Week In Review

A Weekly Column by Bill Onasch
July 27, 2011

Note: Certain strange abbreviations and awkward formulations are necessary to comply with e-mail rules of some ISPs.

Bargain Time In North America
We devote a lot of space in these weekly missives urging our unions to take up the broader social, economic, peace, and environmental issues that are so crucial to the working class. But we haven’t lost sight of the core mission around which our unions were built--and must continue to pursue if they are to survive: defending and advancing wages, benefits, working conditions, just treatment, and job security in the workplace. Even if we someday achieve a Labor Party government, implementing a restructuring of the economy along the lines advocated by the Alliance for Class & Climate Justice, that fundamental duty will remain relevant.

Over the next few WIRs we’ll take a look at some major contract negotiations. For the past year or so the public sector has dominated the labor scene and there are still some important battles in that arena in both the U.S. and Canada. Right now we shift the focus to private industry contracts covering, or setting the pattern for hundreds of thousands of workers.

Public workers have had to confront employers with very real revenue shortfalls. The private sector is a different kettle of fish. Reuters business writer Steven C. Johnson recently wrote,

“About 78 percent of companies in the benchmark S&P 500 index that have reported second-quarter earnings have beaten Wall Street expectations. Many benefited after slashing costs when the financial crisis hit and then keeping tight control on them even as sales recovered.

“Economists say the ability to do more with less has helped create a two-speed U.S. recovery. The S&P 500 has doubled in value since the recession ended and per-share earnings are currently on track for a new annual record, while employment remains below the level seen in late 2008 when corporate profits troughed..

“What's more, workers have never claimed such a paltry share of real national income growth. Economists at Northeastern University in Boston recently found corporate profits captured 88 percent of income growth between the second quarter of 2009 and the fourth quarter of 2010. Workers' take? Slightly more than 1 percent.”

What should be a time of “catch-up” in recovering concessions granted during recession is instead a battle to hang on to what workers still have–and many of those fights are being lost. We start with negotiations just beginning in America’s largest industry.


Who Are These Men and Why Are They Smiling?
I thought I would save a thousand words with this Kodak Moment recorded at the ceremonial handshake launching the formal opening of UAW-Big Three negotiations at Chrysler. The smiling hand clasp is tradition. New is the sartorial display of matching shirts. The casual observer can not tell the difference between union and company. Perhaps this symbolic melding with the boss flows from a subconscious desire to be their junior partners so powerful it can no longer be suppressed.

The last contract negotiations in 2007, led by Ron Gettelfinger, of course produced a sea change at the Big Three. I wrote a detailed analysis of that agreement at the time, Big Three Get Big Deal. The most prominent historic give-backs included a new second tier wage and benefit package, at roughly half-pay and no defined benefit pension, for new hires while the companies bought out their commitment to retiree health care with a fixed-amount funding of a VEBA.

But the deal got even bigger at GM and Chrysler with the bailout and bankruptcy contract modification dictated by the White House in the spring of 2009. The pot sweeteners included a wage freeze, cut bonuses, reduced break time, loss of a holiday, scrapping of the eight-hour day, restructuring of company VEBA payments, health insurance cost shifting, and stricter work and attendance rules. Plant closings eliminated about 20,000 UAW jobs with enormous collateral damage to salaried workers, parts suppliers, and shuttered dealerships. The small IUE auto division was wiped out. CAW workers in Canada had to make similar concessions as Ottawa bailed out the companies on their turf as well.

Also included was giving up the right to strike over economic issues for six years. Any deadlock in the current negotiations at GM and Chrysler will go to binding arbitration.

At the expense of UAW workers, the Big Three have now largely closed the gap in labor costs with their transplant competitors. In fact, Chrysler and General Motors’ hourly labor costs are now less than 100 percent nonunion Toyota. The combined second quarter profits for the Big Three are about four bln dollars.

But these bosses aren’t looking to give any of this away. A Detroit Free-Press story says,

“Mark Fields, Ford's president of the Americas, has a clear message for UAW members who want more job security and higher pay now that the company is solidly profitable after the recession. At a time when many of their neighbors still aren't working, he said, they shouldn't expect pay raises...”

Ford is not alone. Christina Rogers wrote in the Detroit News,

“Heading into talks..., GM wants to avoid additional long-term fixed costs, such as automatic pay and cost-of-living increases; it seeks, instead, to reward its 49,000 hourly workers with a richer profit-sharing formula.”

Gettelfinger’s anointed successor, Bob King is not anxious to go back to the “bad old days” that made their “partners” uncompetitive. He is open to new compensation schemes based on pay for performance.

For some, all this is merely more cumulative evidence that the UAW itself has become an antiworker appendage of the employer. Fooled by the costume, they make no distinction between the bureaucratic caste that has ruled through the Administration Caucus since the beginning of the Cold War and the institutions of a union that was built through militant class battles.

But the recognition of this difference has never been lost by the employers. The nonunion transplants have tenaciously–and successfully–resisted UAW organizing. And, while the Big Three employers are no doubt glad to have today’s compliant negotiators rather than what they faced in the bad old days, they recognize the UAW remains dangerous. That’s why they insisted on the no-strike provision in the bankruptcy deal. Two incidents since the bailout stand out.

Because Ford chose not to go down the bailout/bankruptcy road they didn’t get the extra concessions extracted by GM and Chrysler with the help of the bosses’ White House. In the name of “pattern bargaining,” they appealed to their union “partners” to give them the same deal. In one of Gettelfinger’s final acts before retirement he told them “no problem.” But this is how I opened an article, UAW Lives, in November, 2009,

“Since 1946, when Walter Reuther consolidated the one-party regime that still rules the UAW, rejection of a national Big Three agreement recommended by the bargaining committee has been as rare as steak tartare. But Ford workers have shot down what president Ron Gettelfinger called ‘a good deal for workers.’

“This was no fluke or cliff hanger. The figures are truly astounding. Dearborn Truck in Local 600 voted no by 93 percent, edging out Local 249's earlier 92 percent trouncing at Claycomo (Kansas City Assembly). Gettelfinger’s home local in Louisville, where he made an in person appeal, shot down his ‘good deal’ 84 percent.”

In the October 3, 2010 Week In Review I wrote,

“You may remember earlier reports of how UAW Local 23 at GM’s Indianapolis stamping plant twice rejected give-backs to allow sale of the facility to J.D. Norman Industries. On the second occasion members literally chased International reps out of their union hall.

“Ever persistent Solidarity House then decided to avoid noisy crowds by submitting the deal yet another time–by mail-in ballot. The ever suspicious ranks voted to rent video equipment and 416 hourly workers--out of about 625 eligible union members--traveled to the union hall to cast their no votes before a video camera. Both companies now say the deal–which included fifty percent wage cuts–is dead and the plant is scheduled for closing next fall. But, you never know.”

No, the UAW is neither dead nor an extension of the boss. Though this union faces a challenging bargaining climate saddled with a leadership determined to collaborate with the employers its potential power in the most important manufacturing industry remains formidable. We will closely follow and comment on this fight now in progress.

Next time we’ll take a look at rail.

In Brief...
¶ According to a report compiled by the Pew Research Center median household net worth in the USA plummeted across the board between 2005-09. The historical gap between whites and people of color also grew wider than ever–an 18 to 1 ratio of whites over Latinos, 20 to 1 over Blacks. If anything, the situation has undoubtedly grown worse since 2009.
Jenny Brown in Labor Notes, “ Republican House members were able to perfectly blend their hatred of unions and hatred of corporate taxes Friday when they refused to extend authorization of the Federal Aviation Administration, leaving the agency powerless to collect fees from airlines...The FAA shutdown was part of a Republican attempt to roll back a new union elections rule adopted by the National Mediation Board (NMB) last year....Most airlines raised their prices in anticipation that the FAA fees would soon be subtracted. Now, the airlines are collecting a windfall of 25 to 50 dollars per round-trip ticket.”
¶ (AP) — Ohio voters will get to decide in November whether to repeal the state's new collective bargaining law, which would let public worker unions negotiate wages but not health care, sick time or pension benefits.
¶ While we’re not always on the same page politically, I wish Canadian NDP leader Jack Layton the best in his second battle with cancer.

That’s all for this week.

Alliance for Class & Climate Justice

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