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For several decades following the CIO victories, three employer responses - relocation of production (disinvestment in union strongholds), process innovations (mainly automation), and "political exchange" (the promotion of "responsible" unionism and the repression of "irresponsible" unionism) - progressively undermined the structural strength of U.S. labor in general, and autoworkers in particular. When a new upsurge in rank-and-file unrest at the end of the 1960s (symbolized by the "Lordstown Blues") pushed the UAW back toward confrontational tactics with "Operation Apache" (a campaign of short, small, but highly disruptive strikes), the automakers abandoned the promotion of "responsible unionism" and pursued geographical relocation and automation of production with a newfound zeal.
During a 1990 strike at the Hyundai Group, auto assembly-line workers described the following incidents:
"Only a small number of [Hyundai Motor] workers were blocking the road at first [in solidarity with striking Hyundai shipyard workers] ", said Roh Sang Soo, a young assembly line worker...."Then the police threw teargas into the compound while we were working. We could not work. ...I was on the Excel line at the time. I smelled the teargas. I came out of the plant and joined the demonstration" ....Those who came to work the next day again got teargassed. "We couldn't work because of the gas", said assembly line worker Lee Sang Hui. "If one person cannot work, the whole line stops. I just joined the demonstration and sang songs and clapped. "
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The Japanese auto makers brought to these sites many of the organizational practices of automobile production in Japan. These practices spread still further as U.S. and Western European automobile firms responded to the Japanese competitive threat by selectively emulating Japanese organizational practices. Thus, in the 1980s, flexible work rules, just-in-time delivery systems, teamwork, quality circles, and a move away from vertical integration toward the extensive use of subcontracted inputs (outsourcing) were widely adopted. There was, however, a crucial difference between the original Japanese model and that adopted by the U.S. and Western European multinationals. That is, the latter did not promise job security to their core labor force. In other words, the cost-cutting measures of ]apanese lean production were adopted without the related employment policies. This model might thus be labeled "lean and mean" (cf. Harrison 1997). In contrast, the original "Toyotist" model - which offers employment security to a core labor force in exchange for cooperation, but at the same time creates a large buffer of less privileged workers without the same rights and benefits - might be labeled "lean and dual." The difference between these two models, we will argue, is crucial to understanding the dynamics of contemporary labor unrest in the world automobile industry.
Through the 1990s, the lean-and-mean version predominated. Whereas Japanese multinationals operating in core countries tended to implement the homegrown model (Florida and Kenney 1991: 390- 1), U.S . corporations have generally taken the lean-and-mean road, as have Japanese producers operating in Southeast Asia and Latin America. Deyo (1996a: 9) argued that "authoritarian politics and repressive labor regimes" are characteristic of the main sites of industry expansion in low-wage countries. In Thailand, Mitsubishi has not extended employment guarantees to its core workforce (Deyo 1996b: 145-6). In Korea, the domestic auto producers (except Kia) continue to pursue a low-wage, high-turnover strategy of mass production and an anti-union and autocratic managerial style (Rodgers 1 2 On the U.S. automobile industry's emulation of Japanese production methods, see among others Abo (1994). And in China, "layoffs are becoming a painful reality" as the central government promotes a "leaning-out of the industry" in an effort to bring labor productivity in Chinese automobile factories in line with the standards set by international "market rule" (Treece 1997c). Likewise, Japanese transnationals in Mexico are employing traditional Fordist techniques; they have found it "economically rational to place a heavier emphasis on low wages, even if the consequent high turnover disrupts quality circles and other lean production techniques" (Shaiken 1995: 248-9, 254).
Yet, to the extent that the main trend in the world automobile industry is toward lean-and-dual production, then the most likely sites of future autoworker labor unrest will be among the lower-tier workers in the subcontracting system. Yet, in these sites, strong grievances do not go hand in hand with strong workplace bargaining power. Moreover, while upper-tier workers are likely to have strong workplace bargaining power, they are also likely to have fewer grievances, and at the same time they are likely to be physically and psychically separated from lower-tier workers with greater grievances and less structural power. And with the "leaning" of the industry, primary-sector workers will account for a tiny fraction of the automobile (and overall) working class. Finally, the distribution of upper- and lower-tier (secure and insecure) workers is likely to correspond to and reinforce the core-periphery geographical divide as well as to overlap with differences in ethnicity, place of residence, and citizenship - with important implications for world labor politics.
[...] the windfall profits that accru ed to U.S. automakers helped them underwrite a stable lab or-capital accord and mass consumption social contract that lasted for more than four decades after the CIO struggles of the 1930s. In contrast, the lower profit levels associated with the intense competitive pressures toward the end of the life cycle (and the relative national poverty of the favored new sites of production) make such social contracts increasingly difficult to sustain economically. In other words, late-developers of mass production automobile industries have experienced the social contradictions of capitalist development (including strong working classes) without the benefits that might allow them to deal with those social contradictions successfully. Elsewhere, we have labeled this phenomenon "the contradictions of semiperipheral success" (Silver 1990; see also Arrighi 1990b).
The combination of these strategies - the spatial fix and the technological/organizational fix - may be leading to the re-consolidation of a spatially bifurcated process. On the one hand, new innovations in organization and technology, to the extent they can be monopolized by the innovators, provide the basis for more consensual labor-capital-state social contracts, allowing legitimacy to be combined with profitability, albeit for a shrinking labor force. On the other hand, in poorer countries, where competitive advantage is based on a continuous drive to lower costs, profitability requirements lead to continuous crises of legitimacy. [...]
The ability of both textile and auto workers to make substantial and durable gains at the end of the innovation phase suggests that the monopolistic windfall profits reaped by the innovator in any given product cycle also creates favorable conditions (at least the material resources) for stable labor-capital compromises. Yet, as in the automobile industry, so in textiles, once the labor movement made a show of force, capitalists responded with a spatial-fix strategy that accelerated the diffusion of production to new sites, initiating the mature phase of the industry. [...]
Moreover, in transportation industries, it is not easy to devise (much less practically carry out) spatial fixes as counterweights to labor's strong workplace bargaining power. Particularly troublesome nodes might be eliminated entirely fr om the distribution network - that is, unruly or otherwise unprofitable nodes can be cut off from networks of trade and production. But the upstream and downstream ramifications for all other industries of such a spatial fix in transportation makes it a heavy-handed solution at best (especially if the region as a whole to be cut off is not plagued by generalized problems of profitability and control). Moreover, "roads, railways, canals, airports, etc., cannot be moved without the value embodied in them being lost," creating the paradoxical situation whereby the mobility of capital requires relatively immobile investments in the transportation industries (Harvey 1999: 380). Thus, the disincentives to geographical relocation facing the transportation industries are on average significantly higher than the deterrents facing even the most capital-intensive manufacturing industries. Indeed, the fact that the reports of transportation workers' unrest in the WLG database are consistently spread widely across the globe throughout the 1870-1996 period suggests that spatial fixes have not been the main response to transport worker unrest.
Technological fixes have, on the other hand, been far more significant in the arsenal of employer responses to transportation worker labor unrest. The most widely studied case is that of containerization and dock automation in the shipping industry. These process innovations dramatically downsized the historically militant dock labor force in the second half of the twentieth century and in large part account for the dramatic decline in labor unrest mentions discussed earlier. Where substantial transformations in the transport labor process have been less forthcoming, product fixes have been the more prominent response. Thus, for example, railroads and railroad workers have come under increasing competitive pressure from new alternatives: trucking and aviation for cargo and the automobile and aviation for passengers.
Thus, in the 1970s, when faced with the choice between meeting the demands from below for the fulfillment of the hegemonic promises or the demands fr om capitalists for a restoration of favorable conditions for capital accumulation, metropolitan states attempted not to choose. In response, capital went "on strike." An increasingly mobile capital "voted with its feet, " not only by intensifying and deepening the geographical relocation of productive capital to lower-wage areas but also by accumulating capital in liquid form in proliferating offshore tax havens. And to the extent that industrial production still took place in the core, technological fixes and a growing reliance on immigrant labor became increasingly important capitalist strategies.
Initially, the financial fix further strengthened the bargaining power of workers in the Second and Third World states. In the 1970s (in sharp contrast to what would happen in the 1980s), loan capital flowed freely to Second and Third World countries. With capital "on strike" in the First World, and with an excess accumulation of petrodollars to recycle, First World bankers were eager to make loans on easy terms to Second and Third World governments. Thus, for example, in 1981 (the eve of the debt crisis), First World banks loaned approximately $40 billion (net) to Second and Third World countries (UNDP 1992). Debt became an important mechanism through which the contradictions of the postwar developmentalist social contracts were managed in the short run. In Poland, for example, extensive overseas borrowing allowed the Polish government to promote rapid industrialization. At the same time, borrowed funds were used by the Polish government to accommodate the periodic upsurges of labor militancy in the 1970s, making it possible for the government simultaneously to increase wages and food subsides, expand employment, and maintain high levels of capital investments. In the 1970s, the Polish government expected that industrialization would lead to a surge in exports, allowing the government not only to pay back the loans but also to increase national wealth and finally deliver on the promises of socialism to a restive working class (Silver 1992: chapter 2; Singer 1982).
Needless to say, managing the contradictions of the developmentalist social contract through debt was a highly unstable solution. To the extent that Second and Third World states used the borrowed funds to promote further industrialization and/or expand state employment in social services, the marketplace bargaining power (and potentially the workplace bargaining power) of labor was strengthened. If they attempted to accommodate this growing strength of labor, they risked losing further access to foreign investment funds and/or becoming internationally uncompetitive and thus unable to pay the accumulated debt service through exports. If they failed to accommodate the growing strength of labor, they risked a crisis of legitimacy for having failed to deliver to the masses the expected benefits of national sovereignty (or social revolution) and industrialization! modernization. The social compacts in Second and Third World countries thus faced contradictions analogous to those plaguing core social contracts.