Sizing Down: Chronicle of a Plant Closing. - book reviews

Administrative Science Quarterly,  Dec, 1997  by Martin G. Evans

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In the boom years of the late 1990s it is easy to forget the decimation of the managerial and blue-collar workforce in the earlier part of the decade. In the U.S. between 1990 and 1992 many thousands of managers and professionals lost their jobs. The general unemployment rate went from 5.3 percent in 1990 to 7.8 percent in 1992. The employees and managers whose experiences are chronicled in this book were luckier than most. Their layoffs occurred at the front edge of the downsizing phenomenon; they worked in an industry that was rebounding from a downturn; many were found places in other company units; and the majority found work relatively quickly after the layoff; most of those who did not find work returned to school or retired.

In January 1992, top management of Signetics (then a wholly owned subsidiary of Philips NV, now an integrated part of the Philips Corporation) announced the closure of their Orem, Utah, microchip fabrication plant, a plant employing about 1,000 people, including production workers, engineers, and managers.[1] This was not the bad kind of downsizing - though all downsizing is bad to its victims - that you read about in the newspapers: employees marched into the auditorium, presented with an announcement, and then escorted to the front gate and handed their paychecks or escorted to their offices to collect their things and then escorted off the company premises. No, the management of the downsizing was undertaken with scrupulous attention to procedural justice (Brockner, 1992), but the whole process was much more complicated: the announcement in January was that the plant would close toward the end of the year, that production would continue until that time, and that people would be laid off on a rolling schedule. Such a strategy creates very difficult challenges for the employer: managing in an end-game situation; maintaining high quantity and quality of production; and creating an appropriate package of incentives to retain employees and induce them: to take a new job with a new firm now in the present location, accept a transfer, if offered, to another location in the same company, accept a job offer in another community, remain with the plant until their services are no longer required, or return to further education.

This book is the account, by a participant, a human resources manager, about this closure. The book is crafted as a chronological account of the progressive reactions of plant employees to the announcement of closure and the consequent actions of the company to implement the nitty-gritty activities designed to maintain production and ensure an orderly shutdown of the plant over the subsequent 12 months. The book ends with the layoff of the author (who found work at the University of Utah). The reactions of the employees, as might be expected, followed the typical cycle of shock and disbelief, anger, bargaining, and regeneration. Though, in this case, the long time period between announcement and final closure meant that some people went through this cycle more than once: first after the initial announcement and then after they received their layoff notices about seven months later.

The perspective of a participant has many strengths. There is a closeness to the reactions, ideas, feelings, and behaviors of the other participants. There is a closeness to understanding the human relations practices employed by the plant during the downsizing. But there are also disadvantages. In the book, too much is taken for granted about the context of the downsizing. For example, the plant had grown from 100 employees in 1973 to 2,000 in 1988, but by the time the plant's closure was announced, it was down to about 1,000 employees. What happened in those four years between 1988 and 1992? What kind of context did that set up for management and employees? Did everyone realize that the plant was in trouble, or did people believe that a workforce of 1,000 and the current product mix was a formula for a viable plant for the foreseeable future? Analysis of that kind of background would have been invaluable in understanding the reactions of employees to the announcement of the plant closure. There are some clues that the viability of the plant was not high. Engineers fought hard with the corporate headquarters to have new fabrication processes assigned to the plant rather than to another facility in New Mexico, but they lost. As a consequence, an extension of the fabrication area built in 1988 remained unused in 1992.

This taken-for-grantedness by the participant-writer also has consequences in a piecemeal and unsystematic revealing of information to the reader. Perhaps this reflects how the information was revealed to the participants, but I suspect the reason is the author's closeness to the event she is chronicling. Even though the author describes in some detail the closure announcement made by the firm, it is only through a description of the reaction of employees to their opportunities that we learn that offers were made to some employees to transfer their employment to the company's site in New Mexico or to the head office in California. This provided a good discussion of the conflicts some employees, mainly managers and engineers, experienced between home and job, between children's education and job, and the dual career dilemmas that they felt, but there is no statement of how this part of the process was managed. Was there a blanket announcement that some employees would receive offers and that others would not? We are not told how many offers were made, but we are told late in the book that fifty people accepted the offer of transfer. We are not told which kinds of people received offers, though they appear to be managers and engineers, and there is no discussion about the criteria for selection, although there is a description of managers, later in the process, appealing their exclusion from the list and negotiating offers of transfer through their contacts at the New Mexico site.