SEAN FLAHERTY”

Strike Activity & Productivity Change: The U.S. Auto Industry

EVIDENCE OF SIGNIFICANT RELATIONSHIPS between industrial pro- ductivity and certain industrial relations practices has emerged from several recent studies. Bowles, Gordon, and Weisskopf (1983a,b) have constructed and tested a “social model” of productivity change in the U . S. business sector; Norsworthy and Zabala (1985) have investigated the impact of worker attitudes and behavior on productivity growth in the U.S. automobile industry; and Katz, Kochan, and Gobeille (1983) have studied the relationship between plant-level measures of industrial relations performance and “direct-labor efficiency” at the General Motors Corporation.

The research reported in this note also focuses on the American automobile industry, using data from the Bureau of Labor Statistics and from General Motors, Chrysler, and Ford company records to examine the relationship between strike activity and industry-level productivity change. I This approach does not imply that other elements of worker behavior do not affect productivity growth; indeed, I argue that strike activity should be interpreted as an observable proxy for more broadly practiced but less easily measured forms of worker militancy. Analysis of the evidence shows a strong, if sometimes complex relationship between strike activity and the rate of productivity change in the auto industry.

Theoretical Framework The links between strike activity and productivity change are both

direct and indirect. Strike activity has an obvious dampening effect on the pace of productivity change because of resulting production bottlenecks and/or forestalled managerial initiatives. The more indirect relationship results from the fact that changing patterns of strike activity reflect changing worker attitudes and practices on the shop floor; periods of high strike activity represent times of generally obstreperous work force behavior. Episodes of “unmanageable” shop-floor behavior, along with “un- cooperative” worker attitudes, retard the pace of productivity growth, ceteris paribus; variants of this hypothesis underlie the research of the studies cited above.

*Department of Economics, Franklin and Marshall College. ‘Of the studies mentioned above, only Norsworthy and Zabala examine directly the impact of strike

activity on productivity (costs), they find a significant negative (positive) correlation, but it is quantitatively smaller than that found for grievance activity. Naples (1981j and Flaherty (1987) found significant relationships between strike activity and productivity change at more aggregate levels of analysis.

INUUSTHIAL RELATIONS. Vol. 26, No. 2 (Spring 1987). 01987 by the Regents of the University of California. 001918676187/5251174/$10.00

174

Research Note I 175

Conceiving of strike activity as a reflection of “worker militancy” deviates from the Hicksian notion of strikes as bargaining “miscalculations” (see Hicks [ 19631 and an adaptation by Ashenfelter and Johnson [ 19691). Hicks’ formulation, however, is most appropriately applied to strikes at contract (re)negotiations, which are expected to affect productivity, if at all, only via direct linkages. Here the focus is on stoppages that break out during the term of a contract. These local - and often “wildcat” - strikes are a manifestation of a more continuous form of industrial conflict.2 Intra- contractual strikes, moreover, have a different relationship to hypothesized economic determinants than do contract renegotiation strikes (see Flaherty, 1983). These patterns suggest that intracontractual strikes are unique manifestations of rank-and-file mil i tan~y.~

Finally, there is the possibility that some strike activity occurs as the result of efficiency-augmenting schemes. When successful “rationalizations” or “speedups” provoke worker protest, then rapid productivity advance might be associated with a burst of strike activity (see Soskice, 1978; Shalev, 1980; Flaherty, 1987). Evidence from the automobile industry presented below can be interpreted as supporting the existence of all three kinds of linkages.

The Data The Bureau of Labor Statistics publishes work stoppages data for the

Transportation Equipment Industry (SIC 37) and for the more disaggregated Motor Vehicles and Equipment Industry (SIC 371); the latter is referred to here as “the automobile industry.” Proprietary data on strike activity at General Motors and Chrysler are also used, along with some proprietary Ford data for the early fifties. Table 1 presents summary statistics for these strike activity data.

The BLS figures provide information on annual number of stoppages, workers involved (WI), and worker-days-idle (WDI). Information on the contract status of strikes is available from 1961. Proprietary data supply annual number of stoppages and worker-days-idle and also break down strikes according to their “authorized” or “unauthorized” status. Table 1 distinguishes between all strikes and “nongeneral” strikes. “General” strikes - large-scale, interplant stoppages associated with the renegotiation of collective bargaining contracts at the “Big Three” - involve a kind of ritualized bargaining behavior that may not be relevant here. Although elimination of the few “general” stoppages leaves periodic average numbers of strikes unchanged, workers involved and worker-days-idle figures change substantially.

T h e y are often portrayed in the literature as the weapons of militant work groups seeking to reshape the informal and fluid dimensions of labor contracts (see Kuhn, 1961; Hampton, 1965; Stieber, 1962; Herding, 1972; Hyman, 1975; and Katz, 1985) or as general expressions of “rank-and-file protest” (see Gouldner, 1954; Sayles, 1954). Berg, Freedman, and Freeman (1978, p. 126) note that these strikes are an indication of “the proximal discontents of worker groups.”

3Herding’s (1972) case studies of automobile plants find that slowdowns and other less visible refusals of cooperation are typically complements of, rather than substitutes for, local strike activity.

’For example, a drastically reduced figure for worker-days-idle in the 1967-1973 subperiod is largely due to the elimination of the huge 1970 contract strike at General Motors, which idled approximately 355,000 workers for 134 calendar days and cost the company more than 20 million worker-days-lost. Pattern-setting contract renewal strikes of this sort take on a life of their own and do not reAect in their size and severity the more continuous state of industrial relations in the industry as a whole. The capacity of these huge strikes to dominate the other strike data dictates their elimination from a series that will he used to represent the changing state of worker attitudes and practices on the shop floor.

176 / SEAN FLAHERTY

TABLE 1

STRIKE DATA, PERIODIC ANNUAL AVERAGES

BLS Data, SIC 3714 Proprietary Datah

Nongeneral Nongeneral All stoppages, stoppages,

All stoppages stoppages GM & Chrysler GM & Chrysler No.< WId WDI‘ No. WI WDI No. WDI No. WDI

195 1-1957 1958-1 966

19761978 1967-1973

100 79

104 91

195C 1957 195g1966 196 1-1966 1967-1973 19761978

No.

n.a. n.a.

54 60 20

156 749 100 116 672 165 1,131 79 59 592 175 3,640 104 103 1,525 98 1,571 91 57 1,106

Intracontractudl Strikesh SIC 37‘ SIC 371K

WI WIII No.

n.a. n.a. n.a. n.a. n.a. n.a.

65 435 32 71 382 39 22 114 9

247 426 247 363 99 1,814 99 268

101 3,528 101 556 69 419 69 393

Nongeneral Strikes Unauthorizedh Authorizedh

No. WDI

244 255 93 109 37 34 87 80 55 45

No. WDI

2.5 109 5.5 159 4.5 140

13.3 476 14.6 348

“The data are drawn from U.S. Bureau of Labor Statistics, “Collective Bargaining in the Motor Vehicle and Equipment industry,” Report 574, September 1979, Table 1. “Nongeneral” strikes are computed by subtracting major contract renegotiation strikes, as identified in Table 2 of BLS Report 574. Worker-days-idle figures for this catagory are estimated by taking periodic averages of WDI for years in which major contract renegotiation strikes did not occur. ‘Provided to the author by General Motors Corporation and Chryslrr Corporation. Workers involved figures are not available. GM identifies large-scale interplant stoppages associated with contract renegotiations as “general.” Chrysler dors not make that distinction; worker days lost to “general” strikes at Chrysler are estimated by the author. ‘Nu. means average annual number of stoppages per period. dWI means thousands of workers involved (average annual number per period). “WDI means thousands of workers-days-idle (average annual number per period). ‘Transportation Equipment industry; compiled from U. S . Bureau of Labor Statistics, Analysis uf Work Stoppages, 19- (annual), various issues. KMotor Vehicle and Equipment industry data on intracontractual strikes (numbers only) compiled from unpublished BLS data tape. h“Authorized’ and “unanthorized stoppages identified by the companies as stoppages that followed proper or improper bargaining procedures. respectively, as stipulated by the collective bargaining contract.

The data presented in Table 1 are divided into four subperiods. These subdivisions highlight differences in the figures by data source. The BLS understates the number of stoppages that occur in the automobile industry. In the two earlier periods (1950- 1957 and 1958-1966), the sums of stoppages reported by GM and Chrysler alone are larger than the numbers of RLS recorded strikes for the entire (Sdigit) i n d ~ s t r y . ~ That pattern does not hold in the latter two periods, but it is clear that the BLS series continues to miss small strikes.fi

The two (all stoppages) worker-days-idle (WDI) series move fairly closely together, showing a simple correlation coefficient of .933. The BLS days-idle figures generally

SFor 1951-1954, stoppages reported by Ford, GM, and Chrysler amounted to approximately 256 per year, as against a BLS average of 94 per year for an industry that included several smaller motor vehicle producers as well as a significant number of “job shops.” Ford data are reported in Macdonald (1961).

“he BLS recorded 1,183 stoppages for the 1967-1978 period; GM and Chrysler reported a total of 1,052 strikes; 879 of these are classified as “unauthorized” and therefore were likely to have occurred during the term of a standing contract. Yet the BLS recorded only 318 (520) intracontractual strikes for all of SIC 371 (SIC 37) during the same period. The simple correlation between annual numbers of all BLS recorded stoppages in SIC 371 and all stoppages at GM and Chrysler is ,662.

Research Note I 177

surpass the GM plus Chrysler WDI figures, implying that the BLS measure does capture the bigger strikes in the industry and that unrecorded strikes are typically small and short-lived.

The GM and Chrysler proprietary data, despite their only partial coverage of the industry, offer a more consistent series of annual strike activity information than do the BLS data, especially with respect to smaller, local strikes. Year-to-year or period- to-period changes in the proprietary data series more likely reflect true changes in strike activity for the industry as a whole than do changes in the BLS series.’ The BLS data are useful nevertheless, especially because they provide othenvise unavailable information on numbers of workers involved in stoppages by period.

Productivity. The BLS also publishes data on labor productivity in SIC 371 from 1957. Information on auto industry productivity before that year must be derived from an alternative output series. I use a real output series available from the U.S. Department of Commerce, Bureau of Economic Analysis (BEA). Table 2 reports alternatively derived average annual growth rates of output per production worker hour for four subperiods from 1950 to 1978. The use of subperiod boundaries in production cycle peak years is a partial control for the influence of business cycle effects on productivity change.x

Most recent studies of the U.S. productivity growth “slowdown” have focused on pre- and post-1973 rates of growth. Bowles et al. (1986a,b) specify a two-stage slowdown; they identify the initial period (1966-1973) as one in which managerial control is

TABLE 2

AVERAGE ANNUAL RATES OF GROWTH OF LABOR PRODUCTIVITY, SIC 371^

Period BENBLS data” BLS data. Avg. capacity utilizationd

(a) (b) (a) (b) 1 (i) 1950-1957 3.2 2.6 n.a. n.a.

(ii) 1950-1960 2.9 2.4 2 (i) 1957-1966 4.6 4.1 4.6 4.2

(ii) 1960-1966 5.6 5.1 3.8 3.8 3 196G1973 2.7 3.2 3.3 3.2 4 197S1978 5.4 4.6 3.8 3.0

86.5 81.9 80.5 85.0 85.5 81.4

dAverage growth rates for the data in column (a) are computed as linear least-squares trends of logs of index numbers; average growth rates for the data in column (b) are computed as simple peak to peak trends; r = ([Pt2/Ptll”(t*-t1’) - 1. \’Productivity index: (BEA output/BLS production worker hours), 1977 = 100; BEA data provided by Milo Peterson, National Income and Wealth Division; BLS production worker hours published in Employment and Earnings. ‘Productivity index: output per production worker hours, 1977 = 100; published in U.S. Bureau of Labor Statistics, Producticity Measures for Selected Industries, 1954-1980, Bulletin 2128, April, 1982. dCapacity utilization data provided by Board of Governors, United States Federal Reserve System.

‘I assume here that the ratio of industry-wide strike activity to CM-plus-Chrysler-reported strike activity remains roughly constant throughout the period of analysis - or at least that this ratio is more stable than the ratio of industry-wide strike activity. In one period (1958-1966), the BLS data record fewer industry-wide worker-days-idle than reported by just GM and Chrysler; in other periods the BLS records a greater number of days idle, suggesting that the ratio of industry-wide strike activity to BLS recorded strike activity is not stable.

Tomputing growth trends between roughly equal points of the production cycle should substantially eliminate the capacity utilization problem, but it does not do so entirely. Still, the capacity utilization pattern in the table suggests that the observed pattern of labor productivity growth rates is not the spurious result of capacity utilization differences among periods. Overall, the evidence suggests that the imperfect “decycling” method causes - if anything- a dampened pattern of observed productivity growth variation.

178 / SEAN FLAHERTY

deteriorating. I adopt that periodization - which coincides with auto industry production cycle peak years - but I also divide the pre-1966 period into two more appropriately boundaried subperiods of roughly equal length.'

The pattern of the data in Table 2 is surprising. The post-1973 automobile industry does not show the precipitous productivity growth slowdown that Bowles et al. and Norsworthy et al . (1979) have found for the U . S . economy as a whole. In fact, for the full 1950-1978 period, automobile output per production worker hour demonstrates a pattern of "slow"-"fast"-"slow"-"fast" growth. Both productivity series imply that the industry suffered a growth slowdown in period 3; the evidence is mixed for period 4. The BEA data show a growth rebound in the post-1973 period, whether the average rate of growth is computed as a least-squares trend or as a simple peak-to- peak rate.'" The BLS data show a rebound in the least-squares trend rate but a slight decrease in the simple peak-to-peak rate. Evidence on multifactor productivity (pre- sented in Table 3) helps clear up this ambiguity, as well as providing a clue to the differences between the BEA and the BLS productivity series.

An increase in output per unit of labor input (labor productivity) could be due to a higher capital-labor ratio and/or a higher intermediate input-labor ratio, or to an increase in multifactor productivity - a productivity increase beyond that attributable to the growth of physical input(s). A multifactor productivity series for SIC 371 (derived by Shenvood and Mark [ 19841) makes it possible to determine average rates of growth for the three subperiods from 1960. Table 3 reports these results, as well as growth rates for labor productivity (for all employee hours), for the capital-labor ratio and for the intermediate input to labor ratio.

The (all employee) labor productivity pattern replicates the BLS (production worker) productivity pattern of Table 2 (column b), but the multifactor productivity data show that a rebound occurs in the post-1973 years." Moreover, the growth patterns of

TABLE 3

AVERAGE ANNUAL RATES OF GROWTH OF MULTIFACTOR PRODUCTIVITY, SIC 371"

Multifactor Labor'' Capital-labor Intermediate input- productivity productivity ratio labor ratio

2 (1960-1965) (3.3) (4.5) ( -2 .6) (3.2) 1960-1966 2.4 3.8 - .7 2.8

3 (1965-1973) (.85) (2.8) 1.0) (2.9) 1966-1973 1.3 3.2 0.0 3 .2

4 1973-1978 1.6 3.1 0 .6 2.0 'Derived from Mark Sherwood and Jerome Mark, "Capital, Intermediate Purchases, and Multifactor Productivity in the Steel and Motor Vehicles Industries," paper presented at the American Enterprise Institute Conference on Interindustry Differences in Productivity Growth, October 1984; growth rates computed as simple peak to peak trends. "Note that Shenvood and Mark define input as all (production plus nonproduction) employee hours.

YAn alternative periodization, specifying a 1960 peak year boundary between periods 1 and 2, is also reported to allow comparison with the multifactor productivity data (presented in Table 3), which are available only from 1960.

I"A least-squares regression of the log of a productivity index on time, t, yields an estimate of the rate of productivity growth, r,. Alternatively, we can derive the (annually compounding) peak-to-peak rate of growth of productivity as r,, = {(P,2/P,l)""2~'~'}- 1, where P, is the value of the productivity index at time t. The regression estimates are somewhat less sensitive to the choice of peak year boundaries.

lLSince Shenvood and Mark base their multifactor productivity series on an output series that peaks in 1965, Table 3 reports growth rates for alternatively boundaried periods 2 and 3, demonstrating an even more precipitous period 3 slowdown (and consequent period 4 rebound).

Research Note I 179

the input ratios can be interpreted to imply that period 2 labor productivity grew rapidly despite a declining capital-labor ratio (but with the help of a growing intermediate input to labor ratio). The period 3 labor productivity slowdown occurred despite improvement in the capital-labor ratio growth rate and continued strong growth in intermediate purchases per unit of labor. A period 4 slowdown in the growth rate of the intermediate-to-labor-inputs ratio contributed negatively to the relative pace of period 4 labor productivity growth.

The multifactor productivity series does not extend back to 1950, but Shenvood and Mark (1984) note that high levels of capital accumulation occurred in the first half of the fifties. A relatively slow rate of labor productivity growth in period 1 thus need not be attributed to sluggish investment in new plant and equipment. Clearly, then, multifactor productivity data cannot account for the apparent pattern of labor productivity growth in the auto industry. In fact, the multifactor evidence suggests an even more pronounced pattern of total productivity change than do the simple labor productivity data. After changes in capital, labor, and intermediate inputs have been accounted for, automobile industry output has grown at significantly varying speeds in the subperiods identified here. The role of auto worker militancy in establishing that pattern is examined next.

Strike Activity and Productivity Change Since an industry’s strike activity is at least partly a function of its

size, I “deflate” levels of strike activity by a production worker employment index (1967-1973 = 100). Table 4 juxtaposes the productivity growth pattern established in the two previous tables with (deflated) strike activity averages. I compute averages of workers involved and worker-days-idle after eliminating “general” strikes, on the grounds that a single (or a few) such strike(s) can drastically alter those averages. The goal here is to measure a more continuous kind of militant activity and sentiment than those concentrated bursts of “ritualistic” militancy associated with massive (and pattern-setting) contract renewal strikes.

The evidence in Table 4 suggests that changes in strike activity - and associated worker practices - are related to changing rates of productivity growth through nearly three decades. This is seen most easily in the case of numbers of workers involved in work stoppages. Slow productivity growth period 1 shows the greatest number of striking workers. The subsequent periods faster-paced growth is associated with declining numbers of workers involved. The slowdown and subsequent rebound of productivity growth in periods 3 and 4 is accompanied by an increase and then a decrease in the number of striking workers.

The relationship is more complicated in the case of worker-days-idle and numbers of strikes. The proprietary data days-idle figures show the same general pattern as the BLS workers-involved figures; but the BLS days-idle figures grow from period 1 to period 2, then show a big jump in the third period and a subsequent decline in the fourth. If peak year 1957 is used to demarcate a boundary between periods 1 and 2, the proprietary data on strikes at GM and Chrysler appear to contradict my hypothesis by suggesting a steady decline through the four periods. On the other hand, a 1960 boundary yields a general pattern of “high”-“low”-“high”-“low” strike activity, which is consistent with my argument that a periodic variation in auto worker

180 / SEAN FLAHERTY

TABLE 4

(PERIODIC ANNUAL AVERAGES)” PRODUCTI\71TY GROWTH A N D NONGENERAL STRIKE ACTIVITY

Number of Workers Worker- Productivity stoppages involved days-idle

Period growth (Prop.) (BLS) (BLS) (Prop.) (BLS) Years ............ thousands . . . . . . . . . . . . .

1950-1957 254 1 S LOW (200)

1950-1960 259 1957-1966 119

2 FAST (56) 1960-1966 51

3 1966-1973 SLOW 101

4 66 1973-1978 FAST

dFor data sources. see notes to Tatk 1.

____

-

103

111 95

80

104

88 -.___

119

109 71

68

110

87 __

388 (305) 428 32 1

(218) 20 1

556

379

69 1 1951-1957 (1951-1956)

670 195 1-1960 710 195b1966

(1959-1966) 780 1961-1966

1.687 1967-1973

1.113 19741978

militancy has been responsible - in part - for a changing pace of productivity growth.

The discrepancy that emerges from the alternatively specified periodization occurs because the year 1958 is shifted out of period 2 and into period 1. In 1958, the Chrysler Corporation experienced the second greatest number of (unauthorized) strikes (495) and the greatest number of worker-days-idle (676,000) that it suffered during the entire sample period. For the two-year period from 1957 to 1958, Chrysler witnessed an average of504 strikes, as against an annual average of 155 stoppages in the six preceding years (1951-1956) and of just 23 strikes in the eight years that followed (1959-1966). This burst of strike activity represented a rank-and-file response to Chrysler’s successful efforts to reduce the gap between its own and its major competitors’ work standards.12 With the start of the 1957 model production run, the Chrysler Corporation began, in the words of a corporation vice president, “a great and sustained effort to accomplish. . . [relative improvements in]. . . labor efficiency” (quoted in Macdonald, 1961, p. 324). Intimations that the UAW leadership was collaborating in the “speedup” only exacerbated the situation. Wildcat strikes in 1957 and 1958 cost the company just under one million worker-days-idle. But once these “defensive” rank-and-file energies had been spent, the Chrysler work force settled down to a period of relative quiescence.

Since this anomalous Chrysler situation “pollutes” the basic (negative) relationship between the striking expression of worker militancy and productivity change, Table 4 reports numbers of stoppages and worker-days-idle with 1957 and 1958 deleted from the compilation of periodic strike activity averages. l3 Again the “high”-“low”-

‘zChrysler’s productivity improvement does not show up in the industry level productivity data; nor is there direct evidence in the form of a corporate productivity index. But industry analysts have noted the success of an efficiency drive at the corporation in the late fifties (see Kilbridge, 1960; Macdonald, 1961).

13Deleting strike data on the grounds that it is anomalous is problematic. Even where more detailed information about a strike is available, it is often difficult to determine whether the stoppage ought to be categorized as one that reflects an offensive-minded militancy or one that is a response to a successful management initiative. The 1972 Lordstown strike, for example, reflected the rebellious spirit of a youthful

Research Note I 181

“high”-“low” pattern emerges, with a global peak for number of stoppages in period 1, but a global peak for worker-days-idle in period 3.

Strikes, then, were fewer in period 3 than in period 1, but at the same time they were larger and/or longer. As the proprietary data for authorized and unauthorized status of work stoppages at GM and Chrysler presented in Table 5 demonstrate, the fifties mark the high point of wildcat strikes in the post-war automobile industry (although another peak emerges in period 3). The companies did not suffer equally from such stoppages; General Motors escaped much of the wildcat wave. During the years for which proprietary data for each of the “Big Three” are available - 1951 through 1955 - Chrysler experienced the most wildcat stoppages (788), followed by Ford (432), and then GM (209). l4 This pattern mirrors the (unofficial) labor efficiency rates of the “Big Three” during the fifties: Chrysler’s work pace was considerably slower than GM’s, with Ford’s about halfway in between (see Kilbridge, 1960; Mac- donald, 1961). The pattern provides some support for a cross-sectional version of my hypothesis.

Unauthorized stoppages typically involve relatively few workers who go back to work quickly; the average wildcat strike has resulted in about 1,000 days-idle. But when these strikers return to work, it is not necessarily with a sense of conciliation and all-out effort. Thus, unauthorized stoppages are likely to affect productivity performance to an extent beyond the direct costs they impose on the companies. Wildcat strikes reflect the precariousness of shop-floor relations, the changing practices and attitudes of workers that form the behavioral environment within which the strikes break out.

Authorized strikes generally impose more substantial direct costs on the affected companies. Nevertheless, the greater significance of such strikes is that they reflect

TABLE 5

AUTHORIZED AND UNAUTHORIZED NONCENERAL STRIKE ACTIVITY: PROPRIETARY DATA* (PERIODIC ANNUAL AVERAGES)

WD1-strike ratios‘ Authorized Unauthorized Authorized strikes at GM

No. WDI WDI-ind.h No. WDI WDI-iiid.b Direct indirect , . . , . . thousands.. , . , . . ...... thollsands ....... Years

1951-1956 1.2 21 5 196 260 5 21.0 4.5 1957-1958 5.5 321 6 529 505 1 26.1 1.8 1959-1966 6.1 148 41 41 37 3 25.3 9.6 1967-1973 13.3 476 226 87 80 98 42.7 23.3 1974-1978 14.6 348 70 55 45 1 34.5 7.6

‘Figures in this table are not dejated by an employment index and so are not strictly comparable to those in Table 4. See notes to Table 1 for sources and defiuitions of the proprietary data. hWorker-days-idle-indirect: WDI due to work stoppages at plants which result from strikes at other locations; figures for GM only. ‘Simple ratios of (thousands of) worker-days-idle-direct and indirect-to authorized stoppages at General Motors.

and militant workforce, but it also broke out in response to a severe speedup by the General Motors Assembly Division. In the present case, the 1957-1958 Chrysler episode qualifies as anomalous because it is the only instance of a significant burst of strike activity in response to a management initiative.

‘*Information on Ford is from Lichtenstein (1985). Macdonalds (1961) discussion of the labor relations experiences of the so-called “independents” (e.g., American Motors, Willys Motors, and Studebaker- Packard) suggests that they too suffered disproportionately from stormy shop-floor relations.

182 / SEAN FLAHERTY

more commonly practiced worker behavior. The changing numbers of worker-days- idle indicates the varying willingness of auto workers - and the UAW - to engage in larger, more sustained and self-conscious battles with the auto companies. Authorized (nongeneral) strikes typically involve (single plant) disputes associated with local contract bargaining and/or intracontractual stoppages prompted by production standards fights, which effectively involve a kind of local contract “reopening.” These fights are very much related to the “settlement” of standards under which production will be undertaken (or continue).

Authorized stoppages are rare in the early fifties, but their numbers grow through the next three sample periods. Yet, despite a slight increase in the average number of actual stoppages in period 4, worker-days-idle drop off rather significantly in this period of recharged productivity growth. The period 3 peak in days-idle is even more pointed when indirect worker-days-idle are considered. (Only General Motors reports these figures, which refer to days lost at GM plants that had not been struck but which had to be shut down because of work stoppages elsewhere in the company.) Moreover, the simple ratios of direct and indirect days-idle to numbers of authorized strikes at General Motors (see Table 5) suggest not only that local battles had become more pitched in period 3, but also that GM’s workers - and the UAW - had become more deliberate in their choice of strike timing and location in order to exact high costs on the company. Though numbers of authorized stoppages remain relatively high in period 4, idleness per strike returns closer to rates prevailing in earlier years.

Overall, the evidence, including results from regression analyses using BLS and BEA data,lfi supports the basic hypothesis that strike activity has been negatively related to productivity growth. While evolving collective bargaining practices from the fifties to the sixties may have led to changed formats for auto industry strike activity, periods 1 and 3 can be legitimately characterized as years of relatively high levels of worker militancy. Actual walkouts were only one form of that militancy. The auto industry of the late sixties has been described as seething with worker discontent, evident in historically high rates of absenteeism, quits, disciplinary actions, grievances filed, and generally obstreperous behavior (see Herding, 1972; Rothschild, 1973; Widick, 1976). Less has been written about discontent in the fifties, but it is

I5Of course, numbers of actual stoppages and of days-idle can reflect company militancy as well as worker militancy.

‘“Regression analysis yields mixed, but generally supportive, results. A regression of BLS measured output per production worker hour, (QIPWH), on time, T, a capital-to-labor ratio, (WPWH), a [nonproduction worker hour]-to-[production worker hour] ratio, (NPWH/PWH), a capacity utilization rate, CU, and the frequency of (proprietary data) strike activity, S (annually, 1957-1978) yields:

In(Q/PWH) = 4.4* + .031* T + ,024 In(K/PWH) + .23 In(NPWH/PWH) + .24** In(CU) - .015* In(S) Rz = 98.8 D.W. = 1.81

(*statistically significant at the 95% confidence level; **at the 90% level)

Analogous regressions using BEA output data, Q*, over the longer period yield similar results:

In(Q*/PWH) = 3.26* + .029* T + .231* In(K/PWH) - .392** ln(NPWH/PWH)

Use of a two-year-moving-average of strike frequency strengthens the size and statistical significance of the strike coefficient. Regressions of productivity change on changes in the right-hand-side variables yield insignificant coefficients for various specifications of the strike activity variable. Detailed information and extended results of these analyses are available from the author upon request. In the present case, regression analysis is complicated by possible two-way causality between strike activity and productivity change, as well as by restrictions on data availability.

+ .191* In(CU) - .019** In(S) R2 = 98.5 D.W. = .94

Research Note I 183

clear that autoworkers then actively resisted a “normalization” of shop-floor relations. Thus, I would interpret the strike activity drop-offs of periods 2 and 4 as reflecting an easing of tensions on the shop floor. In these two periods, a more ready worker acceptance of managerial initiatives, and perhaps a genuine sense of cooperation as well, improved prospects for industrial productivity growth.

Direct strike effects. The final question, whether strikes lead directly to a productivity decline (owing to the bottlenecks or other immediate technical problems they create), could be answered more readily using disaggregated data on individual strikes and their immediate outcomes. The industry data do make clear, however, that the largest one-year production worker productivity fall-off (-1.9 per cent) occurred in 1970, a year that GM suffered more than 20 million worker-days-idle in a huge contract renewal strike. The following year’s extremely fast productivity growth rebound (13.7 per cent) also suggests that some unique and “short-lived” phenomenon contributed to that pattern.ls GM (and no doubt its competitors) also lost many millions of worker- days-idle in 1959, but in that case, it was an “external” strike (the 1959 Steelworkers’ strike) that created significant supply constraints for the auto industry. l9 The industry posted a (production worker) productivity growth rate of 4.7 per cent in 1959 - the lowest rate of productivity advance in any of the production cycle recovery years covered by the BLS data - even though the percentage increase in automobile output in 1958-1959 was the largest of any recovery phase of the 1957-1978 period.2” In each of these examples, single strikes were big enough to directly affect the industry-wide productivity data.

Discussion The evidence confirms that strike activity (and associated worker

behavior) is related to the pace of productivity change in the U.S. automobile industry. This is hardly surprising; it corroborates the impressions of industry observers and participants alike. The relationship is not always a single and .unidirectional one, however. Auto workers at times have responded to successful productivity enhancement schemes with isolated bursts of strike activity. Most of the (quite limited number of) strikes since 1978, for example, have been of the “defensive” variety. An unusual burst of strike activity (61 strikes) experienced by Chrysler in 1982 can be interpreted as a concentrated worker response to a company efficiency drive, not unlike what occurred in 1957 and 1958. Chrysler workers in 1982 were (finally) responding to another round of “concessions bargaining,” which would have further tightened work standards and broadened job classifications.

“See, for instance, Brody (1980), Herding (1972), Macdonald (1961), Stieber (1962), Lichtenstein (1985), and Flaherty (1986). Intraunion factionalism continued throughout much of the fifties, with anti-Reuther forces practicing their militancy at least partly in the form of local strike activity, within the larger context of a general refusal to regularize shop-floor relations with the automobile companies.

‘”The 13.7 per cent increase should be compared to an average of5.6 per cent productivity improvement in the production cycle recovery years of the BLS covered period (1957-1978).

”GM alone lost more than 5 million worker-days to supply constraints resulting from the steel strike; Chrysler does not report those details.

U’A 29 per cent output increase accompanied the 4.7 per cent productivity increase in 1959; an average 25 per cent output increase in other production cycle recovery years accompanied an average 7.8 per cent productivity growth rate.

184 / SEAN FLAHEHTY

In the 1979-1983 period, a yearly average of 14.8 authorized stoppages accounted for only 126,000 worker-days-idle per year; and wildcat strikes dropped off to an annual average of just 16 stoppages, costing the companies about 16,000 days-idle per year.” Productivity data available through 1984 suggest that the industry experienced a production worker productivity growth rate of just 2.6 per cent, at the same time that strike activity had fallen off further still from that of period 4. This evidence does not, as it first appears, contradict the strike activity-productivity relationship demonstrated for the 1950-1978 period. Two important factors must be considered. First, until 1983, when production finally turned strongly upward, the industry was nearly moribund. Second, the upswing was still underway in 1984; at this point the industry’s output index had not quite reached its 1978 value, so this is not a peak- to-peak rate of growth. Not surprisingly, productivity remained stagnant during the industry’s four-year depresssion. And, given the characteristics of recent strike activity, it is not surprising that a comparison of (BLS) productivity growth rates two years out from production cycle troughs since 1958 reveals that productivity growth in the 1982-1984 (sub)period is surpassed only in the 1958-1960 (sub)period. The latter, of course, lies within the 1950-1978 sample’s most rapid productivity growth period (see Table 2).22

Auto workers have been “blamed” by some for having exacerbated or even brought on the industry’s problems. The experience of the last decade suggests, however, that the workers’ recent behavior can be described as “moderate” when compared to the previous 25 years. Of course, even relatively rapid productivity advance may not be sufficient to solve the U. S. industry’s long-term crisis, if foreign competition can still outpace American productivity growth, or if large fluctuations in international currency values continue to occur. It nonetheless seems worth the effort for industry participants to strive for reduced shopfloor tensions; a collectively bargained industrial peace can yield productivity growth dividends for the industry and the nation.

References Ashenfelter, Orley and George Johnson. “Bargaining Theory, Trade Unions, and Industrial

Berg, Ivar, Marcia Freedman, and Michael Freeman. Managers and Work Reform: A Limited

Bowles, Samuel, David Gordon, and Thomas Weisskopf. Beyond the Wasteland. Garden City,

. “Hearts and Minds: A Social Model of U.S. Productivity Growth,” Brookings

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Papers on Economic Actiuity, 2: 1983h, pp. 381-441. Brody, David. Workers in Zndustrial America, New York: Oxford University Press, 1980. Flaherty Sean. “Contract Status and the Economic Determinants of Strike Activity,” Zndustrial

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2LThis further drop-off from period 4 is at least partly the result of drastic employment reductions and/

**I have riot included the period from 1970 to 1972 in this comparison because productivity and output or the chilling effect of the industry’s very high nnemployment rate.

were “artificially” depressed in 1970 by the massive GM strike.

Research Note I 185

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