As evident from the discussion above, tension between the Harbor Works and I/N has been apparent from the start, although at certain times it has been more submerged than at others. Much of this tension revolves around the fact that a clear vision of what the relationship would be was never articulated and then institutionalized. Financial projections that anticipated much higher prices for I/N products never materialized, and this made matters even more difficult. Ideas about what and how Inland and I/N would learn from each other were not consistent; and a clear consensus on the degree of autonomy that I/N should have from the Harbor Works has not emerged.
One of the main reasons for this lack of understanding may stem simply from the fact that high level executives and managers at the Indiana Harbor Works were not fully involved with and trained in the process of creating and operating a work system like the I/N joint venture. According to Selky, managers at the Harbor Works who did not participate in the startup process may not be able to identify with the new work culture or may not have the desire to make it succeed. (personal interview, 4 December 1998). In this scenario, plants become more dependent on particular individuals who must insulate them from the influence of an organization which does not fully understand what has been created “out there in the cornfields.” Finding managers from Inland to replace managers retiring from I/N also becomes problematic.
Although I/N created a highly successful work system substantially different from past models, it has often seemed as though Inland was not interested in learning from the I/N experience, and in fact wanted to suppress it. Frequent management changes at the Harbor Works compounded problems. This inability to respect the original mission to create a new work culture and then to transmit lessons was frustrating to managers and employees at Tek and Kote. Freeland recalled that it was like:
“We were commissioned by the king to go out and find new land and do missionary work and once we understood best in class practices … to share that information….well now we’re coming back, the king is dead, the entire leadership has changed, and they are saying “who are you?”” (personal interview, 15 December 1998).
Elaborating on the confusion caused by shifting leadership, Freeland said
“to me, that was one of the primary problems that we had. It was always changing… what we were. The finance people at the Harbor were always caught in that, where they wanted to report Tek and Kote results managerially, as if we were part of the steel company, but yet we were trying to operate discretely as a separate company, and it was always a conflict. And it was always a situation of “should we centralize, or should we not centralize, should you really have your separate finance department there, or should you be reporting back to Inland.” (personal interview, 15 December 1998).
Confusion continues to this day, with the latest swing towards consolidation at the Indiana Harbor Works.
These swings inevitably pressure the plants towards a more traditional work system. Reflecting on the rhetoric of the “new work system” and the reality of the pressure coming from the Harbor Works, one manager said:
“They told us to go out there in the corn field and be different. They promised that to our employees. And then we turn around and we don’t walk the talk.” (personal interview, 17 March 1999).
Recalling a consultant’s comments before both plants were even started up, this manager also noted:
“The consultant said ‘you need involvement from the highest levels of the company because when you go into something like this in a new venture, one of two things will happen…you’ll be the point of a wedge that will drive this work system back to the bigger company, or, sooner or later, they will send Attila the Hun out to stamp out the revolution.’ I reflect a lot on that in the last year, because a lot of the actions are to stamp out the revolution.” (personal interview, 17 March 1999).
In fact, developments at the highest levels of both managerial and union leadership throughout the 1990’s created pressures that appear to be pushing all players into more traditional directions. On the management side, turnover prior to the ISPAT takeover – both at Inland and at I/N – contributed to increased fragility of the work culture. Although I/N leadership was stable through the 1990s, leadership changes at Inland’s strategic level were relatively frequent, causing shifts in management philosophy that caused confusion, and often hard feelings on all sides. At the plant-level, with Selky's retirement in the spring of 1998, I/N was put in a vulnerable position, and replacing him was a difficult task. Selky was respected on all sides, and clearly had an ability to empathize with employee positions. A local union official said: “He’s one of the most level headed guys I know. Quite often we had much different approaches to similar issues, but I always respected him. He’s just a guy who is always straight up.” (personal interview, 16 November 1998). From the beginning, Selky was determined to create a steel plant with a fundamentally different work system - and with unionized employees.
This is not to imply that the work culture was completely harmonious during Selky’s tenure. Problems did arise, and some of these problems caused substantial frustration. One such event occurred in 1993 when a small group of white-collar employees at I/N started an organizing drive. The resolute corporate campaign against the drive created disappointment on the union side. As a local union official put it:
“Clearly [Inland leadership] said [to Selky]: You can not let that happen. These are all pressure tactics that notoriously anti-union companies use on their employees. And here I am sitting there thinking “which is it?” They’re going to all this trouble and spending all this money trying to bust up this little O and T [Office and Technical workers] organizing drive. And at the same time they want to go on TV and smile and shake my hand
and give me a plaque [because of our innovative labor relations environment].” (personal interview, 12 February 1999).
Although this did not cause much visible turmoil, it did erode morale: “It wasn’t really much talked about – it was sort of a wink and a nod … well, you know, we gotta do what we gotta do, and you gotta do what you gotta do … and I would respond, yes, and you know I have to do what I have to do – the corporate game – but it was extremely disappointing.” (personal interview, 12 February 1999).
On the management side, there was frustration that O and T white- collar employees were not satisfied with their wages despite the fact that they were relatively high by local standards. Here again, regardless of what Selky may have personally felt, pressure from Inland was intense to keep the bargaining unit members limited to production and maintenance employees.
The current plant president of I/N is viewed by production employees as a more traditional type of manager, contributing to an erosion of trust and morale. This has been exacerbated by developments following the ISPAT takeover, which occurred soon after his appointment. Further, he is not an officer of Inland as Selky was; and he reports to a vice-president at Inland rather than to the president, reducing his influence and consequently his ability to effectively represent and protect the interests of I/N and its employees.
On the union side, Lynn Williams’ recent retirement as president of the USWA and his replacement by George Becker has caused frustration among I/N management, who view Becker as a more traditional union leader, willing to “knock heads and bring management to their knees.” In contrast, Lynn Williams was a firm supporter of the type of work system created at I/N and a more cooperative approach to labor relations. Additionally, and analogous
to I/N management difficulties in selling the work system to Inland as leadership changed, the I/N local union leadership has faced mounting difficulty defending their approach, to both the local union at the Harbor Works and the international union.
In short, although the I/N work system is remarkable in its achievement of cooperative labor relations, innovative work structures, management methods and human resource practices, it was not devoid of problems. Jointly solving some of these problems, especially those relating to I/N’s immediate task of producing high quality steel, strengthened the work culture. However, other problems, often stemming from external sources, served to weaken it. The failure to create a productive system totally autonomous from Inland meant that I/N remained vulnerable to strategic level decisions subordinating local interests to those of Inland corporate. This made it harder for I/N to create “deep roots” for the work system. Adding to this, the retirement of I/N’s president, John Selky; continually changing leadership from Inland; and the retirement of USWA president, Lynn Williams, put the labor relations of I/N under greater pressure. I/N’s roots are now being tested in a way that no one in the plant could have anticipated ten years ago.
“It would be great if an orderly transition had happened, to see if those roots took hold and were healthy. But with a change in control in the acquisition, and the abrupt termination of some of the senior management people who had designed some of the original things, we’re not in a position to make this orderly transition and pass on some of the legacy and information. That complicates it – you’ve just changed all the players - it would have been nice to know what the alternative would have been, what would have happened had I had the ability to talk to a lot of people and mentor a lot of people; but that never happened. You’ll never know how the joint ventures would have matured..” (Dennis Freeland, Personal interview, 4 December 1998).
Freeland and other senior managers were notified of their immediate termination on 31 July 1998.