Win or lose, the UAW is doomed

But labor shouldn't be blamed for the Big Three's failure to compete.


Andrew Leonard
September 25, 2007 11:42PM (UTC)

"Globalization is killing us," said Jerry Gillespie, president of a UAW local in Warren, Mich., as reported in the Wall Street Journal.

The present tense is misleading. The last time the United Auto Workers called a national strike against General Motors, in 1970, there were 400,000 UAW members working for GM. Today, there are about 73,000. Total UAW membership at the "Big Three" U.S. automakers has dropped from 310,000 to 180,000 in just the last four years.

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That isn't a decline -- it's a death spiral. If "globalization" is the grim reaper wielding this scythe, then the foul deed is nearly complete. Even if the union wins its game of chicken with GM, and manages to latch on to some measure of job security in exchange for the huge concessions on healthcare that it has already agreed to, the numbers brook little argument. In the U.S., unionized labor in the automaking industry is wasting away. What's left is little more than a desperate attempt to ease the pain for a terminal patient.

The right would have us believe the denouement is labor's fault -- that the glorious victories of organized labor in the past paved the way for the uncompetitiveness of American carmakers in the future. But if labor was such a millstone around the Big Three's necks, then how was it, exactly, that Ford and GM were raking in record profits a little more than half a decade ago? The high cost of American labor didn't seem to make that much of a difference when Chevy Tahoes and Ford Expeditions were selling like hot cakes.

The left blames free trade: cheap foreign labor undercutting the American worker. But if that's the only thing going on here, then why are hybrid sales rising so rapidly -- by 49 percent in the first seven months of 2007 as compared to last year? Hybrids are not cheap cars.

The calculus is simple: If your costs are higher than your competitors', and you make a product that customers don't want to buy, you're doomed.

And therein lies the tragedy. Because it didn't have to be this way. The truth of the global economy is that the U.S. is never, ever again going to be competitive as a manufacturer of cheap cars, either globally or in the United States. That market will belong to China and India -- even now, cheap Chinese cars are making inroads into European markets. U.S. carmakers can't compete with that, and they shouldn't want to.

U.S. carmakers should be doing what carmakers in other advanced industrial nations -- like Germany and Japan -- do: make better cars than anybody else. But the U.S., a country that enjoys greater access to capital and high-tech research and development expertise than any other nation on earth, and which prides itself on being the supreme font of "innovation" in the global economy, has embarrassingly missed the boat on being able to produce high-tech cars appropriate to an energy constrained world. That sad truth sure isn't labor's fault. Instead, it represents a miserable failure by both government and management. But labor takes the hit.

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Government refused, at the direct request of Detroit, to pass laws that would require American carmakers to increase fuel efficiency. Government refused to come up with a national healthcare system that would have made it easier for American companies to compete globally.

Meanwhile management focused on short-term profits and shareholder "value" at the expense of long-term strategies for increasing market share. Instead of being smart, the Big Three played it stupid. Now, they can't compete at the low end or the high end.

Symbolically speaking, the history of the United Auto Workers is in many ways the history of the rise and fall of organized labor in the United States. But its decline into irrelevance should not be read as an indictment against its own overreaching. Instead, it should be seen as a demonstration of how an entire nation lost its way.


Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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