30th Annual Automotive Insights Symposium

KRISTIN DZICZEK: My notes here and this-- thank you, guys. We're going to get started here. And we're back with our final panel of the conference. And I think we saved the best for last, personally. This is something-- an area of great interest of mine-- again, something that I think a lot about and I think more people should be thinking about and concerned for the next few years about how things are going to play out.

I'm going to start with a little bit of a slide presentation. Our third panelist-- see, there's only two gentlemen here. I'm going to introduce them when I'm done with my presentation. Our third gentleman is joining us a little bit later. So listen to me for just a bit. Then when he joins, we'll bring him into the conversation as well. So can you load up my slides? There we go. Hooray.

So the panel here is "After the Strike-- Prospects for Automotive Labor Management Relations." And yesterday, we talked a little bit about strike impacts and a lot about the economics and the cost. Colin Langan's presentation talked about the average hourly labor costs going up-- not going up quite as high as they would have if it had been the 2007 deal rolled forward. So we are still well below that.

Much of the 27% headline of the wage increase is, in my estimation, make-up for some of the wage increases that did not occur in the last few years. But that's all the headline kind of thing. The economics of the deal we talked about.

There's labor beyond the economics, though. And the automakers and the supplier-- and the union have to now live with each other and execute these agreements. And this is something that I don't think a lot of people think about. It's not an every four years thing, like the Olympics, and it happens, and then it doesn't. Olympic athletes go back and train. Union and management work together in those periods of time.

We also have the UAW with an ambitious project to organize the non-union automakers in the US, 13 of them all at once, so that when they come back to the table in early 2028, Shawn Fain says he wants to be bargaining for the Big Five or Big Six. So that's a-- doubling the number of automakers for a greater share of the automotive workforce.

This panel brings together academic experts who've worked with the UAW and automakers directly and a former labor vice president to talk about-- at Ford Motor Company to talk about what it means to administer a contract over the life of an agreement and then what are the things that might change and how we might see labor going forward. Certainly, there's sort of a renaissance of interest in labor. And the Gallup poll shows that the public opinion of unions is rising at an all-time high, actually, a recent peak.

But the UAW really has a market share problem. If you take them all together, the companies, the automakers that are represented by the UAW, are 39.1% of the market. And in order to have greater market power and bargaining power at the table, they need to have more. And they explicitly, during the rescue of General Motors and Chrysler, Fiat Chrysler, or whatever name they were at that point-- it's part of that deal with the government.

Senator Corker inserted language that said you must become cost-competitive with the international firms in the US. So the UAW becomes wage takers and not wage setters. And until you are a bigger share of the industry, wage taking might be more of an issue.

So this is, of course, the UAW membership. It's also-- oop, let me go back. It's also their net assets that are reported to the Department of Labor every year. So they had a sharp drop-off into the bankruptcy of two of the automakers. They've grown back a bit. They've also organized a lot beyond the Detroit three automakers.

The official name of the UAW is the International Automobile, Agricultural, and Implement Workers of the World. And they should add in there some other things. The largest local is the state workers in Michigan, Local 6000. They've also been actively organizing at universities, graduate students, casinos, and state workers. So there's this fund. There's a lot of money. Nearly $1 billion was in the fund. And their membership has leveled off.

We look at what was the impact of the strike. And we went back and looked at all the big strikes for the last 50-some years. This goes back my whole lifetime. And we were trying to see how impactful are they in the economy.

And usually, the UAW contracts expire in September. And if they have a strike, it's six or eight weeks, maybe, and that comes back up. So the third quarter might-- the end of the third quarter might get impacted. The beginning of the fourth quarter-- and you do not see a GDP impact. This is gross domestic product of the economy. You don't see one for any of the strikes except for 1970.

1970-- there was a strike at General Motors. General Motors was then the largest employer in the world with 400,000 workers. They had over 100 locations in the United States. And this was a very long strike. This was 67 days.

There are a number of parallels to 1970 and 2023 that I would like to draw. In the spring of 1970, Walter Reuther died in a plane crash. So you have immediately new people thrown into leadership with not a lot of time to plan. They were deputies to Walter. But they weren't in the lead seat. So new president--

You also have high inflation because we're talking about the post-Vietnam or Vietnam era. And inflation was quite high. There was an existential threat to the Detroit three automakers of the international firms-- the imports, the Japanese, coming to the US market.

So there's an existential threat. There's high inflation. There's a new president. And they had some big bargaining goals in 1970. One of the things that was won in 1970 was the "30 and out" retirement. So work 30 years, and then you can retire.

There were a number of other things that were on the table that did not get one in 1970. And some of the bargaining demands that were on the table this year date back to 1970 and 1976, like the 32-hour workweek. That was a point in the 1976 strike with Ford.

I keep saying wages were a big part of the story. This is the top-tier labor rate and how much it has changed over time going back to 2003, which was a recent peak of the wage rate for top-tier production workers. See that long, flat line, where it's just sitting there and not going anywhere? No raises for nearly a decade.

Now, this is jumping up. And then I do have the projections for just the wage side on the right side. If you take into account inflation, if your wage doesn't move up for 10 years, you are losing. Your real wage is falling.

I do have some projections over there that do not incorporate the cost of living agreement that-- or cost of living adjustment that they won. I want to make a point that they also got lump sums in that term for things like inflation protection-- was about $1,500 a year. That equals to about 3% inflation. So some years, they were overpaid for inflation, and some years maybe underpaid.

They got paid for quality, attendance, other kinds of reasons to give cash lump sums, and, of course, profit sharing. Profit sharing is good when you have profits. There were many, many years where there was no profit sharing. There was one very famous year in Flint, Michigan, where I'm from, where GM workers got a $50 check. Some of them burned them. Some of them took them to McDonald's. It wasn't worth a whole lot.

The truck boom in the '90s produced quite a bit of profits, particularly for Green Company, which is Chrysler at the time. Ford was making some decent profits in that period of time-- GM, not so much. They go along with very little in terms of profit sharing. This goes back to 1983, by the way, which-- profit sharing first came into their contract.

In 2011, Bob King is president. And he changes the formula for profit sharing, makes it much simpler. And before, you had to know the ratio of salaried workers to hourly workers. And you had to kind of stand out-- Ford had a really great-- here's how we calculate it. And there's no way that any layperson or worker could have taken that formula and had any idea what their profit sharing check was going to be. So it was kind of a black box.

It's very clear. If the profits are $12 billion, your check is-- average check is $12,000. This is the new formula. It's a little different at Chrysler. But that's the new formula.

The formula changes. But what really changes has become profitable again. And so Ford and GM-- very profitable in the beginning of the recovery out of the last Great Recession, and then Stellantis really kicking it into gear in the last couple of years.

So the average profit sharing payout is up here on the chart, between $300 pre-2011 per year in the-- for General Motors to an average of $9,300 for GM workers post-2011. So this is clearly adding a lot to people's pay.

I want to make a point, too, that if you are a entry-level or a second-tier worker, as they used to be called, you got the full amount of profit sharing. So this might show up in your pay as about a third of your pay. For a top-level worker, it's not quite a third. But one year, you get-- a third of your pay is huge. And then the next year, if the profit sharing check is smaller, it's much smaller.

And this is one of the reasons if you go back to 1983-- this is about when the Canadian union broke away from the UAW. And they did not like lump sums and profit sharing and all of these sorts of things. They wanted wage increases. And so the chief economist at the Canadian Auto Workers union-- he's retired now. He used to say, this is the slot machine economy. How can you have my compensation based on things I can't control? Profitability-- I-- there's nothing I do in my job as a production worker on the line that makes the company more profitable, or less.

Profits are often impacted by things like big recalls or how successful a product was in the market. They didn't design the product. So there was some unions, like the Canadian Auto Workers union-- do not have profit sharing for this reason. There's not a whole lot that workers can do.

Motor vehicle and parts wages overall, though this is not just the D3-- this is the government data-- are about 30% to 40% lower than they were at the most recent peak in 2003. But unit labor costs are up about 1.3% in that time. So that means productivity, the output, output per dollar of labor, is lower.

So we've got a lower productivity, lower wages. These will change. Of course, the government data will change as this contract goes into effect and these raises take impact.

What I want to talk about with our panelists, though, is some on cost. What's the impact of changing labor cost? And we heard on the-- when Colin was talking about offshoring and outsourcing and automation and the flow through to other automakers and suppliers and sectors, which is what the president of the UAW calls the UAW bump, where many of the international firms raised wages right after the UAW strike was concluded. We spent a lot of time yesterday talking about different ways to manufacture that are much more efficient and low-cost.

But really, I want to focus on how are the parties going to work together to administer the contract, what are the prospects for the UAW organizing in this sector, and what's the longer term outlook for labor. That-- I am going to introduce my panelists who are here. My third panelist, as I said, is going to join us a little bit later. He'll pop up here. And I'll introduce him when he shows up.

But my first is Joel Cutcher-Gershenfeld. He's a professor at Brandeis University. Joel has worked very closely with Marty and other folks at Ford and the UAW on how to come to unique agreements, how to find the win when there's conflict, how to get in between their positions and find a way forward.

So I commend you to take a look at what Joel has done over his career. He's got a lot of things you can read. And I'm so happy that you're here, Joel. It's great to have you here.

JOEL CUTCHER-GERSHENFELD: Delighted.

KRISTIN DZICZEK: My other panelist on the stage with me is Marty Mulloy. Marty is the former vice president of labor relations at Ford Motor Company. He negotiated-- I don't know, how many contracts did-- were you the lead on?

MARTY MULLOY: I was chief negotiator in '07, '09, and '11.

KRISTIN DZICZEK: The easy ones, right? You had all the easy ones, Marty. He is now the president of Mulloy Consulting and a good friend of mine as well. And so I'm really happy to have Marty here.

So we're going to start with Joel giving some initial remarks. Then we'll go to Marty. And if Tom is here by then, he can join us there. So go ahead, Joel.

JOEL CUTCHER-GERSHENFELD: I'd like to begin by putting collective bargaining in the spotlight. At its best, collective bargaining does three things. Yes, it settles wages, hours, and working conditions. But also, at its best, it's an engine for innovation. And at its best, it is a valued institution in society. In Europe, it's what they would call a vehicle for social dialogue. And in order to understand what happened in the recent negotiations, I'd actually like to, as you did, take a step back first and pick two pivotal prior negotiations, 1982 and 2007.

So if we go back to 1982, that was, of course, before what we just saw with all negotiations being concurrent. Then the UAW picked a target. It was GM at the time. GM was first in the box. And this was just after a recession. And Ford was ahead of GM in terms of downsizing to match the workforce with the capacity and the demand. And it looked like GM was going to reach an agreement that Ford felt would be not to its interest.

And I was on staff at the Michigan Quality Work Life Council at the time. And I remember Ernie Savoy came in with what was called the gear chart. He had hand-drawn this chart, which had a gear for the UAW with its interest, a gear for Ford with its interest, and a middle gear for mutual gains. And he put that on the table for the UAW to say, come bargain with us.

And part of the UAW's interest was job security. And so they came. And two things happened. One, it was an agreement that was an engine for innovation-- that the joint efforts on quality, safety, and a lot of other important topics really got launched under that agreement.

It also, it turns out, because Ford had already downsized, gave them a competitive advantage since GM hadn't. But yet they-- with pattern bargaining, they were subject to the job security language. And so for about five or six years, Ford actually had a significant advantage over GM in the marketplace.

So that was an important agreement in the sense that it illustrated how collective bargaining could go beyond wages, hours, and working conditions and drive innovation. Let's fast-forward to 2006. Oh, Tom is here. So he'll be joining us in a minute.

In 2006-- I'll talk about it from a personal point of view. I'm about to describe something that Marty knows far better than I. But I got a call from Marty and from the UAW to say, before bargaining, would I fly to Detroit-- I was living in Boston then-- and meet them secretly at a Catholic seminary, Saint John's Seminary, which, of course, I did.

And at that meeting, Marty's successor, Bill Dirksen, quoted Henry Ford, saying the definition of insanity is doing the same thing and hoping for different results. They said, if we bargain the way we've always bargained, we will take this company into bankruptcy. There's a recession forecast. And we're at risk of losing-- I think Marty said $6 billion at the time.

And so we redesigned the collective bargaining process. We said there was something like 23 or 26 subcommittees. Each subcommittee would first define the issue that they were working on. They would then identify the relevant data that everyone needed to have. They would analyze the interest of the key parties-- labor, management, and others. And then they would generate options.

And it wasn't till step 5 that they would actually bargain. And the idea was to take collective bargaining and make it into a problem-solving process. And then, of course, there was a final step to actually plan for implementation.

That wasn't the only thing that kept Ford out of bankruptcy when Chrysler and GM went into bankruptcy. But it was a considerable factor. Not only that, but because they came out of that bargaining with a better relationship than they went in because they had truly done problem-solving together, when it came to the downsizing that had to happen in that recession, and Marty can tell you more about that, it was entirely done at Ford with voluntary separations. And these were very generous packages. Just one of them, for example, was four years at half salary with full benefits and something like $30,000 for college tuition a year.

And so the reason I tell that story is not only did they, in the various subcommittees, come up with innovations for the joint programs that-- I know there's been issues with the joint programs more recently. But they served a powerful function in driving continuous improvement. But they also had a relationship that was better that they could do those voluntary separations.

And coming out of the recession, quality actually went up. There was no involuntary layoffs. And for the point of view of society, collective bargaining is a social institution. Quite a few people landed on their feet in a recession when otherwise, if it was an involuntary layoff, it would have been devastating to this community and others.

I tell those two stories because if we come forward to the most recent negotiation, and you'll hear more about it from both Marty and Tom, it failed on the first two-- on the dimensions of being an engine for innovation and being a fully valued social institution. I want to unpack that in a couple of ways. First, the fact that there was going to be a wage correction is not a surprise.

As Kristin has shared with the data, more broadly in this country, we had about a 40-year period from the end of World War II in which wages-- there was wage compression in society, that the gap between the lowest and the highest was reduced. We've now had 30 years of increasing-- the compression has reduced. The separation has grown greater. And so as a valued institution, the reason that a lot of people in the public leaned in on the auto negotiations is that that's being experienced across the nation. And a lot of people saw that as a correction that they could relate to.

So in that sense, it was a social institution. But as you've already discussed in this conference, the-- there were no guardrails on the bargaining. So the wage increase is now going to come at the expense of jobs down the road. And so in that sense, there will be social costs, as well, coming out of this.

But most importantly, and I'll stop here, is that the parties came out of this with relationships that were worse, not better. And now if all goes well, they will dedicate themselves to some repair and rebuilding because they cannot accomplish what they need to accomplish to address the wage differential that there now is without a relationship that lets them work on quality, safety, continuous improvement, and the rest.

Living under an agreement is as important as reaching the agreement. And on that, I'm sorry to say the work to be done is considerable. Let me stop there.

KRISTIN DZICZEK: So let's go to Marty. And I'll also-- I forgot to mention Marty and Joel have written a book together about this-- these topics. And I commend you to read that as well.

JOEL CUTCHER-GERSHENFELD: Along with Dan Brooks from the UAW.

KRISTIN DZICZEK: Right.

MARTY MULLOY: So let me give you an example of a company and a union collaboratively-- excuse me-- working together. And there's been a lot of comments about corporations making these obscene profits.

I got to tell you, from 2001 to 2008, Ford Motor Company lost $50 billion. From 2006, 2007, and 2008, we lost $35 billion. So quite frankly, when I hear about these companies making billions, I'm elated. I'm thrilled because they need that cash. They need that cash not only to play profit sharing, but to invest in new products.

And conference has really been enlightening, truly enlightening. And the complications with the EV and where you're going to put your investment-- these companies need those billions to invest to put in new product and continue to employ these people.

Now, we're coming into 2000-- about seven negotiations. We sit down. Alan Mulally is our CEO, brilliant-- I mean, brilliant CEO. One of the best moves Bill Ford ever did was bring in Alan Mulally. And the key Alan stressed across the entire company was shared sacrifice. It started out we'd sold brands-- sold Jaguar or Volvo, Aston Martin, Mazda, Land Rover, Mercury-- and discontinued Mercury. But all that money was put back into North America, primarily, because that's where we're really bleeding terribly.

I was in the meeting when Mulally sat down with Gettelfinger. And the transparency of information and the honesty and trust between Ford Motor Company and the UAW is something I recall Ron saying he's never seen a company so transparent. The information was provided. In fact, we used to have meetings with the UAW. We were showing them our board decks. We met with them monthly.

Alan would meet with the senior UAW on-- about every other month. But every month, we met with the president of the UAW. We met with the vice president of National Ford Department. We would meet with the president of the Americas, group vice president of manufacturing, and myself.

And from the start of the meetings, as we continued, they got better and better and better and better. And what these meetings built on was trust-- that we could explain information to them. You know the term "first try to understand, and then try to be understood"? That's what people were practicing.

So when it came up to 2007 negotiations, there were no surprises. We knew exactly what the hurdle was because, let's face it, you lose $50 billion, you don't have a lot of money left. In addition to that, we had-- we were facilitized for 25% share. We were down to 14%. Basically, in these negotiations, we're at 14%. We stop the bleeding.

We had approximately 90,000 people, hourly employees, at the late '90s. By the time-- I'd say about 2009, we were down to about 35,000 employees. And as Joel mentioned, we took out about 50,000 hourly employees and not one involuntary retirement of the whole bunch-- a lot of special early retirements, a lot of people taking packages. And we offered something called the Educational Opportunity Program. We'd send you to college. We give you some money in your pocket so you have cash. We kept you on our health care rolls. And we provided insurance. That's how strongly we felt about providing our hourly employees opportunities going forward.

Joel mentioned we did a modern operating agreement at every plant in the entire company. We took away old work practices, consolidated skilled trades, that saved us about a billion dollars. We fixed Visteon. Visteon was an $800 million problem. Visteon was going to go bankrupt in '05. We decided to bring it back as Automotive Components Group, work collaboratively with the UAW, and we had to basically either close or we tried to sell those operations to component suppliers in the business.

We had a balance sheet of $23 million in OPEB obligations. Our balance sheet was a mess. We funded the OPEB through the UAW in the 2007 negotiations. And that tremendously improved our balance sheet. And we borrowed $25 billion. Alan used to call it the biggest loan, the biggest homeowners loan, in the world. We mortgaged the BlueOval.

And I got to tell you, the rally of the company, hourly and salary together, to pay off that loan-- when we paid it off, we had people, all hourly, salary, outlined in the BlueOval-- were all cheering because we paid off our loan. And we are on a sound financial footing going forward.

Now, when it came to 2008, Lehman Brothers collapsing-- you remember that? I think it was June or July. The world's falling apart. The banks are failing. The TARP money, which Bush started-- and then finally, General Motors succumbed, and Chrysler succumbed.

The reason we didn't go bankrupt is because we had already two things-- A, the money was huge, the loan, great decision by Alan Mulally and Don Leclair as our chief financial officer. But it's also because we worked with the UAW. If the UAW basically told us to stick it, we would have gone bankrupt. We would have gone bankrupt before 2008. There would have never been a 2008. We would have liquidated. And god knows what would have happened.

The people on the [INAUDIBLE], the hourly retirees, [INAUDIBLE], that would have blown up. There would have been no money. So they're gone. Our retirees, who are depending on their pensions-- we've continued to put money in their retirement fund. The PBGC can just take so much. And then our active employees-- we did the right thing. And we did the right thing. And we're working with the UAW to accomplish it.

I got to tell you, I am speaking for Marty Mulloy not on behalf of Ford Motor Company in all my comments, but our DNA in the company-- it started with the UAW as Bill Ford. Bill Ford establishes how we treat people and how we treat the union.

We were organized in 1941. We were the last of the Big Three to be organized by the UAW. But we very quickly moved to a participative role. The first-- we did-- we did try to do, more importantly than anything else-- soft on people, hard on problems-- so no screaming, no yelling, no comments that they were just really off the ledge. But you got to look at what the problem is.

And by the time Obama's presidential task force got-- took a look at the numbers, back in 2007, the gap between us and the transplants was $27, fully fringed. By the time Obama's and-- task force completed their analysis, it was down to about $5. They made, quite frankly-- Obama, the task force-- in my opinion, even though we weren't a part of it, we weren't bankrupt, stepping back and looking with it, I thought they did an outstanding job. Geithner was from the Treasury Department. Steven Rattner was the person-- the "car czar," if you remember. I thought they did a great job.

And so what happened from that? We went up. We've gone out and hired about 30,000 people. I'm talking about Ford Motor Company. You see all those profit sharing checks? Those profit sharing checks came in.

And before negotiations started this term, the UAW, or I should say the Big Three, were still about $10 over the transplants. There is a narrative created that the-- our hourly employees were terribly disadvantaged. They're still making $10 more than the guys at Toyota all in all.

And if you step back and ask the question, how relatively-- what's your job security, I like working for a company that has money in the bank instead of the kind of restructuring effort we went through. So I'll leave it at that and turn it over later for questions and answers.

KRISTIN DZICZEK: Marty, Thank you. And Tom has joined us. We had a little bit of some issues to get Tom here. But I'm so happy you're here, Tom. So Tom, I'm going to introduce you and then give you a little bit of time.

I want to start with something and play off something Marty said-- was Ford was the last to be organized. It was bloody.

MARTY MULLOY: Yeah, it was.

KRISTIN DZICZEK: It was awful. If you google "Battle of the Overpass," Ford did not want to be organized. They did not.

MARTY MULLOY: That's true.

KRISTIN DZICZEK: They did not want to be part of what Joel and Marty are discussing here. It was not pretty. And we'll get to it.

[LAUGHTER]

I'm going to get Tom up here, though. One of the things that-- I've read Tom Kochan's work for a very long time. And one of his more recent pieces in the Harvard Business Review is "How Businesses Should and Shouldn't Respond to Union Organizing and the Labor-savvy Leader."

so Tom has been a thought leader in labor management relations for a long time. He is the George Maverick Bunker Professor of Management, Emeritus, at MIT. And he joins us remotely. So, Tom you can give your opening remarks. It's nice to have you.

THOMAS KOCHAN: Good. Well, it's great to be here. Thank you, Kristin. And I apologize for being late and having to deal with a double scheduling issue. But I'm so delighted to be part of this. And I can't think of a more important conversation, both, certainly, for the auto industry, but for the country because the auto industry is a bellwether, continues to be a bellwether, both for the economy and for labor relations. And so the challenges that you all have outlined in your opening remarks are enormous. And they have to be addressed straight on.

But I also think that the potential to address them lies within the auto industry and the UAW as well. Joel reviewed some of the history of the positive innovations in labor relations that Ford, the UAW, with the help of my colleagues on the panel here, introduced in the last decade, and even before that.

I want to remind everyone that in 1982, Ford Motor Company was going bankrupt. And what saved it, just as Marty indicated in 2007 and so on-- what saved it from going bankrupt was a-- very innovative negotiations and follow-on effort between the UAW and Ford Motor Company to focus on exactly what Joel said. And that is rebuilding the relationship, finding ways to improve quality-- remember the slogan "quality is job one"-- and putting real resources into developing a different relationship.

What does that mean today? Now, I understand the cost differences that Marty articulated and that you've all emphasized. I also understand the bitterness that management may harbor from the kind of language and rhetoric of the UAW during the negotiations. Those are realities. And those are realities that have to be addressed, not festered.

It's very difficult for managers-- I've worked with a lot of executives. It's very difficult to come out of this experience and now say, that's a sunk cost. That's where we were. That's what's happened. If we want to survive and if we want to prosper and we want to prosper in the United States and we want to prosper with the UAW, then we've got to figure out a way-- ways to really work together to get over the psychological hump of feeling that we've been attacked and, therefore, we're going to be defensive.

If that psychological barrier is not overcome, then this will be a downhill process of more outsourcing, more job loss, more problems with competitiveness with not only the transplants in the United States, but elsewhere. But if management now says, here's our challenge, we're going to figure out what we are going to do to lead this effort, we have to do it at the company level, not necessarily at the presidential level of the UAW, not-- and not just at the company level, but right on down to the workplace, right on down to the rank and file workers, right on down to the local union stewards and leaders, and the first-line and middle managers who will set the tone for a recovery process, what might that recovery process look like?

Well, there's no black magic here. But it starts by having straightforward conversations at all of those levels about the competitive pressures and listening to what the workforce has to say about their concerns and finding that joint area of concerns, of mutual concerns, about jobs of the future, about training, about safety and health, about new technologies, whether it's the EVs or the myriad of new forms of technology that are going to be coming in. These all have to be the agenda for management to lead in engaging the workforce, engaging the union, and saying, we are going to move forward, and we want to move forward with you, but we have to really address these issues. We have to share information the way Marty described it in the past. We have to talk about the competitiveness of a particular plant and what we need to do to invest in making sure that it can be competitive in the future.

We have to talk about how we are going to develop new products together because one of the biggest costs-- I don't have to tell anybody on this panel and probably anybody in the room that one of the biggest costs is the development and the time needed to go from concept to launch of the first product out the door. If that process can be condensed by jointly working, as I have seen it in the auto industry, both at Ford, at Saturn when Saturn was part of GM, working together to say, how do we make sure the workforce has the right training, how do we make sure that we restructure the jobs that are going away and the new jobs that are coming in and making sure that everybody's on board and that we use the workers' ideas for how to structure these processes to get the engineers working in tandem with people on the shop floor as these new products are getting the new processes for assembling them, for putting them together, are coming into place, that's the avenue. Those are the avenues for moving forward.

Now, will it be enough? It may or may not be. But I can guarantee you that if we stay where we are at right now with a highly adversarial rhetoric from the negotiations, a psychological feeling that we have been mistreated by-- within management, all of which is reality, and a workforce and a local union leadership and a company union leadership that doesn't quite know where they need to put their energy, then it will be a downhill slide.

I think there's an alternative. I think the alternative has to be led by plant management, by company management, and by training and making sure that middle-level managers and supervisors are on board and working on these issues with a very clear agenda that we've got to make sure that we can recoup some of these high costs and we can recoup the productivity. We can make sure that we are the quality leaders in the auto industry again if we are not right now. Where we have some challenges, we need to address them.

As we introduce the new vehicles and the new plants and the new technologies, we have to really make sure that workers have a voice. There's a phrase that both Joel and Marty know of that came out of the innovations in dealing with robotics and so on in the auto industry from our Japanese firms that it's workers who give wisdom to these machines. That applies to AI even more so than the-- just the manufacturing, robotics technologies. But it applies in general.

Workers how to do the work. With the right training, with the right leadership, with the right opportunities for participating, they can bring their wisdom how to do this in a highly productive and effective way. I hope we will have that kind of leadership. And it has to carry through not only in the OEMs, but Ford has done this before, as Marty articulated. It has to permeate through the supply chain, through Ford's suppliers, because you're only as good as the weakest link in the supply chain. And so the leadership has to extend into the supply chain to deal with these issues.

Now, what will happen with the UAW? We'll see. The UAW has got this major organizing effort that they're going to give high priority to. They already are. There's going to be a lot of noise about that. There's going to be a lot of public attention to that.

I am not smart enough-- don't have a crystal ball that will tell us how that will all work out. But that's going to go on. And that is something that-- obviously, if there's more success in organizing, that will help deal with this issue at some marginal level. But that's not going to save the Ford Motor Company, General Motors, Stellantis, and the suppliers.

You have to do it on your own. Let that process play out. You don't have any role in it. Where you open new facilities, it has to be done on a joint basis. I know the language varies from one company to another. But the principle has to be, we are going to work together. The only way we are going to survive is if we survive together.

So that's a-- I think I'm of the mind that this is an exciting opportunity. It's an enormous challenge. But it's not an insurmountable challenge if the best leadership is brought to bear in moving forward. Thank you.

JOEL CUTCHER-GERSHENFELD: I know you have questions for us. But I can't resist a tiny anecdote.

KRISTIN DZICZEK: You can do that.

JOEL CUTCHER-GERSHENFELD: This is ancient history. But you're taking when Tom mentioned, quality is job one, the ads. Ancient times-- I was working at the Quality of Work Life Council. And the executive committee had arranged for us to go meet with Young & Rubicam for some pro bono advertising support.

And so we met with this junior ad executive. And he said two things-- one, that the quality is job one. It was an hourly worker with a UAW local turning to the camera and giving a thumbs up-- was the single most successful ad at the time in auto history because it was the front-line workers certifying the product. But then he said he didn't know which ad writer had come up with this idea of employee involvement, but it was a good line for the ad.

[LAUGHTER]

THOMAS KOCHAN: Well, let me add-- let me just add one thing very quickly. Maybe the second most effective advertising was in the early stages of Saturn and the UAW where they talked-- they-- we said it was a different kind of company and a different kind of car. And they had joint ads. And the UAW was a partner in the marketing of the Saturn vehicles. And in fact, there were many stories of where the UAW Saturn workers would see a Saturn owner, and they would stop and talk.

We've got to get the workforce and the UAW as partners in all aspects of making this business successful, including the marketing. There's a tremendous interest in American products today. The American public wants more American-made products. And so if the UAW is invited to join in joint marketing, that's another avenue to pursue.

KRISTIN DZICZEK: Thank you. I want to make a quick comment. And we're going to look at the strike a little bit. But first, one of the reasons I thought about this panel was right after the strike, the media, and some of them are here, go up to the CEOs and say, how do you feel? How did that go? It was a very adversarial relationship during bargaining. Very bad things were said about each side on both sides.

It doesn't look like the honesty and trust and transparency that my panelists have described that has existed in the past and may exist in the future. But all of the CEOs are like, we're working together, we are sitting down with our partners, and we're building our relationship. And many of these people are newly elected. They didn't know them very well. They came into office in either January or March. So it's still a fairly young relationship.

But there was an interview with CNN with Shawn Fain. And he said, are you going to pivot now? The companies say, you're working together, and you're going to do things. And he says, well, what we did worked.

THOMAS KOCHAN: But that's at the Shawn Fain level.

KRISTIN DZICZEK: Yes.

THOMAS KOCHAN: And he's putting his eyes on organizing these non-union plants. And he's going to take a very hard line in negotiations in other places. That is not where I believe the union leadership at the company levels is. I think they will be open to these kinds of things. So let's not get carried away--

KRISTIN DZICZEK: No, no, no. I was just bringing that in. And we're going to pivot from there.

JOEL CUTCHER-GERSHENFELD: Just to stay with that--

THOMAS KOCHAN: I got it. But I think we've got to look a little bit beyond the rhetoric and do the hard work. Now, what Marty described and Joel described, it made it sound like-- well, this is unfair-- made it sound like this was easy and natural and developed quickly.

Now, they will tell you this was sweat and blood and years and [INAUDIBLE] and long hours of hard work to build those relationships. And you have to start and work at it step by step and stay with it. So it'll be a process. It won't happen overnight. And I think Marty would be the first to reinforce--

JOEL CUTCHER-GERSHENFELD: And I would say keep your eye on local negotiations at the plant level because there's a-- there is the ability to-- for folks to lean in on the issues around quality safety, continuous improvement, and the rest in plant-level local negotiations. And more importantly, it's the local relationships, as Tom has highlighted, that are going to be handling things on the ground.

Now, they will be affected by what the president of the UAW says. So that's-- that matters. But I think there's a lot of important and hard work to be done plant by plant, relationship by relationship.

MARTY MULLOY: Just as anecdote, some of my best friends, UAW guys I used to bargain with-- and I went to a couple union Christmas parties. And I got to tell you, I had people taking me aside and said, Marty, this is not what we're all about. You understand there's a lot of rhetoric going out there. But we love Ford Motor Company. In fact, one of the chairmen came up to me and said, we're going to add employees because we've got market volume. And we're going to go out and get it. And we've got skilled trades doing this. And we're working with suppliers.

And Chuck Browning happens to be the president-- the vice president of National Ford Department-- tremendous credibility in Ford Motor Company. He was a part of all the restructuring of Ford Motor Company. He's smart, innovative, trustworthy.

JOEL CUTCHER-GERSHENFELD: And he started in the Flat Rock plant.

MARTY MULLOY: And he started in the Flat Rock plant. He understands modern-day operating agreements. So we've got-- I completely agree with Tom. We cannot let this get in the way of doing the right thing and working as we've traditionally worked with the UAW because that's the only way we're going to make it. We have to figure out a way to be-- the competition isn't the UAW. They asked Bill Ford-- I never thought of the UAW as my enemy. That's exactly what I thought when I heard-- when the new president of the UAW was announced, he said, they're our enemy. I never thought of the UAW as my enemy, for God's sakes.

The enemy is the competition. When I was hired, we had 90% market share. By the way, in '08, we had-- I'm talking about domestics-- we had 52% market share. We got around 40% market share. We can't be infighting We got to hold on to our share and stay competitive.

KRISTIN DZICZEK: So you guys kind of answered where I was going with this. So I was going to throw down there's this top-line adversarial language. It may be necessary for rallying the calls for the organizing. And we had some bad words thrown back and forth. I want to ask you, during the strike, post-strike, what do you think both sides did right? What were the most effective tactics that the companies and the union did right in these negotiations?

JOEL CUTCHER-GERSHENFELD: So I want to highlight on the union side the public relations in the following sense. I'm going to actually give a different example. But you'll see the connection.

About 10 years ago, there was a UPS strike. And in that case, the Teamsters union did a good job of making the strike about part-time work, not about the specific issues that they were negotiating. And in a sense, they commanded the high road. And it became a national discussion on part-time work.

In this case, the UAW, I think, did command the spotlight in a way that management did not and did make it about reducing wage inequality. And that resonated. So calling it right, it-- I think they were effective in doing that. And I think management was caught off guard by how much that played and had to play catch up.

KRISTIN DZICZEK: And if you don't mind, I'm going to jump in. I attend the briefings for-- before negotiations start. I've talked to both sides for many, many years. And usually, when the companies do their briefings, they're like, oh, we're not competitive, and we got to get some savings, we got to get costs, we got to get health care costs down, we've got to do this and this. And they lay out the numbers to the press the analysts, people like me.

This year, for the first time in my recollection, the company said, we want to raise wages. They're coming into this with a-- and there were difficulties in a tight labor market of getting and keeping people at those low wages. They were transitioning people from part-time to full-time quicker than was required under the contract. They knew they had some issues that they needed to solve. So I'm going to come back to-- I call it like, what are the most effective tactics? You say communication and that that kept the companies off guard.

JOEL CUTCHER-GERSHENFELD: And I will say, and I'm going to turn to Marty on this, the UAW demonstrated that it had the power to skillfully close plants, do things, and exercise that power. But to quote an expert on the subject of power, Spider-Man, with great power comes great responsibility. And Marty, I don't know if you want to talk a little bit more about just the power that the UAW has and the consequences of fully utilizing its power?

MARTY MULLOY: Yeah. They have $875 million in a strike fund.

KRISTIN DZICZEK: A little less now. They had a strike.

MARTY MULLOY: Yeah, a little less. $875 million in a strike fund-- and all three companies burn cash really fast when they're not working. We're not like a GE, where we're a subcomponent of a company. And this is the United States. Here's where the profit margin-- this isn't like negotiating in Australia, where it's a small bit of the company. It's not really going to affect the bottom line.

And we don't use replacement workers. They're really not practical under the circumstances. So we're not running our operations. We're burning cash fast. And they have $875 million.

The key to this is that UAW has to sit back and ask the question, what's in our best long-term interest? Do we want to create a situation where we place the people that are paying the bills-- they pay the health care bills, they put food on the tables for the families-- do we really want to put them in an uncompetitive position, cost position?

Ford announces $8.8 billion, $900 of product. We got to figure that out. We got to figure where are we going to take the cost out. Ratner is on YouTube. And he talked about the negotiations, the outcome. And he talked about unintended consequences.

Well, the unintended consequences is the yin and yang he talked about. Wages go way up. But you're just going to have less people. It's just going to be one of the alternatives.

There's got to be-- there's innovations rooms, I'm sure, all over the company. How are we going to get that cost out, because the consumer is not going to chin it? We can't give that over to the consumer. It's got to come out somewhere.

So I look at it differently. I don't think-- I honestly don't think the UAW got the optimal contract for all their employees because I believe they've actually put a large portion of their employees longer term in a difficult position because I just think there are going to be less UAW employees employed. And one of the reasons is because of this agreement. By the way, that's my opinion, personally opinion, not speaking for the company.

KRISTIN DZICZEK: It's a common refrain, though, I think that the UAW won the battle and lost the-- may have lost the war. I'll say may have lost the war. Tom, if you don't mind, I'm going to pivot to this next question. And you can weigh in with this and-- at first and come back to the effectiveness of those strike.

UAW was really publicly seen as having won this round. What did you guys see that companies gained? Negotiations are two ways. And you don't just give everything away. You get something for that. So what do you think the companies have won in this round of talks and that maybe didn't get highlighted as much when everyone is paying attention to 27% raises and COLAs back and all the headline kinds of things? These are quiet things that happen in the details of the language and the memorandums in the back of the agreement and all of those sorts of things. What do the companies get?

THOMAS KOCHAN: Well, there's two things I would highlight. And then I would ask Marty since he's closer to the companies. The first thing is they did have a big problem with this two-tiered wage structure.

I'm always an opponent of two-tiered arrangements because they always come back to haunt you. And you have to then close those gaps because they're not sustainable. And they had a problem with recruiting the quality of the workforce that they need to be productive in the future and retaining that workforce, the youth.

So I think they've opened up an opportunity now to get-- by closing-- or I mean having a path to closing some of those gaps in significant ways. They have an opportunity to recruit and train and retain a younger, new workforce that will be open to ways of having a voice that helps improve operations.

I think that's a big win for the companies. It's a big win for the UAW, of course, as well. But that's-- there were some joint interests there. And I think that was really critical.

The second thing is-- go ahead, Marty.

MARTY MULLOY: I think there was a joint interest in terms of addressing that issue. Again, I'm not speaking for the company. I wasn't in negotiations. But I assume that could have been addressed without a strike or the kind of other elements of the contract and all the costs.

THOMAS KOCHAN: Yeah. Yeah, I'm not I'm not saying that the strike was necessary. I'm saying that that's something that the companies achieved in negotiations. The second thing--

JOEL CUTCHER-GERSHENFELD: I'm an optimistic person. So I will also say that they at least joined the issue, not fully and not in the way that they need to going forward, on the transition from internal combustion to electric vehicles that battery plants were in the conversation. Now, the way they resolved it, I think, still needs work. But at least they started that conversation. And that was an essential conversation for the parties to have, which includes the engine plants as well as the new battery production.

MARTY MULLOY: That's a good point. We're not specifically-- we don't have the same language as Chrysler and Stellantis and General Motors regarding batteries.

KRISTIN DZICZEK: You had a different ownership situation, too, in this case.

THOMAS KOCHAN: Yeah. But let me just build on that because that was going to be an additional point I was going to make as well. I think that that is the frontier issue in labor management relations across the country. How do you bring worker voice into the design and the use of new technologies? And all around the country now with generative AI and all that stuff, there is a big explosion of interest in how to bring worker voice into these processes.

The auto companies can take advantage of the language that they have, the opportunities that they have to work together in opening those facilities or in training the workforce, making sure they have the training and education. You've got all the resources. You've got the apprenticeship program. You've got the joint programs. You've got the capabilities of training and retraining workers who have a knowledge of the industry for the industry of the future. And this is a major-- way we know that when you bring workers in to the technology design process, you get better quality, you get better productivity, you get better acceptance, and you have a more knowledgeable workforce who can then incrementally improve the use of that-- those technologies once they're in place.

That's a frontier issue. I think this language wasn't designed for this, for what I'm talking about. But I think it can be used in that way. And that will be a long-term competitive advantage for these companies if they can do that and do it right and do it effectively and bring the workforce into that process of bringing in all of the new technologies, whether it's the EVs, the batteries, or other innovations that are going to come into the existing facilities.

JOEL CUTCHER-GERSHENFELD: And if I could just reinforce, my brother-in-law just retired as a design engineer with Chrysler. And he was one of a very small number of folks who started his career in an apprenticeship as a tool and die maker and then moved on and became-- in that poorly used career path from skilled trade to engineer.

But he said he looked around. He was designing wheels. There was almost nobody else in the engineering design function that knew how things were actually produced in the factory. And design for manufacture was really hard to do.

You mentioned Alan Mulally. When he was at Boeing, he did something pretty radical, which is people who designed a generation of planes had to stay and then work on the production of the plane they had designed. And I spoke to some of those engineers. I was part of the Lean Aerospace Initiative at MIT at the time. And they said it was like a-- forgive the phrase-- a come-to-Jesus moment to have to build what they designed because they really didn't understand the full downstream implications of decisions. And so the wisdom of the workforce, the front-line knowledge, has to be harnessed in a way that is all in together. And if the relationship is sour, that just becomes really hard to do.

MARTY MULLOY: I just have a word of caution on the whole battery issue because we've been down this road before. Delphi had thousands and thousands of workers, hourly workers. Visteon had thousands and thousands of hourly-- I'm seeing big numbers. I don't think there's a UAW hourly Visteon or UAW Delphi. I think the corporations still exist.

KRISTIN DZICZEK: They've changed their names.

MARTY MULLOY: They've changed their names. But the point is the components were overpriced versus an OEM wage. So if you've got a component and here's the market wage and here's your OEM wage, if you bring it up like this and your competitors don't, you're over the market. It's going to get priced into the vehicle immediately. You've got to find an offset somewhere.

So you're better off placing the compensation package of the battery employee at the compensation level within that industry because if you go higher, it's going to just flow into the cost of the vehicle, which adversely affects your sales, which adversely affects the amount of money you can invest in new product. It's a terrible, vicious, downward cycle. So that's my caution.

KRISTIN DZICZEK: So one of the themes, I think, of the last two days has been everything is kind of chaotic. The trade panel, the minerals panel-- things are changing very quickly. Yesterday, with my cost panel, look at these new ways of doing things, new ways of building cars, new ways of where competition is going to come from.

And what I want to say-- this is language that's going to govern the relationship for the next four years and eight months from when they signed it. A lot of stuff changes in between. And I'm going to pick on Ford for you, Marty. Maybe during your term, actually, when you were there, I was at the Center for Automotive Research. And we would get phone calls about-- and it was-- in the UAW agreement, it says, we're going to commit $700 million to product X at plant B. And a little bit later, they'd be-- we're going to commit $900 million to product Y at plant B. So they're changing their minds a couple of times. And then it was-- it's going to be completely different thing and different amount of money.

And so what I'm getting to-- at is stuff changes. It's going to change a lot more rapidly, I think, in the next few years. And you started off with honesty, transparency, and trust. I have, and he's, I think, a good friend of most of the panelists-- who's passed away, Art Schwartz, who was the general director of labor relations at GM for a long time.

JOEL CUTCHER-GERSHENFELD: We miss him still.

MARTY MULLOY: Yeah, we miss him.

KRISTIN DZICZEK: Miss him terribly. But he said-- he was in on these meetings. And he'd say, there's a bad taste in our mouth about that plant or that thing. The company is not really thrilled about what happened there.

So when we've got new investment or we've got changes or we've got things to do, we don't really want to do it with that local. We want to do it with the local that's easier to work with, the local that wants this investment, the local that will work with us. And that goes all the way up to the vice presidents and the president.

So if you're going to say, we need to change something, we have some more investment to make, or less investment even, you've got our friends at Unifor, who I know are watching because they've been texting me, who inked new agreements this year. And theirs are three-year agreements. There's Mexico sitting on our southern border, where these companies could also invest. They've got investments to move around. They've got things that might be changing very rapidly.

How do you see this evolving with the UAW and these companies in the next few years, when you've-- when they've got to come back and say, yeah, I know we agreed to this in the language, but the world has changed and we have to revisit this? And this is part of the administering the contract over the period of time that's not just the every four years. And you guys had a million press releases every time you did this. And it was driving me nuts. So thanks for that.

MARTY MULLOY: Right. Well, you go back. When I talked about having monthly meetings and making sure the UAW is apprised of what's going on-- and by the way, they-- it's a two-way street. They're telling us what they would like change. And we're telling them what's going on in the market back and forth. So if you have that discussion, you have that kind of dialogue, you have that kind of trust, and it's not a surprise, then it's a lot easier to have that conversation than if you're not talking to each other, you don't have any dialogue, and you don't have any trust.

JOEL CUTCHER-GERSHENFELD: Well, and both Tom and I as the academics here are equally dedicated to transforming the institution of collective bargaining into one that's more agile, adaptive, and problem-solving in its focus. At Brandeis, we have a new seminar that we're launching, a two-day virtual seminar-- this is an unpaid promotional announcement-- on rethinking collective bargaining as a process and providing the tools and methods, very much building on the stuff that we did with the joint process with Ford and the UAW back in 2007, 2006.

But the point is that collective bargaining as an institution can't be every four years, we finally talk. It has to be embedded in a whole institutional arrangement that allows the parties to do problem-solving on a continuing basis and then periodically to codify innovation and set the stage for new innovation. That's a process that is relevant not just to the auto industry OEMs, but to the whole supply chain.

MARTY MULLOY: Kristin, I got to tell you, as an example, these are not pleasant conversations. When we're going from $25 to $14 share and we're sliding and we have plants like Wixom, which is a great plant, closed, Atlanta assembly plant-- you couldn't find a better plant-- cooperation, people, diversity-- than the Atlanta assembly plant.

KRISTIN DZICZEK: Highest productivity.

MARTY MULLOY: Highest-- that's right-- closed. Those are extraordinarily difficult conversations. But quite frankly, you either have to resize, you got to get yourself into a position where you can be competitive to survive going forward and continue to pay the health care bills and continue to hit payroll and so on and so forth. But those are extraordinarily difficult conversations.

KRISTIN DZICZEK: So we have just five minutes left. And I just picked up the iPad and started looking at things. Sorry about that, guys. I get so engaged in the conversation that we're having. But they're asking some questions that I was planning to ask, anyway.

So five minutes left-- so we'll have shorter answers. What do you think the-- and this is one that was asked of me yesterday. And I kicked it to you. So what do you think is the likelihood the UAW will get a foothold organizing foreign auto manufacturers in the south and with Tesla? And it appears they have already made some inroads at Mercedes and Volkswagen. So what do you think is the likelihood of the Big Five, Big Six in 2028?

JOEL CUTCHER-GERSHENFELD: Tom, you said that you're not going to do any prognosticating.

THOMAS KOCHAN: No. But let me say this. There's a new approach that the UAW is using. Instead of going plant by plant and just working, they have developed a coherent strategy for organizing all of these non-union OEMs.

I do think that it will be priority for the European companies. I do think that what's different about the organizing now is-- are two things. One-- it's much, much more media-intensive. These are going to be public campaigns. And they are going to be much more aggressive in embarrassing the companies for being anti-union if that's what they choose to do. And they're going to find more community and maybe even more national support for their efforts. That's a positive feature.

Second thing is I sense, and I see it-- there are much more sophisticated in grassroots organizing department by department in these plants and building the base of organizing. You can't organize from the top-down anymore. You can do that to some extent. But you've got to have that base of leadership that says peer to peer, I go to Marty and Joel and say, I think we should talk about whether we should organize here. I've got an open mind. But I think we really need to build the leadership to make sure that if we get a union, it's a union that we can really benefit from.

I think there's a lot more grassroots, a lot more national publicity, and a lot more coalition building. So I don't know that I will predict that we will have two or three more companies organized. But I would not rule that out. I think it's a different day.

The American public by 70% approves of unions today. The American workers-- a majority if you ask them, as we have in our surveys, would you join a union if given the opportunity to say, yes, that's a new day.

JOEL CUTCHER-GERSHENFELD: I also think that Volkswagen and Mercedes-Benz have worked with works councils. How to have those conversations. Japanese manufacturers-- the union management relations in Japan, as I'm sure most of you know, have a different flavor to them. But they also know how to have those conversations. I think it's more likely that Tesla and some of the others that don't have that history will do missteps in their conversations because they don't know how to have those conversations, and they're going to say things that will get people upset.

MARTY MULLOY: I worked at global labor responsibilities. So I had a lot of discussions with the works council in Europe. When you sit down with the works council, they are extraordinarily professional, extremely urbane, sitting through, looking at the issues, talking big picture.

I think what we saw and the rhetoric that we saw, Axis powers and things like that-- I think they'll turn off the Europeans who might otherwise be more interested because of their experience in the works council. Culturally, this does not-- this-- it doesn't reflect at all the European unions which I dealt with.

THOMAS KOCHAN: There's no reason why you can't have a union in the United States and a works council, or call it whatever-- maybe you call it something else. There's nothing illegal about it once there's a union there. They came close to that in Volkswagen. I don't know that the UAW is ready to champion that.

But if I was advising Mercedes or Volkswagen or BMW, I would really say, look, if we're going to get organized, we're going to build some institutional arrangement that is the functional equivalent of effective works councils. And that's got to be a conversation going on inside those firms. And I think the UAW would go along with it because the work force would value it.

KRISTIN DZICZEK: Well, we are out of time. And I greatly appreciate your time and your insights and your optimism for what may come in the next few years. I am as concerned as you are. I know that when the price of UAW labor goes up, companies do not buy more of it. And I know what's coming in automation. I know what's coming in competition. These are critical issues to deal with in order to have, as Marty said, the focus on what makes this relationship sustainable and the employment sustainable.

JOEL CUTCHER-GERSHENFELD: Could I share one final tiny anecdote, which I think is a good note to end on?

KRISTIN DZICZEK: You can. Absolutely.

JOEL CUTCHER-GERSHENFELD: We've talked about quality and continuous improvement. And as many of you know, at the core of our learning on that was the teachings of Dr. Deming, his PDCA model. And as it happens, in the mid 1990s, it was arranged that I might talk to him about how his ideas might relate to relationships that were tense and difficult. And I met with him. He was in a wheelchair, quite frail, on oxygen. Actually, Anne Stevens was next to him at the time.

And so I asked him, how do his quality principles apply to a relationship that's having difficulty? And he answered, as he often would, with a story. He said he had just received a letter from a woman who said that his teachings had changed her life not so much on the job, although she said they were helpful, but they had saved her marriage. She said she and her husband had a marriage in which they were always fighting.

And applying quality principles, she got him to sit down and look at the data. They made a list of all the arguments they had had and started seeing patterns. And the big pattern was every argument was out of proportion to whatever it was they were fighting over. So using the five whys, they started doing root cause. And when they finally got down to the root cause, she said it was because they realized they were both competitive people. They each liked to win. And that's when she got the insight that saved her marriage and that, in a sense, is the theme of this whole panel, which is-- she said even though they both wanted to win, they realized that neither one wanted to be married to a loser.

KRISTIN DZICZEK: That's amazing. And if I can add one more anecdote, another person who was in a position much like Marty's recently-- I'm not going to call them out by name. But when they retired from company-side labor relations, they went into, they and their wife, working on marriage counseling.

JOEL CUTCHER-GERSHENFELD: There you go.

MARTY MULLOY: That's really what their job is.

[LAUGHTER]

KRISTIN DZICZEK: Well, excellent. Tom, thank you so much for joining us.

THOMAS KOCHAN: And there are some areas of mediation I avoid.

[LAUGHTER]

KRISTIN DZICZEK: Excellent. And Joel and Marty-- let's give them all a hand.

THOMAS KOCHAN: Thank you.

KRISTIN DZICZEK: And give us just a minute. And Rick is going to come and sum us all up.

JOEL CUTCHER-GERSHENFELD: Exit through that-- this way.

MARTY MULLOY: This way? Thank you.

KRISTIN DZICZEK: Oop, you're losing your mic.

JOEL CUTCHER-GERSHENFELD: Whoops.