United Auto Workers President Douglas A. Fraser began an unprecedented experiment in U.S. corporate democracy when he took a seat on Chrysler Corp.'s board of directors.
That was 18 months ago. Today, the union is on strike against Chrysler's five Canadian plants and Fraser has temporarily stepped down from Chrysler's board. And Fraser's dilemma shows the weakness in placing labor and other special-interest representatives on corporate boards, according to one influential observer -- General Motors Corp. Chairman Roger B. Smith.
"We never really thought that you could be on a board and only represent one segment of anything," Smith said in an interview. He said the walkout "certainly points out the difficulties a guy can get into trying to do two jobs right, trying to serve two people."
Fraser, attempting to alleviate any trouble and to avoid any appearance of conflict of interest, left the Chrysler board last Friday -- the same day his Canadian members walked out in a wage-and-benefits dispute. The union leader said he never discussed collective bargaining matters at Chrysler board meetings. In fact, he said he always left the meetings when bargaining questions were raised.
The UAW also sought a director's seat on the GM board. But the company resisted.
"There is a fundamental question" involved in the whole issue of special-interest seats on corporate boards, Smith said. "Who does the board member represent?
"You can't have a dealer-director and an employe-director and a supplier-director," said Smith. "The shareholders pay directors to represent everybody.
Before the strike, Fraser consistently denied that his Chrysler board seat was incompatible with his union position. "I think the important thing is [that] I bring a different perspective to the board," he said in an interview last year. And, at that time, many Chrysler board members, including Chrysler Chairman Lee A. Iacocca, applauded that view.
Fraser, for example, is given credit for Chrysler's decision last July to set up a five-member committee to examine methods easing the employe-burden in plant closings. Said Iacocca, then: "There is no question that his goals are the same as our goals -- that is, the preservation of jobs for American workers and a strong corporation."
Iacocca, who invited Fraser to join the board, still contends that Fraser's presence is valuable.
Chrysler spokesman Baron Bates, speaking for Iacocca but not other board members, said the chairman "certainly understands why Doug has stepped down temporarily" and doesn't regard the current impasse as fatal to the union seat experiment.
Other Chrysler board members were declining comment yesterday, because of, as another company spokesman put it, "the volatility of the situation" involving the strike.
Staff Writer Martha Hamilton also contributed to this article.