The ultimate demise of Levi Jeans Company came long before the announcement was made on the closing of eleven of its US factories, ending the jobs of over 6,000 employees--many of which had been long term. Although many manufacturing type businesses are notorious for their "slave labor wages" and less than reputable working conditions, Levi's Strauss broke the mold by maintaining its character of always treating its workforce fair and employees as valued. The company was ranked in many polls and by numerous magazines as one of the best to work for.
What led to the downfall? Most say that it was the abandonment of the old piecework system in 1992. Under the old system, an employee did one dedicated task such as sewing buttons or zippers. The worker was paid according to the amount of individual work completed. Unfortunately, the recurring tasks showed increases in "repetitive-stress injuries", for example, carpel tunnel syndrome.
At this point came the birth of the 'work group method', which the company saw as more productive. The idea of teamwork seemed profitable for Levi'sUS based factories whose competition was already turning to the overseas markets to cut costs on labor. It was obviously more economical for them to hire a seamstress at several dollars a day (overseas) as opposed to having to pay hourly wages stateside. "Teamwork is the basis for solving frustrating and costly workplace problems, such as high stress, unsolved conflicts, low job satisfaction, and high turnover", says Steve Carney, the author of The Teamwork Chronicles. The idea backfired on Levi's and inevitably turned the workers against their counterparts.
The buddy teams worked as long as you had an entire team of experienced, top performers. But predictably, "longtime friendships were dissolved as faster workers tried to banish slower ones." (King, 1998) Morale...