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It’s
the most concerted union-busting drive in memory—and it is being led by
Barack Obama, the
auto bosses, and the Democratic Party. To the delight of the corporate
elite, President Obama’s “Auto Task Force”
(ATF) has insisted on a “quick and surgical” restructuring plan for the
ailing automobile industry, which includes deep cuts in wages, health
care, and pension benefits.
The
Treasury-run ATF is stacked with top corporate execs. ATF chief Steven Ratt--ner is a former
“superstar” investment banker and Democratic Party insider—a
friend of Bill and Hillary Clinton.
The
administration wants a “new” auto industry, and, in the words of the
president, one that is, “mean, lean, and competitive.” That means
breaking the back of the United Automobile Workers (UAW). One auto
analyst with Barclays Capital of Chicago says, “Improvements in
liquidity for GM will come out of the UAW.”
The
administration’s goal is to slash labor costs to that of non-union auto
manufacturers like Honda and Toyota, especially in health and pension
benefits. History is now punishing the UAW for not organizing those
mostly non-union companies.
The
ATF clearly supported bankruptcy for GM, under which contracts and
workers’ rights can be tossed out the window. The ATF strategy was, as
with the Chrysler agreement the month before, to threaten bankruptcy
and thereby extort massive concessions from the union. Bankruptcy court
can rip up contracts and destroy worker rights.
Their
ploy worked. It is estimated that the May 21 ATF-brokered GM-UAW agreement
contains over $1 billion in union concessions per year. The “job
security” provisions of the 2007 GM contract were suspended. Armed with
a concessionary agreement, GM filed June 1 for bankruptcy protection in
a New York Bankruptcy Court. The agreement gave the court the green
light to cut, cut, cut.
GM
hopes to emerge from bankruptcy protection by mid-July. After filing
for bankruptcy, General Motors announced that it was cutting a whopping
21,000 jobs, about 34% of its workforce, and closing 14 U.S. plants. Since 2006, the GM
bosses have cut an astounding 60,500 jobs.
After
GM’s announcement, Don Skidmore, president of UAW Local 735 in Ypsilanti, Mich., said, “I was angry at
first, then I cried, then I got angry again.” Local 735 represents 1100
workers at a plant built in 1943 to make bombers during World War II
and now facing closure. “I’m hurt for the people. The looks on their
faces are horrible.”
One
could argue that Obama and the UAW
bureaucrats were in on the recent layoffs from the get-go. Their lack
of opposition says it all. According to the March 30 Wall Street
Journal, at the ATF-brokered talks, “Both GM and Chrysler are
negotiating with the UAW to accept a range of cost-cutting measures,
including a greatly reduced work force, lower wages and a revamped
health-care fund for retirees.”
By
any rational criteria, layoffs and concessions are completely
unnecessary and are the product of an inhuman system in deep crisis, a
system based on profits for the few—capitalism. Moreover, union workers
are being made scapegoats for the crisis by auto bosses, the capitalist
parties, and corporate media despite the fact that only 10 percent of
production costs go for labor.
Bottom
line, the greed and stupidity of the Big Three bosses produced millions
of gas-guzzlers since the 1970s, which lost out to smaller, more
fuel-efficient imports. No worker had a say in that.
Socialists
say, “No to all layoffs! Nationalize the entire auto industry under the
democratic control of working people! Money for jobs, not war!”
Is Obama
pro-union?
Obama’s campaign promises to Midwest voters that he would “save
jobs” as president rings as hollow as his promise to “renegotiate” the
job-killing sweatshop agreement with Mexico (NAFTA). The layoffs
violate the 2007 GM contract on job security, about which the UAW and
Washington have revealingly remained silent.
Washington conditioned the release of
some $50 billion in bailout funds for GM and about $12 billion for
Chrysler on cost savings.
In
April, the ATF rejected the two companies’ reorganization plans as not
going far enough. Obama’s ATF moved into the
GM headquarters and, as a joint UAW-GM press statement says, the
negotiators made “modifications to the collective bar-gaining agreement
to satisfy the Treasury Auto Task Force.” The press revealed that Washington’s plans were even more
brutal than what auto bosses themselves had been willingly initially to
try.
A White House briefing boasted, “In virtually every respect,
the concessions that the UAW agreed to are more aggressive than what
the Bush administration demanded in its loan agreement with GM.”
As the June 1 New York Times observed, the
agreement contains, “steps that most analysts thought could never be pushed
through by a Democratic president allied by organized labor.”
New
York Times
labor reporter Steven Greenhouse wrote on June 2, “The Obama administration structured the GM and Chrysler
plans to lessen the union’s voice in management.” In other words, the
boss class figured that only a so-called “progressive” Democrat could
get the UAW, which had backed Obama, to
swallow the rotten deal!
More fallout from the deal
On
the chopping block are also 1100 GM dealerships, with up to 2600 going
next year. Chrysler is closing 789 dealerships. Dealers claim that
closures will eliminate 100,000 jobs. Auto-parts manufacturers were
also warned that 49 major suppliers would collapse in 2009 and 60 more
in 2010. Being cut by GM are the Pontiac, Saturn, Opel, Vauxhall, and Hummer lines. Some 37,000 out
of Canada’s 100,000 auto-parts
workers are estimated to lose their jobs.
Mass
pickets, organized by the UAW leadership, or certainly a plant
occupation would have likely stopped the layoffs and givebacks cold.
The equally lifeless AFL-CIO bureaucracy sat idly by, trusting in their
candidate, Barack Obama.
Chrysler
workers are also on the chopping block (see the May 2009 Socialist
Action). Chrysler was first targeted by the administration to wring
concessions from the smaller company to be used as a precedent with the
larger GM. With the approval of the White House, Chrysler has been
taken over by the Italian automaker Fiat, headed by CEO Sergio Marchionne, who has spearheaded cuts that sparked
worker protests and strikes. So far, Ford has not asked for a bailout,
but Ford bosses are using the Chrysler-GM pattern to re-negotiate at
least some, if not all, aspects of its’ UAW contract.
Within
days, the Chrysler and GM agreements were overwhelmingly ratified by a
fearful membership, who saw only treachery and surrender by their
leaders. There were no recognized rank-and-file movements seen as
capable of waging a serious fight.
The
United Automobile Workers has gone from 1.5 million members in 1979 to
431,000 in 2008. In 1991, GM employed 304,000. The total number of GM’s
current U.S. employees is set to shrink from 88,000 to 63,000. The
unemployment rate in Flint, Mich., the scene of militant
autoworker plant occupations in 1936 and 1937, is 15.3 percent.
According
to the magazine In These Times, the most recent GM plans call
for a 98% increase in autos produced in Mexico, China, South Korea, Japan, and other overseas
countries bound for the U.S. market. The UAW and the
Steelworkers union launched a campaign against Chinese truck imports
based on reactionary “Buy America” chauvinism (not cross-border organizing)
and succeeded in having imports slowed by Washington.
The high price of surrender
The
new GM agreement, which is a modification of the 2007 contract, includes
a wage freeze and a suspension of cost-of-living allowances.
Performance bonuses and some holidays were also lost. It also includes
job title consolidation, much like “broad banding,” which gives bosses
the right to assign a worker any job almost at will.
The
“job security” provisions of the 2007 contract are suspended. Part-time
“flex employees” will be hired as needed. Pensioners will be paying $76
a month in Medicare contributions, formerly paid by the company, and
worse, retirees loose vision and dental care.
A
no-strike pledge will be in effect until 2015, thus stripping the union
of power. Unresolved issues in 2011 concerning the expiring 2007
contract, including wages, will be subject to binding arbitration. The
framework for arbitration is likely to be non-union standards at Honda
and Toyota. Workers cannot vote on an arbitrator’s decision.
Perhaps
the biggest travesty is the payment of half of GM’s $20 billion
health-care obligation to the union’s already underfunded
Voluntary Employee Benefits Association (VEBA) in nearly worthless GM
stock. In fact, it’s presently so worthless—about 75 cents a share at
one point in June—that it has been taken off the stock exchange. The
VEBA underfunding seriously endangers health
care for retirees, who outnumber active members.
The
VEBA was created to offload GM’s health-care obligations onto the UAW.
The $20 billion owed the VEBA will likely go to repay debts to banks,
not workers. Veteran journalist Greg Palast
writes, “its illegal,” and cites the 1974 Employee Retirement Income
Security Act (ERISA), which prohibits seizing pension funds, which are
already paid for by workers in lieu of wages. Now, the UAW bureaucrats
must consider any serious protest against management as undermining the
market value of its own health-care fund!
The
UAW deal is another reason to struggle for the passage of the
single-payer (health care for all) bill, HR 676, now before Congress.
UAW in corporate boardroom
In
exchange for health-care funding in GM stock, Obama-GM
offered the UAW 39% of equity and a single representative on the GM
board. The UAW settlement provides for a 60% U.S. Treasury stake in the
“new GM.” The union’s healthcare trust or VEBA will have a 17.5% stake;
the Canadian government 12% and GM bondholders 10%.
Can
having a union member on a corporate board change things for the
better? Never has, never will.
The
June 2 New York Times reported, “The retiree’s health fund has 6
public-appointed trustees and five union appointed trustees. Though the
union health trust owns 55% of Chrysler, it will hold just one seat on
the Chrysler board. And, at both automakers, the health fund’s shares
will be non-voting.”
Newsweek summed it all up: “A
shrinking union accepts stakes in shrinking companies. It promises not
to strike. The governance system muffles the union’s voice by
restricting its board presence. Its sounds like an arrangement a
union-hater like [notorious corporate boss] Jack Welch would have
cooked-up.”
Right
now Welch, Obama, the auto bosses and the UAW’s Gettlefinger are
sounding an awful lot like each other. Just ask any laid-off auto
worker.
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