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How Industrial Relations Affects Plant Performance: The Case of Commercial Aircraft Manufacturing

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  • Morris M. Kleiner
  • Jonathan S. Leonard
  • Adam M. Pilarski

Abstract

This analysis examines how changes in major industrial relations policies affected productivity over the years 1974–91 at one of the most important manufacturing plants in the United States. The authors find that productivity fell greatly, both in percentage terms and in absolute dollars, during strikes and a slowdown and during the terms of office of tough union leaders. In contrast with much of the firm performance literature, they find only small initial productivity effects of a movement from adversarial labor-management relations, which is the norm in this industry, to total quality management (TQM) and back again. How and why TQM is adopted, the authors suggest, may be as important as whether it is adopted. Finally, major industrial relations events like strikes, a slowdown, and the TQM program did not have long-term productivity effects; the firm returned to pre-event levels of productivity within one to four months.

Suggested Citation

  • Morris M. Kleiner & Jonathan S. Leonard & Adam M. Pilarski, 2002. "How Industrial Relations Affects Plant Performance: The Case of Commercial Aircraft Manufacturing," ILR Review, Cornell University, ILR School, vol. 55(2), pages 195-218, January.
  • Handle: RePEc:sae:ilrrev:v:55:y:2002:i:2:p:195-218
    DOI: 10.1177/001979390205500201
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    References listed on IDEAS

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    1. Richard B. Freeman & Morris M. Kleiner, 1998. "The Last American Shoe Manufacturers: Changing the Method of Pay to Survive Foreign Competition," NBER Working Papers 6750, National Bureau of Economic Research, Inc.
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    6. Golich, Vicki L., 1992. "From competition to collaboration: the challenge of commercial-class aircraft manufacturing," International Organization, Cambridge University Press, vol. 46(4), pages 899-934, October.
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    Cited by:

    1. Jonathan Gruber & Samuel A. Kleiner, 2012. "Do Strikes Kill? Evidence from New York State," American Economic Journal: Economic Policy, American Economic Association, vol. 4(1), pages 127-157, February.
    2. Barry T. Hirsch, 2008. "Sluggish Institutions in a Dynamic World: Can Unions and Industrial Competition Coexist?," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 153-176, Winter.
    3. John T. Addison, 2005. "The Determinants Of Firm Performance: Unions, Works Councils, And Employee Involvement/High‐Performance Work Practices," Scottish Journal of Political Economy, Scottish Economic Society, vol. 52(3), pages 406-450, July.
    4. Akerlof, Robert & Ashraf, Anik & Macchiavello, Rocco & Rabbani, Atonu, 2020. "Layoffs and productivity at a Bangladeshi sweater factor," The Warwick Economics Research Paper Series (TWERPS) 1293, University of Warwick, Department of Economics.
    5. John T. Addison, 2016. "Collective bargaining systems and macroeconomic and microeconomic flexibility: the quest for appropriate institutional forms in advanced economies," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-53, December.
    6. Michele Manna, 2021. "An OEE index for the Bank of Italy’s banknote production plant," Questioni di Economia e Finanza (Occasional Papers) 595, Bank of Italy, Economic Research and International Relations Area.
    7. Qi Ge & Michael J. Lopez, 2016. "Lockouts and Player Productivity," Journal of Sports Economics, , vol. 17(5), pages 427-452, June.
    8. Mariesa A. Herrmann & Jonah E. Rockoff, 2012. "Worker Absence and Productivity: Evidence from Teaching," Journal of Labor Economics, University of Chicago Press, vol. 30(4), pages 749-782.
    9. Panos, Georgios & Theodossiou, Ioannis, 2009. "Union Mediation and Adaptation to Reciprocal Loyalty Arrangements," MPRA Paper 15471, University Library of Munich, Germany.
    10. Addison, John T. & Teixeira, Paulino, 2019. "Strikes, employee workplace representation, unionism, and industrial relations quality in European establishments," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 109-133.
    11. Adam Seth Litwin, 2011. "Technological Change at Work: The Impact of Employee Involvement on the Effectiveness of Health Information Technology," ILR Review, Cornell University, ILR School, vol. 64(5), pages 863-888, October.
    12. Morris M. Kleiner & Jerry Nickelsburg & Adam M. Pilarski, 2012. "Organizational and Individual Learning and Forgetting," ILR Review, Cornell University, ILR School, vol. 65(1), pages 68-81, January.
    13. Ann P. Bartel, 2004. "Human Resource Management and Organizational Performance: Evidence from Retail Banking," ILR Review, Cornell University, ILR School, vol. 57(2), pages 181-203, January.
    14. Constanţa POPESCU, & Elena Diana ŞERB, & Andreiana CARMEN, 2016. "Study On The Repercussions Of Conflict Situations On Employment," EcoForum, "Stefan cel Mare" University of Suceava, Romania, Faculty of Economics and Public Administration - Economy, Business Administration and Tourism Department., vol. 5(1), pages 1-38, January.
    15. Chong, Sophia & Guillen, Pablo, 2012. "The discreet charm of the collective contract," Working Papers 2012-03, University of Sydney, School of Economics.
    16. Fernando Rios-Avila, 2017. "Unions and Economic Performance in Developing Countries: Case Studies from Latin America," Revista Ecos de Economía, Universidad EAFIT, vol. 21(44), pages 4-36, June.
    17. Dermot Breslin & Geoffrey Wood, 2016. "Rule breaking in social care: hierarchy, contentiousness and informal rules," Work, Employment & Society, British Sociological Association, vol. 30(5), pages 750-765, October.
    18. Jaren Haber, 2016. "Institutionalized Involvement: Teams and Stress in 1990s U.S. Steel," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 55(4), pages 632-661, October.
    19. John T. Addison & Paulino Teixeira, 2020. "Trust and Workplace Performance," British Journal of Industrial Relations, London School of Economics, vol. 58(4), pages 874-903, December.

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