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America's 'other' auto industry

In the South, host to foreign-owned plants, there is little sympathy held for Detroit.

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"If you're making $60 or $70 an hour, I can see how you don't want to work for $20," says West Point barber Dewey Rayley, who reports that most of his customers look unfavorably on a federal bailout for the American auto companies. "But that's the thing: What makes you think it's worth so much just to build a car?"

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The UAW, for its part, has tried to unionize the international plants in the South, to no avail. Its membership is down 17 percent from 2007, to 464,910 – the lowest since the Great Depression.

With the stakes rising, the once tough-minded union is now "a shadow of its former self," says Nelson Lichtenstein, director of the Center for the Study of Work, Labor and Democracy in Santa Barbara, Calif.

On Wednesday, UAW head Ron Gettelfinger said the union will discontinue a controversial jobs bank – a kind of private unemployment program – and allow the Big Three to postpone payments into a healthcare trust for workers. It's the second offer to reopen contract negotiations in three years.

The UAW concession "is significant and unprecedented," says Harley Shaiken, an expert on labor and the global economy at the University of California, Berkeley. "The fact that the union is willing to jettison [the job bank] shows that they want to clear the political air for a reasoned discussion on why the industry survival is important to the entire economy."

A prevalent right-to-work philosophy isn't the only reason foreign companies like Toyota have located plants in the South. There's also the proximity to a car-loving region with little mass transit and a population that totals that of the Midwest and New England combined. Moreover, the Southern autoworkers are fairly young, meaning few qualify for pensions. General Motors, for instance, supports 400,000 retirees; Toyota supports 700.

While Detroit and the UAW are locked in what Mr. Lichtenstein calls a "failed marriage," the Asian firms, in particular, have flirted effectively with a South big on states' rights and individual liberties. With different work styles and no union rules with which to comply, foreign-car companies can be more flexible and responsive to customers – though union shops get top marks on seven of eight quality and productivity standards. Unlike in the Detroit-owned plants, workers at foreign-owned facilities eat in the same cafeterias as the brass – a kind of egalitarian mind-set that fits well with Southern social graces, leaving workers few incentives to unionize.

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