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6 The North American Auto industry: The Apex of Concessionary Bargaining The real story is that we’ve become partners in some of the most profitable companies in the world, DaimlerChrysler, Ford, and General Motors.1 —UAW President Stephen Yokich (1999) Nowhere have the pressures associated with globalization and NAFTA been more evident than in U.S.-based auto manufacturing, once considered the world’s undisputed titan of the industry. For more than a century , the auto industry had been an anchor for the U.S. economy, a trendsetter for both corporate America and the trade unions. Following World War II, the United Auto Workers (UAW) and auto management negotiated agreements that provided the industry’s workforce with wages, health benefits, and pensions that set standards for unions in steel, mining, rubber, trucking, construction , telecommunications, and other industries. The pattern of steady wage increases together with increasingly stronger health and retirement benefit packages stretched well beyond heavily unionized industries, setting benchmarks for all the nation’s employers, union and nonunion alike.2 As late as 2005, automobile manufacturing remained one of the U.S. economy ’s best-paying industries, with production workers earning an average hourly wage of $29.91 (excluding benefits). Wages in the auto sector were 79 percent greater than the national average for all manufacturing industries.3 But over the last few decades, the hegemony of the U.S. auto industry has been increasingly challenged by foreign competition as a result of an ever more integrated global economy. In recent years, this trend has intensified, as American-based auto companies have lost market share both globally and within the United States.4 In November 2005, the severity of the crisis for the auto industry and its north american auto industry · 143 broader implications for the American economy became apparent when Delphi Automotive filed for bankruptcy, the largest industrial enterprise to do so in the entire history of the United States. While announcing the company’s bankruptcy, Delphi’s chief executive officer (CEO), Steve Miller, signaled what was at stake: “I want you to view what is happening at Delphi as a flash point, a test case, for all the economic and social trends that are on a collision course in our country and around the globe.”5 Miller emphasized that a successful course of action to avert catastrophe lay exclusively with Delphi’s union members who needed to “sacrifice” in order to “save” the industry.6 On the heels of the Delphi bankruptcy filing, General Motors (GM) announced plans to close or eliminate shifts at nine of its assembly plants and cut 30,000 hourly workers’ jobs in the United States and Canada by the end of 2008. The elimination of 22 percent of the North American workforce was part of a major restructuring plan designed to boost profits and raise share values for the company’s stockholders. In the months leading up to the announcement, Wall Street investors had driven GM share values to the lowest point in eighteen years, and the company’s credit rating had dropped to junk status. With losses of $5 billion in 2005, some analysts had predicted that the company would file for bankruptcy before 2008.7 When announcing the massive job-cutting program, company CEO Rick Wagoner said the objective was to reduce structural costs by $6 billion and bring the company’s expenditures “in line with our major global competitors.” He continued: “In short, they are an essential part of our plan to return our North American operations to profitability as soon as possible.”8 The downsizing measures represented the most extensive since the early 1990s when GM closed twenty-one assembly plants and manufacturing operations and cut 74,000 hourly and salaried jobs in just a few years. The new round of cuts sought to reduce the U.S. GM blue-collar workforce to 86,000 by the end of 2008.9 At its peak in the early 1970s, GM employed more than 600,000 American workers. By 1978, GM employed 466,000 hourly workers, and by 1993 the numbers had been reduced to 233,000 blue-collar employees. GM’s hourly U.S. workforce shrank by more than half, or 114,800 workers, between 1994 and 2004. In 2005, only 35 percent of workers in all auto companies and suppliers were unionized, down from nearly 65 percent in the mid-1970s.10 The downsizing at GM and the drop in union membership reflected the general decline in...

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