Corporate Security in the 21st Century

Theory and Practice in International Perspective

Kevin Walby, Randy Lippert

• Publisher: Palgrave Macmillan
• Year: 2014
• Print ISBN: 9781137346063
• eBook ISBN: 9781137346070
• Topic: Law
• Subtopic: Management
• Index: Law

This interdisciplinary collection places corporate security in a theoretical and international context. Arguing that corporate security is becoming the primary form of security in the twenty-first century, it explores a range of issues including regulation, accountability, militarization, strategies of securitization and practitioner techniques.

Part I

Making Sense of Corporate Security: Historical and Theoretical Perspectives

1

Corporate Security at Ford Motor Company: From the Great War to the Cold War

Robert P. Weiss

Introduction

In the history of industrialization, few security challenges were as important or vexing to employers as labor discipline. Quaintly called ‘the labor question’ by Gilded Age and Progressive Era observers, employers’ need for a ready supply of workers and their desire to obtain maximum surplus value from them incited perpetual confrontation over wages, hours, working conditions, and productivity. Nowhere in the industrial world did this struggle play out more violently than in the US. A National Labor Relations Board (NLRB) report from 1936 (U.S. Senate, 1936: 71–77; NLRB, 1941) listed over 200 contemporary detective agencies engaged in industrial espionage and strikebreaking services, accounting for an estimated 10,000 ‘agents,’ not including the private ‘secret service systems’ maintained by many large industrial corporations (Weiss, 1986). Among the fiercest fighting occurred in the auto-making industry, where by 1937 employers spent millions of dollars annually on hundreds of thousands of spies, provocateurs, and strikebreakers, supported by munitions fit for serious warfare, including tear gas and Gatling guns (Huberman, 1937; U.S. Senate, 1937c, 1939c).

Brutal repression was not the exclusive labor management strategy of the early 20th century. Depending largely on the economic situation, trying to muscle workers into greater productivity was not always enough. Seeking to win more worker loyalty when labor markets were tight, some employers initiated ‘benevolent’ welfare schemes too. The more enlightened owners supplemented their coercive strategies during labor shortages and periods of low productivity with monetary incentives, including premium pay, profit-sharing, group insurance, and pension and savings plans. To foster self-discipline, some paternalistic employers even tried to regulate the moral and family life of workers. Henry Ford was the most prominent industrialist of the early 20th century to attempt, on a grand scale, to regulate workers by consent as well as coercion. Over a 35-year period, the labor discipline strategies of Ford Motor Company (FMC) ran the gamut from paternalism to terrorism to a ‘partnership’ with trade union leadership. Pre-World War I (pre-WWI) paternalism and post-World War II (post-WWII) partnership were bookends to the 27-year reign of terror and despotism emanating from the ‘Ford Service Department,’ the company’s official security force. Ford hired no outside detective agencies to provide guards and spies, as was the norm among automakers and most other industrialists.¹ Henry Ford preferred what he called ‘loyal employees’ instead.²

This chapter focuses on Ford Service from 1919 to 1946, a period of tyrannical rule that extended to all spheres of a Ford worker’s life – from factory floors and offices to homes and communities. Ford workers were told what brand of car to buy and forbidden to drink alcohol (New York Times, 1930);³ even their sexuality was policed. The company searched payroll sheets to check against Detroit family welfare rolls for cheaters among Ford workers (New York Times, 1931). Thousands of spies were recruited from among co-workers, neighbors, and community members and local business establishments. In developing this surveillance Hydra, Ford Service spun a web of power that transcended conventional boundaries between the exercise of private and public power, often blurring the lines between legality and illegality in the use of force. The public/private distinction in US legal history has occluded an appreciation of the role of the state in economic development in general (Novak, 2008: 391, 2010), and anti-labor activities in particular (Joh, 2004, 2006).⁴ The history of Ford corporate security provides a vivid illustration of the interpenetration of private and public sectors, as well as the changing nature of state involvement in corporate security; first, by governmental toleration and outright support for labor repression, and, then in a changed political economy, by exerting Congressional authority to force corporations to accept a conciliatory approach to industrial unionization.

Henry Ford and his chief lieutenants were autocrats of legendary proportions, outsizing figures even among the robber barons of American industry. But the historian should not paint a pure laissez-faire picture of management history. Labor policy was conducted within the framework of social structural development, where ‘free labor’ and the weak state were always mythical. Transformations in the political economy played a large role in shaping corporate and governmental policy decisions on the labor question, while specific labor relation strategies were shaped by, and in turn shaped, developments in the labor process, particularly automation, and in the vicissitudes of the labor market and the business cycle (Gartman, 1986). When labor was in short supply, as during wars, employers turned to a softer discipline and more lenient supervision of the shop floor. They also sought ways to automate and encourage migration and immigration. When labor was plentiful, as in postwar recessions, employers became more coercive. In both strategies, employers received the full support of the local, State, and federal authorities. The US has always been governed by a capitalist state, and Ford employed state power to great advantage in governing through corporate security.

The Automobile, automation, and automatons: The transformation of auto production from craft to mass manufacturing

From a personal and flexible style of supervision to an authoritarian and coercive regime

In what became known as the Fordist system, the mass manufacture of standardized products and the supporting system of mass marketing greatly altered work routines, workplace social relations, and shop floor supervision. In the process, Fordism had a significant impact on modern culture and society. The turn of the century automobile industry was in the forefront of the deskilling process and minute division of labor that destroyed the 19th-century craft system of skilled tradesmen and foremen who ruled the workplace (Gartman, 1986: 183) by determining, among other aspects, hiring and work pace. Fordist production was highly regimented with a pyramidal command structure. As automakers pushed harder to change work rules and speed production, trade unions fought back. Beginning in 1901, Detroit was hit with a sudden resurgence of the labor movement that doubled union membership in three years. To counter this union drive, area employers launched an ‘open shop’ campaign beginning in 1903, the year Ford was established. The anti-union counterattack was led by local Alliances of the Citizens’ Industrial Association (New York Times, 1903). Metalworking manufacturers in and around Detroit, under the auspices of the Employers’ Association of Detroit, a powerful business lobby and Ford surrogate, were especially truculent, launching a confrontational strategy using the most notorious private detective companies in the effort to defeat craft unions and gain direct access to the labor market, unmediated by foremen (Meyer, 1981).

More damaging to the craft system than the violence of the open shop campaigns were the impersonal forces of the Second Industrial Revolution: the Progressive Era scientific management movement and the rapid advance of mechanization and deskilling. To help wrest control of the workplace from the auto craftsman, Ford invested heavily in sophisticated machinery to replace skilled and semi-skilled workers. The turn of the century managerial revolution and technological developments of the first half of the second decade of the 20th century profoundly altered the means of production. The development of mass production technology after 1910 at Ford’s Highland Park plant changed the nature of work, the social origin and skill levels of workers, and the role of the foreman (Montgomery, 1987). Industrial managers including Ford removed much of worker oversight from the shop floor by bureaucratizing authority and introducing centralized employment departments and personnel management systems. Brutally coercive and dictatorial factory superintendents, beginning with Charles Sorensen at Ford, changed the disciplinary power of the foreman, removing his authority as a subcontractor to hire and fire workers (Meyer, 1981: 4; Gartman, 1986: 179–180) and changing his role from that of a diplomat to an arbitrary and brutal taskmaster. The mass production process took another leap in 1913, when Ford’s Highland Park Plant introduced the first moving assembly line production. Mechanized production enabled the company to replace expensive western and northern European and American-born workers with unskilled machine operators and assemblers recruited from southern and eastern Europe and Americans from the farm belt. By 1914, three quarters of Ford workers were foreign born (Meyer, 1989). In 1910, Ford listed 60 percent of its labor force as skilled (foremen included) (Gartman, 1986: 129). By 1913, only 28 percent were listed as skilled.

In addition to technological innovations, large corporations transformed labor management through scientific management and Taylorist principles of simplification and routinization, hierarchical management, time-and-motion studies, and a panoptic supervision of workers. While the Fordist labor process of deskilling, extreme division of labor, and intensified production gave managers new forms of labor control, it also increased worker alienation and sent rates of labor turnover, sabotage, and absenteeism soaring. Ford’s annual turnover rate in 1914 was 416 percent, and 10 to 20 percent were absent daily (Lawrence, 2008: 177). Henry Ford believed that men worked for only two reasons: wages and fear of job loss. When labor was scarce, Ford addressed the first motivation by doubling wages to $5.00 a day and instituting the eight-hour day. However, Ford’s famous incentive system came with strings.

Americanism and Fordism in the new century⁵

Henry Ford introduced the ‘Five Dollar Day’ to great fanfare in January of 1914. Roughly half this pay was in wages, the other half was a profit-sharing program offered only to ‘worthy’ workers who agreed to submit to periodic, unannounced home inspections by FMC’s Sociological Department investigators. Company social workers assessed lifestyle worthiness, which included, among other behaviors, cleanliness, regular church attendance, sobriety, marital fidelity, and frugality (Dunn, 1929: 157–158; New York Times, 1930). The Five Dollar Day was the centerpiece of what came to be known as ‘Fordism,’ an industrial and cultural project fostering work regimentation, mass consumption, and a social order of standardized persons. Ford’s cultural hegemony was carried out through a variety of public policies, institutions, and governance mechanisms (Gramsci, 1934/2011). In the so-called ‘Americanization’ campaign, for instance, the automatous workers of Ford’s ideal society – most of whom were recent immigrants – were brought into the American cultural system through English language and civics classes provided by numerous corporations, chambers of commerce, churches, schools, labor unions, and civic and voluntary organizations like the YMCA and YWCA. Ford’s Five Dollar Day was a key component of this effort at social and cultural control of the workforce. Henry Ford was a social engineer who sought to run society like an industrial plant.

WWI gave employers the opportunity to gain political control of the labor market and scale back costly welfare incentives. While the Industrial Workers of the World and Socialist Party criticized the war effort and most immigrant workers took sides, conservative unions like the Samuel Gompers’ American Federation of Labor (AFL) gained power by cooperating with employers and government in the war effort through no-strike pledges and by helping ferret out ‘radical’ workers. The War Labor Board was sympathetic to wage increases (but still not enough to offset the steep wartime inflation pressing on real wages), improved working conditions, and shorter working hours, and collective bargaining with conservative (‘patriotic’) trade unions. Nevertheless, by 1916 labor turnover became a critical problem for war production. Worse, union membership in mass-manufacturing sector mushroomed between 1914 and 1920, with many workers displaying a new militancy (Brody, 1993: 60–61) that alarmed employers and the federal government. According Arthur I. Waskow (1967: 11), a ‘new American state’ was born during the war, with vastly expanded federal repressive apparatuses and considerable ideological power. Washington sought to monopolize legitimate violence – that is, act as a ‘state’ – but applied a double standard. While President Woodrow Wilson expressed great alarm over the rapidly growing metropolitan police unionization movement, calling it a threat to the ‘public police’ and the state’s monopoly of police power, federal and State government officials at the same time extended police power to various private ‘patriotic’ groups, making them arms of the state in labor repression.

Labor radicalism became the focus of a new program of political policing. Conservative unions and an assortment of vigilante groups, including the American Protective League (APL), joined the government in combating radicalism. The APL was created in 1917 by a Chicago advertising executive as a spy network to purge war dissenters, labor radicals, and ‘saboteurs’ from the ranks of American businesses such as Ford (Hough, 1919; Meyer, 1981: 6; Ackerman, 2007). These ‘patriotic’ groups worked in conjunction with the Federal Bureau of Investigation (FBI), as an auxiliary of the Bureau of Justice and the Department of Labor. The APL was also connected to Ford’s Sociological Department and to local, federal, and military authorities. Semi-official, quasi-governmental voluntary surveillance organizations were an early blending of corporate and state power, and their activities intensified during WWII and in the postwar Red Scare.⁶

Postwar authoritarianism and the Open Shop Campaign of 1920–1921

The ‘era of good feeling’ at FMC began to fade with America’s entry into WWI. The cost of living in Detroit surged 110 percent from 1914 to 1918 (National Industrial Conference Board, 2009). By 1917, inflation had so seriously eroded the Five Dollar Day incentive that it hardly counterbalanced the intensified wartime work pace. Productivity at FMC diminished and labor turnover increased to 42 percent in 1917, and then 51 percent in 1918 (Meyer, 1981: 170). Wartime worker discontent fueled labor radicalism and militant industrial unionism, especially among the semi-skilled and unskilled Ford workers (Meyer, 1981: 171; Brody, 1993: 60–61). The Armistice and the 1919 communist hysteria were fertile occasions for a labor crackdown. By 1920 – the first year of postwar depression, increasing unemployment, and falling auto industry profits – Ford entirely abandoned welfare capitalism of the Progressive Era and joined the policy of repression and espionage that marked the 1920s ‘American Plan’ of anti-unionism.

The National Association of Manufacturers (NAM) led the business interests in beating back wartime wage increases. While conservative unions were strengthened by government cooperation with the AFL during the war, the immediate postwar revealed the tr...

Table of contents

• Cover
• Title Page
• Copyright
• Contents
• List of Figures and Tables
• Foreword
• Series Editor’s Preface
• Acknowledgments
• Notes on Contributors
• Introduction: Governing Every Person, Place, and Thing – Critical Studies of Corporate Security
• Part I: Making Sense of Corporate Security: Historical and Theoretical Perspectives
• Part II: Empirical Case Studies of Corporate Security in International Perspective
• Part III: Corporate Security: Challenges and Dilemmas in the Field
• Index