tag:theconversation.com,2011:/us/topics/ford-3418/articlesFord – The Conversation2024-03-27T23:28:32Ztag:theconversation.com,2011:article/2267242024-03-27T23:28:32Z2024-03-27T23:28:32ZAustralia must wean itself from monster utes – and the federal government’s weakening of vehicle emissions rules won’t help one bit<figure><img src="https://images.theconversation.com/files/584679/original/file-20240327-24-tmdd5x.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C5810%2C3867&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>The federal government has bowed to pressure from the car industry, announcing it will relax proposed emissions rules for utes and vans and delay enforcement of the new standards by six months.</p>
<p>The legislation was introduced to parliament on Wednesday. The government <a href="https://minister.infrastructure.gov.au/c-king/media-release/new-vehicle-efficiency-standard-tailored-australia">says</a> the new rules give Australian motorists a greater choice of electric vehicle models and insists the policy is “good for the environment”. </p>
<p>But on the latter point, the government is mistaken. The amended rules will slow the reduction in emissions from Australia’s polluting road transport sector. And they reflect domestic and international trends that, taken together, increase the risk Australia, and the world, will fail to achieve net-zero emissions by 2050. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/australian-passenger-vehicle-emission-rates-are-50-higher-than-the-rest-of-the-world-and-its-getting-worse-222398">Australian passenger vehicle emission rates are 50% higher than the rest of the world – and it's getting worse</a>
</strong>
</em>
</p>
<hr>
<h2>What are the changes?</h2>
<p>Vehicle emissions standards set a limit on grams of CO₂ that can be emitted for each kilometre driven, averaged across all new cars sold. Carmakers failing to meet the standards will incur financial penalties.</p>
<p>The federal government released its <a href="https://www.infrastructure.gov.au/department/media/publications/cleaner-cheaper-run-cars-australian-new-vehicle-efficiency-standard-consultation-impact-analysis">initial version</a> of proposed vehicle emissions standards in February.</p>
<p>Under the changes announced this week, some 4WD wagons – such as the Toyota LandCruiser and Nissan Patrol – will be reclassified from “passenger car” to “light commercial vehicle”. The change means less stringent emissions standards will apply to those models.</p>
<p>In a <a href="https://minister.infrastructure.gov.au/c-king/media-release/new-vehicle-efficiency-standard-tailored-australia">statement</a>, the government justified the change by saying some off-road wagons have a similar chassis and towing capacity to vehicles in the light-commercial category, and so should be subject to the same standards.</p>
<p>The government will also give more favourable treatment to heavier vehicles. And manufacturers will not be penalised under the scheme until July 2025 – six months later than the government originally proposed. </p>
<h2>The global picture</h2>
<p>The government’s decision to weaken the standards is a response to pressure from the domestic vehicle industry, and a concession to the Opposition which falsely claims the new standards are a “<a href="https://www.abc.net.au/news/2024-03-15/fact-check-vehicle-missions-standard-ute-family-car-tax/103587622">ute tax</a>”.</p>
<p>But the watering-down also reflects a broader international trend in which the legacy vehicle industry is backing away from its <a href="https://media.ford.com/content/fordmedia/fna/us/en/news/2021/09/27/ford-to-lead-americas-shift-to-electric-vehicles.html">earlier</a> <a href="https://www.gm.com/commitments/electrification">commitments</a> to a rapid transition to electric vehicles. </p>
<p>For example, in the United States Ford and GM have both cut back production of some models, <a href="https://www.axios.com/2024/01/19/ev-cars-ford-lightning-gm-chevy-blazer-cuts">reportedly due to</a> lower-than-expected consumer demand.</p>
<p>Also in the US, carmakers this month <a href="https://www.politico.com/news/2024/03/20/bidens-regulators-poised-to-issue-rule-meant-to-drive-electric-car-sales-00148019">secured a relaxation</a> of the Biden administration’s fuel efficiency targets for new vehicle sales.</p>
<p>US politicians are also pushing for <a href="https://www.hawley.senate.gov/hawley-introduces-new-bill-raise-tariffs-chinese-evs-protect-american-autoworkers">increased tariff protection</a> from imports, already taxed at 27.5%. This would make US producers even more competitive against big Chinese electric vehicle brands such as BYD.</p>
<p>Toyota, the world’s largest car maker, has gone all-in on hybrid electric vehicles, beginning with the highly successful Prius. But as the global market has shifted to fully electric cars, Toyota has <a href="https://electrek.co/2023/10/30/why-is-toyota-anti-ev-it-lost-the-race-to-compete-ev-council/">fought against</a> further tightening of standards. </p>
<figure class="align-center ">
<img alt="three large utes under US flag and Ford sign" src="https://images.theconversation.com/files/584688/original/file-20240327-26-ws6hhg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/584688/original/file-20240327-26-ws6hhg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/584688/original/file-20240327-26-ws6hhg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/584688/original/file-20240327-26-ws6hhg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/584688/original/file-20240327-26-ws6hhg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/584688/original/file-20240327-26-ws6hhg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/584688/original/file-20240327-26-ws6hhg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">US carmakers secured a relaxation on fuel efficiency targets.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>Pressures in Australia</h2>
<p>Australia no longer has a domestic car manufacturing industry. But global carmakers continue to exert powerful influence through the Federated Chamber of Automotive Industries, Australia’s peak industry body for manufacturers and importers of passenger and light-commercial vehicles. The chamber has consistently <a href="https://www.smh.com.au/national/inside-the-car-industry-s-climate-lobbying-push-20230522-p5da61.html">lobbied against</a> effective climate action. </p>
<p>The government’s agreement to weaken standards also reflects the prevailing assumption, apparently shared by both major parties, that tradespeople comprise the majority of the “working class” voters for whom they are vying.</p>
<p>But it’s an out-of-date assumption. In the 1980s, the occupations fitting a broad interpretation this term (trades and technical workers, machinery operators and labourers) <a href="https://www.abs.gov.au/statistics/labour/employment-and-unemployment/labour-force-australia-detailed/latest-release">accounted for 40%</a> of all employed workers, and a majority of full-time non-managerial workers. </p>
<p>But today, <a href="https://www.abs.gov.au/statistics/labour/employment-and-unemployment/labour-force-australia-detailed/latest-release">only 28%</a> of workers fit this description. Workers with professional qualifications, such as teachers and nurses, <a href="https://www.abs.gov.au/statistics/labour/employment-and-unemployment/labour-force-australia-detailed/latest-release">outnumber</a> trades and technical workers two to one. But their concerns are frequently dismissed by some politicians as those of a woke, inner-city minority. </p>
<h2>Utes are changing</h2>
<p>The shift from substance to symbol in regards to the working class is mirrored in the transformation of utes themselves. </p>
<p>Until relatively recently – and as the name implies – utes were utilitarian vehicles designed for the practical tasks of carrying a farming couple “<a href="https://hidrive.com.au/a-brief-history-of-the-ute/#:%7E:text=In%20one%20version%20of%20the,pigs%20to%20market%20on%20Mondays.">to church on Sundays and the pigs to market on Mondays</a>”. But over time, this has been replaced by various forms of cosplay. </p>
<p>Utes have been tricked out with sports bars and fancy wheels, metallic paint and so on. More recently, the traditional ute has been replaced by US-style pickups, typically sold in dual-cab configurations. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/labors-fuel-efficiency-standards-may-settle-the-ute-dispute-but-there-are-still-hazards-on-the-road-222875">Labor's fuel-efficiency standards may settle the ute dispute – but there are still hazards on the road</a>
</strong>
</em>
</p>
<hr>
<p>Most models of the market-leading Ford Ranger <a href="https://www.ford.com.au/showroom/trucks-and-vans/ranger/specs/">don’t even offer</a> a single-cab version, though such versions are sold overseas.</p>
<p>These vehicles are massive, but many have far less carrying capacity than a traditional ute. For example, the Ram 1500 has a tub length of <a href="https://www.news.com.au/technology/motoring/motoring-news/2023-ram-1500-big-horn-has-arrived-in-australia/news-story/f84366c4e20c57d6a25201cc52440062">1.7 metres</a>, compared to about 2.4 metres for the tray of a standard single-cab ute. </p>
<p>Unless the growth in the size of passenger vehicles is stopped and reversed, Australia’s task of meeting our net-zero target will be even more difficult.</p>
<p>It’s unlikely the two big parties will act on this issue any time soon. But as climate change worsens, the need to wean ourselves from monster cars and internal-combustion engines will demand the attention of our political leaders.</p><img src="https://counter.theconversation.com/content/226724/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Quiggin is a former Member of the Climate Change Authority, which recommended fuel efficiency standards in 2014</span></em></p>The amended rules will slow the reduction in emissions from Australia’s polluting road transport sector and reflect alarming trends, here and abroad.John Quiggin, Professor, School of Economics, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2233072024-03-01T13:36:06Z2024-03-01T13:36:06ZRemembering the 1932 Ford Hunger March: Detroit park honors labor and environmental history<figure><img src="https://images.theconversation.com/files/579009/original/file-20240229-25-snzdp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A Dearborn policeman knocked unconscious was the first casualty of the 1932 Ford Hunger March in Detroit and Dearborn.</span> <span class="attribution"><a class="source" href="https://wayne.contentdm.oclc.org/digital/collection/vmc/id/35955/rec/1">Walter P. Reuther Library, Archives of Labor and Urban Affairs, Wayne State University/Detroit News Burckhardt.</a></span></figcaption></figure><p>The intersection of Fort Street and Oakwood Boulevard in southwest Detroit today functions mostly as a thoroughfare for trucks and commuters. </p>
<p>However, as you sit idling at the stoplight waiting to cross the bridge over the Rouge River, you might glance to the side and see something unexpected in this heavily industrialized area: A sculpture of weathered steel reaches toward the sky alongside a spray of flowers and waves of grasses and people fishing. </p>
<p>This inconspicuous corner, now the home of the <a href="https://www.motorcities.org/fortstreet">Fort Street Bridge Park</a>, has several stories to tell: of a river, a region, a historic conflict and an ongoing struggle. </p>
<p>If you pull over, you’ll enter a place that attempts to pull together threads of history, environment and sustainable redevelopment.</p>
<p>Signs explain why this sculpture and park are here: to honor the memory of <a href="https://www.zinnedproject.org/news/tdih/hunger-march-ford/">protesters who met on this very spot on March 7, 1932</a>, before marching up Miller Road to the massive Ford Rouge River Complex located in the adjacent city of Dearborn. </p>
<p>As a <a href="https://scholar.google.com/citations?user=K9xPsDgAAAAJ&hl=en&oi=ao">sociology professor</a>, I have a strong interest in how the history of labor and industrial pollution have influenced Detroit. </p>
<p>I’m also interested in the potential for <a href="https://doi.org/10.1007/s11252-018-0765-7">environmental restoration</a> or “<a href="https://doi.org/10.1016/j.cities.2019.05.002">green reparations</a>” to <a href="https://doi.org/10.1016/j.cities.2019.05.002">offer a new way forward</a>.</p>
<p>To understand this potential future, we must first recognize and honor the past.</p>
<figure class="align-center ">
<img alt="An iron sculpture commemorates industry and sits as the centerpiece of the Ford Street Bridge Park." src="https://images.theconversation.com/files/577974/original/file-20240226-24-rb9wdh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/577974/original/file-20240226-24-rb9wdh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/577974/original/file-20240226-24-rb9wdh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/577974/original/file-20240226-24-rb9wdh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/577974/original/file-20240226-24-rb9wdh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/577974/original/file-20240226-24-rb9wdh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/577974/original/file-20240226-24-rb9wdh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The Fort Street Bridge Park is located along the banks of the Rouge River in southwest Detroit.</span>
<span class="attribution"><span class="source">Paul Draus</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<h2>14 demands</h2>
<p>In their book “<a href="https://www.ueunion.org/labors-untold-story#:%7E:text=Extensively%20researched%2C%20yet%20highly%20readable,conflict%20from%20the%20workers'%20perspective.">Labor’s Untold Story</a>,” published in 1955, journalist Richard Boyer and historian Herbert Morais quote a contemporary account of the Hunger March: </p>
<p><em>It was early, it was cold when the first of the unemployed Ford workers (many of whom had been laid off the day before) arrived at Baby Creek Bridge. They were a small gray group and they stood slapping their sides, warding off the cold, and wondering if they alone would come.</em></p>
<p>Others soon joined them: Black and white, men and women, immigrants and American-born. They united to deliver a list of 14 demands to the auto tycoon <a href="https://corporate.ford.com/articles/history/henry-ford-biography.html">Henry Ford</a>, whose US$5 daily wage for his workers was once considered revolutionary. </p>
<figure class="align-center ">
<img alt="Police with bats follow Hunger March marchers on March 7, 1932." src="https://images.theconversation.com/files/579052/original/file-20240229-30-qh3912.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/579052/original/file-20240229-30-qh3912.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=463&fit=crop&dpr=1 600w, https://images.theconversation.com/files/579052/original/file-20240229-30-qh3912.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=463&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/579052/original/file-20240229-30-qh3912.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=463&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/579052/original/file-20240229-30-qh3912.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=582&fit=crop&dpr=1 754w, https://images.theconversation.com/files/579052/original/file-20240229-30-qh3912.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=582&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/579052/original/file-20240229-30-qh3912.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=582&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Hunger March protesters demanded better pay and working conditions at the Ford Rouge plant.</span>
<span class="attribution"><a class="source" href="https://wayne.contentdm.oclc.org/digital/collection/vmc/id/37798/rec/1">Detroit News Staff via Walter P. Reuther Library, Archives of Labor and Urban Affairs, Wayne State University.</a></span>
</figcaption>
</figure>
<p>Among the marchers’ demands: jobs for laid-off workers, a seven-hour workday without a pay reduction, two 15-minute rest periods a day, an end to discrimination against Black workers and the right to organize. </p>
<p>This crowd of several thousand marched up the road on one of the coldest days of winter. They were greeted at the Dearborn border with clouds of tear gas, jets of cold water and a shower of bullets. </p>
<p>It was then that the Ford Hunger March became the Ford Massacre. </p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/HFEskpjPbfE?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Detroit Workers News Special 1932: Ford Massacre via Workers Film & Photo League International.</span></figcaption>
</figure>
<h2>The seeds of a labor movement</h2>
<p>Beth Tompkins Bates, in her book “<a href="https://uncpress.org/book/9781469613857/the-making-of-black-detroit-in-the-age-of-henry-ford/">The Making of Black Detroit in the Age of Henry Ford</a>,” wrote that “The response of the Ford Motor Company on that day shot holes in the myth that Ford cared about his workers, that he was different from other businessmen.” </p>
<figure class="align-left ">
<img alt="Black and white portrait of a young man with wavy hair" src="https://images.theconversation.com/files/578741/original/file-20240228-32-57ksmd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/578741/original/file-20240228-32-57ksmd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=736&fit=crop&dpr=1 600w, https://images.theconversation.com/files/578741/original/file-20240228-32-57ksmd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=736&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/578741/original/file-20240228-32-57ksmd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=736&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/578741/original/file-20240228-32-57ksmd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=926&fit=crop&dpr=1 754w, https://images.theconversation.com/files/578741/original/file-20240228-32-57ksmd.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=926&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/578741/original/file-20240228-32-57ksmd.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=926&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Portrait of Joe Bussell, killed by Ford Servicemen during the 1932 Ford Hunger March in Detroit. Bussell’s relatives contributed to the Fort Street Bridge Park.</span>
<span class="attribution"><a class="source" href="https://reuther.wayne.edu/node/7269">Walter P. Reuther Library</a></span>
</figcaption>
</figure>
<p>At the end of the day, four marchers lay dead, while many others were injured and hospitalized. A fifth would die months later of his wounds. </p>
<p>More than 30,000 people showed up for the dead marchers’ funerals. The violent reactions of Ford security and Dearborn police during the march were widely condemned. </p>
<p>In an effort to address the stain on its public image, the Ford family first commissioned then expanded a major work by <a href="https://www.nps.gov/places/detroit-industry-murals-detroit-institute-of-arts.htm">Mexican muralist Diego Rivera</a> that was to become the centerpiece of the Detroit Institute of Arts, known as the Detroit Industry Mural. Rivera, <a href="https://doi.org/10.1017/S0018246X0800678X">a known communist</a>, depicted both ruthless efficiency and the racialized inequality of the industrial process. </p>
<p>Ford’s battle against unions was ultimately a failure. Five years after the Hunger March, the so-called “<a href="https://reuther.wayne.edu/ex/exhibits/battle.html">Battle of the Overpass</a>” led to the organization of the Rouge plant by the United Auto Workers. </p>
<p>The Ford Hunger March, long forgotten by many, is now <a href="https://www.workers.org/2022/03/62190/">acknowledged as an important catalyst</a> in the growth of the union movement. </p>
<h2>Struggle for sustainability and justice</h2>
<p>The fight for sustainability and environmental justice is another major theme of the park, which chronicles the history of the Rouge River, including the day in 1969 when the <a href="https://www.greatlakesnow.org/2019/10/rouge-river-fire-anniversary-great-lakes-moment/">oily water infamously caught fire</a>. </p>
<p>The hellish image of burning rivers helped motivate the signing of the <a href="https://www.boem.gov/air-quality-act-1967-or-clean-air-act-caa">Clean Air</a> and <a href="https://www.epa.gov/laws-regulations/summary-clean-water-act">Clean Water acts</a>, as well as <a href="https://www.epa.gov/history">the creation of the Environmental Protection Agency</a>. </p>
<p>The air and water in and around Detroit are <a href="https://www.greatlakesnow.org/2023/05/once-beset-industrial-pollution-rouge-river-slow-path-recovery/">much cleaner today</a> than they were 1969. But this doesn’t change the fact that the area where the park sits bears a disproportionate burden of the pollution generated by the region’s industrial production, which includes cement plants, gypsum and aggregates processors, salt mining and asphalt storage, as well as a steel mill and petroleum refinery.</p>
<p>Another <a href="https://www.marathonpetroleum.com/content/documents/Citizenship/2018/Sustainability_Report_10_21.pdf">donor to the park</a> is Marathon Petroleum Corporation whose Detroit Refinery occupies the adjoining neighborhood. Though Marathon has invested in the development of green spaces on its own property, the refinery has also expanded in recent years, <a href="https://wdi-publishing.com/product/marathon-petroleum-and-southwest-detroit-the-intersection-of-community-and-environment/">further degrading the local environment</a>.</p>
<p>Research shows that workers <a href="https://doi.org/10.1016/j.pmedr.2021.101502">benefit from unionization</a> in myriad ways, not only directly but indirectly. But <a href="https://theconversation.com/2023s-historic-hollywood-and-uaw-strikes-arent-labors-whole-story-the-total-number-of-americans-walking-off-the-job-remained-relatively-low-219903">recent labor victories</a> by the UAW, Hollywood writers and other organizers stand in stark contrast to the <a href="https://theconversation.com/1-in-10-us-workers-belong-to-unions-a-share-thats-stabilized-after-a-steep-decline-221571">long-term erosion of union membership</a>.</p>
<p>Today, the Fort Street Bridge Park in southwest Detroit serves to remind us of the complexities of history and how apparent progress in one area may be followed by a setback somewhere else. It also represents how the spirit of community, unbroken, keeps pushing for something better.</p><img src="https://counter.theconversation.com/content/223307/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Paul Draus is affiliated with Friends of the Rouge and Downriver Delta CDC, two nonprofit organizations involved with the Fort Street Bridge Park. He is also the facilitator of the Fort-Rouge Gateway (FRoG) Partnership, a coalition of representatives from nonprofit, community-based, academic and industry that is focused on the sustainable redevelopment of the industrial Rouge region. </span></em></p>On March 7, workers at the Ford Rouge River plant marched for better working conditions, sparking America’s labor movement. Almost a century later, a quiet park honors their memory.Paul Draus, Professor of Sociology; Director, Master of Science in Criminology and Criminal Justice, University of Michigan-DearbornLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2146792023-10-06T12:31:51Z2023-10-06T12:31:51ZWhy the UAW union’s tough bargaining strategy is working<figure><img src="https://images.theconversation.com/files/552177/original/file-20231004-27-7fq66x.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C5842%2C3665&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">UAW union members picket in front of a Stellantis distribution center on Sept. 25, 2023, in Carrollton, Texas.</span> <span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/PicturesoftheWeek-NorthAmerica-PhotoGallery/c1ac21c35db54e70b1f39af3b7653bc2/photo?boardId=37be9465fcce45d283d5431cccb20a6a&st=boards&mediaType=audio,photo,video,graphic&sortBy=&dateRange=Anytime&totalCount=455&currentItemNo=8">AP Photo/Tony Gutierrez</a></span></figcaption></figure><p>The United Auto Workers union isn’t backing down as it <a href="https://www.npr.org/2023/09/20/1200357955/uaw-big-3-strike-auto-shawn-fain">bargains for more compensation and better benefits</a> in its new contracts with General Motors, Ford and Stellantis. <a href="https://www.nytimes.com/2023/10/05/business/economy/shawn-fain-uaw-profile.html">Under the deft leadership</a> of its <a href="https://theconversation.com/historic-uaw-election-is-bringing-profound-union-leadership-changes-and-chances-of-more-strikes-and-higher-car-prices-200335">president, Shawn Fain</a>, and other officials elected in March 2023, the union has thrown the three companies off balance with a strike that began on Sept. 15 – the minute its prior contracts expired.</p>
<p>As of Oct. 6, the number of UAW members on strike from their Big Three jobs <a href="https://www.clickondetroit.com/news/local/2023/10/02/uaw-strike-week-3-what-we-know-as-25k-workers-picket-big-three-talks-persist/">stood at 25,000</a> after a gradual climb – meaning that 1 in 6 of the union’s nearly 150,000 autoworkers were on the picket lines instead of going to work.</p>
<p>I’m a labor and business scholar who has studied the <a href="https://scholar.google.com/scholar?hl=en&as_sdt=0%2C23&q=marick+masters&btnG">history of UAW collective bargaining with the Detroit Three</a>. I’ve observed that the union’s bargaining strategy has three interconnected elements that match what <a href="https://www.pon.harvard.edu/daily/negotiation-training-daily/negotiating-in-three-dimensions-2/">Harvard Program on Negotiations researchers</a> recommend: an emphasis on substance, processes affecting interpersonal relations, and the setup – or context.</p>
<h2>3-part strategy</h2>
<p><a href="https://www.reuters.com/business/autos-transportation/uaw-chief-shawn-fain-disrupts-detroits-labor-tradition-2023-09-15/">Fain and his leadership</a> team have gotten the upper hand in all three regards.</p>
<p>First, it framed the negotiations by publicizing its members’ demands at the very beginning of formal talks. From the start, the union has clearly argued that the automakers’ “record profits” in recent years meant that autoworkers deserve <a href="https://www.theguardian.com/commentisfree/2023/sep/14/record-auto-profits-inequality-climate-crisis-ford-general-motors-stellantis">what it calls “record contracts”</a> to compensate them for past sacrifices, such as <a href="https://www.michiganradio.org/economy/2023-10-03/behind-the-push-to-end-tiers-a-precarious-history-of-solidarity-in-the-uaw">lowering pay and reducing benefits</a> for newer hires.</p>
<p>So far, it looks like the UAW is making real gains on the substance of its demands. For example, by Oct. 3, <a href="https://media.ford.com/content/fordmedia/fna/us/en/news/2023/10/03/ford-makes-comprehensive-offer-to-uaw--record-pay-and-benefits--.html">Ford was offering a 26% pay raise</a>, <a href="https://abcnews.go.com/Business/day-workweek-46-raise-uaw-makes-audacious-demands/story?id=102926195">up from about 15% before the strike</a>, and the restoration of annual cost-of-living adjustments to keep up with inflation.</p>
<p>And on Oct. 6, Fain applauded GM’s acceptance of a key union demand: that all <a href="https://twitter.com/AFLCIO/status/1710359460521062858">workers at their electric-vehicle battery manufacturing plants</a> have the same working conditions and compensation as those who are making vehicles with internal combustion engines and transmissions. I see this as a monumental concession that signals to the other companies that it would be advisable for them to follow suit.</p>
<p>Second, the union unilaterally changed the bargaining process, starting with its optics. The UAW dispensed with the <a href="https://www.cnbc.com/2019/10/26/with-gm-contract-set-uaw-takes-its-fight-to-ford-and-fiat-chrysler.html">traditional handshake ceremonies</a> it had previously held with auto executives to kick off contract negotiations. “There is no point in having some pomp and circumstance and some big ceremony acting like we’re working together when we’re not,” <a href="https://www.clickondetroit.com/news/local/2023/07/12/no-handshakes-uaw-leaders-visit-plants-as-high-stakes-contract-talks-begin-in-metro-detroit/">Fain told reporters in mid-July</a>.</p>
<p>Instead of participating in conciliatory photo-ops, the leadership held <a href="https://www.cnn.com/2023/07/12/cars/uaw-head-strike-big-three/index.html">meet-and-greets with rank-and-file UAW members</a> at factories belonging to Ford, General Motors and Stellantis – the global automaker that makes Chrysler, Dodge and Ram vehicles – where Fain declared that the union was ready to go on strike. </p>
<p>More significantly in terms of its processes, the UAW is on strike for the first time <a href="https://www.npr.org/2023/09/15/1199673197/uaw-strike-big-3-automakers">against all three of the automakers</a>, having abandoned its prior practice of targeting one company at a time. Bargaining simultaneously with all three companies effectively pits them against each other. </p>
<p>One way Fain is doing that is by expanding picket lines in accordance with the progress or lack thereof each of the three automakers makes in meeting the UAW’s demands. Pressure on the companies is building with rolling deadlines at which additional strike sites are announced. </p>
<p>This strategy has led the companies to make concessions, with the union barely having to reciprocate. Although the UAW is now <a href="https://www.cbsnews.com/news/uaw-strike-what-are-their-demands-detroit-big-three-detroit/">seeking a 36% increase in pay</a>, down from 46%, it has not ratcheted down many of its other demands.</p>
<p>Third, the union has successfully used social media to get its narrative across and to <a href="https://pro.morningconsult.com/analysis/uaw-strike-polling">rally public support</a> for its <a href="https://news.gallup.com/poll/510281/unions-strengthening.aspx">fight with the automakers</a>.</p>
<p>Perhaps the best evidence that the union’s outreach strategy is succeeding is that Joe Biden became the first sitting president to <a href="https://www.whitehouse.gov/briefing-room/speeches-remarks/2023/09/26/remarks-by-president-biden-at-united-auto-workers-picket-line/">join strikers on a picket line</a> when he made a trip to Belleville, Michigan, on Sept. 26. Once there, Biden expressed support for the UAW’s cause.</p>
<p>The UAW has <a href="https://uaw.org/uaw-releases-new-video-corporate-greed-whats-really-going-auto-industry/">repeatedly accused the companies of being greedy</a>, often by pointing to what their top executives make: The CEOs of Ford, General Motors and Stellantis each received between <a href="https://www.wsj.com/business/auto-ceos-make-about-300-times-what-their-median-worker-is-paid-heres-how-that-stacks-up-cefc9a5">$21 million and $29 million in compensation</a> in 2022.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/Z2sgkOVS_Ko?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">UAW President Shawn Fain has emphasized themes such as corporate greed in the union’s social media campaigns.</span></figcaption>
</figure>
<h2>Collaborative vs. adversarial</h2>
<p>Research on labor-management negotiations has underscored two basic approaches to bargaining: <a href="https://www.pon.harvard.edu/shop/getting-to-yes-negotiating-agreement-without-giving-in/">collaborative</a> and <a href="https://www.pearson.com/en-us/subject-catalog/p/mind-and-heart-of-the-negotiator-the/P200000006425/9780135641262">adversarial</a>. </p>
<p>Early on, collective bargaining in the U.S. auto industry was the latter. </p>
<p>By the late 1970s, as the <a href="https://www.wardsauto.com/news-analysis/foreign-invasion-imports-transplants-change-auto-industry-forever">Big Three lost market share</a> to foreign automakers, the UAW was forced into a concessionary bargaining mode. It compromised on pay and benefits to enable manufacturers to compete against nonunion employers – <a href="https://www.chicagofed.org/publications/blogs/chicago-fed-insights/2023/recent-uaw-contracts-ford-gm-stellantis">especially in 2007 and 2009</a> amid weak demand for new vehicles.</p>
<p>In 2023, the UAW has declared those days over.</p>
<p>The union is instead focused on what <a href="https://theconversation.com/united-auto-workers-strike-if-it-happens-should-channel-the-legacy-of-walter-reuther-who-led-the-union-at-the-peak-of-its-power-212324">Walter Reuther</a>, the UAW’s longtime leader, called “<a href="https://uaw.org/walter-reuther-quote-collection/">the sharing of economic abundance</a>.”</p>
<p>To implement its new strategy, the union is relying on several <a href="https://www.pon.harvard.edu/daily/batna/10-hardball-tactics-in-negotiation/">hard-bargaining tactics</a>: extreme demands, personal attacks, threats and warnings, rolling deadlines and holding unpredictable strikes that are the same for all three companies.</p>
<p><a href="https://abcnews.go.com/Business/day-workweek-46-raise-uaw-makes-audacious-demands/story?id=102926195">Fain himself described</a> the union’s initial demands as “audacious.” </p>
<p>On top of a roughly 46% wage increase, it sought the restoration of annual cost-of-living adjustments, retiree health care and defined-benefit pensions, the elimination of separate wage tiers for longtime and newer workers and increases in profit-sharing. The UAW also sought a 32-hour work week with pay for 40 hours of labor and the <a href="https://apnews.com/article/auto-workers-union-wage-increase-jobs-bank-b8370b11bd692191d9ee3080001ef358">restoration of jobs banks</a> – an abolished system that paid workers at closed factories who did community service.</p>
<p>Some analysts have estimated that accepting all of these conditions <a href="https://www.wsj.com/business/autos/uaw-strike-tesla-labor-costs-baf8b897">would more than double</a> labor costs for the three automakers.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/552182/original/file-20231004-24-hjr1vh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="President Biden, in blue, speaking into a megaphone near several people dressed in red in front of signs saying GM and UAW." src="https://images.theconversation.com/files/552182/original/file-20231004-24-hjr1vh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/552182/original/file-20231004-24-hjr1vh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/552182/original/file-20231004-24-hjr1vh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/552182/original/file-20231004-24-hjr1vh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/552182/original/file-20231004-24-hjr1vh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/552182/original/file-20231004-24-hjr1vh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/552182/original/file-20231004-24-hjr1vh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">President Joe Biden addressed striking United Auto Workers members on the picket line outside a GM facility on Sept. 26, 2023, in Van Buren Township, Mich.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/Biden/881fa5d8d9fc45b99ec615befe6f9c3f/photo?boardId=37be9465fcce45d283d5431cccb20a6a&st=boards&mediaType=audio,photo,video,graphic&sortBy=&dateRange=Anytime&totalCount=455&currentItemNo=6">AP Photo/Evan Vucci</a></span>
</figcaption>
</figure>
<h2>Signs of success</h2>
<p>I think it’s clear that the union caught the companies flat-footed in response to this unconventional approach and that the Big Three are <a href="https://www.washingtonpost.com/business/2023/10/04/uaw-strike-automaker-offers/">making significant concessions</a> in terms of raising pay for the lowest-paid workers.</p>
<p>At the same time, gaps do remain between the union’s demands and what the companies are offering, especially in terms of across-the-board pay increases.</p>
<p>For example, Ford and Stellantis have not yet agreed to the UAW’s demands regarding equal pay, benefits and job protections for <a href="https://www.axios.com/2023/09/29/uaw-strike-ford-ceo-ev-battery-plants">electric-vehicle manufacturing workers</a>. And there seems to be no progress toward shortening the work week to four days from five – which may have been more of an <a href="https://www.npr.org/2023/09/11/1198394085/uaw-big-3-automakers-4-day-work-week-shawn-fain-detroit">optimistic ask than a hard demand</a>.</p>
<p>But with a little give-and-take, I have little doubt that the parties will resolve these matters. And despite this high-stakes dispute, I believe it’s possible for the automakers to wind up with a win if they can accentuate the common interests that bind labor and management to their shared future success.</p>
<p><em>This is an updated version of an article originally published on Oct. 6, 2023, with details about a new development involving the UAW’s negotations with General Motors.</em></p><img src="https://counter.theconversation.com/content/214679/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>While director of the Douglas A. Fraser Center for Workplace Issues at Wayne State University from 2009 through 2019, the Center received grants from the Detroit Three's joint training centers with the United Auto Workers to pursue education and research on unions and labor-management relations. These grants were operating strictly with the purview of the university. </span></em></p>The companies are making more generous offers, and the union is commanding support from the general public and the president of the United States.Marick Masters, Professor of Business and Adjunct Professor of Political Science, Wayne State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2100372023-08-07T12:41:03Z2023-08-07T12:41:03ZUS autoworkers may wage a historic strike against Detroit’s 3 biggest automakers − with wages at EV battery plants a key roadblock to agreement<figure><img src="https://images.theconversation.com/files/538558/original/file-20230720-19-obsn7t.jpg?ixlib=rb-1.1.0&rect=26%2C139%2C2236%2C1850&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">UAW President Shawn Fain speaks with General Motors workers on July 12, 2023, in Detroit.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/united-auto-workers-president-shawn-fain-speaks-with-and-news-photo/1528218013?adppopup=true">Bill Pugliano/Getty Images</a></span></figcaption></figure><p>The United Auto Workers union, which represents nearly <a href="https://www.cnn.com/2023/07/24/business/stellantis-samsung-battery-plant-uaw/index.html">150,000 employees of companies that manufacture U.S.-made vehicles</a>, has been engaged since July 2023 in the labor negotiations it undergoes every four years with the three main unionized automakers.</p>
<p>By late August, it still wasn’t clear that the UAW would agree to a new contract with <a href="https://www.investopedia.com/terms/b/bigthree.asp">Ford, General Motors and Stellantis</a> – the automaker that manufactures Chrysler and 13 other vehicle brands – <a href="https://www.reuters.com/business/autos-transportation/uaw-will-open-contract-talks-with-detroit-three-automakers-2023-07-10/">by their impending deadline</a>. The <a href="https://apnews.com/article/auto-workers-union-wage-increase-jobs-bank-b8370b11bd692191d9ee3080001ef358">contracts expire at 11:59 p.m. Sept. 14</a>.</p>
<p>The union’s leaders skipped the <a href="https://www.usatoday.com/story/money/cars/2023/07/13/uaw-detroit-three-handshake-tradition-shawn-fain/70407842007/">traditional handshake ceremonies</a> it usually holds with these automakers, which are often called the Big Three or Detroit Three. The union instead held grassroots photo-ops: UAW leaders greeted rank-and-file members at one Ford, one GM and one Stellantis factory. On Aug. 25, the UAW announced that <a href="https://uaw.org/97-uaws-big-three-members-vote-yes-authorize-strike/">97% of its members had authorized a strike</a> “if the Big Three refuse to reach a fair deal.” It’s a major milestone.</p>
<p>I’m a labor scholar who has studied the <a href="https://scholar.google.com/scholar?hl=en&as_sdt=0%2C23&q=marick+masters&btnG">history of UAW collective bargaining with the Detroit Three</a>. Given that the UAW is <a href="https://uaw.org/president-fain-facebook-live-big-threes-record-profits-mean-record-contracts">making major demands</a> at a time of <a href="https://www.washingtonpost.com/business/2023/08/03/strikes-2023-summer-unions/">rising union assertiveness and ambition</a>, I believe it’s reasonable to wonder whether U.S. automakers will be the next industry to face a strike.</p>
<p>In 2023, there have been <a href="https://www.nbcnews.com/pop-culture/pop-culture-news/emmys-postponed-due-writer-actor-strikes-rcna96803">strikes by screenwriters, actors</a>, <a href="https://www.beckershospitalreview.com/hr/us-healthcare-workers-walk-off-the-job-7-strikes-in-2023.html">health care workers</a> and <a href="https://apnews.com/article/taylor-swift-los-angeles-hotel-strike-ff26bbef8cbf37c82469a446ff29f919">hotel staff</a>, as well as vigorous organizing by workers for <a href="https://labornotes.org/2023/07/reform-caucus-rises-sues-elections-amazon-labor-union">warehouse and delivery services</a> at <a href="https://labornotes.org/2023/07/amazon-teamsters-rolling-pickets-hit-facilities-nationwide">Amazon</a>, <a href="https://theconversation.com/ups-and-teamsters-agree-on-new-contract-averting-costly-strike-that-could-have-delayed-deliveries-for-consumers-and-retailers-210431">UPS</a> and <a href="https://www.cnn.com/2023/07/24/business/fedex-pilots-union-vote/index.html">FedEx</a>.</p>
<h2>Strike could stall Detroit GM, Ford and Stellantis</h2>
<p>All three automakers with expiring contracts have amassed nearly <a href="https://uaw.org/new-uaw-video-highlights-big-3s-massive-profits-makes-clear-can-easily-afford-unions-contract-demands/">US$250 billion in reported profits</a> in their North American operations over the past decade.</p>
<p>And <a href="https://uaw.org/new-uaw-video-highlights-big-3s-massive-profits-makes-clear-can-easily-afford-unions-contract-demands/">UAW leaders have pledged</a> to garner what they see as their members’ fair share of those profits through higher wages and stronger job security.</p>
<p>The UAW’s newly elected president, Shawn Fain, frequently denounces corporate greed and has proclaimed the union’s willingness to go on strike. In the past, the union has <a href="https://www.nytimes.com/2019/09/26/automobiles/auto-strikes-history.html">held strikes against one automaker at a time</a>, most recently in <a href="https://www.vox.com/identities/2019/10/25/20930350/gm-workers-vote-end-strike">2019 against GM</a>. </p>
<p>That could change this time.</p>
<p>“The <a href="https://www.reuters.com/business/autos-transportation/uaw-president-says-union-prepared-strike-detroit-three-2023-07-11/">Big Three is our strike target</a>,” Fain has said. “And whether or not there’s a strike, it’s up to Ford, General Motors and Stellantis.” </p>
<p>The UAW has said it has <a href="https://www.detroitnews.com/story/business/autos/2023/06/21/bank-of-america-analysts-expect-uaw-strike-during-auto-talks-this-year/70343417007/">more than $825 million</a> in its strike fund to <a href="https://uaw.org/strike-faq-2/">help workers make do</a> without pay should they walk off the job. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/540915/original/file-20230802-15-h9ccgy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Man carries a 'UAW on strike' picket sign, enveloped in an American flag." src="https://images.theconversation.com/files/540915/original/file-20230802-15-h9ccgy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/540915/original/file-20230802-15-h9ccgy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/540915/original/file-20230802-15-h9ccgy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/540915/original/file-20230802-15-h9ccgy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/540915/original/file-20230802-15-h9ccgy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/540915/original/file-20230802-15-h9ccgy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/540915/original/file-20230802-15-h9ccgy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Autoworker Ray Dota picketed outside the shuttered General Motors plant in Lordstown, Ohio, on Sept. 23, 2019, during the most recent UAW strike.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/ray-dota-of-austintown-oh-pickets-outside-the-shuttered-news-photo/1178903811?adppopup=true">Craig F. Walker/The Boston Globe via Getty Images</a></span>
</figcaption>
</figure>
<h2>Fain’s leadership</h2>
<p>Fain has declared that the union will no longer maintain the somewhat cozy relationship with the Big Three that <a href="https://uaw.org/president-fain-facebook-live-big-threes-record-profits-mean-record-contracts">led to major concessions</a> in the past.</p>
<p>Many of the <a href="https://www.npr.org/2023/04/04/1167902956/united-auto-workers-president-shawn-fain">union’s other new leaders also</a> are affiliated with the UAW’s <a href="https://uawd.org/about/">Unite All Workers for Democracy</a> caucus, which launched a successful campaign to require the direct election of the union’s top officials in 2022, with runoff elections held in 2023. They want to prevent a recurrence of a massive scandal that resulted in the <a href="https://www.justice.gov/usao-edmi/pr/former-uaw-official-sentenced-57-months-prison-embezzling-over-2-million-union-funds">federal prosecution</a> of more than a dozen <a href="https://www.justice.gov/usao-edmi/pr/former-international-uaw-president-gary-jones-sentenced-prison-embezzling-union-funds">UAW leaders from 2017 to 2022</a>.</p>
<p>Two former UAW international presidents were sentenced to time in prison after being convicted of embezzling union funds. The new slate of leaders <a href="https://www.npr.org/2023/04/04/1167902956/united-auto-workers-president-shawn-fain">assumed control of the UAW under court supervision</a> in March 2023.</p>
<h2>Seeking equal pay for EV workers</h2>
<p>As part of their bolder strategy, the <a href="https://www.autonews.com/automakers-suppliers/gm-samsung-sdi-build-3b-ev-battery-plant-us">UAW’s new leaders have criticized the joint ventures</a> between the three automakers and foreign-based electric battery producers.</p>
<p>They want to see Ford, GM and Stellantis paying UAW-level wages and benefits at all joint-venture operated plants in the U.S. making batteries for their EVs. Today, workers at the joint-venture factories earn far less than their <a href="https://electrek.co/2023/06/23/car-wars-ford-gm-stellantis-gain-most-us-ev-market-share/">counterparts who produce vehicles that run on fossil fuels</a>.</p>
<p>The <a href="https://electrek.co/2022/12/09/gms-ultium-battery-plant-votes-overwhelmingly-to-unionize-with-uaw/">UAW has succeeded in organizing one of these joint ventures</a>, Ultium Cells in Lordstown, Ohio. But pay for workers at the former General Motors plant, which is now a joint EV battery venture between GM and LG Energy, <a href="https://www.reuters.com/business/autos-transportation/auto-union-harshly-criticizes-us-ford-joint-venture-battery-loan-2023-06-23/">starts at just $16.50 per hour</a>. In 2019, the year that GM ended car assembly at that factory, workers <a href="https://www.cnbc.com/2023/04/28/auto-workers-union-and-sanders-blast-gm-for-wages-at-us-battery-plant.html">earned $32 per hour</a>. </p>
<p>The UAW has several other objectives, which <a href="https://uaw.org/president-fain-facebook-live-big-threes-record-profits-mean-record-contracts">Fain first announced in a Facebook live meeting</a> on Aug. 1, 2023.</p>
<p>They include greater job security <a href="https://www.reuters.com/business/autos-transportation/uaw-seeks-double-digit-pay-hikes-detroit-three-contract-talks-2023-08-01/">and steep wage increases</a> for UAW-represented workers covered by the union’s contracts with GM, Ford and Stellantis.</p>
<p>Among other things, it also seeks to end the two-tier wage system negotiated in 2007, under which new hires make much less than veteran workers, and the restoration of cost-of-living allowances, which the UAW also conceded in 2007 to help the companies stay afloat during the Great Recession.</p>
<p><a href="https://www.abc12.com/news/business/uaw-president-lays-out-list-of-demands-for-big-three-automakers/article_3e76b288-3130-11ee-861e-2365c42aa592.html">Other UAW goals include</a> resuming company-paid retiree health care benefits, adding more paid time off and limiting the use of temporary employees. Fain also says he wants <a href="https://www.youtube.com/watch?v=K_4x-seTCvc&ab_channel=CBSNews">workweeks scaled down to 32 hours, from its current 40</a>.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1686494700331728906"}"></div></p>
<h2>Smaller ranks</h2>
<p>Union membership in the auto manufacturing industry has <a href="https://www.unionstats.com">shrunk from nearly 60% in 1983 to under 16% in 2022</a>. Nonunion competitors with U.S. locations include foreign companies such as Toyota, Honda, BMW and Volkswagen, as well as domestic-based EV rivals Tesla and Rivian.</p>
<p>In 1970, GM employed more than 400,000 workers. In 2001, the Big Three combined employed 408,000. Today, a total of only 146,000 people work for those companies – <a href="https://abcnews.go.com/US/wireStory/uaw-show-list-economic-demands-automakers-week-seek-101925455">57,000 at Ford, 46,000 at GM and 43,OOO at Stellantis</a>. </p>
<p>The Big Three’s share of the U.S. automotive market has <a href="https://www.autonews.com/article/20090601/OEM/306019739/detroit-3-domestic-brands-u-s-market-share-history">declined to about 40% from more than 90%</a> in <a href="https://datacenter.autonews.com/data-center/market-reports">the mid-1960s</a>.</p>
<p>But the UAW’s negotiations also directly affect the economic livelihood of the millions who work for the Big Three’s suppliers and in communities dependent on the <a href="https://www.autosinnovate.org/posts/press-release/new-data-on-economic-impact">$1 trillion the auto industry contributes to the U.S. economy</a>.</p>
<p>In addition, many union and nonunion employers monitor the wages and benefits of UAW-represented workforces as they set compensation for their own employees. When union members get raises and better benefits, many employers of nonunion autoworkers mirror those changes – <a href="https://www.epi.org/publication/unions-and-well-being/">raising pay too</a>. </p>
<p>The shift to electric vehicles poses several related challenges to the UAW.</p>
<p>First, it requires less labor than producing vehicles that burn fossil fuels, which means <a href="https://spectrum.ieee.org/the-ev-transition-explained-2658797703">EV manufacturing generates fewer jobs</a>.</p>
<p>Second, autoworkers employed at joint-venture EV-battery factories have to be organized by the UAW on a case-by-case basis. That can prove especially difficult at plants located in such states as Kentucky, Tennessee or Georgia – where unions have <a href="https://www.unionstats.com/">lower membership rates</a>.</p>
<p>Third, <a href="https://www.teslarati.com/tesla-tsla-median-earnings-81-percent-us-average">nonunion electric vehicle companies like Tesla</a> and <a href="https://www.wglt.org/local-news/2022-12-16/why-the-uaw-is-so-hungry-for-a-unionization-win-at-rivian">Rivian generally pay their production workers less</a> than the Detroit Three.</p>
<h2>What the automakers say</h2>
<p>Ford, GM and Stellantis have noted that they have invested heavily in U.S.-based factories to <a href="https://www.freep.com/story/opinion/contributors/2023/06/29/ford-jim-farley-uaw-contract-bargaining/70361242007">preserve UAW-represented jobs</a>. Also, the Big Three point out that they have shared their North American profits in sizable annual payments to their workers.</p>
<p>In 2022, for example, the Detroit Three combined made profit-sharing payments that averaged <a href="https://www.freep.com/story/money/cars/ford/2023/02/02/ford-uaw-hourly-workers-2022-profit-sharing/69865970007/">$36,686 per worker</a>. In addition, the companies pay higher wages and provide more benefits to U.S. autoworkers than foreign automakers, such as <a href="https://www.nytimes.com/2023/07/14/business/uaw-contract-talks.html">Toyota and Honda, or domestic EV producers</a>.</p>
<p>Ford CEO Jim Farley and <a href="https://www.freep.com/story/opinion/contributors/2023/07/12/gm-reuss-uaw-contract-talks-detroit-automakers/70401953007/">GM President Mark Ruess have published op-eds</a> in the Detroit Free Press praising their workers and expressing their commitments to do right by them.</p>
<p>“We share common goals” with the UAW, <a href="https://www.freep.com/story/opinion/contributors/2023/06/29/ford-jim-farley-uaw-contract-bargaining/70361242007/">Farley wrote in late June</a>. Both sides want to reach “a new deal that allows us to stay ahead of the changing industry landscape, protecting good-paying jobs in the U.S.”</p>
<p>But both executives have emphasized their need to be competitive.</p>
<p>After seeing the UAW’s demands, GM criticized their “breadth and scope” and said they “would threaten our ability to do what’s right for the long-term benefit of the team.” The <a href="https://www.gmnegotiations2023.com/public/us/en/negotiations/home/negotiation-updates.html">automaker also reiterated</a> its openness to what it called a “fair agreement” and to raise wages.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/540913/original/file-20230802-29-bfgvep.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A very modern-looking concept-car truck beneath the Ram automotive brand name." src="https://images.theconversation.com/files/540913/original/file-20230802-29-bfgvep.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/540913/original/file-20230802-29-bfgvep.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=315&fit=crop&dpr=1 600w, https://images.theconversation.com/files/540913/original/file-20230802-29-bfgvep.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=315&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/540913/original/file-20230802-29-bfgvep.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=315&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/540913/original/file-20230802-29-bfgvep.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=396&fit=crop&dpr=1 754w, https://images.theconversation.com/files/540913/original/file-20230802-29-bfgvep.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=396&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/540913/original/file-20230802-29-bfgvep.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=396&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Stellantis’ Ram 1500 Revolution battery-electric concept pickup truck was on display in January 2023 at a trade show in Las Vegas.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/stellantis-ram-1500-revolution-battery-electric-concept-news-photo/1454496551?adppopup=true">Ethan Miller/Getty Images</a></span>
</figcaption>
</figure>
<h2>What may happen during a UAW strike</h2>
<p>Halting production for even one big automaker during a strike would directly harm thousands of workers and cost the company money in terms of lost sales and production. Strikers would lose out on wages that would only be partially offset by the union’s <a href="https://uaw.org/strike-faq-2/">striker benefits of $500 per week</a>. </p>
<p>And any strike could further disrupt supply chains that have not fully recovered from the shocks caused by the COVID-19 pandemic and natural disasters that have sharply <a href="https://www.cargroup.org/auto-supply-chain-update/">curtailed vehicle production</a> since 2020.</p>
<p>Financial losses can be immense for automotive companies when their workers walk off the job. The 40-day <a href="https://www.freep.com/story/money/cars/general-motors/2020/07/01/uaw-strike-fund-benefits-scandal/5353128002/">strike in 2019 cost GM a reported $3.6 billion</a>. </p>
<p>A weekslong strike would also jeopardize the UAW’s struggle to rebuild its image <a href="https://www.freep.com/story/money/cars/general-motors/2020/07/01/uaw-strike-fund-benefits-scandal/5353128002/">following a string of corruption scandals</a>. </p>
<p>I believe that it’s up to both the corporate and labor leaders involved to avoid what could turn out to be a costly miscalculation.</p>
<p><em>This article was updated on Aug. 25, 2023, to report the strike vote.</em></p><img src="https://counter.theconversation.com/content/210037/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>As Director of Labor@Wayne at Wayne State University, Marick Masters received funding from the joint training centers operated by the UAW with Ford, GM, and Fiat Chrysler. Representatives of these organizations served on the external advisory board of <a href="mailto:Labor@Wayne">Labor@Wayne</a>. All money was channeled through Wayne State University for educational purposes.</span></em></p>A strike would shake up the auto industry, even though both the union’s ranks and the share of the US automotive market controlled by GM, Ford and Stellantis have been shrinking for decades.Marick Masters, Professor of Business and Adjunct Professor of Political Science, Wayne State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2031732023-04-05T17:25:45Z2023-04-05T17:25:45ZCarmakers are mistaken if they think chip shortages are over – they need to reinvent themselves while there’s time<figure><img src="https://images.theconversation.com/files/519045/original/file-20230403-24-d3ec2v.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The chips are down. </span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/blurry-highway-background-hand-man-holding-1956308611">Ju Jae-Young</a></span></figcaption></figure><p>Finally, carmakers got a break. Those in the UK boosted their output <a href="https://www.imeche.org/news/news-article/uk-car-production-up-13-as-semiconductor-shortage-eases">by over 13%</a> in February as supply-chain pressures subsided, especially the persistent global shortage in microchips, also known as semiconductors. This “signals an industry on the road to recovery”, declared <a href="http://imeche.org/news/news-article/uk-car-production-up-13-as-semiconductor-shortage-eases">UK motoring trade association</a> the SMMT. Well, up to a point. </p>
<p>Early in the pandemic, carmakers slashed sales forecasts as <a href="https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/how-the-automotive-industry-is-accelerating-out-of-the-turn">demand for cars evaporated</a>, falling 47% in US and 80% in Europe in the first couple of months of lockdowns. Carmakers couldn’t see how sales could rebound quickly, which was a reasonable assumption at the time. In an industry where everyone has their own version of <a href="https://www.techtarget.com/searcherp/definition/lean-production#:%7E:text=Lean%20manufacturing%20is%20a%20methodology,not%20willing%20to%20pay%20for.">lean</a> or <a href="https://www.planview.com/resources/guide/what-is-lean-manufacturing/just-in-time-manufacturing/">just-in-time</a> manufacturing, where unsold inventories are seen as tantamount to incompetence, they quickly scaled back orders from their supply chain. </p>
<p>Car parts suppliers such as Bosch and Continental reacted by scaling back their production – and naturally, their own suppliers, such as NXP and Infineon, also reduced their forecasts. These second-order effects went deep into the supply chain, eventually converging on the great and mighty semiconductor manufacturer in Taiwan, TSMC (Taiwan Semiconductor Manufacturing Company).</p>
<p>A modern car can easily contain more than <a href="https://www.nytimes.com/2021/04/23/business/auto-semiconductors-general-motors-mercedes.html">3,000 microchips</a>. These control brakes, doors, airbags and windscreen wipers; they even support advanced functions like driver assistance and navigation control. <a href="https://en.wikipedia.org/wiki/Chipset">Chipsets</a> are like golden screws.</p>
<p>Yet obviously, many other industries depend on chips too. At the same time as carmakers were reducing their orders, manufacturers of gadgets such as games consoles, TVs and home appliances were seeing orders surging as consumers were forced to stay at home. They increased their chip requirements, and TSMC was more than happy to oblige.</p>
<p>It then became apparent to carmakers later in 2020 that they had overreacted. But by the time they woke up to this and ramped up orders, it was too late. TSMC was running all of its factories at maximum capacity to meet the surge in gadget demand, and there were no more chips available for carmakers.</p>
<p>As a result of this global semiconductor scarcity, worldwide vehicle production was <a href="https://www.statista.com/statistics/1288308/automotive-production-reduction-semiconductor-shortage/">approximately 11 million</a> units, or about 12%, lower in 2021 than it would otherwise have been.</p>
<h2>What carmakers got wrong</h2>
<p>No one could have predicted the outbreak of COVID. Nor could anyone have foreseen the ramifications on the supply chain as the virus receded. Still, every executive in the car industry knows the importance of computing power in a modern car. A car is a supercomputer on wheels, they’ll say. And yet they didn’t treat chipsets as a critical area. In other words, they were happy to let their suppliers worry about chip requirements and not have any direct involvement with chipmakers. </p>
<p>Why? Because chips don’t involve mechanical engineering. From the boardroom to the shop floor, carmakers generally focus on final assembly. Chipset design and fabrication is one of many things that gets outsourced. </p>
<p>So during the pandemic, most carmakers had little choice but to perfect the art of triaging their chips: for example, <a href="https://www.nytimes.com/2021/04/23/business/auto-semiconductors-general-motors-mercedes.html">General Motors</a> hoarded them for expensive models, temporarily shutting down factories that produce lower-priced sedans. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/519047/original/file-20230403-20-ukkjhk.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="BMW on a snowy road" src="https://images.theconversation.com/files/519047/original/file-20230403-20-ukkjhk.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/519047/original/file-20230403-20-ukkjhk.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/519047/original/file-20230403-20-ukkjhk.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/519047/original/file-20230403-20-ukkjhk.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/519047/original/file-20230403-20-ukkjhk.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/519047/original/file-20230403-20-ukkjhk.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/519047/original/file-20230403-20-ukkjhk.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The flagship BMW X3: now with reduced capabilities.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/moscow-russia-february-05-2022-bmw-2233469243">Rising Star</a></span>
</figcaption>
</figure>
<p>Others instead removed features from vehicles that rely on microprocessors. <a href="https://www.automoblog.net/will-chip-shortage-end-in-2023/">BMW did away</a> with parking assistance and even touchscreen capabilities in various models. It also withdrew semi-autonomous driving functionality from the X3, its top-selling model. <a href="https://www.nytimes.com/2021/04/23/business/auto-semiconductors-general-motors-mercedes.html">Mercedes-Benz</a> eliminated features such as high-end audio and wireless phone-charging from a number of vehicles. </p>
<h2>The future threat</h2>
<p>Car production is now increasing as the high pandemic demand for chips for household gadgets has <a href="https://www.globaltimes.cn/page/202302/1285931.shtml">fallen away</a>. Still, it would be unwise to conclude that things are back to normal. Demand for chips is likely to look so different in future as we see the rollout of technologies like AI, the internet of things, and 5G/6G. </p>
<p>Major chipmakers are <a href="https://www.reuters.com/technology/tsmc-q4-profit-up-78-beats-market-expectations-2023-01-12/">boosting capacity</a> to meet this extra demand, with big new US facilities in the offing, for example. Yet it will take time for this to come on stream, and it’s still difficult to predict whether it will meet demand.</p>
<p>New product categories can appear unexpectedly, in a similar way to how bitcoin mining suddenly led to unforeseen chip demand. As <a href="https://fortune.com/2023/03/11/chips-and-science-act-semiconductor-shortage-rakesh-kumar/">Professor Rakesh Kumar</a> in the Electrical and Computer Engineering department at the University of Illinois observes: “The exact nature, speed and magnitude of the increase in demand is still unknown.” </p>
<p>As we saw during the pandemic, chip factories also typically run close to maximum capacity, leaving production extremely susceptible to disruptions. Natural disasters like earthquakes and floods can cause problems, as can accidents such as fires and power outages. In March 2021, for instance, <a href="https://www.reuters.com/article/us-usa-semiconductors-idUSKBN2BO4TV">a fire</a> at a Renesas Electronics chip factory in Japan caused a significant disruption to supplies over and above the pandemic-related problems. Geopolitical or military tensions, including those between the US and China, could also affect production in future.<br>
The implication is clear: carmakers must cultivate in-house expertise in this area. Rather than relying on suppliers or their sub-suppliers for semiconductors, they need to directly engage with chipmakers and do the relevant designs in-house. For example, <a href="https://www.cnbc.com/2021/11/18/ford-partners-with-globalfoundries-to-increase-chip-supplies.html#:%7E:text=Ford%20plans%20to%20increase%20its,chips%20to%20Ford%20from%20GlobalFoundries.">Ford announced</a> a collaboration with US chipmaker GlobalFoundries in 2021 to create chips for its vehicles while exploring the prospect of expanding domestic chip production. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/519048/original/file-20230403-18-xfyd9m.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Engineer working on a Ford car in a factory" src="https://images.theconversation.com/files/519048/original/file-20230403-18-xfyd9m.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/519048/original/file-20230403-18-xfyd9m.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/519048/original/file-20230403-18-xfyd9m.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/519048/original/file-20230403-18-xfyd9m.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/519048/original/file-20230403-18-xfyd9m.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/519048/original/file-20230403-18-xfyd9m.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/519048/original/file-20230403-18-xfyd9m.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Ford is trying to get ahead of the curve.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/turkey-december-172014-ford-car-factory-502840735">OVKNHR</a></span>
</figcaption>
</figure>
<p>This approach is already common practice among newer, more self-sufficient carmakers such as Tesla and China’s BYD and NIO, who all have extensive operations dedicated to designing or even producing their own chipsets. </p>
<p>These changes will not be easy. Yet the cost of clinging to the status quo will far outweigh the difficulties in the transition. For any company dependent on semiconductors, their resilience and future success hinge on getting this right. The correct response to the end of the pandemic is not to say “back to normal” but “never again”.</p><img src="https://counter.theconversation.com/content/203173/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Howard Yu does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The car industry is celebrating an increase in production as the chip shortage subsides, but it could be short-lived.Howard Yu, Professor of Management and Innovation, International Institute for Management Development (IMD)Licensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1959602022-12-07T22:40:42Z2022-12-07T22:40:42ZElectric vehicles: if the UK is serious about being a major player, here’s what needs to happen<p>The UK’s efforts to become a global player in electric vehicles (EVs) are back in the spotlight with two government announcements: a <a href="https://www.gov.uk/government/news/ford-accelerates-electric-car-production-with-uk-government-support">£500 million loan guarantee</a> for Ford and a <a href="https://www.gov.uk/government/news/more-than-70-million-to-turbocharge-the-future-of-clean-transport">£73 million package</a> to support various smaller clean transport projects. </p>
<p>The loan guarantee is enabling Ford to spend £230 million on its Halewood plant near Liverpool to nearly double output of EV powertrains to 420,000 units a year. Powertrains are the motor and other parts that propel EVs forward. </p>
<p>It is also helping Ford to invest £370 million in its global R&D headquarters in Essex to help support EV development. Ford’s Mustang Mach-E SUV is one of the <a href="https://www.greencars.com/expert-insights/best-selling-electric-vehicles">best selling EVs</a> in the world, though it is currently <a href="https://www.ft.com/content/38579e30-d4ce-4dee-9acd-52d7e6350e87">made in Mexico</a>. </p>
<p>The government’s second <a href="https://www.gov.uk/government/news/more-than-70-million-to-turbocharge-the-future-of-clean-transport">£73 million package</a> is a 50-50 investment with the auto industry. Among five projects receiving support is one aiming to develop a more efficient way of manufacturing EVs. </p>
<p>While these announcements are very welcome, we have seen numerous similar ones in recent years. But what’s the the big picture? How far is the UK from being a powerhouse in global EV?</p>
<h2>Assembly lines</h2>
<p>The UK currently produces <a href="https://www.smmt.co.uk/vehicle-data/manufacturing/">over 850,000 cars</a> a year, the vast majority petrol and diesel. Over 700,000 are exported, more than half to the EU. </p>
<p>The biggest producers are Nissan in Sunderland, BMW Mini at Cowley near Oxford, Jaguar Landrover at three sites in the Midlands and north west, and Vauxhall at Ellesmere Port in Cheshire. Since all new cars must be at least hybrid by 2030 and <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1005301/transitioning-to-zero-emission-cars-vans-2035-delivery-plan.pdf">completely electric by 2035</a>, all these groups are undergoing major transformations. </p>
<p>Nissan gave the UK an early lead in EVs with the Leaf, building it in Sunderland since 2013. On the back of a recent <a href="https://www.thetimes.co.uk/article/nissan-to-invest-billions-in-sunderland-plant-to-drive-electric-car-revolution-j70j95fmn#:%7E:text=Nissan's%20vast%20carmaking%20plant%20at,new%20electric%20models%20by%202030.">£1 billion investment</a>, the group is now also making hybrid Qashqais and Jukes at the plant, as well as lining up a replacement for the Leaf. </p>
<p>The news with the other players is more mixed. <a href="https://www.thisismoney.co.uk/money/cars/article-10695081/Final-British-built-Vauxhall-Astra-rolls-Cheshire-production-line.html">Vauxhall will start</a> making electric vans at Ellesmere in 2023, but has ceased Astra production there and will make new EV versions <a href="https://www.cinch.co.uk/news/final-vauxhall-astra-made-in-britain-ahead-of-electric-switch">in Germany</a> instead. Similarly, Mini is relocating electric production <a href="https://www.theguardian.com/business/2022/oct/15/bmw-axe-uk-production-electric-mini-relocate-china">to China</a>, with owner BMW saying the UK plant is not currently up to the task. </p>
<p>As for Jaguar Landrover, it has been investing in its UK plants to ensure that <a href="https://zenoot.com/2019/07/05/jlr-confirms-plan-to-build-electric-vehicles-at-castle-bromwich/">some EV models</a> will <a href="https://electrek.co/2022/09/21/jaguar-land-rover-converts-halewood-factory-for-electric-vehicles/">be made there</a>, but others <a href="https://www.theguardian.com/business/2022/may/27/uk-battles-to-keep-jaguar-land-rovers-planned-ev-production">may reportedly</a> be made abroad, as is already the case with its Austria-made i-Pace. </p>
<p>Ford’s powertrains investment is a solid commitment to the UK, but there are no signs it will start making cars here again. It is due to start making EVs in <a href="https://europe.autonews.com/automakers/ford-drop-fiesta-bring-forward-ev-launch#:%7E:text=The%20automaker%20is%20investing%20to,based%20on%20the%20MEB%20platform.">Germany and Romania</a> in the next two years. Nissan is the only other player that makes EV powertrains in the UK. </p>
<p>In all, the UK’s share of European EV assembly and production has fallen from 25% in 2018 to what industry sources tell us is about 10% today, and it’s forecast to <a href="https://www.taylor-studwelding.com/blog/the-uks-ev-production-rate-compared-to-other-european-countries">drop to 5%</a> by 2030. <a href="https://www.amz-sachsen.de/en/news-en/every-fifth-electric-car-built-in-europe-is-made-in-saxony/">Germany is making</a> four times more EVs than the UK – or around a third of the European total – while France and Slovakia are also ahead. </p>
<p>It does not help that UK consumers are somewhat lukewarm about EVs. The UK is only 17th in terms of EV ownership per head, way behind leaders <a href="https://www.carwow.co.uk/blog/which-country-is-leading-in-the-electric-car-race#gref">Norway and the US</a>. </p>
<h2>Gigafactories</h2>
<p>The main obstacle to UK success, however, is batteries. They are easily the heaviest EV component, so having production close to assembly plants is essential for reducing costs. And if producers in the UK are going to avoid EU import tariffs from 2027, they also need locally made batteries to qualify as “<a href="https://europe.autonews.com/automakers/brexit-britain-faces-battery-challenge-avoid-tariffs">made in the UK</a>”. </p>
<p>The <a href="https://www.cmc-global.consulting/insights/blog/can-europe-s-battery-production-industry-catch-up-to-asia-s-ev-dominance--23/">EV battery market</a> is <a href="https://oilprice.com/Energy/Energy-General/China-Is-Dominating-The-Global-Electric-Vehicle-Battery-Market.html#:%7E:text=Chinese%20Dominance&text=Currently%2C%20Chinese%20companies%20make%20up,come%20from%20the%20Chinese%20company.">dominated by China</a>, but Europe and the US are <a href="https://www.investmentmonitor.ai/manufacturing/what-is-a-gigafactory-where-are-they-being-built">battling to catch up</a>. </p>
<p>Nissan Sunderland is the cornerstone of UK efforts, since there is an adjacent battery plant owned by Chinese supplier Envision AESC. <a href="https://www.transportenvironment.org/discover/uk-auto-industry-left-behind-as-carmakers-focus-ev-production-in-eu-countries/">Once the biggest</a> plant in Europe but long since outgunned by continental rivals, Envision’s 3-4 gigawatt hours (GWhrs) of annual output are enough for just 40,000 cars. But once a current expansion completes in 2024 it will <a href="https://www.electrive.com/2021/10/25/envision-aesc-aims-for-38-gwh-in-sunderland/#:%7E:text=The%20planned%20Envision%20AESC%20battery,a%20potential%20final%20expansion%20stage.">produce 11GWhrs</a>, potentially later expanding to 38GWhrs. </p>
<p>A second gigafactory in north-east England is in the offing in Blyth, Northumberland by start-up Britishvolt. It aims to produce 30GWhrs of annual capacity, but has <a href="https://www.theguardian.com/business/2022/nov/02/britishvolt-staves-off-collapse-with-extra-funding-and-steep-staff-pay-cut">funding problems</a> and has been sounding out buyers. It is <a href="https://www.ft.com/content/7cd57531-1c54-4d32-955c-d185dcea0621">yet to announce</a> any major supply deals and is several years away from production.</p>
<p>There is also a <a href="https://www.coventry.gov.uk/news/article/4432/west-midlands-submits-investment-zones-bid-to-drive-economic-growth-new-homes-and-jobs">plant proposal</a> in advanced planning in Coventry in the West Midlands. This joint venture between the local council and airport aims to produce 60GWhrs of batteries each year. </p>
<p>These three plants could service about 1.2 million cars a year – more than enough to power the UK’s entire output. But the government would like to go further, attracting another five gigafactories with a <a href="https://energymanagementsummit.co.uk/briefing/environmental-audit-committee-issues-warning-over-gigafactories/">further 100GWhrs</a> of capacity by 2027. </p>
<p>With gigafactories costing several billion pounds each, the government <a href="https://www.proactiveinvestors.co.uk/companies/news/953873/nissan-confirms-plans-for-1bn-electric-vehicle-battery-gigafactory-in-sunderland-953873.html">has been subsidising</a> the <a href="https://www.reuters.com/business/uk-battery-startup-britishvolt-secures-short-term-funding-2022-11-02/#:%7E:text=Britishvolt%20has%20outlined%20plans%20for,the%20line%20after%20construction%20began.">existing projects</a> to <a href="https://www.warwickshireworld.com/business/gigafactory-plan-for-coventry-airport-in-contention-for-controversial-government-scheme-3858448">help get them</a> moving. It has also <a href="https://www.gov.uk/government/news/record-funding-uplift-for-uk-battery-research-and-development">committed £211 million</a> to battery research and innovation through the Faraday Battery Challenge. </p>
<p>One potential advantage is <a href="https://www.geplus.co.uk/news/cornwalls-lithium-enriched-geothermal-waters-hold-untapped-potential-23-09-2022/">substantial lithium deposits</a> in Cornwall, so the government has been <a href="https://www.theguardian.com/business/2022/oct/20/the-part-of-cornwall-nobody-ever-sees-the-hi-tech-future-for-lithium-and-tin-mining">subsidising Cornish developers</a> too. With enough lithium to power the entire UK requirement, it could yet become the 21st century equivalent of North Sea oil. </p>
<h2>The competition</h2>
<p>It still feels like the UK could win a good share of the EV market, but it is going to have to get its gigafactories up and running. With UK battery output still tiny, the temptation is for EV producers to move overseas. </p>
<p>In all, Europe now makes between <a href="https://www.visualcapitalist.com/sp/mapped-ev-battery-manufacturing-capacity-by-region/">about 10%</a> and <a href="https://www.ipcei-batteries.eu/fileadmin/Images/accompanying-research/market-updates/2022-01-BZF_Kurzinfo_Marktanalyse_Q4_ENG.pdf">15% of</a> the global total. Hungary and Poland are currently the first and second biggest producers in Europe, but a <a href="https://www.investmentmonitor.ai/sponsored/how-germanys-automobile-hubs-are-pivoting-towards-the-e-mobility-revolution">huge push</a> in recent years by Germany to become a hub for assembly lines, batteries and EVs in general is set to eclipse them by 2025 to become the <a href="https://www.visualcapitalist.com/sp/mapped-ev-battery-manufacturing-capacity-by-region/">second biggest world player</a> after China. </p>
<p>Germany benefits from having had a larger auto industry for the past few decades than the UK, due to a much more joined up system of education, government and manufacturers working together. <a href="https://group.mercedes-benz.com/company/news/211202-supervisory-board-confirms-business-plan.html">This means</a> it <a href="https://www.theverge.com/2022/7/7/23198203/volkswagen-ev-battery-factory-power-co-investment">can invest</a> more into building battery factories and production lines. If the UK wants a bigger share of this business, it will need to invest more and think more strategically. </p>
<p>This is not like 60 years ago, when Prime Minister Harold Wilson <a href="https://www.theguardian.com/science/political-science/2013/sep/19/harold-wilson-white-heat-technology-speech">invested in science and technology</a> to help drive innovations that were as yet unknown. Today, we have the technologies, but need to develop the necessary systems and infrastructure. If the UK is to put itself at the heart of the EV boom, it needs a <a href="https://www.pmi.org/-/media/pmi/documents/public/pdf/research/research-summaries/flyvbjerg_megaprojects.pdf">mega project-level investment</a> to make it work – and quickly. The ball is very much in the politicians’ court.</p><img src="https://counter.theconversation.com/content/195960/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tom Stacey receives funding from ERDF (Eastern New Energy and South Eastern New Energy) and is consulting on UK Gigafactory development via Anglia Ruskin University.</span></em></p><p class="fine-print"><em><span>Chris Ivory receives funding from ERDF, FORTE (Sweden).</span></em></p><p class="fine-print"><em><span>Elisha Rasif receives funding from ERDF for the Eastern New Energy (ENE) project in the UK.
</span></em></p>Having once led Europe in zero-carbon cars, the UK has some catching up to do.Tom Stacey, Senior Lecturer in Operations and Supply Chain Management, Anglia Ruskin UniversityChris Ivory, Director of the Innovative Management Practice Research Centre, Anglia Ruskin UniversityElisha Rasif, Associate Lecturer in Supply Chain Management, Anglia Ruskin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1808842022-06-15T03:30:05Z2022-06-15T03:30:05Z‘I couldn’t see a future’: what ex-automotive workers told us about job loss, shutdowns, and communities on the edge<figure><img src="https://images.theconversation.com/files/457026/original/file-20220407-11-t6cnqf.jpg?ixlib=rb-1.1.0&rect=48%2C97%2C3546%2C2274&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Economies are forever changing and the loss of some industries or businesses is part of that transformation. But change often comes at great cost for workers, many of whom are already vulnerable.</p>
<p>The stories of retrenched workers give us important insights into the often complex effects of job loss. To find out more about these experiences, we interviewed 28 workers made redundant from the auto sector around South Australia and Victoria over the past five years, as part of a larger research project about disadvantaged communities.</p>
<p>Our <a href="https://rsa.tandfonline.com/doi/full/10.1080/21681376.2022.2078737#.YqVksHZBw2w">paper, published in the journal Regional Studies, Regional Science</a>, reveals how economic change interrupts careers and life plans, casting people into new worlds of precarious work and long, indefinite journeys in search of security.</p>
<p>The stories of these automotive workers are not unique; they reflect the experiences of many workers in Australia who have faced retrenchment and redundancy as industries and businesses have closed.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/what-the-departure-of-toyota-holden-and-ford-really-means-for-workers-23137">What the departure of Toyota, Holden and Ford really means for workers</a>
</strong>
</em>
</p>
<hr>
<h2>Bad jobs are easy to find</h2>
<p>Since being retrenched, many of our interviewees have struggled to find a job that is secure, safe and pays a decent wage.</p>
<p>Bad jobs – with undesirable hours and low pay – are easy to find, and many are forced to take them. Many are also shocked by what they find at their new workplaces – poor safety standards, toxic cultures and boring or “disgusting” work. These included jobs as diverse as food processing, cleaning, warehousing, chicken killing and grout manufacturing. </p>
<p>As one worker who’d been made redundant three years before <a href="https://rsa.tandfonline.com/doi/full/10.1080/21681376.2022.2078737#.YqVksHZBw2w">told</a> us:</p>
<blockquote>
<p>I got a job as a prefabrication supervisor […] And that was absolutely horrible, horrible, horrible […] just the safety stuff, you know, like they talked a lot of safety, but there was never much action […] just a bullying culture.</p>
</blockquote>
<p>Another left a processing job with a food company after just two days, saying:</p>
<blockquote>
<p>I couldn’t do that job. It was absolutely disgusting. It was hot. They were arrogant towards you.</p>
</blockquote>
<p>Workers often left jobs quickly, or struggled through while looking for something else. The result was a high level of employment instability, as people cycled through multiple jobs searching for one they could tolerate long term.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/457029/original/file-20220407-19249-cwi93t.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Two men working on automotive engineering." src="https://images.theconversation.com/files/457029/original/file-20220407-19249-cwi93t.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/457029/original/file-20220407-19249-cwi93t.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=402&fit=crop&dpr=1 600w, https://images.theconversation.com/files/457029/original/file-20220407-19249-cwi93t.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=402&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/457029/original/file-20220407-19249-cwi93t.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=402&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/457029/original/file-20220407-19249-cwi93t.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=505&fit=crop&dpr=1 754w, https://images.theconversation.com/files/457029/original/file-20220407-19249-cwi93t.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=505&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/457029/original/file-20220407-19249-cwi93t.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=505&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Ex-automotive workers shared their experiences candidly.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>‘It really, really scarred me’</h2>
<p>Workers at the bottom of the labour market often experience demanding or demoralising recruitment processes for casual positions through labour hire agencies. These workers are made to feel feel they can’t afford to be choosy:</p>
<blockquote>
<p>So labour hire, I just pretty much I just said yes to everything. And that’s the way, that’s the work in labour hire. If you start saying no, then you go to the back of the list.</p>
</blockquote>
<p>Casual jobs often serve as a kind of probation, but there are no guarantees:</p>
<blockquote>
<p>I couldn’t see a future. Yeah. So I would just continue to look around […] because I couldn’t see them taking me any further than casual.</p>
</blockquote>
<p>One worker who had already experienced bad employers <a href="https://rsa.tandfonline.com/doi/full/10.1080/21681376.2022.2078737#.YqVksHZBw2w">described</a> the difficult choice she faced:</p>
<blockquote>
<p>I would like [to leave this job and look for something] permanent. But I really don’t want to go into another workplace like [company name], it really, really scarred me.</p>
</blockquote>
<p>Workers want their old lives back – even if that’s not the “real world” any more. As one <a href="https://rsa.tandfonline.com/doi/full/10.1080/21681376.2022.2078737#.YqVksHZBw2w">put it</a>:</p>
<blockquote>
<p>I just think there’s a lot of work out there that, there’s just bits and pieces, and it doesn’t really support someone to have a proper job or be able to afford a decent life […] I’ve probably had maybe six, seven, eight jobs since [the closures]. And none of them have been that good. And I mean, I’ve hated most of them.</p>
</blockquote>
<h2>A new world of precarious work</h2>
<p>In many established sectors, workers once enjoyed good working conditions – often over decades of employment in what they believed were “jobs for life”. Job loss thrust them into a new world of precarious work very different from what they’d known.</p>
<p>Many were downhearted about this new reality:</p>
<blockquote>
<p>It’s just very, very dodgy […] it’s sad, really sad to think that there’s, like, these places out there. And there’s so many of them and they’re operating the way they do and, and nobody’s really controlling any of it.</p>
</blockquote>
<p>Some never stopped longing for a job that made them feel the way their old job did:</p>
<blockquote>
<p>I just miss [my old firm], I miss their way of working. Building up you as a person, as a team.</p>
</blockquote>
<p>Even those who had adjusted to their new working lives admitted that you needed to be willing to do anything:</p>
<blockquote>
<p>[T]here is work out there […] Too many people are too choosy, that’s the problem […] I didn’t give a shit what sort of work I did […] There’s money in shit.</p>
</blockquote>
<h2>Better jobs – not just more jobs</h2>
<p>At the start of the pandemic, the nation’s leaders talked about “building back better”. </p>
<p>For those living on the margins of our workforce and those made redundant through processes beyond their control, “building back better” means finding ways to create better – not just more – jobs.</p>
<p>Australian workers want security, decent conditions and job satisfaction, not a choice between one “shit” workplace and another.</p>
<p>Most of all, they want work they can build their lives around. If we don’t listen to the voices of those living on the fringe, the problems we know all too well today will haunt our communities into the future.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/australias-choice-pay-for-a-car-industry-or-live-with-the-consequences-8305">Australia's choice: pay for a car industry, or live with the consequences</a>
</strong>
</em>
</p>
<hr>
<img src="https://counter.theconversation.com/content/180884/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>This story is part of The Conversation's Breaking the Cycle series, which is about escaping cycles of disadvantage. It is supported by a philanthropic grant from the Paul Ramsay Foundation.</span></em></p><p class="fine-print"><em><span>Andrew Beer receives funding from Australian Research Council. </span></em></p>Our interviews with ex-automotive workers reveal how economic change interrupts lives, casting people into new worlds of precarious work and long, indefinite journeys in search of security.Helen Dinmore, Research Fellow, University of South AustraliaAndrew Beer, Executive Dean, UniSA Business, University of South AustraliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1617312021-06-15T12:26:10Z2021-06-15T12:26:10ZWith Ford’s electric F-150 pickup, the EV transition shifts into high gear<figure><img src="https://images.theconversation.com/files/405774/original/file-20210610-15-1vxmnj3.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C7380%2C4142&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Ford calls its all-electric F-150 Lightning "the truck of the future."</span> <span class="attribution"><a class="source" href="https://media.ford.com/content/fordmedia/fna/us/en/news/2021/05/19/all-electric-ford-f-150-lightning.html">Ford</a>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span></figcaption></figure><p>When President Joe Biden took Ford’s electric F-150 Lightning pickup for a <a href="https://www.freep.com/story/money/cars/ford/2021/05/19/biden-ford-f-150-lightning-track-dearborn/5152825001/">test drive</a> in Dearborn, Michigan, in May 2021, the event was more than a White House photo op. It marked a new phase in an accelerating shift from gas-powered cars and trucks to electric vehicles, or EVs. </p>
<p>In recent months, global auto manufacturers have released plans to <a href="https://www.bbc.com/news/business-40505671">electrify their vehicle fleets by 2030 or 2035</a>, setting up a race to see who can most quickly shift entirely away from producing vehicles <a href="https://www.caranddriver.com/news/g35562831/ev-plans-automakers-timeline/">powered by gasoline</a>. </p>
<p>Like Biden, former President Donald Trump <a href="https://www.nbcnews.com/business/autos/trump-biden-both-boast-about-creating-auto-industry-jobs-differ-n1240000">promised to create jobs in the auto industry</a>. But Trump sought to do it by perpetuating a fossil-fueled system that is the <a href="https://www.epa.gov/ghgemissions/inventory-us-greenhouse-gas-emissions-and-sinks">largest source of U.S. greenhouse gas emissions</a>. Automakers benefited from some Trump policies in the short term, including <a href="https://www.reuters.com/article/us-usa-autos-emissions/trump-finalizes-rollback-of-obama-era-vehicle-fuel-efficiency-standards-idUSKBN21I25S">the rollback of fuel economy standards</a>. Now, however, they seem to be embracing the challenge of competing globally in a climate-constrained future. </p>
<p>As an <a href="https://bcb47.wixsite.com/bcb4">environmental historian</a>, I see this moment as pivotal because unlike EVs from manufacturers like Toyota or Tesla, the electric F-150 does not entirely rely on green consumer choice. It places the electric vehicle transition squarely in the hands of mass-market consumers who don’t choose cars based on environmental considerations, and who are buying far more light trucks – pickups, sport utility vehicles and minivans – than cars today.</p>
<p><iframe id="GT7dC" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/GT7dC/1/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
<h2>The century of gasoline</h2>
<p>America’s 20th-century affair with gas-powered cars was not inevitable. From 1890 through about 1915, vehicles powered by <a href="https://theconversation.com/energy-transitions-are-nothing-new-but-the-one-underway-is-unprecedented-and-urgent-104821">horses, coal, electric batteries and gasoline</a> jockeyed for position on U.S. streets. And electric-powered vehicles had some clear advantages. Many consumers feared that gas-powered cars were prone to explode, and there was no nationwide fueling infrastructure. </p>
<p>But World War I combined with a moment of technological convergence that favored the internal combustion engine. Massive new petroleum discoveries in Texas, and later in the Middle East, produced a glut of oil, just as electric lighting replaced kerosene lamps. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/405777/original/file-20210610-11008-dxhvtk.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Soldiers assess a plank bridge over a gully." src="https://images.theconversation.com/files/405777/original/file-20210610-11008-dxhvtk.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/405777/original/file-20210610-11008-dxhvtk.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=471&fit=crop&dpr=1 600w, https://images.theconversation.com/files/405777/original/file-20210610-11008-dxhvtk.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=471&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/405777/original/file-20210610-11008-dxhvtk.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=471&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/405777/original/file-20210610-11008-dxhvtk.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=592&fit=crop&dpr=1 754w, https://images.theconversation.com/files/405777/original/file-20210610-11008-dxhvtk.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=592&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/405777/original/file-20210610-11008-dxhvtk.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=592&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">In a photo captioned ‘Another fine example of modern engineering,’ members of the 1919 Transcontinental Motor Convoy decide whether a rickety bridge will support their vehicles.</span>
<span class="attribution"><a class="source" href="https://www.eisenhowerlibrary.gov/research/online-documents/1919-transcontinental-motor-convoy">Eisenhower Presidential Library</a></span>
</figcaption>
</figure>
<p>In 1919, Capt. Dwight D. Eisenhower <a href="https://www.eisenhowerlibrary.gov/research/online-documents/1919-transcontinental-motor-convoy">joined a small convoy</a> that crossed the U.S. in gas-powered military vehicles to test Army mobility. It took them 62 days – clear evidence that <a href="https://theconversation.com/how-world-war-i-ushered-in-the-century-of-oil-74585">modern vehicles required better roads</a>. </p>
<p>By World War II, gasoline-powered personal transportation and road-building to support it had become planks of American economic growth. In the 1950s, President Eisenhower furthered that commitment with the construction of the <a href="https://www.fhwa.dot.gov/interstate/history.cfm">most extensive system of highways</a> the world had ever seen.</p>
<h2>Car culture and the pickup truck</h2>
<p>Americans’ particular contribution to 20th-century transportation patterns was making automobiles part of a competitive consumer marketplace. Starting in the 1950s, a complex economy of easy financing and advertising drove consumers to buy new and buy often. Every aspect of a car was a potential marketing point, from <a href="https://www.motorcities.org/story-of-the-week/2020/the-1958-buicks-were-fins-and-chrome-models">chrome styling</a> to <a href="https://www.hotrod.com/articles/hemi-engines-ford-chevy-oldsmobile-ardun-big-small-block/">hemi-powered hot rod engines</a> and more modern options like <a href="https://www.consumerreports.org/car-maintenance/how-to-add-remote-start-to-your-car/">remote starting</a> and <a href="https://www.motorbiscuit.com/5-family-friendly-suvs-with-fab-rear-seat-entertainment-systems/">rear-seat theaters</a>.</p>
<p>Another uniquely American marketing achievement was framing trucks – utilitarian vehicles designed for work – as rides that could also serve consumers. Advertisers used themes of <a href="https://www.youtube.com/watch?v=LdP-xTIipXc">grit and power</a> to sell trucks, depicted in the muddy expanses of western landscapes, to suburban drivers. </p>
<p>Federal fuel efficiency standards enacted in 1978 unintentionally reinforced the idea of <a href="https://theconversation.com/how-the-federal-government-came-to-control-your-cars-fuel-economy-94467">trucks as a consumer product</a>. These <a href="https://www.transportation.gov/mission/sustainability/corporate-average-fuel-economy-cafe-standards">Corporate Average Fuel Economy standards</a> classified pickups as “light trucks,” along with sport utility vehicles and minivans, and set separate fuel efficiency standards for them. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/405779/original/file-20210610-28-nt9fmq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Biden at the wheel of an electric F-150." src="https://images.theconversation.com/files/405779/original/file-20210610-28-nt9fmq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/405779/original/file-20210610-28-nt9fmq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/405779/original/file-20210610-28-nt9fmq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/405779/original/file-20210610-28-nt9fmq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/405779/original/file-20210610-28-nt9fmq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/405779/original/file-20210610-28-nt9fmq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/405779/original/file-20210610-28-nt9fmq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">President Joe Biden, a self-described ‘car guy,’ drives a test model F-150 Lightning truck at Ford’s Dearborn Development Center on May 18, 2021.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/Biden/f6ff6bb8cf8e4da09cd19c60c109705a/photo">AP Photo/Evan Vucci</a></span>
</figcaption>
</figure>
<p>By the year 2000, pickup trucks were U.S. automakers’ <a href="https://www.manufacturing.net/automotive/news/21415625/gm-profit-surges-on-truck-sales">most profitable models</a>, and manufacturers were looking for ways to make these vehicles <a href="https://www.statista.com/statistics/199980/us-truck-sales-since-1951/">more powerful and luxurious</a>. Ford’s F-150 became the <a href="https://theconversation.com/how-the-ford-f-150-became-king-of-cars-96255">best-selling vehicle in the nation</a> in 1982 and held that spot for the next four decades.</p>
<h2>Lightning in a bottle?</h2>
<p>Modern hybrid and electric vehicles emerged in the 1990s, driven by Japanese manufacturers’ innovations. Early versions – the <a href="https://en.wikipedia.org/wiki/Honda_Insight">Honda Insight</a> and <a href="https://en.wikipedia.org/wiki/Toyota_Prius">Toyota Prius</a>, and later the <a href="https://en.wikipedia.org/wiki/Nissan_Leaf">Nissan Leaf</a> – allowed consumers to choose automobiles that burned much less gasoline, or none in the case of the Leaf. Options like these had been unavailable during the gas crises of the 1970s. </p>
<p>While the Prius, which was the first mass-produced hybrid electric vehicle, will likely be remembered as transformational in the electric transition, <a href="https://www.tesla.com/">Tesla</a> was the first manufacturer to take the possibility of an alternative vehicle and combine it with style and prestige. Tesla brought bling and sex appeal to early EVs, many of which had functioned more like their golf-cart cousins.</p>
<p>Today’s hybrids and EVs aren’t just little sedans. Manufacturers including Honda, Toyota and Ford offer popular hybrid SUVs, and all-electric versions are entering the market. And now the electric F-150 breaks new ground. It’s targeted at small businesses and corporate customers, particularly construction and mining companies, which purchase many trucks. These buyers are the auto industry’s bread and butter.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/3-YOvl8ygeg?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Car-buying guide Edmunds suggests thinking of the electric F-150 as “a battery you can drive.”</span></figcaption>
</figure>
<p>To satisfy their needs, the Lightning has a battery large enough to travel <a href="https://www.autoweek.com/news/green-cars/g36492134/ford-f-150-lightning-things-to-know/">more than 200 miles per charge</a> (320 kilometers), and paying a bit more gets customers over 300 miles (480 kilometers). An <a href="https://www.ford.com/trucks/f150/f150-lightning/2022/">electric motor on each axle</a> provides faster acceleration than gas-powered models and enough torque to tow 10,000 pounds (4,535 kilograms). </p>
<p>In a unique feature, the truck’s battery pack can be configured to produce 9.6 kilowatts of power – enough to <a href="https://www.autoweek.com/news/green-cars/g36492134/ford-f-150-lightning-things-to-know/">run an average home for three days</a> during an outage. The Lightning also has 11 outlets that enable it to double as a worksite power station for charging tools and gear. </p>
<p>The base model has a <a href="https://www.wired.com/story/most-radical-thing-about-ford-f-150-lightning-cost/">sticker price just under US$40,000</a>, and the Lightning qualifies for a <a href="https://www.cars.com/articles/which-electric-cars-are-still-eligible-for-the-7500-federal-tax-credit-429824/">$7,500 federal tax break</a> for electric vehicle purchases that the Trump administration <a href="https://www.reuters.com/article/us-usa-trump-budget-autonomous/trump-budget-proposes-ending-electric-vehicle-tax-credit-idUSKBN1QS27Q">tried unsuccessfully to end</a>. Combined, those factors can make it <a href="https://www.motor1.com/news/508418/ford-f150-lightning-price-cheapest/">cheaper to buy than its gas-powered sibling</a>.</p>
<p>[<em>Over 100,000 readers rely on The Conversation’s newsletter to understand the world.</em> <a href="https://theconversation.com/us/newsletters/the-daily-3?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=100Ksignup">Sign up today</a>.]</p>
<p>Ford’s 1908 Model T may look like ancient history by comparison, but experts chose it as the <a href="https://europe.autonews.com/article/20000103/ANE/1030709/model-t-beats-mini-to-the-car-of-the-century-award">car of the 20th century</a> because it put gas-powered cars within reach for mass consumers. Judging from early consumer buzz, the electric F-150 could play a similar role for EVs today. Ford received <a href="https://www.nytimes.com/2021/06/09/business/ford-jim-farley-electric-vehicles.html">100,000 preorders in three weeks</a> for the new model, which is scheduled to start rolling off the assembly line in spring 2022. </p>
<p>As one analyst put it, “If this truck is successful, it means <a href="https://www.nytimes.com/2021/05/18/todayspaper/quotation-of-the-day-top-selling-us-vehicle-could-be-make-or-break-in-bid-to-cut-emissions.html">you can sell an electric version of any vehicle</a>. It could be the domino that tumbles over the rest of the market for EVs.”</p><img src="https://counter.theconversation.com/content/161731/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Brian C. Black does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Ford’s electric F-150 pickup won’t roll off assembly lines until early 2022, but the company has received thousands of preorders already for a vehicle aimed at the mass market, not eco-buyers.Brian C. Black, Distinguished Professor of History and Environmental Studies, Penn StateLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1351702020-05-22T12:18:59Z2020-05-22T12:18:59ZWhy Ford, Chanel and other companies pitch in during a crisis – without the government ordering them to<figure><img src="https://images.theconversation.com/files/336859/original/file-20200521-102647-gbww8q.jpg?ixlib=rb-1.1.0&rect=50%2C179%2C3690%2C2311&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Ford employees assemble ventilators. </span> <span class="attribution"><span class="source">AP Photo/Carlos Osorio</span></span></figcaption></figure><p><a href="https://www.who.int/news-room/detail/03-03-2020-shortage-of-personal-protective-equipment-endangering-health-workers-worldwide">Severe shortages of critical medical supplies</a> have prompted governments to compel private companies to fill the gap. In the U.S., President Donald Trump invoked rarely used powers to force <a href="https://www.nytimes.com/2020/03/30/business/gm-ventilators-coronavirus-trump.html">General Motors</a> to make ventilators, while the leaders of <a href="https://www.ft.com/content/42f636be-751d-4ebf-9b55-bf313014769f">France</a>, the <a href="https://www.autocar.co.uk/car-news/industry/government-ask-uk-manufacturers-build-ventilators">U.K.</a> and <a href="https://www.japantimes.co.jp/news/2020/02/28/national/mask-makers-distance-abes-coronavirus-guarantee/#.XsbHpBNKgnc">Japan</a> have put pressure on companies to make more medical supplies. </p>
<p>But, judging by how many non-medical companies have voluntarily stepped up to shift their manufacturing might to produce health care supplies – including GM rival <a href="https://www.businessinsider.com/ford-making-ventilators-to-fight-coronavirus-how-many-when-ge-2020-3">Ford</a> – it seems hardly necessary. </p>
<p>Fashion brands such as <a href="https://www.ft.com/content/e9c2bae4-6909-11ea-800d-da70cff6e4d3">LVMH</a>, <a href="https://www.reuters.com/article/us-health-coronavirus-france-chanel/chanel-turns-its-workshops-to-making-face-masks-as-coronavirus-spreads-idUSKBN21G0JP">Chanel</a> and <a href="https://wwd.com/beauty-industry-news/beauty-features/loreal-launches-sweeping-program-to-combat-covid-1203539626/">L’Oreal</a> <a href="https://www.businessinsider.com/dior-reopens-baby-dior-factory-to-start-making-face-masks-2020-4">are transforming their factories</a> to mass produce face masks. Spirit and beer makers <a href="https://www.nasdaq.com/articles/anheuser-busch-starts-making-hand-sanitizer-alongside-its-beer-2020-03-23">Anheuser-Busch</a>, <a href="https://www.adweek.com/creativity/diageo-and-anheuser-busch-join-alcohol-brands-pivoting-to-free-sanitizer/">Diageo</a>, <a href="https://www.businessinsider.com/coors-beer-company-makes-hand-sanitizer-amid-coronavirus-pandemic-2020-3">Molson Coors</a> and <a href="https://www.bevindustry.com/articles/92934-bacardi-launches-production-of-hand-sanitizer-at-puerto-rico-distillery">Bacardi</a> are shifting some of their production and distribution towards hand sanitizer. And automakers <a href="https://www.bloomberg.com/news/articles/2020-03-27/toyota-shifts-factories-to-face-shields-will-help-device-makers">Toyota</a>, <a href="https://www.reuters.com/article/us-health-coronavirus-volkswagen-ventila/volkswagen-tests-ventilator-output-as-carmakers-join-coronavirus-fight-idUSKBN2172VH">Volkswagen</a> and <a href="https://www.reuters.com/article/us-health-coranavirus-fiat-chrysler-vent/fiat-chrysler-starts-ventilator-component-output-in-italy-idUSKBN21L1FA">Fiat Chrysler</a> are leveraging their 3D printing capabilities to produce face shields and are <a href="https://www.msn.com/en-us/money/companies/ford-partners-with-3m-and-ge-healthcare-to-make-respirators-ventilators-to-fight-coronavirus/ar-BB11DicJ">partnering</a> with other companies to make ventilators.</p>
<p>And that’s just three industries. In all, hundreds of companies across the globe have committed money, supplies and know-how to help with the COVID-19 response, according to the U.S. Chamber of Commerce Foundation’s <a href="https://www.uschamberfoundation.org/aid-event/corporate-aid-tracker-covid-19-business-action">corporate aid tracker</a>. </p>
<p>Why are these companies being so generous? </p>
<p>As <a href="https://kelley.iu.edu/faculty-research/faculty-directory/profile.cshtml?id=EMAFIKRE">scholars</a> of <a href="https://scholar.google.com/citations?user=DFjwsYUAAAAJ&hl=en&oi=ao">corporate social responsibility</a>, we believe altruism certainly plays a role for many of them, but it’s not the only motivator. Research on company behavior points to two others: <a href="https://www.ingentaconnect.com/content/mcb/168/2015/00000020/00000002/art00003">bolstering reputation</a> and <a href="https://www.doi.org/10.1086/467466?mobileUi=0&">avoiding regulation</a>. </p>
<h2>Burnishing the brand</h2>
<p>In normal times, companies often undertake socially responsible initiatives to <a href="https://www.inc.com/maureen-kline/how-to-manage-your-companys-reputation.html">enhance their brand</a> and build a stronger relationship with consumers, investors and employees in order to drive profits. </p>
<p>What’s a socially responsible initiative? <a href="https://www.doi.org/10.1002/csr.132">There are many definitions</a>, but the way scholars like us think of it is it means taking voluntary action that is not prescribed by law or not necessary to comply with a regulation. </p>
<p>Reputation Institute, a management consultancy, found that people’s willingness to buy, recommend, work for or invest in a company <a href="https://www.forbes.com/sites/jacquelynsmith/2012/12/10/the-companies-with-the-best-csr-reputations/#49e60e384404">is significantly influenced</a> by their perceptions of its corporate social responsibility practices. So doing something that benefits people in their community can lead to <a href="http://dx.doi.org/10.2139/ssrn.2062429">higher sales</a>, <a href="https://philpapers.org/rec/SHIEDS">increase the company’s valuation</a> and <a href="https://doi.org/10.1108/14720701011085544">keep good employees around longer</a>. </p>
<p>But these are anything but normal times. Rather, it is a global crisis that has created a need for an <a href="https://unfoundation.org/blog/post/weekly-update-all-hands-on-deck-against-covid-19/">all hands on deck</a> response from everyone, including corporate America. In other words, <a href="https://www.forbes.com/sites/pamdanziger/2017/10/20/fire-floods-hurricanes-how-and-why-corporations-must-help/#10231fb67388">just like during natural disasters</a>, people expect companies to do their part – and not appearing to do so could damage a brand’s reputation. A <a href="https://www.conecomm.com/news-blog/2013-global-csr-study-release">2013 survey of citizens of 10 countries</a> that included the U.S., France, Brazil and China found that 9 in 10 people said they would boycott a company they believed behaved irresponsibly. </p>
<p>And this is especially true of industries that are more directly connected to the crisis. In the current situation, for example, there’s been a shortage of hand sanitizer, which fashion companies that make perfume <a href="https://tanksgoodnews.com/2020/03/17/lvmh-hand-sanitizer/">can easily produce</a>. And manufacturers are, as we’ve seen, <a href="https://www.wsj.com/articles/trump-lashes-out-at-general-motors-over-ventilators-11585327749">capable of repurposing</a> their assembly lines to build ventilators. </p>
<p>Not doing its part, in this environment, could result in a long-term hit to a company’s reputation. </p>
<h2>Eluding onerous regulations</h2>
<p>The other motivator is preempting government regulation, which becomes a greater risk during and after a crisis. </p>
<p>For instance, we saw <a href="https://corpgov.law.harvard.edu/2010/11/20/the-financial-panic-of-2008-and-financial-regulatory-reform/">more financial regulation</a> after Wall Street’s behavior sparked the Great Recession, and lawmakers from districts that suffer from hurricanes <a href="https://www.nber.org/papers/w25835">tend to support bills</a> promoting more environmental regulation. </p>
<p>So companies will often pursue voluntary self-regulation and take other proactive measures during a crisis in hopes of forestalling a more onerous government reaction. A recent <a href="https://web.stanford.edu/%7Etomz/pubs/MMT-APSR-2019.pdf">Stanford study</a> found that even a modest effort can work to effectively preempt regulation. </p>
<p>Furthermore, this allows companies to set the terms and control the agenda, <a href="https://store.hbr.org/product/profiting-from-environmental-regulatory-uncertainty-integrated-strategies-for-competitive-advantage/CMR498">allowing them to choose actions</a> that are in the interest of society, profitable, and avoid the costs and pains of complying with new regulations. </p>
<p>At the moment, companies may be stepping up to avoid a more draconian response from the government, such as when Trump invoked the <a href="https://www.washingtonpost.com/politics/2020/03/19/defense-production-act-trump-coronavirus/">Defense Production Act</a> against GM, which allows him to control and direct corporate resources towards production of critical equipment. This also gives the federal government priority in contracting, limiting a company’s ability to find the most efficient or profitable contracts.</p>
<p>So next time you read about a company doing something for the greater good, applaud the effort. But you could consider its other strategic motivations as well. </p>
<p>[<em>Insight, in your inbox each day.</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=insight">You can get it with The Conversation’s email newsletter</a>.]</p><img src="https://counter.theconversation.com/content/135170/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Ford is assembling ventilators, LVMH is making hand sanitizer, and Chanel is making masks. Here’s why these and dozens of other companies are doing it.Elham Mafi-Kreft, Clinical Associate Professor of Business Economics, Indiana UniversitySteven Kreft, Clinical Professor of Business Economics and Public Policy, Indiana UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1156812019-04-25T10:43:28Z2019-04-25T10:43:28ZHow your employer uses perks like wellness programs, phones and free food to control your life<figure><img src="https://images.theconversation.com/files/270864/original/file-20190425-121228-11h7dqu.gif?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Free office food isn't there just to fill your belly</span> <span class="attribution"><span class="source">fizkes/Shutterstock.com</span></span></figcaption></figure><p>Companies offer all sorts of benefits and extras to attract the most favored workers, from health care and stock options to free food. But all those perks come at a price: your freedom. </p>
<p>There’s a reason labor historians call these perks “<a href="https://books.google.com/books/about/American_Welfare_Capitalism_1880_1940.html?id=RoKTAAAACAAJ">welfare capitalism</a>,” a term that originated to describe company towns and their subsidized housing, free classes and recreational activities. Like government welfare, offering any benefits that people come to rely on is also a <a href="https://www.brookings.edu/research/from-welfare-to-work-what-the-evidence-shows/">convenient vehicle</a> to mold their behavior. </p>
<p>And just as Henry Ford sought to transform auto workers through a generous though invasive profit-sharing program, today’s employers also use perks to influence our behavior in subtle and not-so-subtle ways. </p>
<h2>The dark side of corporate perks</h2>
<p>You might think of compensation in terms of your hourly wage or salary. Companies see it differently.</p>
<p>Back when <a href="https://law.uoregon.edu/explore/elizabeth-tippett">I drafted employment contracts</a> and policies as an employment lawyer, companies tended to think in terms of “total compensation,” which also included commissions, bonuses, stock options and sometimes benefits like medical insurance and vacation. And that’s where they stand to influence behavior.</p>
<p>Under <a href="https://www.dol.gov/whd/state/payday.htm">state</a> and <a href="https://www.dol.gov/whd/flsa/">federal</a> law, companies aren’t allowed to mess around with your hourly wage. A company <a href="https://www.law.cornell.edu/cfr/text/29/3.5">can’t dock</a> an entire day’s pay if you show up five minutes late. Or <a href="https://www.dol.gov/whd/state/payday.htm">issue paychecks</a> only once every six months.</p>
<p>However, that’s not true of other types of compensation. Lawyers like me attach all sorts of policies and restrictions on these benefits as a way to influence worker behavior. The aim of such policies generally ranged from a modest goal like getting you to work harder to making it painful to leave for a competitor. </p>
<p>For example, companies such as <a href="https://www.theringer.com/tech/2018/8/2/17640904/facebook-cafeteria-free-food-mountain-view-menlo-park-google-headquarters">Facebook</a>, Dropbox and LinkedIn <a href="https://www.cnbc.com/2018/05/30/which-tech-company-has-the-best-free-food.html">have offered free food</a>, but it’s not necessarily for employee well-being. It’s for the bottom line. And if your employer offers a gym, free dry cleaning or – heaven forbid – a <a href="https://www.geekwire.com/2015/top-tech-internships-of-2015-how-facebook-google-apple-microsoft-and-other-giants-rank/">nap pod</a>, don’t assume it’s an act of charity. As former Zillow CEO Spencer Rascoff <a href="http://fortune.com/2015/10/21/working-dry-cleaning-nap-pods/">observed</a>, perks of this sort mean “that employees are expected to work very long hours and not leave the office too often.”</p>
<p>On the other end of the spectrum, benefits can be laid out in a way to encourage sought-after employees to stay longer. Stock options are typically earned slowly over four years, an especially valuable tool in Silicon Valley, where workers are <a href="https://www.businessinsider.com/average-employee-tenure-retention-at-top-tech-companies-2018-4#apple-employees-typically-hang-around-for-5-years-and-many-of-them-now-work-in-the-new-5-billion-spaceship-headquarters-12">prone to jumping ship</a>. Vacation never seems to accumulate fast enough for new workers to take holidays off. </p>
<p>Even signing bonuses – purportedly a rewarded for starting a job – are sometimes structured where you have to pay it back if you leave in the first year or two.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/nw08tb6Tjeg?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">The author speaks with Lewis Maltby, president of the National Workrights Institute, about how your boss can legally control what you do outside of work.</span></figcaption>
</figure>
<h2>Company town, corporate control</h2>
<p>But as I learned recently while researching a book about how companies – with some help from courts – exert control over workers, it gets a lot worse. It turns out there is a rich history of employer experimentation with benefits as a behavior-modification device. </p>
<p>Benefits, particularly those that employees deem necessary or exceptionally valuable, enable employers to exercise surveillance over workers and demand behavioral change in ways they could never do through threats alone.</p>
<p>Historically, company housing sat at the sweet spot of valuable and necessary.</p>
<p>If you were operating a new mine in the early 20th century and there was no housing or transportation nearby, you likely had to provide housing. But like stock options or paid vacation today, once companies started offering it, they couldn’t resist the urge to meddle.</p>
<p>For example, company towns commonly restricted the consumption of alcohol, according to historian <a href="https://books.google.com/books/about/Company_Towns_in_the_Americas.html?id=-eMhc5ErezAC">Angela Vergara</a>. Pennsylvania coal companies <a href="https://books.google.com/books/about/American_Welfare_Capitalism_1880_1940.html?id=RoKTAAAACAAJ">even included a provision</a> in their leases requiring workers to move out within 10 days if they went on strike. Not only would the prospect of eviction weigh heavily on workers’ decision to unionize, companies could use the vacated housing for strikebreakers.</p>
<p>And although Henry Ford <a href="https://www.thehenryford.org/collections-and-research/digital-collections/expert-sets/7138/">is famous for paying</a> his workers US$5 a day – an extravagant wage at the time – that’s only half the story. Ford actually paid his workers a wage of just $2.50 day. </p>
<p>The other $2.50 was a profit-sharing dividend. To qualify, a worker had to submit to a home inspection by Ford’s sociological department and allow inspectors to interview his family and friends. <a href="http://www.sunypress.edu/p-260-the-five-dollar-day.aspx">Reasons a man might fail</a> such an inspection included debt, having a wife that worked outside the home or being an immigrant who did not speak enough English. </p>
<p>Ford also had an honor roll for employees with the best inspection scores, but even that status was precarious. According to company notations, one worker <a href="http://www.sunypress.edu/p-260-the-five-dollar-day.aspx">was booted off the roll</a> for “selling real estate.” Another was dropped for being “drunk” and having a “Polish wedding.”</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/FtG7ZGrcrh8?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">The author talks to professor Angela Vergara about how company towns sought to influence worker behavior.</span></figcaption>
</figure>
<h2>Health care and cellphones</h2>
<p>Although few employers provide housing nowadays, workers still rely heavily on employers to provide another basic necessity: health insurance. </p>
<p>While the <a href="https://www.hhs.gov/hipaa/for-professionals/privacy/laws-regulations/index.html">Health Insurance Portability and Accountability Act</a> places some informational barriers between your employer and your health care provider, employers still choose which insurers and wellness programs to offer workers. And they send a pretty clear message about how they want us to behave outside of work.</p>
<p>My employer-provided health insurance, for example, uses a “health engagement model,” which charges higher premiums and deductibles unless you agree to fill out a lengthy questionnaire and commit to change two things about your identified lifestyle failings. </p>
<p>Admittedly, no one interrogated my friends on whether my wedding was excessively “Polish.” But the questionnaire did ask, “How many servings of cookies, cakes, donuts, candy, soda or packets of sugar do you eat daily?” I mean, come on. My cake intake is a private matter between me and my supermarket cashier.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/269861/original/file-20190417-139116-1stlxf.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/269861/original/file-20190417-139116-1stlxf.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/269861/original/file-20190417-139116-1stlxf.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=634&fit=crop&dpr=1 600w, https://images.theconversation.com/files/269861/original/file-20190417-139116-1stlxf.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=634&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/269861/original/file-20190417-139116-1stlxf.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=634&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/269861/original/file-20190417-139116-1stlxf.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=797&fit=crop&dpr=1 754w, https://images.theconversation.com/files/269861/original/file-20190417-139116-1stlxf.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=797&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/269861/original/file-20190417-139116-1stlxf.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=797&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Screenshot of health engagement model questionnaire.</span>
<span class="attribution"><span class="source">Provided by the author</span></span>
</figcaption>
</figure>
<p>Another necessity of modern life is a cellphone – which college students apparently preferred to food in an experimental study involving “<a href="https://doi.org/10.1016/j.addbeh.2018.10.018">modest food deprivation</a>.” </p>
<p>But beware the company-issued cellphone or laptop. Not only does it set up the expectation that you are always on call, all of the information on those devices technically belongs to the company. Even apps you might download on your personal phone to punch in to work <a href="https://blog.hubstaff.com/best-time-tracking-with-gps-iphone-apps/">can track your location</a>.</p>
<h2>The nanny employer</h2>
<p>Historian Christopher Post <a href="https://books.google.com/books/about/Company_Towns_in_the_Americas.html?id=-eMhc5ErezAC">observed that</a> company towns all had one thing in common: None of them had a town council. The company was the government. </p>
<p>And in that sense, all of us live in the company town when we go to work each day. </p>
<p>Unless you happen to work in a unionized setting – and most of us don’t – the workplace is the most command and control environment in our lives. The company gets to decide who is worthy of the most coveted perks, and how best to dangle them.</p>
<p>Which is why I find employer efforts to use workplace benefits to control our personal decisions so grating. Some days, you just want to go home, crack open a beer, and eat cake in front of the television – without worrying whether your boss will approve.</p><img src="https://counter.theconversation.com/content/115681/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Elizabeth C. Tippett does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>From Ford to Facebook, companies have long used benefits to mold employee behavior – even incentivizing the ‘right’ kind of lifestyle.Elizabeth C. Tippett, Associate Professor, School of Law, University of OregonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1089532018-12-18T22:00:13Z2018-12-18T22:00:13ZThe Ontario government’s plan to loosen child-care rules is dangerous<figure><img src="https://images.theconversation.com/files/251324/original/file-20181218-27758-1n49gz6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The Ontario government tabled legislation Dec.6 which would increase the number of young children who can be cared for at once by home child care providers. The proposed legislation is as part of larger reform measures introduced under the Restoring Ontario's Competitiveness Act that the province says will cut red tape for businesses. </span> <span class="attribution"><span class="source">Shutterstock </span></span></figcaption></figure><p>The Ontario government’s <a href="https://www.cbc.ca/news/canada/toronto/ontario-childcare-business-bill-1.4934815">proposed changes to home child-care legislation</a> would loosen the number and ages of children that providers can care for at any one time. This is dangerous and troubling.</p>
<p>These changes would impact the youngest and most vulnerable members of our society. The new proposed rules were recently introduced when Todd Smith, the province’s minister of economic development, job creation and trade, tabled <a href="https://www.ola.org/en/legislative-business/bills/parliament-42/session-1/bill-66">Bill 66</a>, Restoring Ontario’s Competitiveness Act. </p>
<p>The <em>Toronto Star</em> reported that in a note to care operators, Education Minister Lisa Thompson described the proposed changes as being part of a mandate to “<a href="https://www.thestar.com/politics/provincial/2018/12/06/ontario-government-loosens-child-care-rules-raising-safety-concerns.html">make life easier for all families</a>” across Ontario. </p>
<p>The view that child-care regulations are unnecessary restrictions, however, is wrongheaded. The primary purpose of regulations is to protect children. There is no way that care provided under the proposed circumstances will provide children with the safe, responsive and enriching care they deserve.</p>
<p>Instead of the proposed reforms, we suggest a different model: Replace the existing system with one where where every home that regularly cares for unrelated children for a fee must be licensed. </p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1071046903284912128"}"></div></p>
<h2>Will children really be safe?</h2>
<p>Right now in Ontario, home child care (HCC) is either delivered by providers associated with a licensed agency or by unlicensed individual providers who can legally operate as long as they adhere to number and age restrictions in the <a href="https://www.ontario.ca/laws/statute/S14011">Child Care Modernization Act, 2014</a>. The proposed legislative change would apply to both the licensed and unlicensed settings.</p>
<p>Licensed home child care is heavily regulated, but our research shows licensed agencies run only a small proportion of total home child care. </p>
<p>Under the proposed changes, care providers would be allowed to care for three children instead of two children under age two, and up to six children under the age of 13 (or up to five children in the case of unlicensed providers). </p>
<p>Rules around the age of a care provider’s own children would also change: right now, the provider’s children are not counted towards the maximum number of children allowed in the home if they are aged six or older. </p>
<p>But under proposed changes, any children of providers aged <em>four</em> and older would not be included in the count of total children in care. The new legislation also allows two caregivers to work together to care for double the number of children. </p>
<p>The resulting prospective care scenarios have left many advocates stunned.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1072143427238797313"}"></div></p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1071131278261534720"}"></div></p>
<h2>Why regulations are needed</h2>
<p>The purpose of child-care regulations in Ontario and elsewhere is to ensure that children are cared for in safe and healthy environments that promote their well-being and development. More regulation and support for providers is necessary to achieve this, not less.</p>
<p>As recent research documents, unlike licensed home child care, <a href="https://www.tandfonline.com/doi/abs/10.1080/13669877.2017.1422786">unlicensed providers aren’t required to pass fire inspections or health inspections</a>. Unlicensed providers are not monitored or supported. Under the current act, regulations are enforced only as a result of specific complaints. And as recent history proves, the <a href="https://www.cbc.ca/news/canada/toronto/daycare-death-1.4056033">results can be tragic</a>. </p>
<p>While the previous Liberal government was reviewing child rules leading up to the passage of the Child Care Modernization Act, <a href="https://www.thestar.com/news/gta/2014/02/26/baby_found_dead_in_unlicensed_daycare.html">four infants and toddlers died in unlicensed child care in the Greater Toronto Area over a seven-month period</a>.</p>
<h2>Non-standard work, non-standard care</h2>
<p>To try to understand this sector better, we used parent surveys from the General Social Survey of Canada (2011). We found that <a href="https://www.oise.utoronto.ca/atkinson/UserFiles/File/Events/20170602_Summer_Institute_2017/SI_2017_Presentations/Understanding_usage_patterns_and_oversight_of_unlicenced_family_child_care_in_Canada.pdf">only about 12 per cent of children who attend home child care are with licensed care providers</a>.</p>
<p>We also found that parents using unlicensed home child care tend to be lower-income, less-educated and have non-standard work schedules. At least one parent, if not both, work evenings and/or weekends, making finding regulated care difficult. </p>
<p>Thus children from less enriched backgrounds who could benefit the most from high-quality care are most likely to find themselves in unlicensed HCC.</p>
<p>When we analyzed data from the General Social Survey and the Ontario government, we found many more parents report that their children are in licensed home child care than is possible given data on the number of licensed spaces. </p>
<p>This finding is consistent with showing that <a href="https://journals.sagepub.com/doi/abs/10.1177/1476718X12466214">parents have important gaps in their knowledge of their child’s early childhood education and care services</a>. </p>
<p>Parents’ lack of knowledge is not surprising given the complexity of the child-care landscape and the fact that parents are already tasked with the challenge of finding care when it is often scarce. </p>
<p>Thus, the burden of quality assurance belongs with government, not parents. Appropriate regulations and their enforcement are necessary. </p>
<h2>License everyone, strengthen services</h2>
<p>A system that establishes standards and supports that allow all home child-care providers to be licensed individually would serve Ontario’s children and families far better than what we now have and what the government proposes.</p>
<p>Such a system would take into account the circumstances under which the care is being delivered: For example, circumstances of providing care in rural or northern regions are very different from circumstances in the large urban areas.</p>
<p>We propose that to be eligible for a licence, the home must: have appropriate, up-to-date First Aid training; provide a developmentally appropriate child-care setting including regular access to an outdoor play area; undergo annual health and safety checks conducted by Public Health and Fire Prevention officials; and undergo annual in-home quality assessment conducted by independent, trained observers.</p>
<p>But <a href="https://www.tandfonline.com/doi/pdf/10.1080/10409289.2017.1324243">licensing of individual homes alone is not enough</a>. </p>
<p>We propose that, whenever practical, all home child-care providers must participate in regular visits to community-based <a href="http://www.edu.gov.on.ca/childcare/plan_report.html">early years sites</a> (hubs) dedicated to supporting HCC providers. <a href="https://www.tandfonline.com/doi/abs/10.1080/10409289.2016.1256720">Support would be given through</a>: professional development; registry and referral services; equipment loans; back-up service arrangements; administrative support including, potentially, fee collection. Scheduled and unscheduled home visits would also be required. </p>
<p>We estimate that, depending on the actual program configuration, the per child cost of our entire proposal would be between 30 and 40 per cent of the cost under the current licensed HCC agency system. </p>
<p>Given how little is known about home child care, licensed and unlicensed, as it’s delivered in Ontario, it is time to find out the facts, learn from them and use them to guide future decisions. </p>
<p>It is not the time to relax the very limited regulations that are in place to protect our youngest citizens.</p><img src="https://counter.theconversation.com/content/108953/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Petr Varmuza provided consulting services for the Atkinson Foundation, City of Toronto, Child Care Human Resources Sector Council and Toronto Educational Workers . </span></em></p><p class="fine-print"><em><span>Linda A. White has received funding from the Social Sciences and Humanities Research Council of Canada, the Ontario Human Capital Research and Innovation Fund, and the McCain Foundation in the past five years.</span></em></p><p class="fine-print"><em><span>Michal Perlman receives funding from Social Sciences and Humanities Research Council of Canada, the Canadian Institutes of Health Research, The City of Toronto, the Ontario Ministry of Education, the Ontario Human Capital Research and Innovation Fund and the Lawson, McCain and Bernard van Leer Foundations in the last five years.</span></em></p>Low-income, less-educated parents with non-standard work schedules rely most on home child-care providers whose rules would be relaxed under proposed legislation.Petr Varmuza, PhD Candidate, University of TorontoLinda A. White, Professor of Political Science and Public Policy, University of TorontoMichal Perlman, Associate Professor of Applied Psychology and Human Development, University of TorontoLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/989882018-07-17T10:48:55Z2018-07-17T10:48:55ZWhen corporations take credit for green deeds their lobbying may tell another story<figure><img src="https://images.theconversation.com/files/227884/original/file-20180716-44073-1ydrel9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Former EPA chief Scott Pruitt, second from left, conferring with auto industry leaders</span> <span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/EPA-Fuel-Standards/0014357f5b0646df8754a7a9bb20ff59/12/0">AP Photo/Andrew Harnik</a></span></figcaption></figure><p>Today most large companies like Exxon Mobil, Ford and GM issue <a href="https://www.ey.com/us/en/services/specialty-services/climate-change-and-sustainability-services/value-of-sustainability-reporting">slick reports</a> extolling their efforts to conserve resources, use renewable energy or fund clean water supplies in developing countries. This emphasis on efforts to curb environmental harm while benefiting society is called corporate sustainability.</p>
<p>Once uncommon but now mainstream, this show of support for a <a href="https://doi.org/10.1016/j.jclepro.2017.09.159">greener and kinder business model</a> might seem like a clear step forward. But many of these same companies are quietly using their political clout, often through industry trade associations, to block or reverse policies that would make the economy more sustainable. And because public policy raises the bar for entire industries, requiring that all businesses meet minimum standards, lobbying to block sound public policies can outweigh the positive impact from internal company initiatives.</p>
<p>This kind of corporate hypocrisy – what we call talking green while lobbying brown – is a form of <a href="https://doi.org/10.1525/cmr.2011.54.1.64">greenwashing</a>, in which companies trumpet their good deeds while hiding their efforts to block progress. As the <a href="https://scholar.google.com/citations?user=ZE02oYAAAAAJ&hl=en">past</a> and <a href="https://scholar.google.com/citations?user=JwLkuSIAAAAJ&hl=en">present</a> presidents of the <a href="https://corporate-sustainability.org/">Alliance for Research on Corporate Sustainability</a>, we are concerned that this greenwashing may delay by years or even decades steps that might solve sustainability problems, such as slowing the pace of climate change or ending the <a href="http://www.sciencemag.org/news/2015/02/here-s-how-much-plastic-enters-ocean-each-year">ocean plastic pollution crisis</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/227883/original/file-20180716-44103-ktced2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/227883/original/file-20180716-44103-ktced2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/227883/original/file-20180716-44103-ktced2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/227883/original/file-20180716-44103-ktced2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/227883/original/file-20180716-44103-ktced2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/227883/original/file-20180716-44103-ktced2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/227883/original/file-20180716-44103-ktced2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/227883/original/file-20180716-44103-ktced2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Greenwashing is environmentally responsible talk without action.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-illustration/3-paint-brushes-greenwashing-48920020?src=6HXxCHHBBpEzOhYBRPGAlA-1-6">By Tamixes/Shutterstock.com</a></span>
</figcaption>
</figure>
<h2>Sounding good yet lacking impact</h2>
<p>We and our colleagues in the alliance have documented many business initiatives that fall short of the impact they claim. One of the best known was the <a href="https://responsiblecare.americanchemistry.com/">chemical industry’s Responsible Care</a> program, created after an explosion at Union Carbide’s plant in <a href="https://doi.org/10.1186/1476-069X-4-6">Bhopal, India,</a> killed thousands of people in 1984. Strategy professors <a href="https://scholar.google.com/citations?user=1knV0GgAAAAJ&hl=en">Andy King</a> and <a href="https://scholar.google.com/citations?user=cmOfwlsAAAAJ&hl=en">Mike Lenox</a> <a href="https://journals.aom.org/doi/abs/10.5465/1556362">showed</a> that participants actually made less progress in reducing their emissions of toxic chemicals than did nonparticipants. That prompted the industry to overhaul the program.</p>
<p>Or consider the <a href="https://www.env.go.jp/earth/g8_2000/forum/g8bp/detail/usa/usa11.html">Climate Challenge program</a>. The Energy Department created this now-defunct partnership between business and government to encourage electric utilities to voluntarily reduce their greenhouse gas emissions. When one of us teamed up with Management Professor <a href="https://scholar.google.com/citations?user=l8Se0QoAAAAJ&hl=en">Maria Montes-Sancho</a> to evaluate its track record, we found that there was no difference overall between participants and non-participants in their <a href="https://doi.org/10.1002/smj.826">emissions reductions</a>. </p>
<p>Both of these voluntary initiatives failed to solve environmental problems, so why were they created?</p>
<p>In the case of Responsible Care, <a href="https://www.sciencedirect.com/science/article/pii/S0168851006001278">chemical industry documents</a> show that one of the program’s main goals was preempting tighter regulations. Likewise, <a href="https://onlinelibrary.wiley.com/doi/abs/10.1002/smj.826">public statements</a> the electric utility industry and the Energy Department made indicate that they formed Climate Challenge to stave off new regulations.</p>
<p>And following the Trump administration’s plan to spike the Clean Power Plan, a federal rule that would have limited air pollution from power, <a href="https://www.utilitydive.com/news/report-epa-planning-inside-the-fence-clean-power-plan-replacement/448348/">utilities have essentially avoided federal climate regulation</a> to date. </p>
<p>Even though these and other voluntary initiatives accomplish little of substance, they help call attention to the good steps industries appear to be taking instead of the environmental damage they are causing – which is exactly <a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1530-9134.2010.00282.x">how greenwashing works</a>.</p>
<h2>Talking green while lobbying brown</h2>
<p>As we and our colleagues explained in an 2018 article in the business journal <a href="http://journals.sagepub.com/doi/abs/10.1177/0008125618778854">California Management Review</a>, it is easy to get away with greenwashing in part because it’s hard to detect what companies lobby for in the U.S., as there is no requirement to disclose the positions they espouse.</p>
<p>“Despite the statements emitted from oil companies’ executive suites about taking climate change seriously and supporting a price on carbon, their lobbying presence in Congress is 100 percent opposed to any action,” Sen. Sheldon Whitehouse, a Rhode Island Democrat, lamented in <a href="https://hbr.org/2016/02/the-climate-movement-needs-more-corporate-lobbyists">Harvard Business Review</a>.</p>
<p>Exxon Mobil has clearly engaged in this doubletalk. The corporation declared in its 2016 <a href="http://cdn.exxonmobil.com/%7E/media/global/files/corporate-citizenship-report/2016_ccr_full_report.pdf">Corporate Citizenship Report</a> that “climate change risks warrant action by businesses, governments and consumers, and we support the Paris Agreement as an effective framework for addressing this global challenge.” Yet the <a href="https://influencemap.org/report/Corporate-Carbon-Policy-Footprint-4274a464677481802bd502ffff008d74">nonprofit group InfluenceMap recently found</a> that Exxon was one of the top three global corporations in lobbying against effective climate policy. </p>
<p>Exxon Mobil’s hypocrisy may not be surprising given the company’s long history of <a href="https://www.independent.co.uk/environment/exxonmobil-funds-climate-change-deniers-exxon-oil-gas-a7818626.html">funding climate deniers</a>. However, it is far from alone in talking green while lobbying brown. Indeed, even companies with much stronger records on sustainability than Exxon do this, often through industry trade groups.</p>
<p>For example, <a href="https://corporate.ford.com/microsites/sustainability-report-2017-18/doc/sr17.pdf">Ford said in its 2017 sustainability report</a> that “we know climate change is real, and we remain committed to doing our part to address it by delivering on CO2 reductions consistent with the Paris Climate Accord.” <a href="http://www.gmsustainability.com/_pdf/downloads/GM_2017_SR.pdf">GM’s sustainability report</a> stated that “General Motors is the only automaker on the 2017 Dow Jones Sustainability Index for North America, and is also on the World Index.”</p>
<p>Yet as Alliance for Automotive Manufacturers members, <a href="http://fortune.com/2016/11/10/auto-trade-group-trump-emissions/">Ford and GM both lobbied</a> the Trump administration to <a href="https://theconversation.com/stronger-fuel-standards-make-sense-even-when-gas-prices-are-low-94274">weaken fuel economy standards</a> – a strong tool for reducing vehicle emissions.</p>
<h2>More political transparency needed</h2>
<p>When companies hide their political opposition to sustainability policies, it deprives investors of the right to know how their funds are being used. This obfuscation also denies consumers the right to vote with their wallets for greener products.</p>
<p>We believe the best way to expose this duplicity is by requiring corporations to disclose more details about their political actions. For instance, new laws might demand that companies, both individually and as part of industry associations, make their lobbying stances public, and reveal which politicians they have called on to take a given position.</p>
<p>And companies could be forced to reveal what they spend on so-called “independent” political advertisements, also known as <a href="https://www.pbs.org/wgbh/pages/frontline/shows/scandal/etc/ads.html">issue ads</a>.</p>
<p>In the U.S., one good option would be to update the <a href="https://lobbyingdisclosure.house.gov/amended_lda_guide.html">Lobbying Disclosure Act</a> to require more detailed reporting, including spending on <a href="http://www.businessinsider.com/astroturfing-grassroots-movements-2011-9">astroturf lobbying</a>, the practice of using fake grass-roots groups to influence public opinion.</p>
<p>The private sector can take action too. In Europe, the Vigeo Eiris rating agency has begun to assess corporate <a href="http://www.vigeo-eiris.com/transparency-and-integrity-of-lobbying-a-new-challenge-for-csr-2/">political transparency</a>. Such evaluations would become much more powerful if required by leading investment managers. That is why we see the 2018 call by BlackRock, the world’s largest asset manager, for companies to “<a href="https://www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter">benefit all their stakeholders</a>” as a step in the right direction.</p><img src="https://counter.theconversation.com/content/98988/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tom Lyon is the President of the Alliance for Research on Corporate Sustainability. He and Professor Delmas received funding from the Borchard Foundation that supported research on corporate political responsibility. </span></em></p><p class="fine-print"><em><span>Magali (Maggie) Delmas is the past president of the Alliance for Research on Corporate Sustainability (ARCS) and remains affiliated with it.</span></em></p>The environmental responsibility some businesses say they embrace is only a veneer.Tom Lyon, Dow Professor of Sustainable Science, Technology and Commerce; Professor of Business Economics; Public Policy Professor of Environment and Sustainability, University of MichiganMagali (Maggie) Delmas, Professor of Management Institute of the Environment and Sustainability, Anderson School of Management, University of California, Los AngelesLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/992672018-07-05T10:38:44Z2018-07-05T10:38:44ZWhy it doesn’t matter if a Harley is ‘made in America’<p>Harley-Davidson was one of the president’s favorite companies less than six months ago. Now it’s the latest business to feel his wrath. </p>
<p>That’s because on June 25, Harley-Davidson <a href="http://investor.harley-davidson.com/node/17401/html">announced</a> it will move some of its production overseas. The iconic American motorcycle brand said it was doing this to avoid retaliatory tariffs imposed by the European Union in response to U.S. import taxes. </p>
<p>“A Harley-Davidson should never be built in another country – never!” President Donald Trump <a href="https://twitter.com/realdonaldtrump/status/1011584315040419840">tweeted</a> “Their employees and customers are already very angry at them. If they move, watch, it will be the beginning of the end.”</p>
<p>Back in February, things were very different. At a meeting with executives at the White House, Trump <a href="https://www.whitehouse.gov/briefings-statements/remarks-president-trump-meeting-harley-davidson-executives-union-representatives">praised</a> Harley-Davidson for being “a true American icon, one of the greats,” and thanked them “for building things in America.” </p>
<p>As an international relations expert who focuses on <a href="https://scholar.google.com/citations?user=vf1UpqAAAAAJ&hl=en&oi=ao">trade disputes</a>, Trump’s anger at Harley’s announcement is understandable. He wants to promote Harley-Davidson for his <a href="https://www.upi.com/Trump-puts-America-first-in-manufacturing-trade-speech/2081500317847/">“America First” agenda</a>. The goal of this approach is to protect and create American manufacturing jobs. With Harley taking the production of its EU-bound bikes abroad, this does not look like a success for Trump. </p>
<p>But this got me to thinking, in a world that depends on global supply chains, what makes a product truly “made in America”? Is a Harley really an all-American bike? Who even cares?</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/226054/original/file-20180703-116129-1keb60x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/226054/original/file-20180703-116129-1keb60x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=415&fit=crop&dpr=1 600w, https://images.theconversation.com/files/226054/original/file-20180703-116129-1keb60x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=415&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/226054/original/file-20180703-116129-1keb60x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=415&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/226054/original/file-20180703-116129-1keb60x.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=522&fit=crop&dpr=1 754w, https://images.theconversation.com/files/226054/original/file-20180703-116129-1keb60x.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=522&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/226054/original/file-20180703-116129-1keb60x.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=522&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Trump and Vice President Mike Pence met with Harley-Davidson CEO Matthew Levatich in February.</span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Trump-100-100-Photos/6e55f7cf96a8455a9567e56961fd8497/10/0">AP Photo/Pablo Martinez Monsivais, file</a></span>
</figcaption>
</figure>
<h2>What ‘made in America’ means</h2>
<p>For consumers hoping to figure out if a product is made in the U.S., it’s trickier than you’d think.</p>
<p>Products like American soybeans or corn are pretty clear-cut: They are grown and harvested in the U.S. by American farmers, in states like North Dakota and Iowa. The only inputs are seeds, land, fertilizer and water – all of which are easily found in the U.S. </p>
<p>“American-made” clothing, on the other hand, becomes more ambiguous. Even when a garment is sewn in a factory in New York or Los Angeles, earning it its “Made in USA” tag, the fabric or thread may have been spun in Bangladesh or India with American-grown cotton. </p>
<p>The Federal Trade Commission has a <a href="https://www.ftc.gov/system/files/documents/plain-language/bus03-complying-made-usa-standard.pdf">40-page document</a> that thoroughly explains what makes an item “Made in USA.” Basically, to earn that designation, a product has to be “all or virtually all” made in a U.S. state or territory. Only automobiles, textiles, fur and wool must disclose their U.S. content at the point of sale. Other products may use the tag as long as they follow the guidelines. </p>
<h2>Foreign or domestic</h2>
<p>Let’s take a closer look at vehicles.</p>
<p>The parts that comprise “American-made” motorcycles and cars have been shuttled back and forth over North American borders ever since the <a href="https://www.history.com/this-day-in-history/nafta-signed-into-law">North American Free Trade Agreement</a> was signed in 1993. American auto manufacturers like Ford and Chevrolet <a href="https://www.autoblog.com/2010/10/06/is-your-car-really-american">depend</a> on parts from Mexico and the EU and often assemble their cars in Canada. </p>
<p>In 1994, Congress passed the <a href="https://www.nhtsa.gov/part-583-american-automobile-labeling-act-reports">American Automotive Labeling Act</a>, requiring automakers to reveal the share of the parts that came from the U.S. or Canada, the country of assembly, and the engine and transmission’s country of origin. The aim was to encourage more patriotic consumerism on the premise that Americans would buy more of a product if they knew it was produced domestically. </p>
<p>American University business professor Frank DuBois describes some of this data as misleading because it doesn’t break down what share of the parts came from the U.S. versus Canada. He created the <a href="http://kogodbusiness.com/auto-index/">2016 Kogod Made in America Auto Index</a> to track this and other information to come up with a more accurate indicator of how much of a car benefits the U.S. economy. His results reveal the fine line between foreign and domestic. </p>
<p>For instance, Japanese carmaker Toyota assembled its 2017 Camry in the U.S. with an American-made engine and transmission. Three-quarters of the parts came from either the U.S. or Canada, giving it a “total domestic content” score of 78.5 percent. Similarly, Tokyo-based Honda built its Accord in the U.S. with an American engine, Japanese transmission and 80 percent U.S. or Canadian parts, giving it a score of 81 percent. </p>
<p>General Motors’ Chevy Volt, on other hand, contains only 63 percent domestic content and half its parts are from outside the U.S. or Canada, even though its engine is American. The Ford Fusion is even lower: It has a U.K.-built engine, and only a quarter of its parts were made in the U.S. or Canada. </p>
<h2>A global bike</h2>
<p>As for Harley-Davidson motorcycles, they may be considered classic Americana, but the components of the bikes themselves come from many places outside the U.S., just like in the auto industry. </p>
<p>Harleys sold in the U.S. <a href="https://www.jsonline.com/story/money/2018/06/28/harley-davidsons-classic-americana-foreign-sourced-parts/741163002">are indeed assembled</a> in one of four plants located in Wisconsin, Missouri and Pennsylvania. But the brakes and clutch are imported from Italy, the engine pistons are made in Austria, the bike suspension comes from Japan, and other electronic components originate in Mexico and China.</p>
<p>While Harley-Davidson claims it attempts to use as many American parts as it can, the company is <a href="https://www.cycleworld.com/2013/11/12/where-is-it-made-2014-harley-davidson-street-750-and-street-500/">sometimes forced</a> to go abroad to find the right parts in terms of cost and comparable quality. </p>
<p>As for its <a href="https://www.nytimes.com/2018/06/25/business/harley-davidson-us-eu-tariffs.html">plan</a> to avoid the EU counter-sanctions, Harley plans to shift some production of bikes intended for European markets to facilities in other countries <a href="https://www.vox.com/policy-and-politics/2018/6/26/17506424/trump-tariffs-harley-davidson-thailand">such as Thailand</a>, where it’s building a new factory. </p>
<p>But that won’t actually change anything for American consumers, no matter what Trump says. In other words, Harleys that Americans buy after its plans go into effect will still be as American as they were a year ago. And all the profits Harley makes will continue to flow to the U.S. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/226056/original/file-20180703-116120-1vbwya3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/226056/original/file-20180703-116120-1vbwya3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=339&fit=crop&dpr=1 600w, https://images.theconversation.com/files/226056/original/file-20180703-116120-1vbwya3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=339&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/226056/original/file-20180703-116120-1vbwya3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=339&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/226056/original/file-20180703-116120-1vbwya3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=426&fit=crop&dpr=1 754w, https://images.theconversation.com/files/226056/original/file-20180703-116120-1vbwya3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=426&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/226056/original/file-20180703-116120-1vbwya3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=426&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Furniture-Revival/9e2874e6e1d34c2180c01282a8285c03/2/0">AP Photo/Rogelio V. Solis</a></span>
</figcaption>
</figure>
<h2>Don’t go bananas</h2>
<p>So back to our original question, what does it really mean to be “made in America”? </p>
<p>Since the 1980s, U.S. companies have been using this label in their advertising to push back against foreign competition as global production expanded into Asia and elsewhere. In this era of “America First,” the Trump administration <a href="http://thehill.com/homenews/administration/342235-white-house-announces-new-campaign-promoting-trumps-agenda">has doubled down</a> on this branding. </p>
<p>But the truth is it makes little sense. Nor does attacking a U.S. company for moving some of its production – production intended for overseas markets and customers – to another country. </p>
<p>In 2013 political scientist Mike Allison and I <a href="https://onlinelibrary.wiley.com/doi/pdf/10.1111/j.1557-203X.2013.01195.x">wrote an article</a> that showed how the meaning of “domestic” can be very expansive. In the 1990s, for example, the U.S. filed a complaint with the World Trade Organization against the EU for quotas it set on bananas from Latin America.</p>
<p>None of the products in the dispute were made in the U.S. or Europe, but two of the biggest growers of bananas – Chiquita and Fyffes – were headquartered in the U.S. and the U.K. respectively. Essentially, both the Clinton and first Bush administrations – as well as officials in the EU – fought over bananas made elsewhere because they figured corporate profits supported by a product mattered more than where it was made. </p>
<p>Furthermore, consumers also look at other things besides where the product is made. In a <a href="https://www.reuters.com/article/us-usa-buyamerican-poll-idUSKBN1A3210">2017 poll</a>, 69 percent of Americans surveyed said price is “very important” in considering the purchase of a product. Only 32 percent said not bearing a made in the U.S. label was a dealbreaker. </p>
<p>So the problem with Trump’s tariff push is that other things matter more than where something is made. And companies will do what they have to do to stay competitive, even if it means moving overseas. </p>
<p>Following Harley’s announcement, fellow bike maker Polaris <a href="https://www.desmoinesregister.com/story/money/business/2018/06/29/polaris-tariffs-prompt-study-moving-production-out-iowa-europe/747386002/">said</a> it was also considering moving some production from Iowa to Poland. </p>
<p>Other companies in different industries will likely follow. While Trump may be following a hard line with tariffs against U.S. competitors, Americans will likely see negative effects from that move, either in the form of jobs being shipped overseas or prices rising due to reciprocal tariffs.</p><img src="https://counter.theconversation.com/content/99267/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Christina Fattore does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The motorcycle maker angered Trump after it said it plans to move some production overseas to avoid EU tariffs – just a few months after the president praised the company for being a ‘true American icon.’Christina Fattore, Associate Professor of Political Science, West Virginia UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/962552018-06-08T10:52:38Z2018-06-08T10:52:38ZHow the Ford F-150 became king of cars<figure><img src="https://images.theconversation.com/files/222218/original/file-20180607-137306-nltwet.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Ford has doubled down on its best-selling pickup trucks.</span> <span class="attribution"><a class="source" href="http://www.apimages.com/metadata/Index/Auto-Show-Ford-Pickup-Photo-Gallery-/99fae4d97c9c4a9a8dfee1631b8b1fcc/38/0">AP Photo/Paul Sancya</a></span></figcaption></figure><p>In April, Ford announced that it will be <a href="https://www.washingtonpost.com/news/innovations/wp/2018/04/26/ford-has-been-synonymous-with-cars-for-more-than-a-century-thats-about-to-change/?utm_term=.60a395e83c27">phasing out nearly all of its passenger cars</a> in the United States. </p>
<p>If all goes according to plan, <a href="https://media.ford.com/content/dam/fordmedia/North%20America/US/2018/04/25/1q18-financials.pdf">90 percent</a> of Ford’s portfolio in North America will be trucks, SUVs and commercial vehicles. Its F-150 – the <a href="http://money.cnn.com/2018/05/11/news/companies/ford-f150-history/index.html">most popular</a> vehicle in America – is now poised to build on its stunning success. </p>
<p>The model’s ascent is really part of a larger, decades-long trend of Americans’ eschewing sedans for trucks and SUVs. </p>
<p>But why do Americans flock to the F-150 over the Tacoma or the Silverado? </p>
<p><a href="https://scholar.google.com/citations?user=8WFEoO8AAAAJ&hl=en">I study</a> how innovation drives success in competitive markets, and Ford’s emphasis on original design – together with its frequent upgrades – have allowed the F-Series to gain an edge over its peers. </p>
<h2>A post-war truck boom</h2>
<p>By the end of World War II, the car market in the United States, was, by and large, a seller’s market. </p>
<p>From February 1942 to October 1945, the <a href="https://www.britannica.com/place/United-States/World-War-II">War Production Board</a> froze automobile production for civilian use, which created pent-up demand for <a href="http://library.cqpress.com/cqresearcher/document.php?id=cqresrre1945082100">5 to 9 million</a> new cars by the time the war ended. </p>
<p>In a race to cash in, U.S. automotive manufacturers capitalized on the expertise they had gained from manufacturing military trucks during the war and introduced trucks – in addition to cars – into the market. </p>
<p>In the past, trucks had been marketed to farmers and business owners. These newer trucks, advertised as a more comfortable ride with larger cabins, were designed to also appeal to suburban buyers.</p>
<p>In 1947 Chevrolet launched its <a href="https://www.classicmuscle.com/resources/chevy-advance-design-trucks-history">Advance-Design trucks</a>, while the now-defunct International Harvester launched its <a href="https://commons.wikimedia.org/wiki/File:48_International_Harvester_KB-1_Pick-Up_(9129159505).jpg">KB Series</a>. The following year, Dodge released its <a href="https://www.youtube.com/watch?v=Vl47-FLX2uk">B Series</a>, and Ford introduced its <a href="https://en.wikipedia.org/wiki/Ford_F-Series_(first_generation)">F-Series</a>.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/222238/original/file-20180607-137312-1xbogqw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/222238/original/file-20180607-137312-1xbogqw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/222238/original/file-20180607-137312-1xbogqw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=777&fit=crop&dpr=1 600w, https://images.theconversation.com/files/222238/original/file-20180607-137312-1xbogqw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=777&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/222238/original/file-20180607-137312-1xbogqw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=777&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/222238/original/file-20180607-137312-1xbogqw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=977&fit=crop&dpr=1 754w, https://images.theconversation.com/files/222238/original/file-20180607-137312-1xbogqw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=977&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/222238/original/file-20180607-137312-1xbogqw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=977&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">With its ‘Million Dollar Cab,’ Ford sought to gain an edge over its competitors.</span>
<span class="attribution"><a class="source" href="http://www.fatfenderedtrucks.com/folder/page6.jpg">Ford Truck Enthusiasts</a></span>
</figcaption>
</figure>
<p>With design offerings that could appeal to a range of customers, the F-Series was an instant success. The F-Series line-up included eight models with varying sizes and cargo capacities, from the F-1, a light-truck with half-ton capacity, to the F-8, a 3-ton, heavy-duty truck.</p>
<p>To appeal to a wider range of buyers, Ford designed <a href="https://auto.howstuffworks.com/1948-1952-ford-fseries-trucks2.htm">a considerably more spacious and comfortable cabin</a>. Dubbed the “Million Dollar Cab” to underscore the one million dollars the company spent on its design, this cab was wider, quieter and featured luxuries like a full interior trim, sun visors, an ashtray, and easy-to-read instrument panel.</p>
<h2>Staying ahead of the competition</h2>
<p>Since the earliest days of the U.S. auto industry, <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/jpim.12080">innovation has been a critical element</a> for sustained success. To keep up with the evolution of consumer demands and emergence of new technologies, automakers have to invest heavily on research and development. In 2017 alone, they spent more than <a href="https://autoalliance.org/innovation/">$100 billion</a> globally. Companies that fall behind in this innovation “arms race” tend to either <a href="https://en.wikipedia.org/wiki/Studebaker">go out of business</a> or <a href="https://en.wikipedia.org/wiki/American_Motors_Corporation">are acquired</a>.</p>
<p>Now in its 13th generation, the F-Series has been through more frequent upgrades and redesigns than its competitors, and its innovation is a big reason for the line’s enduring popularity. </p>
<p>We saw it in the early 1950s, when Ford updated its Million Dollar Cab by designing a “<a href="https://www.ford-trucks.com/forums/attachment.php?attachmentid=67593&stc=1&d=1358103089">Five Star Extra Cab</a>,” which came with foam seat padding, twin horns, and improved sound proofing. We saw it in 1987, when the F-Series became the first pickup truck to introduce rear anti-lock brakes as a standard feature. And we saw this in 2014, when Ford invested <a href="https://www.economist.com/news/science-and-technology/21630375-one-way-or-another-fords-new-aluminium-truck-set-be-game-changer-adding-lightness">US$3 billion</a> to replace the truck’s steel body with an aluminum one, which shed, on average, 700 pounds and drastically improved the vehicle’s fuel economy.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/222225/original/file-20180607-137298-1hczl3i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/222225/original/file-20180607-137298-1hczl3i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/222225/original/file-20180607-137298-1hczl3i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=478&fit=crop&dpr=1 600w, https://images.theconversation.com/files/222225/original/file-20180607-137298-1hczl3i.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=478&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/222225/original/file-20180607-137298-1hczl3i.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=478&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/222225/original/file-20180607-137298-1hczl3i.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=601&fit=crop&dpr=1 754w, https://images.theconversation.com/files/222225/original/file-20180607-137298-1hczl3i.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=601&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/222225/original/file-20180607-137298-1hczl3i.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=601&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">A 1987 print ad for the F-150 highlights the truck’s new anti-lock brakes.</span>
<span class="attribution"><a class="source" href="https://upload.wikimedia.org/wikipedia/commons/b/be/1987_Ford_F_Series_%2815837672134%29.jpg">JOHN LLOYD</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>For these cutting-edge upgrades, the company has been handsomely rewarded. In 2017, F-150 was the best-selling vehicle in the U.S. – a title it has held for the last <a href="https://media.ford.com/content/fordmedia/fna/us/en/news/2017/01/04/ford-f-series-40-years-best-selling-truck.html">36 years</a>. More than <a href="http://www.foxnews.com/auto/2017/01/04/ford-f-series-marks-40-years-as-usas-best-selling-truck.html">40 million</a> F-Series trucks have been sold since 1948, making it one of the best-selling vehicles in history. </p>
<h2>The bigger the car, the bigger the profit</h2>
<p>Just how important is the F-Series to Ford’s bottom line?</p>
<p>While Ford doesn’t disclose model-level profit data, it is estimated that each F-150 earns the company an operating profit of around $10,000 and generates around 90 percent of Ford’s <a href="https://www.foxbusiness.com/markets/why-the-ford-f-150-is-a-profit-machine">global profits</a>. In fact, the line of trucks is <a href="https://www.cnbc.com/2018/03/14/fords-f-150-truck-franchise-alone-is-worth-more-than-the-whole-company-morgan-stanley.html">thought</a> to be worth more than the entire company.</p>
<p>In general, pickup trucks, and their less-rugged siblings, SUVs, generate more profit per unit than passenger cars. <a href="https://www.bloombergquint.com/onweb/2018/05/08/ram-and-chevy-s-deep-discounts-portend-an-old-pickup-price-war">According to Bloomberg</a>, the average price of a full-size pickup truck is around $45,000, with a profit margin of roughly 25 percent; the average price of a mid-size sedan, on the other hand, is around $22,000 with a 10 percent profit margin.</p>
<p>This might explain why other car companies are also getting cold feet about their passenger cars. Fiat Chrysler has phased out the Dodge Dart and Chrysler 200 and <a href="https://www.reuters.com/article/us-fiatchrysler-usa-idUSKBN14S0WL">announced</a> that it will retool its factories in Michigan and Ohio in order to build a new pickup truck and two new SUVs. General Motors also <a href="https://www.wsj.com/articles/gm-to-kill-chevrolet-sonic-subcompact-car-1522850577">reportedly</a> plans to cut production of some of its passenger cars.</p>
<p>Car sales as a percentage of total light vehicles sales has been in steady decline since the early 1980s. In May 2018, car sales made up only 32.1 percent of all light vehicles sales in the U.S., down from a 40-year high of 83.2 percent in October 1980. <a href="http://umich.edu/%7Eumtriswt/PDF/SWT-2017-7.pdf">According to a recent study</a> conducted by the University of Michigan Transportation Research Institute, people are switching to SUVs and pickups because these vehicles offer greater general utility and better on-road 4x4 capabilities and are safer.</p>
<p>Meanwhile, low gas prices, <a href="https://www.bls.gov/news.release/eci.nr0.htm">increasing wages</a>, ongoing <a href="https://www.bloomberg.com/news/articles/2018-05-01/as-u-s-expansion-hits-endurance-milestone-here-s-what-s-next">economic expansion</a> and <a href="https://www.bloomberg.com/news/articles/2018-04-24/u-s-consumer-confidence-index-unexpectedly-rebounded-in-april">soaring consumer confidence</a> could mean more Americans are willing to shell out extra cash for a truck or SUV.</p>
<p>Together, these trends indicate that the F-150’s reign as king of trucks won’t end anytime soon.</p><img src="https://counter.theconversation.com/content/96255/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>M. Berk Talay does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>For 30 years, it’s been the best-selling vehicle in the US.M. Berk Talay, Associate Professor of Marketing, UMass LowellLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/919492018-02-22T13:00:09Z2018-02-22T13:00:09ZSilicon Valley is winning the race to build the first driverless cars<figure><img src="https://images.theconversation.com/files/207500/original/file-20180222-152348-n7t8rw.png?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Waymo</span></span></figcaption></figure><p>Henry Ford didn’t invent the motor car. The late 1800s saw a flurry of innovation by hundreds of companies battling to deliver on the promise of fast, efficient and reasonably-priced mechanical transportation. Ford later came to dominate the industry thanks to the development of the moving assembly line.</p>
<p>Today the sector is poised for another breakthrough with the advent of cars that drive themselves. But unlike the original wave of automobile innovation, the race for supremacy in autonomous vehicles is concentrated among a few corporate giants. So who is set to dominate this time? </p>
<p><a href="https://indd.adobe.com/view/a0bd4358-a51c-4a90-b300-e727272a6bba">I’ve analysed</a> six companies we think are leading the race to build the first truly driverless car. Three of these – General Motors, Ford and Volkswagen – come from the existing car industry and need to integrate self-driving technology into their existing fleet of mass-produced vehicles. The other three – Tesla, Uber and Waymo (owned by the same company as Google) – are newcomers from the digital technology world of Silicon Valley and have to build a mass manufacturing capability.</p>
<p>While it’s impossible to know all the developments at any given time, we have tracked investments, strategic partnerships and official press releases to learn more about what’s happening behind the scenes. The car industry typically rates self-driving technology <a href="https://autoalliance.org/connected-cars/automated-driving-systems/levels-of-automation/">on a scale</a> from Level 0 (no automation) to Level 5 (full automation). We’ve assessed where each company is now and estimated how far they are from reaching the top level. Here’s how we think each player is performing.</p>
<h1>Volkswagen</h1>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/207502/original/file-20180222-152375-15m1e12.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/207502/original/file-20180222-152375-15m1e12.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=225&fit=crop&dpr=1 600w, https://images.theconversation.com/files/207502/original/file-20180222-152375-15m1e12.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=225&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/207502/original/file-20180222-152375-15m1e12.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=225&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/207502/original/file-20180222-152375-15m1e12.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=283&fit=crop&dpr=1 754w, https://images.theconversation.com/files/207502/original/file-20180222-152375-15m1e12.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=283&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/207502/original/file-20180222-152375-15m1e12.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=283&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Audi A8 traffic jam pilot.</span>
<span class="attribution"><span class="source">Audi</span></span>
</figcaption>
</figure>
<p>Volkswagen <a href="https://www.ft.com/content/b09e7396-21c5-11e6-9d4d-c11776a5124d">has invested</a> in taxi-hailing app Gett and partnered with chip-maker Nvidia to develop an artificial intelligence co-pilot for its cars. In 2018, the VW Group is set to release <a href="https://www.forbes.com/sites/michaeltaylor/2017/09/10/tthe-level-3-audi-a8-will-almost-be-the-most-important-car-in-the-world/">the Audi A8</a>, the first production vehicle that reaches Level 3 on the scale, “conditional driving automation”. This means the car’s computer will handle all driving functions but a human has to be ready to take over if necessary.</p>
<h2>Ford</h2>
<p>Ford already sells cars with a Level 2 autopilot, “partial driving automation”. This means one or more aspects of driving are controlled by a computer based on information about the environment, for example combined cruise control and lane centring. Alongside <a href="https://www.forbes.com/sites/samabuelsamid/2016/08/16/ford-and-baidu-lead-new-150-million-investment-in-lidar-maker-velodyne/#2203481b1de7">other investments</a>, the company has put US$1 billion into Argo AI, an artificial intelligence company for self-driving vehicles. Following a trial to <a href="https://www.wired.com/story/ford-self-driving-pizza-delivery-dominos/">test pizza delivery</a> using autonomous vehicles, Ford is now testing Level 4 cars on <a href="https://www.forbes.com/sites/samabuelsamid/2017/08/29/dominos-takes-high-tech-pizza-delivery-to-level-4-with-ford/">public roads</a>. These feature “high automation”, where the car can drive entirely on its own but not in certain conditions such as when the road surface is poor or the weather is bad.</p>
<h2>General Motors</h2>
<p>GM also sells vehicles with Level 2 automation but, after buying Silicon Valley startup Cruise Automation in 2016, <a href="http://uk.businessinsider.com/gm-cruise-fully-autonomous-electric-car-no-steering-wheel-2018-1">now plans</a> to launch the first mass production-ready Level 5 autonomy vehicle that drives completely on its own by 2019. The Cruise AV will have no steering wheel or pedals to allow a human to take over and be part of a large fleet of <a href="https://www.ft.com/content/cc88fc96-d620-11e7-8c9a-d9c0a5c8d5c9">driverless taxis</a> the company plans to operate in big cities. But crucially the company hasn’t yet <a href="https://www.recode.net/2018/1/12/16880570/general-motors-self-driving-cars-cruise-steering-wheel-nhtsa-fmvss">secured permission</a> to test the car on public roads.</p>
<h2>Waymo (Google)</h2>
<figure> <img src="https://storage.googleapis.com/sdc-prod/v1/press/waymo_first_ride.gif"><figcaption>Level 5 testing.</figcaption></figure>
<p>Founded as a special project in 2009, Waymo separated from Google (though they’re both owned by the same parent firm, Alphabet) in 2016. Though it has never made, sold or operated a car on a commercial basis, Waymo has created test vehicles that have clocked more than <a href="https://waymo.com/ontheroad/">4m miles</a> without human drivers as of November 2017. Waymo tested its Level 5 car, “Firefly”, between 2015 and 2017 but then decided to focus on hardware that could be installed in other manufacturers’ vehicles, starting with the <a href="https://www.cnbc.com/2018/01/29/waymo-orders-thousands-of-pacifica-minivans-in-push-to-open-ride-hailing-service.html">Chrysler Pacifica</a>. </p>
<h2>Uber</h2>
<p>The taxi-hailing app maker Uber has been testing autonomous cars on the streets of Pittsburgh <a href="http://uk.businessinsider.com/uber-self-driving-car-testing-in-pittsburgh-2016-2?r=US&IR=T">since 2016</a>, always with an employee behind the wheel ready to take over in case of a malfunction. After buying the self-driving truck company Otto in 2016 for a <a href="https://www.reuters.com/article/us-uber-tech-volvo-otto-idUSKCN10T1TR">reported US$680m</a>, Uber is now expanding its AI capabilities and plans to test NVDIA’s latest chips in Otto’s vehicles. It has also partnered with Volvo to create a <a href="https://www.ft.com/content/36f071b0-cd64-11e7-b781-794ce08b24dc">self-driving fleet</a> of cars, and with Toyota to co-create a <a href="https://www.recode.net/2018/1/8/16864916/uber-partnership-toyota-ces-volvo-daimler">ride-sharing autonomous vehicle</a>.</p>
<h2>Tesla</h2>
<p>The first major car manufacturer to come from Silicon Valley, Tesla was also the first to introduce Level 2 autopilot <a href="http://www.bbc.co.uk/news/technology-34535604">back in 2015</a>. The following year, it announced that all new Teslas would have the hardware for <a href="https://www.tesla.com/blog/all-tesla-cars-being-produced-now-have-full-self-driving-hardware">full autonomy</a>, meaning once the software is finished it can be deployed on existing cars with an instant upgrade. Some experts have challenged this approach, arguing that the company has merely added surround cameras to its production cars that aren’t as capable as the <a href="https://www.theverge.com/2017/10/24/16504038/tesla-autopilot-self-driving-update-elon-musk">laser-based sensing systems</a> that most other carmakers are using.</p>
<p>But the company has collected data from hundreds of thousands of cars, driving millions of miles across all terrains. So we shouldn’t dismiss the firm’s founder, Elon Musk, when he claims a Level 4 Tesla will drive from <a href="https://www.teslarati.com/tesla-autonomous-coast-to-coast-self-driving-trip/">LA to New York</a> without any human interference within the first half of 2018.</p>
<h2>Winners</h2>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/206746/original/file-20180216-131000-1tlem5l.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/206746/original/file-20180216-131000-1tlem5l.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/206746/original/file-20180216-131000-1tlem5l.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=376&fit=crop&dpr=1 600w, https://images.theconversation.com/files/206746/original/file-20180216-131000-1tlem5l.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=376&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/206746/original/file-20180216-131000-1tlem5l.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=376&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/206746/original/file-20180216-131000-1tlem5l.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=472&fit=crop&dpr=1 754w, https://images.theconversation.com/files/206746/original/file-20180216-131000-1tlem5l.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=472&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/206746/original/file-20180216-131000-1tlem5l.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=472&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Who’s leading the race?</span>
<span class="attribution"><a class="source" href="https://indd.adobe.com/view/a0bd4358-a51c-4a90-b300-e727272a6bba">IMD</a></span>
</figcaption>
</figure>
<p>At the moment, the disruptors like Tesla, Waymo and Uber seem to have the upper hand. While the traditional automakers are focusing on bringing Level 3 and 4 partial automation to market, the new companies are leapfrogging them by moving more directly towards Level 5 full automation. Waymo may have the least experience of dealing with consumers in this sector but it has already clocked up a huge amount of time testing some of the most advanced technology on public roads.</p>
<p>The incumbent carmakers are also focused on the difficult process of integrating new technology and business models into their existing manufacturing operations by buying up small companies. The challengers, on the other hand, are easily partnering with other big players including manufacturers to get the scale and expertise they need more quickly. </p>
<p>Tesla is building its own manufacturing capability but also collecting vast amounts of critical data that will enable it to more easily upgrade its cars when ready for full automation. In particular, Waymo’s experience, technology capability and ability to secure solid partnerships puts it at the head of the pack.</p><img src="https://counter.theconversation.com/content/91949/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael Wade does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Uber, Tesla and Waymo (Google) are leapfrogging traditional car makers like Ford, VW and General Motors when it comes to self-driving cars.Michael Wade, Professor of Innovation and Strategy, Cisco Chair in Digital Business Transformation, International Institute for Management Development (IMD)Licensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/846442018-02-14T11:36:44Z2018-02-14T11:36:44ZCorporate America needs to get back to thinking about more than just profits<figure><img src="https://images.theconversation.com/files/206059/original/file-20180212-58327-1ra6xen.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Larry Fink, right, shared a stage with several of the CEOs he urged to spend more time doing good.</span> <span class="attribution"><span class="source">Stuart Ramson/AP Images for The Women's Forum of New York</span></span></figcaption></figure><p>Should companies be doing more to make the world a better place? </p>
<p>The <a href="https://www.cnbc.com/2018/01/23/blackrocks-push-for-social-responsibility-shows-shift-in-companies.html">world’s biggest money manager thinks so</a>. He recently urged companies to contribute more to society if they want BlackRock as an investor. </p>
<p>“A company’s ability to manage environmental, social and governance matters demonstrates the leadership and good governance that is so essential to sustainable growth,” BlackRock chief Larry Fink <a href="https://www.blackrock.com/corporate/en-no/investor-relations/larry-fink-ceo-letter">wrote in his annual letter to CEOs</a>, “which is why we are increasingly integrating these issues into our investment process.”</p>
<p>Fink’s letter, seen by some as an <a href="https://www.forbes.com/sites/robertlenzner/2018/01/17/blackrocks-6-trillion-and-the-social-purpose-of-corporations/#69867df7a1e6">ultimatum</a> to “be good” or be excluded from BlackRock’s US$5.7 trillion in assets, symbolizes the tightrope companies must walk. On one side are those insisting companies focus on raising their share price in the short term – even if it means hurting the environment, workers and communities in the long run. On the other, a growing chorus are demanding that doing “good” (or at least, as Google might put it, <a href="http://time.com/4060575/alphabet-google-dont-be-evil/">not doing evil</a>) be their top priority and let profits follow. </p>
<p>This battle isn’t new. It was front and center in the 1970s as economist <a href="https://link.springer.com/chapter/10.1007/978-3-540-70818-6_14">Milton Friedman insisted</a> a corporation’s only obligation was to maximize profits for the shareholder. What is new is that the “forces of good” appear to be rising again. </p>
<p>Earlier in my career, in the 1980s, when companies were putting shareholder value first and profits were tight, I was a senior executive at General Motors during a period of wrenching downsizing. I convinced my bosses that doing a little good, even amid plant closings and layoffs, could make a real difference for hard-hit communities, and so we donated to local charities to mitigate some of the pain.</p>
<p>Years later, at the University of Michigan, my experience at GM helped me shape a graduate course on corporate social responsibility that examined the tension between Friedman’s view and the one expressed by Fink. </p>
<p>Today I believe that companies, awash in profits, can once again afford to make money while doing good. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/206284/original/file-20180213-44630-102lbm6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/206284/original/file-20180213-44630-102lbm6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=464&fit=crop&dpr=1 600w, https://images.theconversation.com/files/206284/original/file-20180213-44630-102lbm6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=464&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/206284/original/file-20180213-44630-102lbm6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=464&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/206284/original/file-20180213-44630-102lbm6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=584&fit=crop&dpr=1 754w, https://images.theconversation.com/files/206284/original/file-20180213-44630-102lbm6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=584&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/206284/original/file-20180213-44630-102lbm6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=584&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Companies didn’t do good just for the warm feelings it created. Newly empowered unions were among the forces that prodded companies such as Ford to do better by their workers.</span>
<span class="attribution"><span class="source">AP Photo</span></span>
</figcaption>
</figure>
<h2>The ‘good corporation’ is born</h2>
<p>A <a href="https://hbswk.hbs.edu/archive/new-world-new-rules-the-changing-role-of-the-american-corporation-new-world-new-rules-from-global-dominance-to-global-competition">lack of competition</a> is one of the main reasons U.S. companies became known for serving the public good in the decades after World War II. </p>
<p>Domestically, whole industries were dominated by just one or a handful of companies, such as AT&T in communications and the “Big Three” (GM, Ford and Chrysler) in automobiles. Meanwhile, Europe and Japan were struggling to recover from the massive destruction of years of war, while the rest of Asia had not yet developed enough to provide competition. </p>
<p>So American businesses became very profitable. At the same time, <a href="https://hbr.org/2013/04/why-the-decline-in-corporate-s">three pressures helped imbue them</a> with a sense of a public purpose: more powerful unions, partnerships between business and government forged during World War II and the need to raise capital from public markets to fuel expansion. </p>
<p>Yes, shareholders were to be rewarded, but it was also the case that <a href="https://itif.org/publications/2005/02/28/past-and-future-americas-economy-long-waves-innovation-drive-cycles-growth">big companies provided workers</a> with stable, well-paid jobs and secure pensions. This was back when Americans were <a href="https://hbswk.hbs.edu/archive/new-world-new-rules-the-changing-role-of-the-american-corporation-new-world-new-rules-from-global-dominance-to-global-competition">more likely to have one or two jobs for life</a>. </p>
<p>Communities and the public in general often benefited as companies financed public-interest research like <a href="https://www.bell-labs.com">AT&T’s Bell Labs</a> or developed products with broadly positive impacts like <a href="http://theinventors.org/library/inventors/blcrashtestdummies.htm">GM’s crash dummy</a>. </p>
<p>Put simply, profitability and a bit of prodding to serve a public purpose prompted U.S. companies to do good. </p>
<h2>The good company: RIP</h2>
<p>This stable world <a href="https://hbswk.hbs.edu/archive/new-world-new-rules-the-changing-role-of-the-american-corporation-new-world-new-rules-from-global-dominance-to-global-competition">began to unravel</a> during the 1970s in the aftermath of two oil shocks and the disintegration of the international monetary system that had been forged at Bretton Woods near the end of World War II. Growth slowed in virtually all industrialized nations. At home inflation and unemployment both worsened sharply. </p>
<p>At the same time, those “oligopolistic rents” in the ‘50s and '60s began to shrink steadily as U.S. companies faced increased competition in global markets after Europe and Japan recovered and rebuilt from wartime devastation and other Asian countries climbed the development ladder to the point where they, too, could create competitive companies and industries.</p>
<p>This made it harder for U.S. companies to meet the expectations of their many stakeholders. American businesses’ profit margins shrank, and companies were broken up, cutting short the previously safe seats of chief executives. The views of conservative economists like Friedman took hold, dictating that a corporation’s sole obligation should be to stockholders.</p>
<p>In 1993, journalist Robert Samuelson drove the point home by <a href="http://www.newsweek.com/rip-good-corporation-194642">publishing an “obituary”</a> in Newsweek headlined “R.I.P.: The Good Corporation,” concluding bleakly that, “"We thought all companies could marry efficiency and social responsibility. We were wrong.”</p>
<h2>Institutional investors strike back</h2>
<p>Well, turns out Samuelson may have called the death of the good company prematurely as activists and even investors like BlackRock bombard executives with demands that they bear more responsibility for social good. In fact, 60 percent of the companies that responded to a <a href="https://www.conference-board.org/retrievefile.cfm?filename=TCB-GT-V1N15-How-Corp-Speaks-Out-on-Social-Issues1.pdf&type=subsite">2016 survey of 92 major corporations</a> reported rising stakeholder pressure to get engaged on issues, from human rights to climate change. </p>
<p>While environmental and <a href="https://www.theguardian.com/sustainable-business/2015/feb/09/corporate-ngo-campaign-environment-climate-change">other more traditional activists</a> <a href="https://theconversation.com/when-did-che-guevara-become-ceo-the-roots-of-the-new-corporate-activism-64203">have had some impact</a>, it’s the major institutional investors that are the more effective conduit to force corporate change since <a href="https://www.finra.org/investors/institutional-investors-get-smart-about-smart-money">they manage nearly 70 percent</a> of all publicly listed U.S. securities. </p>
<p>For example on climate change, financial firms that collectively own more than $26 trillion in assets <a href="https://www.ft.com/content/6cfa6c50-dff9-11e7-a8a4-0a1e63a52f9c">have been pressuring</a> the world’s biggest emitters to cut emissions and disclose more of the risks. Their pressure has worked, as oil companies such as <a href="https://theconversation.com/exxon-mobils-about-face-on-climate-disclosure-89121">Exxon Mobil</a> and others have promised to do both.</p>
<p>For today’s CEOs, managing the delicate balancing act between these stakeholders and the equally powerful “activist” investors that primarily want a quick gain has perhaps never before been such a challenge. Billionaire investor Carl Icahn and other hedge fund managers <a href="https://www.theatlantic.com/business/archive/2016/11/activist-investors/506330/">have become more aggressive</a> pushing companies to maximize profits or face the consequences. Just ask Ford’s <a href="https://www.nytimes.com/2017/05/22/business/dealbook/ford-was-unprepared-for-investor-revolt-and-ceo-change.html">Mark Fields</a>, <a href="https://www.huffingtonpost.com/entry/you-dont-think-like-i-do-why-activist-investors-target_us_598b6debe4b08a4c247f27f4">DuPont’s Ellen Kullman</a> or the former CEOs at <a href="https://hbr.org/2017/10/why-ges-jeff-immelt-lost-his-job-disruption-and-activist-investors">General Electric</a>, <a href="https://www.bloomberg.com/gadfly/articles/2017-05-16/u-s-steel-stock-an-activist-could-galvanize-it">U.S. Steel</a>, <a href="https://www.washingtonpost.com/business/csx-lost-expensive-ceo----and-contenders-for-his-job-gadfly/2017/12/18/afab7714-e405-11e7-927a-e72eac1e73b6_story.html">CSX</a>, <a href="https://www.businessoffashion.com/articles/news-analysis/breaking-mickey-drexler-to-leave-j-crew">J.Crew</a> and <a href="http://www.businessinsider.com/yahoo-marissa-mayer-rise-and-fall-2017-6">Yahoo</a>, <a href="https://www.wsj.com/articles/the-ceos-who-didn't-deserve-the-boot-1499899231">all of whom</a> lost their jobs because they didn’t do what the activists wanted in 2017. </p>
<h2>Fat with profits</h2>
<p>I would argue, however, that today the choice between satisfying shareholders and serving a public service should be an easier one for most companies. That’s because the biggest companies in the U.S. are sitting on a <a href="https://www.bloomberg.com/news/articles/2017-09-21/corporate-america-has-amassed-a-record-amount-of-cash">record pile of cash</a> and making some of the <a href="https://fred.stlouisfed.org/series/CP">biggest profits on record</a>. </p>
<p>And that’s before they start to see the <a href="https://taxfoundation.org/final-tax-cuts-and-jobs-act-details-analysis/">tremendous gains</a> from the sharp reduction in the corporate tax rate from 35 percent to 21 percent. </p>
<p>In other words, companies can afford to do a little good and heed Larry Fink’s message. Some companies, including AT&T, Boeing and several large banks, <a href="http://www.businessinsider.com/trump-gop-tax-plan-companies-rush-to-announce-special-bonuses-pay-hikes-2017-12/#wells-fargo-4">have already announced</a> that they plan to use the windfall from the tax cut to invest more in their communities and <a href="https://www.nytimes.com/2018/01/22/us/politics/bonuses-tax-laws-trump-impact.html">give raises</a> or bonuses to workers. </p>
<p>It’s a good start to bringing the good corporation back from the dead.</p><img src="https://counter.theconversation.com/content/84644/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Marina v. N. Whitman does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Companies are flush with cash and profits and soon will have even more once the tax cut takes effect. So they can afford to be good again.Marina v. N. Whitman, Professor of Business Administration and Public Policy, University of MichiganLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/839322017-09-14T22:34:30Z2017-09-14T22:34:30ZPizza delivery by robot cars has arrived with big questions<figure><img src="https://images.theconversation.com/files/186069/original/file-20170914-9029-zd94o5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Ford and Dominos have teamed up to deliver pizza by driverless cars in a public test in Michigan. </span> <span class="attribution"><span class="source">Handout</span></span></figcaption></figure><p>People in Ann Arbor, Mich., are experiencing <a href="http://www.freep.com/story/money/cars/ford/2017/08/29/dominos-ford-self-driving-cars-ann-arbor/597329001/">home food-delivery without a driver.</a> </p>
<p>Domino’s Pizza and Ford have paired up in a pilot project that will look at how humans interact with driverless food-delivery cars. Ann Arbor is home to thousands of students, an age group not likely to view this new technology with suspicion. But it could turn into a <a href="https://www.wired.com/story/ford-self-driving-pizza-delivery-dominos/">fascinating social experiment</a> for the food industry.</p>
<p>Customers ordering through Domino’s will be able to track their delivery in real time by using a downloadable app on their smartphones. They receive a text message that gives them a four-digit code to use once the car arrives. </p>
<p>But it’s the final portion of the drive that could prove unpredictable for Domino’s. The driverless delivery vehicle could end up in the driveway, or near the curb. Customers may not want to go out to the car if it’s raining or snowing. Domino’s USA president Russell Weiner says these challenges are a major part of the experiment.</p>
<p>“We’re interested to learn what people think about this type of delivery,” <a href="https://www.theverge.com/2017/8/29/16213544/dominos-ford-pizza-self-driving-car">he said in a recent statement.</a> “The majority of our questions are about the last 50 feet of the delivery experience.”</p>
<h2>No tipping attractive to students</h2>
<p>Human behaviour can be difficult to predict at the best of times, especially when dealing with food. This will be the first time a food service or retail company has used driverless cars to interact with actual consumers.</p>
<p>The experience will certainly offer convenience for customers in a variety of ways. With the app, expectations will be managed, and quality of service — Domino’s key strategic focus — will be more consistent. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/186072/original/file-20170914-8975-1mw0trs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/186072/original/file-20170914-8975-1mw0trs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/186072/original/file-20170914-8975-1mw0trs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=429&fit=crop&dpr=1 600w, https://images.theconversation.com/files/186072/original/file-20170914-8975-1mw0trs.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=429&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/186072/original/file-20170914-8975-1mw0trs.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=429&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/186072/original/file-20170914-8975-1mw0trs.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=539&fit=crop&dpr=1 754w, https://images.theconversation.com/files/186072/original/file-20170914-8975-1mw0trs.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=539&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/186072/original/file-20170914-8975-1mw0trs.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=539&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">People can track their driverless pizza delivery with a smartphone app.</span>
<span class="attribution"><span class="source">Handout</span></span>
</figcaption>
</figure>
<p>That’s because delivery times will be streamlined, fewer pizzas will be damaged in handling mishaps and the customer won’t have to deal with tips — at least not for now. No tipping will reduce price points, making delivered pizzas more affordable. For cash-strapped students, that’s key.</p>
<p>For Domino’s, the business case for a driverless fleet is unquestionably strong. Lower insurance costs, lower fuel consumption, consistent delivery times, no thefts, controllable temperatures to keep food safe for customers so therefore less waste — the list goes on. </p>
<p>Domino’s delivers more than a billion pizzas annually, and has more than 100,000 drivers. Running a driverless fleet could save the company millions. </p>
<p>Embracing the concept of <a href="https://www.recode.net/2017/1/18/14306674/starship-robot-food-delivery-washington-dc-silicon-valley">home food deliveries without having to hire drivers</a> cannot come soon enough for the food service industry, which is looking for ways to increase revenue beyond their regular foot traffic. </p>
<p>Restaurant operators won’t need to deal with the headache of hiring the right people for delivery, and delivery is an important means of expanding the brand outside their facilities.</p>
<h2>Home delivery can be dicey</h2>
<p>Most of us who have ordered home-delivered food have had mixed experiences. </p>
<p>Some drivers make convicted felons look like choir boys, causing customers to be hesitant about the food. But home delivery is no walk in the park for the drivers, either. </p>
<p><a href="https://www.thrillist.com/eat/nation/pizza-delivery-horror-stories-delivery-drivers-reveal-naked-truths">Drivers in the U.S. have told</a> of finding themselves in unbelievably <a href="http://mashable.com/2017/08/03/deliveroo-awkward-experiences/#6alVgiJeHmqp">awkward situations,</a> including being tipped with weed, being asked to eat with the customer to offer company, showing up during domestic disputes and being greeted by a naked customer as the front door opens.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/186073/original/file-20170914-8975-qts1zp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/186073/original/file-20170914-8975-qts1zp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/186073/original/file-20170914-8975-qts1zp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/186073/original/file-20170914-8975-qts1zp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/186073/original/file-20170914-8975-qts1zp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/186073/original/file-20170914-8975-qts1zp.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/186073/original/file-20170914-8975-qts1zp.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/186073/original/file-20170914-8975-qts1zp.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Domino’s and Ford are testing whether people will go to the driveway or curb to get their pizza.</span>
<span class="attribution"><span class="source">Handout</span></span>
</figcaption>
</figure>
<p>There’s an endless list of unpleasant scenarios that would discourage anyone from contemplating home food delivery as a full-time job or even part-time job.</p>
<p>A humanless home food delivery experience, on the other hand, also offers a unique perspective on the market currency of convenience. </p>
<p>For years, price has been king. In study after study, price has trumped any other feature consumers were looking for in food service. </p>
<h2>Consumers crave convenience and privacy</h2>
<p>Younger generations, however, have a different take on convenience. Price remains a significant factor for higher revenues of course, but the constant quest for more convenience on both sides of the food continuum is now reaching the point of obsession. </p>
<p>Getting rid of delivery personnel is now a realistic approach. With driverless home food delivery, one could potentially get food delivered without seeing a single human being — a frightening thought for some, a reassuring one for others. </p>
<p>In the future, consumers could binge on their favourite junk food several times a week without the embarrassment of seeing the same delivery person.</p>
<p>No matter how you look at it, Domino’s and Ford are onto something. After all, driverless technologies are consistent with what Domino’s is all about. </p>
<p>The company has been successful over the years with its mastery of home delivery. Joining forces with Ford could make the company even more efficient.</p>
<p>Nonetheless not all of us needs Domino’s to get our food fix. Divorcing the human aspect from food is simply impossible for many food service companies — thousands of them, in fact. And thank goodness for that.</p><img src="https://counter.theconversation.com/content/83932/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sylvain Charlebois does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Domino’s Pizza and Ford have teamed up to offer pizza delivery via driverless cars in Michigan. Is it the way of the future?Sylvain Charlebois, Professor in Food Distribution and Policy, Dalhousie UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/725922017-02-19T08:09:24Z2017-02-19T08:09:24ZFord still can repair its brand in South Africa but it needs to act quickly<figure><img src="https://images.theconversation.com/files/156955/original/image-20170215-27406-ms2eoz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The Ford Kuga brand has been blemished in South Africa by its propensity to burst into flames which has caused a recall of over 4000 cars.
</span> <span class="attribution"><span class="source">REUTERS/Maxim Shemetov</span></span></figcaption></figure><p>There can be no doubt that the Ford Kuga brand in South Africa is in trouble following the model’s propensity to <a href="https://businesstech.co.za/news/general/150371/another-ford-kuga-bursts-into-flames-the-ninth-car-so-far-in-2017/">burst into flames</a>. Ford South Africa has not helped the situation with its lethargic reaction to what’s now a major crisis. </p>
<p>Some considerable damage has been done but Ford South African can still make amends. It will need to move with lighting speed because the window of opportunity to fix the public relations disaster, won’t stay open for long.</p>
<p>After more than a year of largely avoiding the issue Ford South Africa was finally compelled to announce a recall of more than <a href="http://www.biznews.com/motoring/2017/01/17/ford-recall-kuga-fires/">4000</a> Kuga 1.6-litre models in January 2017. This came after 51 Kugas burst into flames in South Africa as well as a couple in neighbouring countries. <a href="http://www.timeslive.co.za/local/2016/12/08/Burnt-to-death-in-a-Ford-Kuga-what-really-happened">One person lost his life</a>. </p>
<p>It didn’t help that the recall only came after the company was put under pressure by the <a href="http://www.702.co.za/articles/238948/consumer-commission-to-make-a-decision-on-the-burning-ford-kuga">National Consumer Commission</a>. Up until that point Ford South Africa had failed to produce a satisfactory response and was facing <a href="http://www.timeslive.co.za/consumerlive/2017/02/03/Ford-Kuga-sales-drop-by-50">increasing criticism</a>.</p>
<p>The company’s reputation has suffered and its brand is reeling. While it’s too soon to calculate the financial cost, one thing is certain; it’s not too late for Ford South Africa to embark on a massive PR campaign to rebuild trust with consumers and mitigate the damage done to its image.</p>
<h2>Consumers are forgiving</h2>
<p>Consumers are remarkably forgiving. Take the example of Volkswagen. In 2016 the German car giant suffered a major blow to its reputation when the company was found to be cheating in <a href="http://www.bbc.com/news/business-34324772">emission tests</a>. Volkswagen was found to have made its cars appear <a href="https://www.washingtonpost.com/news/the-switch/wp/2015/09/22/the-tech-behind-how-volkswagen-tricked-emissions-tests/">more environmentally friendly</a> than they were. The defect affected 11 million cars worldwide. </p>
<p>Yet a year later it had bounced back to regain its position as the <a href="http://www.forbes.com/forbes/welcome/?toURL=http://www.forbes.com/sites/bertelschmitt/2017/01/30/its-official-volkswagen-worlds-largest-automaker-2016-or-maybe-toyota/&refURL=https://www.google.co.za/&referrer=https://www.google.co.za/">world’s biggest car manufacturer</a>, selling more vehicles than Toyota in 2016.</p>
<p>Volkswagen had to deal with <a href="http://www.cnbc.com/2016/12/20/volkswagen-strikes-deal-to-address-80000-polluting-diesel-vehicles-judge-says.html">car recalls</a>, fines prosecutions and settlements. But it was still able to record an overall 3.8% rise in vehicle sales. </p>
<p>Over the years, there have been many products tainted by scandal and <a href="https://www.bloomberg.com/news/photo-essays/2013-01-17/the-most-expensive-product-recalls">worldwide recall</a>. Yet companies have managed the crises, sometimes emerging stronger.</p>
<p>The most celebrated case is multinational <a href="http://www.biznews.com/thought-leaders/2013/11/15/five-key-lessons-from-tylenol-crisis/">Johnson & Johnson</a>. </p>
<h2>How Johnson & Johnson did it</h2>
<p>The company spent millions of dollars recalling the painkilling medication Tylenol http://time.com/3423136/tylenol-deaths-1982/ in the US in 1982 after <a href="http://www.pbs.org/newshour/updates/tylenol-murders-1982/">seven people died</a> following cases of potassium cyanide poisoning. It was revealed that the pills had been tampered with and new tamper proof holders had to be made for the medication. The company destroyed 31 million capsules valued at <a href="http://www.ft.com/cms/s/1/01e2330c-faa8-11d8-9a71-00000e2511c8.html?ft_site=falcon&desktop=true#axzz4YkQqqDPb">$100 million</a>.</p>
<p>The way in which Johnson & Johnson dealt with the Tylenol crisis is one of the most widely taught case studies of <a href="http://mallenbaker.net/article/clear-reflection/johnson-johnson-and-tylenol-crisis-management-case-study">effective crises management</a>. </p>
<p>The reasons are quite simple: Johnson & Johnson acted swiftly and decisively, turning its crisis into an opportunity. The company chairman appeared in commercials and did more than 50 interviews. When the new packaging for the medication had been designed he held a <a href="http://www.aerobiologicalengineering.com/wxk116/TylenolMurders/crisis.html">press conference</a> to introduce it. </p>
<p>But the crisis plan Johnson & Johnson’s put into action is widely believed to have saved the day. Tylenol’s <a href="http://mallenbaker.net/article/clear-reflection/johnson-johnson-and-tylenol-crisis-management-case-study">market share went up</a> from 33% before the crisis to 48% days after the relaunch of the medication. </p>
<p>Ford could follow in Johnson & Johnson’s footsteps with an action plan designed along the same lines.</p>
<h2>Ford needs to launch their own crisis plan</h2>
<p>The main action points would be the following. </p>
<p>It’s imperative that the company puts together some kind of war room or operational team to drive a public relations strategy around the Ford Kuga incidents. They need a marketing plan – not to sell more cars, but to restore consumer confidence. They need to appear to be open and honest and more concerned about customers than about the legal implications of the situation. Customer needs should be foregrounded.</p>
<p>Top of their action plan should be the hiring or seconding of a dedicated person to run a nationwide campaign and interact with the public. In addition, they should consider setting up a hotline where people can call in with their concerns and where customers can air their grievances rather than turning to public grievance platforms like <a href="https://www.hellopeter.com/">hello peter</a>.</p>
<p>Ford has provided a customer service number that people can call for information and assistance. But the goodwill of this has been offset by some Ford dealers <a href="https://businesstech.co.za/news/motoring/151901/ford-kuga-owners-turned-away-by-dealers-when-trying-to-trade-in-their-cars-report/">refusing to help</a> customers as instructed. The company needs to consider setting up dedicated centres where consumers can go with their cars for help and advice.</p>
<p>But it needs to act quickly. The window of opportunity is closing and it’s operating in a difficult economic environment. The latest car sales figures show a 15.3% year-on-year drop in new car sales in South Africa and 2017 is also expected to be tough. </p>
<p>Ford cannot afford to let its reputation be tarnished any further. It’s time to stop the Ford Kuga bleed and to make the most of the small window of opportunity for Ford South Africa to repair its name and reputation.</p><img src="https://counter.theconversation.com/content/72592/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nothing to disclose </span></em></p><p class="fine-print"><em><span>Mlenga Jere does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Some considerable damage has been done to the Ford brand as a result of the Kuga fires but Ford South Africa can still make amends.Mlenga Jere, Associate Professor of Marketing, University of Cape TownRaymond van Niekerk, Adjunct Professor, with expertise in Branding, Marketing, Business Strategy, Corporate Citizenship and Social Responsibility, University of Cape TownLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/719092017-01-29T16:41:10Z2017-01-29T16:41:10ZFord South Africa reacted badly in a crisis: it doesn’t have to be that way<figure><img src="https://images.theconversation.com/files/154389/original/image-20170126-30413-8a7r9l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption"></span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>In December 2015, <a href="http://www.timeslive.co.za/local/2017/01/24/Ford-broke-law-by-not-informing-consumer-commission-of-Kuga-death-police">Reshall Jimmy</a> burnt to death in his 1.6-litre EcoBoost Ford Kuga in South Africa. Since then a recorded <a href="http://www.timeslive.co.za/local/2017/01/19/Another-Kuga-burns1">51 Kugas</a> have caught alight across the country, and two more in Swaziland and Botswana. The Jimmy family recently announced they intend to bring a class <a href="http://ewn.co.za/2017/01/17/family-of-kuga-fire-victim-to-bring-class-action-suit-against-ford%20despite%20Ford%20denying%20his%20death%20was%20linked%20to%20the%20fault%20http://www.huffingtonpost.co.za/2017/01/18/ford-insists-that-reshall-jimmys-fiery-death-was-not-linked-to/">action suit</a> against Ford.</p>
<p>Yet it was more than a year after Jimmy’s death that Ford <a href="http://www.iol.co.za/motoring/industry-news/ford-sa-to-finally-recall-fiery-kugas-7418489">recalled</a> 4,556 1.6-litre EcoBoost Kugas in South Africa and more in other southern African countries. Ford took the decision only after the <a href="http://www.timeslive.co.za/local/2017/01/24/Ford-broke-law-by-not-informing-consumer-commission-of-Kuga-death-police">intervention</a> of the <a href="http://www.thencc.gov.za/">National Consumer Commission</a>, a statutory body designed to protect consumers in South Africa. At a joint media briefing, Commissioner Ebrahim Mohamed stated that Section 60 of the Consumer Protection Act had been invoked to compel Ford into corrective action.</p>
<p>When confronted with the possibility of having to decide on a recall, manufacturers can respond in one of four ways: </p>
<ul>
<li><p>denial, </p></li>
<li><p>involuntary recall, </p></li>
<li><p>voluntary recall and </p></li>
<li><p>super effort. </p></li>
</ul>
<p>That Ford only acted after the consumer commission got involved suggests that it was in denial. It required a push to at least get to the involuntary recall phase and only after overwhelming <a href="http://www.702.co.za/articles/239364/ford-kuga-owner-says-dealership-don-t-provide-courtesy-cars">negative publicity</a> and memes that spread around social media.</p>
<p>The Ford Kuga case adds to a growing list of similar experiences in the auto industry which seems incapable of learning from its own history. Ford and Toyota have both been involved in messy voluntary recalls where both companies took a long time to act. Evidence of safety issues with the <a href="https://philosophia.uncg.edu/phi361-metivier/module-2-why-does-business-need-ethics/case-the-ford-pinto/">Ford Pinto’s</a> fuel tank first emerged in 1973. It took another five years – and a number of explosions, deaths and court cases – for Ford to recall 1.5 million Pintos built between 1970 and 1976.</p>
<p>Toyota faced complaints about the <a href="https://www.washingtonpost.com/business/economy/toyota-reaches-12-billion-settlement-to-end-criminal-probe/2014/03/19/5738a3c4-af69-11e3-9627-c65021d6d572_story.html?utm_term=.3af43d08c2cc">sticky accelerators</a> in 2002. It took the company eight years to <a href="http://www.nytimes.com/2009/11/26/business/26toyota.html">recall</a> 7.7 million vehicles after a number of crashes and <a href="http://www.nytimes.com/2010/09/19/business/19autos.html">deaths</a>.</p>
<p>Empirical research into the effect of recalls confirms what rational people know to be true: they’re a good idea. Laval University scholars, Nizar Souiden and Frank Ponsen, <a href="http://www.emeraldinsight.com/doi/full/10.1108/JOCM-04-2015-0063">note</a> that</p>
<blockquote>
<p>Voluntary recalls and improvement campaigns can have a positive and significant impact on the manufacturer’s image.</p>
</blockquote>
<p>On top of this, it’s also <a href="https://faculty.fuqua.duke.edu/%7Emoorman/Marketing-Strategy-Seminar-2015/Session%206/Kalaignanam,%20Kurshwaha,%20and%20Eilert.pdf">self-evidently true</a> that product recalls can reduce the number of injuries and recalls in the future.</p>
<p>It’s therefore clear that the sooner a company reacts to a problem, the less of a negative impact there will be on customers, the brand and the bottom line. And, in addition, that if it makes a super effort to address the problem it can even build brand and customer loyalty like never before.</p>
<p>This is vital in the business of business because, as <a href="https://studentvillage.sv.co.za/careers-news/careers-vega-to-launch-new-degree">Gordon Cook</a>, co-founder of preeminent marketing school Vega, bluntly puts it: “Brands cause business”.</p>
<p>So if the evidence supports the contention that the survival of a business depends on acting quickly in a time of crisis, including instituting swift recalls, why should there be any reason to delay? </p>
<h2>Why firms freeze</h2>
<p>The answer lies partially in the realm of <a href="http://dx.doi.org/10.1108/JOCM-04-2015-0063">complexity theory</a> – that in the midst of a crisis many factors are at play, all of which have the potential to muddy the analysis and to pull the organisation in different directions. This often results in ill-conceived, naive and ineffective responses. </p>
<p>In the case of Ford, some commentators have even gone so far to say that there was <a href="http://www.timeslive.co.za/consumerlive/2016/12/22/Ford-confirms-Kuga-fires-confined-to-single-model%E2%80%9A-concedes-engine-overheating-a-possible-cause">no response</a> at all. </p>
<p>But it doesn’t have to be this way. There’s another side to <a href="http://dx.doi.org/10.1108/JOCM-04-2015-0063">complexity theory</a> that holds that organisations with two critical attributes can weather most storms. These are:</p>
<ul>
<li><p>a strong commitment to doing the right thing for stakeholders, and </p></li>
<li><p>a high readiness are most likely to effectively respond to crises. </p></li>
</ul>
<p>But organisations need both. If they’re lacking in one they are likely to have ineffective responses which in turn will lead to post-crisis losses. This could be in both their competitive edge, including market share, as well as financially if they face penalties or their share price dives.</p>
<p>Singapore Airlines handling of <a href="http://thinkbusiness.nus.edu/article/sia-crisis-response/">Flight SQ006 crash</a> is often cited as a model example of doing the right thing.</p>
<h2>Rebuilding confidence takes time</h2>
<p>The Kuga case is a classic example of being in the news for all the wrong reasons. And only time will tell if it will be able to bounce back from this as Toyota appears to have done. </p>
<p>It will need to rebuild brand equity. This will take time and will involve a great deal more than settling claims. And customers aren’t their only constituency. They must also restore faith with other stakeholders such as the dealer network. The company faces a hard journey ahead. </p>
<p>In the meantime, the Kuga fire story will continue to dominate the headlines. These will only cease being negative and become positive if Ford South Africa truly embraces a stakeholder inclusive approach and views events from a moral perspective. Debates on brand value will come across as off-centre if legitimate and reasonable demands to right a wrong are not addressed.</p><img src="https://counter.theconversation.com/content/71909/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Owen Skae does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The behavior of Ford South Africa around the fires that have engulfed its 1.6-litre EcoBoost Kugas model is a classic case of how not to handle a corporate crisis.Owen Skae, Associate Professor and Director of Rhodes Business School, Rhodes UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/718922017-01-26T09:39:48Z2017-01-26T09:39:48ZFord South Africa failed to protect its reputation. What it should have done<figure><img src="https://images.theconversation.com/files/154268/original/image-20170125-23854-1n6dkh4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Reuters/Bogdan Cristel</span></span></figcaption></figure><p>Ford South Africa has suffered huge damage to its reputation thanks to its poor handling of a crisis involving some of its Kuga cars.</p>
<p>The global car manufacturer’s local operation has been forced to <a href="http://www.iol.co.za/motoring/industry-news/ford-sa-to-finally-recall-fiery-kugas-7418489">recall</a> more than 4 000 Kuga Ecoboost 1.6 litre models manufactured between December 2012 and February 2014. Ford South Africa’s CEO Jeff Nemeth <a href="http://www.iol.co.za/motoring/industry-news/ford-sa-to-finally-recall-fiery-kugas-7418489">announced</a> the recall after over 40 cases of engine fires had been reported. To aggravate the situation, one <a href="http://ewn.co.za/2017/01/13/kuga-fire-victim-s-family-yet-to-hear-from-ford">death</a> allegedly resulted from a Ford Kuga exploding in December 2015. </p>
<p>There can be little doubt that the <a href="http://www.timeslive.co.za/local/2017/01/09/Resale-value-of-Ford-Kuga-plummets-following-fires-fiasco1">Ford Kuga crisis</a> has hurt the company’s reputation, and could even prove fatal to its South African operations. Ford South Africa has been attacked viciously in the media and radio stations have been inundated with calls from <a href="http://www.702.co.za/articles/239364/ford-kuga-owner-says-dealership-don-t-provide-courtesy-cars">angry customers</a> some of whom have resorted to legal action against the company.</p>
<p>Ford South Africa has clearly made some elementary <a href="https://www.infomart.com/4-reputation-management-mistakes-you-cant-afford-to-make/">mistakes</a> in managing the crisis. Companies today recognise the importance of a strong corporate reputation as a critical strategic asset, which translates into a source of competitive advantage. This is why a company’s reputation has become a top priority.</p>
<p>One reason why reputation has been put in the spotlight so much is the huge <a href="http://www.wsj.com/articles/SB1023409436545200">corporate reputational losses</a> in the last few decades. These include BP’s oil <a href="http://edition.cnn.com/2015/04/14/us/gulf-oil-spill-unknowns/">spillage disaster</a> and number of car manufacturers.</p>
<p>Toyota has had to <a href="http://www.forbes.com/forbes/welcome/?toURL=http://www.forbes.com/sites/kbrauer/2014/07/01/why-massive-safety-recall-hurt-toyota-more-than-gm/&refURL=https://www.google.co.za/&referrer=https://www.google.co.za/">recall</a> millions of vehicles worldwide because of various mechanical issues. And in 2015 Volkswagen’s reputation took a <a href="https://www.bloomberg.com/news/articles/2015-09-21/volkswagen-drops-15-after-admitting-u-s-diesel-emissions-cheat">serious knock </a> after it was found to have manipulated its diesel vehicles’ software to pass environmental tests. <a href="http://www.reuters.com/article/us-gm-recall-trial-preview-idUSKCN0UP0G620160111">General Motors</a> also suffered reputational damage because of faulty ignition issues resulting in recalls. </p>
<p>So what did Ford South Africa get wrong? What should it have done to protect both its customers and its reputation?</p>
<h2>Proper reputation management</h2>
<p>Proper crisis management is crucial for a company. This is of course particularly true when a bad story breaks and a full-blown crisis is at hand. But in fact crisis management is only effective if there’s already a reputation management process in place. This should be done during the “good times”. </p>
<p>Also, a member of the executive should have been assigned responsibility for the company’s reputation. If this is done properly managing a crisis is always easier as goodwill would already have been built over time.</p>
<p>Once a crisis hits, it is extremely important to act immediately. Three things should be done:</p>
<ul>
<li><p>the company must acknowledge the problem immediately,</p></li>
<li><p>it must engage empathetically with customers, and </p></li>
<li><p>it must answer questions from the media as honestly as possible.</p></li>
<li><p>It then needs to plan its next steps – in order of priority.</p></li>
</ul>
<p>It seems as if some companies still think that they can keep facts away from the outside world. They think they have time to fix things on their own before deciding to come out in the open. In the old days, companies had the luxury to hide. But this was before the immediacy of the internet and social media arrived.</p>
<h2>A question of trust</h2>
<p>Reputations are built on trust. But in recent years the business world has been shaken by economic disruption, unethical and fraudulent practices, bad publicity and <a href="https://www.foreignaffairs.com/reviews/review-essay/2016-06-13/capitalism-crisis">cracks in capitalism’s foundations</a>. People have lost their trust in companies. A climate of anti-business activism, skepticism, pessimism, blame and cynicism has emerged.</p>
<p>So companies’ reputations come under attack more easily. This is fuelled by the media, the internet, social media and pressure groups. Customers are increasingly interested in the way large companies behave and have become more vocal in calling for transparency, accountability and social and environmental responsiveness. </p>
<p>Companies’ reputations <a href="http://www.leader.co.za/article.aspx?s=6&f=1&a=5871">are built more on emotional factors</a> like trust, pride, admiration, liking and a good feeling than on rational factors such as corporate performance or the quality of products and services. </p>
<p>Clients and customers are applying a whole new set of criteria before buying products and services. These include ethics, values and stakeholder democracy. Buying decisions and support of companies <a href="http://customerthink.com/5-factors-that-directly-influence-customer-purchase-decisions/">are influenced</a> by how companies themselves are perceived and <a href="http://www.marketingcharts.com/traditional/corporate-reputation-affects-consumer-purchase-decisions-20826/">to a lesser degree</a> by the perceptions of the companies’ products or services.</p>
<p>The media plays an important role in spreading the word about a company’s reputation. History has shown that companies with favourable reputations are given the “benefit of the doubt” when faced with a sudden crisis.</p>
<p>But reputation isn’t formed just by a company’s PR and branding efforts. Most people form their impressions based on limited information or others’ opinions. Factual information is not enough for customers to form an opinion. </p>
<p>To acquire a favourable brand reputation companies should make sure that they pay attention to a range of dimensions. The most important is that they should try and build a strong emotional bond with their customers and other stakeholders. They can do this by ensuring that the company is admired, trusted and respected and that customers are proud to be associated with it and have a general “good feeling” about it.</p>
<h2>Tangible issues matter too</h2>
<p>Looking after the company’s more tangible issues also plays a role. Companies should pay attention to:</p>
<ul>
<li><p>corporate social responsibility – including social engagement and being environmentally friendly, </p></li>
<li><p>a strong corporate performance. This includes strong and visionary leadership, sound financial decisions, strong financial performance, and solid market leadership, </p></li>
<li><p>being a good employer, and </p></li>
<li><p>making sure that customers have a good service experience – both in physical and online spaces. </p></li>
</ul>
<p>But given the scale of the anger and mistrust directed at Ford South Africa it’s clear that even if it had ticked all these boxes, its management of the current crisis has left a lot to be desired. Its reputation is so badly damaged that even a massive PR campaign won’t help it much at this stage. </p>
<p>What is essential, even at this late stage, is direct, honest and authentic communication with customers as well as stakeholders such as dealers, employees, the media and the National Consumer Commission. In particular, customers who have lost confidence in Ford and its products should be treated extremely well and be reassured. The company needs to give people a reason to trust it again.</p><img src="https://counter.theconversation.com/content/71892/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Marietjie Theron-Wepener does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Ford South Africa has made some elementary mistakes in handling the crisis caused by fire hazards in its Kuga Ecoboost 1.6 litre model.Marietjie Theron-Wepener, Doctor of business studies, Stellenbosch UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/707192017-01-03T12:06:10Z2017-01-03T12:06:10ZWhy the rise of wearable tech to monitor employees is worrying<figure><img src="https://images.theconversation.com/files/151565/original/image-20170103-18656-1p8otmh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">shutterstock.com</span></span></figcaption></figure><p>An increasing number of companies are beginning to digitally monitor their employees. While employers have always scrutinised their workers’ performance, the rise of wearable technology to keep tabs has more of a dystopian edge to it. Monitoring has become easier, more intrusive and is not just limited to the workplace – it’s 24/7. </p>
<p><a href="http://www.forbes.com/sites/paullamkin/2016/02/17/wearable-tech-market-to-be-worth-34-billion-by-2020/#bde31e73fe38">Devices</a> such as Fitbit, Nike+ FuelBand and Jawbone UP, which can record information related to health, fitness, sleep quality, fatigue levels and location, are now being used by employers who integrate wearable devices into employee wellness programmes.</p>
<p>One of the first was BP America, which introduced Fitbit bracelets in 2013. In 2015 at least 24,500 BP’s employees <a href="http://www.bbc.co.uk/news/business-33261116">were using them</a> and more and more US employers have followed suit. For instance, the same year, Vista Staffing Solutions, a healthcare recruitment agency, started a weight-loss programme using Fitbits and wifi-enabled bathroom scales. Appirio, a consulting company, started handing out Fitbits to employees in 2014. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/151567/original/image-20170103-18668-yxqrtn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/151567/original/image-20170103-18668-yxqrtn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/151567/original/image-20170103-18668-yxqrtn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/151567/original/image-20170103-18668-yxqrtn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/151567/original/image-20170103-18668-yxqrtn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/151567/original/image-20170103-18668-yxqrtn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/151567/original/image-20170103-18668-yxqrtn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Always on the clock.</span>
<span class="attribution"><span class="source">shutterstock.com</span></span>
</figcaption>
</figure>
<p>In the UK similar projects are <a href="https://www.theguardian.com/sustainable-business/2015/sep/30/wearables-companies-smart-devices-health-wellbeing-privacy">under consideration by major employers</a>. And this trend will only intensify in the years to come. By 2018, <a href="https://www.abiresearch.com/press/corporate-wellness-is-a-13-million-unit-wearable-w/">estimates suggest</a> that more than 13m of these devices will be part of worker wellness schemes. Some <a href="http://www.gartner.com/newsroom/id/3143718">analysts say</a> that by the same year, at least 2m employees worldwide will be required to wear health-and-fitness trackers as a condition of employment.</p>
<p>According to some, this is a positive development. Chris Brauer, an academic at Goldsmiths, University of London, <a href="https://www.facebook.com/wearablesatwork/videos/383034568560288/">argues</a> that corporate managers will now be comparable to football managers. They will be equipped with a dashboard of employee performance trajectories, as well as their fatigue and sleep levels. They will be able to pick only the fittest employees for important business meetings, presentations, or negotiations. </p>
<p>It seems, however, that such optimism overlooks important negative and potentially dangerous social consequences of using this kind of technology. History here offers a word of warning.</p>
<h2>Historical precedent</h2>
<p>The monitoring of workers’ health outside the workplace was once attempted by the <a href="https://www.thehenryford.org/collections-and-research/digital-resources/popular-topics/sociological-department">Ford Motor Company</a>. When Ford introduced a moving assembly line in 1913 – a revolutionary innovation that enabled complete control over the pace of work – the increase in productivity was dramatic. But so was the rise in worker turnover. In 1913, every time the company wanted to add 100 men to its factory personnel, it was necessary to hire 963, as workers struggled to keep up with the pace and left shortly after being recruited.</p>
<p>Ford’s solution to this problem was to double wages. In 1914, the introduction of a US$5 a day wage was announced, which immediately led to a decline in worker turnover. But high wages <a href="http://www.uniforlocal200.org/OLDER%2520DOCUMENTS/HELPFUL%2520HINTS%2520FOR%2520FORD%2520EMPLOYES%2520-%2520HANDBOOK.pdf">came with a condition</a>: the adoption of healthy and moral lifestyles. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/151569/original/image-20170103-18659-17fhxec.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/151569/original/image-20170103-18659-17fhxec.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=391&fit=crop&dpr=1 600w, https://images.theconversation.com/files/151569/original/image-20170103-18659-17fhxec.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=391&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/151569/original/image-20170103-18659-17fhxec.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=391&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/151569/original/image-20170103-18659-17fhxec.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=491&fit=crop&dpr=1 754w, https://images.theconversation.com/files/151569/original/image-20170103-18659-17fhxec.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=491&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/151569/original/image-20170103-18659-17fhxec.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=491&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Ford’s assembly line revolutionised work.</span>
<span class="attribution"><span class="source">OVKNHR / Shutterstock.com</span></span>
</figcaption>
</figure>
<p>The company set up a sociology department to monitor workers’ – and their families’ – compliance with its standards. Investigators would make unannounced calls upon employees and their neighbours to gather information on living conditions and lifestyles. Those that were deemed insufficiently healthy or morally right were immediately disqualified from the US$5 wage level.</p>
<p>Analysing Ford’s policies, Italian political philosopher and revolutionary <a href="https://archive.org/stream/AntonioGramsciSelectionsFromThePrisonNotebooks/Antonio-Gramsci-Selections-from-the-Prison-Notebooks_djvu.txt">Antonio Gramsci</a> coined the term “Fordism” for this social phenomenon. It signalled fundamental changes to labour, which became much more intense after automation. Monitoring workers’ private lives to control their health, Gramsci argued, was necessary to preserve “a certain psycho-physical equilibrium which prevents the physiological collapse of the worker, exhausted by the new method of production”.</p>
<h2>Parallels today</h2>
<p>Today, we are faced with another great change to how work is done. To begin with, the “<a href="http://eml.berkeley.edu/%7Ewebfac/eichengreen/e183_sp07/great_doub.pdf">great doubling</a>” of the global labour force has led to the increase in competition between workers around the world. This has resulted in a deterioration of working and employment conditions, the growth of informal and precarious labour, and the intensification of exploitation in the West. </p>
<p>So there has been a significant increase in the average number of hours worked and an increase in the intensity of labour. For example, <a href="https://www.tuc.org.uk/international-issues/europe/workplace-issues/work-life-balance/15-cent-increase-people-working-more">research</a> carried out by the Trade Union Congress in 2015 discovered that the number of people working more than 48 hours in a week in the UK was rising and it warned of a risk of “burnout Britain”. </p>
<p>Indeed, employee burnouts have become a major concern of employers. A UK <a href="https://www.roberthalf.co.uk/press/employee-burnout-common-nearly-third-uk-companies-say-hr-directors">survey</a> of human resources directors carried out in 2015 established that 80% were afraid of losing top employees to burnout.</p>
<p>Ford’s sociology department was shut down in the early 1920s for two reasons. It became too costly to maintain it in the context of increasing competition from other car manufacturers. And also because of growing employee resistance to home visits by inspectors, increasingly seen as too intrusive into their private lives. </p>
<p>Wearable technology, however, does not suffer from these inconveniences. It is not costly and it is much less obviously intrusive than surprise home visits by company inspectors. Employee resistance appears to be low, though there have been a few attempts to fake the results of the tracking (for example, workers strapping their employer-provided Fitbits <a href="https://www.ft.com/content/8c52aff6-bdda-11e5-9fdb-87b8d15baec2">onto their dogs</a> to boost their “activity levels”). The idea of being tracked has mostly gone unchallenged.</p>
<h2>Labour commodified to the extreme</h2>
<p>But the use of wearable technology by employers raises a range of concerns. The most obvious is the right to privacy. The use of wearable technology goes significantly further than computer systems where emails are already logged and accessible to employers. </p>
<p>Surveillance becomes continuous and all-encompassing, increasingly unconfined to the workplace, and also constitutes a form of surveillance which penetrates the human body. The right to equal employment opportunities and promotion may also be compromised if employers reserve promotion for those who are in a better physical shape or suffer less from fatigue or stress. </p>
<p>It may also be argued that the use of wearable technology takes what the Hungarian historian Karl Polanyi called the “<a href="http://www2.warwick.ac.uk/newsandevents/features/polanyi/">commodification</a>” of human labour to an extreme. Monitoring worker health both inside and outside the workplace involves the treatment of people as machines whose performance is to be maximised at all costs. However, as Polanyi warned, human labour is a “fictitious commodity” – it is not “produced” for sale to capital as a mere tool. To treat it as such risks ultimately leading to a “demolition of society”.</p>
<p>To protect individual rights, systems have been introduced to regulate how data that is gathered on employees is stored and used. So one possible solution is to render the data collected by trackers compulsorily anonymous. For example, one company that collects and monitors employee data for companies, <a href="https://en.wikipedia.org/wiki/Sociometric_Solutions">Sociometric Solutions</a> only charts broader patterns and connections to productivity, rather than individual performance. </p>
<p>This, however, does not address concerns about the increasing commodification of human labour that comes with the use of wearable technology and any potential threats to society. To prevent this, it is perhaps necessary to consider imposing an outright ban on its use by employers altogether.</p><img src="https://counter.theconversation.com/content/70719/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Ivan Manokha does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Ford Motor Company’s attempts (and failure) to monitor its employees offers some lessons in why we should question the use of wearable tech by companies today.Ivan Manokha, Departmental Lecturer in International Political Economy, University of OxfordLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/667592016-10-11T02:17:29Z2016-10-11T02:17:29ZAustralia’s car industry ignored the elephant in the room: carbon emissions<figure><img src="https://images.theconversation.com/files/141156/original/image-20161011-3864-nf7o00.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Australia's car industry got left behind on emissions standards. </span> <span class="attribution"><span class="source">Exhaust image from www.shutterstock.com</span></span></figcaption></figure><p>Ford’s closure of its Geelong manufacturing plant on Friday is part of a broader story about <a href="https://theconversation.com/the-ford-plant-closure-is-sad-loss-of-manufacturing-know-how-65651">Australia’s manufacturing sector</a>. But one side of this story has so far been overlooked: the role of Australia’s lax attitude to vehicle emissions. </p>
<p>Globally, car manufacturers are taking climate action seriously by significantly <a href="https://www.globalfueleconomy.org/media/203446/gfei-state-of-the-world-report-2016.pdf">improving fuel economy</a>, in turn reducing a car’s CO₂ emissions. </p>
<p>Repeated policy failure and a marked reluctance by the Australian car industry to shift from manufacturing mostly high CO₂-emitting vehicles contributed to Ford ending operations. The Australian car industry ignored the elephant in the room. </p>
<p>This effectively contradicts former-Treasurer Joe Hockey’s assertion that <a href="http://www.smh.com.au/business/g20/climate-change-is-no-impediment-%20%20%20to-economic-growth-says-joe-hockey-20141115-11nlzs.html">climate change has no impediment on economic growth</a>, as Australia gets left behind in a world embracing action on climate change.</p>
<h2>Warning signs</h2>
<p>In 2008, the international community launched the Global Fuel Economy Initiative (GFEI) to facilitate and promote large reductions of greenhouse gas emissions by establishing a global target to improve fuel efficiencies. The target included a 50% improvement in vehicle fuel economy in new light duty vehicles by 2030. <a href="http://ewp.industry.gov.au/sites/prod.ewp/files/submissions/Energy%20White%20Paper//EWPGP099-713.pdf">The GFEI offered to assist successive Australian governments</a> in the development of better fuel policy. </p>
<p><a href="http://onlinelibrary.wiley.com/doi/10.1111/ropr.12100/abstract">European car manufacturers made slow progress</a> and continued manufacturing larger high-performance vehicles. But in 2009, the European Parliament introduced CO₂ emission standards of 130 grams of CO₂ per km by 2015 and long-term target of 95g CO₂ per km by 2021. </p>
<p>By 2013, <a href="http://www.theicct.org/info-tools/global-passenger-vehicle-standards">80% of global passenger vehicle sales</a> were subject to CO₂ standards. Complementary economic measures were introduced to support the standards by influencing consumers into choosing low CO₂-emitting vehicles.</p>
<h2>Australia left behind</h2>
<p>In 2005, the Australian car industry adopted <a href="http://www.fcai.com.au/library/publication/1216168398_document_fcai_final_submission.pdf">voluntary targets of 222g CO₂ per km by 2010</a>. This wasn’t in line with international standards and masked the poor fuel efficiency of locally manufactured vehicles as shown in the chart below. </p>
<iframe src="https://datawrapper.dwcdn.net/GdtJp/1/" frameborder="0" allowtransparency="true" allowfullscreen="allowfullscreen" webkitallowfullscreen="webkitallowfullscreen" mozallowfullscreen="mozallowfullscreen" oallowfullscreen="oallowfullscreen" msallowfullscreen="msallowfullscreen" width="100%" height="503"></iframe>
<p>With voluntary standards, the local car industry was under no pressure from the government to improve its fleet’s fuel efficiency. The Australian car industry failed to meet the target. <a href="https://www.ntc.gov.au/Media/Reports/(DF694ECD-E315-41C8-367C-19D67D2A6FF5).pdf">Average emissions from cars manufactured in Australia</a> in 2010 were 247g per km – 11% higher than the voluntary target.</p>
<p>In April 2012, the Australian government mandated that 100% of all Commonwealth vehicles would be Australian made. This explicitly excluded acquiring vehicles on the grounds of “<a href="http://www.finance.gov.au/vehicle-leasing-and-fleet-management/fleet-guidance-and-related-material.html">environmental considerations, such as fuel efficiency</a>”.</p>
<p>In 2013, the government announced a <a href="http://www.pc.gov.au/inquiries/completed/automotive/report/automotive.pdf">Productivity Commission review</a> of the industry that would examine international competitiveness, exports, trade barriers and long-term sustainability. At this point the <a href="https://theconversation.com/holden-to-cease-making-cars-in-australia-by-2017-experts-react-21369">local car industry</a> announced its decision to abandon manufacturing in Australia. As a result, the commission didn’t examine the impact of climate policy measures on the local car industry, although it did suggest that environmental policies could serve as a barrier to international trade. </p>
<p>Industry actors also criticised other measures such as vehicle or excise taxes that it said would impede Australian exports.</p>
<p>For example, <a href="http://www.sciencedirect.com/science/article/pii/S096585641100053X">Ireland’s 36% vehicle tax</a> on new light passenger vehicles with emission greater than 225g per km would apply to most Australian-made vehicles. Such measures support emission standards, and are imposed on all vehicles sold (whether imported or manufactured domestically) for the protection of the environment. They have been effective in shifting consumer demand to fuel-efficient vehicles.</p>
<p>Under the <a href="http://www.wto.org/english/tratop_e/envir_e/envt_rules_exceptions_e.htm">rules of the World Trade Organization</a> national governments can ban imports that do not comply with product standards, if they do not constitute non-tariff barriers. To meet this exception, the policy must be measurable (such as an excise tax based on CO₂ emissions), apply to all goods sold (domestic and imports), and contribute to the fight against climate change. </p>
<p>The adoption of regulatory standards and supporting economic instruments, meant car manufacturers/importers will not be able to sell as many larger high CO₂-emitting vehicles. To sustain economic production runs, manufacturers will seek to sell these vehicles to countries with lenient or no standards, such as Australia, which then become “<a href="https://theconversation.com/could-australia-become-a-dumping-ground-for-high-emission-vehicles-38299">dumping grounds</a>”.</p>
<h2>Government and industry caught off guard</h2>
<p>In 2014, the Abbott government supported the <a href="http://www.g20australia.org/sites/default/files/g20_resources/library/g20_energy_efficiency_action_plan.pdf">G20 Energy Efficiency Action Plan</a>, which included “improving vehicle energy efficiency and emissions performance” by strengthening domestic standards in vehicle emissions and vehicle fuel efficiency. Despite the plan, there was no recommendation to introduce emissions standards in the government’s <a href="http://ewp.industry.gov.au">2015 Energy White Paper</a>.</p>
<p>Successive Australian governments, trade unions, and industry actors have all failed to appreciate the impact of climate action on the economic interest of the local car industry. The Australian government is now examining <a href="http://minister.infrastructure.gov.au/pf/releases/2016/february/pf018_2016.aspx">fuel efficiency standards</a> and complementary measures, but will only report next year. It’s a little too late to save the industry. </p>
<p>Forcing the local car industry to meet similar standards would have been to its benefit and would have outweighed the costs of being shut out from the market. As more global car manufacturers began adopting emissions standards more pressure was placed on car manufacturers to remain competitive. </p>
<p><a href="http://globalchange.mit.edu/files/document/MITJPSPGC_Reprint_13-20.pdf">Car manufacturers were known to lobby their governments</a> to adopt European emission standards to increase their competitiveness and restrict importation of high CO₂-emitting vehicles. The former Vice-Chairman on General Motors, Bob Lutz, said the <a href="http://www.autonews.com/apps/pbcs.dll/article?AID=/20110523/OEM02/305239961/1432#axzz2V8MLH900">fall of GM in the United States</a> was largely a result of a terrible government policy on fuel economy, which gave its competitors, the Japanese automakers, a free pass. </p>
<p>The <a href="http://www.manufacturing-policy.eng.cam.ac.uk/futures-documents-folder/eu-eu-manufacturing-industry-what-are-the-challenges-and-opportunities-for-the-coming-years/view">European Commission stated that</a> if a car industry fails to embrace a shift towards more fuel-efficient vehicles, it will continue to be structurally unprepared for the future.</p>
<p>To compete globally, the Australian car industry had to decide whether to embrace cleaner technology to meet the standards of its importers, or abandon the export market. Unfortunately for the workers, Ford chose to close its operations on October 7, and GM Holden and Toyota will close by the end of 2017.</p><img src="https://counter.theconversation.com/content/66759/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Anna Mortimore does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Australia’s lax attitudes to vehicle emissions has been overlooked in Ford’s exit.Anna Mortimore, Lecturer, Griffith Business School, Griffith UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/652332016-10-06T19:10:46Z2016-10-06T19:10:46ZThe US used foreign investment to develop a new car industry, a lesson Australia hasn’t learned<p>In Australia, car makers have come to be seen by many as more of a cost than a benefit, a failing industry that was too reliant on government handouts. But in the United States, many state governments have attracted foreign investment that has provided ongoing economic security.</p>
<p>Now the end of car manufacturing in Australia is fast approaching. Ford Australia will close its production line in Broadmeadows on October 7, where the iconic Falcon has been made for almost six decades. </p>
<p>On the same day, Holden will close Cruze production in Adelaide, and Ford will shutter its engine plant in Geelong. In the course of the next year, Australia’s three car makers – Ford, Holden, and Toyota – will shut down completely. </p>
<p>In all, more than 5,000 production jobs, plus many more white collar and supplier positions, <a href="http://www.heraldsun.com.au/news/car-jobs-at-risk-as-national-employment-crisis-looms-after-federal-election/news-story/4eec69a23b48ac8275aaaf4554498925">will be lost</a>. </p>
<p>The shutdowns come following the 1984 Button Plan, a Hawke government initiative that provided for phased tariff reductions (2.5% per annum) as well as fewer separate manufacturing facilities. After this, industry protections were gradually removed and successive governments also signed more free trade agreements that made it easier for imported brands to penetrate the Australian market.</p>
<p>Prior to the closures, Holden boss Mike Devereux fought for two years for an increase of more than A$200 million in government funding, <a href="http://www.news.com.au/technology/innovation/motoring/holden-shutdown-general-motors-international-boss-stefan-jacoby-says-australia-is-better-without-car-manufacturing/news-story/af4de2d0090baa6c2a0ce24aa0e28729">claiming this would save the assembly lines.</a></p>
<p>By contrast in the US over the past few decades, a series of states have paid large financial incentives to attract foreign-owned car makers.</p>
<p>In 1980, Tennessee officials offered Nissan a US$33 million package to build its first American plant in Smyrna, while in 1985 Kentucky committed US$149 million in subsidies to lure Toyota to Georgetown. Another generous package, including a US$1 a year lease on a US$36 million piece of land, brought BMW to Greer, South Carolina in the early 1990s. From there, the <a href="https://www.amazon.com/South-America-since-World-Wardp/0195166507">incentives continued to escalate.</a></p>
<p>In the mid-1990s, Alabama spent US$325 million to bring Mercedes-Benz to Vance, and also gave generously to secure Honda and Hyundai factories. By 2002, Alabama’s total subsidies to foreign automakers <a href="https://www.amazon.com/South-America-since-World-Wardp/0195166507">were an estimated US$874 million</a>. More recently, Mississippi has paid close to US$800 million to land plants by Toyota and Nissan.</p>
<p>Ironically, the subsidies have been dished out mainly by southern states. The South is the most conservative region in America. </p>
<p>Many of the incentives have been authorised not by Democrats but by conservative, patriotic Republicans. Governing over states that are among the poorest in America, they argued that the cost of landing high-paying automotive jobs was justified. </p>
<p>Twenty-five years ago, for example, the Deep South state of Alabama had never produced a vehicle. By 2015, more than 13,000 people were employed in four major assembly plants, <a href="ww.edpa.org/wp-content/uploads/Alabamas-Automotive-Industry.pdf">while a further 24,000 worked for suppliers</a>. “Whatever it cost,” economic recruiter Ellen McNair asserted, “it was worth it”. </p>
<p>The incentives have established a thriving economic sector. In 2009, foreign-owned automotive factories <a href="http://www.nytimes.com/2008/11/17/business/economy/17impact.html?_r=0">employed 78,000 people</a> and turned out more <a href="http://query.nytimes.com/gst/fullpage.html?res=9503E1D9113BF931A15755C0A9639C8B63&pagewanted=all">than 25% of all vehicles manufactured in the US.</a></p>
<p>Even during and after the global financial crisis, none of these plants closed – unlike their domestically-owned counterparts. Instead, the sector has continued to expand. </p>
<p>Australians now drive many cars, including the high-end BMW X-5 and Mercedes M-Class, made in these US factories. Contrary to popular impressions, there is a thriving car industry in America; it is <a href="http://www.weeklystandard.com/the-other-american-auto-industry/article/17000">foreign-owned and based largely in the southern states.</a> </p>
<p>There are important differences between the Australian and American stories. In the US, a more decentralised political system means that states compete with one another <a href="https://www.amazon.com/SELLING-SOUTH-Southern-Industrial-Development/dp/0252061624">to land industrial investment</a>. Unions are much weaker in the US than in Australia, and southern states used weak labour laws, together with promises to fight organised labour, to lure automotive investment.</p>
<p>Transplant car workers are paid well by the standards of their area, yet not as much as their counterparts in Michigan and other traditional car-making states. The poverty of southern US states also drove their search for car plants, whereas in Australia, economic boosters argue the economy is diversified and displaced car workers can find other employment more easily. The US also has a much bigger vehicle market than Australia.</p>
<p>The US story reminds us, however, that automotive <a href="http://www.cargroup.org/?module=Publications&event=Download&pubID=113">jobs have tremendous value.</a>. In Australia, as in the US, the industry has provided well-paid jobs to generations of new immigrants, giving them upward mobility. Research of automotive plant closings in the US – and of manufacturing shutdowns more generally - shows that they have <a href="http://www.tandfonline.com/doi/pdf/10.1080/00236560903020906">devastating economic and social consequences</a>, as few workers <a href="https://www.amazon.com/Town-Abandoned-Confronts-Deindustrialization-Political/dp/0791428788/">are able to gain jobs that pay as well.</a> </p>
<p>As sociologists and others have demonstrated, displaced car workers - especially women and racial minorities - <a href="https://www.amazon.com/End-Line-AUTOWORKERS-AMERICAN-DREAM/dp/0252061489/ref=sr_1_1?s=books&ie=UTF8&qid=1474349920&sr=1-1&keywords=end+of+the+line+feldman">usually suffer “downward mobility,”</a> a drop in socio-economic status as a result of losing their job. Former automotive communities have <a href="https://www.amazon.com/End-Line-Postindustrial-America-Morality/dp/0226169103">suffered high rates of unemployment and depopulation</a> for years after plant closings. </p>
<p>In 1950, when the industry was booming, Detroit had 1.86 million inhabitants. Today, it <a href="http://www.census.gov/library/publications/2011/compendia/statab/131ed.html">has fewer than 700,000.</a></p>
<p>Unlike Australia, the US has used incentives to maintain a viable automobile industry. While Australia’s car industry was contracting, total domestic vehicle production in the US actually grew, and investments by foreign companies have also kept industry employment levels steady. </p>
<p>Many Americans believe that a viable automotive manufacturing sector is essential for their economy. It remains to be seen whether the Australian car industry can cope easily with the shutdowns.</p>
<p>The US experience, however, suggests that those displaced will not be able to move on so easily, and that Australia might be losing more than many of us realise.</p><img src="https://counter.theconversation.com/content/65233/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Timothy Minchin receives funding from the Australian Research Council to study the foreign-owned automotive sector in the U.S. </span></em></p>Australia can learn from the US where state governments have attracted foreign investment in manufacturing that contributes to local economies.Timothy Minchin, Professor of North American History, La Trobe University, La Trobe UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/665622016-10-06T05:16:15Z2016-10-06T05:16:15ZFord workers willing but unlikely to find decent jobs: study<p>When Ford closes the doors on its vehicle manufacturing operations today <a href="http://www.news.com.au/technology/innovation/motoring/half-of-ford-employees-will-be-jobless-after-factory-shutdowns-in-broadmeadows-and-geelong/news-story/c7e639b451eae34b2e7d046e8677e424">about 600 workers</a> will walk out of the factory gate for the last time at the Broadmeadows assembly plant in Melbourne’s northern suburbs and at the company’s engine and stamping plants in Geelong. Preliminary results from <a href="http://www.abc.net.au/news/2016-10-05/most-victorian-auto-workers-yet-to-start-looking-for-new-jobs/7904164">a survey of more than 400 auto workers</a> show that most of them still want to work but are unlikely to find secure, long-term jobs.</p>
<p>Most will become jobseekers in regions which are <a href="http://dote.org.au/wp-content/themes/dote2015/resources/melbourne.pdf">already socio-economically disadvantaged</a> with higher than average unemployment levels and lower than average household income. While 46% expect to be made redundant at some point in the next 12 months and 24% expect to remain with their current employer (either in the same role or redeployed within the company), 27% still don’t know whether or not they will have a job. This partly reflects the large number of workers employed in the supply chain and uncertainty about the survival chances of many of these businesses. </p>
<p>Most workers (62%) will want a new job if and when they are retrenched. Only a small minority plan to retire (8%), take a break from work (6%) or go into business or self-employment (1%). </p>
<p>Importantly, 50% say it is important that they stay in the same or a similar occupation. This finding highlights the ongoing need for governments to support manufacturing occupations, skills and careers. These could come from key manufacturing corridors of Victoria such as Melbourne’s southeast and northern suburbs. </p>
<p>Unfortunately, many workers will struggle to find jobs that fit their preferences and skillsets. In areas like Melbourne’s northern suburbs, near Ford’s Broadmeadows assembly plant, hundreds of newly-retrenched workers will join a local labour market in which more than one in every five jobseekers are currently out of paid work. </p>
<p>Many workers have received comprehensive assistance from the carmakers or state governments. For example, 53% say their current employer has provided help and 64% found this help useful. But there remains a critical role for government in carefully monitoring the transition for workers over the coming months and years. </p>
<p>The survey is a representative sample of all trade union members in the Victorian auto industry and part of a long-term study which will monitor the future work, job quality and health and wellbeing of these workers over the next three years. It includes employees of Ford (17%), Toyota (28%), GM Holden (7%) and many manufacturers which produce components in the auto supply chain (43%), where most of the job losses will be experienced. </p>
<p>The Australian car manufacturing industry will be gradually wound down over the next 12 months as GM Holden and Toyota follow suit and close their local car-making operations. Projected job losses resulting from these decisions are somewhere between <a href="http://www.pc.gov.au/inquiries/completed/automotive/report">40,000</a> and <a href="http://apo.org.au/files/Resource/wiser_closing_the_motor_vehicle_industry_2014.pdf">200,000</a> jobs nationally.</p>
<p>Australia has never before experienced such a rapid closure of an entire, strategically-important industry, with the process taking approximately three years from the closure announcements in 2013/14 to the final shutdown in 2016/17. </p>
<p>The major concern of this study is the quality of work and quality of life outcomes for workers and communities in regions affected by closures. </p>
<p>Preliminary results from our study show that the average age of workers is 50, the average length of time with their current employer is 19 years (with some having been employed for up to 45 years). And approximately one in five primarily speak a language other than English at home. </p>
<p>Workers with limited formal education and accredited skills may also struggle. Almost half (45%) of workers left school before Year 12 and 48% do not have a trade qualification. </p>
<p>Numerous studies of past large-scale closures and redundancies suggest that particular groups are disadvantaged as jobseekers, including older workers, workers who have been with a single employer for a long period of time and workers from a non-English speaking background. </p>
<p>Workers in these categories find it more difficult to negotiate local job markets. They tend to take longer to find alternative employment and often move into poorer-quality employment with lower wages and inferior employment conditions.</p>
<p>The first round of results from this survey of auto workers will be launched at the Victorian Parliament on October 26.</p><img src="https://counter.theconversation.com/content/66562/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tom Barnes does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Auto manufacturing workers will face significant problems in finding new jobs after the closure of the Ford and Holden plants, a new survey has found.Tom Barnes, Postdoctoral Research Fellow, Institute for Religion, Politics and Society, Australian Catholic UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/656512016-10-05T21:33:23Z2016-10-05T21:33:23ZThe Ford plant closure is sad loss of manufacturing know how<p>The closure of Ford’s casting plant in Geelong does make you wonder how losing the ability to make our own engines can be a step forward. Australia should take stock and contemplate what kind of society we are becoming.</p>
<p>Critics of the decision to allow the car industry to leave would argue that governments should subsidise their local car manufacturing industries because of the benefits the industry brings in terms of employment and raising the general technological level of that country.</p>
<p><a href="https://www.blackincbooks.com.au/books/economy-not-society">In An Economy is not a Society</a>, Dennis Glover argues that we are making a tremendous social and economic mistake in allowing such industries to close in the name of global competition. Glover outlines how the support for manufacturing in the post second world war era provided a base for many ordinary people to lead better lives, leading to many positive social and economic outcomes. He argues that the type of economy we have developed since the 1980s favours a few over the many.</p>
<p>Certainly, the current government has shown more enthusiasm for making submarines than it did for car manufacturing, how does that <a href="http://www.abc.net.au/news/2016-04-26/pm-announces-france-has-won-submarine-contract/7357462">extraordinary $50 billion dollar</a> investment stack up, in terms of jobs and flow on effects?</p>
<p>With the closing of the automotive industry, our knowledge of metals casting will clearly dive. Those employed at Ford and similar employees at Toyota and Holden don’t have equivalent jobs to take their deep knowledge to.</p>
<p>The opportunities in the metals industry in this country are thin on the ground. The large casting plants are now in Asia, though the high technology end still prospers in part of Western and Northern Europe. The Chinese are currently known more for the low value end of metal castings but they are likely to follow the Koreans and Japanese into the high value end as their economy develops.</p>
<p>Recently, I took a group of engineering students to visit the Ford casting plant. After donning high visibility orange vests, we were given a tour of the plant by an amicable Ford engineer. </p>
<p>He showed us the various details of how engine moulds were formed, steel scrap melted, alloy elements added and engine blocks cast. It was clear that a lot of expertise had been developed over the decades to ensure that tight quality requirements were met. </p>
<p>I was also interested to see how much technology had been developed to recycle the sand used in the moulds and our tour guide joked that he had spent as much time cleaning sand as did making engines. </p>
<p>Casting is one of those technologies that it is so successful, we barely notice it. We take it for granted that millions of objects can be cast each year with excellent physical properties and durability. New technologies such as 3D printing can out do the same in terms of versatility and detail but currently lag far behind casting in terms of quality, cost and productivity.</p>
<p>The materials science that underpins this technological triumph was mainly developed in the post second world war era, when new techniques in microscopy and analysis allowed us how to control the structure of cast materials with greater precision. New developments in casting and thermo-mechanical processing (post treatment of the cast structure) continue, as the push for even higher quality and better properties drives research and investment in new technology.</p>
<p>Our safe arrival at work each day, whether we travel by car, rail or plane, relies on this knowledge. </p>
<p>Our tour guide said that our group was probably the last tour through the plant before it is closed and the site is bulldozed. As he tried to make light of the situation, the good humoured banter between the engineer and the students evaporated and we all stood stone faced outside the plant feeling like something worthwhile was about to disappear.</p>
<p>The plant isn’t closing down because casting technology is no longer important but because our car industry has become uncompetitive in a global market and our government is no longer willing to prop it up on the promise that it will one day become more competitive.</p>
<p>At a more immediate personal level, we have all got use to the idea of buying cheap cars produced in Asia. The thought of returning to the era of our parents, where there was limited choice and the local made cars were protected by tariffs and government policy, has little appeal. </p>
<p>We may want to blame the government for the end of the car industry in this country but there are literally millions of individual choices underneath that decision. Simply put, most of us prefer a cheap Korean or Japanese car over a locally made equivalent from Broadmeadows, Altona, Geelong or Elizabeth.</p>
<p>Perhaps, the loss of skills in casting will be offset by jobs in new industries. Certainly, opportunities for skilled jobs in 3D printing, carbon fibre composites, biomedical equipment and automation are likely to emerge over the next decade. </p>
<p>Australia has a number of impressive technology based companies who specialise in the high precision machining, and the Boeing works in Melbourne, where carbon fibre technology developed in Australia has been successfully applied.</p>
<p>Perhaps, new casting industries will also emerge in Australia. The A W Bell company in Dandenong South has recently prospered by combining traditional casting with new digital based technology<a href="http://www.csiro.au/en/Do-business/Solutions-for-SMEs/Our-track-record-working-with-SMEs/AW-Bell">link text</a>. It must be said, that these are all relatively minor successes compared to the closure of an entire major industry.</p>
<p>There is a real danger that an important skill base will disappear from our country, as the furnaces are turned off for the last time in Geelong.</p><img src="https://counter.theconversation.com/content/65651/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Geoffrey Brooks had previously received funding from the CAST CRC for fundamental work relating to the casting of metals. </span></em></p>The closure of the car manufacturing plants in Australia is a sad loss of knowledge and jobs that will be difficult to replace.Geoffrey Brooks, Pro-Vice Chancellor (Future Manufacturing), Swinburne University of TechnologyLicensed as Creative Commons – attribution, no derivatives.