[Marxism] UAW at the Crossroads
jayroth6 at cox.net
Mon Mar 2 21:51:03 MST 2009
UAW at the crossroads
By Martha Grevatt
Published Feb 28, 2009 8:45 AM
Last year the U.S. Treasury Department ordered Chrysler and General
Motors to reopen their contracts with the United Auto Workers. In order
for them to receive $25 billion in government loans, the two companies
would have to show by Feb. 17 that they could get the union to agree to
a “competitive” wage and benefit structure. With only hours to spare
before the deadline, they submitted their plans for “viability,” along
with requests for additional funding.
For workers, the entire scenario raises more questions than it answers.
Union workers are being told they must lower their compensation to that
of nonunion workers at Honda, Toyota and Nissan plants in the U.S.
Doesn’t that deny the union a basic legal right, for which many workers
gave their lives, which is the right to bargain for a bigger share of
the wealth they create?
Nevertheless, the UAW last week reached a tentative agreement on new
wage and benefit concessions. If news reports are correct, workers will
be asked to give up cost-of-living-allowance raises and annual bonuses,
work more than eight hours a day for straight time, and lose all income
security after two years of layoff. This is a precedent-setting rollback
of 70 years’ worth of hard-fought gains.
The fact is that concessions have never saved jobs. As early as 1954,
workers at Studebaker were pressured by the company and the UAW
leadership to take a pay cut so their company could compete with the Big
Three. On the first vote they rejected the cut, but it was narrowly
approved in a second vote. What happened? Studebaker merged with Packard
in 1954 and ceased producing vehicles altogether in 1966.
Now GM’s “viability” plan includes cutting 47,000 jobs worldwide and
closing 14 plants. Chrysler called attention to its having eliminated
32,000 positions since 2007, with 3,000 more hourly and 10,000 more
salaried jobs on the chopping block. This may or may not satisfy the
government’s Auto Task Force, led by Treasury secretary Timothy Geithner
and National Economic Council chair Lawrence Summers, whose goal is
Meanwhile, union retirees are worried about losing their health care
coverage if there are changes in the way the Voluntary Employee
Beneficiary Association is funded. Under the 2007 contract the three
automakers were to make a one-time lump sum payment, after which they
would be relieved of future obligations for retiree health benefits. The
terms of the government loan, through the Troubled Assets Recovery
Program, call for half of the payment to be made in company stock. An
agreement along those lines was reached Feb. 23 between Ford and the
UAW, with the expectation that Chrysler and GM will follow that pattern.
David Tyler, a Ford retiree in Ypsilanti, Mich., told the Detroit Free
Press, “It’s not good to tie the stock market in the VEBA plan. The
volatility of the stock market is not in anybody’s control.”
Right now the Treasury’s guidelines are mathematically impossible.
Initially, GM was to pay $24.1 billion into the plan, Ford $13.2 billion
and Chrysler $8.8 billion. Half of GM’s obligations would be $12.05
billion. Yet the company is not even worth one-tenth of that, based on
current stock prices which on Feb. 20 hit a 74-year low of $1.55 a
share. How would the stock value of Chrysler, owned by a private equity
firm, even be determined?
GM wanted the union to go along with a deal even worse than what the
loan terms called for, by not only reducing the VEBA contributions
further but also spreading them out over 20 years. No wonder the UAW
walked out on negotiations on Feb. 13.
This should dispel all illusions that there can be a united front of the
UAW and the automakers to “save the industry.”
UAW bargainers charged Chrysler and GM with trying to shortchange
workers while favoring bondholders, with whom the companies are supposed
to negotiate debt for equity. The bondholders were refusing to work out
an agreement with the automakers until concessions from the UAW are
These moneylenders remain nameless and faceless, represented only by “a
person familiar with the committee representing the bondholders” that is
“questioning whether the company’s viability plan goes far enough.”
(Detroit Free Press, Feb. 19) Any number of high-stakes financial
players could be part of this amalgam. Among them might be JPMorgan
Chase, Citibank, Goldman Sachs or some other big bank—or perhaps private
equity firms such as Cerberus. Jobs, pensions and health benefits are
being held hostage by an anonymous “committee.”
Union-haters clamor for bankruptcy
While the terms of the bailout represent a major attack on organized
labor, many in the ruling class want to dispense with such democratic
niceties as letting workers vote on taking concessions. Their preference
is for the automakers to declare Chapter 11 bankruptcy, where a
bankruptcy court judge would have the power to scrap union contracts and
set terms favorable to the companies. Some even call for a consolidation
or liquidation that would reduce the number of Detroit automakers to two.
Those pushing bankruptcy and/or mergers have included Sens. Mitch
McConnell of Kentucky, Richard Shelby of Alabama and Bob Corker of
Tennessee, as well as Thomas Donahue, president and CEO of the U.S.
Chamber of Commerce. These sworn enemies of labor have had no trouble
getting air time.
The Democratic “friends of labor,” however, aren’t rushing to denounce
the union-busting-by-bankruptcy scheme. Sen. Christopher Dodd and
Congressman Barney Frank, on the Senate and House Banking Committees
respectively, have both been friendly to the idea of a GM or Chrysler
bankruptcy. The Feb. 23 Wall St. Journal reports that “people involved
in talks with senior Obama administration officials said that the
administration believes that the option of Chapter 11 filings by the two
automakers needs to be seriously considered.” Treasury officials are
reportedly seeking out private lenders should debtor in possession
financing be needed.
Can workers tip the scales in their favor?
To autoworkers on the shop floor the situation has reached a most
critical point. Everything and everybody—the company, the government,
the media, union leaders, even public opinion—seem poised against them.
If they reject concessions the government will not loan out any more
money and could call up the loans. The company will declare bankruptcy
and possibly go out of business. Then again, bankruptcy could be
Nothing is certain—except that GM, Ford, Chrysler and the elusive
bondholders care only for profit. Out of fear, many autoworkers will go
along with more givebacks while others reject them as a form of protest.
This was the case at New Process Gear in Syracuse, N.Y. Although workers
had taken pay cuts averaging nine dollars an hour, they were told more
reductions were necessary to keep the plant open. But with no guarantee
that the plant would not close, UAW members voted the concessions down
three to one.
UAW rank-and-filers picketed the Detroit Auto Show in January to oppose
more concessions. On Feb. 16 Canadian Auto Workers members did likewise
at the Toronto Auto Show.
The primary issue for workers is this: can they stop the restructuring
in its tracks? Can they keep their plants open and halt the mass
layoffs? How can the militants move their unions from protest to
resistance? What can shift the balance of power? A strike now could
actually help automakers reduce inventory. Yet not fighting back will
only allow business as usual to continue.
There are examples for workers in fighting back, not only from the UAW’s
proud past, but also the recent occupations of Republic Windows and
Doors in Chicago, Waterford Crystal in Ireland and in 2007 the auto
supplier Collins and Aikman in Ontario, Canada. Actually seizing company
property can, even with a sluggish economy, give the workers leverage
against the bosses.
As Sam Marcy wrote in “High Tech, Low Pay,” such action “can change the
form of the struggle, take it out of its narrow confines and impart to
it a broader perspective. In truth, it brings to the surface a new
working-class perspective on the struggle between the workers and the
bosses. It says in so many words that we are not tied to a
one-dimensional type of struggle with the bosses at a time when they
have the levers of political authority in their hands.”
Martha Grevatt is a 21-year member of UAW Local 122 in Twinsburg, Ohio.
E-mail: mgrevatt at workers.org.
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