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Cars and the Men

by Louis Stark

Reporter, New York Times

November 1935

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The investigators reported that until 1934 little attention was paid to seniority in hiring after layoffs. This goes beyond the statement of Leo Wolman, chairman of the Automobile Labor Board, that seniority, in the past, "generally applied in the industry in times of layoff and rehiring" but that the prevailing practice was one "not fixed by rule and was therefore subject to changing policies of managements." The Automobile Labor Board, according to the report, has developed rules relating to seniority and rehiring "which constitute a distinct advance over previous conditions," but under the seniority rules a worker's seniority status applies only at the company which employed him last. If a worker with seniority loses his job his chances for employment with other companies are said to be limited to peak periods "when all workers with seniority status have been rehired." The report said that the regulations of the Wolman Board were so administered as "not to meet the needs of those workers who have voluntarily presented their problem to those conducting the survey."

The Automobile Labor Board, in its report of ten months' activities, made to President Roosevelt, claims that:

Discrimination caused by union activity or union membership is not a problem of any magnitude at the present time and has not been for some time in the past. Wherever agreements are made between the industry and the Board or the industry and labor to return men to work or to restore to employes their seniority, it is the Board's information that these agreements have been fairly observed. Furthermore, in all of the many instances in which the Board had ordered individuals or groups back to work, they have been returned to work so far as the Board knows. Few cases have been brought to the Board's attention of violation of its orders or decisions.

As to the seniority rules established by it, the Board says that:

In general the industry has observed the rules fairly and carefully....Under the system and the Board's rules and rulings, every worker in the industry under the Board is protected by an orderly and legal method in his lay-off and rehiring, with review by the Board if necessary. He thus finds himself protected not only against the possibility of the pay-off period or the period of re-hiring being used as a method of discriminating against him for ulterior motives growing either out of the struggles about organizing or out of alleged personal favoritism of the lower supervision, which causes so much uneasiness in the minds of the workers, but above all against the general hazards and uncertainties of lay-off and re-hiring. Before the system of seniority these were almost unlimited.

THE NRA inquiry did not go into the workings of section 7-a, the collective-bargaining provision of the Recovery Act, as this was excluded from the presidential order.

The members of the Automobile Labor Board, according to Mr. Wolman, "are satisfied that collective bargaining is extensively practised in the industry." One may question whether the fundamental groundwork for genuine collective bargaining can even exist in an industry whose industrial relations are colored by the conditions disclosed by the NRA investigators, an industry maintaining industrial espionage, where men are bitter against their foremen, where they complain of "terror and discrimination," and where they claim that they are ignorant of their true earnings under the prevailing group and bonus systems of payment.

In one particular the report foreshadowed the action taken by the industry when the code was extended by the President in February. It suggested that regularization of employment should be promoted by fall announcement of new models instead of having all companies present their new cars in January.

The report pointed out that three large companies—Ford, General Motors and Chrysler—were increasingly obtaining a greater and greater share of the business volume and it was suggested that this tendency toward concentration "should not be accelerated by the government," because "the contribution of these small companies far exceeded their importance in rank of production," and "the value of preserving the status of the efficient smaller units is obvious even to the casual observer."

The sales swing to the lower-priced-car field was found to be a dominant circumstance in the industry resulting in a growing concentration in the three large companies which produced 77 percent of the automotive vehicles in the United States in 1929 and 88 percent in 1934. A different story was told as to the smaller companies. Working capital of eight of these companies declined from $179 million in 1929 to $79 million in 1933.

The report treats the dealer as an important factor in regularization and it was charged that the manufacturers have maintained an unreasonable attitude toward their dealers in recent years. Reforms in sales and purchasing methods to relieve destructive pressure on dealers and automotive parts manufactur ers were recommended. The effect on the status of labor in the parts-manufacturing establishments was stressed when it was pointed out that hundreds of parts-suppliers were dependent on the purchasing methods of a few automobile companies and that the inequalities of bargaining power have caused undue burdens to be laid on the labor employed by the partsmanufacturers.

The report called for a reform of labor practices, extension of facilities for collective bargaining and amendment of the code to provide for a 40-hour week, with a maximum work-week of 48 hours and time and a half overtime for all over 40 hours. The code, as extended by executive order, provides an average work week of 40 hours and for time and a half overtime beyond 48 hours.

This epoch-making report is summarized by the Research and Planning Division of the NRA in these words:

"The automobile industry, like its product, has changed so materially that its present structure, without industrial plan ning, is socially inadequate to meet its responsibilities accruing out of the changes, or to achieve in the future the lowered cost of the product, the satisfactory labor relations and the continued vigorous progress to be expected of our leading industry."


Kay Davis, University of Virginia, © 2001-2003