Industrial Relations in the U.S. Automobile Industry: An Illustration of Increased Decentralization and Diversity

By Katz, Harry C. | The Economic and Labour Relations Review : ELRR, December 1997 | Go to article overview

Industrial Relations in the U.S. Automobile Industry: An Illustration of Increased Decentralization and Diversity


Katz, Harry C., The Economic and Labour Relations Review : ELRR


Harry C. Katz *

* Jack Sheinkman Professor of Collective Bargaining and Director of the Institute of Collective Bargaining, NYSSILR, Cornell University

Introduction

The auto industry has historically played a prominent role in American collective bargaining, introducing many how common features--multi-year contracts with cost-of-living-adjustment escalators and built-in annual real wage increases, supplementary unemployment benefits, '30 and out' pensions, and quality of working life (Q WL) programs--and upholding a strong structure of pattern bargaining for many years. (1) In the 1980s, automotive labor relations was again in the forefront in taking actions to modify this long-established model, under pressure from both foreign and domestic competitors and from new production models linked to new human resource practices.

The cumulative outcome of these pressures has been increased diversity and decentralization of employment relations. Modifications of the industry's collective bargaining model have included so-called 'concessionary' contracts that replace traditional bargaining formulas with company-specific profit-sharing plans and work rule changes; extensive new income and job security programs to cope with industry restructuring; joint labor-management efforts around training and quality; and the use of new work structures at the shop floor level, such as teams combined with very few job classifications, that challenge the principles of 'job control' unionism.

Diversity across companies in industrial relations practices also is being spurred through the expansion of Japanese ownership and influence and the prominence of new models of worker and union participation. As Japanese companies became owners or co-owners (along with American company partners) of new assembly plants, the fact that virtually all of the solely-owned Japanese plants operated without a union introduced the threat of non-union operations to what had been one of the few remaining fully unionized sectors in the American economy. The presence of Japanese plants in the United States also gave impetus to the diffusion of 'lean production', a Toyota-derived model combining new manufacturing methods such as just-in-time inventory systems and statistical process control with new human resource practices focused on worker motivation and multiskilling. Meanwhile, the extreme form of worker and union involvement (even in business decisions) that emerged in the expanding Saturn facility, a subsidiary of General Motors, was viewed by many as an American alternative to (or extension of) lean production, and quickly attracted both proponents and opponents among management and union ranks.

Variation in employment relations in the auto parts sectors includes pressures similar to those found in the assembly sector plus more extensive growth in non-union employment. Linked to the deunionization occurring in the auto parts sector is the spread of low wage employment practices.

Before describing these recent developments in automotive industrial relations more fully, the industry and its innovative history of labor-management relations are reviewed. The next section includes a description of the primary parties involved in U.S. automotive labor relations: the unions and the companies. Subsequent sections then focus on the changing nature of industrial relations in the auto assembly and auto parts sectors.

Unions, Companies and the Competitive Environment

The Unions

The United Automotive Workers (UAW) is the primary union representing workers in the auto industry. The International Union of Electricians (IUE) also represents some hourly auto workers (primarily in the electrical product parts plants). By the late 1940s the UAW had organized all hourly workers in the companies that assembled cars and trucks. Until 1985, the UAW was an international union as it included Canadian auto workers. …

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