Border Trade Union Networks at Ford and General Motors (1953-2001)
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Transactions and Interactions – the flow of goods, services and information European Business History Association Conference, Bergen, 21-23 August 2008 The long path to international labour cooperation: Fifty years of cross- border trade union networks at Ford and General Motors (1953-2001) Thomas Fetzer, London School of Economics The growing significance and power of multinational companies (MNC) has undoubtedly become one of the most important challenges the trade union movement faces today. A plethora of academics, journalists and activists have taken up the issue during recent years, and have offered criticism and advice of how organised labour should deal with this challenge. Against this backdrop, and given that the growth of MNC has been a long-term historical process 1, it is rather surprising how little efforts labour historians have devoted to the topic. This neglect is particularly evident in the case of national trade union historiography. 2 Yet, historians of the international union movement, too, have shown rather little interest in case studies, or more generic treatments of international networks in MNC – despite the existence of a rich sociological and industrial relations literature providing ‘snapshots’ about such networks during the 1970s, and again since the mid1990s. 3 The article sets out to contribute to fill this gap with a case study analysis of international trade union networks at Ford and General Motors, two firms in which such networks emerged early after the World War II, and which today, at least in Europe, again stand out as ‘best practice’ cases of international labour cooperation in the guise of European works councils. 4 The paper inquires into the changes in the motives, forms, and practical results of cross-border cooperation initiatives at Ford and GM in Western Europe during the second half of the 20 th century, and interprets these patterns against the backdrop of the broader development of trade 1 By way of introduction see Geoffrey Jones, Multinationals and the global economy – from the nineteenth to the twenty-first century, Oxford University Press 2005. 2 In Britain and Germany, for example, first attempts have been made only recently. See Bill Knox/Alan McKinlay, “Working for the Yankee Dollar: American Inward Investment and Scottish Labour, 1945-1970”, in: Historical Journal of Industrial Relations 7/1999, pp. 1-26; Thomas Fetzer, “International challenges and national allegiances. British and German trade union politics at Ford (1967-1973)“, in: Contemporary European History 18 (1)/2009 (forthcoming). 3 For the 1970s see for example Herbert R. Northrup/Richard L. Rowan, Multinational Collective Bargaining Attempts. The Record, the Cases, and the Prospects, Philadelphia 1979; Ernst. Piehl, Multinational Konzerne und internationale Gewerkschaftsbewegung. Ein Beitrag zur Analyse und zur Strategie der Arbeiterbewegung im international organisierten Kapitalismus insbesondere in Westeuropa, Nördlingen 1973; for the more recent period see Torsten Müller/Hans-Wolfgang Platzer/Stefan Rüb, Transnational Industrial Relations in Global Companies, Düsseldorf 2004, and, with a regional focus on Europe, Michael Whittall/Herman Knudsen/Fred Huijgen (eds), Towards a European Labour Identity. The case of the European Works Council, London 2007. 4 For General Motors see Thomas Fetzer, „European works councils as risk communities: The case of General Motors“, in: European Journal of Industrial Relations 14 (2)/2008, pp. 289-308. 1 union internationalism during the post-war period, and the more specific challenges organised labour faced in these two multinational firms. I argue that attempts for international cooperation started already during the 1950s initiated by the American automobile trade union UAW. However, these attempts were frustrated not only because of management obstruction but also because of fears among major European unions that international bargaining at company level could weaken national union structures and solidarity notions. The late 1960s and early 1970s saw a repetition of this dynamic, this time however confined to Western Europe. It was only during the 1990s that the emergence of European works councils led to the first tangible results of international trade union cooperation, reflecting above all the much more threatening labour market consequences (employment, wages) of MNC development during the 1990s. The article proceeds as follows: Section two provides a brief account of the growth of MNC in Western Europe in the post-1945 period, and the specific challenges this raised for the trade unions. Section three reviews the trade union responses as described in the literature about post- war international union organisations. The next four sections then portray the development of cross-border union networks at Ford and GM distinguishing between the periods between 1953- 65, 1966-1974, 1975-1987, and 1988-2001. The paper concludes with reflections about the significance of the case studies for the future of international labour cooperation in multinational firms. Multinational firms – a new challenge for the trade union movement after 1945 According to the most commonly used definition multinational companies (MNC) can be conceived of as firms that own and control operations or income-generating assets in more than one country. In contrast to simple portfolio investments MNC are not just capital movements, but involve management control and the transfer of a whole package of resources (technology, managerial know-how etc.) across borders. 5 The history of multinational firms dates back to at least the mid19th century but the focus of this article is confined to post-1945 period, which was different from the pre-war era in a number of key respects. The bulk of MNC activity shifted from the exploitation of natural resources towards manufacturing, which meant that the biggest industrialised nations now also became the major MNC host countries. 6 The strong growth of foreign direct investment was further encouraged by the emergence of regional free trade zones particularly in Western Europe enabling MNC to integrate their subsidiaries across borders without incurring the tariff penalties 5 Geoffrey Jones, The evolution of international business, London/New York: Routledge, 1996, p. 4. 6 Ibid. p. 29. 2 of the interwar period. 7 Until the late 1950s many MNC had adopted a “multi-domestic” approach leaving their national subsidiaries a large degree of autonomy; in the cases of Ford and General Motors, for example, the British and German subsidiaries competed against each other on European markets, and, for a brief period during the late 1950s, also for the delivery of small cars to the US parent companies. 8 However, from the mid1960s the situation changed dramatically: Like many other US firms Ford adopted a strategy that considered Western Europe as a single economic area. Between 1965 and 1972 the firm standardised its entire European product range and, in 1967, created the holding company “Ford of Europe” to co-ordinate all its future business on continental scale. 9 General Motors with its subsidiaries Opel in Germany and Vauxhall in the UK belatedly followed Ford’s example in the mid1970s. 10 Against the backdrop of these developments critical public debates about “the multinationals” emerged in the late 1960s. 11 In turn, these debates translated into attempts for comprehensive MNC regulation at the national and international level during the 1970s though it soon turned out that they would fall far short of the ambitious initial agendas. At the international level, various “codes of conduct” for MNC were adopted by the United Nations, the ILO, and the OECD yet these had a voluntary character, and remained without much practical effect. 12 At the national level, many governments actively promoted the creation of “national champions” to contain the influence of MNC in key sectors, and to varying degrees also stepped up the screening of MNC investment policy itself. 13 However, such attempts had only limited success not least because national governments, particularly in integrated regional blocks like Western Europe, found themselves increasingly drawn into “regime competition” for internationally mobile capital. 14 This trend was magnified from the late 1970s onwards with the shift towards neo-liberal economic policies in many countries, and, from the late 1980s, with the opening up of new investment opportunities for multinational firms in Eastern Europe and Asia. New regional free 7 John. H. Dunning/P. Robson (ed.), Multinationals and the European Community, Oxford 1988. 8 For Ford see Mira Wilkins, American Business Abroad. Ford on Six Continents, Wayne State University Press, Detroit 1964, pp. 360ff. 9 Steven Tolliday, “The origins of Ford of Europe: From multidomestic to transnational corporation, 1903-1976”, in: id./Hubert Bonin/Yannick Lung (eds.), Ford, 1903-2003: The European History, vol. 1, pp. 153-242, here: pp. 182ff. 10 Carl H.A. Dassbach, Global Enterprises and the World Economy. Ford, General Motors, and IBM, Galrand New York/London 1989, pp. 426ff. 11 For a “conceptual history” of the term “multinational” as used by economists and economic historians see John H. Dunning et. al., “The theory of international production: some historical antecedents”, in: Peter Hertner/Geoffrey Jones (eds.), Multinationals: Theory and History, Aldershot 1986. 12 P. T. Muchlinski, Multinational Enterprises and the Law, Oxford 1999. 13 A. E. Safarian, Multinational Enterprise