The recent labor struggle played out in Spring Hill, Tenn., for the soul of Saturn Corp. is a reminder that the only certainty in life is change.
In the 1980s, General Motors Corp. tacitly acknowledged it wasn’t capable of producing a successful small, fuel-efficient car within its behemoth, rigidly ordered ranks. It turned the task over to a brand-new, wholly owned subsidiary–Saturn.
From the beginning, Saturn Corp. was a different kind of car company–a tag line the company has successfully exploited to create a cultlike following among workers and customers alike.
Saturn succeeded in producing that small, fuel-efficient car, recapturing some of the buyers who had fled to Japanese imports. It did this through rigorous attention to quality and customer service, no-haggle pricing and an innovative labor contract.
That historic 32-page “Memorandum of Agreement” promised no layoffs for the rank-and-file, tied 12 percent of compensation to meeting quality and training goals and rewarded workers with bonuses when the company’s profit goals were met.
In 1996, Saturn’s 9,700 workers got $12,500 each in bonuses. Last year, sales were down 10 percent and the bonuses dropped to $2,000. So far this year, sales are down even more, by 14 to 20 percent; bonuses are in jeopardy.
Oil prices are plunging, and buyers are no longer interested in small, fuel-efficient cars. The Saturn line, with its coupes, sedans and wagons, offers neither of the sizzlers of 1998–sport-utility vehicles and light trucks–nor does it have a mid-sized model so faithful Saturn owners can trade up.
So, in keeping with Saturn’s labor-management spirit, the memorandum was put to a vote: Stick with the riskier but potentially more lucrative agreement–or bag it and surrender to the rigid but more secure UAW contract that governs the rest of GM’s vast empire.
By a 2-1 ratio, the more than 7,000 contract workers voted to keep the spirit alive, proving that Saturn remains a different kind of car company.
