Transforming worker representation: the Magna model in Canada and Mexico.

THE EMERGENCE OF internationalized production in the context of weakening state regulation of labour rights and of increasing employer dominance in industrial relations systems raises significant questions about the nature and future of worker representation. A crucial issue is the transferability of company-specific models of worker voice across national boundaries. This issue is the focus of this case study of Magna International, a leading member of a small group of transnational automotive parts manufacturing firms that are central to the contemporary restructuring of the international automotive industry. The paper compares the transformation of worker representation at Magna in Canada and Mexico. In crossing international borders, the Magna industrial relations model has taken on national and local features of the host country. However, the underlying industrial relations structure is one which has elicited a successful reconfiguration and containment of much, although by no means all, of the adversarialism inherent in labour-management relations. This reconfiguration has aligned worker representation to an essentially unitarist project oriented to management's productivity goals. More than merely suppressing independent unions, Magna has constructed a coherent, management-dominated model of worker representation in both Canada and Mexico. The paper concludes with an assessment of the implications of this model for independent unionism.

L'EMERGENCE DE la production internationale dans le contexte d'affaiblir la reglementation des droits syndicaux et d'augmenter la dominance patronale dans les relations industrielles souleve des questions importantes a l'egard de la nature et de l'avenir de la representation ouvriere. Une question fondamentale est le caractere transferable des modeles precis de la voix des travailleurs a travers les frontieres nationales. Elle represente le theme principal de cette etude de cas de Magna International, membre preponderant d'un petit groupe d'entreprises manufacturieres internationales des pieces d'automobile; essentiel a la restructuration contemporaine de l'industrie automobile internationale. Cet article fait la comparaison de la transformation de la representation ouvriere a Magna au Canada et au Mexique. A travers les frontieres internationales, le modele des relations industrielles de Magna avait pris les caracteristiques nationales et locales du pays d'origine. Toutefois, la structure fondamentale des relations industrielles est celle qui avait declenche une reconfiguration reussie et un confinement de la plupart, mais en aucune facon la totalite, du caractere adversaire inherent dans les relations ouvrieres patronales. Cette reconfiguration a aligne la representation ouvriere a un projet essentiellement unitariste axe sur les objectifs patronaux de production. Bien plus que de supprimer les syndicats independants, Magna a construit un modele coherent avec dominance patronale de la representation ouvriere au Canada et au Mexique. Cet article se termine avec une evaluation des implications de ce modele pour le syndicalisme independant.

A SMALL GROUP OF LARGE TRANSNATIONAL automotive parts manufacturers have enjoyed significant growth since the early 1980s, in important part as a result of the liberalization of global trading rules and the restructuring of the automobile industry. (1) Over the same period many states have retreated from the labour market regulations and social welfare provisions that underpinned the post-World War II Fordist systems of production and union-based models of worker representation. This retreat by the state has created a space for these rapidly expanding parts manufacturers to experiment with new models of work organization and non-union forms of worker representation. While unions are in decline, and some companies are reverting to the pre-World War II unitarist model of human resources based on market power, this is an incomplete analysis of the changes taking place. Katz and Darbishire have shown how the decline of unions is related to patterns of workplace practices that to varying degrees diverge from national models of industrial relations. (2) Others have analysed the non-deterministic dialectic between transnational corporate regulation of labour and local regulatory systems. (3) Far from convergence to a single work organization or human resources model as suggested by Womack, Jones and Ross, (4) these works indicate a rich diversity of outcomes shaped as much by the differing strategies of individual companies as the constraints imposed by different systems of national state regulation. Our analysis rests on a variety of sources. Particularly important, however, are interviews with Magna personnel. The nature of these interviews, and details on the methodology that guided them, are outlined in the Appendix.

The emergence of these new firms as global manufacturers operating in a context of weakened state regulation raise important questions about the nature of worker representation being adopted and the exportability of company-specific models of worker representation across national boundaries. To what extent are these models of worker representation a challenge to traditional forms of worker representation based on independent unions? To what extent are these corporate models "path dependent" expressions of home country industrial relations and to what extent are they modified by the institutional and cultural milieux of host countries? These questions will be explored through a case study of one of these emerging parts manufacturers, Magna International.

Elsewhere we have discussed how the organization of work at Magna's Canadian operations has been built on and reinforced the fragmentation and weakening of the remaining vestiges of class-oriented industrial action and politics. (5) In what follows we compare the transformation of worker representation under Magna's model of labour-management relations in Canada and Mexico. The first section of the paper focusses on Magna's Canadian operations. The second half of the paper examines the transfer of this model to one of Magna's production facilities in Mexico. Based on this comparative analysis of the Magna model of worker representation in the two countries, the paper concludes with an assessment of the implications of the Magna model for independent unions.

Changing Models of Worker Representation in Canada

Within the highly competitive automotive parts manufacturing industry, Magna International is a Canadian success story. Magna began as a small tool and die shop just outside of Toronto in 1957. It was typical of many small Canadian job shops supplying local assembly plants. But unlike other Canadian small job shops it grew. In 2005, it was the third largest auto parts supplier in the world behind only the Bosch Group and the Denso Corporation. It is now the largest employer of automobile workers in Canada. It operates over 200 plants worldwide with over 84,000 employees. Annual sales exceeded $22 billion in 2006. Magna expects sales to reach $50 billion within the next ten years. In 1999, Magna was named the world's top auto parts company by Forbes magazine. (6)

Magna's success is based on two sets of factors, q-he first was the changing production strategy of major auto assemblers in the early 1980s and the shift to contracting out large components of the vehicle production process to independent parts manufacturers. By diversifying its production and design capacities Magna was able to capture a significant portion of this business and join the ranks of large tier-one suppliers. (7) The second factor was the erosion of the Fordist model of labour market regulation in Canada during the 1970s and 1980s. This allowed Magna to employ labour at a much lower cost than was the case for established vehicle assemblers and to reorganize work on an almost exclusively non-union basis. (8)

In Canada after World War II, particularly in manufacturing, many large companies moved to models of worker representation based on unions selected by workers in secret ballots administered by the state. This was especially true in the vehicle assembly and automotive parts sectors. This approach to worker representation was one component of the postwar compromise with segments of the working class. In exchange for union recognition, major wage and benefit increases, due process in grievance and arbitration procedures, and seniority-based rights, workers conceded management's right to organize production and accepted fundamental limits on their ability to mobilize and resist while collective agreements were in effect. (9) Strikes during contracts were banned and compulsory binding arbitration became the norm for resolving disputes over contract interpretation. The 'management's rights' sections of collective agreements and the legal limits on strike action generally made it more difficult for workers to resist management around crucial labour process issues such as work loads and job design. Legally, unions were vested with collective bargaining rights and union leaders with obligations to act "responsibly" and manage dissent, substituting for workers' more direct collective control over bargaining.