This was one of the most difficult papers to write as I understand the perspectives of those both for and against labor unions…
The industrial might of the United States upon the close of the Second World War was second to none in the global economy. American will and pride had risen to the challenges posed by foreign threats in Europe and Asia, and due to the geographical remoteness to the distant battlefields, the American production capacity and logistics infrastructure was unscathed and unhindered by the devastation experienced by nations heavily involved in the fighting. Following the end of the war and the creation of an economic stimulus of Western European recovery under the Marshall Plan, U.S. financial assistance to post-war Europe alone consisted of $43 billion of the total $84 billion worldwide support.[1] With U.S. military spending dropping 90 percent over the next three years, 1948 found the U.S. enjoying 50 percent of the world’s wealth with only 6.3 percent of the global population.[2] With the American gross national product (GNP) rising from $85.2 billion in 1941 to $211.4 billion in 1944, the momentum of American industries carried forward into the post-war years with a transition to consumer goods from wartime necessities.[3] Behind this national change was the increased need for automotive transportation of the people and goods upon which the growing American economy relied upon, and the blossoming of the automotive industry in the U.S. However, this level of capacity and potential proved to be temporary as the U.S. experienced periods of economic recession as well as prosperity, with an overall decline in production severely damaging the integrity of American industries. One such aspect, the excessive influence of domestic labor unions and the ineffective corporate measures taken to address concerns of these influential entities instigated the relocation of the American automobile industry to more cost-effective foreign nations.
Four years of American involvement in the global conflict that became known as the Second World War ended on September 9, 1945, with the official surrender of Japan. With the U.S. possessing half the global manufacturing ability and maintaining two-thirds of the world’s gold stocks, America emerged as a true economic and military superpower.[4] The immediate post-war economy efficiently shifted gears, from the production of implements of destruction to consumer goods for domestic use and export. Closer scrutiny of the last seventy-two years, however, reveals a tumultuous legacy of conflict, concession, and rivalry within the American automobile industry. With the increased demand of consumer goods like automobiles, the ability for the workers within the automobile manufacturing industries to effectively leverage their efforts against wages and benefits grew as well. Labor leaders such as Walter Reuther (1907-1970) rose to prominence on his beliefs that the existence of industrial monopolies undermined the safety and trust of the nation due to the possible abuse of their powers for the sake of profit.[5]
Walter Reuther stands as a central figure in the post-war labor effort for several significant reasons. The son of a German immigrant, Reuther’s primary professional concern remained the welfare of the American laborers and their contributions to the overall success of the automotive industry.[6] In this respect, Reuther considered the biggest threat to the labor movement and the industrial capability of the U.S. was the growing power of the monopolies and the potential for the irresponsible use of such influence for the sake of financial profit.[7] Realizing the imperative creation of coordinated labor efforts of automotive, steel, and other industrial workers, Reuther’s efforts as the president of the United Auto Workers’ Union (UAW) in the 1950s and 1960s were the result from explorations of the issues of the growing discrepancies in pay and benefits between corporate leadership and the assembly-line workers.[8] As an early critic of automation on the assembly line, Reuther also foresaw the potential financial attractiveness and corporate benefits in replacing human labor with that of robots.[9] Such corporate measures for reducing operational costs were further complicated due to informal labor practices of the assembly-line workers to ease the increasing workload driven by the corporate desire to produce more automobiles, the managerial reaction of personnel cuts was met by the workers becoming selective in tasks to be completed on the assembly line.by taking into consideration ancillary costs of unemployment, retirement, and other compensations for workers, he was also in favor of shortened work weeks to promote quality family time for laborers.[12]
Politically, Reuther negotiated contemporary dangers. Addressing Congress, Reuther highlighted the Constitutional protections equally benefitting the UAW as well as those within the union who desired financial support to political candidates in direct contrast with the organizational support of the union.[13] Such national loyalty was further reiterated with Reuther’s November 1954 statement that “there is no place in American unionism for anyone who does not put the United States of America above all other nations,” a critical position to take during the growing contemporary concerns of the spreading influence of Communism during the 1950s.[14] Internally, however, power struggles between the organizational leadership of the various unions increased, with Reuther being the target of numerous assassination attempts during his time as the president of the UAW.[15] As the number of automobile manufacturers located in cities like Detroit decreased from 155 in 1904 to only 4 at the end of the Second World War, the consolidation of the power of the labor unions grew, as did the friction between the different unions.[16]
The discussion of the overall effect unions has had on the American economy and industry since 1945 has been a topic of contention and debate since the end of the Second World War. Historic advocates for unions have placed the legal responsibility for employers to enter into negotiations with labor leaders representing the majority of employees within an organization or industry.[17] Such activism has also been cited as a means by which workers were able to bring to public and corporate attention the organizational shortcomings and opportunism of managers.[18] Accordingly, the official UAW Constitution states not only that, “[w]ithin the orderly processes of such government lies the hope of the worker in advancing society toward the ultimate goal of social and economic justice,” but that democracy necessitates “that workers through their union participate meaningfully in making decisions affecting their welfare and that of the communities in which they live.”[19] It was this foundation of organizational and civic stewardship which drove unions to act as a form of institutional memory and conscience to maintain industrial relevance as well as a source of regional vitality to the neighboring communities.[20] Before unionization, increased industrial growth posed difficult demands to meet the production requirements, and the unions successfully bridged the gap of understanding between the corporate desires and human realities of industrial production.[21] Finally, the presence and efforts of unions slowed the annual turnover rate of the automobile industries’ formative periods, emphasizing individual skill and expertise as an offset for increased wages and benefits, thus resulting in reduced production times and increased quality of the vehicles produced.[22]
Counterpoints to the benefits presented by the establishment and activities of labor unions have cited the increased financial costs of formal dispute resolution between corporations and employee advocacy groups.[23] The granting of $1.5 billion in federal loans to Chrysler in 1980 marked the beginning of the troubles for the American auto industry, as the once-powerful manufacturer experienced difficulties from the increase in imported automobiles and a failing national economy.[24] Bankruptcy negotiations and labor unions favored the corporate stockholders over the unions through much of the 1980s and further indicated that the rising production costs due to the earlier successes of unions in securing increased wages and benefits were slowly crippling the American auto industry.[25] As leverage against the unions, bankruptcy effectively negated the ability for collective bargaining agreements by the unions and undermined the benefits unionization offered for future industry workers as a result.[26]
Another criticism of unions such as the UAW maintains the idea that the centralization of power increased the bureaucratic inefficiency of unions and increased the internal division within unions like the UAW that came to represent the corporations they were created to counter for the sake of the workers.[27] In conjunction, the establishment of formal employee committees increased the need for diversion of financial resources from the union and corporation alike, reducing the benefits, negotiation leverage, and overall profit as labor disputes and corporate financial difficulties became more frequent in the 1980s.[28] Current literature and media focus illustrates the decline of the union within U.S. industries and notes their decreased involvement in corporate reorganizations. With financial difficulties faced by many other American corporations such as American Airlines in 2011 and Hostess Bakeries in 2012, the matter of labor unions and their relationship with organizational survival indicates that the problems faced by the U.S. auto industry in the 1980s remain as a current reminder of the challenges faced by unions and businesses alike.[29]
With the foundation of the key economic factors of operational cost and profit dictating the organizational and operational needs of any business, the relationship between labor unions and the automotive and closely-related steel industries was critical for their combined successes. For the steel industry, 2015 revenues had decreased from $126,708 million in 2008 to $90,998 million in 2015.[30] The 1978 bailout of the Chrysler Corporation by the federal government established a trend in which automobile manufacturers began to use their profit losses as leverage against the union-driven campaigns for wage and benefit concessions.[31] Secondary regional benefits involved in the overall cost and profit margins of the major corporations and sub-contractors provided growth in local areas neighboring the larger manufacturing locations in the form of parts supplies and tool manufacturing.[32]
A discussion of the conflicts between labor and corporate interests requires an understanding of additional cultural and societal aspects of the problem to understand the implications of the decline of the industries and union influence. The overall growth of the U.S. population between the 1950 and 2010 census indicates a threefold increase – from 152 million to almost 309 million, respectively.[33] Following the Second World War, the northern states experienced a migration of almost 5 million southerners looking for better employment opportunities between 1941 and the 1970s. [34] As a result, the issue of civil rights in the northern industrial areas extended into the conflict between union leadership and were limited by the ability of the unions to effectively deal with racial issues within the labor movement and the stagnation and decline of employment opportunities.[35]
One such example – the result of discrimination, along with gender and racial tensions in the declining labor market in the Southern states – not only reduced the influence of unions within the textile industries in the region, but also undermined the participation and overall effectiveness of the labor movement in the South during the 1960s. With unemployment and inequality becoming politicized, unionization became progressively unfavorable, with membership of textile workers dropping from 20 percent before 1950 to 8 percent by 1965.[36] Mirroring this decline, the recession during the 1980s as well as the overreaching efforts of the labor unions resulting in decreased unit profit as well as the reduced consumer demand for automobiles and steel, resulted in the progressive collapse of the communities which relied upon these industries to maintain their vitality. Consequently, the migration of skilled and unskilled laborers to regions with more favorable employment opportunities deprived automotive and steel industrial cities of the key contributors to their local economies.[37]
Globally, the slow decent from the economic power of the American automobile and steel industries placed the U.S. in a difficult strategic position. U.S. steel production in 2017 reflects the diminishing production capacity, falling fifth behind China, the European Union, India, and Japan, respectively, with the highest production year for the American steel industry being 1973.[38] Alternatively, U.S. automobile industry, as of 2017, has maintained the lead in international vehicular production with only China and Iran posing a potential threat of competition in this market, though American automobile production suffered a decline as well with 1978 as the highest production year.[39] As an example of the turning point for the American automobile and steel industry, the shift to foreign steel in 1969 by General Motors in the production of the Vega was due to the prohibitive price of domestic steel.[40] By 2008, General Motors was replaced by Toyota as the largest worldwide manufacturer of vehicles, with Chrysler providing another indication of the slow decline of the American automobile industry a year later – filing for Chapter 11 bankruptcy protection due to excessive corporate debt.[41]
An analysis of the interaction and influence of the labor unions such as Reuther’s UAW and these two key industries had on the American economy, industry, and society highlights the importance of understanding various factors involved in the study of history. Directly related, the American auto and steel industries could not be justified or considered independently, especially in relation to the influence of unions on the American economy. Though neither the labor unions or the corporations were directly responsible for the decline of these two industries, their reluctance to work in a concerted effort and endure necessary concessions failed to effectively address the issues which affected both. The American auto industry consisted of much more than the simple assembly of parts into a functioning vehicle, and the supporting regional industries required and created the communities to sustain their production of the parts and subassemblies which fed directly into the larger production lines.
Likewise, the steel industry created additional demands for the excavation of key natural resources, processing, raw material transportation and finished product delivery to the automotive plants. These two industries relied on skilled and unskilled labor alike, and the post-war increase in the demands placed upon these industries impacted the men and women who constituted the foundation for the corporations which drove these industries. With the increased lobbying power of unions, the initial goals of advocacy and protection of the workers from unethical or unsafe processes dictated by the corporations were gradually replaced by political infighting within the leadership of the various unions, as well as the complications from national economic variances and the increased preference of imports over domestically produced goods. As a result, both the auto and steel industries experienced compounding problems which effectively reduced their ability to remain decisively competitive and viable in the global economy.
Walter Reuther’s legacy is not one of the ability of the American labor union and their abuses of power, but one of the initial ideal of effective and coordinated efforts between the workers and the corporation. A visionary from the start, Reuther understood the difficulties that the labor unions would experience and the problems the corporations would face as the initial post-war economic boom stabilized. However, Reuther’s efforts were eclipsed by factors beyond the control of the UAW and the industries which it contributed to along with the human trait to desire for more. The decline of the American automotive industries and subsequent rise of foreign competition was a result of two significant and mutually responsible breakdowns – the ability for domestic labor unions to effectively self-regulate, and the inability of the involved corporations to effectively manage their growth and relations with labor unions.
Notes:
[1] Philip S. Golub, Power, Profit and Prestige, (Pluto Press, 2010), accessed March 29, 2017, ProQuest Ebook Central, 69.
[2] Ibid., 48.
[3] Richard R. Weeks, and William J. Marks, “The Marketing Concept in Historical Perspective,” Business and Society (Pre-1986) 9, no. 2 (1969): 24, accessed March 29, 2017, https://search-proquest-com.ezproxy2.apus.edu/docview/233315434?accountid=8289.
[4] Marilyn M. Harper, “World War II & The American Home Front,” nps.gov, 2007, accessed March 29, 2017, https://www.nps.gov/nhl/learn/themes/wwiihomefront.pdf, 15.
[5] Carol L. Thompson, “Labor’s Real Problem: Real Wages: Walter Reuther,” Current History (Pre-1986) 18, no. 000105 (1950): 286, accessed March 29, 2017, https://search-proquest-com.ezproxy2.apus.edu/docview/202915949?accountid=8289, 288.
[6] Ibid., 286-287.
[7] Carol L. Thompson, “Labor’s Real Problem: Real Wages: Walter Reuther,” 288.
[8] Walter P. Reuther, Selected Papers, (New Delhi: Eurasia Publishing House, 1961), accessed March 29, 2017, https://ia601502.us.archive.org/35/items/in.ernet.dli.2015.132499/2015.132499.Walter-P-Reuther.pdf, 43-44, 65.
[9] Ibid., 74.
[10] Gregory M. Miller, “Place, Space, Pace, and Power: The Struggle for Control of the Automobile Factory Shop Floor, 1896–2006,” (PhD diss., University of Toledo, 2008), accessed March 29, 2017, https://search-proquest-com.ezproxy2.apus.edu/docview/304434218?accountid=8289, 205.
[11] Ibid., 203.
[12] Walter P. Reuther, Selected Papers, 92-93.
[13] Ibid., 149.
[14] Robert Cherny, Kenneth Burt, William Issel, Kiernan Walsh Taylor, Ellen Schrecker, Gerald Zahavi, Don Watson, Randi Storch, and David Palmer, American Labor and the Cold War, (Rutgers University Press, 2004), accessed March 28, 2017, accessed March 29, 2017, ProQuest Ebook Central, 150.
[15] Carol L. Thompson, “Labor’s Real Problem: Real Wages: Walter Reuther,” 292.
[16] Naomi R. Lamoreaux, Kenneth L. Sokoloff, and Kenneth Lee Sokoloff, Financing Innovation in the United States, 1870 to the Present, (MIT Press, 2009), accessed March 29, 2017, ProQuest Ebook Central, 90, 87.
[17] Cynthia Estlund, “Are Unions a Constitutional Anomaly?” Michigan Law Review 114, no. 2 (11, 2015): 169-234, accessed March 29, 2017, https://search-proquest-com.ezproxy2.apus.edu/docview/1725442999?accountid=8289, 197-198.
[18] Andrew B. Dawson, “Labor Activism in Bankruptcy,” The American Bankruptcy Law Journal 89, no. 1 (Winter, 2015): 97-131, accessed March 29, 2017, https://search-proquest-com.ezproxy2.apus.edu/docview/1674962535?accountid=8289, 127.
[19] “Constitution of the International Union – United Automobile, Aerospace and Agricultural Implement Workers of America, UAW,” uaw.org, 2014, accessed March 29, 2017, https://uaw.org/app/uploads/2015/09/2014-UAW-CONSTITUTION.pdf, 3.
[20] Andrew B. Dawson, “Labor Activism in Bankruptcy,” 123.
[21] Gregory M. Miller, “Place, Space, Pace, and Power: The Struggle for Control of the Automobile Factory Shop Floor, 1896–2006,” 164.
[22] Miller, 165.
[23] Ibid., 127.
[24] Thomas H. Klier, “From Tail Fins to Hybrids: How Detroit Lost its Dominance
of the U.S. Auto Market,” chicagofed.org, 2009, accessed March 29, 2017, https://chicagofed.org/~/media/publications/…/ep-2qtr2009-part1-klier-pdf.pdf, 8.
[25] Andrew B. Dawson, “Labor Activism in Bankruptcy,” 101.
[26] Ibid., 124.
[27] Miller, 182.
[28] Dawson, 127.
[29] Ibid., 101-102.
[30] Iron and Steel Mills and Ferroalloy Manufacturing Industry (U.S.) Analytics, Extensive Financial Benchmarks, Metrics and Revenue Forecasts to 2023, NAIC 331100 Published December 12, 2016, Houston: Plunkett Research, Ltd, 2016, accessed March 29, 2017, https://search-proquest-com.ezproxy2.apus.edu/docview/1855911484?accountid=8289, 9.
[31] Miller, 29.
[32] Ibid., 10.
[33] U.S. Census Bureau, “Statistical Abstract of the United States: 2012,” census.gov, 2012, accessed March 29, 2017, http://www2.census.gov/library/publications/2011/compendia/statab/131ed/tables/pop.pdf, 8.
[34] U.S. Census Bureau, “Demographic Trends in the 20th Century,” census.gov, 2002, accessed March 29, 2017, https://www.census.gov/prod/2002pubs/censr-4.pdf, 29.
[35] “Conflict within the AFL-CIO: The Meany-Reuther Split,” Management of Personnel Quarterly (Pre-1986) 7, no. 3 (Fall, 1968): 24, accessed March 29, 2017, https://search-proquest-com.ezproxy2.apus.edu/docview/195875115?accountid=8289, 24.
[36] Robert Cherny, Kenneth Burt, William Issel, Kiernan Walsh Taylor, Ellen Schrecker, Gerald Zahavi, Don Watson, Randi Storch, and David Palmer, American Labor and the Cold War, 237-238.
[37] Miller, 238.
[38] “United States Steel Production 1969-2017,” tradingeconomics.com, 2017, accessed March 29, 2017, http://www.tradingeconomics.com/united-states/steel-production.
[39] “United States Car Production 1967-2017,” tradingeconomics.com, 2017, accessed March 29, 2017, http://www.tradingeconomics.com/united-states/car-production.
[40] Miller, 66.
[41] Thomas H. Klier, “From Tail Fins to Hybrids: How Detroit Lost its Dominance
of the U.S. Auto Market,” 2, 14.
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