MANAGEMENT: The Scanlon Plan

(3 of 3)

The Agreement. The plan is now working in some 60 plants from furniture to steel, where profits were excellent and where they were nonexistent, where labor relations were good and where they were bad, where labor productivity was easy to measure and where it was virtually impossible. But the plan cannot operate without the wholehearted agreement of both management and unions. It requires a strong union, able to guarantee the support of its members. It also requires a management willing to open its books and innermost production secrets to union members. And the plan demands a sense of management-union cooperation that is often most lacking in the plants that most need Scanlon's help.

Scanlon refuses even to try unless he is convinced that the two sides will work together. Once, in desperation, the union and management of a deeply troubled plant arrived in Scanlon's office and announced they were all ready to try out his plan. Scanlon looked at the glowering men arrayed on both sides, each with a watchful lawyer, and said: "Yeah, you're all set, both of you—to get the hell out of here."

Rough on Clients. Scanlon bullies his clients and lays down the law, once told an executive: "You'll probably have to fire every foreman you've got working for you." Another time, when a company head came in with his troubles, Scanlon roared: "Why in hell did you put your brother-in-law in that job? That'll have to be changed."

Despite Scanlon's brusque ways, the companies who have tried his plan are sold on it. Said President Leo Beckwith of the Market Forge Co. of Everett, Mass., a Scanlon plant since 1947: "Maybe it isn't the Utopia that some people try to make it, but it has been a fine thing. If for any reason we ever had to drop it, the boys in the plant would be very unhappy and so would I." The vice president of an Illinois company was even more enthusiastic: "As far as I'm concerned, Joe has the answer to the future for American free-enterprise capitalism."