The economy seems to be improving. Part of the reason for the upturn in manufacturing is the business cycle. But there’s more to the story. In certain key industries, improvement has been the deliberate result of an unusual level of cooperation between management, labor and government—part of a larger trend of increased government involvement and investment in business activity. We thought you might find the story of interest as you consider the external factors that might influence your organization’s growth in the months ahead.

How One Union is Saving American Manufacturing

The US economy has lost over 2 million manufacturing jobs since 2000. This is part of a decades-long trend. There are a number of causes for the unrelenting destruction of good-paying jobs, including technological innovation, globalization, and Wall Street pressure to manage for the short term. No matter what the cause, the effect is the same: The continued hollowing out of the middle class and a weakened belief in the promise of upward mobility. If the faith in upward mobility—the heart of the American Dream—was ever to die, the consequences for the nature of our politics and our social life would be difficult to imagine.

Thankfully, there are individuals and groups struggling to save manufacturing and, with it, an important rung on the ladder of intergenerational mobility. Perhaps the most creative—and successful—is the United Steelworkers of America (USWA). Working quietly and persistently, the USWA has saved the American steel industry and is on its way to saving our country’s tire making industry.

The steel industry has been losing jobs for decades. The overarching cause of its current difficulties is global overcapacity. In 2001, the Bush Administration slapped tariffs on steel coming into the US. The USWA long argued for temporary tariffs that would give the industry breathing room to deal with the overcapacity issue. When Bush enacted tariffs, the USWA company executives and political leaders with a comprehensive plan to restructure the industry. At the heart of the plan were mergers of weak steal companies and the shutting down of plants to eliminate capacity. Of course, this also meant the loss of tens of thousands of steelworkers’ jobs. It also resulted in the elimination of pension and health benefits for retired steelworkers when the federal government refused to absorb these ‘legacy’ costs. In return, the union and its members received a degree of job security, a commitment by industry executives to invest in remaining plants and revised work processes to increase the input by shop floor workers. While the industry has not been totally restructured, it is well on its way back to health.

The USWA has now turned its sights on the tire industry, another once great American jobs machine hammered by global overcapacity. The USWA recently signed a deal with Goodyear to restructure that company. The union agreed to close two plants, freeze wages and make other monetary concessions. In return, Goodyear will limit production at plants it owns in Brazil and other countries and pay down debt faster to free up money to reinvest in its 12 remaining US plant. In addition, Goodyear executives agreed to cap their compensation—including stock options—and to give a board seat to a union leader. The USWA is now preparing to hammer out similar deals with the other tire manufacturers.

As creative and effective as the USWA has been, it can only carry the ball so far. The President and Congress should take the USWA’s lead, get serious about saving our manufacturing base, and implement the following policies:

Universal Healthcare. Guaranteeing that every American has decent health care is good health policy. It’s also good economic policy. American manufacturers are responsible for the health care of millions of current and retired workers. These costs are increasing by over 10% per year. The US is the only advanced economy that places this burden directly on its companies and their employees. This raises the cost of US products and makes them uncompetitive. The only way these companies can then compete is by cutting American workers’ wages or by sending their jobs to Mexico or China. The solution is to spread these costs across the entire economy through some form of universal health care.

Planned Research & Development. Well over 50% of money spent on R&D comes from us, the taxpayers. The great majority of that money is spent on the military. Military R&D is overseen by a large federal planning body. It’s called the Pentagon. It’s time that the same focus and resources be applied to other key manufacturing industries. If you and I are going to keep investing our tax dollars in private companies, let’s do it rationally and systematically so we create the kinds of jobs we want and need.

Support Unions. The people with the greatest stake in American manufacturing are the workers in our plants and the families and communities they support. The way to leverage that stake is through workers’ unions. As the USWA has demonstrated, unions have well-developed ideas for saving entire industries, as well as the resources to implement them. Rather than undermining unions, our political representatives should recognize and support them as the fiercest defenders of a vibrant US manufacturing base.

American manufacturing will never be what it was 40 years ago when it represented the majority of American economic activity. But it can and must continue to be a dynamic part of our economy and society. The Steelworkers Union has laid out a plan to save American manufacturing. It is demonstrating intelligent, persistent and self-sacrificing leadership. It’s time for our political system to follow.

John Jordan is President of Principor Communications, a Washington, DC-based public relation agency. A former labor organizer, he provides communications counsel to businesses and non-profits.

Visit Principor Communications at www.principor.com or contact us at 202-595-9008.

back to top

Return to 2003 News Archive

© 2002–2004 Principor Communications