In his August 4 column “Caterpillar to unions: Drop dead,” Steve Pearlstein argues that if Caterpillar were to invest in its production workers the way it invests in top management, it could lead to better corporate results. We can provide some evidence for that assertion. Over the past three years, our foundation has developed more than 70 case studies on what we call “pioneer employers” – companies in healthcare and manufacturing that make substantial investments in the training, education, and wages of their own front-line workers – and benefit their stockholders as a result. There are far more such companies than most people realize, and in many cases their stories are simply extraordinary.
For instance take the case of Pridgeon and Clay, a mid-size, non-union auto supplier in Michigan. Like many such firms, P&C was hit hard by the global economic meltdown – but has rebounded far better than most, growing from 400 to 650 workers stateside since 2009, and adding millions in annual revenues. Their secret has been to invest heavily in R&D and new product development – and to prepare, rather than replace, their workers when it comes to the impact of new technology. That’s accomplished with a home-grown Automated Press Operator training program, which provides wage increases of over 50% to employees who enter the program (and graduates receive even more). The firm also has a robust employee stock ownership program through which they share profits, and has provided generous tuition reimbursement to over 245 employees since 2005.
Stories such as that of P&C demonstrate that technological change and globalization don’t have to result in tragedy for workers. We can build a roaring, 21st century economy that lead to better results for American workers and American shareholders. But we need visionary managers who can see past the next quarterly earnings report.