BlockMexicoPaperonAutoAssemblyLaborRelationsJuly2006Version3 (1)

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Labor relations in the unionized automobile assembly sector in the United States

experiencing what is likely the most turbulent period since the U.S. industry was organized

by the United Auto Workers (UAW) between 1937 and 1941. Collective bargaining in the

auto assembly sector can be analyzed be dividing the post-World War II period into three

distinct time periods: 1946-1979; 1980-2004; and 2005-06. This paper will analyze labor

relations at the firm level during each of these time periods.1

LABOR RELATIONS IN THE U.S. AUTOMOBILE INDUSTRY, 1946-792

Through the late 1970’s, collective bargaining in the automobile industry

exemplified the arm’s length collective bargaining system in the United States that had

developed starting in the late 1930’s. By the early 1950’s, the United Auto Workers

Union (UAW) had organized and established collective bargaining relationships with the

Big Three - General Motors, Ford, and Chrysler, as well as with the smaller auto producers

– Nash Kelvinator, Studebaker-Packard, Hudson, and Kaiser Willys, and with American

Motors, formed by a merger of Nash-Kelvinator and Hudson, in 1961 (Katz, 1987).

The relationship that was established had two major components: (1) corporate

control over business decisions that unrelated to labor issues; and (2) negotiated terms and

conditions of employment at both the corporate and local levels. Thus, the corporation

exercised total control over such functions as product design, engineering, marketing, and

pricing.

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Negotiations were carried out at two levels; the firm level and the local level. Firm

level bargaining was actually pattern bargaining. Under pattern bargaining, the UAW

would negotiate a pattern-setting collective agreement with one “target” firm, and then

attempt to apply that same agreement to the other firms. Although there were occasional

deviations from the pattern, such as a profit-sharing agreement with AMC in 1961, these

deviations were the exception. The basic point is that the UAW-represented employees of

the GM, Ford, and Chrysler, enjoyed almost identical levels of wages and benefits

Pattern bargaining served the interests of the companies and the unions. From the

point of view of the companies, it minimized variations in labor costs across their

competitors. For the union, the uniformity of pay created an objective pay standard that

was acceptable within the union, minimizing political costs to the leadership. (M at the M

Footnote). Negotiations also occurred at the local/plant level. These addressed such

matters as job classifications, job descriptions, seniority, and the many issues that occurred

at the plant.

In order to avoid labor conflict, between 1948 and the later 1970’s , wage

bargaining between the UAW and the industry and the resulting wage changes generally

followed a formula. Wage adjustments were based on two main factors: an annual

improvement factor (AIF) and cost-of-living (COLA). In principle, the AIF was designed

to provide workers with wage increases as national productivity increased, and the COLA

increases were designed to protect workers from a decline in real wages by increasing the

money wage as the cost-of-living increased. COLA, the other component of the wage

formula, provided 80% coverage for inflation between 1955 and the early 1970’s. The

4



result of the formula was that wage increases were highly predictable, with variation

determined primarily by the cost-of-living. (Katz, 1987).

During the 1950’s, 1960’s, and 1970’s, fringe benefits came to account for an

increasing share of employment costs in the industry. In addition to health insurance and

pensions, by the late 1970’s, the fringe package included paid personal holidays, 30

(years)-and-out pensions, and a guaranteed income stream. Katz estimated that while

fringe benefits accounted for only 11.1% of hourly compensation costs in 1948, they

accounted for 42% of hourly compensation costs in 1981 (Katz, 1987).

It is important to note that during this post-World War II period, wage and benefit

increases were unrelated to the short-term economic situation in the industry. Downturns

in sales and production were addressed through temporary layoffs. Because these

downturns had traditionally followed the business cycle, and had always recovered, the

companies and the UAW negotiated Supplemental Unemployment Benefits (SUBS). This

was a benefit that provided laid off Big Three employees with monetary benefits over and

above unemployment insurance so that the autoworker received 95% of his or her take-

home pay. The monies came from a SUB account funded with per worker-hour

contribution made by the companies.

Overall, labor relations system in autos during the thirty-year post-World War II

period reflected an era of economic success for the U.S. automobile assembly industry.

The “Big Three” auto manufacturers – General Motors, Ford, and Chrysler, dominated the

U.S. market. This was an era of high wages and employment growth, and collective

bargaining outcomes reflected this economic success.

5



THE TRANSFORMATION IN LABOR RELATIONS IN THE U.S. AUTOMOBILE

ASSEMBLY INDUSTRY: 1980-2004

The changes in the automobile assembly industry in the United States since 1980

have been well documented in scholarly studies and the popular press and will not be

repeated here. The major change is the continual decline in sales and market share of the

traditional U.S. unionized domestic auto manufacturers, vis-à-vis nonunion non- U.S.

manufacturers.

3

This has continued unabated. For the first six months of 2006, GM, Ford,

and DaimlerChrysler, sales, including Mercedes, declined 7.5% as compared to the first six

months of 2005. The “purely” domestic U.S. automakers, GM and Ford, experienced an

8.9% sales decline. Toyota sales increased 9.8% during this period. (Automotive News,

2006).

This increase in market share for the non-U.S. based companies has coincided with

the non-U.S. manufacturers opening manufacturing facilities in the United States. These

facilities are all nonunion (Hill and Brahmst, 2003). It is these two trends that have been

driving collective bargaining in the U.S. automobile industry over the last twenty-five

years.

Labor Relations in the Auto Industry, 1980-2004. 4

While pattern bargaining continues to be a dominant characteristic of auto industry

collective bargaining, the content of the pattern changed beginning in the early 1980’s.

Through the 1970’s, the pattern generally focused on wage and benefit increases. Buffeted

6



by employment declines in the industry in the early 1980’s, the focus of bargaining and the

content of the pattern shifted from wage increases to job security starting in the early

1980’s. This shift of the focus of bargaining from increasing wages to enhanced job

security that is the salient feature of firm-level collective bargaining in the auto industry

during the last two decades.

The 1979 UAW-GM and UAW Ford agreements had no provision on job security.

This is to be expected, as production worker employment in the industry had been

generally increasing over the previous two decades. From a recession-trough low of

452,500 in 1958, production worker employment in Motor Vehicles and Equipment

climbed to 708,000 in 1969 and to a historical high of 782,000 in 1978 (United States

Bureau of Labor Statistics, undated).

By 1980, production worker employment in the industry was only 575,000, a

26.5% decline in only two years. Believing that this decline was not a familiar cyclical

fluctuation in employment, but rather a structural decline in the number of production

employees in the industry, the UAW implemented a bargaining strategy aimed at

maintaining employment security for its members working in the automobile assembly

industry (“Job Security . . ., 1981).

Although the 1979 collective agreement was scheduled to expire in September,

1982, the economic crisis in the auto industry spurred the parties to early negotiations. The

UAW and Ford signed a 31-month agreement in February, 1982. Reflecting the new UAW

priority on employment security, the 1982 Ford-UAW agreement included a 24-month

moratorium on plant closings and a commitment by Ford on subcontracting to “make every

effort” to maintain employment. As part of a disincentive for Ford to reduce employment,

7



the parties also agreed on a Guaranteed Income Stream, under which an employee with 15

years seniority would receive 50% of his/her hourly base wage. This percentage increased

with the employee’s length of service, with the employee receiving a maximum of 95% of

take-home pay, net of government benefits and earnings from another job. (“Pay

Concessions . . .,” 1982; “Joint UAW-Ford Summary . . .,” 1982.)

Significantly, Ford obtained relief on monetary employee compensation, as the

parties agreed on wage increase moderation. Although there would be no reductions in

wage rates paid on the date of the agreement, the AIF was eliminated, and COLA

adjustments were deferred. The parties agreed that there the employees would not receive

their 26 paid personal holidays during the agreement, and a special December holiday

would not be paid. (Joint UAW-Ford Summary . . .,” 1982). The February, 1982

agreement with Ford established the industry model that would eventually apply to GM,

Ford, and, eventually Chrysler. Employees would obtain enhanced levels of job security

and the company would obtain relief on wage compensation.

A month later, the UAW reached a similar, but not identical agreement with

General Motors. The major difference between the two agreements was that GM agreed to

rescind four plant closings that had been announced and agreed to an experimental

“Lifetime Job Security Program” at four plants. The plan used attrition and alternative

assignments both within and outside GM to provide job security to 80% of the facilities’

workforce. (“UAW Summary . . .”, 1982).

The pattern was initially not extended to Chrysler. In order for Chrysler to obtain

loan guarantees from the U.S. government in 1979, the UAW was required to make special

wage concessions to Chrysler, breaking parity with GM and Ford (Block, 2001). In 1983,

8



however, the UAW and Chrysler agreed on a contract which restored wage parity with

Ford and GM. Reflecting the continuing precariousness of Chrysler’s financial condition,

no employment security provisions were incorporated in the Chrysler agreement. (“New

Agreements . . ., 1983).

In the 1984 bargaining round, the UAW obtained additional job security The

agreements included Protected Employee Program (PEP) at Ford and a Job Opportunity

Bank-Security Program (JOBS) at GM that were essentially identical. PEP and JOBS

provided job security for employees with at least one year of seniority in the event of

technological change, outsourcing, productivity improvements, transfer of operations, and

production consolidations. Job security was not provided for a decline in employment due

to volume declines, although, as noted, such employees would be eligible for SUB benefits.

(Agreement . . ., 1984; Agreements . . ., 1984).

In addition, the parties for the first time agreed upon a dedicated maximum

financial commitment. Ford promised $280 million over the life of the agreement and GM

promised $1 billion (Agreement . . ., 1984; Agreements . . ., 1984). This had the effect of

institutionalizing the program while minimizing financial uncertainty for the companies

and converting a component of discussions regarding the program into traditional

negotiations over labor costs.

Although by 1984, the system architecture for GM and Ford of a financial

commitment of job security was basically complete, the parties continued to make

adjustments through 1993. Building on the guarantees in the PEP and JOBS program, it

was but a small additional burden on GM and Ford to convert these security promises into

numbers. In 1987, the Ford and GM agreements established Guaranteed Employment

9



Numbers (GEN at Ford) and Secured Employment Levels (SEL) at GM at each plant. The

GEN/SEL was to reduced by one position for every two employees who left the company

because of normal attrition (resignation, death, or retirement). The agreements also

prohibited plant closings. The financial commitment was increased to $500 million for

Ford and $1.3 billion for GM. Significantly, sales volume-related declines were

exempted, as persons on layoff due to volume declines would draw SUBS.

(Agreement . . ., 1987; Agreements . . . , 1987).

Employment security was accompanied by wage moderation . The agreements

incorporated a 3% general wage increase for 1987, but only lump sum bonuses at 3% for

1988 and 1989, thereby minimizing increases in the base wage on which many benefits

(vacation, etc.) are based. Eighty-one cents of the $.86 COLA increase that had

accumulated was also folded into the base wage (Agreement, 1987; Agreements . . . , 1987;

UAW-Ford Report, 1987) .

The sales volume exception was addressed in 1990. The agreement limited layoffs

for volume reasons to 36 weeks over the life of the agreement, with the employee either

being recalled or shifted to the JOBS Bank/PEP, and off the SUB fund, if there is no job

was available. Maximum funding was increased to $586 million at Ford and $1.7 billion

at GM. (1990 National Agreement . . .; Agreements . . ., 1990; “General Motors, UAW . . .,

1990; “UAW-Provided . . . ,1990; “UAW, Ford . . ., 1990).

The only major change in 1993 agreements was the inclusion of language

clarifying the assignments that could be given to employees under the GEN/SEI programs.

The funding maximum remained at $586 million in the Ford-UAW agreement and $1.7

billion in the GM-UAW agreement (Agreements . . ., 1993; UAW-GM Report, 1993).

10



The UAW then turned its attention to Chrysler, the smallest of the Big Three. After

discussing the issue in 1993, the 1996 UAW-Chrysler agreement included a Memorandum

of Understanding on the Employment Security System (ESS) program which essentially

mirrored the programs in the Ford-UAW and GM-UAW agreements. (Letters,

Memoranda . . .1996 . . .; UAW Summary . . . , 1996). Funding levels over the life the

agreements remained stable at GM and Ford; $1.7 billion at GM and $586 billion at Ford.

(Agreement . . . , 1996; UAW Summary, . .. , 1996).

Further adjustments were made in the 1999 agreements, the first agreements to

expire in four years. The major change was the creation of benchmark employment s

(SEL at GM, GEN at Ford, BEL at DaimlerChrysler 5) minimums which would be reduced

be .333% each quarter so that at the end of the agreement, benchmark levels in the

agreements would be at 95% of benchmark levels at the commencement of the agreements.

Funding levels over the life of the agreement were increased to $2.107 billion at GM, $944

million at Ford, and $451 million at DaimlerChrysler. No adjustments were made in the

job security provisions in the 2003 GM and Ford agreements; funding levels remained

constant. The 2003 agreements will expire in September, 2007. (Agreement . . ., 1999;

Agreements . . ., 1999; Agreement, 2003; Agreements . . ., 2003.)6

Overall, these provisions created a situation in which employment declines in the

unionized sector of industry would be due primarily to attrition, e.g. retirements. There

would be no employment reductions due to technological change. As the unionized

workforce was aging, one would expect to see decreasing employment over time.

Effects of Bargaining Outcomes, 1985-2004

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The foregoing discussion indicates that the bargaining outcomes would be expected

to have effects on wages and employment. One would expect that the result would be a

slowing of wage growth and a moderation of employment reductions, essentially making

employment reductions due to attrition rather than to reductions in demand for the product.

First, with respect to wages, if the union truly “traded” wage increases for

employment security, such a “trade” would be expected to be indicated by wage data.

First, using wage data provided by the UAW research department, average annual

September-to-September changes in negotiated wage increases, composed of negotiated

increases and cost-of-living increases of assemblers at GM and Ford were examined.

7

Two twenty-year periods were examined, the pre-employment security period 1961-80 and

the employment security period 1985-2004. The period 1980-85 was excluded for two

reasons. First, the 1980-83 was a period of transition and cyclical declines in employment

in the industry, when the contract was being restructured. Second, the period 1983-84 was

associated with the disaffiliation of all but one of the Canadian locals from the UAW and

formation of the Canadian Auto Workers and a Chrysler “catch-up.”

For the period 1961-1980, annual negotiated wage increases, averaged 7.2% at the

two companies. For the period 1985-2004, annual negotiated wage increases averaged

only 3.6%, exactly half of the pre-employment security negotiated wage increases. This is

consistent with expectations, indicating that the employment security guarantees were

accompanied by wage moderation.

Block and Belman (2003) estimated that company payments into the fund for the

employment security provisions added a maximum of 5.9% to the hourly wage paid by the

companies, but that a more reasonable estimate was 4% to 4.5%. Based on this, it appears

12





the workforce aged and employees retired. While there is no way of knowing what would

have happened in the absence of these job security provisions, this is the predicted effect of

the job security provisions.

Importantly, however, the employment security provisions, while protecting the

employment of UAW-represented workers in the industry, have not prevented the U.S.

auto industry from becoming less unionized as the non-U.S. firms have established

nonunion manufacturing facilities in the U.S. Table 1 presents the data on motor vehicle

manufacturing (MVM) employment in Michigan ,in the United States overall, in the United

States outside of Michigan, and the percentage of MVM employment in Michigan from

1990 to 2004. MVM employment in Michigan declined by 28.15% during this 15-year

period. While overall MVM employment in the U.S., including Michigan, declined by

only 5.7%. Significantly, MVM employment outside Michigan increased by 12.2%.

During this period, Michigan’s share of MVM employment dropped from 36.3% to 27.7%,

a decline in share of 23.8%. These changes are due to the increasing size of the nonunion

sector of the auto assembly industry associated with the non-U.S. manufacturers.

BARGAINING DURING A PERIOD OF FINANCIAL DISTRESS: 2005-06

The period since 2004 has been one of severe financial crisis for the two U.S.-based

auto manufacturers. GM reported a loss of US$10.6 billion in 2005 (Peters, 2006).

Although Ford earned a US$2 billion profit in 2005, it’s North American operations lost

US$1.6 billion (Maynard, 2006; :Ford Posts . . ., “ 2006).8 Also in 2005 Delphi, the firm

14



created when GM “spun off” its parts operation, filed for bankruptcy. This was important

to GM not only because Delphi is GM’s largest parts supplier, but also because GM agreed

to permit former GM employees with Delphi to “flow back” to GM under certain

circumstances (Agreement, . . ., 2006).

As a result, GM and the UAW and Ford and the UAW undertook rare mid-contract

negotiations in 2005 and 2006. The negotiations focused on two areas, health care and

employment levels. With respect to health care, a major concern of the companies has

been “legacy costs,” the cost of paying for the health care benefits of retirees. GM has long

claimed that these legacy costs have placed GM at substantial cost disadvantage vis-à-vis

their non-U.S. based competitors with plants in the U.S. Because all these latter plants

have opened since the mid-1980’s (Hill and Brahmst, 2003), the non-U.S.-based firms do

not have retirees to whom health insurance must be provided. Reflecting this company

concern, GM and Ford agreed with the UAW that that the health care benefits of active

employees would not be reduced for the remainder of the current agreement, expiring in

September, 2007, but the active employees would forego US$.17 per hour of future cost of

living increases and a 3% wage increase due in September, 2006. Retirees whose GM or

Ford pension was greater than US$8,000 per year and who were receiving benefits greater

than US$33.33 per month per year of service would be required to pay US$10 per month

for single coverage or US$21 per month for family coverage, along with deductibles and

co-pays. Prior to this agreement, all health insurance for active employees and retirees was

fully paid by the Company. (UAW Statement. . ., 2005; “UAW National Ford Council . . .,

2006)

15



With respect to employment levels, in March, 2006, GM and Delphi, its former

parts division currently in bankruptcy, announced an early retirement program that would

provide monetary incentives for employees who retired early and voluntarily left the

Company. Employees were offered payments from US$35,000 to US$140,000 depending

on length of service. Approximately 35,000 GM workers accepted the “buyouts,”

reducing GM hourly employment by about 30%. Approximately 12,600 Delphi workers

also accepted the buyouts. (“Delphi, GM . . ., 2006; “35,000 GM Employees . . . , 2006;

Hawkins and Maher, 2006; Ellis and Roberson, 2006). The early retirement program falls

within the framework created by the employment security provisions at GM. They assure

that employment reductions are due primarily to attrition via retirement.

Ford followed a different path than GM. In January, 2006, Ford announced it

would close up to 14 North American manufacturing plants and eliminate 25,000 to 30,000

jobs (Bajaj, 2006). The UAW has said it will vigorously enforce the employment security

provisions in the 2003 collective bargaining agreements (“UAW Statement . . ., 2006).

THE NORTH AMERICAN FREE TRADE AGREEMENT AND THE U.S. AUTO

INDUSTRY

Given the substantial restructuring that has occurred in the U.S. auto industry since

1993, it is almost impossible to determine the contribution of the 1993 North American

Free Trade Agreement (NAFTA) to these changes.9 Burfisher, Robinson, and Thierfelder

(2001) note that the prediction that NAFTA would have devastating effects on the U.S.

16



automotive industry had not come to pass, at least by the late 1990’s. They observed that

that employment overall in the U.S. automotive sector had grown in the period 1993-99,

suggesting that NAFTA had not reduced employment in the automotive sector in the

United States. They also note that GM, Ford, and Chrysler, invested US$39.1 billion in

their U.S. facilities between 1993 and 1996, compared to US$3 billion in Mexico.

Schott (2006) observes that NAFTA created an integrated North American

industry. Writing in 2006, however, he notes that automotive employment declined in the

United States during the NAFTA period and that wage rates have remained stable, findings

consistent with some detriment to employees in the U.S. auto industry.

These analyses are consistent with the analysis here. Overall U.S. auto assembly

employment has grown outside the unionized sector during the NAFTA era that started in

1993, but it declined overall and in the unionized sector in the U.S. Schott’s statements

on wages are consistent with the nature of wage-setting structures as they have evolved in

the industry over the last twenty-five years, discussed above. As noted, wage rate changes

in the unionized sector have tracked inflation as the UAW “traded” wage increases for

employment security. At the same time, there is no reason to believe that the real wages of

employees in the nonunion firms have increased; it is likely that these firms already paid a

local premium and the firms would have no reason to raise wages faster than the wages

were increasing in the unionized sector to avoid unionization. Overall, then, there is little

evidence to suggest that NAFTA has been a major cause of the structural changes in the

U.S. auto industry.

Finally, and as Burfisher, Robinson, and Thierfelder note, U.S. firms have

continued to invest in the U.S. While it is impossible to know with certainty the reason for

17





development will determine the future of the U.S.- based automotive firms. The UAW has

an enormous stake in the success of these firms; their members depend on these firms for

their employment, and these are among the best manufacturing jobs in the United States.

Based on the past sixty years of labor relations, there is no reason to believe that the UAW

will be an impediment to recovery.

REFERENCES

1990 National Agreement and Supplemental Agreements Between General MotorsCorporation and the UAW.

“35,000 GM Hourly Employees Participate in Attrition Program,” 2006, GM NewsRelease, June 26.

Agreement Between General Motors Corporation and the UAW , 1984,, September 21.

Agreement Between General Motors Corporation and the UAW, 1987, September 21.

Agreement Between General Motors Corporation and the UAW,1999, September 28.

Agreement Between General Motors Corporation and the UAW, 2003, September 18.

Agreements Between Ford Motor Company and the UAW, 1984, Volume 1, October 14.

Agreements Between Ford Motor Company and the UAW , 1987, Volume 1, September 17.

Agreements Between Ford Motor Company and the UAW ,1990, Volume 1, October 7.

Agreements Between Ford Motor Company and the UAW,1999, Volume 1, October 9.

Agreements Between Ford Motor Company and the UAW ,2003, Volume 1, September 15.

Automotive News, 2006, “Data Center,” athttp://www.autonews.com/apps/pbcs.dll/section?Category=DATACENTER ,accessed July 7, 2006.

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http://www.autonews.com/apps/pbcs.dll/section?Category=DATACENTER

http://www.autonews.com/apps/pbcs.dll/section?Category=DATACENTER



Bajaj, Vikas, 2006, “Ford to Cut Up to 30,000 Jobs and 14 Plants in Next 6 Years,” The New York Times, January 23.

Block, Richard N. and Dale Belman, 2003, “Automotive and Other ManufacturingIndustries in Michigan,” Michigan at the Millennium, Charles L. Ballard, Paul N.

Courant, Douglas C. Drake, Ronald L. Fisher, Elisabeth R. Gerber, eds., EastLansing, Mich.: Michigan State University Press, pp. 145-68.

Block, Richard N. and Peter Berg. 2003. “Auto Assembly,” in Bargaining for Competitiveness: Law, Research and Case Studies, Richard N. Block, ed..Kalamazoo: W.E. Upjohn Institute for Employment Research, pp. 101-16.

Burfisher, Mary, Sherman Robinson, and Karen Theirfelder, 2001, “The Impact of NAFTAon the United States,” Journal of Economic Perspectives, Vol. 15, No. 1 (Winter), pp. 125-44.

“The Contribution of the International Auto Sector to the U.S. Economy: An Update,”2005, Economics and Business Group, Center for Automotive Research, Ann Arbor,Michigan, March, http://www.cargroup.org/pdfs/AIAMFinal.PDF, accessed July 10, 2006.

“Delphi, IUE-CWA, and GM Agree on Hourly Special Attrition Plan,” 2006, Delphi NewsRelease, June 16.

Ellis, Michael and Jason Roberson, 2006, “”47,600 Hourly Workers Take SeverancePackages from GM, Delphi,” Detroit Free Press, June 27.

“Ford Posts 19% Profit Rise, Unveils Restructuring Plan,” 2006, The Wall Street Journal,January 23.

Hawkins, Lee, Jr. and Kris Maher, 2006, “GM’s Buyout Package Attracts 35,000Workers,” The Wall Street Journal, June 27, P. A3.

Hill, Kim and Emilio Brahmst, 2003, “The Auto Industry Moving South: An Examinationof Trends,” Center for Automotive Research, December 15, athttp://www.cargroup.org/pdfs/North-SouthPaper.PDF, accessed July 6, 2003.

“Joint UAW-Ford Summary of Terms of Tentative National Agreement,” 1982, BNADaily Labor Report, No. 31 (February 16), pp. E-1 to E-4.

“Job Security and Moderation in Wages Cited as Key Topics in 1982 Auto Talks,” 1981,BNA Daily Labor Report, No. 181 (September 18), p. A-1.

Katz, Harry C.,1987, Shifting Gears: Changing Labor Relations in the U.S. AutomobileIndustry, London, UK and Cambridge, Mass.: The MIT Press.

20

http://www.cargroup.org/pdfs/AIAMFinal.PDF



http://www.cargroup.org/pdfs/North-SouthPaper.PDF


http://www.cargroup.org/pdfs/North-SouthPaper.PDF





ENDNOTES

22



1 Due to space limitations, this paper will not address the substantial changes in plant level labor relationsthat have occurred over the past twenty-five years. For a discussion of plant level labor relations in theunionized sector of the U.S. auto assembly industry, see, for example Katz, 1987; Kochan, et al, 1997;Rubenstein and Kochan, 2001; and Block and Berg, 2003.

2 Much of the material in this section of the paper is adapted from Block and Belman (2003).

3 See, for example, “The Contribution . . .,” 2005).

4 Much of the material in this section of the paper is adapted from Block and Belman (2003).

5 Chrysler Corporation and Daimler Benz Corporation merged in 1998 to form DaimlerChrysler.

6 DaimlerChrysler does not provide copies of its agreements outside the corporation, but there is noreason to believe that the 2003 agreement with DaimlerChrysler did not mirror the GM and Fordagreements.

7 The September to September time frame was used because the annual wage increases are time tocoincide with the anniversary of the effective date of collective agreements and this anniversary is inSeptember. been effective. Chrysler/Daimler Chrysler was not included as Chrysler and the UAWnegotiated a separate wage concessions as part of government-backed loan guarantees for Chrysler in1981, and was on a separate negotiating schedule during much of this period.

8 The smaller Chrysler unit of DaimlerChrysler earned US$1.8 billion in 2005 (Maynard, 2006).

9 See also Office of Automotive Affairs, 1999.

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