The White House and the American automobile industry have had an up-and-down relationship over the past century. And while Detroit isn’t quite the goliath it once was, the automobile industry accounts for around three percent of the United States’ GDP today. For comparison, the technology sector amounts to ten percent of the country’s gross domestic product.
That’s how we can have Elon Musk essentially begging Joe Biden to mention Tesla by name. Meanwhile, President Biden is also test-driving the Ford F-150 Lightning and GMC Hummer EV. However, General Motors hasn’t always had the best relationship with the Oval Office.
In 1950, President Harry Truman passed over General Motors to replace FDR’s “Sunshine Special” Lincoln. The Ford Motor Company won the contract and supplied ten Lincoln Cosmopolitans. Popular belief is that Truman did not choose General Motors because GM refused to give him vehicles to use during his election campaign in 1948 as the company didn’t want to be associated with the eventual loser. Very few people thought that Harry Truman would win in 1948, but that’s not the whole story.
Despite winning World War II, the transition from a war economy to peacetime production was turbulent. Government contracts had become the by-far largest source of revenue for every corporation producing war materiel. According to General Motors, the automaker produced $12.3 billion ($194 billion in 2022 U.S. dollars) in arms, equipment and vehicles. General Motors even used the motto “Victory Is Our Business” during the war.
The federal government also had to detangle itself from the private sector. For example, William Knudsen was President of General Motors until he left GM in 1940 to lead the government’s wartime production effort. In 1942, President Roosevelt directly commissioned Knudsen as a three-star general in the U.S. Army. As a civilian with no military background, Knudsen was made a lieutenant general to take a similar position within the War Department.
And with millions of soldiers returning home, inflation ran rampant. The inflation rate in the United States today is considered high at 7.9 percent. Inflation reached as high as 18 percent in late 1946. There was a wave of workers’ strikes across the country for better pay and working conditions. The most prominent was the United Auto Workers’ strike against General Motors.
The UAW strike began in November 1945 with the goals of a thirty percent wage increase and a price freeze on vehicle models. The effort was led by the UAW’s GM Department Director Walter Reuther. Reuther argued that GM was utilizing advances in manufacturing technology to lower work hours while also increasing prices to maximize profits to the detriment of American society. He asserted that fewer jobs and lower wages would lead to less tax revenue in local communities to build and maintain municipal services like hospitals, schools and roads.
General Motors claimed that it couldn’t afford the wage increase and that GM must have the exclusive right to determine the prices of its products. As a response, Reuther countered with a smaller wage increase demand on the condition that GM proves that it couldn’t afford the initial wage demand. GM refused to open its books to the UAW. The strike eventually ended on March 13th, 1946 with a 17.5 percent (18.5-cent an hour) wage increase and no union input on product pricing. Two weeks later, Walter Reuther was elected UAW President.
The Truman administration attempted and failed to end the strike early via mediation. Though, the White House’s policy positions at the time aligned with the UAW. In the wake of the UAW strike, the Republican Party gained control of both the House and the Senate after the 1946 midterm elections. President Truman infamously referred to this Congress as the “Do-Nothing Congress.”
To prevent further worker action, the “Do-Nothing Congress” passed the Taft–Hartley Act in 1947, a bill drastically reducing the power of unions in the United States granted by the New Deal. Truman vetoed the bill and, in an address to the nation, stated, “I vetoed this bill because I am convinced it is a bad bill. It is bad for labor, bad for management, and bad for the country.”
However, a significant amount of Democrats crossed the aisle to support the bill. The Republicans had enough votes in Congress to override the veto and pass Taft–Hartley into law. It still remains in effect today.
Charles Erwin Wilson, GM President during the strike, would leave the company after being appointed Secretary of Defense during the Eisenhower administration.
General Motors would eventually win the contract to supply the Presidential State Car in the early 1980s during the presidency of Ronald Reagan. GM has supplied the state limousine since except for a brief period during the term of George H. W. Bush.
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