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U.S. work force on the defensive

From left, United Auto Workers Vice President General Holiefield, UAW President Ron Gettelfinger, Chrysler Group CEO Tom LaSorda and DaimlerChrysler Senior Vice President John Franciosi shake hands to open the 2007 contract talks at Chrysler Group headquarters in Auburn Hills, Mich., on July 20. The national contract between the UAW and the automakers expires Sept. 14.Associated Press photos (Associated Press photos / The Spokesman-Review)
John Gallagher Detroit Free Press
From left, United Auto Workers Vice President General Holiefield, UAW President Ron Gettelfinger, Chrysler Group CEO Tom LaSorda and DaimlerChrysler Senior Vice President John Franciosi shake hands to open the 2007 contract talks at Chrysler Group headquarters in Auburn Hills, Mich., on July 20. The national contract between the UAW and the automakers expires Sept. 14.Associated Press photos (Associated Press photos / The Spokesman-Review)

DETROIT – American workers once looked to the Motor City to see their future. That’s no longer the case.

This year’s contract talks, under way between the United Auto Workers and the Detroit Three automakers, may decide the fate of the domestic auto industry. But economists and labor historians agree that UAW contract talks no longer set the nationwide agenda for the broader American work force as they once did.

Paul Fuller, 44, of Temperance, Mich., a nearly 20-year veteran of Ford Motor Co.’s Flat Rock assembly plant, said the public needs to realize that good pensions and benefits don’t come automatically but must be earned through hard bargaining.

“I think maybe it’s taken for granted that that stuff is automatically given to employees,” he said. “I don’t think the public is really aware of the impact that it’s going to have on retirements and things like that. By the time it does, it’s going to be too late.”

Dana Johnson, chief economist of Comerica Inc., said Detroit’s influence on the U.S. economy has waned with manufacturing on the nation’s financial landscape.

“I think the big industrial unions find themselves in a different kind of position than they once did,” Johnson said. “They’re not the pacesetters of the overall economy.”

From the 1940s on, particularly in the 1950s and ‘60s, the UAW won benefits that soon became standard for a broad swath of the American public.

Those included everything from paid holidays for production workers to company-paid pensions and health coverage. The UAW either won those benefits first in Detroit or popularized them in landmark contracts with General Motors, Ford and Chrysler.

“The idea of pattern bargaining meant not just the pattern for the unionized industry but for other workers as well, and it had a big ripple effect throughout the economy. But that’s no longer the case,” said Nelson Lichtenstein, a labor historian who has written about the UAW.

A professor at the University of California at Santa Barbara, Lichtenstein argues that low-cost, low-wage retail giant Wal-Mart now influences U.S. pay scales more than the UAW contracts. Just as historic UAW contracts once built up the U.S. middle class, Wal-Mart’s low pay rates and anti-union policies may now be eroding what it means to be middle class.

Fifty years ago, when the UAW helped set the agenda for the broader American workforce, about one-third of U.S. workers labored in manufacturing, and roughly a third of all non-agricultural workers were unionized. Today, not one in 10 workers toils in a factory, and less than 10 percent of workers outside government belong to unions.

Peter Morici, a professor of business at the University of Maryland, said those trends diminish the significance of this year’s UAW talks.

“I don’t believe this has any great significance for the U.S. economy other than the survival of the industry itself,” Morici said. ” I don’t believe this is setting the pay scale for anyone.”

With the Detroit Three’s market share dipping below 50 percent of U.S. vehicle sales for the first time ever in July, the UAW’s ability to dominate the nation’s pay-and-benefits agenda is shrinking still further.

According to an internal document obtained by the Detroit Free Press last winter, Toyota Motor Corp. wants to move its pay toward regional rates – more in some parts of the country than in others – to control costs.

Toyota and other foreign-based automakers operating in the United States had sought to match UAW pay rates in part to fend off union organization efforts in their plants, but the memo suggested a move away from that practice.

If anything, UAW concessions this year may set a pattern for further givebacks by other American workers. Peter Rachleff, a professor of labor history at Macalester College in St. Paul, Minn., has worked extensively with unionized postal workers. He said that UAW contracts have influenced what postal workers got both on the way up and on the way down.

“When I started, you went into contract talks and the arbitrators would say, ‘The auto industry and the steel industry, here’s what they just did, and you guys can get more or less the same.’ “

But for the past several years, Rachleff said, “Postal negotiators have been saying, ‘This is what the auto- and steelworkers have just given up, and you’re going to have to give it up, too.’ “

The waning influence of the UAW for the broader economy also may reflect the changing position of major corporations, said Comerica economist Johnson.

“We had a model in this country that major corporations would continue on indefinitely, and it was perfectly reasonable to organize our pension and health care around them,” he said. “But we’re finding, in fact, that major corporations come and go. We really have to organize our compensation schemes with the idea that very few people have careers that are predominantly at one company.”