GM Fights For Its Future, Its Unions Hold It Back
GM is in the process of a restructuring to shift its focus to autonomous, electronic vehicles. But just as the company is in the midst of entering the future, its union and workforce are trying to pull it back.
Self-driving and electronic vehicles will cost billions of dollars and an extraordinary amount of design and engineering talent. But they won’t be able to sell them in meaningful numbers for years.
The pressures spell big trouble for the United Auto Workers. Gone will be thousands of jobs at engine and transmission plants across the industrial Midwest, replaced by much smaller workforces at clean, mostly automated factories that mix up chemicals to make batteries. That is actually the underlying issue in the current strike by 49,000 workers in several states.
But GM CEO Mary Barra has vowed to pursue an all-electric future, with plans for 20 new all-electronic vehicles. The painful restructuring is costing billions of dollars, thousands of jobs, and a step back in salaries.
The only GM plant that meets that bill is one in Brownstone, Michigan where about two-dozen make hybrid battery packs and assemble autonomous vehicle equipment at a wage of $15-$17 per hour.
The GM workers are going through a painful transition. It’s not the first time we’ve seen this. We saw same in the early shift to autos from horse-drawn carriages.
The Ford Auto Company improved mass production in 1916 with the introduction of the first conveyor belt assembly line, producing the Model T to at significantly reduced cost.
GM decentralized management, introduced annual model changes, and pioneered new technologies. The nature of the workforce went through several revolutions. The industry changed. The workforce changed. The auto industry has constantly had to adjust to meet the evolving needs of society.
In the 1990s, the industry faced another challenge. GM had to reinvigorate production methods. The decades-old paradigm found itself under pressure, with a need to transform to a model based on a smaller workforce, lower wages and new efficiencies. It was a tough fight, characterized by a lengthy strike at GM’s Canadian operations. The company got some of what it needed.
But the industry has changed even further, with the introduction of new methodologies based on cross-border supply chains. Now, GM and all other auto companies, face a need to radically revise its production model, and face the next wave of demand - for electronic, autonomous vehicles. GM’s ability to pull off that transformation will determine its future.
But the shift is not a popular one. Workers and communities are finding themselves caught up in the changes. GM’s ability to weather that storm will determine its place in the 21st century.
