In Auto Negotiations, UAW Will Likely Continue Move Away From Setting Standards

David Moberg

Workers install engines in Ford vehicles at the Chicago Assembly Plant on December 1, 2010 in Chicago, Ill.

UAW president strikes a Reutherian pose, but times have changed for the once-mighty union

The United Auto Workers (UAW) negotiations opening this week with the Detroit Three” car and truck companies will likely confirm and consolidate an industry labor relations model that has been evolving for several decades in ways that depart dramatically from the strategy of the union in its heyday of power. 

Although this new model was imposed on the UAW largely because the union had lost power in changed global and domestic markets, UAW President Bob King hopes it can be the basis for rejuvenation of a union that once set the pattern of aspirations for the American working class. But he may find the challenge in reaching a new contract will be as much with restive union members as with corporations that intend not only to hold the line on labor costs but also to continue cutting costs – especially for healthcare.

In the 1950s, the UAW represented all the nation’s assembly, engine and stamping plant workers and enough parts workers to set standards for the industry. Contracts guaranteed wage increases more or less tracking productivity increases and cost-of-living adjustments to protect real earnings. Benefit packages expanded. And while the union had limited success reducing work hours, it did make it possible for workers to retire securely earlier following often grueling decades of work.

Negotiators set industry standard wages for all workers, effectively compressing wage differences between, for example, sweepers and skilled tradespeople. Not only did the pattern contracts take wages out of competition, as unions always hope to do, the union won many provisions that effectively forced the companies to accept workers as a relatively fixed cost in a cyclical industry, such as supplementary unemployment benefits for laid-off workers or the controversial job banks of recent years.

But competition increased from imports and then from largely nonunion factories of Japanese and other foreign multinational companies, primarily located in relatively rural southern state location. And the domestic car company managers failed time and again to provide cars that were well-engineered, well-designed and reliably well-made. A combination of poor energy policy and management inclinations led to some interim successes – minivans and SUVs – that contributed to long-range misdirection of the companies’ strategies.

The 1979 Chrysler bailout, followed by decades of corporate concession demands, bit by bit unraveled much of what the union had built. Faced with restraints on imports into the United States, Japanese and then other country – auto manufacturers built more factories in culturally anti-union regions of the U.S. They also used typical fear-mongering and threatening U.S. management techniques to defeat unionization drives (although critics claimed the union might have done better to settle in for the long run in the southern auto towns to develop trust and support).

Faced with periodic crises (including every surge in gas prices), declining market share, and a proportionately growing cost of retired workers, U.S. companies shut factories, moved out of the country, and whipsawed” one local union against another to re-write local contracts to compete for products and a chance to stay open. Rank-and-file opposition groups claimed that concessions wouldn’t save jobs, and in the long run that proved true, but in the short-run concessions to save a job often seemed tempting.

Without success in organizing the industry, where union density was steadily falling, the balance of power shifted from the UAW setting standards to the nonunion companies establishing wage rates. And even when the unionized companies began matching transplant efficiency in recent years, they still suffered a cost disadvantage (in addition to continuing management and design incompetence, despite improvements in car quality).

The crisis came to a head with a deeply concessionary contract in 2007 after years of financial losses. More union givebacks followed during government bailout and restructuring of Chrysler and GM during the depths of the Great Recession in 2009

Now, even though the transplants set standards, there are two (often more) tiers of wages, reduced fixed costs of employment, more temporary and subcontracted labor, and continuing pressure on local unions to weaken work rules for competitive operating agreements.” Competition has been put back into the labor market, and companies are trying to drive down the fixed costs of workers.

But the three companies – Chrysler talks start Monday, GM Wednesday, Ford Friday – came out of the crisis with booming profits and executive pay. Many workers expect to recover some of what they were forced to surrender; others want to eliminate the huge difference between new-hires and older workers (who are paid about twice as much).

King has been consistent, if marching to a somewhat different drummer. He insists that the union has to be concerned about the competitiveness of each employer. While he thinks second-tier wages should rise and temp help be controlled, he does not promise even to demand eliminating the differential. While he argues against new concessions, he does not talk about restoring what was lost. Instead he appears committed to expanding and improving profit-sharing more than increasing fixed costs. And as auto executives reject the idea of a pattern agreement, King does not talk as forthrightly about preserving pattern bargaining. More than wage increases, he argues, auto workers want jobs and job security. And they want to share more fully in their employers’ upside, since they’ve paid heavily on the downside.

King seems to be gambling that a more accommodating UAW may inspire transplants to agree to be less hostile to union organizing, especially if the alternative is facing a global union campaign on their disrespect for labor rights. 

As a socially progressive union leader, King is clearly adopting the old Walter Reuther model. But his labor relations model is far different from Reuther’s. Critics see it as surrender to the auto companies, but King hopes – just as he hopes to persuade union members – that it’s a necessary step toward saving and rebuilding a once-powerful union.

David Moberg, a senior editor of In These Times, has been on the staff of the magazine since it began publishing in 1976. Before joining In These Times, he completed his work for a Ph.D. in anthropology at the University of Chicago and worked for Newsweek. He has received fellowships from the John D. and Catherine T. MacArthur Foundation and the Nation Institute for research on the new global economy.

Subscribe and Save 66%

Less than $1.67 an issue