It could have been called the First Annual Conference on the Decline and Fall of Industrial America.
The United States is steadily losing its technological edge, said Thomas A. Vanderslice, president of General Telephone and Electronics Corp., and holder of a dozen scientific patents.
Business managers seem to be losing nerve, as American industry ages, making them slower to take risks and innovate, said Charles P. Kindleberger, a Massachusetts Institute of Technology economist and historian.
American businesses have been forced to accept a tide of new workers -- specifically, women and minorities -- whose skills and work attitudes don't measure up to past levels, said Patrick E. Haggerty, chairman of Texas Instruments Inc. Progress "demands that we bias our institutions to seek out and reward those who do things better," he said.
At a conference here last week at the American Productivity Center, business and labor leaders, academic experts and government officials all recited evidence of serious, long-termm downward trends in the U.S. economy. The general name for the illness they described is declining productivity.
Productivity -- a measure of the hourly output of the average American worker -- has become an increasingly convenient if inexact symbol of the country's economic distress.
During the first two decades after World War II, when American industry's world leadership was secure, productivity grew by more than 3 percent a year. The growth in productivity testified to the increasing efficiency in American workplaces and the production of more goods and services with the same effort. A 3 percent gain in productivity could be matched by a 3 percent wage increase without an increase in prices or inflation.
Beginning in the 1960s, productivity growth began to cool off. Between 1973-1977, the annual growth of productivity was only about one percent, as the four-fold increase in oil prices and the severe 1974-75 recession combined to weaken the economy.
Last year, productivity fell, according to government estimates. The output of goods and services per hour for all workers was less than the figure for the year before.
There is continuing debate about the exactness of the national productivity figures, since they result from comparisons of the broadest data on the production of goods and services through the United States with the total effort of all employes in the country.
But the figures indicate a troubling trend, according to C. Jackson Grayson Jr., former dean of the Southern Methodist University business school and chairman of the federal Price Commission during the Nixon administration. In 1977, Grayson founded the American Productivity Center, which recently moved into a lavish, new $4 million building in Houston. Last week's conference was held there.
The slump in productivity results from inadequate investment by business in labor-saving technology, and a failure to improve the efficiency of private business and government services, Grayson says. The trend produces inflationary price increases and a greater vulnerability in this country to foreign import competition, he adds.
Despite Grayson's appeals for consensus, however, his conference produced at least three different strategies for reversing the trends.
Business leaders cite the productivity figures to strengthen their push for major reductions in corporate taxes beginning next year. Lower taxes would generate more cash, encouraging companies to increase investments in new equipment and plant modernization, the business argument goes.
Some economists -- and most of organized labor -- contend there is no guarantee that the billions of dollars in tax reduction sought by business would be channeled directly into productivity-improving investments.
In a period of "balanced budget mania," the AFL-CIO President Lane Kirkland put it, a dollar of tax reduction for business is a dollar less for individuals who receive government assistance.
"If productivity is merely a device to make workers toil harder and longer, or simply a means for higher profits, then workers will resist . . . and labor will lead the fight," said Ken Young, Kirkland's chief assistant, who read Kirkland's speech at the productivity conference.
The fight will occur late this year, or more likely next year, when Congress is expected to consider a broad, business-oriented tax cut.
A second strategy, to defuse a conflict between business and organized labor on the issue, was urged by Jordan J. Baruch, assistant secretary of Commerce for technology, productivity and innovation.
The government, labor and business should take up projects together that would strengthen U.S. industrial technology and break down barriers of mistrust and misunderstanding, Baruch and others said.
One fourth of U.S. industrial processes involve welding, and the testing of welded joints is slow and archaic, Baruch said. A government-backed project to develop a faster, surer method would have broad benefits, he said.
Beyond that, he would like to see an even larger scale partnership between government, business and labor, such as a joint venture to develop new steelmaking processes that appear too costly for single companies to tackle. A pilot plant for the project could be located in one of the country's industrial centers hit hard by plant closings, providing jobs for skilled, out-of-work steelmakers, he noted.
But a consensus among government, labor and business on improving productivity is not likely to come at the national level, from the top down, at least not now, many conference participants said.
In today's climate, there isn't much confidence that the federal government would pick the right technologies and industrial processes to support. Irving Leveson of the Hudson Institute, a private research organization, said such attempts at national industrial planning smacked of a "whole new level of meddling in the economy that will lead to disaster, as it has in Europe."
Fundamentally, a government role in the industrial process spells regulation to business, at a time when it is besieging Washington to reduce government intervention. "We don't need government incentives as much as we need to get rid of a potful of disincentives imposed by the government's regulations," said Vanderslice in an interview.
If business remains suspicious of government, organized labor is just as wary of a partnership with business, said Glenn E. Watts, president of the Communications Workers of America.
In order to break the current inflationary surge, Americans will have to accept wage increases of perhaps 2.5 percent less than the inflation rate, said Watts, for as long as five years. A national consensus on that degree of sacrifice isn't likely, he added. "Right now, it would be very difficult to get national labor-management cooperation as we've had it in the past (on anti-inflation policy)," Watts said.
A third strategy is possible, however, he and other conference speakers said.
"At the moment, it is far easier to get cooperation on a plant level," Watts said. The surest prospects for improving productivity are there.
"In the last analysis, it is at the firm level that most of the gains must be made if we are to improve the productivity performance of the economy," said K. H. Militzer, chief economist of American Telephone & Telegraph Co.
A look at plant-level attempts to improve productivity shows some success stories -- while challenging claims that a general decline in the American work ethic has occurred, several conference participants said.
An example is General Motors,, said D. L. "Dutch" Landen, director of GM's organizational research and revelopment. In 1971, the company and the United Auto Workers began working together on improving the "quality of work life" in GM assembly plants. The year before, there was only one agreement between a local union and a local GM plant in force when the national GM/U.A.W. labor agreement was signed -- a measure of labor-managemment antagonism at the local level.
Today, there are more than 100 "quality circles" at GM plants -- committees of employes who meet with management's support to review operating problems and morale issues, Landen said. The results are concrete, he said: Better quality of workmanship, better morale, less absenteeism, more ideas for assembly line improvements. In a word, better productivity, he said. said.