I
n the midstof the first-ever strike by General Motors workers in
Flint, Michigan, in 1936, an advocate for the carmaker called the
firm “a big family of 250,000 people” in which strikes were alien.
Homer Martin, then-president of the United Auto Workers (uaw),
retorted with a phrase sizzling with the class consciousness of the
era. gm, he said, was “the kind of family where father eats the ba-
con, mother eats the gravy and the kids can lick the skillet”.
Once again, gm’s family values are under attack. A strike of
46,000-odd workers demanding better treatment, now into its
third week, is the company’s longest since 1970. Some see it as a
sign of a long-overdue rebalancing of American capitalism. Public
support for unions in America is among the highest in half a cen-
tury, according to Gallup, a pollster. Last year more Americans took
part in strikes and lockouts than in any year since 1986. Low unem-
ployment has increased the clout of workers after a precipitous fall
in their share of national income since the 1990s. Terry Dittes, the
uawofficial heading the gmstrike, told the New Yorkerthat with
corporate profits and executive salaries in America at an all-time
high, “there’s something bigger brewing here.”
Yet if the gmstrike shows anything, it is how America’s econ-
omy has transformed since the days when industrial firms and
blue-collar unions called the shots. That past was at times glori-
ous. The 1936 strike in Flint led to the unionisation of gm. The
Treaty of Detroit in 1950, between the uawand gm, offered full
medical benefits to workers. But in time unions and industry start-
ed to drag each other down. The unions’ victories made carmakers
less competitive. As two sociologists write in a new book,
“Wrecked”, the carmakers responded to organised labour by mov-
ing away from Detroit, lest strikers turn it into a choke point. That
weakened the unions’ bargaining power—but also the carmakers’
productivity by pushing them away from innovation clusters.
Meanwhile, America’s economy has become tech-centric, making
20th-century industrial relations look like a relic. As such, the bat-
tle between gmand the uawmay be one of the last gasps of a form
of collective bargaining that seems obsolete in the 21st century.
The strike itself is mostly about pay and health care. Pay, his-
torically a big bone of contention, is the easier part to settle. Since
its bankruptcy and bail-out in the financial crisis of 2008-09, gmhasbecomeDetroit’smostprofitable car company, with earnings
last year of $8bn. Workers, who made sacrifices in the lean years,
receive a share of those profits. They think they deserve a bigger
one. The uawsays that Mary Barra, the firm’s boss, makes 281 times
as much as an average gmworker. gmprobably has enough dosh to
offer them a pay rise that would narrow this gap, which many peo-
ple, not just the uaw, find outrageous.
Health-care costs are a bigger headache for gm. Its workers pay
just 4% of their medical costs, a pittance by the standards of cor-
porate America. Like other carmakers, gm is desperate for them to
foot more of the bill, which is swelling as workers age and Ameri-
can health care grows pricier. The same rising costs mean that
many workers would struggle to pay for treatments out of pocket.
But not all Americans will sympathise. The uaw’s battle on behalf
of a blue-collar aristocracy, many of whom earn around $30 an
hour, loses emotional appeal compared with McDonald’s burger-
flippers fighting for a $15 minimum wage or Uber drivers demand-
ing the barest of benefits. (It doesn’t help that several uawbigwigs
have of late been convicted for corruption.)
For all its profits,gmis in a precarious state, too. Last year Ms
Barra, a company lifer, unveiled a $6bn-a-year savings drive. It in-
volved shedding up to 14,000 jobs and shutting factories in North
America to focus on making high-margin suvs and trucks, as well
as developing electric vehicles and self-driving cars. She sees dis-
ruption barrelling down the freeway from rival carmakers but also
tech firms investing in autonomous vehicles. To stop gmfrom be-
coming the next Studebaker, she is determined to curb the firm’s
reliance on old factories and wants to be able to shift output up and
down as needed by hiring temporary workers. That requires rela-
tions with the union to be more flexible than they have ever been,
says Patrick Anderson of Anderson Economic Group, a Michigan-
based consultancy. gm’s very vulnerability over the future of the
vehicle reduces the union’s leverage.
Across America, private-sector unions are struggling. Member-
ship has fallen from 30% in the 1950s to just 11%. Among private
firms it is less than 7%. Tech firms are non-unionised. Industrial
concentration has made things worse. Workers’ threats to flee to a
competitor are less credible when there are fewer rival employers.
Some in the Democratic Party hope to revive the fortunes of the
traditional union. But it seems more likely that new forces are at
work in the relation between capital and labour. Employees of big
firms are “self-organising” via social media, often around issues
alien to union bosses of old. One group, United for Respect, has
successfully badgered Walmart, America’s biggest private employ-
er, into changing its pregnancy policies and offering more family-
friendly schedules—areas that male-dominated unions ig-
nore—as well as better pay. Another, Coworker.org, enables people
to press their employers on issues ranging from parental leave to
climate change through online petitions. Last year Google was per-
suaded to drop out of a lucrative tender to provide the Pentagon
with artificial-intelligence software after moral objections from
its coddled coders.Between the frying pan and You’re Fired
Such “bursts of expression”, as Andrea Dehlendorf, co-head of Un-
ited for Respect calls them, may one day become what strikes were
in the 20th century—the norm. Unions should take note. So
should companies, which can be skewered over an expanding
gamut of gripes. Tired of licking the skillet, workers are finding
new ways to brandish it. 7Schumpeter Licking the skillet
The General Motors strike is an anachronism. But workers are finding new ways to exert their clout60 Business The EconomistOctober 5th 2019