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UAW Defeat at General Motors:
The Class Struggle Road Ahead
by Jeff Mackler / November 2005 issue of Socialist Action
newspaper
Twenty-three
years ago when Continental Airlines CEO Frank Lorenzo used U.S. bankruptcy
laws to gut union contracts, he was portrayed as the bad guy exception in
the ranks of the corporate hierarchy. Demonstrating a blatant contempt for
workers, Lorenzo was corporate
America's
front man in pioneering the slash-and-burn tactics that obliterated
Continental's union contracts. Thousands of flight attendants and pilots
were laid off and replaced with scabs who worked longer hours at half the
union rate.
Today's
version of Frank Lorenzo is the "compassionate" Robert S. Miller
of the Delphi
Corporation.
Miller is a prime example of corporate America's modern intellectual hit
man, expert at stealing billions from working people in the name of
adjusting to the new era of worldwide capitalist economic warfare, politely
called “globalization.”
Today,
half of the 12 Lorenzo-era U.S. airlines don't exist, also victims of the
merciless "survival of the fittest" competition inherent in
capitalist production.
Miller's
credentials include service on the board of directors at Bethlehem Steel
and again at United Airlines, when the bankruptcy device was employed to
dump company pensions while simultaneously demanding 50-60 percent wage
cuts.
His
new assignment is to leverage Delphi Corporation's recent Chapter 11
bankruptcy filing into billions of dollars in union concessions. An Oct. 15
New York Times article, "The Hammer of Bankruptcy at Delphi," has
Miller stating, "My job is easy in comparison to
[United
Auto Workers President] Ron Gettelfinger's. Ron has the job of helping half
a million members adapt to a new reality brought on by the forces of
globalization."
I
couldn't help but wince at Miller's contemptuous familiarity as he
described "Ron's" dilemma in "helping" UAW members to
"adapt" to the mysterious forces of globalization.
Delphi,
among the world's largest auto parts suppliers, was a General Motors
"spin-off" six years ago, and is likely still under GM control
through backwater channels. The UAW tops agreed to the sell-off provided
that Delphi upheld the union's contract until 2007.
But
Delphi, driven by inexorable market forces—that is, the deadly capitalist
competition that has reduced Delphi profit rates to minus figures—couldn't
wait to take its pound of flesh. The "bankruptcy hammer," in
reality, the decisions of the judges of the capitalist state, has been
employed to accomplish the dirty deeds that Delphi requires.
Miller
faces a featherweight obstacle that his forefather Lorenzo didn't. Lorenzo
simply used the then-existing bankruptcy laws to tear up union contracts.
However, labor's "influence" in the Democratic Party, in light of
the Lorenzo experience, was used to amend the law to require the boss class
to "negotiate in good faith" before it ended the charade and
turned over the job of dismembering union contracts to a
"neutral" bankruptcy judge.
The
New York Times reporter Joseph Nocera's interview with Miller (Oct. 15,
2005) accurately summarizes Delphi's position: "Delphi needs a more competitive
cost structure, and bankruptcy is the only way to get there. The company,
which lost $2.4 billion last year,
simply
can't sustain any longer a labor force that gets $65 an hour in overall
compensation, and allows workers to retire with full pension and benefits
after 30 years, even if they're only in their late 40s."
Of
course, these are Delphi's poor-mouthing figures, concocted to evoke
sympathy for its cause and encourage others in the corporate world to
follow suit, while driving a wedge between so-called middle-class unionized
Delphi workers and other sectors of the working class whose overall wage
and benefit levels are significantly less.
The
Times didn't bother to ask the UAW for its take on the data. Today,
newcomers starting out in the auto industry under UAW contract earn close
to $18 an hour. After three years,
in accord with previous UAW contract concessions that reduced starting
wages by 30 percent, they eventually, in six-month increments, reach the
approximate $25-$27 hourly rate that is
standard
with the Big Three.
Based
on a 40-hour week, that works out to an annual gross income of roughly
$50,000. Subtract local, state and federal taxes, and the figure is reduced
to somewhere in the range of $35,000, a modest working-class income still
insufficient to meet basic family expenses without another full-time worker
in the family. The above figure should be further adjusted downward to
account for inflation. In September the rate jumped 1.2 percent, the
highest
monthly
increase in 25 years. This reduces the above figure by several thousand
dollars.
Miller's
Times interview revealed that he had more in mind than complaining about
"high-paid workers."
Nocera spells it out. "If it [the UAW)] wants to hold on to its
rich pension plan, it will have to agree to new, lower wages that will
amount to a two-thirds cut in pay. If it refuses to negotiate wages
downward, he [Miller] will seek permission to terminate the Delphi pension
plan, just as United Airlines and others have done in bankruptcy. It's one
or the other."
Miller's
threats took place in the context of the UAW's now concluded negotiations
with General Motors Corporation (GM), where for the first time in history,
the UAW, led by President Gettelfinger, agreed to major concessions in
health-care coverage for working
members
and retirees. UAW's GM retirees will now be required to pay deductibles,
monthly premiums, and co-payments for some services, including X-rays.
The
deal saves GM at least $1 billion a year, according to the UAW. We have not
seen the fine print. The average
retiree family will now pay up to $752 yearly as opposed to zero. Working
members will take a pay cut of $1 per hour to further subsidize GM's
health-care obligations.
GM
estimates that it will save $15 billion of its anticipated $71 billion in
long-term retiree
health-care
costs. GM's CEO Richard Wagoner hailed the agreement as "the single
biggest cost reduction we've probably ever been able to announce in a
single day in the history of GM."
But
this is just the beginning, says Wagoner, top dog of one of the world's
largest corporations. He warned (The New York Times, Oct. 21), "It's a
very important first step. I didn't say it was the last step, and it's not
the first step. It's a validation of the view that they understand that the
success of their union and the people they represent is tied very closely
to the success of our business."
GM
simultaneously announced plans to speed up its plans to close assembly and
supply plants. It estimates that 25,000 jobs will be lost in the process.
Concession after concession
The
UAW's retreat will resound throughout the labor movement. For decades UAW
contracts, whatever their limitations, were a model to be emulated. They
were the historic product of the union's power and victories won in
class-struggle confrontations with the nation's auto barons 60 and 70 years
ago. But the UAW's more recent
contract "victories," including the maintenance of health-care
and pension provisions over the past three decades, came at a high price.
In 1979 UAW membership stood at some 1.5 million. Today, it stands at less
than 624,000 members, less than half of whom are autoworkers.
As
opposed to its post-World War II high, where virtually every autoworker in the
country was under a UAW contract, today the figure stands close to 60
percent. Japanese cars, Toyota and Nissan, now account for close to 40
percent of the U.S. market, with a hefty proportion of these
"imports" manufactured in the U.S. in non-union plants.
UAW
bureaucrats have negotiated concession after concession, while still
maintaining fairly decent wage and benefit contracts for an ever-declining
number of autoworkers. Their "partnership" with the boss class
includes agreements as to which plants will be closed
and
which, in accord with protecting the jobs and prerogatives of select
sectors of the union's
hierarchy,
will remain open.
But
the general trend in auto production in the U.S. and worldwide is the
relatively rapid closure of plants that can no longer operate competitively
in the context of rapid technological innovation and new super low-wage
opportunities in poor countries.
The
UAW's partnership with the bosses includes a fundamental acceptance of all
the essentials of the profit-making system. To remain competitive on world
and U.S. markets, ever more modern production technologies must be
substituted for workers. One-third
of all autoworker jobs have been lost to technology and automation.
Another
third of jobs have been lost to production shifts to low-wage countries.
The rest have been lost to speed-up and downsizing, to "spin
offs," outsourcing, the use of part-time workers, overtime, and all
the rest. The UAW bureaucracy's best efforts to keep their bosses
profitable at workers' expense have not and cannot stem the tide.
Like
the corporations, which never fail to whine about their losses and insist
on union concessions in the face of ever-sharpening global capitalist
competition, union bureaucrats like Gettelfinger argue that they have been
forced to retreat against their will. Says,
Gettelfinger,
"It is the classic play-off of worker against worker, and it is a race
to the bottom in terms of wages and benefits."
Gettelfinger
understands that whatever concessions the UAW grants in the U.S. will in
turn be used by foreign competitors to demand the same and more from
workers abroad. The whipsaw effect has reduced workers' living standards
everywhere. But Gettelfinger, and the
parasitic
union officialdom he represents, still play the game.
The
promise of restoration when "prosperity" returns has never been
fulfilled. The UAW's "partnership" is a one-way street, with the
workers giving and the employers taking. It cannot be otherwise if the
rules of the capitalist game are accepted.
GM
recently reported the largest third-quarter losses in a decade, $1.6
billion. Its losses for the first nine months of 2005 totaled $4 billion.
Ford lost $284 million in the third quarter. Its 2005 SUV-driven profits
were halved as compared to 2004.
Delphi
lost $2.4 billion in 2004 setting the stage for its Oct. 14, 2005
bankruptcy filing and its very real threat to reduce wages to the levels of
its production facilities in the underdeveloped world.
Delphi's
CEO is also demanding billions of dollars in bailouts from GM. Either GM
pays or its major parts supplier goes under. If GM obliges Delphi, it is
likely that it too will run to the bankruptcy courts to shed its pension
obligations to hundreds of thousands of UAW retirees.
Smelling
blood, Ford announced "significant plant closures."
Daimler-Chrysler declared its intention to seek similar concessions.
Marxist explanation of capitalist crisis
Life
itself has demonstrated that there cannot be an end to the concessions. The
descent to "Third World wages" is appearing on the horizon for
the first time in the modern era. Just what are these "forces of
globalization" that are employed by Corporate America to demand
massive cutbacks?
The
New York Times asked Clark University labor-relations professor Gary Chaison
for his view on the matter. Chaison noted, "Like all of the big
industrial unions, the UAW has never figured out how to deal with
globalization.
"What
they do is they have a conference, or present papers, or talk about
cooperation between unions and social movements in other countries. They
don't know how to take wages and working conditions out of the realm of
competition. And they don't know how to deal with something that is beyond
the jurisdiction of their own membership."
Chaison
didn't bother to instruct The Times how he would advise the UAW to
"take wages and working conditions out of the realm of
competition." That's because the system of competition itself,
capitalism, the private ownership of the means of production—for profit—cannot
be separated from wages and working conditions. No capitalist economist or
Marxist
economist
has ever contemplated doing so. But
Karl Marx did offer a rational explanation for the periodic crises of
recession, depression, and catastrophe that have plagued capitalism for its
300-year history.
He
began with the simple proposition that the value of any commodity is
derived from human labor power. Marx observed that the introduction of
technology into the productive process had contradictory results. On the
one hand, it qualitatively increased the number of
commodities
produced. On the other it reduced the amount of human labor power, or
value, embodied in each commodity, two self-evident propositions. At the beginning of this process the
capitalist is quite pleased with the result, especially the first sectors
of the corporate elite to introduce the new technologies in the name of
capturing a larger proportion of the market.
It
is far better to end up with a profit of, say, $5 each in the production of
one million widgets
manufactured
with state-of-the-art technologies, the pioneering capitalist reasons, than
it is to secure a profit of $20 each on 100 hand-made widgets. Five million
dollars in profit ($5 x one million) is better than $2000 ($20 x 100).
Further, the small-time widget-maker isn't long for the widget business
when faced with a manufacturer who can produce the same product, if not a
superior one, in qualitatively larger quantities, for a fraction of the
cost.
Over
time, however, competition among the still-competing capitalists tends to
result in ever
more
commodities produced by fewer and fewer workers, as each capitalist is
compelled in turn to introduce the next level of technology in order to
stay in the race for survival.
Eventually,
as is the case in today's crisis-ridden world capitalist system, all
markets become saturated with widgets on the one hand, but as a
consequence, a reduced rate of profit on each widget, (or automobile, TV
set, or pair of shoes) on the other.
While
I have purposely and grossly oversimplified the basic features of the
dilemma inherent in virtually all capitalist production, the central
observations remain valid and fully applicable today.
There
is no end to the process other than the "mad race to the bottom"
and extinction for the great majority of the original capitalist players. A
tiny few price-fixing monopolistic corporate survivors remain while
millions of working-class producers are driven to unemployment or low wage
service sector jobs. In the U.S. today one million decent-paying, mostly
union jobs are lost yearly.
The
source of the capitalist profit, Marx demonstrated conclusively, was the
appropriation of a portion of the labor power or value imparted to
commodities by the worker. Simply put, no self-respecting capitalist hires
a worker unless a profit is to be made from his/her labor. But the worker
must be paid at least a portion of the value he/she imparts to the
commodity
produced
in order to survive.
The
amount is determined by the class struggle. In times of retrenchment and
defeat, the boss class appropriates a greater portion of the value that the
worker produces. In times of fightback and advance, the worker wins back a
bit more.
But
as a generalization, the fluctuation between the good times and the bad
times is sufficient only to allow the worker to survive and live like a
worker, minus or plus a few improvements or losses, without ever
accumulating sufficient capital to become a
capitalist
in his or her own right. In short, at the end of the workers' lives, they
leave with what they came in with—nothing.
On
average, in the U.S. and worldwide, they receive in wages and perhaps some
other benefits only what is required to reproduce themselves as a class at
the service of the boss. We are what Marx called the modern-day "wage
slaves."
The
steady decline in average profit rates is a direct product of the operation
of the system as a whole. It is what Marx called, "the tendency of the
average rate of profit to fall." But this "tendency" is just
that. The capitalist bosses have no
intention of bending to the fundamental economic laws that govern the
operation of its system.
To
survive, they are compelled to fight over an ever-increasing portion of the
value the worker needs to survive. They attack wages, hours, working
conditions, pensions, fringe benefits, and all the rest. When this proves
insufficient they call on the capitalist state they control to lend a hand.
This takes place in the form of gutting social services and increasing
working-class tax rates in order to pass on the proceeds to the failing
capitalists.
The
recent unprecedented tax cuts for the rich, engineered by both the Clinton
and Bush
administrations,
account for the transfer of trillions of dollars from working people to the
rich.
Exploitation of workers abroad
Globalization
of production is also a synonym for transferring work to low-wage
countries. It began in the U.S. with the shift of production from the North
to the low-wage "right-to-work" Southern states and then to
Mexico. Even here the maquiladora assembly-line plants proved to be
"expensive" for the needs of U.S. capital.
Why
pay a Mexican worker $5 a day when a Guatemalan or Salvadoran worker can be
bought for $2.50? Indeed, why not transfer operations to Southeast Asia or
to China,
where
some sweatshops employ teenage women in factory dormitories at six cents an
hour!
But
even here, the exploitation and degradation of working people doesn't end.
Whatever advantage that one competitor might gain by moving to low-wage
countries is soon offset by all other serious players, who are compelled to
do the same to survive. When there
is no longer an advantage to be obtained by exploitation abroad, the battle
resumes (or continues
uninterrupted)
at home, with GM, Ford, Daimler-Chrysler, etc., compelled to attack every
last
vestige
of the social gains won in past struggles.
Once
again, it is the inherent working of the system itself that accounts for
the current crisis in the U.S. auto industry and in all others.
The
crushing effect of "the tendency of the average rate of profit to
fall" is now fully operative. It was muted for a time when, following
the slaughter of 80 million people during the imperialist World War II, one
component of the world's capitalist competitors, the United States, emerged victorious. All others,
U.S. "allies" and "enemies" alike, saw their productive
capacities reduced to near zero, destroyed by war.
But
today, the world stands on new economic foundations, on a Europe and Japan
and now capitalist China, rebuilt and fully competitive on all fronts. The startling phenomenon of a world
covered with shining new factories and high-technology farming, able to
provide a life of abundance and leisure to every person on earth, stands in
dramatic contrast to the increasing poverty rates experienced by the
populations of every nation.
There
is no solution to capitalism's inherently destructive nature. Racism, sexism,
homophobia, the poisoning of the environment, global warming, imperialist
war, and neo-colonial conquest are the inherent biproduct of the system's
functioning.
UAW call for slowdown at Lockport
How
can working people fight back today? There is no simple answer, but a few
valuable propositions remain intact. First and foremost, working people
have absolutely no interest in any form of partnership with the employing
class, either at the level of union-management relations or in the
political arena. Despite the
unprecedented decline in union membership,
unions
still retain the potential power to reverse the present trend and win. They
remain organized in the decisive sectors of the economy such as transport,
basic manufacturing, communications, power generation, and construction.
They
can defeat all union-busting efforts provided that they are united, that
they return to the kind of militant class-struggle solidarity that gave
rise to the early battles that defied all reactionary laws and armed bodies
of the capitalist state.
A
single example of an important union with a fighting leadership that is
capable of mobilizing the ranks to say "no" to any concessions
and "yes" to a battle to the end might well spark the first in a
series of struggles that once again demonstrate that labor can fight
effectively and win.
Such
a defiant stance, the example of a real fight, coupled with a direct appeal
to the rest of labor movement, will bring forth what is best and decisive
in organized labor, a willingness to come to the aid of their beleaguered
brothers and sisters who are risking everything for the common good.
Today
we are witnessing what are perhaps the first signs of a willingness to
fight and win. An Oct. 28 Detroit Free Press article entitled, "Action
by UAW could slow work at Delphi," states, "Union leaders at one
of Delphi Corp.'s largest plants are circulating a call for a work action
that could slow down production at the nation's largest auto supplier. It
was the first shot across the bow by unions since Delphi proposed severe
pay and benefit cuts."
The
reference is to a flyer distributed by UAW local leaders at a Delphi plant
in Lockport, N.Y., where 4700 union members make radiators and other vital
auto components.
The
Free Press quotes five-year UAW Delphi worker Dave Savino’s response to the
UAW plant leadership’s vague proposal for a "work to rule" or
slow-down campaign. Savino
explained that "the mood among the workers is grim. We were basically
told [by the UAW leaders], 'Do your job, but don't go the extra
mile,'" Savino adds, "We're so angry that we're ready to go on
strike right now to fight for what we believe in." For Savino, it
appears that "what we believe in" is the right to a job itself
and to keep what Delphi workers have fought
for
their entire working lives.
To
make clear what a Delphi slow-down would cost potentially dissident UAW
locals, the Free Press also quoted Delphi’s CEO Robert Miller, who bluntly
told the paper, "Any plant that wants to be at the top of our plant
closure list should engage in industrial action as a way of sending that
message."
These
are the words of a class-struggle fighter, but a fighter on the boss side,
the capitalist side, of the class line.
The
UAW flyer, in contrast, employs the language of frightened bureaucrats,
more concerned with possible company law suits about union "contract
violations" than with providing clear and decisive strategies for the
ranks. The union flyer reads, "It may not be in your best interest to
go above and beyond for any manager representing the company that is
attempting to strip you of everything you have earned."
The
Delphi/UAW contract today contains a "no strike" provision,
essentially an agreement that the company is free to tear up union
contracts, close plants at will, and obliterate pensions while insisting
that their UAW "partners" play by the rules of the game. But if Delphi workers did close their
plant, as they did seven years ago in a strike that cost the auto
barons
$2 billion in a matter of days, they would send a clear signal to all UAW
members that the battle has been joined. And if UAW members employed at the
Big Three auto plants across the country did the same, the stage would be
set for a fight, the likes of which have not been seen for some 60-70 years.
For
decades UAW misleaders have operated on the basis of their "one at a
time" strategy—that is, the bankrupt notion that striking one
automaker at a time would lead to a quicker settlement, as the struck company
lost market share to its competitors who remained in production. Indeed, in
recent decades the "one at a time" strategy has given way to a
"none at a time" strategy wherein the UAW negotiated endless
concessions to keep their "partners" profitable. "Strikes
are no longer an effective strategy," so the union bureaucrat’s
refrain goes.
But
the threat of a strike or the desire to strike and win by a single Delphi
worker, in this case Dave Savino, or perhaps by a dissident UAW local
leadership was sufficient to elicit the thundering response by Robert
Miller. Strike or slow down, he warns, and we’ll close your plant forever.
It
is only a matter of time until an important section of the ranks respond,
"We will not only close down Delphi’s entire operation, but the entire
auto ndustry, and every component of it, and every ndustry that is
dependent on it—from rail to trucking and shipping and all the rest. That
would get the boss class’s attention and that would begin to change the
relationship of class forces in this country.
It
is just a matter of time until a class-struggle leadership emerges to take
up the challenge. It is absurd to believe that workers will take blow after
blow without a response. To the contrary, growing numbers are coming to the
realization that concessions bring nothing but more concessions—that is,
the "race to the bottom" that we have detailed above.
There
are no doubt important factors that have thus far served to cool the
potential fires of a
class-struggle
fightback. The massive extension of credit, the unprecedented equity that
has resulted from a government-engineered inflation in housing costs and
the now-dominant two-family income are among the most important. But these
too are rapidly reaching their limits.
The coming fightback
When
the struggle begins, perhaps in the least expected sector, it will unleash
an explosive power that will make what was considered impossible yesterday,
a reality and necessity today. Instead of moving plants to low-wage
countries, the boss class will be forced to keep them open, reduce the
workday without a cut in pay, hire the unemployed, and restore past
concessions. Refusal to comply will be met with strikes that go far beyond
the struck industry.
What
might have begun as an economic strike at a particular plant might well
threaten to become a political strike, with far-flung implications for the
capitalist class as a whole.
No
sector of the working class can win by itself. Solidarity, at a level that far exceeds anything seen in
modern times, is a prerequisite for a reversal of past losses and for a
resurgent labor movement. The class-struggle fightback that is envisioned
here will open the floodgates to the organization of the unemployed, as it
did in every other instance when
working
people entered the arena of combat front and center and changed the course
of history.
The
fightback will take on international proportions as labor's power is used
to forge unprecedented levels of solidarity with co-workers around the
globe. GM and all other U.S. auto plants will be struck and closed down,
while class-conscious union fighters join with
their
counterparts at auto plants around the world for the common good.
The
fightback will be joined and complimented in the political arena as
resurgent labor builds its own independent working-class labor party and
opens its doors to the entire working class and allies among the oppressed.
A
fighting and mass labor party, whose initial cadre are in formation today,
will take labor's program to the millions and fight for a workers'
government as opposed to a boss's government. Such a government will be
obliged to challenge the capitalist profit system
itself
and open the door for a fight for socialism, a new system based on the
democratic rule of the working class, the social ownership of the means of
production, and a planned economy based on production for human needs as
opposed to capitalist profit.
The
present labor misleadership in its vast majority will not be a part of these
coming battles. The bureaucracy serves today as the agency of the boss
class in the workers' movement. It is tied to the parties of capital and
dependent on the privileges acquired as it acts to discipline workers,
destroy any semblance of union democracy, and subordinate the
interests
of the ranks to the profits of its corporate "partners."
The
coming fightback will be led in the main by the youthful workers who have
little to lose and a world to win. These will be youth who have been
radicalized in the social and political arenas, who have made the
connections between the imperialist war against the people of Iraq and the
racism evidenced by the horrific failure to immediately come to the aid of
the
victims
of Hurricane Katrina—and who are outraged at the endless capitulation of
their misleaders. These youth will be joined and encouraged by veteran
fighters who have spent decades in the trenches keeping the lessons of past
victories alive, organizing and educating the initial cadres.
Few,
if any, in the organized labor movement today—not to mention the almost 90
percent who remain unorganized—are content with the status quo. They are
looking for an opportunity to fight back and for a new leadership up to the
task.
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