Labor Analysts See Industrial Unrest Growing
Worker unrest is spreading in the nation’s manufacturing sector, and labor analysts say it could mark the beginning of a series of confrontations that could disrupt the nation’s vibrant industrial operations and cut into robust profits.
More than 47,000 workers at General Motors, Chrysler and Goodyear have hit the streets in recent days, demonstrating a renewed willingness to strike over jobs in the face of near-record earnings reports and soaring executive pay.
The latest walkout occurred at midnight Tuesday, when 5,900 auto workers walked out of a GM truck assembly and nearby parts plants in Pontiac, Mich., in a local contract dispute over factory staffing levels.
They join 3,500 GM workers in Oklahoma City who have been on the picket line since April 4. An additional 23,700 union workers have been idled at 19 plants, mostly in the Midwest, by a strike against Chrysler Corp., and 14,300 union members are on strike at 10 Goodyear Tire & Rubber Co. tire plants in seven states.
The labor disputes are being played out against a backdrop of rising union militancy as rank-and-file workers grow restive over what they see as meager wage and benefit gains after years of sacrifice. Meanwhile, management shows increased willingness to take strikes.
“These will not be the last strikes we see in the manufacturing industries,” said Harley Shaiken, a labor professor at UC Berkeley.
“This is indicative of . . . a buildup of resentment by people who have been working mad or working scared,” said Dale Brickner, a labor professor at Michigan State University.
Organized labor, under the direction of the AFL-CIO, has been promising a new aggressiveness and a renaissance. Major unions, such as the United Auto Workers and the United Steelworkers of America, are increasing organizing efforts and pooling resources for lobbying and research.
But the unions, whose ranks have been decimated by a decade of corporate restructuring and downsizing, face an uphill battle. There is continuing pressure on companies to cut costs and become globally competitive.
In fact, the willingness of these major companies to take strikes rather than give in to union pressure has been applauded on Wall Street. GM’s and Chrysler’s stock prices have gone up since the strikes began, even though second-quarter profits will suffer as high-profit products are not built.
“It’s pretty clear that management is not rolling over this time,” said David Cole, executive director of the University of Michigan’s auto transportation office. “They are taking short-term pain for long-term gain.”
All the current walkouts involve employment levels. In some cases, the unions want new hires to replace retirees or to curb recurring overtime. In others, they seek to block the movement of jobs to outside nonunion suppliers.
The most vulnerable of the auto makers appears to be GM, which is still struggling to trim its hourly work force to match the efficiency of competitors Chrysler, Ford and the Japanese. The company has told analysts that it wants to trim its hourly ranks of 230,000 by 5.5% a year for the next three years.
GM has been hit already this year by four local strikes, two of which have been settled. The auto maker still has not reached agreements on 26 local contracts, including several at key parts plants that could close most of its assembly operations quickly if hit with a strike.
Despite the labor disruptions, GM has turned its financial performance around. The company reported earnings of $1.8 billion in the first quarter, up 76% from a year ago when it was hit by a costly 19-day strike.
The labor disruptions at Pontiac and Oklahoma City will take a bite out of earnings. GM makes the popular full-size Chevrolet C/K and GMC Sierra pickups at the Pontiac plant. A prolonged walkout could be costly since GM makes up to $8,000 on each truck sold.
The main point of contention is the union’s demand that GM hire 600 full-time hourly workers. The UAW says the new hires are needed to relieve workers from overtime demands and from line speedups. GM has offered to hire temporary workers, who would be paid lower wages and benefits and have no job security.
GM’s Oklahoma City plant makes the just-redesigned Chevrolet Malibu and Oldsmobile Cutlass. The plant was modernized recently, requiring 900 fewer employees on the assembly line. GM said the union agreed to the cuts but has since demanded that 500 jobs be restored.
Unlike GM, Chrysler’s relations with the UAW are generally cordial. But a strike at a Detroit engine plant two weeks ago has since shut 19 assembly, parts and stamping factories. The strike has halted production of Chrysler’s hot-selling Jeep Grand Cherokee, and analysts estimate it is costing the company up to $20 million a day in lost profits.
The UAW walked out because Chrysler wanted to shift drive-shaft work to an outside supplier. The union said 300 jobs would be lost, but Chrysler said it guaranteed to find new work for any displaced employee.
The Goodyear strike began at midnight Saturday. It is the first strike against the company since 1976. The United Steelworkers union, which recently absorbed rubber workers, said the talks on a new three-year contract snagged on wages, job security and outsourcing--the practice of giving jobs to outside suppliers.
