Not Like the Old Days : GM, Union No Longer Wield the Same Clout

Back in 1970--before “downsizing” and “global competition” became fear-inducing buzzwords--the United Auto Workers union launched a doozy of a strike at giant General Motors Corp. over wage and pension issues. By the time it ended 67 days later, lost production at operations from car assembly plants to advertising agencies had pushed the nation into recession.

Now that’s clout.

Despite its still elephantine proportions, GM--and its work force--no longer wield such power, economists and labor experts said Thursday after company and union officials announced a tentative settlement after a 17-day trike at two Dayton, Ohio, brake plants.

“It used to be: What’s good for GM is good for the nation,” said Diane Swonk, an economist at First Chicago NBD. “That’s not so anymore.”

Much has changed, after all. Although GM is still the nation’s biggest company and auto manufacturing remains a powerful force, the industry clearly is no longer the engine driving the U.S. economy. Health care is a bigger industry; computers and software are more dynamic.

Given the recent decade of declining fortunes at GM, when it withered in the face of competition, it is startling to recall that the federal government in the 1970s was seriously talking about breaking up the company on antitrust grounds.

In the early ‘70s, GM owned 60% of the U.S. auto market, a share that has tumbled to about half that today. GM back then accounted for 2% of the U.S. economy and 10% of U.S. manufacturing, but those numbers too have been halved. A quarter of a century ago, Japanese auto makers were a blip on the horizon instead of the powerful force they represent today, along with other “transplants” from South Korea and Germany.

Investment analysts estimate that the strike by 3,000 UAW members in Dayton has cost GM, which recently reported record earnings, about $50 million a day in lost profit. The action shut down 26 of GM’s 29 North American assembly plants and idled 177,375 workers (compared with twice that number in 1970). However, GM is expected to make up much of the lost production in the next quarter.

A key point of contention was the widely used practice of outsourcing--or buying parts from companies other than GM. The auto maker has argued that it needs more flexibility to buy parts from outside suppliers so that it can cut costs. Union members say the practice reduces jobs.

Thus the strike’s importance is less its economic effect than its role in spotlighting a labor-management issue that transcends the car industry. “The impact of the strike is much more symbolic,” said Thomas Kochan, an industrial relations expert at the Massachusetts Institute of Technology. “Workers,” he said, “are getting fed up with seeing their jobs go away. It’s clearly a signal to both the company and the union that these issues have to be dealt with on an ongoing basis.”

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To be sure, the strike hit the industrial Midwest hard, and the ripple effect could have been far more severe had the action dragged on.

One silver lining of overseas competition is that Japanese auto and parts manufacturers have created nearly 140,000 U.S. jobs. In Battle Creek, Mich., for example, as many as 25,000 jobs have been created at an industrial park where Japanese firms have clustered.

Of course, those operations are not represented by unions, and that’s another big piece of the GM story. Having peaked at 1.5 million members in 1978, when it also represented a huge chunk of the defense and aerospace industries, the UAW has shrunk to 800,000. In its relatively long 30-year heyday, the UAW pioneered the 40-hour workweek, paid vacations and health benefits. But these days there doesn’t seem to be a similarly progressive labor group emerging to carry the flag.

If anything, things seem to be heading in reverse. GM has lost 180,000 jobs since 1985. And in Dayton, workers had grown disgruntled over having had to work six-day weeks for 18 months because GM refused to hire replacements for employees who left.

“It’s a far more complex economy now,” said Sean McAlinden, an economist with the University of Michigan. “It’s a far more complex country. It’s a different world.”

Times staff writer Stuart Silverstein and wire services contributed to this report.

* ACCORD: GM, UAW reach tentative agreement. A1

* CROSS-BORDER LINK: Strike was felt across Mexico. D2