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The Historical Origins of Outsourcing and Union Crisis within the US Auto Industry: Organized Labor’s Self-Determination?
Unformatted Document Text:  Gritsch ASA Labor and Labor Movements## email not listed ## The Historical Origins of Outsourcing and Union Crisis within the US Auto Industry: Organized Labor’s Self-Determination? In the decades between 1945 and 1965, how did the UAW International leadership’s policies promote increased outsourcing and union stagnation? I argue that the UAW’s anti-monopoly political philosophy–motivated by fears of the Big Three’s monopoly power, and of being similarly labeled monopolistic–predisposed its International leadership to promote Big Three outsourcing to independent suppliers. The UAW’s International leadership endorsed outsourcing during a crucial window of opportunity during the 1950s and 1960s when the Big Three had begun to re-integrate outsourced parts production into their corporate operations. Indeed, in 1956, the Wall Street Journal had documented “[t]he trend in the auto industry away from dependency on parts suppliers” (The Wall Street Journal 1956: 2). The UAW’s pro-outsourcing stance was additionally negatively affected by UAW International and local leaders’ decision to grant contract concessions–first to smaller auto manufacturers, then to independent parts suppliers. By 1956, suppliers were facing “losses or slim profits” as the Big Three had begun prodding them to reduce parts prices, lower labor costs and implement speed-ups (The Wall Street Journal 1958: 3). The Big Three pressured suppliers by threatening to consolidate parts orders at plants that obtained the best wage settlements, or failing to obtain lower costs, to pull parts production back into their corporate operations (The Wall Street Journal 1958: 3). UAW leaders’ decision to grant concessions likewise stemmed from the union’s anti-monopoly philosophy–the intent to keep small companies solvent to counterbalance the Big Three–and also from concern over rising auto industry unemployment, resulting from small firms’ insolvency, as well as from recessions, automation and speed-ups. But the UAW’s stance toward both outsourcing and concessions resulted more fundamentally from the UAW’s growing centralization of power, autocracy and anti-labor drift under Reuther (UAW president 1946-1970). During 1945-1946 strike negotiations with General Motors (GM), Reuther introduced his ‘ability to pay’ policy wherein he effectively abandoned the union’s goal of one 1

Authors: Gritsch, Maria.
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Gritsch ASA Labor and Labor Movements
## email not listed ##
The Historical Origins of Outsourcing and Union Crisis within the US Auto Industry: Organized
Labor’s Self-Determination?
In the decades between 1945 and 1965, how did the UAW International leadership’s policies promote
increased outsourcing and union stagnation? I argue that the UAW’s anti-monopoly political
philosophy–motivated by fears of the Big Three’s monopoly power, and of being similarly labeled
monopolistic–predisposed its International leadership to promote Big Three outsourcing to
independent suppliers. The UAW’s International leadership endorsed outsourcing during a crucial
window of opportunity during the 1950s and 1960s when the Big Three had begun to re-integrate
outsourced parts production into their corporate operations. Indeed, in 1956, the Wall Street Journal
had documented “[t]he trend in the auto industry away from dependency on parts suppliers” (The Wall
Street Journal 1956: 2).
The UAW’s pro-outsourcing stance was additionally negatively affected by UAW International and
local leaders’ decision to grant contract concessions–first to smaller auto manufacturers, then to
independent parts suppliers. By 1956, suppliers were facing “losses or slim profits” as the Big Three
had begun prodding them to reduce parts prices, lower labor costs and implement speed-ups (The Wall
Street Journal 1958: 3). The Big Three pressured suppliers by threatening to consolidate parts orders at
plants that obtained the best wage settlements, or failing to obtain lower costs, to pull parts production
back into their corporate operations (The Wall Street Journal 1958: 3). UAW leaders’ decision to grant
concessions likewise stemmed from the union’s anti-monopoly philosophy–the intent to keep small
companies solvent to counterbalance the Big Three–and also from concern over rising auto industry
unemployment, resulting from small firms’ insolvency, as well as from recessions, automation and
speed-ups.
But the UAW’s stance toward both outsourcing and concessions resulted more fundamentally from
the UAW’s growing centralization of power, autocracy and anti-labor drift under Reuther (UAW
president 1946-1970). During 1945-1946 strike negotiations with General Motors (GM), Reuther
introduced his ‘ability to pay’ policy wherein he effectively abandoned the union’s goal of one
1


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