The Workings of Automotive Unions

The Workings of Automotive Unions

The last bolt is screwed on as a relieved automotive worker marvels at his wondrous creation: a car. With the roar of an engine, the car slowly disappears into the distance. The worker gradually turns around, picks up his tools, and continues to work on a new car. As a consumer, we rarely wonder how things are made; we simply take everything we own for granted. For once, have you wondered how many hours of hard labor many automotive workers must go through? The automotive industry has been around for many years, but it has not always been as efficient as it currently is. As the industry continues to evolve, many new innovative ideas are still being developed. In the past, automotive workers have had to work in harsh conditions without much security or job benefits. Nevertheless, through the continuous development of organized collective bargaining, workers are being treated as they should be. Being the largest automobile manufacturer in the world, General Motors Corporation has been greatly affected by the needs of their workers. Rick Wagoner, CEO of General Motors, is currently in charge of "running the show" at GM. Being the most successful automotive company since 1931, it is obvious that he not only has to satisfy customers, but also the workers within the company. From the smallest things such as a work raise to bigger things such as the working condition, the management of General Motors has been pressured to make both positive and negative changes to the way the company is run as a whole in order to satisfy the workers who are part of the UAW Union. Therefore, the formation and development of unions encompasses both pros and cons.

As the automobile industry made its first appearance in the early 1900s, General Motors had already slowly begun its formation. GM was founded in 1908 by William C. Durant, a carriage manufacturer of Flint, Michigan, and today operates manufacturing and assembly plants and distribution centers in many countries, including Canada . Its major products include automobiles and trucks, a wide range of automotive components, engines, and defense and aerospace materiel. General Motors has a long history of business and technological innovation designed to deliver ever-increasing value to their customers and society. GM today has manufacturing operations in more than 30 countries and its vehicles are sold in about 200 countries. As the leading global automotive sales leader since 1931, the General Motors Corporation employs about 355 000 people .

With almost half a million workers employed for General Motors, it would be difficult to satisfy all its workers. However, through collective bargaining, it is now almost possible for GM to hear all the voices of its employees. Collective bargaining is a method of "jointly determining working conditions, between one or more employers on one side and organized employees on the other" . Through this method, members of the union employed by General Motors would have their voices heard. In 1935, not long after GM was declared the top automobile manufacturer in the world, the United Automobile Workers Union was formed with the passage of National Labor Relations Act (Wagner Act). This act protects employees by recognizing their right to join unions and engage in union activities. As one of the largest and most diverse unions in the world, the UAW union is the main arbitrator in terms of the automotive industry. With members in virtually every sector of the economy, the UAW is a powerful bargaining-machine. The UAW Union has approximately 710,000 active members and over 500,000 retired members in the United States, Canada and Puerto Rico. Throughout its years of existence, UAW members have benefited from a number of collective bargaining breakthroughs, including: the first employer-paid health insurance plan for industrial workers, the first cost-of-living allowances, and landmark job and income security provisions .

"The automotive business is extremely challenging no matter how you look at it. It is complex, demanding and continuously changing. It's a highly capital-intensive business, the competition is fierce and the margins are slim" As quoted by the Chief Financial Officer of GM, the automotive industry is like an unpredictable roller-coaster ride. The industry is increasingly demanding, as workers are constantly striving for perfect working conditions. From the point of view of a manager, the formation of unions can be both good and bad. "Unions have perceived management as aloof and uncaring in dealing with the needs of auto workers". On the other hand, General Motors management disagrees and states that their workers are very lucky to be working with them, as they are one of the giants of the industry and offer many benefits.

In today's competitive and challenging global economy, cooperation between unions and employers seems to be gaining headway. Therefore, it can be safe to say that presently, there exist more pros than cons regarding the union movement. Firstly, with nearly half of its currently employed workers in the UAW, General Motors is able to satisfy the majority of its workers. Through negotiating, administering, and interpreting a labor contract, General Motors is trying hard to protect worker interests through complex work rules and expensive compensation packages. Secondly, unions not only benefit workers themselves, but also the economy as a whole. With so many employees around the world, General Motors deems to be a company many countries rely on to hold up its economy. For example, in 2001, GM made a decision about the fate of its Camaro/Firebird sports cars, which meant that the plant where they were manufactured, in Quebec, might soon be closed. If the plant was to close, thousands of employees would loose their jobs, which would in turn affect the Canadian economic drastically. Furthermore, the formation of Maquiladoras (foreign manufacturing plants that operate in Mexico with special privileges) has had a significant impact on the automotive industry. With an increase of jobs exported to Mexico where the pay is evidently lower, many workers are losing

jobs. This issue has been brought up by the UAW, and General Motors