Commentary
10:49 am
Tue July 26, 2011

The UAW and the Changing Auto Industry

Most of us understand that the auto industry isn’t what it used to be. Especially, what we think of as the domestic auto industry. For one thing, it is much smaller, both in terms of market share and in number of people employed. Some time ago, the national media stopped using the term “the big three.“

Now, they mostly call them the “Detroit Three.” Technically, it would be more accurate to say, “the Detroit Two, and the Detroit-based subsidiary of an Italian firm.”  And one of the two, aka General Motors, sells more Buicks in China nowadays than in America.

Before the devastating earthquake hit Japan in March, the Detroit Three combined were selling a minority of all vehicles purchased in this country, a trend that’s expected to resume.

The good news, of course, is that all three automakers have survived, at least for now. You can see how much things have changed, however, by following the national labor contract talks between the Detroit Three and the United Auto Workers union.

Back in the glory days of the domestic industry, these talks were much like the rhetoric expended by the superpowers in the early Cold War, which was going on at the same time.

There were insults, threats, saber-rattling, outrageous demands and brinkmanship, occasionally leading to actual war. In the case of the Cold War, this meant Korea or Vietnam. In the case of the auto industry, it meant strikes. But those days are long gone.

The Cold War between the United States and the vanished Soviet Union is over, and as far as I can tell, Japan and China won. The confrontational rhetoric has also mostly disappeared from the  auto industry. Back in the 1980s, I wrote stories about how Japanese and German unions and management saw themselves as partners in pursuit of a common goal.

Judging by their reactions at the time, American unions didn’t think much of that approach, to put it mildly. But the world has changed. Yesterday, shaking hands with Chrysler executives, United Auto Workers union president Bob King said this:

“We collectively feel we have a huge responsibility to the American public to thank them for their support.” Both he and the auto executives emphasized that their goal was to reach a harmonious settlement without major conflict.

By the way, neither side has a lot of choice. Chrysler and General Motors workers are not allowed to strike, as part of the deal they agreed on to save those companies, a couple years ago. If they reach an impasse, union and management  can seek binding arbitration, though neither side wants to trust its fate to someone outside the automotive industry.

They’ve had enough of that in recent years.

That doesn’t mean there aren’t issues. The union doesn’t want to make more concessions. The companies aren’t too sure about that. As one Chrysler executive said yesterday, “Our objective is to not fall back into our old ways of making ourselves uncompetitive.“

If they do, he knows other automakers are waiting to eat up their market share. So for now, at least, those old adversaries, union and management, seem to realize that we are all in this together.

Wonder what it would take to spread that attitude to the debt talks in Washington, D.C.?