Essay on "International Employment Relations"

Essay 8 pages (2449 words) Sources: 2

[EXCERPT] . . . .

Human Resources

International Employment Relations

Describe the pressures that globalization has placed on the Australian automotive assembly industry since the late 1980's.

Globalization is a procedure of dealings and mixing among the people, companies, and governments of different nations. It is a process motivated by international trade and investment and assisted by information technology. This progression has consequences on the environment, on culture, on political systems, on economic development and prosperity, and on human physical well-being within societies around the world. This present flourish of globalization has been driven by strategies that have unlocked economies domestically and internationally. Since the Second World War, and particularly during the past two decades, many governments have taken on free-market economic systems, greatly increasing their own productive potential and creating countless new occasions for international trade and investment. Governments also have discussed dramatic decrease in barriers to trade and have recognized international agreements in order to endorse trade in goods, services, and investment. Taking advantage of new prospects in foreign markets, corporations have put together foreign factories and recognized production and marketing provisions with foreign partners. A major characteristic of globalization is an international industrial and financial business understanding (What Is Globalization, n.d.).

The automotive manufacturing industry has offered an important function in the development of the Australian economy. It accounts for almost six per cent of the total value added for manufacturing, making it one of the principal manufacturing sectors, and is among Australia's most important export industries. The sector is made up of several hundred component suppliers and four vehicle assemblers -- Ford, GM-Holden, Mitsubishi and Toyota -- the first two are American-owned and the latter two are Japanese-owned. GM-Holden and Mitsubishi have assembly plants located in Adelaide, South Australia, where manufacturing has historically been a centerpiece of the local economy. Ford and Toyota's assembly functions are located in Melbourne, Victoria, where the economy is more diversified. GM-Holden also has an engine manufacturing plant in Melbourne (Lansbury, Wright and Bairdi, 2006).

The growing viable nature of the automotive industry on a global level, declining profits and a decrease in the percentage of exports to imports in the Australian industry have encouraged governments, manufacturers and unions to look at ways to make the industry more capable. Another significant alteration which has affected the Australian automotive industry has been the shift from a mostly centralized system of industrial relations to a more decentralized form of project bargaining. This involves direct negotiation between employers and their employees. In the auto industry, most employees are unionized, and the unions negotiate enterprise agreements on their behalf. Enterprise bargaining agreements (EBA's) are underpinned by awards, which are generally established on an occupational or industry-wide basis (Lansbury, Wright and Bairdi, 2006).

2. Outline and analyze the way that management in the industry has changed its approach to employment relations as a result of globalization.

Mainly due to the domination of Toyota and its success in ground-breaking lean production, all of the companies operating assembly plants in Australia have taken on a variant of the Toyota Production System. Each company has created its own hybrid system of production founded on a mixture of their own management philosophy and elements of lean production. The introduction of new production systems in assembly plants has had significant implications for the way in which work is organized and how decisions are made about changes in the workplace. Senior managers amid the ranks of its competitors recognized that Toyota's success in putting into practice lean production means that it persists to set the benchmark for the industry. Indeed, Toyota's enterprise agreements deal with provisions relating to production more comprehensively than the other assemblers, with its EBA's noting that formal, accredited training is provided to familiarize employees with the Toyota Production System. Ford and GM-Holden are also quite detailed in their discussion of production system arrangements, but this is not the case with Mitsubishi's EBA's and awards, which are reflective of their status as having the least automated production arrangements of the four assemblers (Lansbury, Wright and Bairdi, 2006).

Despite the long-established Toyota Production System, one union official claimed that the Ford had the "leanest" production system of the four assemblers, and a number of Toyota's managers also conceded that its production techniques could be leaner. Larger use of technology and the introduction of leaner production methods have improved efficiency and production output across the four assemblers and lifted the skill levels of employees. Nevertheless, there is data from employees that the increased speed of the production line has had negative repercussions for work strengthening and has raised concerns about the prospective elimination of jobs (Lansbury, Wright and Bairdi, 2006).

There have been important changes to job structures and separation in the automotive industry in recent years. It has gone from 240 job classifications in the award, to only three non-trade levels and six trade levels. These reforms have come about not through activity bargaining but rather through a government-led proposal in the late 1980s to reorganize awards, which was reliable with lean production principles. As a result of this process, all automotive assembly sector awards that have happened since 1988 have proscribed new classification structures setting out the job necessities in terms of competencies, experiences, general duties and tasks for all non-salaried occupations, as revealed in the Toyota Award. Substantial labors have been made in recent years in order to reduce demarcations between trade and non-trade employees. While a number of managers maintain that there is greater range for production workers to become trades workers, troubles have started to re-emerge over the explanation of duties between trades workers and technicians (Lansbury, Wright and Bairdi, 2006).

3. Has government policy helped or hindered the change in employment relations in the industry? If so, how?

The automotive manufacturing industry has played an important role in the development of the Australian economy. It explains nearly six percent of the total value added for manufacturing. This has made it one of the main manufacturing sectors, and is among Australia's most important export industries. The taking apart of tariffs by governments over the past two decades has uncovered local automotive producers to greater import struggles. One result has been Australian manufacturers changing the focus away from the local market and towards overseas markets, principally the Middle East. However, while the importance of exports by Australian producers has amplified over the past decade, this pales in consequence compared to the growth in imports (Lansbury, Wright and Bairdi, 2006).

The longer term outlook of the Australian automotive industry remains unsure due to import opposition, changes in government policies on tariff defense and fluctuations in the exchange rate of the Australian dollar, as well as whether globalize companies are willing to make long-term investments in the domestic automotive assembly division. Because of the small size of the Australian market, the long-term feasibility of the industry depends on the strategies that are accepted by the companies in order to produce vehicles of world-class quality and to win access to overseas markets for their goods. As has been seen, enterprise bargaining will persist to be an important gauge of the extent that companies seek to put together employment relations into such strategies. However, the continuing influence of national systems of employment relations in an increasingly globalize industry remains to be seen (Lansbury, Wright and Bairdi, 2006).

4. Have changes in the employment relations institutional framework helped or hindered the change in employment relations in the industry? If so, how?

Increased competition from overseas producers has been cited in support of employment relations reforms, but the direction this change has taken has been shaped by the decisions available to employers and unions. Employers in the sector do not appear to have robustly resisted the stress of unions regarding high wage claims, at least by Australian principles, in enterprise agreement discussions. A trade-off for open-minded wage outcomes appears to have come in the shape of greater numerical litheness. Certainly, the use of uncertain employment and provision for redundancy appears to be the major strategies that the companies have selected to lessen the competitive pressures that globalization has placed on Australian automotive assemblers. While there are disparities between the employment associations practices of the four assemblers, national-level institutional factors appear to have prohibited greater divergence occurring. The remains of centralization, the power of trade unions in the sector, and even bargaining coordination among employers, have resulted in the preservation of continuity in relation to union recognition and support for trade union membership. There are also comparisons between the companies in areas such as working hours, training and redundancy supplies (Lansbury, Wright and Bairdi, 2006).

While there are distinctions between the employment relations practices of the four assemblers, national-level institutional issues appear to have prevented a greater divergence from occurring. The remains of centralization, the strength of trade unions in the sector, and even bargaining organization between employers, have resulted in the preservation of continuity in relation to union recognition and support for trade union membership. There are also… READ MORE

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