobs moving overseas, has McNerney forgotten about the problems in the supply-chain the has led to the 787 being three years behind schedule?

On the other hand the no-strike request needs to be addressed by the IAM. The union needs to look to the future, not spend its time focusing on past methods of negotiation. The IAM has very creative people, I hope they can create new ways of getting a fair contract for its workers.

My fear is the management at Boeing is going back to its old methods of fear and intimidation. McNerney stated that they are communicating, I hope that is true and not just the communication of threats.

This event displays the antiquated methods of working together still in use within the Boeing and union negotiation process. It really is stupid. If we are going to compete and be productive, then we need to learn how to play together in the sandbox. I hope these children learn how to play before it is too late.

The line has been drawn in the sand. This disagreement between Boeing and the Union, and I would assume it is the IAM, is now in the public arena. I hope we have a significant debate about this topic. This debate will be an excellent forum for recreating Capitalism.

And that is my thought for the day!

Management Lessons I Learned From My Mother

Today is the day after Mother’s Day. My Mother died in 1994. Some years she is a passing thought, and some years, like this one, I really missed her. My son posted a picture of her with him on Facebook, which made my day.

Yesterday I was thinking about what to write in my blog? I thought about some of the things I have written about, and it seems like the world is still the same, so nothing new to write about there. The semester at school is done, and I am going on a couple of trips with students. So nothing too eventful there, yet. So, my thoughts kept going to what can I write about? That is when I started thinking about my mom. What management lessons did I learn from her? So these are my initial thoughts on this subject.

My mom had a rough life. She was born in Nebraska. If I remember correctly she was born in a sod house. I remember her taking me there and seeing where she and her family lived. Her parents, my grandparents, were farmers. She used to tell me stories about working hard in the fields, etc.

She married my dad, and her life was a bit rough there too. Much of this was due to the upbringing he had His mother married a Nazi sympathizer who used to beat my dad. My grandmother eventually divorced the Nazi, but my dad used to tell stories about this ordeal. His hard life eventually took a toll and he struggled with alcohol. He and my mother divorced, but they never stopped loving each other. My mom ended up taking care of my dad until he died.

She endured these hard times and became very strong. She learned from life’s lessons and created for herself a good life. In fact, in her latter years she learned how to drive and swim, both of which she was a little afraid of. I was very proud to visit her one time and watch her swim laps in her pool. She learned wisdom by forgetting the things that were in the past and moving forward.

Another management lesson was how she cared for her children. She would always make sure we had a good breakfast before we left the house. She made sure our clothes were clean and no snot running out of our noses. She served her children well. However, she also had no problem confronting us when we were less than stellar in our behavior. I can remember in the 60’s doing those things that were less than legal, and having her waiting up at night for me to confront me. It wasn’t that she hated me (she was angry), it was the fact she wanted the best for me, which is a very important lesson that managers must learn. If your employees believe that you care about them they will behave in a better manner, eventually.

The last lesson I’d like to discuss today is how she overcame upper management’s stupid decisions. She managed a small grocery store in Hawthorne, California. It was close to the Northrupt plant. One day someone came in and robbed her at gun point. This shook her but she fought hard to overcome this situation. She never wavered, even after she asked her boss for protection and he gave her a bow and arrow. He gave her a bow and arrow to protect herself. By the time she pulled the bow out and put the arrow in it she would have been dead. Needless to say she never used it, and she was never held up again, at least in my memory.

My mother was a strong woman who learned from life. She was wise. She cared about people. She loved her grandchildren, and accepted my oldest daughter Tracy as her own, obviously her grandchildren by blood Jennifer and Chris, and Jennie and Katie, grandchildren by marriage. She cared and confronted.

And lastly, she knew how to overcome dumb decisions that were made by her upper management. She worked many years for that company and they took care of her. You know what I really miss her. Happy Mother’s Day Mom.

And that is my thought for the day.

The Manufacturing Comeback

The manufacturing sector in the US seems to be making a comeback. In April alone manufacturers added 25,000 jobs. It should be noted these jobs pay anywhere from $50,000 to $80,000 per year. This is much higher than what has been reported as an average wage in the US of about $40,000 per year.

I ran into a person I used to work with and she told me that Boeing Portland is hiring people. She was very excited about this. I mentioned I had heard they were hiring 500 people and she said not quite that many. Whatever the number is, bringing new people in is good.

Approximately 2.7 million manufacturing workers are 55 or older. This represents about 25% of the employed manufacturing workforce. Thus many of the current employees could be leaving soon, and with the feeder lines such as engineering schools, apprentice programs, and tech prep not providing enough future employees there could be a problem.

Andrew Liveris, the Dow Chemical CEO, and Andy Grove, retired CEO of Intel, have both mentioned the importance of making product in the US, and Boeing learned through its 787 fiasco that international manufacturing skills are deficient. Thus, the importance of finding skilled employees that can weld, machine, and use math skills to manufacture is critical.

With all the negative press about recessions and layoffs, it is exciting to see a positive problem. Filling these jobs with livable wages will have a huge multiplier affect on the community. Higher wages mean more taxes More taxes means more money in governmental coffers to pay for social programs. More social programs means better care for the less fortunate of our society.

But don’t forget the fact that these well paying jobs also mean that money will be spent on cars, food, gasoline, and entertainment, etc. This means more people will be hired for service and retail companies. Unemployment rates go down, and on on it goes.

Making things in America is good for America. I hope this trend continues.

And that is my thought for the day!

Good Strategy + Good Execution = Good Management

We have all been reading about the events surrounding Osama Bin Laden. We have sat around the television hungry for all of the detail. Was he armed, or was he not? Why was he buried at sea? Why did a friend of mine send me the picture of Bin Laden that is circulating the internet that has turned out to be a scam, introducing a virus into a computer that clicks on it? Although there are many questions there are some very important lessons that we can learn about management from this event.

In business classes we always talk about the four functions of management: planning, organizing, leading and controlling. You know what, these functions work! The event that has just occurred was meticulously planned by the Navy Seals. They went over the plan detail by detail for many months to make sure it worked perfectly. Not one American was killed. That result alone was excellent!

What was also a part of the plan though was a particularly important element dealing with computer information. When your team drops into the compound how do you make sure computers are not destroyed, etc? Obviously this would allow the team to get intelligence detail important to the subsequent war on terrorism? They called this plan the Sensitive-Site Exploitation Plan.

They organized the team, had great leadership in place, and the plan was successful. The Seals carried off five computers, 10 hard drives, and more than 100 DVD’s and flash drives. Not bad, great execution of a plan. The team now will go home and review the execution of the plan and using the control function of management determine what worked well and what didn’t so they can adjust next time.

This is what good management is all about. Executing a plan well, resulting in positive results. Good job team! All of us are proud of you!

And that is my thought for the day!

The IAM versus South Carolina: Boeing Loses

What a morning! So much to write about and so little time. DJIA is up, which is good for those that hold Blue Chips. According the Wall Street Journal Boeing stock led the way. Its stock price increased by over $2. Interesting, I wonder what happened.

Another conversation in the paper this morning involved lean manufacturing. The title of the article is For Lean Factories, No Buffer. The use a modern phrase to describe my response to this is “DUH!” If a manufacturer decides to be dogmatic when it comes to Just-In-Time (JIT) inventories they invariably will cause themselves problems with shortages. These shortages result in missed delivery dates, and problems with the customer. All of a sudden these lean factories recognize they need to hold a certain amount of finished goods to insure they meet the customer’s needs. Seems smart to me.

But the article that stood out to me this morning was on the opinion page, and was authored by the Governor of South Carolina. The governor states, “In choosing to manufacture in my state, Boeing was exercising its right as a free enterprise in a free nation to conduct business wherever it believed would best serve both the bottom line, and the employees of its company.” I have to say I agree with this. We are a democracy, and should have the right to choice. But, before you turn this off continue to read.

The governor then goes on to say that Boeing has dumped billions of development dollars into its new site, and has created thousands of jobs for the people of South Carolina. The governor calls its state a haven for employee friendly corporations. The governor goes on to describe South Carolina as a right-to-work state that does not require employees to join a labor union as a condition of employment. “We don’t need unions playing middlemen between our companies and our employees. We don’t want them forcefully inserted into our promising business climate. We will not stand for them intimidating South Carolinians,” Haley stated. On one hand I find a frank politician refreshing, it does not happen very often, but on the other hand I find this comment problematic.

It seems to me the line is now drawn in the sand. The gauntlet has been thrown down. The gloves are off and the slap has occurred. No matter how you say it, a challenge has been given. My fear is labor relations at the Boeing company will move backwards. My 30 years at Boeing Portland was a positive experience. I started out as a union member and ended up in management. What I remember is a positive working relationship between management and labor. My last three years at BP, before I retired, was within Joint Programs, a partnership between management and labor with the purpose of bettering the employee’s work life. People from all over the Boeing Company would visit Portland to observe what Joint Programs in Portland had accomplished. It was positive and lucrative for all stakeholders associated with the Portland facility.

It does appear that the relationship between Boeing and the IAM is moving backwards. Complaints, threats, and coercive actions are not what is needed at this point in time. Andy Grove, past CEO of Intel, and Andrew Liveris, CEO of Dow Chemical, have both stated in their recent writings that we need to make things in the US. They both take a holistic view of how this could be successful. The actions need to include employee, company, and governmental steps to compete against the rest of the world.

The current situation at Boeing is the exact opposite of what is needed. A friend of mine told me yesterday that instead of moving work to South Carolina, Boeing could move the work to South Vietnam (I know there is only one Vietnam now, just used the south to make the point). Collaboration is needed not confrontation. IAM and Boeing, get it together before it is too late.

And that is my thought for the day!