Shifting gears: with Detroit's 'Big Three' carmakers struggling, what are the prospects for the U.S. auto industry and its workers?Once upon a time, America and its autos reigned supreme. In the decades after World War II, the car industry boomed, and steady, high-paying, unionized jobs at General Motors, Ford, and Chrysler, known as Detroit's "Big Three," helped millions of American workers, in the Midwest and beyond, move into the middle class. Indeed, in better times for the auto industry it was often said, "As GM goes, so goes the nation." (See p. 12.) But all that is changing. GM announced last year that it will cut 30,000 jobs, and that five assembly plants will be closed. The company also reported an $8.6 billion loss for 2005. And in January, Ford announced that it would close as many as 14 factories and cut up to 30,000 jobs over the next six years. Including cuts that took place at DaimlerChrysler (Chrysler merged with Daimler-Benz, the German carmaker, in 1998), the Big Three, once symbols of America's industrial might, have eliminated, or planned to eliminate, approximately 140,000 jobs since 2000. Those jobs represent close to one third of their payrolls in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . "This may not be the end, but it is certainly the beginning of the end of the automobile industry automobile industry, the business of producing and selling self-powered vehicles, including passenger cars, trucks, farm equipment, and other commercial vehicles. as we knew it," says Gary Chaison Gary N. Chaison (b. October 21, 1943) is an industrial relations scholar and labor historian at Clark University. Early life and education Chaison was born in 1943 to Alfred and Ada Chaison, a Jewish family living in Brooklyn. , a professor of industrial relations industrial relations pl.n. Relations between the management of an industrial enterprise and its employees. industrial relations Noun, pl the relations between management and workers at Clark University Clark University, at Worcester, Mass.; coeducational; chartered 1887, opened as a graduate school 1889. It was the second graduate school to be formed in the United States. Its undergraduate college (est. 1902) was integrated with the university in 1920. in Worcester, Mass. Other manufacturing jobs at the Big Three's suppliers are bound to disappear as Detroit's carmakers fight to survive intense global competition. Higher gas prices have added to their woes, causing the popularity of Ford's and GM's low-mileage sport-utility vehicles to sag. LIFE BEFORE TOYOTA What do all these changes mean for auto workers? When Jerry Roy was hired by General Motors in 1977, at about age 21, his salary more than doubled from his job at a local supermarket. He traded in his five-year-old Buick for a new Chevy and since then, he has done well enough to buy a pleasant house on a lake near Flint, Mich. Roy represents the fourth generation of his family to rely on GM for its prosperity. For more than 70 years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time company's wages have bought the Roys homes, cars, and once unimaginable comforts, while GM's medical and pension benefits have kept them secure in their retirements. "General Motors, when I got in there, it was like I'd died and went to heaven," says Roy, who works on an assembly line at a plant operated by Delphi, the now-bankrupt parts unit that was spun off from GM in 1999. Now, Roy faces the prospect of either losing his job or accepting a pay cut. And for those coming after him, he says, "it's just sad that it's ending, that it looks like this ... all these places that used to be factories are now just parking lots." Those were the factories that sustained four generations of Roys. Jerry Roy's great-grandfather, John Westley John Westley (born 1636) was probably born at Bridport, although some authorities claim he was born in Devon. The son of the Rev. Bartholomew Westley and Ann Colley, daughter of Sir Henry Colley of Carbery Castle,[1] Roy, came to Michigan from Missouri in 1931, and worked at GM's AC Delco division for a decade. Roy's grandfather, Edward, worked at the Delco plant during World War II, when it was converted into a machine-gun plant. Roy's father, Gerald, started at GM in 1951; Gerald's sister, uncle, and wife, Delores, also worked for GM. In the 1950s, GM was the world's largest corporation: It had 46 percent of the American auto market, versus about 26 percent in 2005. At its peak, the company employed more than 600,000 Americans. For Gerald Roy, now 71, the 1950s were a golden era, when everything seemed possible. SOCIAL CONTRACT "There were three shifts--they worked around the clock," he says of the plant where he worked. "You'd go in there and you couldn't even hardly walk." Buoyed by such prosperity, the auto industry pioneered the American model for the social contract between workers and their employers--from the $5 a day Henry Ford offered workers in 1914 to the health-care and pension benefits that became a mainstay of the expanding middle class. Powered by the auto industry, the economy boomed after World War II. In negotiating labor contracts, industry executives wanted, above all, to keep the United Auto Workers The United Auto Workers (UAW), headquartered in Detroit, Michigan, officially the United Automobile, Aerospace & Agricultural Implement Workers of America International Union (UAW (spelling) UAW - Misspelling of "IAW"? ) union happy and the assembly lines moving: With no Toyotas to worry about, there was little short-term downside to the industry's expensive concessions. "The workforces were young, the pension costs were low," says Gerald Meyers, a professor at the University of Michigan (body, education) University of Michigan - A large cosmopolitan university in the Midwest USA. Over 50000 students are enrolled at the University of Michigan's three campuses. The students come from 50 states and over 100 foreign countries. and the former chief executive of American Motors American Motors Corporation (AMC) was an American automobile company formed on January 14 1954 by the merger of the Nash-Kelvinator Corporation and the Hudson Motor Car Company. At the time, it was the largest corporate merger in U.S. history, valued at US$198 million ($1. . Each union contract, he says, "added a little more and a little more and a little more." 'FOREIGN' CARS And now the bills for those expensive contract provisions are coming due. GM's biggest cost problem today is the enormous sums it spends on health-care benefits for employees and hundreds of thousands of retirees. (GM is the nation's largest private provider of health care.) Wages are less of an issue because the industry has cut so many jobs, and because it so much more efficient than it used to be. "Over a 10-year period, we have gone from a ballpark of 40-plus hours a vehicle in assembly to 20-plus hours a vehicle," says Rick Wagoner George Richard "Rick" Wagoner, Jr. (b. February 9 1953, Wilmington, Delaware) is Chairman and Chief Executive Officer of General Motors. Wagoner grew up in Richmond, Virginia and graduated from John Randolph Tucker High School there. , GM's chief executive. At the same time, far from Michigan, a very different American auto industry is emerging. Today, almost 50 percent of the "foreign" cars sold in America are actually made in the U.S., with BMW BMW in full Bayerische Motoren Werke AG German automaker. Founded as an aircraft engine manufacturer in 1916, the company assumed the name Bayerische Motoren Werke and became known for its high-speed motorcycles in the 1920s. , Honda, Nissan, Toyota, and others operating large factories in Alabama, California, Indiana, Kentucky, Mississippi, Ohio, and Tennessee. In Alabama alone, some 800,000 passenger vehicles were manufactured last year all for non-Detroit companies. Cars are now to Alabama's economy what cotton once was. Japanese, German, and South Korean companies This is a list of major companies based in South Korea. Please note that the list is highly incomplete and does not have thousands of companies of different sizes. Links should only point to the Wikipedia article, and not to a web page URL. currently employ 60,000 people in the U.S. "The domestic auto industry is as healthy as it's ever been," Eric Noble, president of CarLab, an industry consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee consulting company business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a in Santa Ana Santa Ana, city, El Salvador Santa Ana (sän'tä ä`nä), city (1993 pop. 129,873), W El Salvador. It is the second largest city in the country and the commercial and processing center for a sugarcane, coffee, and cattle region. , Calif., told BusinessWeek. "The names on the plants are just changing." NEW REALITY The foreign automakers are creating a younger, less expensive workforce, side-stepping the higher pay and benefits packages that Detroit workers were getting. The new auto plants aren't unionized. At Nissan's plant in Canton, Miss., workers start at several dollars less per hour than their UAW counterparts in Detroit. But lower costs aren't the only reason these foreign carmakers are thriving: All it takes is a look at a parking lot filled with Toyotas and Hondas to see the popularity of foreign cars among Americans. All of this signals a new reality for autoworkers. At the newer foreign-owned plants in the South, workers may be better off than they were in lower-paying jobs before the carmakers arrived. But for longtime workers at the Big Three, adjusting to a world in which $30-an-hour wages and generous benefits are no longer a guarantee can be difficult. "The days when blue-collar work could be passed on down the family line, those days are over," says Chaison of Clark University. "Where you did have automobile plants, it was always looked at as an elite job. It was hard work, but good, steady work, with wonderful benefits and good solid pay, and you were in the upper middle class." In a move that will save GM $1 billion a year, UAW members voted in November to accept a health-care plan that will require its members to share some of the costs. Larry Mathews, who works at the same Delphi plant as Jerry Roy, says that if the pay cuts go through, he will no longer be able to afford his son's college tuition The examples and perspective in this article may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. College tuition . Mathews also comes from a "GM family": His father retired from GM at a time when the bond between the company and its workers was stronger. Now, Mathews makes clear that he has no desire for his own son to continue the family tradition. "Given what we've lost here in the past decade, I really didn't want to see him come to work at GM or Delphi," he says. "The security just isn't there." Top 10 Cars in the U.S., 1/06 1 > Ford F Series 2 > Chevrolet Silverado 3 > Toyota Camry The Toyota Camry is a mid-size sedan assembled by Toyota in Georgetown, Kentucky; Altona, Victoria, Guangzhou, China and the original factory in Toyota City, Japan. In some markets, the top range Camry models are seen as executive cars. 4 > Toyota Corolla The Toyota Corolla is a compact car produced by the Japanese automaker Toyota, which has become very popular throughout the world since the nameplate was first introduced in 1966. In 1997, the Corolla became the bestselling car in the world, with over 30 million sold as of 2007. 5 > Honda Civic The Honda Civic is a compact car manufactured by Honda. It was introduced in July 1972 as a two-door coupe, followed by a three-door hatchback version that September. With the transverse engine placement of its 1169 cc engine and front-wheel drive, like the British Mini, the 6 > Honda Accord The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. 7 > Dodge Ram
The Ram is a full-size pickup truck from Chrysler LLC's Dodge brand. The name was first used in 1981 on the redesigned Ram and Power Ram, though it came from the hood ornament used on 8 > Chevrolet Impata 9 > Chevrolet Malibu The Chevrolet Malibu (named after Malibu, California) is a mid-size car produced in the United States by General Motors. It is marketed in the United States, Canada, Mexico, and Israel. 10 > Chevrolet Cobalt The Chevrolet Cobalt is a compact car introduced by Chevrolet in 2004 for the 2005 model year. The Cobalt replaced the Cavalier as Chevrolet's compact car. The Cobalt is intended to compete with compact cars like the Honda Civic, Toyota Corolla and Mazda 3. FORD Model-T, 1914 1914 Henry Ford, founder of the Ford Motor Company, increases the daily pay for assembly-line workers to $5 from $2.34. Ford's Model-T has become the affordable "Everyman" car. [ILLUSTRATION OMITTED] OLDSMOBILE, 1937 1937 After a strike in Flint, Mich., the United Auto Workers (UAW) wins the right to organize General. Motors; guards at a Ford assembly plant physically attack UAW leaders. [ILLUSTRATION OMITTED] FORD Convertible, 1949 1949 Ford agrees to a pension fund for workers. Chrysler and GM do the same in 1950; GM also creates a health-insurance program with the company paying part of the costs. [ILLUSTRATION OMITTED] CHEVROLET Camaro, 1970 1970 GM agrees to fully vest workers in their pension plans after 30 years of service, regardless of age. This expensive benefit became known as "30-and-out." [ILLUSTRATION OMITTED] CADILLAC Seville The Cadillac Seville is a luxury car that was manufactured occasionally by the Cadillac division of American automaker General Motors as a specialty model in the 1950s and 60s, and a regular production vehicle from 1975 to 2004. , 1979 1979 To help Chrysler avert bankruptcy, the UAW agrees to cuts in wages and benefits. Congress passes emergency legislation to provide Chrysler with $1 billion in roan roan a coat color consisting of a relatively uniform mixture of white and colored hairs, giving a 'silvered' hue; self-describing colors are red-roan, blue-roan, chestnut roan. guarantees. [ILLUSTRATION OMITTED] HONDA Civic, 1980 1982 Honda, a Tokyo-based company known for its motorcycles, starts building cars in Marysville, Ohio Marysville is a city in Union County, Ohio, United States. It is the county seat of Union County.GR6 The population was 15,942 at the 2000 census, and the Census Bureau estimated 17,621 in 2006. , becoming the first Japanese company to make cars in the U.S. [ILLUSTRATION OMITTED] GMC Yukon The GMC Yukon refers to the basic platform used in both long and short versions of the car. Its main articles are here:
1990s Market-share tosses of American automakers accelerate. The decline began in the 1980s, when foreign competition, especially from Japan, began to intensify. [ILLUSTRATION OMITTED] TOYOTA Camry, 2005 2005 The UAW agrees to have GM workers pay for more of their insurance, reducing the company's hearth-care costs by $1 billion a year. GM says it will cut 30,000 jobs. [ILLUSTRATION OMITTED] Danny Hakim covers the Detroit auto industry for The New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Times; with additional reporting by Gregg Easterbrook, Micheline Maynard, and Jeremy W. Peters of The Times; and Suzanne Bilyeu.</p> <pre> DOMESTIC vs FOREIGN Carmakers' U.S. Market Share 1980 2005 DOMESTIC 73% 57% FOREIGN 27% 43% Note: Table made from pie chart. SOURCE: THE NEW YORK TIMES </pre> <p>LESSON PLAN 1: NATIONAL During World War II, there was no car production, as Detroit shifted to war work. Accordingly, the end of the war brought a huge demand for cars. And as there were no Toyotas or Hondas around, the American car was king. But critics say this captive market led to poor quality and opened the door to Japanese competition. CRITICAL THINKING * Direct students' attention to the term "social contract," on page 10. Do students know what the term means? (Tell them that in this context, the social contract refers to an unspoken understanding that in exchange for their work, employers will reward workers with good pay and good benefits, and that both workers and employers have rights and responsibilities toward each other.) * Refer to the observation of Industrial Relations Professor Gary Chaison (p. 11), that the days of families passing down blue-collar jobs are over. What does Chaison's comment suggest about how young people in traditional auto-making regions should prepare for their futures? Should they bet that Detroit will stay alive? Or stay away from carmaking? DISCUSSION QUESTIONS * Refer to the dramatic shift in the market share of foreign autos in the American market. Ask students what they think might account for this shift. * Ask for a show of hands a raising of hands to indicate judgment; as, the vote was taken by a show of hands. See also: Show . How many students' families own foreign cars? Have them ask their parents why they decided to buy a foreign car, and report the results to the class. * Should Americans "buy American"? Ask students to identify pros and cons pros and cons Noun, pl the advantages and disadvantages of a situation [Latin pro for + con(tra) against] of a "buy American" campaign. WRITING PROMPT Have students assume the role of Jerry Roy. Their job is to write a 50- to 100-word letter to a 15-year-old niece or nephew explaining why he or she should--or should not--consider a career in the auto industry. FAST FACTS * American cars accounted for 54 percent of U.S. auto sales Auto Sales The major producers of domestic automobiles report sales monthly. These numbers are seasonally adjusted by the U.S. Department of Commerce and are available to the public one to five business days after the end of each month. in January, down from about 57 percent in all of 2005. * Robert Miller head of bankrupt Delphi, the GM parts maker, cut his salary to $1 a year but kept a $3 million bonus and $750,000 in salary for his first six months on the job. QUIZ 1 1. One of the employee benefits that the American auto industry helped pioneer in its heyday was company-provided a holidays. b vacations. c job training. d pensions. 2. In 1979, Chrysler was headed for bankruptcy. Which of the following factors helped stave off bankruptcy? a Japanese auto imports took an unexpected dive in sales that year. b It sold valuable property. c Congress gave Chrysler loan guarantees. d Michigan reduced the company's taxes. 3. According to "Shifting Gears," all of the following economic factors are hurting General Motors' future financial, outlook except a foreign competition. b the cost of employees' health insurance. c competition from public transportation. d benefits for its retirees. 4. Which of the following is one of the few bright spots in the American automotive industry? a improved efficiency. b promising sales of 2006 models. c a decline in the fortunes of Japanese auto makers. d the promise of government subsidies. 5. According to "Shifting Gears," about 50 percent of foreign brand cars sold in the United States are actually made in a Japan. b low-wage factories in the Third World. c the United States. d Mexico and the Far East. IN-DEPTH QUESTIONS 1. Some say that unions help workers obtain better salaries and benefits. Others argue that unions have dragged down the U.S. auto industry by saddling companies with costs that make them unable to compete. What do you think? 2. Suppose your family is car shopping. Would the state of the U.S. auto industry or the growing number of Asian imports influence whether you buy a U.S. or foreign car? 1. [d] pensions. 2. [c] Congress gave Chrysler loan guarantees. 3. [c] competition from public transportation. 4. [a] improved efficiency. 5. [c] the United States. |
|
||||||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion