Wednesday, September 8, 2010

Revenge Motive: The 1998 U.A.W. Strike and the Future of Flint

Last week, I had an interesting discussion with a Flint Expatriate who still works in the automotive industry. We talked about the reasons G.M. abandoned Flint, covering the list of the usual rationales, including cheaper labor elsewhere, etc. But he also mentioned a motive I've never really heard before — revenge. Specifically, revenge for the 1998 strike that started at the Metal Fab Center and spread to Delphi East. Before it was over, the strike lasted 54 days, cost G.M. $3 billion in lost profits and $12 billion in sales. It closed 27 of G.M.'s 29 assembly plants and over 100 parts plants in the U.S., Mexico and Canada. While both sides made concessions to reach a settlement, he said, G.M. never forgave Flint, and the corporation abandoned any hope of maintaining a large presence in the city where it was created.

Has anyone else ever heard this theory before? I'm just wondering how prevalent this idea is in the Flint area. Is this something people believe or talk about? I was not really writing or reporting about Flint in 1998, but I was surprised that I'd never heard it before. Wondering if it's just one person's conjecture.


18 comments:

  1. You could say that, but I wouldn't call it revenge. GM's Flint workforce seems to be very militant. Once stung, twice shy. I was born and raised in Flint, now living in northern Michigan. I'm somewhat familiar with some of the issues. It makes sense to me that GM would want to move much of the operations out of the Flint area. The plants were aging, work ethic was bad, workforce was militant. All the wrong ingredients for a successful manufacturing plan.

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  2. Yeah, that was my thinking on it as well. If there's a region where the union is militant, why wouldn't management target that region when they wanted to make cuts? Seems more like a Machiavellian business decision than an emotional pay back for the strike, although maybe it's a mixture of both.

    But I'm also wondering if this is a commonly held belief. Ever heard it put this way before?

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  3. I have heard some say that the unions got too strong for GM to survive. I wouldn't necessarily say they were implying retaliation for strikes, but it's certainly not good business practice to be at a union's mercy for 2 months when there are other people in foreign countries that will gladly work for less.

    That sucking sound was spoken about in '92 wasn't it? So foreign factories were already being considered to save costs (or break unions). Perhaps '98 was the last straw?

    In any case, I have heard people say "unions drove GM out of Flint"...

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  4. Gm was mostly pulled out of Flint or had plans to by the 1998 Strike. I have heard this as the theory though many times. I think it may have been the last straw that reinforced GMs view of the workers. There were many places in the country where workers felt lucky to get a job with GM. Flint workers EXPECTED GM to give them a job. They felt it was their right to work for GM, not their priveledge. I spent many years in the plant around some very lazt people. There were thousands of hard workers, but the few hundred lazy ones (that were most likely to try and get the Union Rep jobs) wanted everything for doing nothing. GM got sick of it and moved out. The union built Flint, but it killed it too.

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  5. Maybe a mixture of both geewhy. Had a lot of relation at GM Flint. Some line workers and others in top supervision. Two brothers at level seven and when they were both retired said the same thing, "UAW better be ready to start ducking some big punches". Flint's manufacturing operation had some old shoes that were being replaced elsewhere to save the company big bucks. The issues that anonymous brought up were all important ingredients for this recipe of change.

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  6. I work in IT for the GM MFG plants and I've not heard this theory before. I mean it makes sense when you think about it but I've never heard it proposed as an explanation for the GM exodus. But GM has also put more money into Flint recently and I doubt they'd do it if they had some agenda of revenge. There were plenty of other places they could have built. Even in Michigan.

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  7. My dad was a union rep in 1998 at Delphi East when the strikes happened. I've heard this story before. Apparently, after the metal plant went on strike, Local 651 (Delphi) decided to strike as well. From what my dad said, Rick Wagoner called Don Beauchamp, who was the head of Local 651 at the time (or even higher up; I can't remember). In that conversation, it was stated that if Delphi East went on strike, they would be shut down within a few years. The strike happened, and though it took longer than a few years, most of the plant is gone now.

    There was a definite fear back then every time contract talks came up. I remember worrying that my dad was going to lose his job, or that the plant would close completely. I actually remember rooting for Delphi West to close, if that meant that East would stay open. Granted, I was 14 in 1998, and didn't realize that different things were built in each plant.

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  8. Well, I think they've closed most of the plants in Lansing now too, and many in Detroit.

    I remember back in the 1970s when the academic mantra began that autoworkers were overpaid. Well, they got their wish. College tuition has skyrocketed. Universities accept out of state and foreign students for the extra revenue. But with the Internet potentially displacing professors, they may face the same fate soon. They should have kept quiet.

    The thing about being overpaid is that the money doesn't burn a hole in an overpaid worker's pocket. They support all kinds of other businesses.

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  9. I have saved a Detroit Free Press from June 29th 1998.Some quotes:Flint is destined to become just a truck stop on I-75,GFM would be crazy,absolutly crazy to build a new plant in Flint,welcome to flint mi,the quintessential company town that is stuck in a time warp slammed the LA times on June 12th in an article about the strike.While much of the world moves forward,this hard luck center of union might and minitancy finds itself stuck on the picket line.

    sometime in that era, I read a story about a GM exec visiting Buick to announce a major investment in the paint operation there.Because a company with the expertise in this field was hired a small handful of Buick guys picketed or otherwise harrassed the guy,that he was furious and went back to Detroit and said screw Flint.

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  10. Revenge is a tactic for the organized and the able; neither of which is General Motors.

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  11. It's been commonly discussed for decades that GM senior management kept notes as to which locals were corporate-profit-focused, and which weren't.

    It's been suggested many times that that was the ultimate driver of the closing of Buick City's assembly operations instead of Lake Orion, Hamtramck or Wentzville. The company could afford to rebuild plants, even choosing an older one over a newer one. It couldn't buy labor attitude and cooperation, though.

    It's always been easy to run numbers to show that, in an apples:apples comparison in which average worker annual compensation is held equal, cooperative plants make the company more money and also turn out better product.

    Thus Flint still has the truck plant complex.

    It was a hard-learned lesson for the UAW on what's required to succeed in the trade-union business. American industrial unions have been hugely strategically unsuccessful as businesses over the past five decades, in failing to foresee and take actions to keep their membership-providers profitable, and in particular in failing to develop consistent means of guiding their members' attitudes and understanding of who their actual opponent is.

    In a history of the American industrial decline, Flint will be an obvious case study.

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  12. Going back a step further, how about the Buick City strike a few years earlier. As I recall, the issue was whether internal GM skilled trades or unionized construction trades would build an addition/renovation. The battle was won by the skilled trades but the war has been long lost. (Both the leaders of these disastrous strikes moved up the UAW ladder.....)

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  13. My dad was Superintendent of Labor Relations at Fisher Plant #2 in the early 60s. I remember well his overwhelming frustration in negotiating with the union. So much so, that he dropped dead of a heart attack in the hallway outside his office December 14,1964 in the midst of "round-the-clock" negotiations with the UAW.

    GM and the union must both share some of the blame here. But, the militancy and entitlement mentality of the unions has always been a problem for me. Justified as it may have been at the time, the original sit-down strike gave birth to the inevitable.

    You may disagree with me. That's fine. Just my view from here.

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  14. I think that many of the comments already made come pretty close to the truth that the big work stoppage was a major factor for GM's pullout, but GM would never officially admit it. My personal experience with two other corporations at other cities reflects that when a company has enough of labor strife they decide that it just isn't worth it to stay.

    Consider what a potential employer coming in to an area looks at: adequate transportation infrastructure, decent housing, good schools (this is a biggie, I remember turning down a very good job, because the city involved had a lousy school system available for my young kids), affordable wage pattern, trainable work force, affordable taxes, business friendly environment, law abiding population and a reasonable labor relations climate. A history of confrontational and toxic labor relations in area will chill the deal, no matter how good the other factors are found to be. Where do you think our old friend Flint (and other similar areas) would fit? There are many cities and states with great credentials just begging new employers to come in.

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  15. Heard this years ago, although with different variations on which straw broke the camel's back.

    For some sobering insight, try to find out what that strike was even about.

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  16. The strike was because GM went in the middle of the night and removed dies, and tooling for the GMT800 project from Flint Metal Fab.

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  17. I knew in 81 that unions were the reason I had to leave Flint and Michigan altogether. I never dreamed of moving. But look at most of us now, we live somewhere else. And I bet you don't have a union job either. The top union guys still have their jobs. Right?

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  18. Think Flint and the Unions are bad? Look what's happening in Ciudad Juarez (just across the river from the West Texas Town Of El Paso). I remember when they built a whole new computer controlled assembly line next to Plant 4 at Chevrolet Flint Manufacturing. They "invested" $80,000,000. Once they had it up and running, they moved the whole thing to Mexico. The Unions aren't the only ones that make bad decisions.

    http://www.dailyfinance.com/story/ciudad-juarez-from-boom-town-to-ghost-town/19440415/

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