GM’s strike has concluded. On Friday, members of the United Auto Workers voted by a solid-yet-not-overwhelming majority to ratify the contract that had tentatively been worked out last week between management and union negotiators.
The strike was a doozy, the largest at the auto manufacturer since the 1990s. Almost 50,000 workers walked off their jobs, leaving all of the company’s U.S. manufacturing capacity idled for more than a month — so long that the company will never be able to make up for the lost output. Estimates for the strike’s total cost to GM run north of a billion dollars. For General Motors this was, as former Vice President Joe Biden might say, a “big [expletive deleted] deal.” It was an even bigger deal for the workers, who spent almost a month trying to live off $250 a week in strike pay.
And for the rest of us, it will probably shave a hair off the total GDP of the nation, not just in GM’s lost output, but through ripple effects in other industries, from auto-parts suppliers to airlines. But while that sliver will show up in the headline GDP figures, it probably won’t much influence our daily lives unless we happen to own a car dealership, sell something to General Motors, or live in one of the handful of areas where GM is a major employer.
That fact is in itself more interesting than the strike’s ultimate resolution, which was mostly a draw. GM agreed not to make any significant changes to its autoworker health benefits, to transition more temporary workers to permanent positions, to speed up the pace of pay increases for entry-level workers, and to give modest raises and a contract-signing bonus to everyone. In exchange, the union reluctantly agreed that, yes, the company was going to shutter three major plants, including a controversial closure in Lordstown, Ohio.
The second most notable thing about this agreement is that despite the union’s fondest wishes, the company managed to avoid a repeat of the old cycle that eventually drove GM into bankruptcy: The union would get some sweet contracts during boom years, the company would teeter on the precipice when a downturn inevitably came, the union would make some concessions. But as soon as the company again showed signs of sustained profitability, the union would deliver (or at least threaten) a punishing strike that forced GM to return to the old ways — and the company found the money to pay for this by reducing the quality of its cars.
This time around GM held firm: It is willing to negotiate on pay and benefits, but not (much) on operations. This is interesting, but not as interesting as the fact that in the grand scheme of things, this news just won’t matter much to most Americans.
Over the years, Charles Erwin Wilson, the GM chief executive who became Dwight Eisenhower’s secretary of defense, has taken a lot of grief for suggesting in a Senate confirmation hearing that what was good for GM was good for America. But read in its full context, that quote has a rather different flavor:
“For years I thought that what was good for our country was good for General Motors, and vice versa. The difference did not exist. Our company is too big. It goes with the welfare of the country.”
One could argue that Wilson was simply speaking the truth. In the 1950s, when Wilson was confirmed, General Motors employed nearly 400,000 union workers. The male U.S. labor force at the time was 43.8 million; one company was employing nearly 1% of them, and at some of the handsomest wages in human history.
That doesn’t count the management workers, who made a pretty good living, too, or the ancillary businesses and institutions that depended on GM for their livelihood, starting with the city of Detroit. Nor GM’s customers: At that time, one out of every two new cars bought by an American rolled off a GM assembly line. It would have been impossible for GM to have a month-long strike without all of America sitting up and taking notice.
Today, other employers in other industries are the biggest company, or the richest. And a dozen foreign car companies will vie for our business if the UAW shuts down the American marques. GM is no longer such a central fact about the American economy — and the new contract shows that both the company, and the workers, understand that new reality.
Follow Megan McArdle on Twitter: @asymmetricinfo.