What’s at Stake in the General Motors Strike

What’s at Stake in the General Motors Strike

Only a strong movement can put the management of capitalism on the political agenda.

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For almost one week, 49,000 General Motors (GM) workers have been on strike. The strike could have a big impact on U.S. politics and work life, but if so, it will have to break with the patterns of conflict and accommodation so long entrenched in a once iconic industry.

A General Motors strike used to send shock waves throughout the economy. In the fall of 1970 when 400,000 members of the United Auto Workers (UAW) shuttered nearly 100 GM factories for more than two months, the U.S. economy shrank by more than 2 percent, forcing President Nixon and his advisors to contemplate wage and price controls, eventually imposed in August of 1971. In those days, the U.S. auto industry was unquestionably one of world capitalism’s “commanding heights,” and General Motors the biggest and most emulated large corporation in the industrialized world.

Today the UAW has once again shut down General Motors, still the largest North American producer of automobiles. But if the workers on the picket line are to have a large impact on the U.S. economy, it will come in the realm of politics, policy, and culture, and not through economic leverage. GM is still a profitable auto corporation, but much diminished, and its thirty-three manufacturing plants (and twenty-two parts distribution warehouses) are concentrated in Michigan, Ohio, and Indiana.

General Motors had sales of $147 billion last year, but the company has been shrinking for decades. It produces 17 percent of all vehicles in the United States, down from nearly 28 percent a couple of decades ago. For more than half a century it was the largest company in the nation and owned the number one spot on the Fortune 500 list of big corporations; today it stands at number thirteen behind Walmart, Exxon-Mobil, Apple, Amazon, and even Ford, its century old rival. GM went bankrupt in 2008 and had to be bailed out by the government. On a world scale, Volkswagen and Toyota sell more cars.

Unfortunately, the UAW is also much diminished from the days when President Walter Reuther could declare the million-member auto union the “vanguard in America.” (Knowing radicals, including an admiring C. Wright Mills, appreciated the Leninist flavor inherent in that phrase.) Factory closings, auto imports, and a general failure to organize new workers have reduced UAW membership in the auto industry to less than 200,000; the union’s official membership stands somewhat higher only because it has been able to organize a variety of other workers, including teaching assistants in California and some Midwestern state employees. The main problem—a truly existential one—has been the inability of the UAW to make inroads among the hundreds of thousands of Americans who work in the “transplant” parts and assembly plants that Toyota, Nissan, Honda, Kia, VW, Mercedes-Benz, and other foreign-based firms have built in Kentucky, Tennessee, Alabama, Mississippi, and elsewhere in the mid-South. Fully half of all U.S. auto production is today non-union, a crippling debility for a labor organization that seeks to raise the general wage level in its industry, and a potent competitive argument that GM and Ford can hurl at UAW negotiators when they seek redress for a decade of plant closings and wage stagnation.

And then there is the corruption scandal that is destroying the credibility of the UAW leadership. At least six UAW officials have been charged with or convicted of graft, and last month the FBI searched the houses of President Gary Jones and former President Dennis Williams. Jones has been conspicuously absent from strike leadership; more consequential, reports the always well-informed Labor Notes, has been the failure of the UAW to really prepare the membership for a strike. There were few meetings or bulletins designed to keep members in the bargaining loop; not a button was distributed in the plants and there was little outreach to the public.

But despite all this, the strike is solid and public support is growing. GM has offered a modest wage increase, an $8,000 signing bonus, and $7 billion of investment in existing production facilities. But what really irks many workers is the proliferation of two-tier, temporary, and outsourced jobs that GM has deployed to fragment the solidarity and equality that were once hallmarks of auto work. Some “permatemps” start at $15 an hour and will never earn the “Tier One” wage, now $31 an hour. At GM’s Spring Hill, Tennessee plant, 5,200 employees are all UAW members, but only 3,600 are covered by the standard GM contract. The others are considered “supplier partners” and work for inferior wages and benefits for other companies on site.

The UAW agreed to such concessions in 2007, on the eve of GM’s Great Recession bankruptcy. A $50 billion U.S. government bailout saved the company, with profits coming in at $35 billion over the last three years. But plant closings and layoffs did not stop. Last year GM announced that it was cutting up to 14,000 jobs and idling five auto plants, including Lordstown in northeast Ohio. Meanwhile, in China investment in new factories has been robust, with the GM joint ventures there now selling more cars each year than in the United States.

All this puts GM at the center of the debate that Elizabeth Warren and Bernie Sanders have inaugurated this campaign season. It is not just about bashing and taxing billionaires to fund a more expansive welfare state. At issue is the management of capitalism. The Trump tax cuts and GM’s own profitability have generated plenty of money for a massive reinvestment program here at home. But GM has spent $10.6 billion since 2015 buying back its own shares in order to goose share prices for investors, as well as for senior executives whose compensation largely comes in the form of stock options. And of course, GM is not alone. This year it is almost certain that corporate stock buybacks will exceed $1 trillion. Not only does this represent a displacement of potentially valuable investment resources, but such buybacks are an engine of economic and social inequality, since their benefit accrues almost entirely to the top few percent. (Sure, some pension funds reap the benefit, but so too did all those widows and orphans take their small share from the whale oil profits on the Pequod.)

Every Democratic candidate for president, from Biden to Bernie, has endorsed the GM strike. That is a shift from the past when liberals too often used a distancing rhetoric whenever a contentious stoppage threatened to upset the public. But it is not enough, as the Sanders campaign put it, to call on GM to “End the greed, sit down with the UAW, and work out an agreement that treats your workers with the respect and the dignity they deserve.” Instead, Sanders, Warren and others should encourage their supporters to show up on the picket lines and transform this work stoppage at a single company into a movement. Only a strong movement can put the investment program of corporate capital on the political and economic agenda.

Walter Reuther and the UAW did that in 1946 when they shut down GM with the transitional, socialist demand to “Open the Books” and offer workers and the American public, “Wage Increases without Price Increases.” Today a demand that the investment program of big corporations like GM must become subject to democratic pressure might not only save factories like Lordstown, but it would be the most effective way to expose President Trump’s faux sympathy for the Midwestern working class. It would unite the populist denunciation of the billionaire class to the concrete work-a-day fears and hopes of millions in factories and offices. In the process such a movement would demonstrate a far more effective and progressive way to revive and reshape the industries and workplaces that once sustained a more egalitarian America.

Nelson Lichtenstein teaches history at the University of California, Santa Barbara. There he directs the Center for the Study of Work, Labor, and Democracy.