In 1966, at the height of the labor movement’s postwar power, Walter Reuther, then president of the United Auto Workers, helped establish the first four “World Auto Councils.” Workers at General Motors, Volkswagen-Daimler-Benz, Fiat, and Chrysler (now Stellantis) could now meet across borders and, it was hoped, establish common international contract expiration dates.
The plan fell short of an international bargaining agreement, but the unions hoped it would “strengthen the hand of each union in the contract negotiations of its own country,” said World Auto Councils coordinator Burton Bendiner in 1978.
In 1971, French GM workers who supplied gearboxes and transmissions for the company’s European operations went on strike. They coordinated with their counterparts in Germany’s IG Metall and the UAW to pressure GM management. They refused work that management had diverted from a struck plant and created a common strike fund. The French union, said Bendiner, was able to draw strength from the more powerful UAW.
imilarly, when Ford workers in Britain went on strike in 1971, their counterparts in West Germany refused to pick up the slack with overtime. This increased striking workers’ leverage at the table while avoiding the legal challenges a sympathy strike would have provoked.
Instead of letting companies pit plants and workers against each other, unions in France, Belgium, Austria, Italy, and Germany negotiated a “multinational-union agreement” that forced their common employer—a Belgian and French glass company—to distribute work among subsidiaries in different countries. This pointed to an international vision of economic development and job creation.
The UAW was championing solidarity, not competition for scarce jobs. The common target was the multinational corporation.
An Outsize Role for Tariffs
The UAW’s 1970s drive for global coordination to take on multinationals is a far cry from its current posture, which gives tariffs an outsize role.
“We have a long history of supporting the use of auto tariffs well before Trump ever stepped foot in the White House,” wrote union president Shawn Fain in an op-ed in The Detroit News, maintaining that the tariffs may bring some auto jobs back to the U.S. “Thankfully, with new tariffs, the new Stellantis corporate leadership has an opportunity to invest in American manufacturing and get UAW members back to work.”
We’ve seen some signs of this in action. The Japanese auto company Nissan has considered shifting production to the U.S. in response to Trump’s tariffs. It’s been in Mexico since 1961, employing 15,000 workers. However, Stellantis actually temporarily laid off 900 autoworkers at U.S. facilities after Trump announced his April 2 tariffs, including layoffs in Indiana and Illinois, while giving Wall Street a lucrative multibillion-dollar dividend.
The UAW is arguing for destroying the neoliberal free-trade regime—a worthy goal. But if the primary tool for doing that is tariffs, the vision is a narrow one, and success is unlikely in an unpredictable economic climate.
The shift in the UAW’s focus from multinational bargaining to tariffs dates back to the 1970s, when an employer counteroffensive got its bearings, culminating in 1981 with the destruction of the Professional Air Traffic Controllers Organization under President Reagan. As inexpensive imports flooded the U.S., the UAW was the last holdout opposing tariffs among unions in labor-intensive industries, preferring a combination of support for unions in developing countries and industrial policy to maintain sufficient levels of investment to avoid job losses.
Tariffs and trade enforcement are tools to protect domestic jobs and industries, but there are other methods to do so. Since the 1970s, the U.S. has allowed multinational corporations to abandon domestic investments. We can learn from the UAW’s own labor history.
And we can also learn from China, while rejecting its authoritarian state-led growth economic model and centralized political party. When a company threatens to leave China, it must apply for a permit, which is typically slow-walked, and it must pay out workers’ wages for one or two years. The company also risks losing the factory, including molds and other intellectual property. While China is experiencing a “China shock” of its own, particularly among textiles and other labor-intensive jobs, the shift is more gradual and less disruptive.
In the U.S., by contrast, no penalty would ever be big enough when a company wants to increase its stock price by offshoring. So the only credible countermeasure is a stronger labor movement committed to practical cross-border solidarity, fair enforcement mechanisms in trade agreements, and government support for rebuilding the industrial base to transition to a climate-friendly future.
Jose Juarez/AP Photo
United Auto Workers President Shawn Fain acknowledges the crowd at a Bernie Sanders rally in Warren, Michigan, March 8, 2025.
A Zero-Sum Calculus
Since the 1980s, the auto industry has been integrated along international supply chain networks, especially for parts. In 2023, Mexico employed 847,140 auto industry workers, representing 17 percent of all manufacturing employment in Mexico. Parts account for 84 percent of these jobs, while auto assembly constitutes 13 percent. That same year, U.S. auto manufacturing, including vehicles and parts, peaked at one million jobs, but most of the growth over the past 16 years went to the non-union sector, which produced 4.9 million vehicles to 4.6 million by the Big Three. Employers haven’t drastically cut union jobs in the U.S. as much as they have added more non-union ones.
The 2018 U.S.-Mexico-Canada Agreement (USMCA) attempted to protect the continental integration of North America from China. It also attempted to equalize wages between Mexican, Canadian, and U.S. autoworkers.
Auto companies, which have more plants than they need, have a bargaining advantage because they can easily add and subtract shifts and lines at each plant, undermining workers’ bargaining power across borders. The UAW wants to restrain capital mobility and increase its bargaining power when auto bosses threaten to offshore jobs and establish runaway shops abroad. But it is trying to do this not by coordinating with other unions abroad, but by erecting trade barriers to compel the companies to reshore jobs in the U.S.
The UAW argues that tariffs could force the U.S. auto industry to bring back jobs from Mexico and Canada, though the union isn’t explicit about job losses to Canada’s unionized autoworkers. But if Mexican workers make on average $3 an hour, would a 25 percent tariff be enough incentive for auto companies to stop producing in Mexico? What about the savings they get from manufacturing in Canada, with its weaker currency and comprehensive national health insurance? Then there’s question of how deeply integrated auto industry is globally. About 46 percent of GM’s U.S. sales come from imports, according to Bloomberg. Of its 1.23 million imports last year, 400,000 came from South Korea, including the budget-friendly Chevy Trax and Trailblazer, which are made there.
When Fain says, “If the Big Three alone just got their currently active plants up to 100 percent capacity, they could add 50,000 jobs,” the conversation has shifted to a zero-sum calculus. Without an increase in car sales—a dim prospect with the world economy tipping into recession—Fain’s statement is tantamount to “take their jobs and give them to us.”
A more internationalist perspective would argue for a new industrial policy focusing on climate change: What new industries are emerging? How can unions shape them, organize, and grow these new sectors? The Biden administration started to do this with the Inflation Reduction Act, the CHIPS Act, and the bipartisan infrastructure law, but now all of that is either on hold or in a precarious state.
The well-being of U.S. autoworkers cannot come at the expense of workers in Canada and Mexico, as well as those in Asia or anywhere else.
Equalizing Labor Costs
The UAW is rightly seeking to equalize labor costs across the unionized auto industry—especially in the South, where the companies flocked for discounts in labor costs and subsidies. But when companies seek to offshore plants in search of lower production costs and higher profits, they can still go further south to Mexico.
Take Volkswagen, where the UAW won a union election a year ago and is bargaining a first contract in Tennessee. Volkswagen has scaled back production by eliminating one shift out of three, moving production of the ID.4 electric SUV to Mexico, and offering a buyout package during bargaining without consulting the union. The company is also denying workers company-paid health care and Veterans Day off. “Volkswagen is now outright refusing to honor those who fought for this country, including the memory of those brave Americans who died 80 years ago liberating Volkswagen’s Wolfsburg factory from the Nazis,” said Fain.
After the UAW won record-setting contracts at the Big Three automakers in 2023, Stellantis began shifting production from the Warren, Michigan, truck assembly plant to Mexico. A thousand UAW members were laid off there six months ago.
As difficult as it is to equalize labor costs within the U.S., that’s the very challenge the UAW must meet across borders if it is to stem the flow of runaway shops to Mexico. The UAW has signaled a willingness to take some initial steps in that direction. “A new trade deal for North America should have a manufacturing minimum wage,” said Fain on the April 10 Facebook livestream. “Workers on two sides of a border should not be competing with one another in a race to the bottom.”
Since the signing of the North American Free Trade Agreement in 1992, wages in Mexico and the U.S. have plummeted as bosses threatened to close plants. The USMCA makes a nod toward raising Mexican wages. It requires that vehicles and parts manufactured anywhere in North America must contain 40 to 45 percent labor content produced by workers earning at least $16 an hour.
This rule was supposed to be phased in over five years. But there’s a loophole: The minimum applies on a per-company basis. As long as a company has some production in a high-wage country, the U.S. and Canada side of the supply chain can fulfill that requirement.
The UAW wants to tighten the loophole and make rules of origin enforceable in the renegotiation of the USMCA. About 8 percent of vehicles and 20 percent of auto parts exported from Mexico to the U.S. violate the USMCA. Another calculation finds that 93 percent of autos are compliant, while only 63 percent of parts are. So when Fain says stronger enforcement is necessary when the USMCA is negotiated in 2026, he’s correct.
Unionized Volkswagen and GM plants in Mexico pay workers $7 an hour. “Wages could grow even faster if the UAW would assist [Mexican autoworkers union] SINTTIA and other independent unions at Nissan, Audi, Volkswagen in organizing and collective bargaining, including using their strike fund,” said Jeffery Hermanson, director of the International Union Educational League, a nonprofit organization supporting unions in Mexico and the Global South.
George Walker IV/AP Photo
Volkswagen automobile plant employees celebrate as they watch the results of a UAW union vote, April 19, 2024, in Chattanooga, Tennessee.
International Automaking
Ford and GM have been assembling vehicles in Mexico since the mid-1930s. Decades before NAFTA wreaked devastation on both sides of the border, the UAW was aware that greater international coordination was the key to equalizing working conditions and standardizing labor costs.
By the 1970s, Volkswagen, Renault, Peugeot, and the Big Three had large operations in Brazil, Mexico, and Venezuela. Chrysler had subsidiaries in Peru, Venezuela, and Iran. The UAW responded to that global spread through hosting educational events to discuss bargaining priorities, as well as plant visits in Argentina, Brazil, and Mexico, among others. Through these exchanges, Bendiner said, European and North American unions assisted counterparts in these developing countries in framing collective-bargaining demands.
But automakers responded by starting to cluster non-union plants around highways I-65 and I-75 corridors in the 1980s, increasing from less than one-third in 1979 to more than one-half in the 1990s, according to James Rubenstein’s The Changing US Auto Industry. Even before NAFTA, the Big Three reduced their capacity to produce autos by more than one-third during the 1980s and early 1990s, “with more plant closures than even during the Great Depression,” as Rubenstein puts it. The only workforce growth would come from non-union international automakers clustered in the South.
In the 1980s, Mexico imposed a domestic content policy requiring that 50 percent of cars built in the country have domestically produced engines, building an export-driven auto sector, especially in parts and components. That was part of the import-substitution strategy of Latin American countries between 1950 and 1980. By 2008, Mexico had overtaken Canada to become North America’s second-largest producer of light vehicles, trailing only the United States, and the Great Recession added even more restructuring, with greater importance allotted to Canada and Mexico in auto assembly. Manufacturing has historically been the path out of poverty, and Mexico has followed that development playbook to grow its economy.
Today, there is no such thing as a 100 percent made-in-America vehicle, with the share of foreign content between 50 to 60 percent. The answer to that reality isn’t to entertain fantasies of undoing integration, but working across borders to lift standards and democratize investment, so auto companies can discipline neither Mexican nor U.S. autoworkers with offshoring.
Going Beyond Tariffs
Between 1979 and 2025, UAW membership dwindled from 1.5 million in 1979 to about 380,000 (though there are still 1.5 million assembly and auto parts workers in total). In that period, the state became an instrument of the neoliberal capitalist regime, breaking strikes, disciplining labor, and handing off corporate subsidies.
In 2023, the UAW set out to organize ten foreign-owned transplants, including Toyota, Hyundai, and Mercedes, as well as in the electric-vehicle sector at Tesla, Rivian, and Lucid. The goal was to organize 150,000 workers, roughly the same number of workers covered under the Big Three contracts, across 13 automakers and their joint-venture battery plants. Only the Volkswagen union drive has been successful to this point.
Sam Gindin, the former research director of the Canadian Auto Workers, argues that tariffs are a diversion from the fight for everything from “universal health care and inadequate access to higher education and affordable housing to the refusal to make unionization a substantive democratic right.” Gindin writes, “Trade matters, but the antagonistic and substantively undemocratic domestic impact of corporate and government decisions matters more.”
At the forefront of this is the climate challenge. Historian Nelson Lichtenstein said that Fain has emphasized Biden’s infrastructure investments in support of a green transition to support battery and electric-vehicle plants, while demanding that the rules support good jobs in these emerging industries. But, as Lichtenstein stressed, Fain “did not really emphasize that such domestic incentives have to be there to make any tariff really work. Otherwise, producers, foreign and domestic, will try to game the system through third countries to get around the tariffs.”
Even with punitive tariffs in place to shut it out of the U.S. market, China, the world’s largest car exporter, reached a milestone of $117 billion in total car exports last year, an increase of 600 percent over five years, according to Bloomberg. BYD, the world’s largest electric-vehicle maker, topped $100 billion in sales last year, surpassing Tesla. China has now established electric-vehicle beachheads in European and Australian markets, as well as Singapore and Thailand. BYD launched the Shark, a midsize hybrid-electric pickup truck, in Mexico last year. One out of ten cars sold in Mexico in 2024 was from a Chinese automaker.
“In the fifties, the US was producing about three quarters of all gas-powered vehicles in the world,” wrote Gindin. “Today China, for reasons that go far beyond trade issues, makes about the same proportion of the world’s electric vehicles. The reasons, and so the solutions, go far beyond tariffs.”
Transition With or Without the U.S.
Industrial policy to spur the EV transition may be on pause for now in the U.S. But the transition will happen globally, with or without the U.S.’s public investment in infrastructure, research and development, and factory construction. EV expansion in the U.S. is likely to arrive chaotically and without state planning, perhaps with tariffs to shield the industry. It is poised to cause extreme dislocations, especially coupled with the increased automation brought on by artificial intelligence, which will reduce labor content.
“The biggest lever is going to be the way we design the vehicle for radical simplification of the labor content,” Ford Motor Company President and CEO Jim Farley said in a June 2022 fireside chat. “Half the fixtures, half the workstations, half the welds, 20% less fasteners. We design it because it’s such a simple product, to radically change the manufacturability, take the content out and labor, and optimize the engineering.” Volkswagen is moving in a similar direction, investing $5 billion into Rivian last year to incorporate technological advancements into its auto manufacturing.
Fain is correct to say it’s a mistake “to just defend the status quo,” asking where the pearl-clutching from Wall Street and the pundits was when 90,000 plants closed in the wake of NAFTA or when four million jobs were lost in less than a decade in the 2000s.
But Fain is also distorting an uncomfortable truth about auto manufacturing. In his magisterial biography, Walter Reuther: The Most Dangerous Man in Detroit, Lichtenstein writes that even in the postwar boom years, a period that saw the real wages for autoworkers double between 1947 and 1960, “big layoffs and plant closings were a regular feature of automobile employment. During the recession of 1957-58, it took almost seventeen years’ seniority to retain a production job in Detroit.”
The answer to high pay and employment instability was bargaining for better retirement, unemployment benefits, greater protections against layoffs, and a shorter workweek. That can also be the answer today, rooted in demanding more from the state for social well-being of all.
History offers some ideas for how we might handle the looming economic restructuring. When Amtrak was created by Congress in the 1970s, railway workers who lost their jobs or whose seniority was downgraded were guaranteed their full wages and benefits for a period equal to their employment, up to six years. At the time, the UAW wanted to model the government’s trade adjustment assistance program on Amtrak. Workers who lost their jobs due to increased imports would receive similar guarantees, coupled with retraining. The answer to protectionism was to supplant its allure with the guarantee of full employment. (In retirement, the UAW’s longtime chief economist, Nat Weinberg, devised a similar six-to-eleven-year federal provision of equivalent wages and benefits to loggers who’d lost their jobs due to the expansion of redwood national forests, similar to the program devised for railway workers.)
U.S. auto manufacturing in the current era is unlikely to employ tens of thousands of union workers at the Big Three or elsewhere for very long. Less than 10 percent of U.S. workers, or 8.9 million nonsupervisory and production workers, are employed in manufacturing in 2025. But manufacturing output in the U.S. today is $2.9 trillion. In 2023, the share of global manufacturing in overall GDP was 15 percent. This gives manufacturing workers incredible structural power in the global economy.
As the EV transition creates disruptions and conflicts ripple across the global auto supply chain network, greater cooperation for growth in a state-planned green transition would be preferable to a zero-sum competition for scarce jobs, especially if global economic stagnation is likely to fuel inflationary pressure and stagflation.
A Peaceful Transition
Already, countries across the Global South are experiencing “premature deindustrialization,” argues historian Tim Barker. Industrial employment has peaked, due in part to increased automation, bringing on a decline even before national income rises as it did in countries that industrialized earlier.
But instead of tackling these larger problems of slow growth and low investment in ways that promote workers’ well-being, the Trump regime seems set on rebuilding the U.S. war machine to fight China, with tariffs escalating the conflict.
UAW president Fain has linked manufacturing capacity with military preparedness. “I do believe, when we eliminate our manufacturing base in this country, we’re going to be in big trouble if we have to defend ourselves,” said Fain. “Because when you can’t produce anything, you’re opening yourself up for attack from anyone. I go back to the arsenal of democracy in World War II: the way that World War II was won when the United States got involved was, we utilized the excess capacity at our auto plants in this country to build bombers, to build tanks, to build jeeps.”
Germany is already retooling auto factories to make components for military vehicles.
But the green transition and the jobs it can create offer another horizon: government planning to promote global growth and well-being, environmental justice, and peaceful coexistence, funded through national investments.
Neoliberal development has created the current impasse. The only way out is through emerging possibilities from below. The first step is class unity to reimagine a different state that meets the needs and wants of its people through an industrial policy oriented toward the future.
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Luis Feliz Leon is an organizer, journalist, and independent scholar in social-movement history making good trouble in New York City.
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