It was a ritual. As contracts between the United Auto Workers (UAW) and the Detroit car companies neared expiration, the union would hold meetings to determine how much more it wanted to get from the companies in a new agreement.
The companies would use the media to send the message that nothing more was forthcoming. The media would run to the unions in pursuit of heated rebuttal. The unions would choose a strike target &
either the richest car company, or the one that had the most to lose. There would be threats of a strike. Sometimes, there would be a strike.
The media then would gather in Detroit at the headquarters of General Motors, or near the old headquarters of what was once an independent Chrysler. Or, the journalists would journey to Ford headquarters in nearby Dearborn, Mich., because Ford always had the best pressroom and the best food for reporters.
In any one of those places, the journalists would camp out until a new agreement was reached, sometimes ending a strike, but nearly always bringing more largess to the UAW. It was the Era of the Myth of Endless Growth, when the Detroit car companies believed that there was always more market share to be had, and when the UAW took as an article of faith that there always was more to be had &
wages, job security promises, fatter pensions, more-generous health-care plans &
from America's Big Three car companies.
But today, as UAW leaders and domestic automobile manufacturers head back to the bargaining table, the world has changed radically. The Big Three car companies are not so big anymore. In fact, they are not even the Big Three.
Chrysler was bought by German luxury automobile manufacturer Daimler-Benz in 1998 and turned into a corporate stepchild, a division called the Chrysler Group. The American company, which had a few decent years under German ownership before it started bleeding money, never was fully, genuinely welcomed into the Daimler family. Now, it has been kicked out, with a sale pending to the highest bidder, a private-equity firm named Cerberus Capital Management. It remains to be seen what Cerberus will do with Chrysler, or with the UAW that is Chrysler's most prominent bargaining unit.
GM and Ford on the other hand, after suffering stupendous financial losses, are in the middle of fragile turnarounds marked by aggressive cost-cutting and downsizing strategies and hugely expensive investments in quality improvements and new products. Neither company is in a mood or a position to be generous at the bargaining table.
That would be bad enough for the UAW. But there is something worse: The union has not organized a single foreign-owned car company that builds and sells vehicles in the United States.
It has not organized BMW, Honda, Hyundai, Nissan, Mercedes-Benz or Toyota. It has little to no immediate prospects of winning representation at South Korea's Kia, which is planning to build an assembly plant near the Georgia-Alabama border. Those and other foreign-owned car companies now occupy 50 percent of the U.S. market, and the likelihood is that their U.S. market share will top 50 percent by the end of the year.
Think about that: You are the UAW. You've only organized three traditional domestic companies. Those companies are all struggling to stay alive and hold onto a dwindling share of their home market. Meanwhile, their foreign rivals, not one of which has been organized by the UAW, are going great guns, taking sales left and right, gobbling up bigger pieces of the market.
And there's this: The definitions of "car" and "car manufacturer" have changed. Zoom-zoom is out. Putt-putt/sip-sip is in. The UAW and the domestically based companies it organized rose to glory on zoom-zoom, never anticipating, never in their wildest nightmares, facing the possibility that zoom-zoom could or would ever be replaced by putt-putt/sip-sip.
But that is what is happening. Despite conventional U.S. wisdom, GM and Ford are quite proficient at producing putt-putt/sip-sip mobiles. They have been doing it for decades in Western Europe and South America. They have been doing it in Asia and Eastern Europe, most recently in China and Russia. But they have been doing it without the UAW.
The Putt-Putt/Sip-Sip Era relies heavily on electronics and suppliers of electronic modules and components. Cars nowadays are not so much manufactured as they are put together like puzzles with giant pieces &
module by module.
Companies such as Hyundai and Nissan have cut production costs by bringing suppliers of those modules into their vehicle assembly facilities. The UAW has not organized those suppliers, either.
Nor has the UAW organized, or apparently even thought about organizing, the myriad new, independent car companies such as ZAP and Tesla Motors, California-based makers of electric cars, which are growing in popularity in tandem with rising gasoline prices.
So, what is the UAW to do? I do not mean to be flippant by suggesting that, perhaps, the UAW should exit the automobile industry altogether, change its name and try its hand at organizing various service and agricultural industries where many workers still are treated poorly and can use a helping hand from a good union. That would be Option A. Option B would be for the UAW to get busy organizing all of the car companies and automotive suppliers it heretofore has failed to organize.
But there is a theory that the company that gets a union probably deserves one. So far, the non-UAW car companies have been savvy enough to keep their employees happy without the UAW. As long as those workers keep American consumers happy by turning out high-quality, innovative, affordable, safe cars and trucks, those consumers won't care that their vehicles were assembled by nonunion hands.
Hardly any car buyer today shops for the union label. Perhaps the UAW seriously should consider Option A.
A different world for the UAW