That’s what makes the United Auto Workers strike against General Motors so different from past conflicts. The union and carmakers have always played tug-of-war: In good years, the UAW demands a share of the prosperity. In bad years, the companies seek concessions so they can stanch their losses. But the current strife pits the auto industry’s past way of doing business against its uncertain future. The carmakers would have you think that every American wants a big ol’ SUV or pickup truck. And the union, with its walkout, is saying it wants to keep things the way they are, without shutting plants or laying off workers or paying more for health care.
But the stakes have changed in a way that neither the carmakers nor the union fully acknowledges. Consumers have signaled that maybe they don’t need Detroit quite as much as they used to. Auto analysts suggest that the country has reached “peak car” — meaning the number of autos sold each year isn’t likely to increase. Some predict a drop in worldwide demand. The long-term trend has been shifting toward fewer cars per household. Because the United States is so big, it takes a lot to bump the ownership statistic, but it has been below two cars per household since 2009. Not only do these trends cause havoc with automakers’ planning, they blunt the UAW’s ability to argue for more money and guaranteed jobs, and to get them through strikes.
Drive any highway in America, and you’ll see fleets of new sport utility vehicles and pickups. The carmakers push them in their advertising just as the behemoths push smaller vehicles out of the way while zooming past. They offer lease deals and rebates, or knock $5,000 or more off the price, which they can afford to do because the big models yield big profits. The companies argue that they’re meeting consumer demand, but like department-store clerks who bring out only the most expensive dresses, they rarely put any effort into marketing less-profitable cars. Detroit automakers have all but erased smaller cars from their lineups: Ford has dropped the iconic Taurus, which helped it compete with Japanese carmakers in the 1980s. Chrysler is going to discontinue, in North America, the little Fiat 500, which it got from its Italian overseer. And GM has ended production of the small Chevrolet Cruze at its factory in Lordstown, Ohio, one of four vehicle plants it announced last year that it wanted to close, a move that enraged the union and struck fear in the hearts of local communities.
The 49,000 striking GM workers, meanwhile, are survivors in what has been a brutal era for the industry. In 1979, the company had 511,000 hourly workers, 10 times as many as in its factories today. But now the union may be keeping GM from dealing with its future, possibly endangering even more jobs as a result.
The UAW wants GM to give full-time jobs to the 7 percent of its workers who are temps; adjust its two-tiered wage and benefits system so newer workers can achieve parity with veteran workers faster; and reopen the four plants. GM says these steps would raise its costs and limit its flexibility. For example, some workers from the closed plants have transferred, so GM would have to hire more workers and, more important, fill up the plants somehow with new products. But that’s basically the UAW’s point: GM should commit to this size workforce, something no carmaker has been able to do for decades.
This strike doesn’t threaten GM’s immediate future. Its dealers have enough cars in stock to last three months, and GM has earned money more or less steadily over the past five years. But some shakiness is beginning to show up in auto sales. If the rate from the first half of the year holds up, car companies are on track to sell 16.9 million vehicles in 2019, according to Automotive News, the industry trade publication. That sounds like a lot, but it would be the first time since 2014 that the companies sold fewer than 17 million vehicles. You can argue that a slowdown is to be expected after the long sales boom the industry enjoyed this decade. But this strike over maintaining the status quo doesn’t seem to be taking into account those wobbles — or, in fact, any of the social changes that are swirling outside car plants.
Bill Ford Jr., great-grandson of Henry Ford and now the company’s executive chairman, has said repeatedly that Detroit’s future will be far different from its past. In 2018, Ford made headlines when he bought the dilapidated Michigan Central train station in Detroit, with plans to transform it into a development center for “urban mobility services” as well as electric and autonomous vehicles. “The urgency has never been more apparent,” he wrote in a Medium essay last year.
Americans have begun to get around in ways that don’t involve owning cars. Walkability has become a real estate selling point; new condo buildings and hotels are being built without parking or with fewer spaces than they once had. People ride bikes and scooters, hail rides from Uber and Lyft, and use public transportation, depending on availability. These modes are a long way from replacing car ownership, but the age of the average car owner keeps going up. It’s 55 now, and buyers that age and older account for the majority of new auto sales. Millennials, who seemed slow to get into the market a decade ago, are picking up their buying pace, but car companies are starting to worry about Gen Z, those born after 1995. These buyers are the ones with a range of transit choices that their parents and older siblings didn’t have.
As the UAW well knows, Detroit has always looked for the silver bullet: the all-in gamble that will result in good times for everyone; the technology that will simplify the way vehicles are built; the vehicles that customers are clamoring for. Sometimes, the car companies are right, as they were during the first SUV boom, in the early 1990s. The union reaped the benefits in constant overtime shifts and year-end profit-sharing.
But repeatedly, the carmakers have gotten it completely wrong. GM was convinced that its 1984 purchase of Electronic Data Systems, the tech company founded by the late H. Ross Perot, would bring it a revenue stream that would shield it from the vagaries of the car market. Instead, it got into constant battles with Perot over the way it ran its auto business and ended up ditching EDS and Perot altogether in 1995.
GM has made multiple efforts to overhaul Cadillac, only to see German, Japanese and even Korean carmakers take slices of the lucrative luxury car market away. And strong car dealer lobbies blocked it from eliminating lagging brands, like Pontiac, Hummer and Saturn, until the government forced it to do so as part of its bankruptcy after the financial crisis.
Every time Detroit is wrong, workers suffer, as jobs are cut and plants are closed. Last fall, it seemed like GM had its act together, with the right number of factories and jobs. Then, it blindsided the UAW and the American public by announcing that it planned to close four factories, including its only production center in Detroit.
Likewise, the past 25 years have seen GM lurch through a series of environmentally friendly vehicles, even when its heart clearly wasn’t in the task. In the late 1990s, it marketed the EV1
electric car, beloved by its owners, then fully retreated. In 2008, hoping to win congressional help, GM executives vowed that the Chevrolet Volt, a plug-in hybrid, was the key to its future.
It killed the Volt in December but promised it would speed up the development of electric vehicles.
Last weekend, according to Automotive News, GM promised the union that electrics would help revive two of its doomed factories — with an electric pickup truck at the Hamtramck factory in suburban Detroit and a battery cell manufacturing project in Lordstown.
You can’t blame the union for being skeptical: It doesn’t believe that GM knows what the future holds. By walking off the job, the UAW is showing it doesn’t want to help GM find out. But the future is coming for the industry, whether the company — or its workers — want it to or not.