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Published online by Cambridge University Press: 20 January 2010
Major reductions in force took place almost simultaneously at British Leyland and at Fiat, following on the heels of the second oil shock. Conditions at BL and Fiat were at that time strikingly similar. In both firms, newly appointed and aggressively antilabor managing directors or chairmen announced massive job reductions as part of more general plans for firm restructuring and reorganization. Both firms had been suffering from poor productivity and losing market shares to foreign competitors. In both cases, too, poor productivity was viewed by management as a result of an unnecessarily large workforce, seen in turn as a function of poor industrial relations. Union organizations at BL and at Fiat enjoyed reputations as highly militant and strike-prone, with strongly entrenched stop steward organizations in whose leadership organs Communist Party members figured prominently.
Given these similar conditions, management's decision to tackle the bloated workforce became invested with similar significance. One study has summarized the major issue involved in both cases as the “re-establishment of managerial authority,” including the very authority to effect workforce reductions. Comparing the outcomes at British Leyland and Fiat, Wolfgang Streeck (1985: 21) notes, “The more or less complete recovery of the two companies by the mid-1980s is accounted for mainly by the fact that management prevailed on this crucial, and cruel subject. …” Both firms were intransigently committed to effecting massive workforce reductions.
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