The Wrong Reason To Strike

By Steven Pearlstein
Wednesday, September 26, 2007

Perhaps it was inevitable that there would be a strike this year against one of the Big Three auto companies.

With the companies losing money and market share in North America, and with the ranks of the United Auto Workers shrinking faster than the Arctic ice pack, this looked to be the contract that would set a new framework for collective bargaining in the auto industry. And with so much at stake, why wouldn't a union look for a chance to play its trump card and gain just a bit of advantage before coming to an agreement?

After all, a strike makes it possible for an angry workforce to let off steam about all the concessions it has already made and easier for the union leadership to sell a contract that is bound to meet opposition from militant locals.

By the same token, a strike could help management convince Wall Street that it held its ground on getting costs in line with those of foreign firms operating in the United States. And as long as the economy is slowing and there is already plenty of inventory sitting on dealer and factory lots, a short strike now need be no more costly than two-week plant shutdowns in December.

So it's not the strike against General Motors that concerns me as much as the reported reason for it -- namely, the union's insistence that this contract, like those before, offer ironclad job security. Given what's gone on the last 25 years, you have to wonder how anyone could think that GM, Ford or Chrysler is in a position to guarantee anything, let alone job security.

More broadly, what the strike suggests is that even when a contract is eventually signed, it won't involve the kind of sweeping changes that the Big Three need to ensure their competitive viability.

"By and large, they are looking for answers to the wrong question," said Barry Bluestone, an economist and labor expert at Northeastern University in Boston. "They are fighting over the same things they were fighting over 50 years ago."

Bluestone is no stranger to the auto industry. His father, Irving Bluestone, 91, was the lead negotiator for the UAW with General Motors during the 1960s and '70s. As a college student, Barry Bluestone worked summers on an auto assembly line. And as an economist, he has documented the importance of unions in creating the American middle class.

Back in the early 1990s, father and son wrote a book, "Negotiating the Future," in which they argued that both unions and companies had to move their focus from dividing the pie to expanding it. That meant putting aside the rigid notion that the role of unions was to fight for better wages and benefits, and the role of management was to run the company, they wrote. To remain competitive, companies had to engage the energies, creativity and commitment of their workers. And that process required a different approach to collective bargaining.

As Bluestone acknowledges, this wasn't a wholly original idea, but one that had been a favorite of the left wing of the labor movement in the 1940s and championed by the UAW's own Walter Reuther until 1950, when he surrendered the dream of industrial democracy for the more fetching and immediate dream of a middle-class life for blue-collar workers.

That grand bargain, known as the Treaty of Detroit, served both sides well until the early 1980s, when foreign competition began to render it unsustainable. And yet in the 25 years since, very little has changed in the collective bargaining process.

During the late 1980s, there were some successful experiments with Total Quality programs borrowed from Japan. And General Motors had some early success with its new-age Saturn division. But according to Ruth Milkman, a labor expert at UCLA, worker involvement was never really embraced by either the unions or management and never allowed to rise beyond production issues on the factory floor. As long as oil prices remained low and SUV profits high, neither union nor management seemed to care.

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