Racial and xenophobic hostilities were not uncommon in the Australian automotive industry in the 1950s and southern European and other non-English speaking background workers often fell victim to such hostilities. To a significant extent, racial and xenophobic prejudices emerged within the labour process itself. This paper examines how the ethnic division of labour on the car production lines generated acts - often violent acts - of intolerance and calumny by Australian born employees against those of non-English speaking background. It also examines the insensitivity of the Vehicle Builders Employees’ Federation to the extent of the racial problems that developed on the factory floor. A key argument of this paper is that the Federation’s hostility towards independent shop floor organisation was a key factor underpinning its ignorance of the extent of racism and xenophobia among the membership. In one automotive workplace characterised by autonomous and militant shop committee activity, substantial steps were achieved in overcoming the problems of racism and xenophobia.