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GMs (General Motors) Collapse

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The collapse of General Motors will mark the death of a blue collar dynasty which bestowed upon generations of Americans the security of a job for life and a ticket to the middle class. "GM represented the good life," said Gary Chaison, a professor of labor relations at Clark University. "There was a social contract: you worked hard and the company would reward you with job security and good pay," Chaison said. "And this was something you could pass on (to your kids.) It was an inheritance."

In towns and cities scattered across the midwest, GM's sprawling plants and the businesses which cropped up to service them brought prosperity and stability. The United Auto Workers union won wages high enough to allow factory workers to own a home, a cottage, a boat, to take summer vacations in cars they bought with employee discounts. Their health insurance was paid for. Pensions would offer guaranteed income in retirement. They worked for the biggest corporation in the world.

That dream began to slip away in the 1980s, when GM began shutting down plants and shipping production to Mexico and Asia.

Once bustling company towns like Flint, Michigan -- memorialized in Michael Moore's documentary "Roger & Me" -- emptied and died. Abandoned houses and darkened storefronts transformed the once rich region into the Rust Belt.

GM employed 440,000 hourly workers in the U.S. in 1981. By 2000, that had dropped to 133,000. In the next eight years it would fall to 62,000.

The latest restructuring plan calls for the unionized workforce to shrink to 38,000 by 2011: less than a tenth of what it was two decades earlier.

But even through the downsizing and plant closures of the 1980s and 1990s, the workers who remained at General Motors were able to hang onto their high wages and benefits. That ended in the latest round of restructuring, which began in 2005 and ended with the union agreeing to slash benefits, cut wages in half for new workers, and even give up the right to strike until 2015.

"It could have been worse," said Doug Bowman, the president of UAW Local 594 in Pontiac, Michigan. Bowman has worked for GM for 30 years and has watched employment at his complex shrink from 14,000 in the late 1970s to 1,000 today. He's anxiously awaiting news about whether his truck plant will be among 14 GM plants slated for closure. But he's resigned himself to the massive concessions the union has made in recent years. "The one thing I regret is that we couldn't protect the retirees," said.

"We have no choice," said Jim Hall, another UAW official from Pontiac. "We have to vote for the concessions to help the company survive." But Hall hasn't given up hope. If GM manages to emerge from bankruptcy protection, which it is expected to seek in the coming days, Hall thinks some of jobs, and some of those benefits, might come back.

The hope is that, like Chrysler, GM will emerge from bankruptcy in a matter of weeks as a leaner, meaner company able to get back to the business of making cars and trucks.

But while the union is likely to hold a large stake in the new General Motors, its power to shape the American social landscape through sheer numbers is gone. "Certainly an era has ended," said Harley Shaiken, a labor expert from the University of California - Berkeley. "We're in uncharted waters."


1 Response to "GMs (General Motors) Collapse"
June 3, 2009 at 10:28 PM
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