Final answer:
Foreign auto companies focus on becoming union-free in the U.S. to maintain operational flexibility, reduce labor costs, and enhance bargaining power. The decline in union membership is linked to increased import competition and a shift of manufacturing to countries with lower labor costs. This strategy is a response to the intense global competition in the auto industry.
Step-by-step explanation:
Foreign auto companies aim to maintain union-free operations in the U.S. to avoid the challenges that come with unionization. Historically, the auto industry in the U.S. has been heavily unionized, with the United Auto Workers (UAW) having a strong presence. However, since the 1960s, increasing import competition from manufacturers in Japan and Europe began to impact jobs in the U.S. auto sector. As imports rose, the number of U.S. auto manufacturing jobs declined, and consequently, union membership dwindled. By 2015, membership in UAW had fallen from 975,000 in 1985 to roughly 390,000.
Multiple factors contribute to foreign auto manufacturers' preference for union-free facilities, which include the desire to maintain flexibility in operations, reduce labor costs, and increase their bargaining power. With lower labor costs, companies can save significantly and increase their profits. This trend is not only seen in the U.S. but in global trade as well, where multinationals benefit from free trade blocs and lower trading barriers, moving their manufacturing bases to countries like Mexico where the costs are lower.
The reduction of union workforce means decreased bargaining power for unions in these sectors, which is further amplified by the growth in unionization among public-sector workers, who do not face import competition challenges. The automotive industry is now marked by intensive international competition, which results in cost-saving strategies by foreign companies, and seeking union-free environments is part of that approach.