Week In Review
A Weekly Column by Bill Onasch
May 31, 2009
Two Down–One to Go
For decades, General Motors, the world’s biggest car company until last year, was the bluest of chips on the stock market. After its shares recently hit their lowest since the depths of the Great Depression it was dropped from the Dow-Jones Industrial Average. Staffers from the President’s Auto Task Force have been basically in charge at GM’s headquarters for weeks. Probably as early as tomorrow the company will be led in to bankruptcy court.
Not the ideal climate for union contract negotiations–which is precisely why the employer, and the U.S. and Canadian governments, demanded renegotiation of long-term settlements from GM’s unions post-haste. Their side saw a window of opportunity to get not only wage and working conditions concessions once unimaginable but also a chance to free GM from a huge chunk of its costly “legacy burden”–that is the promises of secure retirement made to the workers who built the company. In so doing they serve notice on the rest of us that the new President labor helped elect is prepared to actively intervene on the side of the bosses to demolish the last remaining pillars that supported a blue collar “middle-class.”
The UAW’s deal with General Motors got approval–by a 74 percent margin--just in time for this inevitable bankruptcy filing. Having it in place is supposed to expedite the process. The core agreement pretty much follows the “pattern” established with Fiat-Chrysler–soon to emerge from bankruptcy. Among many give-backs, it freezes wages; cuts bonuses; reduces break time; eliminates a holiday; scraps overtime after eight hours; tightens attendance rules. It’s estimated this will transfer a billion dollars from the pockets of UAW members to the coffers of GM.
Most significantly, it accepts a combination of common and preferred stock in the “new” company, along with a 2.5 billion dollar note to be cashed out in dribs and drabs over the next eight years, in place of the cash contribution to the VEBA for retiree healthcare agreed to in 2007.
Like their Chrysler counterparts, GM retirees and surviving spouses will immediately have to lay out considerably more out-of-pocket for healthcare and will lose dental and vision coverage completely. Also gone for good is the scholarship program for kids of UAW-GM workers.
GM mirrors the Chrysler surrender by binding the union to a six-year no-strike pledge.
This much had been agreed to weeks ago. The hold up was over the GM-White House restructuring plan–aka the Viability Plan--that called for greatly increased imports from GM’s offshore plants in to the domestic market. The UAW was particularly incensed over the projection of bringing in large numbers of Chinese-built subcompacts while UAW jobs were being eliminated.
A compromise deal was finally reached to dedicate a closed stamping plant and an assembly plant, employing about 1200, and operating under special “innovative” local agreements--not yet finalized–that would build up to 160,000 small cars per year. A couple of closed plants will also remain on “standby,” ready for any unlikely increased demand in the domestic market.
As part of restructuring GM will take back five Delphi plants in Saginaw, Lockport, Rochester, Grand Rapids, and Kokomo. However, these will be placed in a separate wholly owned subsidiary, subject to the UAW Delphi contract.
GM still hopes to sell Saturn, for which they have no plans. They claim to have a buyer, yet unnamed, to continue Hummer production in Shreveport.
GM’s mandated contraction is causing turmoil in Europe. The future of Swedish Saab is uncertain. The German and U.S. governments have approved the sale of majority ownership in Opel, including British Vauxhall operations, and plants in Belgium, Spain, and Poland, to a consortium led by Magna. 8500 European jobs are expected to be slashed. British unionists are particularly concerned about Vauxhall. (Obama imposed a condition on Magna that Opels would not be sold in the U.S. market.)
Magna is a huge Canadian-based global parts supplier and contract auto assembler employing 82,000 at 326 manufacturing plants. Many of these plants are in the U.S. Members of UAW Local 624 in East Syracuse, New York just rejected a third try for a concessionary deal demanded by Magna as the price for keeping their New Process Gear plant open. A few years ago Magna–with the endorsement of the CAW--made an unsuccessful bid for Chrysler.
Their autocratic, egomanic owner, Frank Stronach, told the Globe & Mail he wants to develop a “Canadian” auto industry based on Opel. A few years ago Buzz Hargrove, then head of the CAW, negotiated an Andy Stern-like deal with Magna, called Framework of Fairness. It gave union recognition under some conditions. In exchange, the union renounced forever the right to strike in favor of arbitration and abandoned the steward system on the shop floor. This deal would make it tough for the CAW to bring what’s left of union standards to any new Magna-Opel production.
The CAW agreed to their third concessionary contract within a year’s time with GM last week. GM Canada/White House projects cutting production by about half. The federal and Ontario governments are chipping in bailout funds and will receive shares in the new GM.
At least fourteen U.S. GM plants will be permanently shuttered, 21,000 UAW jobs eliminated. A few thousand salaried workers will also get the axe and at least 1100 dealerships–with tens of thousands of employees--will be closed. As we predicted, this deal eclipses the recent one at Chrysler earning the dubious distinction of the single biggest collective bargaining defeat in American working class history.
But wait, there’s more to come. There’s still one left out of what we used to know as the Big Three–Ford. Ford chose a different path than its Detroit competitors. It has not asked for government funds and has said it doesn’t expect to file for bankruptcy. They hope to establish their dependability as the other two contend with the stigmas of bankruptcy and bailout, making consumers wary.
The Obama administration has had no leverage for dictating terms to either Ford or its union. But Ford has always made clear that they expect to get concessions similar to what the UAW has given GM and Chrysler so that they can remain “competitive.” The Detroit News reported last week,
“Ford Motor Co. is eyeing the latest deal between General Motors Corp. and the United Auto Workers ‘with interest,’ but executives expressed confidence that the union will not leave the Dearborn automaker at a competitive disadvantage with its crosstown rival.”
Their confidence is probably not misplaced. For decades the UAW used pattern bargaining to obtain more or less wage, benefit, and working condition parity among the Big Three. Now the bosses are driving the pattern and Gettelfinger will have to go along when Ford asks nicely for the same deals cut with the others.
There is already fresh speculation about how long the UAW can remain viable. An article in the Detroit Free Press said,
“With its membership declining and facing ever more demands for concessions, the UAW may need to consider a merger with another union to remain viable. That's the opinion of labor relations experts who point to the UAW's declining membership as a spur to a possible merger. From a peak of 1.5 million members in the late 1970s, UAW membership dropped to 431,000 at the end of 2008. With so many job cuts this year, the ranks are likely to get thinner still.”
Indeed they will get considerably thinner. The prospects for UAW organizing the nonunion transplants–with or without the Employee Free Choice Act-- are zero. While the union has considerable money much is dedicated to the strike fund. Maintaining the present level of bureaucracy in the style to which they have become accustomed is a real challenge. There is some talk about a possible merger with the Steelworkers–though we’ve heard that one more than once over the years.
The Steelworkers are themselves a collection of unions that came to the conclusion they were no longer viable–the United Rubber Workers, Paperworkers, Oil, Chemical & Atomic Workers, Allied Industrial Workers, as well as what’s left in steel and aluminum. Most of their contracts now have two, or multi-tiers of wages and benefits. Some even have VEBAs. In coalition with one wing of the boss class they have become strident advocates of Buy American.
But the real question of viability is not one of dues base. The mortal threat to the UAW is the cumulative damage done by generations of bureaucrats dedicated to partnership with the boss–and now the boss government as well. Getting together with other like-minded bureaucrats to consolidate dues collection will not save the union; it will only prolong its death agony.
For the UAW, and most other unions, to survive and once again win gains for workers we need a return to the kind of class conscious, social unionism that initially built the UAW in struggle. That’s Job One for us.
Nothing Is Often Better Than
I’ve been following, and making very limited contributions to discussions among local climate change activists about whether or not to support the American Climate & Energy Security Act of 2009. That’s the bill that would establish cap-and-trade of carbon emissions--while giving a free ride to the worst polluters for up to twenty years. As regular readers know, I am strongly opposed to this approach that offers little improvement in the long run and authorizes enormous, irreversible damage to our biosphere in the short term.
One activist wrote on a Listserv “From what I've read of this bill, I don't think it's very good either.” But, he goes on to say, “However, I'm also thoroughly opposed to this Congress doing nothing about climate change. So what do we do? shill for an imperfect plan? fight to kill it (thereby being on the same side as the polluters for the time being)? or sit on the sidelines and watch?” After some genuine agonizing he concludes, “I'd rather it passes than not but I won't lift a finger to help it.”
Such quandaries are common. A few years ago there was a big push to force congress to do something about prescription costs for seniors on Medicare. Finally Ted Kennedy and the AARP gave their blessing to a rotten deal with Bush that enriched the drug and insurance companies while forcing many seniors to pay more than ever. But, by God, they did something.
We hear the same thing in today’s healthcare debate. It’s now or never for healthcare reform we are told. Congress must do something and we must support whatever something they are prepared to give us. Single-payer advocates are instructed to sit down and shut up before we mess up everything. Even the “progressive” Health Care for America Now actively works to try to sabotage single-payer rallies.
The UE News used to have an occasional column headed: Danger–Congress At Work. That’s still an appropriate warning. Rather than contribute to the fraud that the climate bill, that gives a green light to two more decades of unrelenting environmental destruction, is a historic Green achievement it would be far better that congress do nothing. Rather than further feed the health insurance robber barons in the name of healthcare reform it would be far better that congress did nothing.
Capitol Hill was bought and paid for by Big Business. Until we can build powerful mass movements for our issues, and a party of our own, we won’t have any meaningful input in to congressional decisions. All we have right now is our principles. Many sneer at those of us “sitting on the sidelines” waiting for the “perfect,” while they rub shoulders with the movers and shakers at the table.
But principles are indispensable to both building movements and keeping them on course. That’s why I will never exchange my limited view on the sidelines for a fantasy luxury box where I must cheer on those wrecking our economy, blocking access to healthcare, and destroying our very biosphere.
A Reader Response
After my comments on Memorial Day last week I got this from my old friend Peter Rachleff, a history professor at Macalester College, as well as a champion of labor solidarity,
“Check out David Blight, Race and Reunion: the Civil War in American Memory (Harvard U Press, 2001). Blight argues that Memorial Day was created by the proponents of ‘reconciliation,’ the bringing together of the veterans of the Union and Confederate armies, and that, as the celebration took shape, it erased the role of slavery as a cause of the war and the role of Black troops as central to emancipation. Memorial Day became a key step towards the ‘Myth of the Lost Cause’ and a justification for Jim Crow, disfranchisement, and lynching.
“You get notes like this when you have a historian for a friend.”
Pardon the Long Wind
I’ve gone on considerably longer than usual this week. I will make up for my excesses by not doing a WIR at all next weekend. This Friday my wife Mary and I will hit the road for a mini-Midwest vacation. We’ll be posting the Daily Labor News Digest as normal this coming week but you’re on your own for news the following week, June 8-12. The next Week In Review will be out June 14.
That’s all for this week.
KC Labor Home Daily Labor News Digest Past Weeks In ReviewSign Up For E-Mail List