The decline of the U.S. auto industry has been the butt of jokes. The punch line is always bipartisan. Environmentalists on the left have savaged the U.S. auto industry as if there were no carmakers outside of Detroit. I admit to using these pages to insert my own daggers into the bull. The perennially conservative American auto enthusiast press has savaged the American car and American carmakers even when the product has matched foreign competition. If Americans don't recognize the link between the plight of Detroit and broader issues of American standards of living, the joke will be on us.
One myth that rings like a chorus in the mouths of media and political drones goes like this: "But Hondas and Toyotas are built in America now." All jobs are not created equal. Japanese manufacturers, which produce as many autos in the United States as the "Big Three," have stopped union activity dead since their first plants went up during the 1980's.
So far, the existence of the United Auto Workers in the United States and the Canadian Auto Workers in Canada has forced the Japanese companies to offer competitive salary and occasionally lavish bonuses, but there will be no guarantees when the union workers at the U.S. manufacturers are gone. At the moment, politically savvy foreign automakers are on their best behavior. 2005 year-end bonuses at Honda and Toyota plants in the United States reportedly were huge. But for workers to depend on corporate largesse instead of organizing in the workplace is the equivalent of living under an enlightened despot instead of a democracy. Regimes change.
The only Toyota plant that uses UAW labor is a joint venture with GM. The Japanese and German companies have unions in their domestic plants, but the tactics for keeping unions out of the United States plants verge on vicious. Carlos Ghosn, Nissan's CEO, has gone so far as to threaten plant closures if unions try to organize at Nissan's U.S. facilities.
As the island of unionized auto plants shrinks, expect foreign-owned plants to become suddenly less accommodating to worker needs. Ghosn, who once wrote a Celliniesque autobiography, has spent the last two years informing white- and blue-collar workers within Nissan's American Operations that they can and will be replaced at whim.
Since 2000, 140, 000 UAW workers have been subject to layoffs or placed on the fast track to unemployment by struggling Detroit automakers. Foreign automakers see this as an opportunity to probe the vulnerabilities of their workforce. This weakening of the union has provided the first glimpse into how a post-UAW auto industry may treat its workers.
Nissan recently announced dramatic cuts to worker healthcare plans that would have required worker consent under a collective bargaining agreement. Right now, Nissan has only 500 retired U.S. workers, but future retirees will be allowed a pitiful $2,500 per year for health care under the new plan. Other Japanese automakers have not been in the United States long enough to amass a large body of retirees, but industry sources report that all have been intrigued by Nissan's miserly healthcare restructuring.
The method of operating in Japan was always to let the national health care program handle the post-employment needs of former assembly workers. Of course, America has no such system; this is turning into both a humanitarian and a competitive disaster for the United States. Right now, this advantage is worth about $1,500 per car to foreign automakers. When, in a recent meeting, President George Bush told Michigan Governor Jennifer Granholm (D), "I can't make your automakers profitable," he was telling a partial fib.
The worst will come when U.S. employees of foreign automakers start retiring en masse. The ability of foreign car manufacturers to use non-U.S. workers for their labor and then dump them with substandard care will become a crushing unplanned economic burden on the U.S. economy if the UAW doesn't survive to keep the non-union plants honest.
The auto industry is the canary in the mineshaft. The unionization of the U.S. automakers in the first half of the 20th century was a landmark event that helped to solidify the broader employment principles that sustained America through its peak years of middle class prosperity. As the union movement struggles for traction, the auto industry must be seen as a battleground for the future of workers' rights in this country.
