The End of Detroit (27 page)

In Alabama, just before the exit for the Mercedes plant, there is a big billboard. Like the three-pointed star atop the visitors’ center, the sign is illuminated at night and is impossible to miss. “Sixty-five years of progress. Standing together as one,” declares the sign, which carries the seal of the UAW. It is a visible reminder that the union hasn’t given up its efforts to organize these factories. And by rights, the Mercedes plant ought to be the one that it is able to unionize the most easily. As part of the merger that created DaimlerChrysler in 1998, the UAW gained a seat on the company’s supervisory board. Chrysler workers in the United States and Canada are unionized, and it seemed logical that Mercedes would be next. Moreover, Mercedes’s plants in Germany are all unionized, so the company has plenty of experience in that regard.

Yet the UAW hasn’t succeeded, either here or at any of the independent factories owned by import auto companies in the United States. The UAW has been defeated in elections at both Honda and Nissan—four times at Nissan alone—and has never called a vote at Toyota, though it has had an organizing office there for years. Bob King, the UAW’s thoughtful vice president in charge of organizing, said after the latest defeat at Nissan in 2001 that the company had engaged in a campaign of “fear and intimidation.” And indeed, Nissan made a concerted effort to defeat the UAW. Even Carlos Ghosn stepped in with an appeal to workers on videotape. But what keeps the UAW out of these plants isn’t the tactics by the companies. It is the fact that workers aren’t convinced that a union would make things any better for them.

The absence of the UAW is the primary difference between Detroit-owned factories and the new plants built in the United States by foreign companies during the past 20 years. By and large, the aging brick facilities that the Big Three companies made do with as recently as the 1990s have been shut down and replaced with newer facilities. Even the factories built in the 1970s and 1980s, when Detroit companies went on a plant-building spree, have been thoroughly renovated. To a casual visitor, walking the floor of a Detroit factory seems just the same as visiting Honda’s plant in Marysville, Ohio, the Nissan factory in Smyrna, or Toyota in Georgetown. The plants all use robots to assemble their car bodies, and they boast highly automated facilities to paint them. On the assembly line, workstations are organized and labeled according to the tasks that are performed there. The ability to stop the line by pulling on an overhead cord, called an andon, which was once exclusive to Japanese companies, has been instituted in the Detroit-owned plants. Just as they do at the Detroit companies, workers go through training classes and meet in groups to discuss ideas to improve their daily tasks. In a sharp contrast to the past, when the path to a powerful job lay through finance or marketing, the Big Three companies all have men in key positions who were trained in manufacturing, such as Gary Cowger and James Padilla, who head North American operations at GM and Ford, respectively.

But the presence of the UAW is what keeps Detroit companies from achieving the efficiency of the transplant factories in “Detroit South” and elsewhere. This obstacle is best defined by a thick book that contains the UAW’s master agreement with each company. In it lie definitions of job classifications and staffing requirements across the plants, as well as the holidays, vacation pay, pensions and other benefits that the UAW workers receive. In addition to the master agreement, there are individual contracts for every assembly plant. All these pages add up to additional cost and complexity that the transplants simply don’t have. They also cut into the speed with which information gained on the factory floor can be transmitted to people upward in the organization. It’s hard to quantify with any certainty just how many additional jobs this means. But Russ Scaffede, the former manager of Toyota’s engine plant in Georgetown, estimated that it was a significant number. Scaffede, who worked at GM before joining Toyota, said that because of the GM contract with the UAW, he would have to have three workers on a GM assembly line to every one at Toyota. Along with more jobs, the UAW contract creates another obstacle: a barrier between the workers and managers. Committeemen are still a part of UAW-represented plants, handling concerns and filing grievances with the company. Often, hundreds of such complaints are open at any time between workers and management. There’s little motivation to solve the complaints as they arise, because they can be a bargaining chip between the union and the company at contract time. The national UAW agreement does not allow company-wide walkouts except when the contract expires, but workers can stage local, or “guerrilla,” strikes over certain local disputes, such as when leaders feel their health and safety is in jeopardy.

And such areas might be logical places where the UAW could center a case for representation at some of the older transplant factories. Georgetown, Marysville and Smyrna are showing their age, and the novelty of working for Japanese companies has evaporated 20 years on. The pace of the assembly line is relentless, and the pressure to always become more efficient adds a factor of stress. Yet, despite an atmosphere that is at least conducive to an organizing drive, the UAW hasn't been able to convince workers in these plants to join its ranks. Given that failure, the UAW stands even less of a chance at the brand-new factories in Detroit, where workers are eager to have these high-paying, prestigious automotive jobs.

Over the years, Mercedes employees have gotten used to being stopped in the grocery store, the bank or in a shopping mall by people who spot the company logo on their clothing, a giveaway of where they work. It’s common to spot workers in Detroit-owned plants wearing UAW shirts, pledging their loyalty to their brethren above the company. But throughout the Mercedes plant, managers and hourly workers alike dress in an array of chambray shirts, sweaters, sweats and golf shirts embroidered with the three-point star. The attire, called “team wear,” results in a casual, upscale atmosphere that is more like the members’ grill at a country club than an auto plant. It also eliminates any visible distinction between boss and employee, since everyone is dressing alike. That is a subtle way to get across the message that Mercedes is one big family and that outsiders needn’t intrude.

A more direct way is through the plant’s team representatives, who serve as problem solvers for disputes between the workers and management. These employees serve as de facto committeemen, except for the fact that they are attached to Mercedes’s human resources department. Arthur Williams, team representative for the plant’s body and paint department, said he believed workers and management are “all one team” but that differences sometimes need to be ironed out. “Our team members come to work wanting to be successful,” said Williams, who is also an ordained minister. He has been trained in nearly every aspect of building a Mercedes—“I can do everything but paint the car,” he says with a smile—and he said the best solutions to Mercedes’s problems come from the workers themselves. “There’s never any blame laid. If there’s a problem, you go back in and try to find a way to fix it. Nobody is looking at someone to point the finger at. If there’s a flaw, you want to be part of the solution,” Williams said. Bill Taylor, the plant’s president and chief executive, said that relying on workers for input, rather than imposing ideas on them, has been a key part of Mercedes’s operating principle. “Technology is exactly the same in the industry. You can buy technology. But deployment of the people and giving them the challenge has unleashed this organization,” Taylor said.

That philosophy, expressed by executives at many of the transplant auto factories, has been a key to keeping the UAW out, said Gary Chaison, professor of industrial relations at Clark University in Worcester, Massachusetts. “What the plants are emphasizing, very importantly, is first-line communication,” he said. “The transplants have said to themselves, ‘Employers create unions. Unions can only organize in an atmosphere where we allow it.’” Chaison said the UAW’s two major selling points—better economic conditions and a voice for workers—simply are ineffective in the case of the auto plants. Toyota, Honda, Nissan and the others have been very diligent in pegging their wage and benefit plans to those of the Big Three. The transplant companies pay salary rates of about $25 an hour, which is within range of those earned by a typical worker at GM, Ford or Chrysler. (The exception is temporary workers, hired for the summer or for specific projects. At Honda, they earn half the hourly rate.) Generous even by northern standards, the income is enormous for workers in low-wage southern states. “They’re comparing themselves with Wal-Mart, and they’re comparing themselves with what their fathers earned, and with clerical jobs in those towns,” Chaison said. “The workers understand what’s going on. Among the southern workers, the realization is ‘You can build the car, or you can fix it’ and they’d much rather build it.”

As for job-security guarantees, the centerpiece of contracts with the Detroit auto companies, workers in the South understand that their best guarantee of a job is to build a vehicle that sells, Chaison said. They’ve watched for years as Detroit car plants closed and as steel mills and textile factories shut down. By contrast, the vehicles built by import auto companies remain in demand, the best job assurance that any of these workers can expect. Even Ron Gettelfinger, the UAW’s president, acknowledges the fierce challenge that the imports pose to jobs at Detroit companies, saying the UAW isn’t “living in a cocoon” and ignoring reality. “We’re telling you guys to get in there and design some competitive vehicles. That’s what it takes,” he said in a March 2003 speech to the Economic Club of Detroit, composed of the city’s business leaders. “We wish there were more products and we wish you’d turn them around in a quicker fashion. We’ve got to get those vehicles out there.” But unless Detroit can do so, and unless the relationship between workers and management changes dramatically at the import companies’ plants, the UAW is dealing with a lost cause. And Detroit South will undeniably grow in influence. Said Chaison, “The American mark on the auto industry is basically gone. The Big Three have to compete instead of making appeals. They are now fully exposed to the international players, and there is nothing that they can do about it.”

But in the past, the UAW has helped the Detroit companies resort to political means to battle the imports. And one question being kicked about in offices, in dealerships, at industry affairs and at other venues is whether there is anything Detroit can do, in the legislature or in the courts, to prevent the imports’ further expansion in the United States. Would there be support in Congress, the federal agencies, or the White House to keep foreign-based companies from gaining more market share? Can Detroit fire another salvo like the 1982 voluntary restraint agreement that limited sales of imported vehicles in the United States and forced the companies to build plants here? This time the answer seems to be probably not. The longtime fear among import companies that Detroit will block them from growing has abated. If it had not, Toyota senior vice president James R. Olson, who joined Toyota from Ford in the 1980s, would be among the first to say that the imports are still in danger. One of the most outspoken executives on the import scene, it fell to Olson, as Toyota’s Washington lobbyist in the early 1990s, to defend his company from charges that it was dumping minivans on the U.S. market. Later on, Olson helped the import companies defeat an effort in Congress to restrict sales of Japanese vehicles, including those sold in the United States. He has matchless political instincts and has never stopped looking over his shoulder. But significantly, Olson is resting easier these days. He senses that overt protectionist moves are a thing of the past. “I don’t see how legislatively they could do it and justify it,” Olson said. “We’ve crossed the threshold.”

Olson believes the danger has passed for a number of reasons. First, the Big Three are no more, thanks to the merger of Chrysler with Daimler-Benz, which created DaimlerChrysler. The collective clout that GM, Ford and Chrysler wielded as recently as five years ago is dissapated. It would be next to impossible for Chrysler to support any action that would sanction foreign-based companies, because now it is owned by one. Further, Chrysler’s siblings under the DaimlerChrysler umbrella include Mercedes, Mitsubishi and Hyundai. It couldn’t back legislation meant to stall European, Korean or Japanese companies without causing a familial squabble. And if Dieter Zetsche and Wolfgang Bernhard are serious about moving Chrysler’s image away from that of Detroit, it would look hypocritical for them to band together with their Detroit brethren to take on foreign competitors. Chrysler’s credibility would be on the line, and its legal ability to do so would probably be in doubt.

GM and Ford, meanwhile, both have poured billions of dollars into investments outside the United States during the past decade—GM building new factories in Brazil, Hungary, Poland, Argentina, Thailand and China. Each company has import brands that are sold in the United States: GM owns Saab along with a share of Fiat, and it controls Daewoo, while Ford has a whole collection of import brands, beginning with Mazda, of which it has ownership control and a 34.5 percent stake. Ford also has the Premier Automotive Group, including Volvo, Jaguar, Land Rover and Aston Martin. What would be the point of protecting Ford, Lincoln and Mercury to the detriment of a more prestigious brand that Ford eventually hopes will earn big profits? All that is aside from the extensive foreign operations that Ford and GM have in Europe, Latin America and, increasingly, Asia. Both GM and Ford, along with DaimlerChrysler, are urgently expanding their operations in China, which may become the next automotive superpower by 2010, if it can get past a business slowdown posed by the outbreak of severe acute respiratory syndrome, or SARS. GM is already talking about exporting engines from China to be installed in cars sold in the United States. Many people in the industry expect that Chinese-built vehicles will not be far behind, not only from the Detroit companies but also from Japanese and Korean companies who are looking at China as a production source. If that happens, there is no way any of these companies could support efforts to limit production by American workers—it would look downright unpatriotic.