To save the domestic auto industry, the UAW may end up killing itself.


National strikes at two of the three major American auto manufacturers have drawn much attention to Detroit in recent weeks, but the latest round of contract negotiations makes it clear that the future of American auto unionism (if there is one) must lie elsewhere. The historic concessions made by the United Auto Workers, billed as necessary measures to keep the reeling Big Three from bankruptcy, in fact represent something far more ominous. To “save” the domestic auto industry, the union may end up killing itself.

The lowlights of the General Motors contract–the model for subsequent deals with Chrysler and Ford–are the creation of an independent benefit trust to assume GM’s healthcare obligations to 340,000 UAW retirees and a tiered wage-and-benefit scale for future hires. As many as one-third of GM’s hourly jobs may be reclassified as “non-core,” with new workers receiving fewer benefits and earning roughly half the wages of current employees. The implications for future organizing are likely to be profound–as Gary Chaison, professor of industrial relations at Clark University, told the Detroit Free Press, “two-tiered wage structures are not what unions are about, when they talk about solidarity.”

The contract will reduce the gap between labor costs at unionized GM plants and those at foreign-owned US plants–all thirty-three of which are nonunion–by as much as 50 percent. The Wall Street Journal summed up the significance of the deal: “Toyota Motor Corp., not GM or the UAW, now sets the bar for labor costs in the U.S. auto industry.”

For the UAW, once the standard-bearer for industrial unionism, that shift may be fatal. So long as the union remains tied to Detroit and committed to the “jointness” business model that has created the ideological framework for repeated concessions, the UAW seems fated to become, at best, industrially irrelevant. And maybe worse–this past February, the Free Press reported that at a Toyota plant in Georgetown, Kentucky, “workers for a foreign automaker for the first time averaged more in base pay and bonuses than UAW members working for domestic automakers.” It was a shocking sign that autoworkers may no longer see a material benefit from joining the UAW.

Hourly wages for union and nonunion autoworkers in fact have been roughly comparable for some time, although the UAW’s vaunted benefits packages have brought total compensation for members well above that of their nonunion peers. By saving as much as $30 an hour on benefits, foreign automakers have been able to dampen interest in the union by paying wages well above the regional standard in places like Canton, Mississippi, where Nissan workers can make more than double the state average. The overall effect throughout the industry is downward pressure on earnings, as the Big Three demand concessions to remain competitive on labor costs, while the UAW mortgages what remains of the union advantage for dubious promises of job security.

So what is to be done? The answer, like the answer to much of the broader labor movement’s woes, lies in the rural South and Midwest, where the proliferation of Toyota, Honda and other foreign-owned plants has accounted for virtually all recent growth in domestic auto manufacturing. After decades of watching plants close down and jobs move overseas, the UAW finds itself beset by a process of globalization-in-reverse, as foreign automakers increasingly “insource” production with cheap nonunion labor in right-to-work and Rust Belt states. The global South has arrived in Detroit’s backyard.

Despite repeated efforts, the UAW has never been able to establish a foothold in these foreign-owned factories, strategically located in rural areas with a negligible union presence, antilabor state legislation and depressed local economies. Foreign automakers have deployed a range of tactics to keep union supporters out of factories. At a Honda plant scheduled to open in Greensburg, Indiana, next year, the company is imposing hiring restrictions based on residency to prevent thousands of out-of-work UAW members in the state from applying for the new jobs. Just outside the company’s carefully delineated twenty-county hiring zone is Anderson, a city once home to three GM factories. All three have closed since 2003, putting some 22,000 UAW members out of a job, none of whom will be able to apply for work at the new Honda Greensburg facility.

If the UAW is to have a future, it must figure out a way into these foreign-owned factories. There have been encouraging signs at two Alabama plants, and in Georgetown, where Toyota workers have mounted what may be the most viable current organizing campaign, aided by groups like Jobs With Justice.

That kind of broad-based mobilization will be needed to counter the sophisticated antiunionism of foreign automakers. It will also require a political strategy to combat the “Third Worldization” of the American South, where a century and a half of economic depression has created an industrial backwater of nonunion labor. In its heyday, the UAW was often credited with setting the standard for the American middle class, and it could do the same today in the South. But unless it re-establishes an industrywide organizing presence, the union that long embodied the strength of the twentieth-century American labor movement may fast become a thing of the past.

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