Change, but in what Direction? Divergent Union Responses to Work Restructuring in the Integrated North American Auto Industry

Abstract

The internationalization of production and the emergence of Japan as the leading efficient producer of high-quality motor vehicles have created a ‘competitive crisis’ for the North American automobile industry.¹ In the past three decades its share of world production has declined from more than one-half to about one-quarter. Japan’s share of global production over the same period has risen from less than three per cent to 31 per cent. The deterioration in the competitive position of the traditional North American manufacturers (General Motors, Ford and Chrysler) has been even more dramatic in the domestic market. In a short span of a dozen years, between 1979 and 1992, their share of total retail sales in Canada and the United States slipped from nearly 80 per cent to 64 per cent largely due to the popularity of vehicles produced by Japanese auto makers. Japanese transplants (a term used for plants in North America owned by foreign-based companies) accounted for over 15 per cent of North American sales in 1992 compared to only one per cent in 1979. The competitive advantage enjoyed by the transplants in labor costs and superior productivity and quality performance² have raised serious questions about the future survival of the traditional segments of the North American auto industry. If the trans-plants continue to erode the Big Three’s share of sales, there are fears that the industry may be changed in ways which will create serious risks to workers and their unions.

The question in the title is taken from a recent speech by Buzz Hargrove (1993), the President of the CAW — Canada. The paper is part of a research study of diversity and competitive efficiency focusing on divergent labor relations responses to workplace flexibility, conducted by the two authors and funded by the Social Sciences and Humanities Research Council of Canada.