Sending a Message

Stellantis “idled” Belvidere Assembly on February 28, 2023. Naturally, it cited economic reasons for the shutdown, particularly rising costs related to the electric vehicle market. But it was widely viewed as a shot across the bow aimed at the UAW in the run-up to Big Three negotiations, which were about to begin.

The company promised to “make every effort to place indefinitely laid off employees in open full-time positions as they become available,” but the reality was that the shutdown forced the 1,350 affected autoworkers to quit, move, or commute hundreds of miles to keep their jobs. This uprooted and divided families as some relocated to new cities, while other workers left their families behind to follow their jobs, traveling long distances to see their loved ones on the weekends or whenever they could find time.

Meanwhile, the community of Belvidere was left devastated, as all the supplier and logistics jobs associated with keeping the plant up and running left, and local businesses suffered from the decline in customers.

UAW leadership vowed to reopen the Belvidere plant as part of contract negotiations, and the fact that they not only made good on this promise, but also pushed the company to build a new EV battery plant — the very thing cited as the reason for the plant’s closure — will make a huge difference in the lives of the workers who lost their jobs and the families and community impacted by the closure.

Bigger Than Belvidere

But the political and economic implications go far beyond Belvidere. First, this win shows that the closure was a political decision by the company, not one dictated by economic imperatives.

This is almost always the case. Firms are by definition political entities, in that they are governed by people (executives, boards) who make decisions about how to allocate and direct the firm’s resources. They are constrained by the economic and organizational environment in which they operate and by the resources and technologies at their disposal. So they cannot do as they please — but they do have room to maneuver.

For the past forty years, the main constraint on firms’ scope of action beyond general market dynamics has been shareholders. Under the guise of “maximizing shareholder value,” firms have engaged in mass layoffs, wage and benefit cuts, mergers, downsizing, stock buybacks, and other moves. These have rewarded shareholders and company executives while punishing workers, communities, and consumers, who have been left with wage stagnation, growing economic inequality, eroding or disappearing jobs, community disinvestment, and worse service and product quality (as anyone who has tried to reach a human when calling customer service or visited what has become of Twitter recently can attest to).

By reversing the Belvidere Assembly closure, the UAW is reasserting an additional constraint on auto firms’ scope of action. Instead of only having to listen to shareholders and corporate executives’ and analysts’ interpretations of “market signals,” now the companies have to take workers’ and communities’ needs into account.

I say “reassert” because this is something that more unions used to do, before the “shareholder value revolution.” In the postwar decades in heavily unionized industries like auto, steel, mining, transportation, meatpacking, and telecommunications, unions set standards that shaped both labor markets and firm behavior. CEOs couldn’t simply make decisions without consulting with unions. But as unions were thrown on the defensive starting in the 1970s, that market- and firm-shaping power has dissipated.

Reopening Belvidere Assembly marks an important step in reasserting unions’ ability to make political demands on firms and force them to address the needs of broader constituencies affected by firm behavior beyond shareholders and executives.

The Investment Function

But the victory goes even deeper than that. To my knowledge, this is the first time that the UAW has successfully asserted a degree of control over what is generally a sacrosanct management prerogative: control over the firm’s investment function.

It certainly isn’t the first time that the union has tried to exert this kind of control. Then director of UAW’s GM Division, and soon to be UAW president, Walter Reuther tried to do this in the union’s negotiations with GM in 1945. At that time, in the aftermath of spectacular wartime economic growth combined with government-imposed wage restraint, Reuther proposed a detailed plan for reshaping the postwar economy around the theme of “Purchasing Power for Prosperity.”

The plan’s centerpiece proposal was a 30 percent raise for autoworkers with no increase in car prices — an explicit attempt to divert company profits from capital to labor. It also included proposals for GM to “open its books” to allow union representatives, not just company officials, to assess the company’s ability to pay. In short, it was an attempt to politicize bargaining, to bring the private decisions of firm directors out into the public, where they could be subject to public scrutiny and debate.

But Reuther fell short, even after a bitter strike that shut down GM entirely for 116 days. An anti-union backlash followed in subsequent years, marked in particular by the passage of the Taft-Hartley Act in 1947. By 1950, Reuther settled for the so-called “Treaty of Detroit,” which traded stable wages, benefits, and job security in exchange for management’s control over investment decisions and the shop floor.

This was hailed at the time as a great victory for the UAW but planted the seeds for labor’s subsequent decline. Assessing the Treaty of Detroit, then Fortune labor editor Daniel Bell wrote that “GM may have paid a billion for peace. But it got a bargain. . . . GM has regained control over one of the crucial management functions — long range scheduling of production, model changes, and tool and plant investment.” He was right.

As the economic crisis of the 1970s morphed into an all-out assault on workers in the 1980s, plant closures became a more common occurrence. This is usually placed in a broader narrative of deindustrialization and the decline of US manufacturing. While this narrative is not wrong, it does not accurately describe the US auto industry.

There were 43 percent more US autoworkers in 2022 (1,420,000) than in 1983 (996,000), right when the deindustrialization narrative was taking hold. This represents a slight decline in auto sector employment as a percentage of overall employment, from 1.1 percent to 1 percent —but it remained essentially stable. The big change was in union membership, which declined from 586,000 in 1983 to 225,000 in 2022. This represents a decline in union density in the auto industry from 59 percent in 1983 to 16 percent in 2022.

So for the auto industry, the story of the past forty years has been less one of deindustrialization and offshoring, and more one of deunionization and restructuring. Plant closures have been a big part of that story, but the jobs haven’t disappeared. Rather, they have been outsourced, deunionized, and moved to employer-friendly, anti-union states, particularly in the South.

These employer efforts to achieve greater flexibility through outsourcing and plant closures did not go unchallenged. From the late 1970s into the ’90s, there were heroic union-community campaigns across the country to fight plant closures. As historian Austin McCoy notes, these campaigns “opened up the possibility for challenging corporations’ management rights and the articulation of economic democracy, or community-worker rights to industrial property.”

In some cases, most notably that of the GM Van Nuys plant in California, organizers were able to force the company to delay the plant closure. But they couldn’t stop the shutdowns. Instead, a troubling trend took hold whereby unions tried to save jobs by competing with each other over who could offer the company the most favorable conditions, a practice known as “whipsawing.”

These efforts, usually cloaked in the rhetoric of “labor-management partnership,” didn’t manage to save plants that management wanted to close. But they did lay the foundation for the UAW labor-management “jointness programs” that ended up being the breeding ground for the massive corruption scandal that discredited the previous UAW leadership and sent thirteen union officials to prison, including two former presidents. (As a silver lining, the corruption scandal did pave the way for implementing a “one member, one vote” leadership election system, which is what allowed Fain and the Unite All Workers for Democracy (UAWD)–backed Members First slate to win office in early 2023).

As labor-management partnership programs proliferated, so too did plant closures. According to data collected by the UAW, the Big Three automakers have closed sixty-five auto plants in the past twenty years.

On occasion, they have reopened plants as well, such as Spring Hill Manufacturing in Tennessee; the GM-Toyota partnership known as NUMMI, which took over the former Fremont Assembly plant in California; or Hamtramck Assembly in Michigan. But in these cases, the reopening was a company initiative, often after negotiating preferential land and tax deals with state and local governments along with concessions from the UAW.

The Belvidere Assembly reopening is different because it is a union initiative, against the stated preferences of the company. In forcing Stellantis to reopen the plant, the UAW has reasserted a degree of influence over one of the crucial management functions that Daniel Bell talked about: unilateral control over investment decisions.

A New Role for Unions?

So this contract victory is not just about immediately improving the lives of the Belvidere workers whose lives and community Stellantis destroyed, which it will do. It also suggests a more expansive role for workers, unions, and communities in shaping future company investment decisions.

For the auto industry, this will be crucial as the fight to move past fossil fuels and navigate the transition to greener transportation heats up. But it also connects in important ways to Bargaining for the Common Good proposals of the types that the Chicago Teachers Union, United Teachers Los Angeles, and other unions have fought for and won. They have negotiated not only over wages, benefits, and working conditions, but over green space on school campuses, police surveillance and harassment of students, defending undocumented students, and much more.

The difference is that it is generally understood that public sector resources are allocated politically. There is a budget, politicians debate it, community members and organizations mobilize for different priorities, and then decisions get voted on in more or less public forums. Here, the UAW is taking what are generally considered the private decisions of firm executives and making them more public. Ultimately, expanding the scope of public control over resource allocation in this way is essential to building a future world that works for all of us, not just executives and wealthy shareholders.