The United Auto Workers’ (UAW) strike against General Motors (GM) seems to be over the same complaints—pay, benefits, retirement, employment status—that have been causing the UAW to strike General Motors for over 80 years. But this time, the two sides may be squaring off with their backs to the same wall.
The UAW first struck GM in 1936, over working conditions that included a 12-hour day and a 6-day week. This current strike is about employee pension plans, health benefits, and the use of “temporary” workers. On the face of it, the disagreements are still about working conditions and pay.
GM bounced back from the Great Depression as a defense contractor during World War II, and then expanded nicely for a generation more. Americans loved cars and bought cars, and bought American cars. Post-war housing developments created suburban living based on urban access based on cars. The national highway system was created. Gas was plentiful and cheap, and so were cars.
UAW membership grew with car ownership, and eventually expanded into other industries, such as bicycle manufacturing. At its peak in 1979, membership topped 1.5 million. Since then, as has been true for all union membership, the numbers have fallen off.
By the time Chrysler was saved from bankruptcy by U.S. government loan guarantees in 1979, there was little public sympathy for either auto manufacturers or workers. Publication of Ralph Nader’s Unsafe at Any Speed in 1965 had heightened concerns about safety and environmental callousness. Then the oil embargo of 1973 raised the price of gasoline, substantially.
Suddenly, American consumers cared about mileage, quality, and safety, and American manufacturers were trying desperately to compete with their Japanese and European counterparts. Imports became a significant segment of the auto market for the first time.
As recessions hit the U.S., and especially its middle class, sympathy for unions and their “generous” compensation packages fell. In truth, most union members were trading current pay for benefits and/or future pay, in the form of defined benefit retirement plans (pensions).
With the genius of hindsight, it is clear that for many union members, that has proven to be a lousy deal: too many pension plans have failed or are grossly underfunded, defined benefits have been replaced by defined contributions, and the wage stagnation that at the time was a temporary bargaining chip has become permanent.
And then, the auto industry survived another near-death experience during the Great Recession. GM filed for bankruptcy in 2009, and reorganized only with the help of a government bailout ($49.5 million in TARP funds). It has since survived and expanded globally, with sales in China now surpassing North American sales. It also manufactures globally, in most cases through joint ventures with foreign brands.
But globalization has meant that most GM employees are not union members now, and the union’s leverage has been greatly diminished. UAW membership has shrunk accordingly, with about twice as many retired as active members now.
Both GM and the UAW face new challenges from the demise of the gasoline-combustion engine, which may by outsold by electronic vehicles as early as 2030. Although GM was ahead of Ford and Chrysler in creating electric vehicles, it lags behind foreign competitors and consumers. In China, for instance, there is limited legacy infrastructure or consumer attachment to gasoline-powered vehicles, and there is massive government investment in R&D for alternatively fueled vehicles.
Most ominous for autoworkers is the fact that electric cars require fewer parts and thus less assembly, and more of that assembly can be done by robots. Technology is moving the auto industry away from the need for the classic, assembly-line army of “rivetheads” and into the 21st Century.
As the UAW and GM square off one more time, it begs the question as to whether the union’s most vested interest now is simply protecting its retirees’ benefits and insuring as soft a landing as possible for current active members, or whether it can carve a new role for its workers through the inevitable industry transformations.
The auto industry has always been a harbinger and—perhaps just because of its sheer size, cultural and iconic importance, and ubiquity—a symbol of American manufacturing and labor relations. But it is clear that more of our heavy industrial manufacturing—and our economy—will be using fewer workers in traditional roles, and that will affect the conditions of employment profoundly. Both employer and employee are scrambling to reimagine themselves, and both GM and the UAW have to know that the ground is shifting beneath their feet.