The End of Business Unionism at the United Auto Workers—and Beyond?

The End of Business Unionism at the United Auto Workers—and Beyond?

The Stellantis Belvidere Assembly Plant built its last Jeep Cherokee in February. The company’s decision to indefinitely idle the Illinois plant came in December, bringing an end to the slow bleed of over 5000 jobs over the past five years. The 25,000-person town of Belvidere was struggling already from the secondary effects of the plant’s downsizing, but this latest blow threatened to be the final nail in the coffin for what remains of the local economy. The members of United Auto Workers (UAW) Local 1268 might have reasonably given up on their union. After all, the UAW had been in talks with Stellantis just months earlier, discussing whether the plant would be transitioned to electric vehicle production, and took no action when the company announced its verdict.

But given a final chance to turn their union around in the weeks before the plant’s closure, 757 Belvidere workers—3 percent of the town’s entire population—cast their ballots for Shawn Fain in elections for the union’s top leadership. Fain was challenging incumbent UAW President Ray Curry with a vision to build a more democratic, fighting union. Those 757 workers know that Belvidere’s closure will be on the table in the upcoming round of negotiations with Stellantis, and they think their fellow union members will fight alongside them if given the chance.

For the first time in the union’s history, UAW members were voting directly for their top leadership. Before this year, the International Executive Board had been chosen by roughly 900 local leaders who serve as delegates. The delegates reliably elected candidates from the Administration Caucus that has ruled the UAW for decades—and has long used its control over appointed positions and other perks to ensure loyalty. But given the choice, the membership elected Fain—a former leader in the Stellantis Kokomo Casting Plant and one of the few appointed staffers to vocally oppose concessionary contracts in 2009 and 2011—and the entire slate of Members United candidates he ran alongside.

In his debut speech to the union, Fain stood before the Special Bargaining Convention in Detroit on March 27 and declared “war against our one and only true enemy: multibillion-dollar corporations.” The response from the audience was mixed: Some tilted their heads and crossed their arms; some clapped reluctantly, while others hollered enthusiastically. The vast majority of delegates in the room had supported Curry, Fain’s Administration Caucus–backed opponent, and were uneasy about the potential change coming to the UAW.

Over the years, delegates have grown accustomed to a far more business-friendly message, like Vice President Cindy Estrada’s appeal to companies at the last Special Bargaining Convention in 2019: “You can build a plant right here in the city of Detroit with union wages and still make a profit.” Estrada echoed the “business unionism” that has dominated organized labor since the 1950s, coincident with the rise of UAW President Walter Reuther and his founding of the Administration Caucus.

While business unionism permeated the entire AFL-CIO, no union better tells its tale than the UAW. In 1950, Reuther bargained the “Treaty of Detroit” with General Motors (GM), inaugurating a new labor-management compact: long-term contracts where demands for worker control over production (such as the ability to resist speed-ups and automation) were traded for improved wages, pensions, and health care benefits. Reuther would soon negotiate similar agreements with Ford and Chrysler (now Stellantis), which, together with GM, came to be known as the “Big Three.” This truce guaranteed both workers and management a piece of the growing pie. At the same time, it cemented in place a system in which UAW officials would join foremen in tempering dissent among workers.

In the decades to come, business unionism would prove as contradictory in practice as it sounds in theory. Union officials were squeezed, first from the bottom as workers rebelled against speed-ups and racial harassment, and then from the top as the companies demanded concessions when faced with falling profit rates and the specter of bankruptcy.

The companies pushed harder, and the arc of history bent toward capital. While the UAW’s leadership held fast to a labor-management arrangement built on shared gains from growing productivity, the Big Three stopped playing by the rules. Over the course of the 1980s, outsourcing and plant closures bit a 650,000-member chunk out of the 1.5-million-member union. For the most part, union officials turned a blind eye to speed-ups and layoffs and agreed to plant closures and pay cuts, attempting to make good on the mantra that Estrada would still be repeating 40 years later: Companies can turn a profit with union labor.

The promise of shared gains gave way to a plea for shared sacrifice. The Big Three were gradually losing market share to foreign auto manufacturers, and they continuously called upon the UAW to make its members’ labor more “competitive.” The divisions between most American auto workers and a growing nonunion workforce—concentrated in Asia, Mexico, and the American South—were revving a race to the bottom.

In 2007, union leaders gave ground once again, this time by further dividing even the small section of the global auto-manufacturing workforce they had pledged to defend. The bargain they struck with the Big Three allowed the company to hire a limited number of new workers at half the rate of existing members while carving this new “tier” of membership out of the pension plan. When GM and Chrysler filed for bankruptcy in 2009, the UAW agreed to lift the cap on the percentage of its workforce that could be hired at the second tier. What started as a leak widened into a gaping hole.

This two-tier system served the companies doubly well, at once dragging long-term labor costs down to the level of nonunion labor and sowing divisions in the union’s ranks. It’s unsurprising that most younger workers have disengaged from the union altogether, given that their second-tier status has been reaffirmed by its leaders in three rounds of bargaining since 2007.

By 2019, it was public knowledge that UAW officials had been accepting company bribes and embezzling union resources for years to purchase vacations and luxury goods. A federal investigation finally burst the corruption scandal open, leading to the conviction of three former Stellantis executives and 12 union officials—including former president Gary Jones and his immediate predecessor, Dennis Williams. The settlement also mandated a membership referendum on whether to elect top leadership via the existing delegate system or through direct elections.

Out of this crisis, a new movement emerged: Unite All Workers for Democracy (UAWD). Under the banner of membership control, UAWD brought workers from the UAW’s traditional base in manufacturing together with those in white-collar sectors like higher education (where the UAW has achieved most of its membership growth in recent years). They recognized that corruption and disenfranchisement had emerged from the same business unionism that had ushered in concessions. Seeing direct elections as an opening to challenge the Administration Caucus and rebuild a fighting union, UAWD campaigned for “One Member, One Vote” in 2021. Members voted overwhelmingly for democracy, and the upstart reformers seized the opportunity to run their own slate, headed by Fain.

The elections became a referendum on decades of business unionism. UAWD set out to convince members that a real alternative to the Administration Caucus is possible, and that the UAWD activists they assembled on the Members United slate were just the leaders to implement it. The Members United message—“No Corruption. No Concessions. No Tiers.”—struck a chord throughout the union, winning support from a majority of members in seven of the union’s nine regions.

Though one pundit ignorantly chalked up the election to an inundation of graduate-student radicalism, the numbers tell a different story. In reality, graduate student workers made up a mere 2.5 percent of Fain’s support. The locals where Fain received an overwhelming majority illustrate a telling map, but not one of sectoral divisions. Rather, they highlight recent battles fought by workers in the union’s rank and file, which often came into conflict with the business-unionist tendencies at every level of UAW leadership.

Volvo workers in Virginia in Local 2069 were on and off strike for three months as their leadership forced them four times to vote on ratifying nearly identical contracts, each time parroting management’s arguments for why workers should settle. In Local 838, John Deere workers voted down two contracts over the course of a five-week strike and, through their fortitude against their bosses and their bargaining team, rejected a new tier and won back a cost-of-living adjustment. These are the workers fighting for a UAW led by its members and unafraid to go head-to-head with employers.

The new leadership’s first major test will be the Big Three contract expiring this September. Fain and other reformers, from the IEB down to the rank and file, will face resistance from an entrenched bureaucracy at every turn as they endeavor to mobilize union resources toward a worker-led contract campaign. But the risk of this approach is also its strength—success will depend on workers’ taking matters into their own hands.

UAW members won’t be the only workers taking matters into their own hands this summer. Three hundred and fifty thousand workers at UPS represented by the Teamsters—who also recently elected reformers to top leadership—are preparing for a possible strike when their contract expires on July 31. Like UAW workers, ending their own two-tier system is at the top of UPS workers’ lists. And from Amazon to Starbucks to Trader Joe’s, the past year saw an explosion in unionizing well beyond traditional employers.

It has been more than a century since German economist and sociologist Werner Sombart asked: Why is there no socialism in the United States? Many have wondered since. Part of the answer might lie with the travails of organized labor. If America lacks a potent labor party, of the kind common in Europe, it lacks union strength too, with only 10 percent of the workforce represented by a union. Yet unions like the UAW remain potentially powerful players, with sizable membership lists and well-padded bank accounts.

Labor has, in most of the world, long provided both a constituency and a vocabulary for attacking concentrated power. That political possibility has been stifled in this country—not only by the size of unions but by their character too. Recent years have seen a socialist become the nation’s most popular politician, and then perhaps more people protesting for Black lives than for any cause in American history. If (and this is still a major if) workers in industries old and new manage to close the book on business unionism, their revived militancy would come at an opportune moment. Old stabilities might fray, and—from several directions—old hierarchies might be in trouble.

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