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Chrysler Workers Nearly Defeat Contract – Reward for Ratification: Mass Lay-Offs

by Andrew Pollack  / November 2007 issue of Socialist Action newspaper

 

 

In our last issue we described efforts by United Auto Workers dissidents to defeat a contract at GM that let the company dump its obligations to retirees' health care and included other historic concessions.

 

On Oct. 10 the GM pact was approved by 66 percent of the members voting. The same day, the UAW leadership announced a tentative agreement with Chrysler after a six-hour strike, which tops even the farcical two-day strike in September at GM and may be the shortest national strike in U.S. history.

 

Five days later the union's nine-member Chrysler bargaining committee met to consider the pact. In its first vote it unanimously rejected the proposed agreement. Pressure from top UAW leadership led to three more votes, with six against and three for, then five against and four four, and finally all but one in favor.

 

That one was Bill Parker, chair of the bargaining committee, a leader of the New Directions dissident movement in the 1980s and ’90s, and president of Local 1700 at the Sterling Heights, Mich., assembly plant.  Parker prepared a minority report for the Chrysler Council, the body of local presidents and committeepersons, which met next to consider the agreement. The vote total there is unknown, as a motion for a roll-call vote was rejected in a voice vote that was itself too close to call.

 

A long list of concessions

 

Parker denounced the pact for being too similar to the GM contract, which, he said, "ends many of the principles established 70 years ago in the UAW's birth." He urged rejection. Among his objections:

 

• A lower tier of wages and benefits for new workers, which would foster division and create pressure to reduce top tier wages and benefits (as happened at GM spin-off Delphi). New hires will start at $14 per hour, half of what current employees make. Instead of a traditional defined  benefit pension, new hires will get a defined contribution pension, and instead of health benefits, a 401(k) on which to draw.

 

• The creation of "non-core" jobs. As at GM, these would include all jobs off the assembly line—including those traditionally bid on by high-seniority workers to escape the killing pace of the line. The number of these jobs is left up to further talks by a union-management committee. Twenty-two out of 53 plants will be 100% non-core once existing employees leave, whereas at GM it was done for particular jobs within each plant.

 

• The outsourcing of janitorial and similar jobs.  Restrictions on outsourcing of other jobs are "dependent upon a favorable business case."

 

• A $3000 bonus but no wage increases, and huge diversion of cost-of-living allowances.

 

• Cut-off of job bank funds after two years if the laid-off employee refuses to take a job anywhere in the country.

 

• Further elimination of job classifications and melding of jobs into homogeneous "team" positions. (The "team" concept has been a major tool used to convince workers their fate is tied to the company's profits. It has also been a bonanza for union bureaucrats given cushy jobs leading these "teams.")

 

• The GM agreement converted 3000 temporary employees to permanent, full-time status, but none would take place at Chrysler.

 

• Retiree health-benefit concessions voted down in 2005 (but passed the same year at GM and Ford) would be implemented. As at GM, a union-run trust fund (called the Voluntary Employee Beneficiary Association or VEBA) will be set up, into which Chrysler will dump its obligations to retiree health care. It will begin with funding of only 53% of the $19 billion owed by the company (compared to GM's  funding of 70 percent of the $51 billion it owed—still not enough to make a secure plan).

 

Even before the VEBA is set up, retirees will be hit with increased premiums, deductibles, and co-pays. Unlike at GM, where the VEBA was perhaps the biggest focus for dissent, it received much less attention at Chrysler in comparison to opposition to the

second-tier and non-core jobs and the lack of job security commitments. This could be due to the younger average age of Chrysler workers.

 

The deal-killer for Parker was the lack of job guarantees like the ones supposedly in the GM deal.  GM, he said, had granted a "moratorium on outsourcing" and a "plant-by-plant commitment of current and replacement product." Product means a particular model, and replacement product means new models after previous ones are phased out.

 

Virtually no Chrysler plant, in contrast, received replacement product commitment. This, said Parker, would allow management to get locals to bid against each other to prove who can do the work cheapest in hopes of securing future product. In addition to new product commitments, Parker insisted any pact must include a guarantee that new hires could progress into higher-paying jobs. The dissident group Soldiers of Solidarity (SOS) soon sprang into action, distributing Parker's letter and generating their own analyses of the deal.

 

In the first few days of voting the pact was rejected by six locals representing about 11,000 workers, often by huge margins. In that same period it was approved by 10 others, representing about 8650 workers (precise vote totals for each local were not released). This was especially encouraging to dissidents as a contract rejection would have been the first at any of the Big Three since a “no” vote at Chrysler in 1982.

 

Fearing defeat, UAW Vice President General Holiefield called for "all appointed union representatives" to "stand in solidarity in support of this agreement."  Needless to say, the jobs of appointees depend on towing the company line (pun intended).  Local presidents received letters from Holiefield praising the contract’s clauses on health care for current workers, alleged limits on plant closings and outsourcing, and creation of new jobs.

 

Voting was originally supposed to end Oct. 24 but was extended to give the leadership a chance to browbeat members. But the extra time also gave dissidents a chance to do more education and agitation.

 

After voting began, Reuters reported "previously undisclosed product commitments to select factories that go beyond the 2011 expiration of the deal." News also spread that Chrysler voting might be halted in favor of switching to talks at Ford—obviously in hopes of getting a similarly lousy deal approved to increase pressure on Chrysler workers. The media speculated that rejection of the pact would not lead to another strike, and that the company would insist that union leadership get members to revote until they got it right.

 

Workers also had to weigh the likelihood that Chrysler's new owner, private equity firm Cerberus, would not honor even the threadbare promises in the contract but would, in typical private equity fashion, split up and sell off parts or all of the company.  Such fears made some workers angrier and more likely to vote no—but scared just as many into voting yes for fear of their jobs.

 

After a few days the bureaucracy's mobilization began to have an impact, and four big Detroit-area plants, representing over 9000 workers, approved the contract on Oct. 24.

 

Lay-offs proceed at GM and Chrysler

 

As voting proceeded, SOS leader Gregg Shotwell reported that the plant making GM's hottest selling vehicles was laying off 1000 workers, despite the fact that they had been working mandatory Saturdays to keep up with demand. Most of those laid off were temps who had been told by managers they would have permanent positions if the contract were ratified.

 

Shotwell urged Chrysler workers at the last major plant yet to vote, in Belvidere, Ill., to demand the UAW "put every promise in writing, sign it, and date it."

 

His advice turned out to be far-seeing. At an informational meeting before Belvidere voting began on Oct. 27 it was announced that the third shift of 1000 workers was being eliminated. First to go will be the plant's temporary workers who have no seniority rights.

 

The high-level UAW official who mentioned the layoffs at a membership meeting didn't realize members had not yet been told. He refused to answer questions on the layoffs, and talked instead about how great the proposed contract was. In the end, 55% of Belvidere workers voted no. But this left the overall total narrowly in favor, with yes votes of 56% among production workers and 51% among skilled trades (as well as 94% of office workers and 79% of engineering workers, both much smaller categories).

 

Less than a week after ratification, Chrysler announced the elimination of six shifts and close to 12,000 jobs in the U.S and Canada. This follows two post-ratification stabs in the back at GM. As Chrysler workers were voting, GM said it would move 56,000, or 75%, of its current workers, into retirement over the next four years, replacing them with non-core workers.  And on Oct. 25, GM said 2000 workers were being laid off despite the pact's so-called job protections.

 

These events should serve as warnings to Ford workers.  On Nov. 3 the UAW leadership reached a tentative contract with Ford; union president Ron Gettelfinger was seeking rapid approval by the membership. Ford is demanding even deeper concessions than at GM or Chrysler as the only way to avoid massive layoffs.  In our next issue we will cover the results of the Ford talks. And with this year's Big Three talks wrapped up, we will provide an overview of the situation facing those who want to change the union's course to try to reverse the concessionary tide.

 

Human Needs, Not Profits!