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Made in (Deunionized) America: Despite Closings at Ford, GM, and Delphi, New Auto Parts Industry Springing Up in Michigan

Industry experts from Wall Street to Washington are busy writing the obituary of the U.S. auto industry — but someone needs to tell the Motor City.  In sharp contrast to the current wave of buyouts at Ford, General Motors, and Delphi, new auto parts plants continue to spring up across Southeast Michigan.

Conditions in these plants — mostly non-union — bear little resemblance to those at the Big Three automakers.

HOPE FOR DETROIT?

Hope Global is an important (or “tier one”) supplier of small parts to Lear and the Big Three.  In the small shop located just outside of Detroit, workers — including many Mexican immigrants — do the difficult job of building auto interiors by hand.

Earning around $10 an hour with few benefits, employees complain of harsh work conditions.  Immigrants in the plant report that they are expected to work harder — and produce more — than their co-workers.

When Hope Global workers attempted to organize with the UAW, union supporters and outspoken leaders were fired and intimidated.  Workers took their concerns to Centro Obrero, a Detroit-based worker center that focuses on immigrant worker issues.

Centro Obrero organizer Elena Herrada says that the conditions she saw at Hope Global weren’t out of the norm in the multiple non-union shops populating Southeast Michigan.  “Hope Global is a symbol of the symptoms in the industry.  This is the last outpost for U.S. auto parts jobs: either we organize them or we shut them down.”

THE RISE OF THE PARTS INDUSTRY

Hard times at the Big Three and the booming non-union auto parts sector are two sides of the same problem, as profit-hungry auto makers have found outsourcing an effective way to erode union-won wages and benefits in the auto industry.

The numbers paint a stark picture.  In the early 1980s close to two-thirds of all auto workers were union.  By the early 1990s that number had fallen to half.

Unfortunately for the UAW, as auto sales and auto employment picked up during the 1990s, union membership declined just as rapidly, thanks in large part to the expansion of non-union auto parts production.

Three-quarters of the new jobs created in the 1990s were in the parts industry, and the Big Three only heightened the importance of this sector with the high profile spin-offs of American Axle, Delphi, and Visteon.  By 2000 only 37 percent of auto workers were union, and the current crisis at the Big Three has only made things worse.  Today, just under 30 percent of the country’s auto workers are union.

The rise of non-union plants was the elephant in the room when UAW leaders agreed to a two-tier wage scale at Delphi and Visteon in 2003 contract negotiations.  Delphi CEO Steve Miller framed the issue bluntly when the company declared bankruptcy last October:

Delphi was saddled with OEM [original equipment manufacturer] wages and benefits, yet expected to compete with other suppliers, often organized by the same unions, paying less than half the OEM levels for their workforces.

Miller’s proposed solution was to cut Delphi wages by 60 percent, down to $10 or $12 an hour.

NEW GROUND

Lotus, another small non-union shop outside of Detroit that produces TV screens for the automobile industry, has been the site of even more intense conflict.  This summer the largely immigrant workforce walked off the job, claiming that Lotus only paid them for 40 hours a week when they typically worked 60 to 80.

Centro Obrero is helping 30 workers who were fired for the walkout file a lawsuit against Lotus for back wages.  Herrada says that large marches of immigrant workers this spring helped workers take a stand: “It’s a sweatshop.  Before the big march people would have never protested, but now they won’t accept these conditions.”

Skyway Precision, another non-union parts manufacturer outside of Detroit, employs approximately 100 workers, many of whom are immigrants.  When workers attempted to organize with the UAW, the company refused to recognize the union.

In response, the workers walked off the job March 1.  According to officials from UAW Region 1A, the company locked out the workers and re-populated the plant with scabs.

Unions like the UAW and worker center supporters struggle with organizing in the parts sector because it’s been easy for employers to isolate and intimidate workers in small shops, many of whom worry about their legal status.

Unions often shy away from waging battles in these small shops.  The fights are long and the potential membership gains, at least in the short-term, are small.  Labor activists outside of the union structure, like those at Centro Obrero, have stepped up to fill the void.

Herrada says that the tactics used against immigrant workers “are changing everyday.  This is cutting-edge organizing.”

Centro Obrero and the immigrant workers in the factories know that the only way to win in a constantly changing industry is to “continuously have high-profile protests and not let up.  The companies don’t know what they’re doing either — its new ground for everyone.”

The U.S. auto industry may not be dead, but if the situations at Hope, Lotus, and Skyway are any indication, the standard-setting wages and benefits pioneered by the UAW are in danger of extinction.


Tiffany Ten Eyck covers the auto industry for Labor Notes (www.labornotes.org) in Detroit.  Mark Brenner works as Labor Notes director in New York City.



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