The World Car: Shifting into Overdrive
In the three decades since the Second World War, the auto manufacturers of Europe and Japan have struggled to break Detroit's stranglehold on the world motor vehicle market. A significant...
...So while UAW Regional Director Ray Ross is "pleased we 33NACLA Report had the opportunity to organize the workers at the first foreign-based auto manufacturer to locate in the United States," it is doubtful that VW workers can share his enthusiasm...
...But this should come as no surprise...
...Many MNCs will be quick to seize the opportunity to make major new investments or expansions in 1979.11 In 1976 Volkswagen contemplated shutting down its operations in Mexico...
...But more importantly, new government legislation aimed at promoting exports permits a significant increase in the cost efficiency and profitability of domestic motor vehicle production...
...A strong position in Venezuela not only affords greater access to the Andean region's largest local market, but simultaneously provides a privileged stepping stone to the Andean Common Market (ANCOM) in which Venezuela plays a commanding role.' 5 ANCOM, whose membership includes Venezuela, Colombia, Bolivia, Ecuador and Peru, is an offspring of the Latin American Free Trade Association (LAFTA...
...However, in light of further tariff reductions on imported vehicles scheduled for the next three year period, Fiat Concord, Chrysler Fevre and Mercedes Benz have already made plans to cut back local production and import vehicles from overseas operations...
...But unlike elsewhere, the relatively uncharted Andean territory has become a magnet for the smaller European automakers (and increasingly the Japanese) anxious to stake a claim to fame and fortune...
...And the longer supply lines dictated by the international integration of Fiesta production could prove to be an advantage despite high transportation costs and possible shipping delays...
...Noticias, June 18, 1979...
...Very few auto companies can match the financial strength of GM or Ford and consequently are at a serious disadvantage in the race to rationalize...
...For the feebler European firms, fusion has become a requirement for survival...
...The UAW has long maintained that the increase in labor productivity, i.e., the decrease in total labor hours required to produce a given or greater output, must not be a cost borne by individual workers in the form of unemployment...
...An international workers' organization must actively support workers' struggles against such repressive regimes...
...Even Renault and Nissan have embarked on expansion programs...
...mechanization--a venture predicated upon the manufacture of a vehicle of uniform design, permitting a high degree of component standardization...
...But with numerical control technology, all engineering instructions for a machining job are put on a computer tape that directly transmits them to a machine...
...it thereby increased yet again the minimum income level required to own and operate a car...
...for specific segments of the European market (and for export to the United States...
...In the wake of the oil crisis, which hit European automakers most severely and caused several bankruptcies and changes of ownership, a major restructuring took place in the West European industry...
...On the other hand, the "Union has insisted on a contractual policy of nonresistance to new labor-saving technologiesin return for a 3% annual 'productivity factor' added on to wage rates...
...THE WORLD CAR 1. According to UAW sources...
...A NEW INTERNATIONALISM FOR AUTOWORKERS The internationalization of the division of labor affords capital sophisticated weaponry to secure maximum output and the least labor strife...
...Noticias, June 18, 1979...
...Its stated policy objective-30 hours work for 40 hours pay-directly addresses the need to distribute the decreased number of labor hours to a larger number of workers...
...GM's Brazilian competitors will also step up efforts to increase and diversify exports in compliance with their 10-year contracts, upon which participation in the domestic market depends...
...Its overseas income financed the rationalization of its European operations that has so markedly increased profits, profits that are no longer being deployed at home against GM...
...The weakest point in any auto company production line is the assembly plant...
...In November 1978, an electrician at GM's truck assembly plant in Flint, Michigan, discovered in the office of a superintendent a mechanism that could secretly override the main speed control...
...To locate the science and organization of work in the hands of working people, and to put an end to capital's ceaseless attack on labor in all its myriad forms, it is imperative that the working class seize control from capital of the means and process of production...
...all others listed pro- duce on the continent...
...cit., p. 6. 9. According to UAW sources...
...For example, in the first quarter of 1979 the government renewed a 1978 decree that allows the industry to import, duty-free, any "new and completely modern" machinery and equipment, raw materials and components that cannot be produced locally...
...GM's plan to double operations in Mexico by 1982 via a $350 million investment is a vital part of its projected $10 billion effort to dislodge Ford from first place in overseas operations...
...The advent of new contenders for the world market has sparked ferocious competition over earnings...
...In each of its five size ranges it developed a single model of uniform design, to be built at selected European locations and marketed throughout Europe...
...For 18 months, GM had been flagrantly violating UAW contract specifications on line speed, imposing a furious speed-up on its workforce...
...But more significant is the mini-explosion in the export of components to parent companies and their subsidiaries in the developed as well as the underdeveloped capitalist countries...
...The international struggle of the autoworkers and of all workers must be an international struggle for socialism...
...for the Brazilian market, by virtue of its being the largest, continues to support the most efficient auto operations in Latin America...
...2 2 (And all 12,600 are faced with the impending collapse of the UAW's Chrysler Supplemental Unemployment Benefits -SUB - Fund...
...In frantic pursuit of additional auto jobs (and additional union members) the UAW is wooing foreign companies to the United States by conceding hard-won gains...
...And in that battle, capital is sure to extend and speed the metamorphosis in the means and process of motor vehicle production that is reshaping the industry worldwide...
...moreover, the organization of work becomes a daily assault on the dignity of the people who produce capital's profits...
...In the scramble for profits, the auto transnationals have launched a spate of massive investments aimed at capturing or expanding national market shares...
...And there is at least one battle that labor must always lose: where production is organized by capital, control over the nature of work passes inevitably and progressively into capital's hands...
...even VW de Mexico, the market leader, could not escape the beating taken by the auto industry in the 1976-77 recession...
...Howard Young, Special Consultant to the President, International Union, UAW, Jobs, Technology and the Hours of Labor: The Future of Work in the United States (presented at hearings of the Joint Economic Committee's Special Study on Economic Change, Washington, June 14, 1978...
...Had there been no coercion on the part of host governments, nor corresponding incentives, the effort to integrate Latin American operations into the scheme of international sourcing might have been long postponed...
...In the 1980s, then, Latin America's integration into a global division of labor will be a growing feature of the struggle for Latin American market shares...
...For instance, in Brazil the operation of outdated, very labor-intensive plants has prompted vicious resistance to wage demands on the part of the auto transnationals...
...Certainly there is sufficient work in the U.S...
...For Brazil, LAER, February 2, 1979...
...What possibilities does it hold for motor capital...
...Automotive News, June 4, 1979...
...However, as Ford of Europe's experience illustrates, a principal, if not primary consideration for motor capital in determining the pattern of international sourcing is its struggle to control its workforce...
...auto industry--if compulsory overtime were abolished and 30 for 40 instituted--to absorb Hamtramck's displaced labor force...
...Latin American Economic Report (LAER), October 13, 1978...
...DIVIDE AND CONQUER In its effort to rationalize its operations, Ford of Europe has assigned the United Kingdom an important role as an engine manufacturer...
...Reliance on state support, already a prominent feature of the industry, was further intensified and in some instances, as in the case of British Leyland, the state acquired the assets of failing comEUROPEAN MARKET SHARE- YEAR END 1978 Producer % 1. Peugeot-Citroen 17.3 2. Renault 12.8 3. Fiat 12.2 4. Ford 12.2 5. Volkswagen 11.4 6. General Motors 10.0 7. Combined Japanese firms* 6.5 8. Others (7 significant) 17.6 *Importers only...
...Argentina At the end of 1978, GM shut down operations in Argentina...
...In fact, it is an integral part of GM's world car strategy, since the new engines will be supplied to GM'sJ-car production facilities in West Germany and Britain as well as in Brazil itself...
...2. Maryann N. Keller, Research Department, Kidder, Peabody & Co., Inc., "Ford of Europe," July 19, 1978, p. 15...
...Although faced with such impediments to cost-efficient component production, the auto transnationals are also confronted by the demand of host governments that they increase and diversify their exports...
...it is not the workman that employs the instruments of labor, but the instruments of labor that employ the workman...
...Dagenham, England...
...And yet this very same process, by creating a labor force that is far more profoundly international than ever before, simultaneously contains the seed of capital's demise...
...But it will also be an uneven feature, dependent on the shape that struggle assumes in the different Latin American states...
...However, the introduction of computer technology is increasingly aimed at those production arenas where skilled labor still predominates...
...In the summer of 1978, it sold all of its European car and truck manufacturing capacity to Peugeot-Citroen.* Even in the United States, Chrysler has not only shelved expansion plans (selling its unfinished Pennsylvania assembly plant to VW, for example) but has severely cut back existing capacity as well...
...For example, for each different component there is a unique maximum economy of scale...
...However, new developments in the U.S...
...Ford, although second to GM in the United States, has experienced remarkable growth in its overseas operations...
...Hence, there is considerable speculation that the Argentine industry "will eventually lose its manufacturing role and simply become an assembler" and importer of motor vehicles...
...now it is labor's turn...
...The grave dangers and profound possibilities present in the international integration of production makes imperative an international organization of autoworkers--one that does not restrict itself to provision of support for different national labor action...
...In] every kind of capitalist production...
...In June 1980, it will close yet another facility, the Dodge Main assembly plant in Hamtramck, Michigan...
...Although ANCOM has been plagued throughout its brief history by continued difficulties in "establishing common external tariffs, reducing taxation on goods imported from member countries and producing a joint industrial program," its Automotive Agreement of 1977 (reformulated in 1978) has recently gotten off the ground...
...With weapons such as these at its disposal, capital can achieve the most profitable distribution of component production: where it faces a contentious labor force, it will assign production of an interchangeable part that can be dual sourced...
...Renault, Peugeot and Volvo have undertaken joint engine work, while DAF, 31NACLA Report Volvo and KHD, a West German company, have embarked on joint commercial vehicle design.'" One industry newspaper report identifies 39 different cases of national and international collaboration between European motor companies And the phenomenon is not confined to European companies...
...Thus, GM's Mexican expansion includes a new V-6 engine plant that will send 80% of its output to the United States...
...WORLD CAR GROWS UP The development of the world car, and its attendant internationalization of the division of labor, is a phenomenon that has yet to come fully into its own...
...Since their introduction 20% more cars are produced with 10% fewer workers...
...Employment by capital is the only means by which the working class can secure its livelihood, and the introduction of labor-saving technology poses an immediate threat to employment...
...World demand for the "Bug" is met entirely by VW's Latin American operations...
...Solidarity (UAW official publication), February, 1979...
...Rough engine block castings start at one end of the line and come off at the other end 275 metres away, completely machined and ready for assembly.3 On the other hand, the manufacture of interchangeable components, especially in the context of international sourcing, lends to capital a degree of control that is just not 24JulylAugust 1979 possible in final assembly operations...
...In fact, it is merely the most sophisticated plane on which capital conducts its battle against the working class...
...8. Keller, op...
...But for the workers at Hamtramck, for the 12,600 workers facing a dry SUB Fund, what deals can they make...
...cit., p. 328...
...The alienation to capital of control over production is not the inevitable outcome of the effort to liberate production from the physical limits of human agency...
...By compelling capital to shrink its costs of production, the push for profit always effects changes in the division of labor in any given industry...
...6 COMPUTERIZING THE PROCESS In addition to this rapid growth of capital's "manufacturing flexibility," there is yet force to confront: the progressive revolution in production technique accompanying the advance toward the world car...
...The government's automotive decree of February 1979, which reduces local content requirements and maintains, for the immediate future, an effective level of protection from imported vehicles, has sparked a revitalization in industry output and sales...
...On the other hand, extensive cost reduc...
...Internationalism has served capital well...
...A primary consideration influencing Ford's decision was the fact that its engine plant at Dagenham produces more engine components than its other European plants, and is also the site of its only European foundry (for casting engine blocks...
...But even this kind of organization is inadequate to the needs of working people...
...2 0 GM is clearly taking full advantage of government export incentives to bring its Brazilian operations into the mainstream of its multinational activities...
...This centralization of capital--the concentration under one control of already existing capitals - has traditionally proceeded along national lines, as in the 1974 merger of Peugeot and Citroen, two French companies...
...Clearly, the TNCs are targeting Mexico as a critical competitive arena...
...and Saarlouis, Germany...
...Keller, op...
...If, for instance, the workers on the Fiesta engine line at Dagenham slow down or strike, Ford can increase output from its Fiesta engine line at Almusafes...
...The developments currently unfolding in the motor vehicle industry--the internationalization of the division of labor and the revolution in production technique--constitute a declaration of war by the auto transnationals against their multinational workforce...
...autoworkers...
...UAW Chrysler Department Director Marc Stepp expressed outrage at Chrysler's decision 32JulylAugust 1979 Unimates spot weld Vega car bodies at GM's Lordstown plant...
...The competitive bidding for TNC participation in the various local allocations has been extremely intense...
...Survival thus compels a furious new struggle to secure additional and larger market shares and, where possible and profitable, to extend the internationalization of the division of labor...
...Imports of raw materials and components that can be produced locally, but which are considered "indispensible" to uninterrupted production for export, enjoy a 75% tariff reduction, as do imports of spare parts not produced locally...
...But the J-car goes considerably further than the X-car...
...Moreover, these costs are then spread over the huge volumes required to service many markets, thereby minimizing the cost per unit vehicle...
...Local purchases of raw materials and lesser components, necessitated by local content regulations for intermediate motor parts as well as finished vehicles, remain far more costly than comparable purchases on the world market...
...cit., p. 1. 22...
...1 (JanuaryFebruary 1979), p. 34...
...Testimony at Detroit City Council hearings, June 11, 1979...
...BLA, April 18, 1979...
...The TNCs operating in Brazil thus face a domestic market whose growth in the immediate future will be modest, at best...
...4. Keller, op...
...And in so doing, it creates competitors with the strength and coordination to more effectively fight it out on the world market...
...the same exploiters...
...4 For the auto companies, the resulting decrease in costs will reap several types of benefits...
...However, in capital's hands machinery can never be more than a mixed blessing for labor...
...Indeed, even GM, which enjoys almost a 60% share of the cars produced in the world's largest auto market, is anxiously endeavoring .to boost its competitive position in overseas markets and has mapped out a $10-13 billion expansion plan toward that end.' 0 As in the past, Latin America continues to be a principal battleground in the competition now raging worldwide...
...tions can be realized in manufacture itself...
...Also in 1978, Fiat do Brasil sent engine blocks to Argentina, cylinder heads to Belgium, rings and plates to the Philippines and additional parts to Australia...
...and it must spearhead the fight against, among others, the second-class status of immigrant workers, no-strike legislation in any form, and government mandated "sacrifice" on the part of the working class...
...in sourcing production on a regional basis, the industry could achieve economies of scale that would otherwise be precluded by the small size of individual markets...
...The dislocations that would follow from the decline of manufacturing operations--and particularly, the thousands who would be thrown out of work in the terminal as well as the parts sector--could only aggravate the unrest of a working class subjected to three years of the military's strivings for "development...
...Business Latin America (BLA), January 10, 1979...
...And in 1982 GM will unveil its J-car, a subcompact that will also provide an identical inside structure for each division's models...
...Solidarity, October 15-30, 1978...
...And VW plans to supply engines to its U.S...
...only where its labor force is weak will it assign production on a non-interchangeable part...
...Karl Marx, Capital, Vol...
...Few auto companies have sufficient resources to rationalize multinational operations in this way...
...If, for example, autoworkers on the Fiesta engine lines in Dagenham and Almusafes, or in the stamping plants of Almusafes and Saarlouis walk out together, Ford's Fiesta assembly operations throughout Europe would be shut down...
...the collective product of the factory workforce is becoming the collective workforce of a global workforce...
...BLA, February 14, 1979...
...8 As in the case of GM's robot welders, a principal aspect of the new technology consists in directly replacing labor on the assembly line...
...BLA, March 7, 1979...
...And it has even become possible to dual source the very tools required to make parts -a phenomenon known as shifting tooling...
...So in capital's renewed effort to increase labor productivity the spotlight has shifted once again to the introduction, en masse, of labor-saving technology...
...s So in return for a small fee, the UAW grants the auto titans the right to disemploy its members...
...Brazil In contrast to the projected high rates of growth for local sales in Mexico and the Andean region, the growth of the Brazilian market is hampered by government maneuvers to curb petroleum consumption...
...13, No...
...1 6 The Automotive Agreement is aimed at the regional integration of motor vehicle production...
...5. Ibid., p. 16...
...s 2 Chrysler's financial plight has prompted a second crucial change in the structure of its operations...
...Stocks already in transit from Dagenham can supplement the increased output from Almusafes and thereby keep Ford's Fiesta assembly facilities operational despite a strike.' This dual sourcing of components is a critical piece of the new weaponry available to capital in its production of interchangeable parts...
...in the motor vehicle industry, capital's renewed effort to slash costs is spawning a division of labor that extends across national borders and vast seas...
...Where high volume production of parts counts- as it does for most major parts like engines, gearboxes and body pressings- the huge volumes required for the single European model guarantee the attainment of those maximum economies of scale...
...They were dependent on Ford for permission to stay and that depended on good behavior...
...the cosmetic variation required by individual markets is introduced via non-interchangeable, lesser components known as "inserts...
...It is designed for production and marketing in North America, Germany, Australia, Japan and Brazil...
...Testimony at Detroit City Council hearings, June 11, 1979...
...The UAW's conciliatory stance in the struggles it already faces at home does not bode well for the future...
...Without the mediation of any direct labor, the machine positions itself automatically for each different operation and moreover, does so in seconds...
...A model which is uniformly designed for all markets is one whose major parts are identical, and hence interchangeable, for all vehicles regardless of national origin...
...In the first half of 1979 the government further reduced auto finan-ing terms, twice in29NACLA Report creased the price of petroleum and raised the products tax on automobiles...
...moreover, its capacity in Europe alone is not significantly less than the worldwide capacity of some of its European competitors...
...This resistance is not only condoned, but made possible by the country's military dictatorship...
...Numerical control thus affords capital enormous savings...
...market, have now compelled GM to vastly expand foreign operations...
...The accumulation of profits accompanying the industry's international expansion, together with the increased collaboration among auto capitals, will put enormous new resources at the disposal of the TNCs to do battle against each other and against the working class...
...And worse, local supplies are often unavailable in the quantities (and quality) required for uninterrupted production...
...Greater use of robots, such as the Unimate welders at Lordstown is inevitable...
...How the Union addresses the enormous dangers presented by capital's new transformation of the production process remains to be seen...
...at that technologically determined, optimal production volume, unit cost is lowest...
...Moreover, the annual export of 250,000 multi-fuel engines to European sites will go a long way toward fulfilling GM do Brasil's commitment to $1 billion of exports for the 1976-1986 period...
...Thus, across-the-sea uniformity in design and standardization of components is now attainable...
...GEARING UP LATIN AMERICA FOR THE 80s Mexico The nearest likeness to a miracle economy in 27NACLA Report 1979 will be Mexico, not because its expected growth rate of 7% is spectacular, but because all the economic indicators point to boom times in the early 80s...
...it is rather, the outcome of a system of production structured by capitalist class relations...
...But it is Chrysler's planned expanion in Mexico in marked contrast to its retrenchment in 28JulylAugust 1979 the rest of Latin America--it sold out to GM in Venezuela and Colombia and merged with VW in Brazil-- that most sharply underscores Mexico's growing importance in Latin America's car wars...
...But the Union itself proclaims that this redistribution provides a crucial defense against capital's assaults...
...In Detroit, "downsizing and other aspects of car redesign give the companies an opportunity to revamp much of the production process...
...So where then did it make sense for Ford to concentrate its final assembly operations...
...Just recently, Brazilian autoworkers protested Fiat's attempts to speed the line, and worker control of line speed is a key issue in the repeated strikes at Ford's Fiesta plant in Almusafes.28 But since speed-up is only feasible where worker compliance can be secured, it fails to provide sufficient "flexibility" to motor capital in the present race for resources...
...But the outstanding feature of the current period is the appearance of international mergers in which companies of different national origins are interwoven into one international company, as in the merger of Sweden's Volvo with DAF, a Dutch firm.25 Although this international centalization of capital is a tendency that has yet to fully blossom in the motor vehicle industry, there is considerable movement in that direction, as indicated in the growth of cooperative ar- rangements for limited tasks across national borders...
...Riding high on its 40 billion barrels of proven oil reserves, the country is throbbing with confidence and capably administered by a pro-business government that is rolling out the welcome mat to foreign companies...
...The new internationalism not only entails autoworkers across the globe laboring under Ford workers occupy factory at Swansea, England...
...And its annual purchase of 300,000 VW engines saves it considerable tooling expenditures...
...cit., p. 37...
...3. Gerald Bloomfield, The World Automotive Industry (Newton Abbot: David & Charles, 1978), p. 25...
...On the one hand, capital costs for the design and engineering of major components is incurred only once for a given size range...
...Similarly, Ford's European car will move several steps closer to a real world car when "Project Erika" goes into production in North America, Europe, South Africa and Australia...
...cit., p. 18...
...cit., p. 329...
...subsidiary from a new plant to be built in Mexico...
...In addition, wildcat strikes were illegal there...
...For VW, the new Mexican investments are compatible with its global strategy of the past decade: unable to destroy the established dominance of Ford and GM in Europe and the United States, VW has staked out Latin America as the centerpiece of its multinational operations, and now boasts a one-third market share for the entire region...
...Unlike the process in which uncompetitive capitals are gobbled up by bigger fish, the fusion of small capitals in voluntary mergers allows each to continue to function as capital and yet realize the competitive strengths derived from size...
...But Chrysler is only first learning what has long been known to the weaker European automakers-capitalist collectivism provides a fighting chance...
...On the one hand, the machining of the engine block is highly automated: Most of the 600 separate operations on a 6 or 8 cylinder engine block are carried out on automatic transfer machines...
...By thus stripping labor of its control over the conditions and content of work, capital is given a freer hand in its struggle to secure the maximum possible profits...
...Less than three years later, VW de Mexico announced a $130 million investment program, and the Big Three have undertaken investments totaling $620 million...
...On the other hand, in a protected market where auto TNCs are free to determine prices, the decline in costs will surely increase the profitability of those booming sales...
...Exports of CBUs ("completely built up" vehicles) and CKDs ("completely knocked down" kits) for markets in neighboring Latin American and other underdeveloped countries have increased dramatically...
...But while the Union has argued its case before Congress, it has yet to bring the issue to contract negotiations with the auto companies, although only via contract language can the Union directly enforce "30 for 40...
...This interchangeability of major parts translates into vast savings for motor capital in every phase of production...
...But this very process is engendering critical transformations in the combatants themselves...
...Ernest Mandel, Late Capitalism (London: New Left Books, 1975), p. 323...
...But in the late 1960s and early 1970s, Ford moved toward the production of a "European car...
...ESTIMATED WORLDWIDE CAR PRODUCTION 1979 TOP TEN PRODUCERS Producers Cars (000) 1. General Motors 7,124 2. Ford 4,881 3. Peugeot-Citroen 2,212 4. Volkswagen 2,150 5. Toyota 2,000 6. Nissan 1,692 7. Renault 1,584 8. Chrysler 1,433 9. Fiat 1,170 10...
...For Chrysler, the heightened struggle of the current period has signaled changes that, while uneven, represent a decline in its worldwide operations...
...The integration of Latin America's auto industry in the international sourcing of components suffers a considerable handicap...
...And rather than forfeit continued access to domestic markets, the transnationals have undertaken an ambitious export program...
...Thus, a car of uniform design is one that permits 23NACLA Report superficial variation but whose inside structure is identical...
...Final assembly: the last and most labor-intensive stage of motor vehicle production...
...It not only reduces capital's need for skilled workers, but also, by minimizing that machine's downtime-the machine no longer sits idle while a machinist hand-positions it for each operation- the cost of the machine is spread over a much larger volume of output...
...The trend toward smaller cars in the United States has decreased the size gap between cars produced and marketed in the United States and in Europe and Japan...
...This extension of the division of labor, which makes production of a vehicle dependent on operations in any number of locations, creates for labor the objective conditions for a victorious struggle against capital...
...In short, a well-developed infrastructure ensured that the costs of engine manufacture would be lower in Britain than elsewhere...
...It obviously made sense for Ford to concentrate assembly in a location where it was strongest visa-vis the workforce, In Saarlouis, for example, there was high unemployment and migrant workers constituted a large percentage of the workforce...
...According to industry sources, Ford's European operations accounted for 12.2% of total European capacity...
...LAER, February 2, 1979...
...From GM's point of view, then, its decision to pull out should not prove to be a significant competitive disadvantage in Latin America...
...For capital's employment of modern science and technology in its quest to increase productivity and decrease costs is never neutral...
...The push to increase labor productivity via technical transformation of the production process is an old and familiar phenomenon in the auto industry dating from Ford's introduction of the moving assembly line around 1910...
...As far back as 1976 VW do Brasil exported 60,000 engines and 140,000 gearboxes to VW's West German plants, and by 1978 those exports were valued at $37 million...
...However, GM's decision appears to portend similar, if less radical, action by some of its competitors in consequence of the legislated changes in the Argentine motor vehicle industry...
...CAPITAL CUTS COSTS But why did Henry II so anxiously pursue this European strategy...
...And that, in turn, is a function both of the strengths and strategies of the transnational contenders and of the rapid and diverse transformations in Latin America today...
...Today, fully half of the European industry is nationalized.2 But more importantly, there was a move toward increased joint ownership of the means of production, effected through a series of mergers...
...the only major components that are single sourced are the gearbox, transmission and axle which are produced at two new plants in Bordeaux, France...
...30JulylAugust 1979 made piecemeal cutbacks, the last occurring in December 1978 when 1200 workers were axed, decreasing employment to its present level of 5000...
...But GM do Brasil's four-year, $500 million investment in the manufacture of multi-fuel engines is aimed at more than the Brazilian market...
...According to UAW sources...
...The sale of much of its Latin American capacity is part of a general retrenchment in overseas markets undertaken to raise badly needed cash...
...to close its Hamtramck plant, calling it an example of the kind of "raw corporate power" that should be subject to federal regulation...
...Forbes, April 2, 1979...
...GM plants in West Germany, Australia and Japan will also turn out the new engine...
...Phone interview with industry spokesman...
...Since that time, Chrysler has *Despite its withdrawal from direct production in Europe, Chrysler's 15% holdings in PSA PeugeotCitroen enables it nevertheless to skim off profits produced by European workers...
...1 8 Although the future of the industry remains unclear, Argentina is certain to be the focus of an aggressive export drive (both of parts and finished vehicles) by auto transnationals operating in other parts of Latin America, particularly in Brazil...
...It is not only in this context that the UAW runs up against the problem of unemployment...
...a series of machine tools, each equipped for automatic loading, operation and ejection, linked together by conveyer systems, while the whole unit is controlled from a central point...
...British-Leyland 625 Source: Fortune, December 4, 1978...
...New plants, new machines and new routines are being introduced at record rates...
...Many cars already use a mixture of 15% alcohol and 85% gasoline known as gasohol since alcohol manufactured from Brazilian sugar cane is considerably less expensive than imported petroleum...
...For example, a door consists of an inside and an outside panel...
...Clearly, the following prediction by a Ford executive is becoming closer to realization: "The day is not far off when manufacturers--and especially auto manufacturers--will be producing the same line of products for sale everywhere in the world, with only the most minor variation among countries...
...Fabar, op...
...The trend toward smaller cars has already given a significant boost to uniform design in the U.S...
...Source: Manufacturers' data provided from Forbes...
...Tariffs on imports of non-indispensible parts produced locally were cut by 25 %. This package is available to the TNCs as long as they meet the local content and export stipulations of the 1977 automotive decree...
...In October 1978, the Union negotiated its first contract with VW, covering 2000 workers at the Rabbit assembly plant in Pennsylvania...
...Furthermore, a sufficiently skilled labor force was available at wage rates that compared favorably with those on the Continent...
...Prior to the formation of Ford of Europe in 1967, each of Ford's European national subsidiaries developed and manufactured distinct vehicles...
...In one sense, the direct replacement of labor by machinery can prove very advantageous to workers, for it often eliminates work that is unsafe, monotonous and debilitating...
...But its position as market leader in the United States affords GM the necessary resources to challenge Ford in every overseas location...
...In the event, let's say, that the machining of dies required for the Fiesta stamping plant at Almusafes is brought to a halt by labor troubles, Ford can shift production to its similar operations at Saarlouis by putting that workforce on overtime...
...I (New York: International Publishers, 1967), p. 423...
...The industry's transformation is also heating up the competition between capitals...
...Similarly, the key to motor capital's current innovations lies in the unprecendented degree of parts commonization entailed in the production of almost identical vehicles for different markets...
...This type of collaboration offers weaker automakers the opportunity to pool their capital and thereby strengthen their collective financial weaponry...
...Hence, manufacture for the regional market could be sufficiently cost efficient to permit exports of vehicles and parts...
...Or perhaps each market requires a unique instrument panel...
...Ford supplies engines for all Fiesta assembly capacity in Europe from its engine plants in Almusafes and Dagenham and its body plants at Almusafes and Saarlouis each supply half the required body pressings...
...For Ford cutting labor costs does not involve following cheap labor around the world...
...for Spain, Challenge, February 14, 1979...
...In that case, the basic car body must be developed to accept the insert of this noninterchangeable part in all its varieties...
...As long 34JulylAugust 1979 as capital retains control over the means of production and conducts its unending drive for profit, labor will always be forced to fight the same battles- against speed-up, job loss, and declining living standards...
...To expand assembly in Germany and component operations in Britain, therefore, offered Ford the chance of squeezing the maximum productivity from the combined workforce of both countries...
...The reluctance of the Union leadership to put its own proclamations into practice is compounded by its apparent willingness to accept what capital describes as inevitable trade-offs in the auto industry...
...The factors that influence the location of production of a given component include, as always, the cost and availability of loan capital, necessary raw materials and transportation...
...The company stressed that its decision solely reflected its weak competitive position in a market that offered little opportunity or incentive for a major upheaval in market share distribution...
...on the other side of the Atlantic, VW is turning out Rabbits for the North American market from its assembly plant in New Stanton, Pa...
...As elsewhere, GM is battling it out with Ford, and VW is seeking to consolidate its Latin American leadership...
...3 In the century since these words were written, capital has seized upon the rapid development of modem science to further centralize the knowledge and organization of the production process...
...A significant number, including Volkswagon, Fiat, Renault, Toyota and Nissan (Datsun), have not only survived the battle but have achieved junior status among the world's auto titans, experiencing a significant increase in size and financial strength, with a corresponding growth in their multinational operations...
...Capital can defend itself against an isolated, i.e., national, labor struggle via multiple sourcing (or shifting tooling), but it cannot do so against one that is internationally coordinated...
...3 3 And worse, the contract permits the company to postpone contributions to its SUB Fund until October 1979 and funding of its pension plan until January 1981...
...Dodge Main is an antiquated plant, built in 1910, that 10 years ago employed 10,000 hourly workers...
...In the manufacture of metal parts a machinist, working from engineering designs, adjusts the machine for each different operation required to form the metal into the desired part...
...LABOR'S OLD FOES In the current car wars, the motor vehicle TNCs continue to use time-tested measures to pump bigger profits from their multinational labor force...
...However, as one industry spokesperson explained, as long as a company is required to export, it might as well turn that to its advantage and integrate its exports properly...
...Its Brazilian merger, in which VW acquired a 67% stake in Chrylser do Brasil, not only raised $50 million but ensured Chrysler's continued, if small, presence in Latin America's biggest market...
...The separation of the intellectual powers of production from the manual labor and the conversion of those powers into the might of capital over labor is finally completed by modern industry erected on the foundation of machinery...
...This phenomenon is finding its fullest expression in the international sourcing of interchangeable components for the "world car...
...For GM, the massive plant re-toolings entailed in downsizing its cars provided the perfect opportunity to introduce its now famous compact- the X-car...
...In order to help "turn things around," and to secure future market shares, VW, Ford, Fiat and GM are actively participating in government efforts to introduce, en masse, autos designed for 100% alcohol consumption...
...But most significantly, these new investments are heralding a fundamental metamorphosis in the means and process of motor vehicle production...
...And in Bordeaux, the two new plants that supply the gearbox, transmission and axle for Ford's Fiesta "are highly automated, and, on Ford's own admission, are the company's most productive European factories...
...Bloomfield, op...
...At GM's Lordstown plant Unimates now perform 95% of the 3900 spot welds required by each car body...
...It also entails autoworkers in locations the world over participating in the production of one and the same automobile...
...market itself...
...If labor problems disrupt machining operations 26JulylAugust 1979 in one plant, the appropriate computer tape, containing all necessary engineering instructions, can simply be sent to a second plant where the machines will work on overtime to make up for lost output.9 And so capital's arsenal grows...
...Thus, should the military regime persist in its free-market strategy, Argentina's integrated auto manufacture is likely to be considerably circumscribed in the next decade...
...panies...
...6. William O. Bourke, Vice President, North American Automotive Operations, Ford Motor Co., "The World Car," November, 1976, p. 6. 7. Al Fabar, "Auto in the Eighties: Uncars and Unworkers," Radical America, Vol...
...World Business Weekly, July 9-15, 1979...
...All compacts manufactured by GM will now consist of major parts that are identical, i.e., interchangeable, between divisions...
...3 " But at Detroit's City Council hearings on the impending plant shutdown, Stepp's outrage became a plea--to the cities of Detroit and Hamtramck, to the Federal government and to Chrysler itself- that "a humanism [be] involved in its decision...
...Engine manufacture, which entails the casting and machining of the engine block and the production and assembly of related components, is not as vulnerable as final assembly to the actions of a dissatisfied workforce...
...British Leyland recently announced its intention to undertake joint production with Honda...
...2 ' Ford's aggressive foray into distant frontiers has served it well...
...As we have seen, despite two decades of albeit uneven progress, Latin America has yet to develop an industrial infrastructure capable of sustaining internationally cost-competitive manufacture...
...And when Hamtramck folds next summer, 2200 of these 5000 workers will be forced to join Chrysler's 10,400 North American employees already on indefinite layoff...
...Uniformity can be achieved by designing and constructing the inside panel, identical for a particular car model, to receive distinct outside panels...
...Mexico's new status for the auto firms is a function, in part, of the projected sales boom, already underway in 1978, accompanying the country's oil-fueled economic recovery...
...The Andean Region GM's acquisition of Chrysler's assembly facilities in Colombia and Venezuela is a crucial move in its push for first place in the expanding market of the Andean region...
...Ford of Europe, a wholly-owned subsidiary of Ford Motor Co., invested $700 million in passenger car assembly and manufacturing capacity at Almusafes, Spain, in order to cut a bigger slice of southern European markets...
...A truly international body must organize international actions around wages and working conditions, and to secure and guarantee the optimum political conditions for workers' struggles worldwide...
...SOURCING THE WORLD CAR FROM LATIN AMERICA...
...But it has not done so equally for individual capitals...
...The redistribution of work time is not a panacea for the problems posed by plant closings or for the broader spectrum of issues confronting U.S...
...25NACLA Report Rather, for Ford, cutting labor costs involves the want and fear that ensure docility and the involuntary scab labor of distant workers...
...Challenge, November 1, 1978...
...Given that this process is the most labor-intensive stage of production, Ford sought to limit the potential for disruption from its traditionally "troublesome" British workforce...
...3 2 Let alone the futility of such an appeal, there remains a question never addressed by the Union: Should Dodge Main, an old and antiquated structure that poses severe health and safety hazards to its 5000 workers and environmental problems to the surrounding community, be kept open...
...Bloomfield, op...
...Britain was already Ford's major engine manufacturer when, in 1977, Ford decided to invest 180 million pounds in a new engine plant in South Wales...
...Despite a week long wildcat by VW workers protesting an earlier agreement, the final contract fails to bring wage rates up to par with those paid by the Big Three and allows for " 'substantially lower pay scales' for newly hired workers" for a period of nine months...
...This process continues today in a different form-entailed in new tooling and re-tooling - to incorporate the most efficient technology that modern science has to offer...
...2 But in choosing to concentrate engine production in Britain, Ford was also choosing not to concentrate its final assembly operations there...
...This success of its arch rival, in conjunction with the slow growth of the U.S...
...And last, but certainly not least, numerical control technology can facilitate dual sourcing of certain parts...
...From the brink of bankruptcy, it has been awakened to the virtues of collective action...
...This represents VW's first direct investment in the United States, that is, its first direct challenge to the Big Three on their home turf...
...even Ford has yet to generalize its European experience...
...WORLD CAR IN INFANCY The midwife of the motor vehicle industry was Ford Motor Co.'s successful venture into 22July/August 1979 ,a a; Japan's challenge to the Big Three: limited investment abroad, but the world's greatest auto exporter...
...market provide an important impetus to the ultimate realization of a world car...
...On the one hand, it markedly improves the international cost competitiveness of component manufacture...
...In 1976, Ford of Europe introduced the "Fiesta," its smallest European model...
...But the most significant economies derive from the "manufacturing flexibility" that production of interchangeable parts affords motor capital- the flexibility to multi-source major components...
...As a noted management analyst states: Assembly is labor intensive, heavily dependent on workers on the line...
...The Fiesta is produced in Almusafes, Spain...
...nevertheless, speed-up-which afford capital a significant increase in output with no additional outlay on labor or plant and equipment--continues to be a widespread tactic in the auto industry...
...Despite much ado about its dire financial straits and its retrenchment worldwide, Chrysler's deals abroad ensure it a piece of the profits produced by foreign workers, while it struggles at home to pull itself together...
...INTERNATIONAL CONCENTRATION AND CENTRALIZATION OF CAPITAL Impelled by unabating competition, motor capital is rapidly transforming the contours of the industry, expanding production to the four corners of the globe and advancing toward the full integration of multinational operations...
...In 1978, 11 automakers combined sold a mere 191,000 vehicles...
...Although GM is the world's second largest corporation, it lags behind Ford with respect to both the scale and profitability of overseas operations...
...Competition has effected a vast increase in the international concentration of capital, that is, the international expansion of the scale of capitalist production in the industry as a whole...
...The element of intrigue makes this case more outrageous than most...
...Similarly, if workers at GM's J-car engine plants in Brazil, West Germany, Australia and Japan conduct an international job action, the production of finished cars would be brought to halt throughout the world...
Vol. 13 • July 1979 • No. 4
