Labor Advocate Online

UAW Helps Accelerate Attrition At GM—May Be Forced To Fight Delphi
by Bill Onasch

The spirit of partnership with the employer remains alive and well at the UAW "Solidarity House" headquarters. On March 22 they announced an "Attrition Agreement" with General Motors that GM hopes will flush out the Job Bank—where they must pay idle workers—as well as helping the company reach their goal of permanent elimination of at least 30,000 UAW jobs. The deal also aims at axing 5,000 jobs at GM’s bankrupt spin-off, and major parts supplier, Delphi. And, it is likely that similar programs will be negotiated with Ford and Daimler-Chrysler as well.

In so doing, the UAW bureaucracy threw in the towel in the union’s historic fight to maintain jobs. They merely haggled over the dollar amount of "buy-outs" and the number of workers who could keep their health care benefits when exiting (very few). They did not involve the IUE, who represent over eight thousand Delphi workers—about 25 percent of the Delphi unionized work force—in the bargaining. (The USW has a Delphi plant of about 800 workers in Vandalia, Ohio and a few hundred workers in small skilled trades units belong to several craft unions.)

Of course, it remains to be seen how many GM and Delphi workers will be lured away from their jobs by the cash payments. Those close to retirement, and eligible to keep their health care, are offered only 35,000 dollars to go now—considerably less than a year’s pay. Those with less than ten years seniority get the largest sum—140,000. But, they will give up all GM benefits. To maintain their current Blue Cross health plan as an individual will cost them anywhere from 484 to 1,032 dollars a month, depending on their age.

Nor are the prospects good for finding another job in the same pay range in such depressed towns as Detroit, Flint, or Oklahoma City. The fact is they will be lucky to find something that pays half of what they are currently earning at GM.

In the long run most workers would no doubt be better off keeping their present job. But, that’s a roll of the dice. The Job Bank, which guarantees standard wages and benefits even when a plant is shut down, almost certainly will not survive past the expiration of the current contract, September, 2007—if indeed it lasts that long. Passing up this buy-out entails the risk of future job and benefit loss without as much severance compensation. It’s a tough call.

Even if sufficient numbers of GM workers take the money and run there is still uncertainty at Delphi—under new management that doesn’t pretend to want to be the union’s "partner." That company wants to slash far more than the 5,000 GM is offering to absorb through the buy-out. They want to close, or sell off, at least fourteen plants. Only one plant would remain in the "home" state of Michigan. Completion of their "reorganization" plan would mean the elimination of 75 percent of UAW jobs in their U.S. operations.

Delphi has become a truly global outfit with more than 150,000 workers outside the U.S. There are nearly twice as many in Mexico than in the "homeland." These operations abroad are highly profitable—only the American division is included in the bankruptcy. Delphi wants to slough off product lines with low profit margins, such as spark plugs, and focus on juicer electronics and fuel systems. And, they want to take the chain saw to union wage and benefits structure for those fortunate few that survive downsizing.

Before completely severing ties from its parent the parts maker wanted GM to guarantee an additional 50,000 dollar bonus to remaining Delphi workers to take some of the sting out of a wage-cutting scheme it was trying to sell the UAW and IUE. Skilled trades workers, now paid 32 dollars per hour, would receive 28 per hour in July and then fall to 24 by Sept. 3, 2007. Production workers would go from 27 to 22 in July, sinking to 16 next year. New hires would earn 12 dollars per hour for production jobs and 21.50 for skilled trades work. Next September the workers remaining with Delphi would receive the one-time sweetener of 50 grand.

This raises a giant new challenge to the UAW bureaucracy. Delphi is part of the coordinated pattern bargaining with the historic Big Three automakers, and their recent parts spin-offs. Only once in the union’s history have they agreed to any cut in Big Three hourly wages. That was 25 years ago during the Chrysler bailout and the cuts were meant to be temporary. In fact, when Chrysler returned to health wages were restored to the industry pattern.

The current pattern contract expires September, 2007. The UAW and IUE bureaucrats don’t want to set the precedent of wage cuts in the run up to those negotiations. Already they have had to give Ford essentially the same mid-contract concessions on health care they gave to GM/Delphi. More probably will be granted in this area in the next contract and the Job Bank will likely have to be given up as well. If bread-and-butter wages are thrown in to the mix of give-backs the whole industry pattern will unravel. The bureaucracy correctly calculates that there is no way to sell a retreat on hourly wages to their Big Three members.

After the UAW balked Delphi followed through on their threat to ask the bankruptcy judge to terminate the UAW and IUE contracts. They want the court to impose the company’s last wage offer on the Delphi workers—along with their plan to jettison 24,000 jobs.

As this is written the situation is up in the air. The IUE has already voted to authorize a strike if the company tries to terminate agreements through bankruptcy. The UAW will almost certainly have to seek, and will get, similar strike authorization. Strike action may in fact be delayed until the judge issues a decision, which could take several months—just as strike plans have been on hold at another bankrupt parts maker, Tower Automotive, while a judge ruminates.

Delphi is by far GM’s biggest parts supplier and an actual strike would almost totally disrupt that company’s production. Delphi also supplies components to virtually every other auto maker as well. The Delphi workers still have some power—for now.

Unfortunately, it’s not at all clear what the strategic objectives of the bureaucracy would be in such an upheaval. They have already conceded massive job loss at GM. Will they be able to hold the line during a strike over job destruction and wage cuts at Delphi while their GM "partner" suffers because of the disruption of parts flow?

While there is wide spread discontent among GM and Delphi workers organized opposition is still small and it too has failed so far to produce a credible strategy. They are calling for job actions and strikes, and demonstrations to build public support.

Those are good short-term tactics, worthy of support. But, to be effective in the long war shaping up against the auto bosses they must be part of a much broader strategy. Such fundamental issues as health care, pensions, and job security cannot be addressed in today’s era of globalization solely through such traditional collective bargaining tactics.

We will return to strategic questions in future articles.

March 31, 2006

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