A tale of two crises: labour, capital and restructuring in the US auto industry

Nicole M. Aschoff

Abstract


Much of the global auto industry went into a well-documented free fall following the 2007 financial meltdown. The US market was hit particularly hard. The collapse in credit for dealers and consumers combined with skyrocketing fuel prices and wary consumers led to an evaporation of demand. US assemblers saw sales drop 50 per cent and foreign assemblers 40 per cent in 2009 to settle at an almost 30 year low of 10.4 million vehicles in the US. Chrysler and General Motor’s (GM) bankruptcy filing that year seemed to signal the long prophesied downfall of Detroit. Citing the negative economic repercussions of the industry’s collapse, the US state threw the assemblers a lifeline, trading financial assistance for reorganization. GM and Chrysler emerged from bankruptcy with fewer plants, dealerships and brands, a new ownership structure, and a mandate to produce smaller ‘greener’ vehicles. In the process unionized autoworkers became partial ‘owners’ of the ‘new’ automakers and agreed to sweeping concessions in wages and benefits that put them on par with non-union assembly workers in the US.

While the financial crisis and ensuing auto crisis did force significant change upon the industry, these changes do not represent a fundamental break from the past. Instead, the primary consequence of the crisis has been to accelerate and reinforce ongoing processes of capitalist restructuring, largely at the expense of autoworkers. The Detroit Three in partnership with the US government exploited the doomsday atmosphere surrounding the crisis to push through concessions that fundamentally undermine the power of the United Auto Workers (UAW) to protect and improve the working lives of its members. Hence, the crisis has had divergent consequences for capital and labour. For capital it has triggered a rapid restructuring and the restoration of profits, while for workers it has compounded the precarious position of unionized autoworkers by reversing decades of hard-won gains. To better understand the crisis and its differing consequences for capital and labour, it is necessary to situate it within an historical context. Doing so allows us to gain a clearer perspective on the nature of the crisis and, importantly, explore possible avenues for workers to regroup and fight back.

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