For generations, the auto industry has been a model for high-wage, secure, industrial employment, with the auto worker emblematic of the blue-collar middle class. Even with the declining fortunes and near collapse of U.S. domestic automakers, the auto industry continues to offer among the most sought-after opportunities for blue-collar employment, maintaining its status as a key driver of economic development. In both the U.S. and Mexico, politicians scurry to offer automakers incentives to build new plants or save aging ones. And the reason is clear. Regardless of location, firm, or union status, auto work provides a stable source of income unmatched by other manufacturing or service-sector jobs.

Still—as this analysis of my fieldwork at three General Motors (GM) assembly plants in Wisconsin, Texas, and Silao, Mexico shows— the value of those jobs has declined. Decades of policies associated with globalization have weakened labor in both industrialized and developing countries. As a result, the pace of work has intensified while wages and benefits have declined. This reality, that even the best jobs are getting worse, highlights a concern far broader than the need to halt the proliferation of sweatshops in the global economy. It points to the need for a new model of globalization that shores up, rather than undermines, traditional labor relations institutions.

Lean Production and the Intensification of Work

Post-Fordist scholars of workplace change claim that globalization has spread manufacturing systems that improve working conditions by reorganizing workers into teams and reengaging their intellects, all the while improving efficiency and product quality. However, evidence from these plants confirms the fears of critics that, rather than empowering workers, lean production has merely intensified the pace of work in the auto industry.

Each of the three plants I studied was under orders to implement a common Global Manufacturing System (GMS) based on the lean production system that GM learned from Toyota at New United Motor Manufacturing, Inc. (NUMMI), the two automakers’ joint venture in Fremont, California. The GMS incorporated into workers’ jobs all the key characteristics of lean production: standardization of work, teamwork, Andon systems to allow workers to stop the assembly line, and employee participation programs to solicit ideas for improving the system.

In both the U.S. and Mexico, politicians scurry to offer automakers incentives to build new plants or save aging ones. 

However, the only component being fastidiously implemented at each of the plants was the meticulous standardization and intensification of work. Each factory mapped the steps of the production process to be performed, and the order in which they had to be completed. Line operators were then expected to repeatedly perform their jobs as choreographed. The goal was to keep each assembly worker busy for fifty-five seconds of each minute with as much work as could be squeezed into that time.

The GMS was implemented far more thoroughly in Silao than in the U.S. In Silao, teams of six workers rotated through a series of jobs and administrative tasks under the guidance of a quasi-supervisory team leader responsible for managing all the team’s work. However, in both Janesville (Wisconsin) and Arlington (Texas) each worker performed the task at one designated work station. And though team coordinators in Arlington assumed a small portion of their Silao counterparts’ responsibilities, in Janesville they served mostly to spell workers who needed an unscheduled break.

The style and extent of teamwork practiced at each plant affected the Andon system, which is meant to allow workers with a problem to signal for assistance and halt production if need be. In Silao, the entire team converged on the worker to quickly group problem solve, address the problem, and typically resume production within a matter of seconds. In Arlington, team coordinators responded to the Andon system, addressed the problem, and alerted a supervisor if necessary. In Janesville, however, workers mostly ignored the Andon system to avoid being scolded by supervisors for slowing production.

These differences among the plants suggest that both proponents and critics of teamwork may be overstating its impact on workers within lean production. Lean enthusiasts cast teamwork as a boon for workers, making their labor more varied, cerebral, and ergonomic. Critics claim teamwork employs peer pressure to manipulate workers into driving the intensification of their own work. However, this research suggests that teamwork does not fundamentally change assembly-line work for the better (as proponents claim) or become the source of intensifying work (as others fear). Instead, other aspects of lean production are key in shaping job quality.

To be sure, the teamwork practiced in Silao provided a modicum of relief from the never ending repetition of the assembly line and better ergonomics than in Janesville. But contrary to the professions of lean production advocates, the intellectual component of the job was dwarfed by the physical. Likewise, teams in Silao did appear to regulate themselves, as lean production skeptics fear. However, they did not appear to have been manipulated into working any harder than in Janesville, where GM used the threat of plant closure to motivate workers.

The common emphasis on standardized work routines in Silao, Arlington, and Janesville exposes lean production for intensifying work in the auto industry, rather than enhancing work through teamwork and participation. But the variation in these components of the GMS reflects the different ways that organized labor has been undermined in each country to force concessions in wages, benefits, and the work rules that stood in the way of intensifying work.

Globalization and Mexican Labor

In Silao, teamwork and employee participation were part of GM’s broader labor relations strategy that began by closing a plant in Mexico City and opening a new one in Silao, where the company hand-picked a union to represent its workers. The move by GM to Silao followed a national trend of weakening organized labor in the auto industry.

For roughly sixty years, and continuing into the early 1980s, Mexico practiced Import Substitution Industrialization (ISI) policies that protected automakers from foreign competition by closing the country to imports. Under ISI, Mexican autoworkers enjoyed steadily rising wages and were among the highest paid blue-collar workers in the country.

Economic crisis in the early 1980s led to the abandonment of import substitution strategies in favor of those embracing trade and globalization. In the name of international competitiveness, the government pressured union officials to sign national “pacts,” limiting pay increases even as inflation spiraled. In response, labor activists seeking to democratize their unions organized strikes to challenge the concessions, the process by which they were handed down, and to demand reform of the labor movement.

The common emphasis on standardized work routines exposes lean production for intensifying work in the auto industry, rather than enhancing work through teamwork and participation.

Both to escape the labor unrest and resituate themselves closer to their new market in the United States, the automakers began migrating north. Starting afresh with inexperienced workforces like those in Silao, the companies hand-picked unions that renounced labor militancy, embraced globalization and labormanagement cooperation, and ceded control of the shop floor to management.

And so, in Silao, the union provided services to help workers acclimate to factory work and take advantage of their steady incomes, a function carefully aligned with GM’s own goal of maintaining low labor turnover. However, it steered clear of any interference with the day-to-day running of the shop floor, or GM’s broader labor relations strategy that fixed a wage hierarchy among the automaker and its local suppliers. GM offered the highest compensation—$200 a week—to men with a ninth grade education. Down the road, Delphi’s wire harness plant paid women with a sixth grade education $7 a day.

When they started afresh with inexperienced workforces in Silao, Mexico, automakers hand-picked unions that renounced labor militancy and embraced globalization. 

So, in Silao, standardized work routines were accompanied by teamwork and employee participation in an environment in which workers knew no other way. GM efficiently ran its assembly lines with a core workforce, while outsourcing many other tasks. Union activism was minimized, as was any challenge to the intensification of labor or meaningful demand for better wages and benefits among GM’s employees and those of its suppliers.

Globalization and U.S. Labor

Just as GM’s fresh start with a new workforce in Silao facilitated the wholesale adoption of the GMS, workers’ reluctance to embrace the model in Janesville and Arlington reflected the experiences of U.S. autoworkers in the global economy and the manner in which they had seen their way of life undermined. Since the early 1970s, the Big Three’s share of the U.S. automotive market shrank precipitously. As “foreign” nameplates claimed an increasing share of the market, the automakers began building factories in North America to produce their vehicles. By 2005, these nonunion “transplant” factories accounted for 30 percent of all auto production in the United States,1 leaving roughly one hundred thousand autoworkers unorganized.2

As the Big Three (GM, Ford, and Chrysler) sought to regain their competitiveness, they restructured their corporations to become leaner, shutting plants and shedding nearly half a million jobs. Even before the 2009 bankruptcies at GM and Chrysler, buyouts had left the United Auto Workers (UAW) with an active auto industry union membership of about 172,000, down from nearly 670,000 in 1978.

In turn, the UAW found itself backpedaling. Whereas industry-wide pattern agreements once took labor costs among the Big Three out of competition and allowed the union to bargain with relative indifference—to the fate of the individual automakers—the inability of the UAW to organize any of the transplant factories left it dependent on the very same companies that responded to the declining popularity of their vehicles by seeking relief from their labor costs. The most recent manifestations of this were the formation of a union-run trust fund—to which the Big Three offloaded responsibility for their retirees’ health insurance—and the union’s acceptance of a two-tier wage system which cut “new hire” wages in half, to $14 an hour.

In addition to wage and benefits cuts, workers have been faced with whipsawing. As the automakers have downsized, they have used the threat of plant closure to play local unions against one another in a competition to relinquish work rules to facilitate the reorganization and intensification of work. In Janesville, these threats had been ongoing since 1985, until GM did close the plant at the end of 2008. Arlington “won” perhaps the most public case of whipsawing by GM. After announcing, in late 1991, that the automaker would close either its Arlington or Ypsilanti, Michigan plant, GM spent several months entertaining concessions to work rules by local union officials, and tax and infrastructure incentives from regional politicians, before announcing that the Arlington facility would stay open and add jobs.

The rolling back of labor standards in the auto industry highlights the overwhelming, negative impact of globalization on workers. 

So, in Janesville, the union and the workers accepted harder work. But workers did not buy into a GMS they viewed as GM’s latest attempt to make them work harder and cut more jobs. In Arlington, attitudes were a little different than in Janesville because the plant still had long-term prospects, which provided incentive for workers, their union, and management alike to navigate the most palatable way to implement the GMS—notwithstanding the intensified pace of the assembly line and resentment many workers felt toward GM.

Looking Ahead for Labor

In spite of the gradual deterioration of wages, benefits, and working conditions, the auto industry still offers betterpaid, more stable, and more desirable work than many other industries, and far better conditions than found in sweatshops around the world. But this rolling back of labor standards in the auto industry over the last couple of decades, even as auto work remains among the most sought-after jobs, highlights the overwhelming, negative impact of globalization on workers. Globalization’s ills cannot be addressed through consumer awareness, corporate codes of conduct, or pressure from NGOs, state actors, and international bodies like the International Labor Organization (ILO) for a basic respect of labor rights. Even calls for protecting core labor rights within, or as a side agreement to, trade pacts will not reverse the decline.

Instead, this research points to a more fundamental problem with globalization, and a greater challenge for labor advocates. Globalization undermines the labor relations institutions that shape labor markets and through which workers have traditionally claimed a standard of living otherwise unavailable. Therefore, for globalization to be an overall benefit to workers, policies that shape globalization must shore up, rather than undermine, these institutions. This requires replacing neoliberal policies that treat workers as commodities and corporations as global citizens with international bodies empowered to hold states and firms responsible for protecting workers and promoting collective bargaining through which labor can claim a share of the profits associated with increased global trade. A good place to start would be to codify all ILO conventions into international law and establish an enforcement mechanism to address violations. This won’t happen anytime soon. But, for labor activists, it should be the long-term goal.

 

Notes:

1. Ward’s Automotive Yearbook (Southfield, MI: Ward’s Communications, 2005).
2. The Contribution of the International Auto Sector to the U.S. Economy: An Update (Ann Arbor, MI: Center for Automotive Research, 2005).

 

New Labor Forum 19(3): 70-74, Fall 2010
Copyright © Joseph S. Murphy Institute, CUNY
ISSN: 1095-7960/10 print, DOI: 10.4179/NLF.193.0000012