May 13

This Day in History

Automotive

May 13, 1980:

Autoworkers union head joins Chrysler board

At the annual meeting of the Chrysler Corporation on this day in 1980, stockholders vote to appoint Douglas Fraser, president of the United Automobile Workers (UAW), to one of 20 seats on Chrysler's board of directors. The vote made Fraser the first union representative ever to sit on the board of a major U.S. corporation.

Born in 1916 in Glasgow, Scotland, to a strongly unionist father, Fraser was brought to the United States at the age of six. After dropping out of high school, he was fired from his first two factory jobs for trying to organize his fellow workers. Fraser then got a job at a Chrysler-owned DeSoto plant in Detroit that was organized by the UAW. Quickly promoted through union ranks, Fraser caught the eye of UAW president Walter Reuther. He worked as Reuther's administrative assistant during the 1950s, a groundbreaking period during which the UAW solidified policies on retirement pensions and medical and dental care for its members. Well liked by Reuther, with whom he shared a similar philosophy of unionism as social action, Fraser became a member of the union's executive board in 1962 and a vice president in 1970. Reuther died in an airplane crash that year, and Leonard Woodcock won a narrow vote over Fraser to become UAW president. Fraser succeeded Woodcock in 1977.

The late 1970s were turbulent times for the American auto industry: Rising fuel prices and the popularity of fuel-efficient Japanese-made cars had crippled sales, and Chrysler--known for its big, gas-guzzling cars--faced possible bankruptcy. In 1979-80, Fraser played a key role in getting Chrysler a $1.5 billion bailout from the U.S. government, negotiating a deal that called for hourly workers at Chrysler to accept wage cuts of $3 per hour (to $17) and giving the company permission to shed nearly 50,000 of its U.S. jobs. In a controversial move that was viewed with trepidation from both sides of the labor-management divide, Chrysler's chief executive, Lee Iacocca, nominated Fraser to the company's executive board. The stockholders voted in Fraser on May 13, 1980--three days after U.S. Treasury Secretary G. William Miller announced the approval of the Chrysler bailout.

Chrysler's subsequent turnaround--the company paid off its government loans ahead of schedule and posted record profits of some $2.4 billion in 1984--seemed to justify Fraser's willingness to make compromises on the labor side. Some critics, however, saw the union leader's actions as opening the door to a wave of similar concessionary bargaining on the part of automakers that later spread to management in other industries. Fraser retired as UAW president in 1983 and left the Chrysler board the following year. He died in February 2008, at the age of 91.

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