Assuming Success Will Last Forever: UAW and GM

Monday, April 4th, 2005

Business Week’s article Twilight of the UAW (4/10) should be a warning call to leaders in other organizations.

Much has been written about General Motors’ missteps over the years, and we can see the price they are paying for it. The United Auto Workers (UAW) has made some equally bad mistakes. As BW says, “. . . it failed to realize what it would take to compete in a world economy.” The union fought concessions when things seemed to be going well. UAW and GM were both breathing the same rarified air, and it has cost them.

The biggest mistake both organizations made: assuming that present successes would last forever.

Since they were making money, they failed to see the problems of rising health care and pension costs as their workforce aged. They never took foreign competition seriously. And they stuck to an old business model (management versus labor) when their experiment with Toyota (NUMMI) in Freemont, California was an example of how things could be done differently.

Two questions to ask yourself:

What assumptions am I making about the future that could be wrong?

To what extent do people in my organization truly see the potential challenges and opportunities facing our industry?

If you don’t like the answers you come up with, then I strongly encourage you to find ways to do a sober analysis of your current conditions and match that with the best guesses about what the future might bring. I like the philosophy of Open Book Management as a way to get everyone thinking differently about your organization. I wrote a short article about this approach. You can access it at: