“From 1989 to 2008, it was fat in this town,” he said. “You’d get a contract, have two parts to work on.”
Throughout the 2000s, though, Lavey saw signs that his dream career was not as secure as he’d imagined. There were fewer designers on each job, which meant the surviving engineers often had to stay in the office until eight or nine o’clock. And the auto companies were outsourcing computer-assisted drafting to India and the Philippines. The draftsmen were cheaper but a pain to work with. You couldn’t talk to them face-to-face. Because they were on the opposite side of the world, bad designs took an entire day to fix.
Still, Lavey wasn’t prepared for the brevity of his last assignment for Ford. The job lasted exactly a month before it was eliminated during the financial crisis.
“Don’t worry,” Lavey’s supervisor told him. “This is a budget thing. We’ll have you back in January.”
Two weeks later, the boss called back, with more bad news.
“Guess what?” he told Lavey. “They got me, too.”
When the chairmen of General Motors and Chrysler traveled to Washington to beg for a loan (first by corporate jet, then by caravan, after congressmen criticized the mendicant auto executives for flying when it would have been cheaper to drive), the strongest opposition came from Southerners who saw burying Detroit as an opportunity to bury the United Auto Workers and the entire union movement. Senator Richard Shelby of Alabama called the American auto industry a “dinosaur” and suggested government aid would only delay its well-deserved demise.
“Companies fail every day and others take their place,” Shelby said. “I think this is a road we should not go down.”
The companies that would have taken GM’s place—Mercedes-Benz, Hyundai, and Honda—all have plants in Alabama, where they benefit from Southern hostility to organized labor. None of Alabama’s plants are unionized—perhaps one reason the state ranks forty-sixth in household income.
Senator Bob Corker of Tennessee, who represented a Volkswagen and a Nissan plant (as well as GM’s unionized Saturn facility in Spring Hill), tried to force the UAW to agree to “wage parity” with the Japanese auto plants as a condition of the bailout. His attempt to cut union wages to nonunion levels was mooted when President George W. Bush decided that, like the banks, the auto companies were too big to fail and sent them $17.4 billion of the $700 billion Wall Street bailout money, enough to keep them afloat for three months.
Bush was one of Detroit’s few friends in Washington during that difficult autumn. Even as two of the Big Three wheedled with the Senate Banking Committee, the House Energy and Commerce Committee unhorsed Representative John Dingell of Michigan as its chairman, replacing him with Henry Waxman of California. It was a clash between liberalism’s most powerful wings—coastal progressives and Rust Belt union brothers—and it was unfortunate, because between them, the two have a solution for saving the auto industry.
If one congressman had foreseen that universal health care could be a boon to American manufacturing, it was Dingell. Rooted in the New Deal and the industrial heartland, Dingell embodied the auto industry’s traditions. Stocky, block-headed, with safety-glass eyewear, he looked like he should have been inspecting the paint job on a Buick. Every year since beginning his record-setting service in Congress, in 1955, Dingell had introduced a bill for a single-payer national health insurance system—the same bill his father began promoting in 1933.
By 2008, though, the political tide had turned against the old Detroit champion. Dingell’s defense of the auto industry made him a stalwart opponent of any regulations that might discourage GM from building ginormous SUVs. He had tried to prevent California from adopting its own auto emissions standards, arguing for a nationwide plan. Waxman, a resident of Beverly Hills, was more concerned with air quality in his overpopulated state than with the plight of Midwestern factory workers. The eighty-two-year-old Dingell left the meeting at which he lost his chairmanship on crutches, demonstrating the infirmity of both his state and the industry he has defended so vigorously.
Waxman and Dingell both needed to realize that health care, environmentalism, and the labor movement are inseparable elements of saving the auto industry. Unfortunately, the Affordable Care Act that Waxman would help pass did not relieve the burden of health care costs on automakers. GM had already tried to do that on its own. During a two-day strike in 2007, the company negotiated an agreement to transfer retiree health care to an independent trust fund maintained by the UAW. GM contributed $36 billion to the fund—70 percent of its liability to retirees. It was expected to save the company $2.5 billion a year.
THE $17 BILLION BAILOUT did not provide a new job for Tom Lavey. Americans still weren’t buying cars. They had no equity left in their houses, and since new housing starts had crashed from two million a year to five hundred thousand, hordes of construction workers were without jobs. Out of work for the first time in his adult life, Lavey joined the “99ers”—the hard-luck Americans eligible for ninety-nine weeks of unemployment. As a bachelor, he had no family to support, but he was nonetheless grateful when his landlord cut the rent in half. He could have paid the full freight with his unemployment check, but that would have meant eating a lot of meals at his mother’s house. Lavey kept busy in his machine shop, where he made screws, nuts, and binocular housings, selling them to a science supply company for just enough money to cover his cell phone bill and fill his gas tank.
“Working in a shop, I got laid off for a week at a time,” Lavey said. “But this was the first time I was told, ‘Get out and don’t come back.’”
He wouldn’t be invited back in for almost two years.
WHEN NICK WAUN CAME home to Michigan after a tour of duty in Iraq, he intended to finish his economics degree at the University of Michigan–Flint. But first, he needed a job to pay for school. Waun was a fourth-generation factory brat—his great-grandfather had been a Sit-Down Striker, and growing up, he’d listened to his father and grandfather talk shop. In 2007, it wasn’t easy to get a job in an auto plant, but Waun was a veteran. More importantly, he was a legacy. He had an in.
“Hey,” his aunt asked. “You want to go work for General Motors?”
(A family recommendation is pretty much the only way to get a job in an auto plant nowadays. The United Auto Workers may as well be a hereditary guild.)
Waun was hired to work on the line at the Lake Orion assembly plant, at $28 an hour, an astonishingly high wage for a twenty-five-year old. He bought a house in Lapeer, a village in Michigan’s Thumb, a protuberance east of Flint whose anatomical nickname is derived from its resemblance to the loose digit on the mitten-shaped Lower Peninsula. At night, Waun built Pontiac G6s and Chevy Malibus. During the day, he went to school in Flint.
Waun belonged to the final class of middle-income autoworkers. If he’d hired in even a few months later, he would have been offered half the money he was earning, and fewer benefits. In 2007, as part of the same national agreement in which the UAW took on retirees’ health care costs, the union also agreed that nonassembly workers could be paid $14 an hour. This arrangement became known as the tiered wage system. The veteran autoworkers were called Tier Ones, while the ill-paid new hires were Tier Twos. The UAW hoped Tier Twos would become Tier Ones as soon as the companies’ fortunes improved. The next year, of course, GM and Chrysler went bankrupt. As part of its prebankruptcy concessions, the union agreed to freeze Tier Two wages until 2015. During the bankruptcy restructuring, GM was forced to eliminate the Pontiac nameplate. (With Oldsmobile already dead, GM’s brand ladder had been reduced to three rungs: Chevrolet, Buick, and Cadillac. Buick survived because it had become to Chinese party officials and software tycoons what the Mercedes-Benz is to Hollywood producers and Brooklyn rap stars: the car that says, “I’ve made it,” or however they say “I’ve made it” in Mandarin.) With Pontiac in the brand graveyard, Waun was laid off for a year while the Lake Orion plant was retooled to build Chevy Aveos. When he was called back, GM gave him a choi
ce: he could stay in Lake Orion as a Tier Two, or he could continue earning $28 an hour at the plant in Lordstown, Ohio, 220 miles around the bend of Lake Erie. The reason: Lake Orion would be building the Aveo and the Chevy Cruze, compact cars that sold for less than $20,000. GM could only make a profit if 40 percent of the workers assembling those cars earned $14 an hour. Because of Waun’s low seniority, he would have to take a pay cut.
Waun took the transfer, which came with a $30,000 bonus. He dropped out of college eighteen credits short of a degree and rented a $450-a-month trailer in a mobile home court across the turnpike from the plant. Lordstown was home to a lot of GM gypsies who’d been forced out of their home factories.
Even before he was jerked around by General Motors, Waun had been a rabble-rouser. During his freshman year in college, he was a campus radical who thought a student should sit on the University of Michigan’s board of regents. Neither the Democrats nor the Republicans would nominate him, so he ran on the Reform Party ticket. At eighteen, Waun was the youngest candidate ever to appear on a statewide ballot in Michigan—one-upping fellow Flintoid Michael Moore, who had only run for local office. As an autoworker, Waun labored in GM’s two most militant cities: Flint and Lordstown. The Lordstown plant had opened in 1966 and was immediately staffed with Vietnam veterans, who were, as we saw in Decatur, Illinois, the most uncompromising labor activists of the late twentieth century. Lordstown built the Vega, Chevy’s crappy attempt to crash the small-car market. The car was scheduled to debut in 1970, but that fall’s UAW strike delayed its introduction. The little Vega was supposed to be America’s greatest weapon against Japan since Fat Man. To rush the heavily advertised car to dealers, GM doubled the speed of Lordstown’s assembly line. A “speed-up” had caused the Sit-Down Strike. Lordstown’s workers responded by slashing upholstery, keying up paint jobs, denting quarter panels, and even breaking off keys in locks. Finally, they went on strike. The estrangement of these young, multiracial workers became known as the “blue-collar blues”; their rebellion was a “Worker’s Woodstock,” drawing comparisons to the antiwar marches at nearby Kent State University.
As a scion of both these Up the Company traditions, Waun began a campaign against the tiered-wage system. It wasn’t just about economic fairness, although that was certainly part of it. Tiered wages were accomplishing what those Southern senators had tried to write into the auto bailout plan. Nonunion, foreign-owned plants were now setting the pay scale for American autoworkers. Not only did Tier Twos earn half as much, they had lesser benefits, bigger copays for health care, and a 401(k) contribution, instead of a pension. If GM could threaten to cut Waun’s pay in half, whose livelihood was safe? There was also a quality issue. After a year at Lake Orion, Waun was named a team leader—just as the plant brought in a second shift, composed partly of Tier Twos. Tier Twos were not supposed to assemble cars. According to the agreement, that status was reserved for “non-core” jobs, away from the line. But GM was putting them on the line, and, unsurprisingly to Waun, they wouldn’t—or couldn’t—work as hard as Tier Ones. Some were juggling two jobs to pay their rent and came to the plant exhausted. Others decided that $14 an hour was not enough money for the hectic pace of auto work. They walked out of the plant, declaring, “I’m going back to Home Depot.” If a bolt wasn’t torqued right, they’d let it go down the line, rather than making the effort to tighten it. Such lax attitudes created tension with the Tier Ones. Waun saw a resentful Tier One punch his Tier Two team leader. When the Michiganders arrived at Lordstown, the lower-paid Ohioans refused to speak to them, then taunted them by wearing T-shirts popular on football Saturdays in Columbus: “Ann Arbor Is a Whore,” “M Go Blow.”
“They’ve already had problems with the Cruze, with steering wheels coming off,” Waun said. “There’s been a couple recalls. I’ve heard it brought up at the union, that it was sabotage by disgruntled Tier Two workers.”
Waun filed a complaint against the Lake Orion agreement, on the grounds that it had been approved without a vote of the local membership. If his brothers and sisters had known about the Tier One/Tier Two clause, he was sure they would have turned it down.
“The membership had no previous knowledge that a 50% pay cut was under consideration until the announcement on October 3,” Waun wrote in his complaint. “For the previous 12 months, charging member Nick Waun had perused every local newsletter, attended every local meeting, and frequently reviewed the local website. Though negotiations with GM were reported on, there had been no indication that significant pay cuts might be an issue at the table.”
In a letter addressed to “Brother Waun,” UAW president Bob King replied that not only had the international executive board rejected Waun’s complaint, but he had no standing to make a complaint, because he had transferred his local membership from Lake Orion’s 5960 to Lordstown’s 1112. Waun then appealed to the National Labor Relations Board, which declined to intervene in “an internal Union matter.”
So Waun continued his campaign on the Internet. He became a regular poster on factoryrat.com and autoworkercaravan.com, two shoprat message boards. During a visit to Michigan, Waun participated in a demonstration against the two-tier system that was attended by one of the last surviving Sit-Downers. Bob King labeled him “the number one troublemaker in the UAW.”
As I found out when I visited his trailer in Lordstown, Waun had nothing better to do. Big and soft, with a shaved head and oblong, half-framed spectacles, Waun lived in conditions that identified him as a) the tidiest bachelor this side of a wedding, b) a mustered-out soldier who still abided by barrack-room standards of neatness, or c) a man who spends most of his nights in a place he refuses to call home. Probably all three. The only furniture in his living room was a folding card table, on which rested his computer and a copy of Overhaul, auto czar Steven Rattner’s self-congratulatory memoir of how he saved Detroit, despite spending only one day there and knowing far more about credit default swaps than internal combustion.
“I look at it like camping,” Waun said of his austere life. “I look at it like when I was in the army. A lot of times we’d sleep in tents. A lot of times we’d sleep in trailers.”
Waun couldn’t travel because he’d burned all his time off visiting his aged parents in Michigan. Since his brother lives in Seattle, Waun is the closest, so he used up a month and a half of sick leave caring for his diabetic father. When his mother’s heater broke down, Waun took vacation time to fix it. He couldn’t sell his house, either, because it’s worth less than he paid for it. Nor could he finish his degree: the school where he earned 90 percent of his credits is in Michigan. Waun didn’t live where he worked. Nor did he work where he lived. It was a familiar situation for a soldier, and it was becoming familiar for autoworkers too.
“We’ve had guys who’ve had nervous breakdowns,” he said. “They’re facing divorce. We’ve had three suicides. They just couldn’t face moving down here. A number of guys got into drugs. Now they’re in rehab.”
Waun took the transfer because had he stayed in Lake Orion, he would never again have earned $28 an hour. GM has promised to promote Tier Twos to Tier Ones, but given the economic structure of the auto industry—in which companies must pay grand retiree benefits while trying to make a profit on fuel-efficient cars—and the prevailing wages at nonunion competitors, Waun believes the company is using the system to permanently reduce its labor costs.
“We’re trying to prevent it from becoming the future,” Waun said. “The Tier Two was sold to the membership in 2007 as a temporary fix to their problems. Now that they’re out of bankruptcy, the dog is dead, but the tail is still wagging.”
The tiered wage system was not just bad for the Tier Twos, he believed. It was bad for the UAW. The union is trying to organize Southern plants, but who needs a union that can’t get you any more money than you’re earning now? It was bad for all American workers, because the UAW “set a standard for wages in the industrial world, and industrial America. At $28.12 an h
our, people can feed a family and buy a used car, buy a decent house, and maintain a certain standard of living.” It was bad for GM, because the auto plants would only attract less skilled, less committed workers. And it was bad for the auto industry, because those workers would build cars as shoddy as any Vega that came out of Lordstown in the early seventies. “People aren’t going to have a vested interest in the automobile. You’re going to end up with cars like my Aveo out there. After fifty thousand miles, the rear axle came off and the odometer broke.”
I visited Waun late in the evening. It was his early morning, since he worked third shift, midnight to eight, at the building across the highway that was his only reason for leaving the trailer. Our interview ended as his clock-in time approached. Before I left, he gave me the phone number of a co-worker named Nadine, who had suffered even more from the tiered wage system: she’d been forced to take a 40 percent pay cut.
Nadine was a plaintiff in Dragomier et al v. UAW, a lawsuit filed by a group of Lordstown autoworkers who had been busted down from Tier One to Tier Two. Nadine hired in at Lordstown in 2002. After over a dozen years of working for banks and law firms, she changed the color of her collar because she was tired of sitting in front of a computer for fifteen hours a day. Building cars was an eight-hour job she could forget about when she went home. Hired as a temporary employee at 70 percent of the full-time rate, by 2008 she was earning $24.40 an hour. That June, a union representative called in thirty-five temporary employees, one at a time, and gave them all the same speech: “The company is finally going to make you permanent. The only thing is, you’re going to have to take a temporary pay cut. If you don’t, you’ll be out of the plant by September.”
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