Discussion On the Future Of the American Labor Movement

Labor Advocate Online

UAW Capitulation Leaves All Of Us Vulnerable In Class War
As Last Heavy Battalions Stand Down It’s Time to Regroup the Partisans

by Bill Onasch

Introduction
As I started to put together an article on the latest developments in the UAW it soon became clear to me that this was not just another in a long line of all too familiar concession deals. What we are seeing is the abandonment of the last credible preserve of the blue collar "middle-class" that was supposed to be a hallmark of American society. This is a big deal.

The bosses, their media, their politicians--and union bureaucrats with no fight in them–will ensure it’s a big deal. When organized labor, above all the pace-setting UAW, won big gains from the end of the last world war into the Seventies, millions of other workers, including the unorganized, indirectly benefited as well. All wages steadily increased. Most employers started offering benefits such as health insurance and pension plans for the first time.

That movie, long running backwards, is now just about back to where it started. The pattern of give-back bargaining by most unions over the past thirty years has led to stagnant, now even declining real wages, and less generous benefits for the organized and unorganized alike.

Particularly hard hit has been the African-American component of the "middle-class," much more dependent on industrial unions as a source of decent paying private sector jobs. In the 1980s one in four Black workers were in unions; today that ratio has shrunk to one in seven. Threatened cuts in auto will hit them proportionally harder. This can only add to the poverty and despair in Black communities across the country.

Now the leaders of the historic pace-setting union have agreed to mammoth give-backs for not only active workers but retirees as well. This has created an atmosphere of an emergency crisis that every employer will seek to exploit–even if they have contracts and retiree plans in place.

Some have said the UAW leaders had no choice but to give in. As a matter of fact, they had the choice of just saying "no." They had a contract in place, good for another two years. GM, with enormous cash reserves on hand, could not have immediately pressed for bankruptcy. Time could have been gained to marshal forces for a fight.

In the context of class war this capitulation was not a fierce battle lost–it is more akin to when the French government declared Paris an open city before the arrival of Hitler’s armies. While our former general staff works to create a Vichy of their own those of us who want to continue to fight need to regroup as partisans.

There are many potential partisans within the ranks, and even in leadership posts here and there, in the labor movement. It is time for us to start getting together, to discuss, to organize, to prepare for future action. This article is offered as a modest contribution to that goal of rebuilding a class struggle wing among America’s workers.

***

Until the past few weeks, the United Auto Workers could legitimately claim to have fared the best among the major industrial unions in American manufacturing. Pointing to their Big Three contracts. and agreements with Big Three spin-offs, they could brag about high wages, the best health insurance, and some of the top pensions and paid time off. They have even had a job bank to lessen the impact of short-term layoffs.

Of course, these benefits were enjoyed by far fewer workers than even twenty years ago. A combination of lost market share by the Big Three, technological changes, off-shoring, and outsourcing, have taken a huge, and ongoing toll on UAW membership.

Solidarity House had been seeking to prevent this decline from becoming a free fall by pursuing a strategy of responsible partnership with the employers. They hoped for some kind of eventual soft landing that could avoid the steep take-backs won by bosses in steel, electrical, rubber, meat packing, and other traditional bastions of industrial union strength.

A Perfect Storm
But this has been a crisis deferred rather than escaped. A perfect storm has come together threatening workers at GM/Delphi with an imminent Force Five blow. Ford and Chrysler are in its path as well and eventually nearly all workers will feel its wrath one way or another.

One doesn’t have to look overseas for a threat to the profit margins of the UAW’s "partners" at GM, Ford, and Daimler-Chrysler’s American operations. So-called "transplants" of Asian and European automakers–the UAW has failed to organize a single one--are cranking out millions of cars in the U.S. with far lower labor costs.

The wage differential paid in those plants, while substantial, is only a small part of this competitive threat. The difference in benefit obligations is enormous. The Big Three are committed to paying an ever-growing number of retirees tens of billions in pensions and health care. The current retiree to active worker ratio at GM is 2.5-1.

Korean based Hyundai recently opened a state of the art plant in Alabama. They, of course, will have no retirees any time soon. In any case, they do not provide a defined benefit pension as UAW workers enjoy. Like most of the transplants, Hyundai workers are enrolled in a 401(k) plan–the kind of retirement security that Enron workers once counted on. The transplant bosses also contribute far less toward out of control health care costs than the Big Three are required to cough up.

The Big Three have seen this coming. More than a decade ago they started to spin-off the unionized sector of their parts manufacturing with the long range goal of seeing these outsourced operations drive down labor costs. But when GM spun off Delphi in 1999 they had to agree to a transition period–at least through 2007--where they would continue to guarantee basic obligations they had accepted under previous contracts.

Delphi, following other major parts suppliers, Federal Mogul and Tower Automotive, has now entered bankruptcy and is demanding huge cuts in wages and benefits. That’s not only bad news for the 24,000 UAW members (and several thousand in other unions) at Delphi. If GM is held to its guarantees of Delphi pensions then General Motors itself may threaten to go the bankruptcy route.

"GM is in meltdown mode," said Peter Morici, a professor of business at the University of Maryland. "The company would be in bankruptcy next year if it didn't have so much cash. It has to get labor costs down to below what Nissan and Toyota pay in the southeast U.S."

If General Motors could realize this learned academic’s goal it would have far reaching ramifications for millions of other workers whose boats have risen over the years on the UAW’s wage and benefit tide.

While health care and retirement obligations put the Big Three at a competitive disadvantage in the auto market the entire industry faces other crucial problems.

Consumer debt in the U.S. is near the breaking point. Also facing sky-rocketing fuel costs, tapped out, worried consumers mean the domestic market pie the corporations must share in will almost certainly decline, not expand.

The Green Menace
And, in the long run, there is even greater challenge. While auto has historically been the engine that drives American capitalism it is also a chief culprit in the environmental crisis that threatens our whole planet. No meaningful progress in reducing greenhouse gasses that accelerate global warming, no significant cut in consumption of dwindling fossil fuels, can be realized without radical changes in transportation. Inevitably car supremacy must yield to greatly expanded mass transit, over the road truck cargoes–along with regional air travel–must be largely shifted to rail, if we are to avoid environmental catastrophe. To at the same time avoid economic disaster, society needs a program of just transition to shift resources and workers into other, socially beneficial production.

In many respects the UAW is on point in what seems to many to be a last stand for organized labor as we know it. If this union that has kept past gains intact the longest, dealing with the single most important industry, falters then the future of American unions seems doomed.

Does Their Doom Have To Be Ours?
Organized labor, as present generations of active workers know it, is doomed. Certainly the strategy of collaboration with the employer, consistently followed by the Administration Caucus leadership in the UAW for over thirty years, was doomed from the beginning. They started out with more to give back, largely the result of past gains won by heroic struggles in the Thirties and Forties. Their concessions have been incremental, granted over decades of "partnership" in quality circles and the NUMMI and Saturn experiments, a little less time off here, a little less on cost-of-living there. The fittest local bureaucrats survived the plant closings through whip-sawing--offering various give-backs, and lining up political support for tax breaks for the boss, to convince the employer to close some other UAW plant. The Solidarity House bureaucracy artfully maintained a greatly reduced base of relatively well compensated active members and retirees–until now.

The UAW officials have simply been the best case example of the American trade union bureaucracy. They proved to be less inept then many of their colleagues sitting astride other unions but, in the end, are about to meet a similar fate. They can no longer disguise how the same trends that have battered the labor movement as a whole–such as union density–have undermined them as well.

At the end of World War II the auto industry, including all of its major parts suppliers, was virtually one hundred percent organized. Today about forty percent of American made cars are built in nonunion transplants. Delphi has more workers in Mexico than the U.S.

The UAW has failed in every one of its periodic attempts to organize assembly plants opened by Japanese, Korean, and German employers. Except for deals cut with spin-offs from the Big Three they have had little success in organizing restructured parts suppliers. The UAW wagons have had to constantly tighten their ever shrinking circle.

Our Captains Rearrange the Deck Chairs
Now the entire American union bureaucracy knows there is a crisis–at least to the extent it affects them. Fewer dues payers undermine their employment security and deprive them of assets to offer in bartering with politicians.

Over the past year some of them have engaged in a "debate" about labor’s future. There was even a split among them with unions representing about forty percent of the membership leaving the AFL-CIO to establish a new federation–Change to Win. But this debate didn’t amount to a hill of beans. The class collaborationist strategy practiced by this bureaucracy needs to be replaced–not fragmented. If that’s not done today’s mainstream unions will become increasingly irrelevant and will eventually fade from the scene entirely.

While there is no reason to expect the present union bureaucracy, at least as a group, to reform itself there is still, in my opinion, an opportunity to reform our union institutions.

First of all, we should recognize there are some small unions that never completely succumbed to mainstream class collaboration such as the UE, California Nurses Association, and Farm Labor Organizing Committee (FLOC). There are local unions here and there that have maintained militant, democratic practices that set them apart as well. They are worth supporting and can be useful, sometimes even inspiring examples for others.

Adversarial unions defending worker interests against the boss are needed today perhaps more than at any time in living memory. Such unions, democratically run, mobilizing the power of the workers on the shop floor, can make a big difference in the day-to-day lives of working people.

But even the most capable leadership and member mobilization in the workplace cannot adequately deal with some of the most critical components of the crisis confronting the UAW and other unions today. Some are simply outside the scope of effective bargaining with individual employers.

The single biggest challenge facing every union–the UAW more than most–is the cost of health care. This situation is unique to unions in the United States.

Our Health Care Is Terminally Ill
Every other industrialized nation has long had universal health care coverage as a matter of public policy. Whether it be socialized medicine, such as in Britain and Italy, regional nonprofit co-ops such as in France and Germany, or "single-payer" as in Canada, everybody is guaranteed access to quality health care. By many standards, such as average life span, and infant mortality, health care delivery is far superior to ours in all of these countries.

And, the percent of GNP devoted to health care in Europe and Japan is from twenty to forty percent less than what is spent in America.

American health care is not a public service but a commodity, dominated by private companies, with costs subject to what the marketplace will bear. Unless you are poor enough, or disabled enough, to qualify for treatment in the few downsized public facilities you need to have an insurance or HMO plan to gain access to health services.

Such coverage is almost always tied to an employer–though employers are under no legal obligation to offer plans and forty percent of them don’t. Millions of other workers can’t afford to pay the required employee contribution where insurance is offered and they must go without. Add in the self-employed, ineligible for group plan rates, and you come up with a total of over 45 million working Americans without access to health care.

The union bureaucracy must share the blame for this disgrace. Private health insurance plans tied to an employer first arose on a major scale during the Second World War--as a way of getting around the wartime wage freeze. "Fringe benefits" such as health insurance were approved by government regulators as being outside the constraints on wages. Kaiser was among the first employers to embrace health care as a fringe, providing it to the tens of thousands of workers assembled in their California shipyards around the Permanente River. It worked so well they spun off today’s health care giant, Kaiser Permanente.

After the war, when working class parties in other countries were guaranteeing not only health care, but also pensions and vacations through legislation covering all workers, the leaders of the AFL and CIO decided to keep such fringes tied to contracts with the employer. These far-sighted labor statesmen thought this would make their unions more attractive. If workers wanted such benefits then they should join the union.

To be competitive in the labor market many nonunion employers started offering fringe plans of their own, undercutting their use as an organizing tool. Thanks to the union bureaucrats, union workers who lose their jobs lose their health insurance as well and often their pensions too. Whenever they change employers they have to start accumulating seniority based vacation time all over again.

Of course, these fringe benefits always came at a cost to workers–even when there was no money directly deducted from their paychecks. They were paid for with employer funds, costed out during negotiations, that could have otherwise gone to wages.

Ongoing costs of health care, and cumulative liabilities for pensions, have grown enormously in the post-war period. The cost of health care in the marketplace is beyond control of either the employer or the union. They can only bargain over how much the company will agree to pay toward this cost.

Under the prior negotiated agreement, UAW members at General Motors were collectively paying for about seven percent of the total health care bill out of their own pockets. The new emergency concession gives back an additional dollar an hour and change in wages to go to health care. For the very first time the majority of retirees will have to start paying monthly premiums for their health coverage. (The UAW has to go to court to get permission to sell out the retirees.)

This is a direct transfer of wealth–totaling billions of dollars–from the pockets of UAW members into the coffers of General Motors.

Even this is considered just an emergency stop-gap measure, intended to last no longer than the life of the current contract, which expires in September, 2007. GM is pushing hard for the UAW to shoulder the same percentage of health care costs as nonunion salaried employees–31 percent.

A New Political Front In Class War Needed
Clearly, the only acceptable solution to the runaway costs of health care is to take it out of the greedy, inefficient private sector market. Health care must become a universal public service as it is in every other civilized country. That requires political power.

A similar approach for retirement should be obvious as well. Both defined benefit and 401(k) pension plans have been trashed at major corporations such as Enron, World Com, and in airline, steel, and mining industries. There are numerous failed pension promises at small firms that don’t make the national headlines.

Now the "legacy burden"–the promised rewards to hundreds of thousands of retirees whose decades of hard work made their employer successful in the past–are under the gun at the Big Three and their spin-offs. If these obligations–once seemingly etched in stone–so much as catch a cold we can expect an epidemic of pneumonia to debilitate the entire national private pension structure.

Since there is no way to protect our bargained pension agreements against bankruptcy we once again have to look for legislation. Instead of chiseling away at present meager Social Security benefits we need to greatly expand them. Society should take over the assets and obligations of every wage worker pension plan--before they go broke–and fold them in to a beefed up Social Security.

And what of the great environmental challenge to the auto industry–and many others? In a misguided attempt to preserve jobs many in both the AFL-CIO and Change to Win union bureaucracies have partnered up with the bosses to roll back environmental protections, to champion urban sprawl and expanded interstate highways, to push to drill for oil and gas in the pristine Arctic and fragile coastal waters.

A New Bankruptcy
This is another powerful argument for bankruptcy–the utter bankruptcy of ideas, imagination and integrity among those who call themselves "labor leaders." With a few honorable exceptions, most union officials have become as cynically focused on short term returns as the polluting bosses and are quite prepared to pass on the disastrous consequences of today’s schemes to future generations.

Irreversible destruction of our environment is not in the interests of union members. It is not worth a paltry number of temporary jobs. Instead we need decent jobs that benefit our society.

In World War II the entire American auto industry was converted to other work–various projects to support the war effort. Virtually all of this was paid for by the tax payers. The government planned all production from grand concepts down to the most nitty-gritty logistical challenges. It all worked pretty damn well.

Why not a similar approach to converting industry in the interest of saving our planet? Instead of SUVs why couldn’t UAW members supply a massive renewal of public transportation?

Such an approach also, of course, is beyond the scope of conventional collective bargaining. This too requires a political movement.

Labor Party Needed
But we’re talking about a different kind of politics then we’ve always known. While the labor movements in every other industrialized country all produced at least one mass party of their own the mainstream union bureaucracy has been either hostile to or frightened of such a prospect here.

Just as they try to be responsible partners with the boss in the workplace the bureaucrats try to kiss up to the bosses’ politicians as well. Their idea of political action is mainly along the line of getting commitments from politicians to use union labor on pork-barrel projects and to allow them to sign up public sector employees. During the 2004 election cycle unions collectively spent 400 million dollars to promote their "friends"–and never at any time in history has their political influence been so negligible.

During the course of the recent "debate"among those heading our unions health care, retirement, and the environment were hardly mentioned. (This includes the UAW leadership who are officially on record as supporting single-payer.) The only contention among them about political action was how much money should be spent on labor’s "friends," and whether adequate attention was being paid to potential new friends among the Republicans.

Experts advising the "opposition" Democrats are scolding them for appearing too left. Convinced that the party’s historical core base in the unions, civil rights, and feminist movements are too dumb or too timid to ever pull out, the Democrats continually narrow any meaningful differences with the Republicans. Much to the chagrin of the pro-choice movement, the Democrats thought the new Chief Justice was a pretty good guy and it’s the extreme right of the governing party that’s complaining about the Miers nomination–not our friends in opposition. And, of course, there’s the "CAFTA 15"–those House Democrats who took union money and then helped Bush get this new globalization tool.

The liberal Democrat who represents the congressional district I live in–a former mayor of Kansas City who is also a minister at one of the biggest Black congregations in town–joined many fellow Democrats in voting for the mean-spirited bankruptcy "reform." This bill, written by the credit card companies, will squeeze a few last drops of blood out of down and out working people–including, I’m sure, more than few among the flock he tends to on those Sunday mornings he’s in town.

We pay a hefty price for the failure to create a party of our own. As long as the employers are allowed to rule uncontested in Washington, the state capitols, and city halls, the working class will be condemned to one defeat after another. To complement and enhance the power of our unions in the workplace we need a party of our own carrying out rounded political activity on behalf of our entire class. In short, we need a labor party.

There is in fact a project dedicated to this, appropriately named–the Labor Party. Initiated by labor veterans who understood the nature of class struggle–such as the late Tony Mazzocchi, who brought along considerable backing from the Oil, Chemical & Atomic Workers (OCAW)–it also picked up support by some of those unions mentioned earlier that had resisted caving in to collaboration, such as the UE, California Nurses, and FLOC, and others in the midst of democratic insurgency, such as the Brotherhood of Maintenance of Way Employees (BMWE).

The Labor Party made an impressive launch in the mid-Nineties. Its first two conventions each attracted about 1400 participants. It adopted an excellent program–and developed a detailed proposal for Just Health Care.

Unfortunately, some early union support eroded--not so much for political reasons but because of organizational shake-ups within the union structure. OCAW merged with the Paper Workers to form PACE and, while the merged union remained a formal Labor Party affiliate, its commitment of resources to LP declined dramatically. Gerry Zero, a staunch Labor Party advocate in the second biggest Teamster local lost his elected position and a considerable well of support dried up there as well. The BMWE has merged with the Teamsters and their future relationship with the party remains to be seen. And, shortly after the party’s third convention, cancer claimed the remarkable Tony Mazzocchi who had played an indispensable role in getting the project off the ground initially.

Added to these problems was the distraction of the unions’ fanatical devotion to the Anybody But Bush fiasco during the 2004 election. That, of course, was followed by the great non-debate and unprincipled split in the AFL-CIO. All this left the Labor Party essentially treading water over the past few years.

In my opinion, little progress for the working class can be expected unless we revive the labor party project. I’m talking about more than securing additional formal union affiliations or signing up individual members–though those things are absolutely necessary.

We also need visible Labor Party campaigns–whether they be electoral, issue-oriented, or solidarity in nature–that can be brought in to not only the organized base in the unions but among the unorganized working class majority in our communities. We need to use these campaigns to go beyond pressure and protest and begging and bribing, to start building a genuine opposition to the bosses’ twin parties--an opposition with a clear working class program that aims to do no less than take political power.

There Is Hope
The Labor Party is far from the only promising sign of life in and around the labor movement not yet extinguished by the bureaucracy. Other encouraging examples include US Labor Against the War; solidarity activities such as support committees for Northwest strikers in the Twin Cities and Detroit as well as good projects in some local areas by Jobs with Justice chapters; rank-and-file caucuses and support groups; discussion forms such as the monthly St Paul Labor Speakers Club, annual Meeting the Challenge Conference, also in the Twin Cities, and the monthly newspaper, books, and conferences organized around Labor Notes. Sprinkled throughout the unions there are some socialists in the tradition of Gene Debs, and veterans of big antiwar, civil rights, and feminist movements of the past. And there are new leaders emerging from many semi-spontaneous local struggles breaking out because more workers are saying "enough is enough."

These examples are quite diverse. They come out of different experiences. They don’t, at least for now, lead great masses. They certainly don’t agree on everything. They can’t all be assimilated into a single disciplined organization.

But it seems to me they agree on a lot of important things. They know we are not the bosses’ partners. They strongly believe in the need for working class solidarity–and in forms going beyond sending an e-mail message. They are different contingents standing on the same, right side of what they recognize is a class conflict with the employers.

In light of this new, sharpened escalation of class war, it seems to me we should all at least be talking to one another and looking for ways to fight back where and how we can. That’s what partisans deprived of heavy battalions have to do in times of war. Sometimes they win.

October 23, 2005

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KC Labor webmaster Bill Onasch is a member of United Auto Workers Local 1981—the National Writers Union—as well as a retired member of Amalgamated Transit Union Local 1287. At the last Labor Party convention he was elected to represent Midwest chapters on the LP Interim National Council.