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The Impact of Globalization

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The Unions’ Response to Globalization

Part of the book series: SpringerBriefs in Economics ((BRIEFSECONOMICS,volume 51))

Abstract

Globalization is defined and illustrated with the growth of the transplant automakers in the United States, the related decline of the Detroit Three automakers (General Motors, Ford, and Chrysler), and the subsequent collapse of the city of Detroit. The impact of globalization on union growth and collective bargaining, particularly for the United Automobile Workers, is described. It is shown how globalization challenges the fundamental union mission. A central question is asked—How can the unions best respond to globalization?

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Notes

  1. 1.

    Other politicians also seem to have forgotten about the global dimension of American automaking. In 2012, President Clinton, as he spoke before the Democratic Party Convention, claimed: “Now there are 250,000 more people working in the auto industry than the day the companies were restructured” (Gregory 2012, 1). But he neglected to mention that these jobs were mostly added by foreign-headquartered carmakers, parts suppliers, and dealers operating in the United States. These jobs were not, as the President implied, the result of the White House restructuring of the Detroit carmakers (Gregory 2012). A similar comment was made by Secretary of Labor Tom Perez in a Labor Day interview in 2013 when he mentioned that jobs had increased in the auto industry and implied that this was entirely the result of a federal bailout of the industry (On the money…. 2013).

  2. 2.

    In 2008, Ford sold Jaguar and Land Rover (both widely believed to be British nameplates) to Tata, an Indian industrial conglomerate (Neil 2013).

  3. 3.

    Globalization has become so pervasive that it was even made into the backdrop of a 2012 novel by John Martin entitled Lost Source. The novel’s plot is described by the publisher as “Two union leaders must take action over a strike against outsourcing American jobs that soon leads to a confrontation between the United States and China” (Martin 2012, backcover).

  4. 4.

    Chaison (2007) compares the impact of job losses in manufacturing, due largely to low-cost competition abroad, to natural disasters, such as hurricanes or floods, that call for emergency disaster relief for hard-hit communities. “Only comprehensive economic disaster relief has a hope of resuscitating the declining communities where manufacturing once thrived (Chaison 2007, 2).”

  5. 5.

    For a similar view, see Porter (2012).

  6. 6.

    Since 2010, auto production and sales have rebounded, reaching nearly 16 million cars sold in 2013 (Ramsey and Rogers 2013). To some degree, this rebound is a result of revived consumer confidence, but also the one-time-only sales needed to replace aging cars. More will be said about the possibility of an auto rebound later in this chapter.

  7. 7.

    The revival of the automobile industry could be cut short when and if the American consumer demand for autos declines, as reported by Maynard (2013b).

  8. 8.

    See Young (2013) for a discussion of the rebound of the auto industry.

  9. 9.

    As a sign of the shrinking overseas auto market, probably the most widely publicized Ford plant closing occurred not in Michigan but in Genk, Belgium, with a loss of 4,300 jobs (Ewing 2013b).

  10. 10.

    However, Walsh (2013, 2) also observed that the industry could slide into a decline in a few years, or even sooner, if sales started to fall (“as they inevitably will”), or when rivals buy back market share with generous rebates.

  11. 11.

    Also see Wheaton (2013) for a management perspective on the importance of the settlement.

  12. 12.

    For example, in 2013, the UAW reported that its membership had increased by 0.5 %, and actually reached the highest level in 5 years. Officers of the union admitted that its future growth would be dependent on successful organizing at the transplants’ factories (Naughton 2013).

  13. 13.

    Maynard (2013a) describes bankruptcy reports of the extreme degree of insolvency of the city of Detroit.

  14. 14.

    On October 10, 2013, former Detroit Mayor Kwame Kilpatrick was sentenced to 28 years in prison for criminal conspiracy, leading to Detroit financial collapse (Dolan 2013c).

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  1. Clark University, Worcester, MA, USA

    Gary Chaison

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Correspondence to Gary Chaison .

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Chaison, G. (2014). The Impact of Globalization. In: The Unions’ Response to Globalization. SpringerBriefs in Economics, vol 51. Springer, New York, NY. https://doi.org/10.1007/978-1-4939-0488-4_1

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