When management strategies change: Employee well-being at an auto supplier

As a result of increased international competition, over the last decade or two U.S. manufacturing firms have made major changes in both their product strategies and their human resource policies. Many firms have chosen one of two strategies: the "high road" of innovative products and skilled, highly paid workers, or the "low road" of commodity products and low-paid, unskilled workers (Appelbaum and Batt 1994). In this chapter, we examine the case of a firm that manages to combine elements of both "roads" in a profitable way: it makes innovative products with moderately skilled, low-paid workers. We think that this firm may well be a bellwether for overall trends in U.S. manufacturing, especially in auto parts. Our firm, which we call SP (Small Parts), is a $600 million manufacturer of electrical and electronic products that it sells primarily to vehicle manufacturers (automakers and truck manufacturers).¹ Since the firm was founded in the 1960s, SP has undergone a number of changes in its markets and products over the years. In the next sections, we describe these changes, first in auto parts manufacturing in general and then at S P. These changes have had a significant impact on SP's human resource practices, including the nature of work, methods and levels of pay, and training.² We describe the impacts of these changes on worker satisfaction, based on surveys we conducted in four of SP's U.S. plants. In the conclusion, we discuss the rationale for the financial success of this firm and analyze outcomes for employees.