South Bend: Tragedy at Studebaker

...That brought a speculation as to how many men they would employ...

...Not much more can be expected...

...As B. J. Widick pointed out a few years ago: "Sociologists, looking for blue-collar workers who were middleclass not only outside the plant, but inside, would have difficulty in finding a better study than the Studebaker payroll...

...Unlike the Chrysler workers, they were not harried by intolerable speed-up...

...In recent years one after another of the auto companies has been driven to the wall by the intense competition of the Big Three...

...One worker, perhaps 55, was discussing his Blue Cross...

...For 15 years he had felt secure against a siege of sickness...

...At its peak it employed 23,000 workers and pre-empted about four per cent of the auto market...

...Little by little the tragedy of the Studebaker workers, whose whole adult life had been given up to the sprawling plant a few blocks from the Local 5 office, would be made invisible...

...The men in the union corridors contented themselves with putting the blame not on the Company, but its management...

...labor depart...

...Twenty-two per cent of the Studebaker men were Negroes, almost all unskilled...

...The 750 skilled craftsmen were no problem...

...Maybe I won't even be able to get it...

...But there is no doubt, as one speaks to the Local 5 President, that he would be happier unemployed himself than having to carry his heavy responsibility...

...If we lose our insurance the only way to handle a load like that would be to mortgage my house...

...Some might, but not the majority...

...The Company, said the men, had been inept and short-sighted...

...Now they were being remorselessly downgraded, and though their future travail was not yet fully evident they could feel in the marrow of their bones the beginning of a descent into what Michael Harrington has called the "invisible poor...

...Almost all had grown children on whom they might lean in case of emergency...

...Studebaker is a symbol of the qualitative decline of unionism itself...

...The problem began with the remaining workers...

...Its gesticulations about the need for jobs are effete and undramatic...

...If they were not so hesitant about moving out of town, they could have been placed by now...

...Thirteen hundred were still employed on parts production and probably would continue...

...Egbert is reputed to have dreamed up this experiment while browsing through hot rod books at an airport...

...The discussion continued through the day, with new faces joining the circle, old ones leaving for home...

...There just isn't enough money in the kitty...

...In trying to find work in an economy where six to nine per cent were workless, they were doing all that could be done, like a conscientious doctor who attends a terminal patient...

...No one threatens to form a national unemployed organization...

...Insofar as factory workers can achieve stability and security, the Studebaker workers seemed to have it...

...Now the shutdown in South Bend—which, by the way, quadruples unemployment in that city from 2% per cent to 10 per cent of the work force—offers Studebaker a great opportunty for gain...

...their grievance machinery was ample...

...This will be a burden because Indiana's maximum unemployed pay is $36 a week...

...Onefourth will wander away, and the rest will be fitted into lower-paid jobs...

...and they had steadily improved their economic position without too many strikes...

...If Litton takes over Studebaker and begins work on an $87 million military order, that might absorb 500 men...

...The Studebaker workers were part of an industrial elite...

...Hill figures that one-third of them will still be jobless by December 1964 or will have resigned themselves to the permanent relief rolls...

...For most of them life will never again be the same...

...As for the men now on the street, they rankle because in 1954, under severe pressure by their leaders, they had agreed to a wage cut that cost them 50¢ an hour—in the mistaken belief that such concessions would keep the company afloat...

...Harassed by questions he cannot answer, Woody reflects the uncertainty of his followers...

...They rankle because since then, in each negotiation session, they have given up benefits won through the years, again to placate a division that was losing money...

...The plight of the Studebaker workers, whose plant—except for a small segment devoted to parts production —was being shut down after 50 years of operation, was not dire and would not be for some time...

...By diversifying so that autos were but one half of its operations, Studebaker has been able to show a net profit each year...

...By pretending to remain in operation and selling perhaps 20,000 to 30,000 cars a year—an insignificant amount in a seven million annual market— they will be doing quite well financially...

...The UAW was canvassing factories in a five or six state area, and had already dug up a dozen or two dozen spots for the Studebaker men...

...Of the 7,000 laid off permanently, 800 were eligible for social security or the company retire...

...The UAW nationally does not rock the boat of its "boy" in the White House...

...The supplemental unemployment benefits are exhausted, sisce the fund is down to a mere $30,000 as a result of previous layoffs...

...There were reports that the Litton Company was going to buy the plant...

...On total sales of perhaps $300 million in all branches, they will be pocketing three or four times what they do now with $400 million...

...They had been among the first—they claim to have been the second local in the UAW— to unionize back in the 1930's...

...What's the sense of retraining," he asked, "if there's no jobs...

...Still another paycheck would come next week and, after that, there would be $36-a-week unemployment compensation for twenty-six weeks...

...Under Egbert the auto division, which accounted for just half the $400 million sales of Studebaker, had produced the Avanti, which because of small production, cost about $10,000 per car to make and then sold for just half—"the only $10,000 car," said the members of Local 5, "you can buy for $5,000...

...Perhaps because Studebaker had been such a prominent company, the government was reacting with surprising vigor...

...The supplemental pension fund, which now has $22 million, will continue to provide for the present 2,175 retirees and perhaps the 800 who may join their ranks, but according to the UAW, none of those now under 60 can hope to benefit from it in later years...

...It does not occur to most Studebaker workers that they are part of a national or social tragedy...

...Jim "Red" Hill, the UAW International Representative who himself came out of Studebaker, estimates that perhaps half the Negroes will still be jobless by the end of 1964, with the other half migrating to parts unknown looking for work...

...He was spending," says Red Hill, "our workers' future...

...The hospital, surgical and life insurance plans—contrary to the fears of the man worried about Blue Cross —can be continued by the laid-off unionists, providing they pay not only their former share but also that of the company—a total of $4.06 a week, as against the previous $1.84...

...ment was alloting $771,000 to retrain 1,500, some of whom would have to be taught simple reading and writing...

...President Johnson had instructed five federal departments to find jobs for the displaced men...

...Its descent was inevitable...

...Their despair is localized asd restrained, not educated enough to see the total ramifications...

...But it failed to plow back its profits to set up an effective dealers organization or to provide adequate credits for consumers...

...The whites would fare better...

...His Local will survive, for it continues to serve the 1,800 men still working on parts, and it will soon be assigned other jurisdiction by the UAW...

...If I have to take Blue Cross, that'll cost me $16 a month," he said...

...Their November 27 union paper called on them to support the "Christmas Seal Campaign," and their Pres ident and Vice-President reminded them "to give thanks to God for the many rights and privileges we enjoy as citizens of the greatest country in the world...

...Some had wives working...

...He recalled that when a fellowworker "was taken to the hospital last year his bill was $2,000 the first time and $3,000 the second time...

...To shout against this fate, to demonstrate, or to march on Washington would upset their own image of middleclass status...

...In our "free enterprise" system this is considered a justified excuse for sending 7,000 people to the scrapheap...

...In Local 5's $200,000 building on South Main Street, President Woody Frick hugs the telephone, waiting for calls from prospective employers and advising workers, for the time being, to take whatever is offered them...

...For a brief moment in 1962, during a 42-day strike—directed mainly against the harshness of Egbert—the Studebaker workers experienced a resurgence of the militancy which made them so vital a force in the 1930's...

...But there is no one to recreate that mood today...

...He thought for a second: "Suppose a guy doesn't have a house...

...Many had put aside a few dollars for just this sort of rainy day...

...The loss on its plant will be written off against profits in other operations, thus providing at least $5 or $6 million a year in increased income for a number of years to come...

...Its comfortable headquarters is paid for and it has a sizable bundle in the bank...

...A dozen local committees were trying to lure outside corporations to take over the six million square feet of Studebaker plant...

...Their average wage had been $2.90 an hour, their average age 54, and their average seniority 25 years plus...

...Kaiser bit the dust in 1955, Hudson in 1957, Packard in 1958, to join a long list of others...

...In this insane hurly-burly of the auto industry it costs $27 to $30 million for a complete body and motor changeover, $4 million merely for a styling face-lift—which is needed each year— and $8 to $12 million for a body changeover...

...By contrast, disability payments are suspended entirely...

...If similar expenditures were made for every unemployed worker in the country, that would come to a cool $2 billion...

...At least as significant as such losses, however, is the loss of personal security...

...Certainly their situation was better than that of some 15,000 or 20,000 workers in defense plants, around the country, who were being laid off the same month...

...It had earned fortunes during the war by producing trucks for Russia, on a costplus basis, and a personnel carrier called the Weasel...

...ment plan...

...and until 1954 their earnings were far higher than that of counterparts in Detroit...

...A health and welfare plan, negotiated by his union, and to which he contributed $1.84 a week, provided for hospital care, surgical benefits, and life insurance...

...The U.S...

...A large portion of the men will doubtless maintain their coverage, for at their age who knows what can happen...

...Periodically Woody joins the men in the hall to answer a few informal questions, but he cannot assuage their insecurity, for what they have lost is not only material benefits but their sense of security and self-esteem...

...He wasn't sure now whether he was still protected...

...Company spokesmen were understandably coy when asked about the value of their plant, for while semi-closed it will bring them great profits, whereas in full operation it lost them almost a million dollars a month...

...One chap raised some doubts about the federal job retraining program...

...There was about them, however, a mood of bewilderment and unreality, such as one notes at the wake of a man who died before his time...

...The villain for them was the recently-resigned President, Sherwood H. Egbert, a "whiz boy" who had pushed them around in the last couple of years and had fathered the Avanti model which turned out to be the final fiasco...

...The nine workers standing semicircle in the entranceway of UAW Local 5 in South Bend were neither angry nor dour...

...They had been rooted in this plant and they gained from it a sense of belonging, a feeling of status...

...They rankle because now they are fearful of long term unemployment or a reduction in status to $1.50 an hour jobs in service industries...

...They had acquired most of the trappings of middle class America...

...They rankle because none of these sacrifices availed, and in the end they were laid off with hardly any notice and with the final indignity of being deprived of three holidays with pay — at Christmas and New Year...

...In 1963 its auto sales were a minuscule .91 per cent of the national market, and it was losing money in this division at the rate of $10 million a year...

...No one is threatening to march on Washington, as would certainly have been done if Eisenhower or Nixon were at the helm...

...When the war ended, it was the first auto company to come out with a brand new car and until 1953 or 1954 it enjoyed boom days...

...They think in pragmatic terms: Egbert, dealerships, credits...

...A company like Studebaker just could not meet these costs...

...The full shock of their new status as permanent alumni of the Studebaker Company had not yet hit them...

...Furthermore, by transfering production to the 250,000squarefoot plant in Canada, where only fifty cars are now being produced daily, it can ward off the expense of having to buy back from its dealers the cars they have in stock—as provided for in Studebaker franchises...