169 161 (4) The increased imports resulting from trade agreement concessions are the major factor causing or threatening to cause the unemploy- From 1968 until April 2, 1975, approximately 3,074 workers in the automotive products industry were certified by the Secretary of Labor as eligible to apply for adjustment assistance pursuant to an affirmative finding of injury by the Commission. Of the 3,074 workers receiving certification the majority, approximately 2,000 workers, were from a Los Angeles (Commerce, California) Chrysler Corporation passenger-automobile final assembly plant. Another 833 were denied certification due to negative findings by the Commission. Adjustment assistance under the Trade Act of 1974.--On April 2, 1975, the Trade Expansion Act of 1962 was superseded by the Trade Act of 1974. Under the Trade Act of 1974, investigations pertaining to petitions by group of workers were transferred to the Department of Labor from the Commission. So far only groups of workers in the automotive products industry have petitioned for adjustment assistance under the Trade Act of 1974. In order for the Department of Labor to make an affirmative determination and issue a certification of eligibility to apply for adjustment ment assistance, each of the following requirements of Section 222 of the Trade Act of 1974 must be met. They are: (1) that a significant number or proportion of the (2) that sales or production, or both, of such firm or 170 162 (3) that increases of imports of articles like or Assistance to workers under Section 222 of the Trade Act may include cash trade readjustment allowances, training, testing, counseling, job replacement, job search grants, and relocation allowances. Between April 2, 1975, and November 30, 1975, approximately 18,720 workers in the motor-vehicle products industry were certified by the Department of Labor to receive adjustment assistance under the Trade Act of 1974. Of the 18,720 workers certified, approximately 18,000 workers were Chrysler auto workers in Missouri and Michigan final-assembly, trim, and engine plants. Another 33,250 workers, of which approximately 23,000 were Chrysler auto workers, were denied certification. 1/ The Department of Labor made affirmative findings for Chrysler auto workers involved in the production of intermediate autos, eightcylinder engines, and certain types of automotive trim. It was found that for these three products there were no significant losses to domestic competition and Canadian imports increased substantially even in absolute terms. On December 18, 1975, a series of petitions for worker adjustment assistance were filed by the UAW alleging that 30,000 workers at General 1/ The United Automobile Aerospace and Agricultural Implement Workers of America (UAW) filed suit shortly after the Secretary of Labor certified the 18,000 Chrysler workers for adjustment assistance and denied 23,000 Chrysler workers certifications. The purpose of the UAW suit is to require the Labor Department to certify the 23,000 Chrysler workers previously denied certification. 171 163 Motors, Ford, and Chrysler had been dislocated by reason of increased imports of standard-sized passenger automobiles from Canada. The workers were employed at 13 final-assembly plants and at many plants supplying parts for standard-sized passenger automobiles made at the 13 plants. At the same time the UAW filed an additional series of petitions with the Labor Department alleging that 48,000 workers at General Motors and Ford had been dislocated by increased imports of subcompact passenger automobiles. Although most of the imports involved in this case may be from Western Europe or Japan, some imports of subcompact passenger automobiles from Canada may be involved. The workers involved in this case were employed at 5 final-assembly plants and numerous plants that supply parts for subcompact passenger automobiles to the five plants. A determination on all of these cases, involving 78,000 workers, is due fom the Department of Labor by mid-February. Canadian adjustment assistance Of the 613 Canadian firms that applied for adjustment assistance, 112 were eligible and received assistance; the remaining 501 did not qualify since it was determined that they were not in the automotive business. Workers filed a total of 6,162 claims for benefits under the "Transitional Assistance Benefit Programme". Of these claims, a little more than onehalf, or 3,113 were certified for payment. Assuming each worker filed only one claim, approximately 3.8 percent of the 1965 employment in the Canadian automotive products industry was affected by the agreement. 172 164 Labor Productivity in the Assembly of Passenger Automo- The firms that received the Commission's questionnaires were requested to furnish data on the number of man-hours required to assemble one vehicle in the subcompact, compact, intermediate, and standard size categories in their United States and Canadian facilities. Not all firms were able to furnish the information as requested. The completed returns for a major producer indicate that the number of man-hours required to assemble a vehicle varies directly with the size of the vehicle. For example, in 1974, the man-hours required to assemble a vehicle ranged from 16.44 for a subcompact model to 23.61 for a regular standard-type model. The same models required between 1 and 6 percent more man-hours to assemble in Canada than in the United States for the responding firms. Trends in United States and Canadian Wage Rates In Canadian motor-vehicle assembly operations where workers are members of the UAW, wage parity has been attained since 1969. The parity is expressed in U.S. dollars and does not take into consideration variations in the exchange rate. Thus, if a punch press operator makes $5.32 an hour in a Ford assembly plant in Detroit, a similar worker in a Ford assembly plant in Canada will also be making (C) $5.32 per hour. Due to differences in the occupational mix an average wage rate for the entire United States automotive-products industry will not be equal to the average wage rate for the entire Canadian automotiveproducts industry. In 1960 the average hourly earnings in the motor-vehicle sector was $2.89 in the United States and $2.27 in Canada, or 78.6 percent 173 165 The of the United States hourly earnings. 1/ By 1972 the United States and Canadian hourly earnings were $5.32 and $4.91, respectively. Canadian hourly earnings had increased to 92.3 percent of the United States hourly earnings from 78.6 percent in 1960. The same narrowing of the differential in average hourly earnings between the two countries occurred in the motor-vehicle parts and accessories sector also. While Canadian hourly earnings averaged 77.2 percent of United States hourly earnings in 1960 ($2.76 for the United States and $2.13 for Canada), by 1972 they were 85.4 percent of United States hourly earnings ($5.05 for the United States and $4.31 for Canada). The overall narrowing of the differential did not begin to take effect in the motor-vehicle sector until 1968 and not until 1970 for the motor-vehicle parts and accessories sector. Trends in United States and Canadian Labor Productivity Even greater disparities in labor productivity are observed between the two countries when comparisons are made in value added per production worker man-hour. In the assembly of motor vehicles the gap in value added per production worker in the two countries has widened rather than narrowed from 1967 2/ to 1972. Canadian value added per production worker man-hour in motor-vehicle assembly increased from 78.8 percent of the United States level in 1967 to 84 percent in 1969 and thereafter declined and reached 64.8 percent of the United States level 1/ See table 123 of this report. 2/ There was a change in the U.S. Standard Industrial Classification in 1967 and a number of commodities including motor vehicles were reclassified. For this reason pre-1967 U.S. data cannot be adquately matched and compared with post-1967 U.S. data on a four digit SIC basis. |