[Marxism] [SocialistProject] 'Unions and the Delphi Concessions' ~~The Bullet~~ November 14, 2005

Ernest Tate mackenzie.tate at sympatico.ca
Mon Nov 14 18:17:17 MST 2005

 ~~~~~~~~~~~~~~~~~~~(((( T h e  B u l l e t ))))~~~~~~~~~~~~~~~~~~~~~~~~~~

      A Socialist Project e-bulletin ....  No. 5  .... November 14, 2005

    GM, the Delphi Concessions and North American Workers: Round Two?

                           --Sam Gindin--

It is important to recall that until the 1970s, collective bargaining in the
United States and Canada was largely about workers demanding improvements
from their employers. But a new era in collective bargaining erupted at the
end of the 1970s that was soon dubbed 'concessionary bargaining'. Corporations
were now the ones making the demands. Tensions had been building through
the decade, with corporations increasingly asserting that they could no longer
both maintain profit rates and meet workers' demands and expectations.
Governments also intervened to shift and enforce the balance of power in
society through 'neoliberalism' through the 1980s,transforming the policy
'rules of the game'.

We are about to see the second wave of this attack on the North American
working class. The first wave did not, of course, ever subside: the story of
the past quarter century is a litany of increased pressure on the job,
insecurity over keeping decent jobs, longer hours and increased debt to hang
on to consumption standards, concern over social services, growing
inequality, and the weakening of trade unions. This is all about to get
dramatically worse.

The events signalling this second wave are unfolding in the American auto
industry. The United Auto Workers (UAW), under threat from General Motors
(GM), opened its collective agreement to save GM over $1 billion in health
care costs. UAW is currently in negotiations at Delphi (a components
division spun off from GM in 1999) where the corporation is threatening to
go bankrupt if workers don't cut their wages to $10/hr from the current
$26/hour as well as surrender health benefits and more or less reduce the
union to a dues collection agency that overseas a non-union workplace.

None of this is entirely new: American (and to a lesser extent Canadian)
workers in the airline and steel sectors are all too familiar with
concessions linked to corporate restructurings from bankruptcy. But given
the pattern-setting role that the auto sector has always played, the impact
of these latest developments should not be underestimated.  And given that
the US-Canadian auto industry is the most integrated cross-border industry
anywhere in the world, workers on the Canadian side of the border will not
be immune from the concessions pressures.

Several key questions emerge.  Will this be just an isolated bad-news
story -- a tsunami-warning -- that we can only hope misses us or at least
doesn't do any damage? Or will it be a wake-up call warning us that if
you're not fighting back, you're only waiting for things to get worse? Is
what's coming inevitable or can it be resisted? The first concessions wave
led the Canadian Auto Workers (CAW) in a direction that challenged
neoliberalism, free trade and ultimately their UAW parent union.  What will
the CAW response be this time?

Any effective counter-response will demand some creativity on the part of
workers and their unions, and a crucial beginning is that workers in the US
and Canada start talking about why this is happening and what might be done.
The following points, we hope, might contribute to the discussion of what
an anti-concessions campaign must take up.

1. You can not privatize the welfare state.

The first generation of postwar autoworkers used the good times to achieve a
host of social benefits, health care and pensions being the most important.
But in bad times, and especially when the competition didn't carry the same
costs, those benefits came under attack. Defending them in bargaining had
its limits both because the companies were in trouble and because winning
benefits which other workers did not have left autoworkers relatively

The response to the recent GM attack on the health care benefits of
autoworkers should have been - as some American rank-and-file workers
insisted - to call for a national health care program that extended this
crucial benefit to everyone, not taking it away from those happened to have
some protection. The UAW did eventually make this point, but only after they
had made the concessions on cutting healthcare costs for the company. Had
they challenged GM and put the larger issue on the national agenda, the
union might have been a catalyst for a larger struggle (and for taking a
step towards reviving the potential social leadership role of unions more
generally). But declaring this only after the precedent that UAW workers
would bear the costs of cutbacks was set reduced the UAW statement to empty

For Canadian workers, this may seem beside the point, as Canada already has
a national health care plan. But isn't that health care system now under
attack? And if this leads to having to negotiate an increasing share of
health care privately with companies, what would happen to the CAW's
ability to negotiate wages and other benefits? More important, however, is
a larger lesson from the UAW concessions: workers and unions who get too far
ahead of other workers when the situation favours them, will inevitably get in
trouble when the winds change. Workers in leading sectors will eventually be
dragged down if other workers are being pushed to the margins. Progress for
workers has to be generalized or those gains will be vulnerable to reversal.

2. The problem isn't 'out there' from globalization, it is in North America.

The main problem that the GM and Delphi workers face isn't competition
from China or Mexico or even Japan but issues which   can be directly
addressed at home. As Steve Miller, the head of Delphi said in a recent
speech: "...in the auto industry, Toyota, Nissan, and Honda are competing
from assembly plants in our back yard...the old oligopoly has crumbled, not so
much from globalization, but from upstart domestic competition" (October
28, 2005). In the parts sector, 80% of the US industry is non-union and
many of these plants pay less than half the wages at Delphi (non-union
parts also increase the incentive to outsource even more from the assembly

The issue is not so different in Canada where the overall industry is in
fact doing well, but non-union auto majors are winning a larger share of
the market. Here too Toyota and Honda won't be organized through business as
usual and neither will the parts industry, where the level of unionization
was once close to 80% and is now approaching 40%. Unless the CAW shows the
same verve which unions showed in the 1930s when they were able to organize
workers in spite of times much tougher than today (and in spite of
dramatically fewer resources than today's unions), breakthroughs in unionization
simply won't happen. In the 1930s, for example, mineworkers sent 100
organizers to organize steel workers so miners would not be isolated.

Although the auto companies are global, production is overwhelmingly
regional: cars sold in North America are largely assembled in North
America and made of parts produced here. This makes organizing all the
more possible, especially if it is seen in cross-border terms. Why couldn't
the CAW and UAW, for example, jointly declare: that the 10 major parts
plants will be organized; that the longer it takes, the more disruption the
entire industry will face; and that there is no point moving form the US to
Canada or vice-versa because we will be there to organize (and into Mexico
as well)? And why would the UAW not put US$200 million of its ever
increasing and unused $900 million strike fund to such use, if only
to defend its own members?

3. Opposition to free trade is nevertheless necessary.

Blaming globalization and free trade for everything can be a diversion from
more basic issues. Yet corporate mobility does remain a threat and this will
increase as we escalate our fights. If we see the issue not as other workers
taking our jobs, but as the freedom of corporations to do what they want
with production versus the ability of workers to influence their lives and
communities, then fighting free trade is a matter of democracy (workers'
freedom versus corporate freedoms), of joining with other in the community
to fight the unilateral power of corporations, and of international
solidarity to avoid the ratcheting down all global working standards.

To limit corporate threats of shutting down plants, it makes sense to revive
a variant of the former Canada-US auto pact and use the leverage of the
market to assert that investing in North America is a condition for making
profits here. Such a pact to constrain corporations and gain some controls
over investment flows would necessarily be extended to include Mexico and
Mexican workers. This couldn't be done alone: it would mean a commitment on
the part of unions far beyond anything to date to join the global justice
movement. In turn, such a campaign might offer the wider movement the kind
of concrete example it needs of alternatives to free or simply fairer trade
in favour of planned trade.

4. There is a need to question what we produce.

The big 'no-no' within auto unions in North America is questioning what kind
of products workers are making.  This was not always the case. In the early
1950s, the UAW was a national leader in calling for small but safe,
fuel-efficient vehicles. Leaving this decision to the companies has neither
helped auto workers nor consumers. Time and again, the companies gave up on
this less-profitable part of the market to concentrate on higher-profit big
vehicles only to see its competitors use this as a base for taking market
share.  Now, an important part of the problems at the Big Three of GM, Ford
and Chrysler are not only cost but the product. Where are autoworkers on
this issue today?

The issue has been avoided in part because of the belief that the companies
know best and in part because any criticism might hurt sales and therefore
the jobs people depend on. The problem is that whether or not the companies
know what their doing in terms of their own interest, there is no reason to
think it coincides with the collective interest of auto workers or workers
more generally.  And had we been pushing for vehicles (and an entire
transport policy) more sensitive to environmental concerns - as we were warned
to do by environmentalists pointing to the trajectory of global warming
and the inevitability of rising gas prices - auto and transport sector jobs
might actually be more secure today.

Consider one example. The Ford engine plant in Windsor makes large engines.
It has been clear for some time that this could not last. Why is the union
not out front mobilizing publicly for Ford to move to develop new kinds of
engines, to convert the Windsor facility to produce them, and to make any
monies given to Ford by the Canadian and provincial government conditional
on such changes? This may not offer immediate answers to those laid-off, but
it would position the union, both in the community and nationally, as
leading on a social issue and this would be part of developing the capacity
to perhaps influence the direction of Ford and positively affect jobs down
the road.

5. There is space to negotiate decent contracts.

It needs to be pointed out that the auto industry is not leaving North
America but competing to come in. Overcapacity is more of an issue than
plants leaving.

In Canada, because of the $0.85 dollar (in terms of the US$) and health care
costs, workers in the Big Three continue to have space to negotiate decent
contracts. AS the CAW pointed out in a recent presentation, Canadian Big
three workers are $10 per hour cheaper (or $20 thousand per worker
yearly) than in the US. It is true that Canadian parts workers must confront
the falling level of unionization in both Canada and the US. But much of the
low-wage, low-capital section of the Canadian industry departed in the
1980s, leaving an industry that is mid to high tech in value-added and
quality-based. This sector has the advantage that it is not as easily moved,
and that it must be located close to just-in-time assembly plants.  Of all
the vehicles assembled in North American, 1 in 6 are assembled in southern
Ontario, with a huge parts industry therefore arrayed around Ontario as

A crucial question, however, is what to focus on in bargaining. Working time
stands out for three powerful reasons. First, it is quite amazing that while
productivity has been growing (output per hour has doubled since the first
wave of concessions in the 1980s), workers are left with less and less of
their own time. Second, while higher wages in the Big Three increase the gap
with other workers, more time off is solidaristic in terms of sharing
existing jobs. Third, and this is especially important in the US, the
attempt to limit the impact of job loss through income security and higher
pensions has increased costs for the Big Three in a way that disadvantages
them relative to non-union assembly plants. But paid time off is something
the non-union plants tend to follow to avoid unionization (or at least it
can become a major issue in organizing). So negotiating paid time off is
actually a better response even from the narrow perspective of

The time to negotiate paid time off may not be only when things are going
well. It may be that this is more likely to be achieved when there are
layoffs and the issue is solidarity to limit the layoffs (the original UAW
Ford contract in the 1940s provided for going to 32 hour weeks before
layoffs took place, a reflection of the solidaristic culture then).
Solidarity may also be invoked to limit overtime when some are called back
and many remain off work. In most cases, the company will plan to reduce the
workforce even when the upturn comes and so limiting overtime might become a
permanent union policy.

6. Militancy is not enough.

Worker militancy is fundamental to everything else. If there no struggle
over everyday issues and wages and benefits, there is unlikely to be
struggles over anything. Parts workers do have power - in some ways even
more power than workers in assembly - because they can shut down a
significant range of assembly plants.

But militancy itself comes up against barriers that are real and not just
propaganda: non-union plants, products that are not selling, corporations
threatening to move abroad. Sometimes this demands new strategies. For
example, if one plant is constantly disrupting overall production, the
companies may move it. But if disruptions are strategically spread across
various plants at different times, no one plant can be targeted by the

This strategy, too, will come up against limits. The key is that when
workers come up against a wall in fighting back, the question must not be
how to retreat but how to knock down that wall or how to scale it. That is
when we have to go beyond the everyday role of the union and raise larger
issues, deepen the involvement of the members, and build broader class and
social alliances.

7. A rethinking of unions is needed.

A common thread running through all of this statement is that: (a) in
fighting concessions and building unions, the need is to act now, and not
wait for further initiatives from the corporations; and (b) the constant
importance of building the capacity of workers to respond so we can, in
fact, have more meaningful options in the future. Over the past almost
thirty years of neoliberalism, corporations and the economy have gone
through remarkable transformations. Unions too have changed, but not always
in positive ways and not always in ways adequate to taking on the new
economic and political challenges. It is therefore central to any
successful working class response that workers think about their unions
and ask how they too might be transformed. This is the difficult but
increasingly unavoidable question that workers and unionists, and
socialists and the Left more  generally, cannot avoid.

Sam Gindin teaches at York University and is retired from the CAW.


Other Resources on Delphi and the 'New Concessions'

(1) The Delphi concessions can be found at
http://www.detnews.com/2005/autosinsider/0511/02/A01-369555.htm .

(2) An important statement on the fightback to the Delphi concessions can be
found at the UAW New Directions Movement web-site at

(3)  A 'Hold Delphi Accountable' petition on the Delphi bankruptcy
proceedings can be signed at
http://www.thepetitionsite.com/takeaction/570770279?ltl=1131905012 or off
the Monthly Review website at http://mrzine.monthlyreview.org/.

(4) For a discussion of an alternate North American auto industry, addressed
to American, Canadian, and Mexican auto workers, see the Socialist Project
pamphlet on the auto industry: 'Concretizing Working Class Solidarity:
International Solidarity beyond Slogans' at http://www.socialistproject.ca.

(5)  For a list of resources and labour reform groups in the US go to:

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