Episode Details

It takes some nerve for a GM man to recommend a book to Ford. In my defense, GM did not want it.

In 1943, General Motors invited a young Viennese writer named Peter Drucker inside. He spent the better part of two years in its meetings and its plants. In 1946 he published what he saw there as Concept of the Corporation.

The book admired GM. It also said two things GM did not care to hear. A corporation is a social institution, and it answers to more than its owners. And the worker is a resource to be developed, not a cost to be controlled.

GM’s president, Charles Wilson, was curious enough to ask. In 1947 the company ran an essay contest for its employees called “My Job and Why I Like It.” About 175,000 of them wrote in. Drucker thought it the richest record of what workers want that anyone had ever gathered. Then the findings went into a drawer, and the idea went with them.

Alfred Sloan’s memoir never mentions the book. Drucker wrote years later that it had shaped business everywhere “and none on General Motors.”

Across town in Dearborn, a twenty-eight-year-old named Henry Ford II had just inherited a company in disarray. He hired managers out of GM. By Drucker’s account, and by the historians who followed, that team rebuilt Ford with his book open on the desk.

Ford read what GM shelved. That is the first thing I would like Jim Farley to know about the debate he has started. His company has done this before.

Farley is counting the workers America is missing. Nobody is counting what the workers it already has can do. That capability is the largest reserve of skilled labor in the country. Most of it stands idle, and it will stay idle until someone forms it on the floor and writes it down where the business can see it.

That’s the argument.

What Farley got right

For two years Farley has been telling the country it has neglected what he calls the Essential Economy: everything that gets built, moved, or fixed. That is ninety-five million people.

On September 30, at his second summit at Michigan Central, he gave the number. America has to fill 1.7 million skilled trades openings a year for the next ten years. Training programs graduate 55 people for every 100 needed. Nearly a quarter of the skilled workforce is 55 or older. He called it “a total killer for productivity.”

He is right. He is also doing more than talking: scholarships, an alliance of employers, a national report, an Ad Council campaign. I have no quarrel with a word of it.

I have an addition. Every one of those numbers counts people who are not there yet. None of them counts the people who are.

His word for all this is pipeline, and it is a fair one. If you want more water out the far end of a long pipe, you start by putting more in. But this pipe leaks. The report released at his own summit found that only one in two people who enroll in trades training finish. Inside the plant the loss is larger. My own estimate, worked out in a forthcoming book, is that a typical frontline operation uses about 30 percent of the capability it is already paying for. Treat that as an estimate. Halve the stranded share if you like. It is still a great deal of skilled labor, and no training program has to graduate it.

The man they flew in

I came to General Motors in 1989 still writing a doctorate on diagnostic expert systems. At Flint Metal Fab we had huge transfer presses with complicated Unico controllers overhead. When a press went down and the electricians were flummoxed, they flew in a man named Jim from Chicago to troubleshoot it. The expert system I called Trades tried to emulate what Jim knew.

Trades may have cut the diagnosis time for a novice electrician. The crew still lost the hour hunting through the basement for spare boards. And Jim still flew in. I did not dent that expense much. What he knew was too vast, and most of it had never been said out