Capital, labour and economic performance in the engineering construction industry: 1960-1990

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Abstract

This study engages with the debates on industrial relations and economic performance at the micro-level. Primarily; this issue has been addressed through the production function approach which seeks to correlate a variable for unionisation with an economic performance measure. Criticisms are put forward which stress the technical limitations of existing studies, the limitations of
statistical studies in examining social processes, and
theoretical problems with the production function approach. The literature recognises the need for a detailed, processual case study. The thesis is such a case study, examining the Engineering Construction Industry, i. e. the building of large power stations and process plants, from 1960 to 1990. The principal research methods were archive work and interviewing.
The industry was chosen because it constituted a 'crucial' case for the argument that labour militancy underlay the UK's poor economic performance in the 1960s and 1970s. The industry was characterised by widespread militancy and large project overruns, the assumption (tested within the thesis) being that the former caused the latter.
The key finding is that the chronic project delays were at root due to the opportunistic practices of contractors who
deliberately and covertly delayed construction in order to force the client into offering extra payments. A key profit focus of contractors lay in exploiting opportunities to generate additional payments. The widespread militancy of the 1960s and 1970s exacerbated overruns, but the key significance of militancy was that it was used as a tool by contractors in reproducing beneficial commercial relations with clients. The improvement in performance in the 1980s was at root due to the rise of managing contractors who curbed opportunism. Unconstrained by high levels of labour militancy, managing contractors adopted a low trust route to improve project performance, implying that the basis for longer term development has not been laid.
A 'crucial' case study of the British worker argument has
rejected the thesis that militancy underlay poor performance. The relationship between opportunism, militancy and poor performance uncovered within the study potentially has relevance for other important sectors of the UK economy.

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