Co-written by Research Associate Julia Tavlas.
Will Chattanooga’s Volkswagen plant expand and hire more workers?
That’s what Hamilton County Mayor Jim Coppinger and City Mayor Andy Berke hope. The two men recently travelled to Germany to meet with Volkswagen officials, hoping to convince them to expand the Chattanooga facilities’ production to include a new SUV.
Expansion would be good for Chattanooga; since the plant opened in 2011 it has employed thousands of workers and pumped millions of dollars into the local economy. But a shadow looms over the prospects of possible expansion, indeed over the very existence of the plant itself: the United Auto Workers union.
The UAW would love to organize VW to staunch the bleeding of membership that has turned theformer giant into a phantom of its former self: Since 1979 membership has declined 74 percent.
Why has it declined so drastically?
One clue can be found on Detroit’s east side where the abandoned Packard auto facility looms tomblike over 40 acres of once-prime real estate, its hollow buildings ringed with mounds of glass and littered with broken beams and broken dreams. The complex once housed busy workers assembling the cars that connected America.
The Packard company was founded in Warren, Ohio, in 1899 by brothers James and William Packard. In 1903, the growing company relocated to Detroit. By the 1920’s, Packard had used its Detroit plant to dominate the luxury car market in the United States. The 3.5 million square-foot Packard complex employed an estimated 36,000-40,000 workers at the height of its production in the 1940’s.
The good times wouldn’t last. As James Arthur Ward relates in his book, “The Fall of Packard Motor Car Company,” on June 17, 1948, a UAW-led strike, closed Packard’s Detroit plant for half a day. The UAW also organized a walkout at the Bendix brakes plant, cutting off Packard’s supply and forcing it to shut down for an entire week. Later that same year, guards at the UAW-organized Briggs Manufacturing plant also went on strike, once again cutting off Packard’s access to necessary parts, leaving the company no choice but to shutter operations for two entire weeks.
And the blows kept coming. The UAW led 8,000 workers on strike in August 1950. The strike lasted two weeks and Packard had no choice but to make concessions — concessions that cost the company an additional $9 million per year, at a time when it could ill-afford such expenditures.
In 1956, Packard shut down its plant in Detroit. Packard was gone for good, and the union had unwittingly helped pack its bags. So what has become of this abandoned auto factory?
Occupants have leased parts of the plant, creating a tangle of legal disputes over ownership rights and property taxes, thus emerging from its post-Packard era as mostly a massive drain on the city. Now it stands as a forlorn symbol of Detroit’s descent from industrial powerhouse to crime-ridden wasteland.
Not coincidently, the torturous decades of Detroit’s decline coincided with the entrenchment of UAW power. Indeed, for years the UAW pushed for contracts giving generous benefits to its members, driving up automakers’ costs to the point of unsustainability.
A union in a company acts very much like a virus in a body; even if the virus itself is not fatal, it can leave its host body weakened and drained of the resources it needs to survive. In the 1980s and 1990s, when foreign-owned companies, like Toyota, were entering the U.S. market in large numbers, UAW contracts bound and gagged the Big Three Detroit automakers with costs and regulations that fatally restricted their ability to innovate and compete, just as they had done with Packard against the Big Three in the 1950s. Now, having long ago devoured Detroit and its car industry, the still ravenous union is forced to look South for its next meal.
City officials need no crystal ball to see Chattanooga’s future if the UAW gets ahold of its VW operation. They need look no further than the crumbling, broken walls of Detroit, Michigan and the abandoned Packard plant that serves as its burnt and hollow heart.