What GM Tells Us

Posted by John Hankey
on Saturday, December 1, 2018

The recent moves by General Motors to close U.S. manufacturing plants and eliminate 14,000 craft and salaried jobs comes as no surprise. There will be the inevitable back-and-forth in our current politically-charged environment. It will have a minor effect on railroad traffic patterns. But I think a little historical perspective is in order.

GM’s decision (as part of a global reinvention of the company following the 2008 recession) is frank acknowledgement that its future will be based on electric vehicles and autonomous driving. The Ford Motor Company is making the same kind of calculation by basically abandoning traditional passenger automobiles in favor of pick up trucks and SUVs. Foreign automakers are filling the vacuum, because at least for a while, many of us can neither afford electric vehicles or want to ride around in big trucks or SUVs.

Yet-- how is this different from the transition from steam locomotives to Diesel motive power between 1940 and 1960? Or the change from horse-drawn vehicles to gasoline-powered automobiles and trucks between 1920 and 1940?

Or travelers abandoning an effective, integrated, broad-based continental railroad passenger train network in favor of automobiles, busses, and airlines between 1945 and 1965? Or the growth of telephone communication (and the rapid decline of telegraph messaging) in the early 20th century?

We won’t even begin to discuss the rapid switch from coal to oil as the country’s primary fuel (1925-1945), or the last twenty years’ experience with the Internet. Isn’t the history of American business the continuous process of entire industries and populations of workers being overtaken by events and marginalized? When did the job of railroad crossing guard go extinct? At least on the B&O, it was in the late 1980s.

I have great empathy for the front-line craftsmen and workers in the automotive industry whose jobs are either evaporating or changing in bewildering ways. Robotics and automation will always be threats to decent-paying factory jobs. The substitution of capital for labor (machines increasingly doing the work of human beings) has been a powerful force in the industrialized world for two centuries. Workers generally lose out.

As news coverage of the GM “rightsizing” points out, mid-level engineers, managers, supervisors, and other professional staff will also feel the pain of transition from one technological regime to another.

It was the same in the railroad industry from the 1930s through the 1950s, when railroads no longer needed mechanical engineers trained in steam locomotive design, draftsmen, boiler inspectors, or other traditional railroad professionals, and instead were looking for electrical engineers, Diesel specialists, and a new set of technical skills. The B&O and a few other roads embraced massive mainframe computer systems in the mid-1950s, and began hiring a very different type of professional and engineering staff.

Consider the tens of thousands of machinists, boilermakers, laborers, clerks, Pullman Porters, and other railroaders put on the street as railroad companies “rightsized” and “transitioned” following the Second World War. At least then, the economy was expanding in ways that allowed many of those folks to find work.

Repeat that unfortunate reality a dozen times in a variety of fields, and you have some idea of the churn transportation and logistics industries have experienced since the end of the Civil War. None of this is new.

Yes—it has been that long. And yes—the railroad industry has had its share of harsh transitions for contract and non-contract employees.

The good news is that the railroad industry today is agile, smart, engaged, and very much aware of its current operating environment. That could not be said as recently as the 1970s.

The other good news is that the industry will adapt to changes in automotive traffic and plant closings pretty much in the same ways it has to changes in energy traffic (coal, oil, gas).

If I had a suggestion, it would be that we keep all of what is unfolding in a common sense context of history. Yes-things seem to be moving awfully quickly. That is what folks thought a hundred years ago, too.

The timing of these sorts of transitions may be growing shorter. We may perceive that change is accelerating, or that waves of new technology wash over us with increasing frequency. If someone had told me in the mid-1970s that railroading today would be so satellite-based, rely on algorithms (which I only dimly understand), and seriously working on autonomous train operations and essentially zero crew, I would have thought it a fantasy--or worse.

But here we are. The B&O Railroad that I worked for still had a working Morse line between Cumberland and Sand Patch at the summit of the Allegheny Mountains, which was often helpful in Winter. Imagine that today.

New technology is disruptive. We’ve been through waves of change sneaking up on us (and then becoming the “new normal”) for two centuries. Railroading has often been at the heart of it. The next decade is going to be a wild ride for American industry, and railroading in particular.

I hope I’m around to see how things turn out.



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