Autoworkers and Their Industry Since World War II: A Drama in Three Acts
It is recommended that readers first review these two excerpts from “We Make our Own History”, a 1986 publication celebrating the UAW’s first 50 years. The photo essays, “Fighting the War and Winning the Peace” and “A Fair Share for Workers” help introduce the discussions that follow.
The history of the United Auto Workers (UAW) union since World War II has often been presented as a study in contrasts, beginning with three decades of substantial growth for the union as the U.S. economy boomed. In this period, the story goes, wages grew significantly and benefits expanded as workers claimed a larger share of auto industry profits. These boom decades were followed by four decades of thorny, fundamental challenges, as the UAW confronted a profoundly changing economic environment. Since the mid-1970s, union membership has declined markedly — in the auto industry and in the national economy generally — threatening the hard-won contractual gains of the early postwar decades and casting hundreds and thousands out of work.
America's postwar economic boom, built on wartime industrial expansion, produced thirty years of unparalleled prosperity. During most of these years, the UAW was led by Walter Reuther, who was elected president in 1946 after establishing his authority in a long strike against GM that began in late 1945. For the next decade and a half, the union negotiated contracts that included increases in pay, protection from inflation, pensions, and employer-paid health insurance.
That progress, however, was anything but smooth. During the war, the UAW signed a no-strike pledge that guaranteed there would be no interruptions of production in auto plants that had been converted to turn out planes, tanks, military trucks, and munitions. The federal government took control over wages and resolution of disputes in the workplace. The UAW, in exchange, got assurances that workers would be required to join the union and that their dues would be automatically deducted from their paychecks.
That system struggled, however, because the government agencies set up to resolve disputes were overwhelmed. Frustrated workers sometimes walked off the job in so-called "wildcat strikes" that were not authorized by the union. Some of those strikes were against the wage freeze and no-strike pledge to which the UAW had agreed. Others, notably a walkout by 25,000 white Packard workers in 1943, protested the hiring of black workers into previously segregated production jobs in the plant. When the company began suspending strike leaders, the strike ended and the black workers kept their jobs. But wildcat strikes did not disappear, and they caused major headaches for union leaders trying to fulfill the union's contractual obligations to employers.
The demands of war production — a quarter-million peacetime autoworkers were off serving in the military — led to the hiring of about 100,000 African - Americans and more than 250,000 women who had previously been denied employment in the auto industry. Women increased from about 7 percent of the pre-war workforce to around 25 percent, though they still faced wage discrimination and harassment.
When the war ended, the transition to a peacetime economy promised new prosperity, but it also brought turmoil to the auto industry as the government rationed raw materials and workers in steel mills and coal mines struck for wage increases and improvements in working conditions. That led to extensive layoffs in the auto plants, and women who had been hired during the war were disproportionately among those laid off. Many women had not expected to retain their jobs when the men returned from the war, but others struggled, with limited success, to stay.
Postwar contracts provided important gains, at least on paper, for autoworkers, including solid pay increases. Starting in 1948, cost-of-living adjustments (“COLA”) were written into the contracts to protect workers' wages from the ravages of inflation. Health insurance benefits and pensions were among the key contractual gains of the postwar period. But chronic layoffs, for reasons ranging from continuing materials and parts shortages, to weather complications, wildcat strikes, overproduction, and the inability of autoworkers and other blue-collar Americans to purchase new cars, undercut contract provisions and made life precarious for rank-and-file UAW members, especially in the first fifteen years after the war. Moreover, the contractual gains did not come easily. Chrysler, Detroit's largest single employer in 1950, only agreed to provide pensions for its workers after a 104-day strike — at a cost of three and a half months without pay on the picket lines for the strikers. And that strike came only a year after the recession of 1949 that caused the layoff of tens of thousands of autoworkers.
The gains eventually became real for those who survived the turbulence of the 1950s, but they were achieved only after great sacrifice. Many workers spent half of the 1950s on layoff, largely due to the cyclical nature of demand for cars and trucks. The auto industry struggled in the early 1950s when the Korean War prompted the federal government to ration crucial materials. Unemployment in Detroit hovered between 100,000 and 200,000 throughout that war. And when a truce ended the fighting in July 1953 and renewed auto sales boosted employment, those gains obscured an important new development — a decentralization of the industry that began shifting thousands of auto jobs away from Detroit. Some of those jobs moved to suburban areas around the city, but most were shifted to other states — including Ohio, California, New York, and New Jersey — and to Canada.
Technological advances also increased uncertainty for autoworkers. Because vehicles were becoming more complex, it is not clear how many jobs may have been lost to automation. Moreover, demand for new, advanced machines created some jobs for highly skilled workers to develop, operate, and maintain them. But over time, the industry acquired the ability to produce many more cars with many fewer workers, which posed serious threats to the UAW and its membership.
Volatility was a growing concern for manufacturers as well. Economic downturns in the 1950s prompted mass layoffs for workers, but also forced independent auto companies like Packard, Nash, Studebaker, and Hudson to pursue mergers to survive. Nash and Hudson merged to form American Motors Corporation (AMC) and Studebaker joined forces with Packard. But by the mid-1960s, all four of those classic nameplates had disappeared from the marketplace, and AMC was eventually bought out by Chrysler in 1987.
Among autoworkers' gains in the 1950s was the 1955 contractual provision for supplemental unemployment benefits (SUB). For the UAW, the SUB system was a compromise from the main goal, a Guaranteed Annual Wage (GAW), which in the union's view would have forced automakers to utilize employees more consistently throughout the year. Automakers rejected the GAW, but agreed to SUB pay that promised to increase the amount of money workers received while on layoff to roughly 60 percent of take-home pay.
Even SUB benefits, however, could not blunt the pain of the massive layoffs that came with the recession of 1958. Around 300,000 workers were unemployed in Detroit alone, far too many to be helped significantly by the new, and not yet fully funded, SUB program. Autoworkers everywhere suffered, but Detroit felt the impact more profoundly because it was still the hub of the auto industry. When the auto plants were operating at capacity, the UAW's contracts made its members among the best-paid workers in the nation. But even the best contracts could not protect autoworkers from the cyclical turmoil afflicting the industry.
That turmoil eased somewhat in the 1960s, when layoffs occurred less frequently. The industry's workforce also became noticeably younger and more racially diverse in that decade. Many older workers were driven out by the 1958 recession, or retired in the early 1960s when pensions became much more generous. New contracts doubled the size of pensions and included full health insurance for retirees and their spouses. By 1968, half of the workforce at Chrysler had been with the company for less than five years.
Working conditions in the plants continued to be a major concern in contract negotiations. In 1964, UAW contracts included more break time for workers to help ease the strain of long shifts and monotonous, stressful tasks. Pay continued to rise through the decade, and workers with more than seven years' seniority were guaranteed 95 percent of their pay if they were laid off.
Bargaining with the Big Three automakers in 1970 produced more substantial contract improvements. Walter Reuther died unexpectedly in a plane crash in May of that year, which propelled Leonard Woodcock into the UAW presidency. Woodcock guided the union through a 67-day strike at GM, which produced a pattern agreement followed by Ford and Chrysler. In addition to a substantial hourly wage increase, the contracts removed limits on the size of COLA increases and made workers eligible for full pensions at age 58 so long as they had 30 years of service.
In the 1970s and after, declines in market share and profitability for the Detroit-based automakers cast the gains of previous decades into doubt. Racial, political, and economic tensions divided autoworkers and threatened union solidarity.
In 1973, the UAW and the American automakers were confronted by an oil embargo by the Organization of Petroleum Exporting Countries (OPEC). OPEC declared its embargo in October 1973 to punish nations, including the United States, that supported Israel in a brief Arab-Israeli war earlier that month. When the embargo ended five months later, the price of oil had quadrupled from $3 to $12 on international markets.
The impact was immediate and profound. The U.S. economy was driven into recession, resulting in mass layoffs of autoworkers. Worse, the crisis revealed the weakness of the auto industry's strategy of focusing on production of big, gas-guzzling cars and pickup trucks and largely abandoning the production of small, fuel-efficient vehicles. The big vehicles had been highly profitable for the automakers as long as oil prices were low, but in the wake of the embargo, a growing percentage of American drivers began switching to smaller, mostly foreign-made cars. The Japanese manufacturer Honda, for example, sold 20,000 cars in the United States in 1972, but in 1977 it sold 220,000 vehicles to American motorists.
Congress responded to the crisis by requiring manufacturers to increase the average fuel economy of the vehicles they sold, with a goal of nearly doubling fuel economy by 1985. Pressured by the new standards, increased competition from foreign competitors, which often enjoyed significantly lower labor costs, and huge expenditures for designing a new generation of more fuel-efficient vehicles, the U.S. automakers scrambled for survival. Increasingly, the Big Three pressured the UAW to grant contract concessions that would help American companies compete with foreign manufacturers.
That dynamic intensified in 1979 when a revolution in Iran produced another spike in oil prices, another recession, and another big round of layoffs in the American auto industry. The ensuing 1980-82 recession drove Chrysler to the brink of bankruptcy until Congress intervened, offering loan guarantees that prompted private lenders to rescue the company. In exchange, however, those lenders demanded that Chrysler's workers accept slower pay increases and cuts in certain benefits to ensure the company's survival. General Motors and Ford immediately demanded similar concessions, and the UAW's members at those automakers, under intense pressure, eventually agreed.
Foreign automakers continued to increase their share of the American market until 1981, when Congress imposed de facto quotas on vehicles shipped from Japan. That prompted the foreign companies to open their own assembly and stamping (and, later, engine and transmission) plants in the United States, Canada, and Mexico. While that increased the numbers of American autoworkers overall, most of the new workers were employed by the foreign companies, rather than America's Big Three. Moreover, many of the new factories were built in southern states that were strongly anti-union, so nearly all of the new workers were not UAW members.
This period marked the beginning of a steep and lasting decline in UAW membership. The Detroit Three’s UAW workforce dropped from more than 650,000 in 1978 to just 135,000 in 2010. Nearly half of that was due to market share losses by the Big Three automakers, from 85% in 1978 to 45% in 2018. Most of the rest of the membership decline came from “outsourcing” the manufacture of parts by the Big Three to lower-wage, mainly non-union independent suppliers, often in Mexico. From 1978 to 2018, the number of in-house parts-making jobs at GM, Ford, and Chrysler (or Fiat-Chrysler Automotive – “FCA” – after 2009) fell from 275,000 to effectively zero.
For nearly four decades, then, the UAW and its members have struggled to resist the erosion of contractual gains won in the thirty years after World War II. Some people were fortunate enough to stay employed in the industry, even while plants closed and the total number of autoworkers plummeted. But even those workers could experience stress, as automakers responded to declining market share and threats to profitability by pitting work forces against each other, often called "whipsawing," demanding concessions from local unions with the threat of moving production to more accommodating plants or even out of the country.
In the 2002-10 period, the UAW made a significant effort to bring workers at independent parts-making companies into the union. It sanctioned brief, highly effective strikes at one large supplier in 2002, and within a year had gotten two dozen other suppliers to agree to “positive neutrality” at their plants that served the Big Three automakers. These suppliers agreed not to fight unionization in return for the UAW’s pledge to keep wages close to those at non-union suppliers making comparable parts. Unfortunately, some of these plants closed, and many others were bought by Europe- and Asia-based companies that typically wanted to operate without American-style labor unions.
Concessions generally meant foregoing raises rather than actual reductions in pay. But by 2007, on the eve of the Great Recession, the UAW was forced to agree to a two-tier wage scale. While 2019 bargaining shortened the “grow-in” period to full pay from eight to four years, workers hired after 2007 do not enjoy defined-benefit pensions or health care in retirement. Moreover, the UAW also had to agree to let the automakers use temporary workers in an increasing number of situations, including during new model launches and peak vacation periods and on days with high absenteeism rates. By 2019, temps accounted for 5% (Ford) to 10% (GM and FCA) of UAW member work hours.
When the American economy collapsed in 2008 — a collapse driven primarily by rampant mortgage-market speculation on Wall Street — the auto industry was hit hard. As noted, in 2007 the UAW had reluctantly accepted a two-tier pay system that paid new hires only 60% of what their senior coworkers earned. And the union also accepted a plan that spun off retirees' health care benefits so that their cost — after a large one-time cash infusion — would no longer be borne by the automakers.
But even those concessions were not enough to prevent GM and Chrysler from being forced into bankruptcy. GM emerged from bankruptcy with 20,000 fewer workers, and Chrysler cut another 6,500 jobs while merging with the Italian automaker Fiat. Ford managed to avoid bankruptcy, but with great difficulty.
Since then, the Detroit Three automakers have enjoyed a remarkable recovery in profitability (from losses in 2007-10 to pretax North American earnings approaching $24 billion in 2017), as the US market has shifted strongly away from cars, in which the three enjoy just 22% of total sales, and toward SUVs and pickups, where they command 75% of the market. But continuing automation and parts outsourcing have meant that the recovery in employment has been far less complete than the rebound in sales or profits. While car and truck sales grew from 10.5 million in 2010 to 17 million in 2016-19, roughly 62%, the Detroit Three automakers’ UAW employment grew by about 15%, from 135,000 to 155,000.
This brief essay won’t attempt to speculate in any detail about what the future portends for the U.S. auto industry and the UAW. It is safe to assert, however, that the industry will continue to be characterized by dramatic technological change as well as cycles of boom and bust. The automakers are making huge investments in both electric and autonomous vehicles, primarily in response to requirements in China and Europe after 2030. We can also safely predict that the social contract between the automakers, their workforces and host communities will look quite different from what it was in the six decades after World War II.
The "Autoworkers and Their Industry" essay was drafted months before the first news broke of investigations into the conduct of UAW International staff. While the subsequent convictions of staff members and UAW International officers in recent years are beyond the scope of the Guide and of this essay, there are some connections to Southwest Detroit that merit this update.
One of the key reforms arising out of the 2020 US Justice Department’s Consent Decree with the UAW addressed how senior officers are elected. Politically fractious contests had characterized elections in the union’s earliest years. After World War II, the Walter Reuther Administrative Caucus was established. Comprised of incumbent officers, staff, and local leaders, the Caucus vetted and endorsed candidates for the union’s International Executive Board (I.E.B.) the leadership body that included International Officers and Regional Directors.
A challenge to these protocols was mounted in 1986, when the New Directions movement elected a former Region 5 staffer to head that region over the candidate endorsed by the caucus. In a subsequent election, a caucus member defeated the New Directions activist. Victor Reuther allied himself with New Directions, publicly breaking ranks with the administration caucus. Key New Directions members were associated with Labor Notes, a national monthly newsletter published by activists with roots in a variety of unions, including several Detroit area UAW locals. Labor Notes also counted among its ranks several leaders of Teamsters for a Democratic Union, which challenged the International Brotherhood of Teamsters union leadership beginning with its 1976 convention.
The Justice Department’s Consent Decree mandated the question of whether to replace the system of electing the I.E.B. at conventions through the delegate system tied to the Administrative Caucus be put to a vote in a federally administered UAW member referendum. The secret ballot of members ultimately determined that the I.E.B. would be chosen via direct elections.
Labor Notes publications and workshops positioned a number of its strategists and activists to play a leading role in the United All Workers for Democracy (“UAWD”) slate in the 2022-23 elections. UAWD activists won the UAW presidency and a majority of top officer positions in the first-ever direct election of UAW officers by the union’s members. Labor Notes’ principal offices have been located on Michigan Avenue since the late 1980s.
PHOTO CREDITS
Walter P. Reuther Library, Archives of Labor and Urban Affairs, Wayne State University - Ford Assembly
MotorCities National Area / Michelle Andonian - Dearborn Assembly
Jim West Photography - 2019 GM Strike
