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University of British Columbia
COMM 410

Breaking Away: The Formation of the Canadian Auto Workers by Sam Gindin The decision of the Canadian section of the United Auto Workers (UAW) to form its own Canadian union was rooted in the different responses of unionists in the Canada and the United S tates to an increasing belligerence on the part of the corporations. While this break from an 'international' union was not the first such action within the Canadian labour movement, it was perhaps the most dramatic and certainly the most significant. A simple explanation for the contrasting reactions of UAW members in the two countries to the corporate attack focuses on the differences in their national environments, particularly the different economic conditions which they faced. This is not wrong but it is incomplete and it does not succeed in accounting for the fact that, after decades of dependency and in a context of intense economic uncertainty, the self-confidence emerged within the Canadian section to force this conflict to the point of a break with the American 'parent.' This event and its implications cannot be understood apart from the dynamics of struggle: that is, from the interaction between a favourable environment in Canada and ideology, leadership, structures for participation, and the specifics of recent struggles. Differences in 'Objective' Conditions There were differences in the environment the two sections of the union faced which did put much greater pressure on the Americans to accept concessions and which did leave the Canadians some space to contemplate opposition to the corporate agenda. But these 'environmental' factors were not simply external facts of life. To a considerable degree they reflected past decisions, past struggles, past successes and past failures of the labour moveme nt in each country. The high level of layoffs at the beginning of the 1980s left American autoworkers particularly demoralized. About one -third of the labour force (some 300,000 autoworkers) was out of work and the steady ascent of Japanese imports indicat ed that this was not just a cyclical downturn. Canadian workers were also reminded daily of the Japanese threat, and it was clear that Canada could not, ultimately, escape the uncertainty experienced in the United States. However, Canadian workers did not experience, to the same degree, the ill effects of closures and layoffs. In large part this was because Canada's favourable model mix and relatively newer plants left it less vulnerable to closures (both these points were related to the Auto Pact). The exchange rate, while important, was not yet a major factor in the layoffs. It was, however, a critical one in the union's analysis of future corporate decisions, because it made the comparatively low Canadian labour costs even lower. Employers' social security and health plan contributions were more costly in the U.S. because of the greater reliance on a payroll tax and because of the absence of publicly funded medicare. This and the favourable exchange rate meant that almost three Canadian workers could be hi red for the price of two American workers. The corporations might argue that labour costs were only one factor in their decisions, and threaten to make un favourable investment decisions should the union adopt an 'uncooperative' attitude - arguments that couldn't be taken lightly. But it was the corporations which had made labour costs the issue in North America; and, in Canada, the union knew that labour costs constituted a domestic advantage. Moreover, the lower exchange rate meant a higher rate of inflat ion in Canada than south of the border. This reinforced resistance among the membership to the kind of wage restraint which would imply seriously falling real wages. It also gave Canadians an additional argument for the notion that Canadian wage bargaining should take a different route than it had taken in the United States. The target of this argument, it should be noted, was both the corporations and the UAW. These arguments are well known. However, the importance of the relationship between wage levels in the auto industry and those of other industries is less well appreciated. Wages among the Big Three in the U.S. were about 40 percent above the average manufacturing wage. When non -wage benefits were added to the calculation, the differences were even mo re dramatic. In Canada, the differential was only about 20 percent and this approximated the average gap in other auto - producing countries. In the U.S. the large differentials meant that auto workers could make major concessions, yet still earn substantial ly more than what they might earn in other jobs. This inequality amongst American workers was rooted in the much lower level of unionization in the United States. In Canada almost two workers in five were unionized, while in the U.S. unionization had slipp ed to less than half that level. Also Canada's relatively larger resource sector often played a leading role in wage trends; and the public sector, particularly in the decade after the intensive unionization of the mid -sixties, was able to make major gains in "catch-up." Such factors combined to limit the wage disparities between Canadian autoworkers and those outside the industry. In the U.S., the yawning income gap left autoworkers more isolated and less likely to receive sympathy within their own communi ties. In fact, this reflected a broader isolation of the labour movement as a whole in American society which took on a critical political dimension during the ascendancy of the Reagan right. The political impact of American labour via its increasingly strained links to the Democratic Party was minimal. In Canada, by contrast, a social democratic party existed with strong links to the trade union movement. Just as Reagan came to office in the U.S., a short -lived Tory government in Canada was succeeded by a revitalized Trudeau government that had business nervous about its interventionist and nationalist policies. While the Trudeau government could hardly be considered sympathetic to Canadian workers' demands, the prevailing ideological climate was decisively less reactionary in Canada than in the United States. A central factor in accounting for the different political c
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