Scania—SPS and the ‘New Employee’

This chapter introduces the case study upon which the theoretical ideas of this book are based. In Chapter 4, we propose the current management ideology of Scania, which forms the basis of our exploration of Scania’s health-promoting activities that follow in chapters 5 to 7. More specifically, the main focus of the chapter is the principles of Scania’s production system and the demands that it puts on Scania’s employees. We account for the two major transformations that Scania’s production system has undergone during a period of 60 years and discuss how these transformations have affected the conditions of work and especially what the work requires from each Scania employee. This background to the arguments in the ensuing chapters is important not only as it shows how each production system tends to presuppose particular personal and behavioral characteristics and capabilities on the part of the Scania employees; but also as it suggests how Scania’s health expertise may play a role in supporting the employees to adapt to the requirements of the current production philosophy. Scania is an internationally leading manufacturer of heavy trucks, buses

and coaches, and industrial and marine engines. It operates in some 100 countries and has 34,000 employees. Scania was founded in 1891. Since then, it has built and delivered more than 1,400,000 trucks and buses for heavy transport work. Scania is well known not only for its products, but also for its stable and long-term strategic focus. It has grown organically, based mostly on internal financing, and it has continued to develop and produce the same category of products for more than 80 years. This conservative stance has also been very successful; Scania has made a profit each year since the 1940s, and it has not laid off any regular personnel for more than seven decades. Today Scania is generally seen as a very stable and attractive employer both among blue-collar and white-collar workers and it is well known for its highly sophisticated production principles that are the result of a long chain of development over a period of 60 years that comprises a limited number of principal transformations in the technical and social organization of its production. The first important transformation took place in the early 1940s when Scania received a new chairman of the board,

Marcus Wallenberg Jr, and a new CEO, Carl-Bertel Nathorst. Both Mr Wallenberg and Mr Nathorst were trained engineers and shared the ambition to transform Scania from a craftsman-oriented medium-sized company, which operated primarily in the Swedish market into a technically as well as organizationally advanced enterprise. Until then, each worker had had considerable professional discretion; he (it was typically a man) decided on the methods to use and was in charge of his own tools and equipment. Basically, each individual assembly worker received boxes of loose unassembled items and then put together entire machines or large components single-handedly. The line between production and development had also been highly blurred. Next to their role as operators in the factory, be it in the role of assembly worker, machinist, etc., the workers also functioned as a flexible service unit and as an experimental workshop for the design department. Based on the drawings from the product design engineers, workers made parts, components and sometimes complete new machines directly from design drawings. Given the high levels of flexibility and creative skills required to function

as an assembly worker, such workers enjoyed high status on the workers’ career ladder. Yet, not only assembly workers but also forge and steel plate workers, coppersmiths, saddle makers, pattern makers and other skilled workers did their jobs under similar conditions. Even machining work required great skill. Machine workers themselves were responsible for pre-production engineering and for making tools and any fixed equipment. Furthermore, machining work was allocated by distributing drawings to individual workers, who then independently made the necessary adjustments to the machines to be able to produce the components specified. Indeed, in the 1930s workers generally worked independently and gradually taught their skills to apprentices. Their working methods were highly craft-oriented and their high level of craft skills gave them considerable autonomy and power vis-à-vis the management. These workers established a a small elite of Swedish engineering industry workers and acted de facto as managers over a cadre of unskilled (younger) workers. Very few of these craft workers left Scania to work for another employer and hardly any of them were ever asked to leave the company. Also contributing to the low turnover was favorable wage growth. Hourly wages were not exceptionally high, but piecework rates, which were set in free negotiations with the master mechanics, resulted in very good flexible earnings. Put drastically, the skilled workers at Scania set their own flexible earnings, which were normally twice as high as their hourly wages. This made the Scania workers among the highest-paid workers in Sweden during the 1930s. They established something of a working-class elite and are still in 2009 widely known at Scania as the ‘Scania pork chop brigade’—a name given to them because they could afford to eat pork chops every day. Control and influence as exercised by these workers over their subordinates was direct and simple, and subject to the whims and subjective viewpoints by them. The general working atmosphere

50 Scania-SPS and the ‘New Employee’

was highly authoritarian and most workers, except the elite, suffered from working with repetitive, simple and sometimes even dangerous tasks. The new CEO, Mr Nathorst, who had recently turned 30 when he came

to Scania in 1940, would initiate changes that ended the era of the “pork chop brigade.” At Scania’s webpage, where information is given on the history of the company, this development is explained as a company that evolved from being “dominated by master mechanics into an efficient industrial enterprise” (www.scania.com downloaded on November 14, 2009). Nathorst “who considered it a challenge to systematise, simplify, trim costs and expand operations” set up a new management team consisting of a range of 12 newly recruited engineers, all of them being relatively fresh from the university and none older than the CEO’s 30 years. Most of these 12 new managers would stay with Scania until they retired in the early to mid 1980s. Together, they initiated a complete reorganization of production according to Tayloristic principles. That is, they thoroughly studied all parts of the production process and carefully designed a completely new factory in which each step in the production process was formalized and broken down into small rationally assembled parts. The idea was to design a production process that, seen as a whole, was highly sophisticated and efficient, but where each separate activity, each separate step in the production process, was not only simple to carry out, but where it was also easy to see how it related to the next step in the production chain. In the Tayloristic production process that was then established the ‘pork-shop-brigade’ and its way of controlling production soon came to be seen by management, no longer as the lifeblood of Scania’s operations, but as a major hurdle to a more modernized and efficient operations. Unless they were promoted to a foreman position, all the changes introduced by the newly appointed skilled management engineers were seen by them as a form of degradation and thus as changes that ought to be resisted. As said by a recruitment officer of Scania’s human resources department who had been working at Scania for almost 40 years:

The pork-shop-brigade no longer fitted into the new Scania that was being formed. Even though some of them found new positions within Scania, most of them either left Scania freely or were forced to leave. In 1938 they were the working class elite of Swedish industrial life; in 1945 hardly any of them remained at Scania.