Thousands of workers on three key auto assembly lines went on strike after the United Auto Workers (UAW) failed to meet the deadline to agree with Detroit’s Big Three automakers Thursday night. The union warned that the strike could escalate if the two sides could not yet reach an agreement.
The UAW has 150,000 members at the three companies. The three Detroit-based companies, General Motors, Stellanis Automotive (formerly Chrysler) and Ford Motor Co, have been losing market share due to stiff competition from Japanese, South Korean, European and Chinese automakers, but they remain pivotal in the US job market.
Meanwhile, the Washington Post reported on Friday that TikTok and the US government are rekindling negotiations, after ban threats for six months. NPR, on the other hand, repeated its earlier judgment that the Biden administration demands that TikTok be sold, or risk a nationwide ban.
Both of these seemingly unrelated events are, in fact, related to the policy of the Re-industrialization of America. And the key lies in the marketplace.
The strikes by car company workers are about the future competition of American-made cars with Chinese, Japanese and European cars in the global marketplace. And the demand for a forced takeover against TikTok shows how far Washington has gone to prevent Chinese companies from taking over the US market.
The timing of the strike is crucial, coming at a rapid change in the global auto industry and on the eve of the highly anticipated 2024 US elections.
From Obama’s “Forward” (2012) to Trump’s “Make America Great Again” to Biden’s “Battle for the Soul of the Nation,” there has always been one thread: the push to re-industrialize America. However, workers’ wallets, bosses’ profits, markets and the “soul of America” don’t always go hand in hand.
In the case of the auto industry, the key is the ability to produce cars at competitive prices with a bigger market share. Clearly, this strike signals a move in the opposite direction.
The strike highlights a trend that has been evolving for nearly two or three decades: de-industrialization. It is reminiscent of the work stoppage between August 1986 and January 1987, which involved 22,000 employees of USX, the leading steel manufacturer in the US. It was the longest-lasting work stoppage in the history of the US steel industry and signaled the beginning of the industry’s downward spiral.
The decline of the US steel industry is primarily due to fierce cost competition brought about by globalization.
While it is too early to predict a similar fate for the US auto industry, rising labor costs will certainly undermine the competitiveness of US car companies.
Relying on further policy subsidies may keep market share in the short term, but in the long run, it will only make US auto companies even less proactive and innovative.
In fact, until the Trump era, the US government has continued to give subsidies and other incentives to the steel industry, failing to save it from its decline.
The audacity of the US auto unions to ask for high prices also reflects the acute labor shortages and rising inflation. This, in turn, intensifies workers’ demands for an income increase, and the price of cars has started to spiral.
Washington’s protectionist trade policies and the containment of Chinese manufacturing may ensure US market dominance in some industrial sectors for some time. However, it’s important to note that it’s not just at the high end of the scale, like chips, but more importantly in consumer sectors like online shopping, electric cars and mobile phones, where the expanding of Chinese manufacturing can’t be stopped.
TikTok is a case in point. TikTok has generated intense market aggressiveness in the consumer sector, turning people’s passions into profits. ByteDance, which owns TikTok, generated a net profit of $3 billion in 2022. Washington is keen to prevent such lucrative profits from flowing into foreign coffers.
This complex interplay of industrial strategies and global market dynamics will continue to shape the future of American industry and its global influence.
The challenge for the American empire is primarily to maintain its dominance in almost all sectors of industry and their markets. It is this attempt at global market hegemony that will ultimately cause the empire to falter.
(Global Times)
