NATIONAL DEFENSE MIGRATION WEDNESDAY, SEPTEMBER 24, 1941 HOUSE OF REPRESENTATIVES, MORNING SESSION The committee met at 9:30 a. m., in the Federal Building, Detroit, Mich., pursuant to notice, Hon. John H. Tolan (chairman) presiding. Present were: Representatives John H. Tolan (chairman), of California; Laurence F. Arnold, of Illinois; Frank C. Osmers, Jr., of New Jersey; and Carl T. Curtis, of Nebraska. Also present: Dr. Robert K. Lamb, staff director; John W. Abbott, chief field investigator; Francis X. Riley and Jack B. Burke, field investigators; and Ruth B. Abrams, field secretary. The CHAIRMAN. The committee will please come to order. TESTIMONY OF R. J. THOMAS, INTERNATIONAL PRESIDENT, The CHAIRMAN. Gentlemen, Congressman Osmers will interrogate you. Mr. OSMERS. Mr. Thomas, will you give your name and your title to the reporter, for the record? Mr. THOMAS. R. J. Thomas, international president, United Automobile, Aircraft, and Agricultural Implement Workers of America, affiliated with the Congress of Industrial Organizations. Mr. OSMERS. Now, would you care to present the other men who are with you? Mr. THOMAS. I have with me as consultants, Mr. Wishart, who is in charge of our research department, Mr. George Addes, who is international secretary-treasurer, and who has been placed in charge of our department on priorities unemployment; Mr. Victor Reuther, who will be Mr. Addes' assistant; Richard Deverall, in charge of our educational department; and Mr. Reisinger, international board member, and also assigned to priorities unemployment. Mr. OSMERS. Mr. Thomas, in going over your prepared statement with respect to the automobile industry, I notice several observations that are at complete variance with the generally accepted notions as to the position of the automobile industry with respect to defense, so as we go along, I am going to quote to you certain portions of your own statement, and then you can enlarge upon them and thereby we will have a full presentation of your views. The statement will be incorporated as a part of the record. (The statement referred to above is as follows:) STATEMENT BY R. J. THOMAS, INTERNATIONAL PRESIDENT, UNITED AUTOMOBILE, AIRCRAFT AND AGRICULTURAL IMPLEMENT WORKERS, AFFILIATED WITH THE CONGRESS OF INDUSTRIAL ORGANIZATIONS The impact of curtailment in the interest of national defense has not yet been felt in the automobile industry. It is true that the Office of Production Management has already announced reduced quotas for passenger-car production for the 12-month period beginning August 1, 1941. Total passenger-car production in those 12 months will be 50 percent under production in the 12-month 1940-41 model year. No more than 2,148,300 cars will be produced as compared with the 4,223,732 cars which came off automotive assembly lines in the previous year. But this slash in production has not yet been realized. From the 1st of August this year up to September 20 a total of 319,720 motor vehicles have been produced as compared with production of 272,673 for the same weeks of 1940. Instead of the 26 percent cut in operations ordered by Office of Production Management beginning with August 1 we have been experiencing a 17 percent increase in production. Only in the last 2 weeks has production been checked. The following table will indicate total vehicle production on a week-to-week basis: Motor vehicle production, Aug. 1 to Sept. 20 The auto production has proceeded at this speed is a matter of some concern to the membership of my organization. For it indicates that the major producers have turned their full energies toward securing the highest possible levels of production in the first few weeks of the present-model year. The United Automobile Workers fears that this all-out production of cars in the last few weeks may be opening the way for a slump in production and employment before the 48.4 production cut announced for December 1 can take effect. In the present uncertain situation, therefore, it will be impossible to present to the members of the Tolan committee any reports of the full impact of production curtailment in the automobile industry. I can only suggest some of the probable effects of curtailment in the auto industry. I can only estimate conditions which will exist throughout our industry within the next few months. Before dealing with this question it is well to point out that in spite of the comparatively high level of production throughout the auto industry, displacement of workers has already taken place in certain areas of the Union. In Buffalo, for instance, 3,600 of our members found themselves without employment over a month ago when the General Motors Corporation shut down its plants in that city for conversion to defense production. Earnest efforts on the part of Office of Production Management secured employment for some 1,400 out of this number in the booming defense plants of Buffalo. The remainder, including about 400 now enrolled in defense training courses, are now subsisting on unemployment compensation. In a number of auto-parts plants, including the giant Briggs body plant where lay-offs will shortly amount to about 4,000, future curtailment in final assemblies has already taken its toll of employment. No conclusive data on this situation is yet available on an industry-wide basis. PRIORITY UNEMPLOYMENT Beginning with December 1, 1941, the automobile industry will be allowed to produce only one passenger car for every two produced last year. Beginning with March of 1942 production quotas are to be reduced even below this level. It should be understood that in establishing quotas for the automobile industry the Office of Production Management makes no guarantee that materials will be available for their complete fulfillment. No priority or preference rating is available for critical materials going into the production of automobiles. In the auto industry such ratings are reserved for the production of heavy trucks and repair parts. In view of the shortages now existing in supplies of essential metals, it is altogether likely that by the first of next year production quotas announced by the Office of Production Management will become impossible of accomplishment by the automobile industry. On the face of it this situation constitutes a grave problem to the men and women whose livelihood depends upon employment in the auto industry of Detroit and Michigan. It is certainly a matter affecting profoundly the interstate movement of workers. How many workers are to be displaced by curtailment throughout the auto industry? The best answer to this question can be suggested by comparing last year's employment with employment during the year of 1938. In that year the auto industry produced about 50 percent of last year's motor vehicle output. And in 1938 an average of 305,000 workers found employment in the auto industry. During winter and spring of 1941 employment in the auto industry has averaged about 520,000. These figures would indicate, then, that about 215,000 auto workers will be seeking new employment of some kind by the middle of December 1941. It is true that a part of this 215,000 will be able to secure employment in expanding defense industry. But defense employment will be sufficient to absorb only a fraction of this number within the near future. Between June and December of this year not much more than 60,000 defense jobs will have been added to the auto industry. Assuming that every defense job went to a displaced auto worker, by January 1, 1942, at least 150,000 automobile workers would be still dependent on unemployment compensation, Work Projects Administration assistance, or relief. For the State of Michigan alone at least 80,000 auto workers are threatened with unemployment through the winter. The effect of this situation would appear to be little short of catastrophic for the communities affected. Unemployment for 150,000 auto workers will mean a decline of $6,240,000 per week in the purchasing power of labor throughout the county.1 In Detroit it appears that net unemployment will be increased by 50,000 by January 1942. In communities such as Flint, Mich., the problem may well assume the proportions of a major crisis. Out of a total industrial employment of 50,000 in Flint as of May 1941, at least 20,000 are threatened by lay-offs within the next 3 months. Only one plant in Flint is now working on Government contracts; and defense work now contracted for will not be sufficient to employ a majority of its present automotive workers. Of course Flint's problem would be well on the way to a successful conclusion had not the General Motors Corporation given up its plans for locating there an aircraft engine plant which could have employed at least 10,000. On the claim that "Flint's labor supply was inadequate" this aircraft engine plant is now swinging into production in Melrose Park, Ill.2 1 Bureau of Labor Statistics average weekly earnings for auto workers in May 1941 ($41.64) times total unemployment. A similar mystery in plant location is the choice of Ypsilanti for Ford's giant bomber plant. This community lacks all facilities for the 30,000 or more workers to be employed. These workers will pay the price for this in a 30-mile drive to and from work over intolerably crowded highways. Saginaw, Lansing, Pontiac, and other centers of auto production in Michigan are likewise threatened by the curtailment of automobile production-though in those cities the impact will be less crushing than in Flint or Detroit. How soon will defense production call for the labor of these men whose jobs are threatened by material shortages and curtailment? All the information we have been able to secure indicates that the auto industry at its present pace is creating about 10,000 defense jobs per month. Unless this pace is considerably increased-and I am confident such increase is possible— net unemployment will not be materially reduced until the summer of 1942. Defense jobs coming into the industry up to July 1942, will be barely sufficient to absorb additional unemployment created by cuts well under the 50-percent level anticipated for next spring. I do not know how much at variance these conclusions may be with those presented to this committee by representatives of the automobile industry. I do not see how they can well present a more hopeful picture. In recent weeks representatives of management have come to take a more realistic view of employment prospects in the auto industry than they had before. Certainly it is difficult now to speak of a shortage of labor as a bottleneck in the defense program. This marks a considerable change over earlier attitudes. Representative of the thinking 2 or 3 months ago of auto company executives is the following statement which appeared in a study of The Auto Industry's Role In Defense prepared by Wards Automotive Reports in July of this year: "The automobile industry, therefore, is likely to add to its pay rolls by next spring a total of approximately 450,000 men. This is a tremendous total—about the equal of the 447,000 hourly rated employees which the plants are estimated to have employed in 1940." GENERAL EFFECTS OF PRIORITY UNEMPLOYMENT All of us in Michigan are deeply concerned with the direct economic effects of this dislocation upon our workers and our communities. If a well-planned program can be followed out by industry, labor, and Government these unfortunate repercussions can be kept at a minimum. But this problem must become not only the concern of the auto worker whose security and standard of living has been made precarious. Along with the worker the large group of tradesmen and professional people whose incomes are dependent upon his wages are threatened. The farmers of this State, too, stand to lose through the misfortune of the city workers who make up their primary market. Certain groups of workers are more seriously endangered by this "priority unemployment" than others: 1. The right to employment for Negro workers in the auto industry on defense production has been resisted by many corporations. I am advised that representatives of the Congress of Industrial Organizations in Chicago have taken steps to bring the General Motors Corporation to the elimination of discrimination against workers of Negro or Jewish origin. 2. With the whole transition to defense production, the position of women workers in the auto industry is threatened. Management has claimed in many cases that work available on defense production is not suitable to the capacities of their female employees. This attitude must be reckoned with here however much it is in variance with the experience of British industry in meeting problems of wartime production. 3. Groups of skilled workers in the auto industry are finding that the present training is of small help to them in securing defense employment. Large numbers of trimmers, and polishers, for instance, are in a difficult position. 4. The unskilled worker and the older production worker are in weak positions to meet the competition of a labor market which still contains close to 7,000,000 unemployed. Only through the protection of the union in securing employment can workers in these categories find stability for themselves and their families. RESPONSIBILITY FOR DISLOCATION For many years the American automobile industry has had a world-wide reputation for its resourcefulness, initiative, and mastery of productive technique. It is this industry with its record of magnificent accomplishment which had been counted on to provide the productive power necessary to make this country an arsenal of democracy. A confidential bulletin of the Bureau of Foreign and Domestic Commerce, quoted by I. F. Stone in his recent book, Business As Usual, states: |