Reference no: EM131532313

Question: HOW CHRYSLER'S TOM LASORDA LEARNED HOW TO TALK TO EMPLOYEES

In the past, Chrysler was often criticized for its failure to adequately communicate current problems and future plans to employees and the trade unions that represent many of them. Its "ivory tower approach" led top decision makers to remain isolated from what was going on in its car plants; and employees often felt they were kept in the dark as announcements about their company came from trained spokespeople reading carefully prepared script. This communication approach led to a wide gulf between Chrysler managers and employees-it contributed to the company's deteriorating performance during the 1990s. Chrysler took many steps to remedy this communication problem in the 2000s to bring managers and employees at all levels of the company closer together to deal with the major problems it faces. Chrysler recognized that only intense cooperation between employees and managers could produce the efforts needed to turnaround its performance. One step Chrysler took to encourage cooperation was to promote managers who understand the concerns and problems facing its work force-and how to talk to employees. And, who better could speak to workers than managers whose parents worked in Chrysler plants and who were raised in homes where events at the company were a major topic of conversation? One of these managers was Tom LaSorda, whose father was the United Auto Workers (UAW) president of one of Chrysler's Canadian auto plants, and whose grandfather was also a union leader at that company. With his union roots, LaSorda had firsthand knowledge about the feelings of car workers when thousands of them were losing their jobs because of intense global competition.

46 LaSorda remembers from his childhood when his father was laid off for six months because the economy collapsed; he came to understand what it is to live from paycheck to paycheck, which is what most American families do. Chrysler recognized LaSorda's unique skills-the background and experience that enables the down-to-earth LaSorda to effectively communicate with ordinary people-such as the employees in Chrysler's plants. How did LaSorda's skills in talking and relating to union employees and officials pay off? Analysts say that Chrysler has enjoyed more conciliatory dealings with employees and the UAW than GM or Ford. LaSorda helped the UAW recognize the reality of global competition and why it was necessary to take a long-term view to help Chrysler and its employees prosper-despite the layoffs and loss of benefits that caused employees so much pain in the crisis following the recession of 2008. Not only did the UAW agreed to a painful 54,000 layoffs, it also has agreed to change work practices that resulted in high operating costs; and it worked with the company to find ways to lower healthcare costs to help the company survive. In return, LaSorda worked to improve the future prospects of laid-off workers. Chrysler provided major funding to help new companies open car parts operations near Chrysler's plants to provide new jobs; it also provided new training, education, and severance benefits to laid-off employees; and it has behaved fairly to current employees. LaSorda spent considerable time walking around Chrysler's plants talking with workers, meeting with UAW executives, and addressing union members at their annual meeting. As he said, "When you're running a business, you do what's best for all," and that he hoped that in the long run this would translate into thousands of new well-paying auto jobs.47 Fiat, which acquired Chrysler in 2009 after a government bailout, is certainly hoping to enjoy the new climate of good communications that presently exists between managers and workers that are cooperating quickly to ramp up production of a new range of car models developed by Fiat targeted at the U.S. market.48

1. In what ways can face-to-face communication between managers and employees help them to develop better ways to reach a common understanding?

2. What kinds of issues between managers and unions might be better handled through other communications media such as written communication?