Yes, the U.S. Auto Industry Can—If the U.S. Congress and Obama Administration Learn a Lesson from Japan

Abstract

The U.S. political economy is long famed and envied as an engine for entrepreneurial ingenuity and economic opportunity. However, the U.S. Congress and Obama administration must now confront its serial failure to sustain a leading role in value-added industrial manufacturing. The current U.S. auto industry debate ranges over billions of American taxpayer dollars, the efficacy of government oversight, Congressional limits to excessive executive compensation, and the uncertain prospects of deploying bankruptcy as a corrective tool. Regardless, the “turning point” of the U.S. auto industry dilemma concerns the nature of American labor—management relations going forward. How can a U.S. company function in a way that American labor and management can—together—confront rapid domestic and international market changes in our globalized economy, given a track record of failure? Remarkably—and regrettably, the one option that has served the Japanese auto industry and Japan’s postwar political economy very well in this regard remains overlooked and unrecognized. This option is one of disarming simplicity and, to a surprising degree, of U.S. origin. Congress and the Obama administration should permit the establishment of works councils in collective bargaining agreements. How would this work? In practice, it appears to require little more than a determination from the National Labor Relations Board (NLRB). At least, that is all it has ever taken the Japanese. At the end of World War II, Japan’s new labor laws were enacted under the Allied Occupation. They are essentially Japanese translations of U.S. New Deal labor legislation. One institution this legislation created was Japan’s Central Labor Relations Commission (CLRC). The CLRC is the functional equivalent of the American NLRB. In the war’s immediate aftermath, Japan faced its own desperate circumstances. National recovery was essential, but traditional Japanese management clashed with a newly legalized labor movement. Confronted with the prospect of labor unions running plants without any management participation, called the seisan kanri ‘production control’ movement, the Ministry of Labor desperately turned to the recently established CLRC for guidance. On 17 Employ Respons Rights J (2009) 21:163–164 DOI 10.1007/s10672-009-9104-8