Monday, October 01, 2007

GM Strike An End Of An Era

So says Michael Barone in U. S. News and World Report:

The United Auto Workers' strike against General Motors last week turned out to be brief. The company and union negotiators reached agreement not much more than 48 hours after union members started picketing.

It barely made the front pages of most newspapers and seems to have made few ripples in the stock market. It didn't last long enough for any Democratic presidential candidate to walk the picket line.

What a contrast with the last UAW national strike against GM. In September 1970, 400,000 workers, 0.5 percent of the nation's non-farm employees -- one of every 200 workers -- walked off the job. Last week, only 73,000 workers struck, 0.05 percent of the national total.

The 1970 strike lasted two months, during which the national unemployment rate rose from 5.1 percent to 5.5 percent. It was estimated that the strike cut the growth in gross domestic product for the quarter from 2.5 percent to 1.4 percent.

The 2007 strike lasted two days, and its effect on GDP seems negligible. At the time of the 1970 strike, GM accounted for 50 percent of all U.S. auto sales and foreign manufacturers for only 15 percent. Now, GM accounts for 24 percent of U.S. auto sales and foreign manufacturers 49 percent.[…]
There’s more before Barone closes with:
In the 1980s, foreign companies began building auto plants in the United States, almost none of them organized by the UAW. As The Wall Street Journal concluded, "Toyota, not GM or the UAW, now sets the pattern for auto industry labor costs in the U.S. economy."

It turns out that market competition punishes those firms whose costs are out of line with others. It also produces better value for consumers, as today's cars are far superior in quality to the clunkers of 1970. And it can make things better for workers, as well.

The reason the UAW demanded 30-and-out in 1970 was that workers hated their assembly-line jobs. Newer manufacturing techniques, pioneered by Japanese firms, give workers more autonomy and responsibility -- and more job satisfaction. The business model of 1970 is history. But most of us are better off today.
Isn’t it interesting the many ways in which globalization works?

Barone’s entire column is here.


bill anderson said...

Very good post, John. The UAW has been one of the most destructive unions in this country, but even with its power, it could not stop the changing of the automobile market. Nonetheless, the socialism of Walter Reuther remains as the guiding ethos of that union and the AFL-CIO in general.