Hit the Global Supply Chain

In late 1936, members of the newly organized United Auto Workers (UAW) struck several General Motors plants to win union recognition. A month later, GM still hadn’t budged. But in February 1937, workers in Flint, Michigan, occupied Chevrolet Plant 4. In less than two weeks, one of the most powerful corporations on earth capitulated.

What made the Flint plant occupation so powerful was Plant 4’s strategic position: This one plant made all the engines for Chevrolet, and its occupation shut GM plants throughout the country. The Flint victory set off a wave of sit-down strikes and union victories across the country.

Today’s just-in-time (JIT) supply chains that produce and deliver goods only in time to be used in production or sold (as opposed to stockpiled) are even more vulnerable. In 1998, when two UAW locals in Flint struck GM, they closed down 25 assembly plants and hundreds of suppliers, from Canada to Mexico. GM’s JIT delivery system meant assembly plants soon lacked key parts, and suppliers had no place to send their parts and no room to store them. In 2014, when members of the Longshore Workers (ILWU) “worked to rule” during contract negotiations, they stopped imports and exports to and from the West Coast for weeks and cost retailers $7 billion.

Logistics—the movement of goods through a supply chain—has grown rapidly in the last couple of decades. Information technologies such as bar codes, GPS, electronic data interchange, and radio frequency identification now track and guide the movement of goods and workers rapidly and reliably.

Intermodal ground transport by truck and rail increased fivefold in ten years, from 43 billion tons in 2002 to 214 billion in 2012. And the last 20 years have seen a doubling of the warehouse workforce to 840,000, a doubling of the number of warehouses to 17,000, and a doubling of the dollar amount of freight.

All this movement of goods requires vast sunk capital investments. The roads, rails, ports, airports, and railroad intermodal yards that make up supply chains can’t be picked up and moved abroad or anywhere else.

Ray Bruwelheide

These transportation networks converge to form huge “logistics clusters” of warehouses, intermodal yards where trucks unload to trains and vice versa, and information technology. In the United States, there are 61 such giant clusters, employing 3.2 million mostly blue-collar workers—and that doesn’t include railroad, postal, construction, utility, or IT workers. With numerous fixed costs, these clusters are vulnerable to expensive disruptions, including worker actions.

Supply chains are also networks of labor. For all the technology in modern business, when the hand and mind of labor are removed, things stop. Even Amazon’s famous Kiva robot becomes so much dead capital and fixed cost when the “fulfillment center” worker to whom it delivers a product isn’t there to receive it.

Where are the pressure points?

In the 1970s and 1980s, big manufacturers moved plants out of cities like Detroit and outsourced aspects of production to suppliers “out on the interstate” to get away from concentrations of blue-collar workers and their unions. But to move parts and goods from those suppliers, as well as imports, they had to concentrate thousands of workers in logistics clusters.

Eighty-five percent of these logistics workers are concentrated in such major metropolitan areas as Chicago, Memphis, southern California, Fort Worth, and Louisville. These are the Detroits of today.

There are, to be sure, barriers to organizing. Many logistics workers are “independent contractors” or temporary workers with no job security, and there is a lot of turnover in the workforce. On the other hand, many of the truckers who make up about 40 percent of the logistics workforce are union members. So are the United Parcel Service, railroad, and U.S. Postal Service workers who move things in and out of these clusters and along supply chains. The power of disruption and solidarity is there.