These trends collided with a deflating stock market in 2000 to create a squeeze play for the industry. Rising gas prices turned consumers off the SUVs and minivans that had saved Detroit's bacon. In just the last five years the Big Three's market share has fallen from 66 percent to 58 percent.

At the same time that the domestic picture soured, many of the Big Three's global acquisitions started to go bad. GM, for example, paid $2.4 billion to acquire a 20 percent stake in Fiat in 2000, then ponied up another $2 billion to get itself out of the deal five years later. Ford has injected more than $5 billion into Jaguar, which to this day remains in the red. Meanwhile, the merged DaimlerChrysler is worth less today than Daimler was on its own before the two united.

Hemorrhaging money and with no end in sight, last year the automakers took desperate measures. Delphi declared bankruptcy. GM and Ford put thousands of jobs on the chopping block. And Detroit has redirected decades of consumer frustration with U.S. automakers for their lackluster designs and poor quality into widespread resentment of rank-and-file auto workers for their company-paid health care and pensions. The automakers have tapped into middle America's insecurity with a not-so-subtle message: "If you don't have a pension or job security, why should they?"

NO FUTURE?—The scale and speed of these changes have left the UAW flat-footed, struggling to get a hearing—much less formulate a strategy—in its fight to save some of the last good manufacturing jobs in America. Cynics might ask: Who cares? After all, the UAW represents fewer than 400,000 auto workers in an industry of more than a million, and the concessions the companies are clamoring for will simply bring their wages and benefits closer to what the market will bear for less-skilled workers. Besides, manufacturing is so 20th century. Aren't we a post-industrial economy with a future in services and high-tech jobs?

This mindset misses what's important about the crisis in auto. Downsizing isn't accountants shuffling numbers around on a spreadsheet; the lost jobs hit real people who are concentrated in specific communities. Cuts of this magnitude will reverberate throughout the Midwest, leaving a lasting economic and social hangover. And they will not be confined to auto, as other companies follow the Big Three's lead.

High-tech companies can't fill the void. Google, for example, has just announced plans to open up shop in Michigan. But Google employs fewer than 6,000 people worldwide, a drop in the bucket compared with the 70,000 jobs this round of auto restructuring will destroy.

How can the industry right itself without devastating workers and communities? Execs have shown themselves curiously unwilling to campaign for one measure that would save them billions per year: single-payer health insurance. GM is the largest private purchaser of healthcare in the country, providing coverage to 1.1 million people. Last year the price tag was $5.3 billion, which, as CEO Rick Wagoner is fond of pointing out, is more than GM pays for steel.

The Big Three say that such "legacy costs," which also include pensions, are choking their business, obscuring the fact that all three automakers have pension and retiree health funds flush with cash—healthy for the foreseeable future. If health care is such a heavy burden, why not join the movement for a national health care plan? Canada's single-payer system makes it much less expensive to do business there and has spared most Ford and GM plants north of the border from the ax. But despite GM's promise to the UAW to pursue "universal coverage" in exchange for the union's $1 billion in concessions on retiree health care, Wagoner didn't even mention national health care in his testimony in June before a congressional panel on the health-care crisis. Either free-market ideology is trumping good business sense, or else paying for benefits isn't such a burden after all.

When Henry Ford introduced the five-dollar day in 1914, he famously quipped that he wanted to pay his workers enough so that they could afford to buy his cars. Today, a new-hire at parts-makers Delphi or Visteon makes $14.50 an hour. In 2007, when new contracts are negotiated, the Big Three's new-hires are sure to take a hit.

What will America look like if most workers earn Wal-Mart, instead of GM, wages? For those without a four-year college degree—about 70 percent of the labor force—average wages have stagnated or fallen for the last 30 years, hovering under $15 today. Manufacturing jobs paid wages no better than the economy-wide average when Henry Ford was perfecting the assembly line. But by the end of the twentieth century they were about 25 percent above average, in no small part due to unions like the UAW.

To solve the industry's problems, many analysts have urged Detroit executives to go back to the drawing board and start afresh. They point to decades of bad decisions and wrong turns, and are convinced that the auto giants will remain beached whales on the shores of the twenty-first century economy if they can't reinvent themselves.

This advice is as relevant for the UAW, although the union's challenges are even greater: creating more good jobs and affordable health care for everyone. The UAW was born in the crucible of Depression-era social upheaval, and its leaders originally saw the union as just one piece of a large-scale movement to solve the problems of the time. Inspired by those challenges, the UAW helped forge the political climate necessary for bold social policy to take root. Today the need is just as great. Now more than ever the UAW needs the audacity and inspiration of its founders to help the country, and its remaining auto workers, form a more perfect union.