Timothy Minchin, America’s Other Automakers: A History of the Foreign-Owned Automotive Sector in the United States (Athens: University of Georgia Press 2021)

The United States auto industry has received much scholarly attention, most focusing on its rise in the Great Lakes region and its decline since the 1970s. Treatment of autoworkers and their main union, the United Auto Workers (uaw), has followed a similar arc. Declining numbers and influence have contributed to the narrative of a Rust Belt of formerly thriving auto centres like Detroit. In America’s Other Automakers, Timothy Minchin reframes that narrative by focusing on foreign-owned auto factories, called “transplants,” beginning in the early 1980s.

Minchin begins with an exploration of the ten-year, unsuccessful experiment by Volkswagen to assemble cars in Pennsylvania. He then offers chapter-length analyses of literally ground breaking and successful efforts at U.S. production by Honda in Marysville, Ohio (beginning in 1982); Nissan in Smyrna, Tennessee (1983); Toyota in Georgetown, Kentucky (1988); bmw in Greer, South Carolina (1992); Mercedes-Benz in Vance, Alabama (1993); Hyundai in Montgomery, Alabama (2005); and Kia in West Point, Georgia (2010). The main questions driving Minchin’s investigation are: “Why did these companies locate where they did, and what did their arrival mean – especially in human terms – for the communities involved?” (3)

Extensively researched in governors’ papers, local newspapers, uaw records, and oral history interviews, the case studies in America’s Other Automakers differ in details but lead to generalized answers. Companies learned from Volkswagen’s experience and chose rural, “greenfield” locations that had no history of unionized industry and came with lucrative financial incentives from state and local governments, which competed aggressively to land auto plants. Minchin explores governors’ records, however, to argue that personal relationships, elaborate meals, private flights over prospective factory sites, and overseas visits could outweigh incentives offered by other states. The highest bidder did not always win, for example with bmw and Kia.

The arrival of transplants in chosen communities brought a combination of joy, celebration, anger, and apprehension. Farmland had to be acquired, often with cajoling and high payouts, and some residents worried about the loss of their rural way of life. Others eagerly applied for jobs. Anti-Japanese sentiment was strong, often fueled by World War II veterans. Hundreds of millions of dollars in incentives seemed worth it to many and a misuse of tax money to others, especially those in distant parts of “winning” states, who experienced such expenditures as reductions in funding for education, roads, and other government services. Many of the workers hired by transplants did not come from the communities or counties where the factories were located. Sometimes, like in West Point, Georgia, massive incentive spending resulted in benefits for citizens of another state, in this case Alabama. New transplant factories generally employed 2,000-3,000 people (in some cases at well over $100,000 in incentives per job) and received tens of thousands of applications (by 1990, Toyota had received 200,000 applications for 3,000 positions).

Although work was often difficult and dangerous, wages, although slightly less than uaw standards, tended to be much higher than anything else in the area. Minchin demonstrates that there was discontent inside these factories. The uaw, however, was unable to organize any of them, stymied by corporate and state government hostility to unions and a general sense that the uaw had caused the decline of the Detroit Three. Transplant workers seemed to fear that unionization would more likely cost them their jobs rather than make their lives better. It didn’t help the union cause that transplant workers lived in vast geographical areas and often didn’t know each other’s last names, making it difficult for organizers to locate them. The uaw also made tactical errors, like handing out cards with a Detroit address, fueling the notion that union organizers were outsiders, apparently unlike foreign automakers.

Ironically, the uaw had pushed hard for transplant factories, assuming that any auto workforces would opt for unionization. Foreign automakers, especially Honda and Toyota, had made significant inroads in the U.S. market during the oil crises of the 1970s but faced serious opposition from many Americans, who saw imports as threats to the U.S. auto industry and auto jobs. Campaigns to set quotas for imports and to require significant domestic content in vehicles sold in the U.S. led Japanese firms to consider building plants overseas. Fluctuating currency exchange rates also affected the profitability of exports to the U.S. and motivated the construction of transplants. Foreign automakers, however, wanted nothing to do with unions in their U.S. operations, although they differed in how overtly they made that known.

Foreign automakers had serious concerns about what they perceived to be Americans’ poor work habits. Any experience with unions, they thought, could only make things worse. Job applications and interviews could weed out those with union backgrounds and extensive training, especially if paid for by state governments, and the development of company cultures, reminiscent of welfare capitalism in the early 20th century, could help create an efficient, loyal workforce. Honda, for example, offered a free laundry service for work clothes, affordable cafeterias, a sports centre with a pool, gym, sauna, and jacuzzi, and incentives for attendance, productivity, safety, and quality. Programs like these, companies hoped, would keep workers motivated to work long shifts, accept mandatory overtime, and endure any management decision. Whether or not that was the outcome – we learn very little about turnover rates – attendance and safety incentives could motivate workers not to report accidents or injuries.

In terms of increasing sales and market shares, these were success stories, and many transplants also became large exporters of vehicles. Transplants tended to weather the Great Recession without significant layoffs, unlike gm and Chrysler, which entered bankruptcy, or Ford, which mortgaged almost everything to avoid that fate. Although early transplants did not spur much of a US-based parts industry, Hyundai and Kia were accompanied by suppliers, which multiplied their economic benefits to their regions. These positives are the book’s biggest takeaway.

But Minchin also asks us to consider alternative perspectives. Despite harsh working conditions and high injury rates, workers accepted their conditions because they had no viable alternatives. To a large extent, the cost advantages of transplants came from not having to pay enormous legacy costs. For example, in 2008, Toyota USA had seven hundred retirees, while General Motors had more than 400,000, which added up to $1500 to the cost of each gm vehicle. Communities that won the competition for transplants rarely benefited as much as predicted. In the 2010s, transplants joined the movement toward hiring temporary employees, who worked precariously at lower wages and without benefits, undercutting much of the promise of this economic development. Automation might be reducing the number of jobs as well, but Minchin does not explore that issue. Significantly, transplants hired relatively few African American employees, even in South Carolina and Alabama. Factory sites and surrounding demographics always favoured potential white workers. The hiring of women seemed to be limited as well. Moreover, states with transplants have seen little improvement in overall poverty rates.

The auto industry remains prestigious enough that winning the factory sweepstakes remains big news and a hopeful sign of a prosperous future. It remains to be seen how the transplant story will play out, however, and this book is a helpful and engaging foray into the topic.

Daniel Clark

Oakland University

DOI: https://doi.org/10.52975/llt.2021v88.0020.