PETER O. ZIERLEIN*
The crisis in the American auto industry marks a decisive turning point for the nation’s manufacturing economy. During the past three decades of global overcapacity, Detroit’s Big Three, the backbone of US manufacturing, have stumbled through intense international competition by periodically shuttering factories; squeezing the pay and benefits of their workers; and every so often getting a quick fix from the sale of gas-guzzling SUVs, minivans and big pickups.
But time has run out. Once the dust clears it seems certain that Chrysler and General Motors will be radically downsized: at least a third smaller, with fewer workers and brands and a dealer network slashed by as much as 40 percent. Most remarkably, these two companies, once in first and fifth place on Fortune‘s list of the 500 largest, will have ceded a big slice of their ownership to the United Automobile Workers and the Treasury.
Under the latest iteration of the GM restructuring deal, the Treasury will own 50 percent of the company and the UAW will own another 39 percent through its healthcare trust. Chrysler will be merged into Fiat, but the government and the union will also take large stakes in the company as they swap debt or healthcare payments for equity.
Given all this drama, the UAW has been strangely silent. Who has heard of Ron Gettelfinger, its president? He has been playing back-room hardball to fend off efforts by Republicans, bondholders and some in the Treasury to slash union jobs and wages. But none of his efforts have amounted to a program that could rally the country on behalf of the UAW and the rest of the union movement.
History, Mark Twain is credited with saying, never repeats itself, but sometimes it rhymes. If we revisit another moment of crisis in the auto industry, perhaps we can catch some of that social and economic poetry. In the mid-twentieth century, the UAW was a far larger and more powerful organization led by men and women of vast ambition and limitless imagination. C. Wright Mills described it as a “‘Grass Roots’ Union With Ideas,” a political and economic formation that Walter Reuther, its legendary president, called “the vanguard in America,” “the architects of the future.” If contemporary progressives and the beleaguered UAW look back at the ambitions of Reuther and the autoworkers of his era, we might find the inspiration and ideas to reshape the bailout and bankruptcy agenda, to build a new vision for the nation’s manufacturing and the millions who labor in American factories and mills.
Reuther was just 33 in 1940, but he was already a union official and the leader of 200,000 workers who labored at GM, an enterprise that Fortune identified as “the world’s most influential industrial unit in forming the life patterns of the machine age.” During World War II the company would account for 10 percent of the nation’s manufacturing capacity; Detroit was then the fourth-largest city in the country, an industrial dynamo where just about every blue-collar worker sported a union button. The shuttered factories and derelict neighborhoods that today exemplify Detroit’s decline also measure the shrinkage in UAW ranks, which have been slashed from more than 1.5 million more than thirty years ago to about 430,000 active workers at the end of 2008. (It is important to note that the American auto industry is not dead: there are still almost a million workers, most nonunion and poorly paid, who design, forge, build, assemble, ship and service the 15 million cars and trucks normally sold each year in the United States.)