San Francisco – “What’s good for General Motors is good for America” became a catch phrase in the 1950s. GM was a symbol of US industrial might. Workers at GM, Ford and Chrysler enjoyed some of the best wages and working conditions in the country, and the United Auto Workers was the flagship of the union movement. Now GM is in bankruptcy and the UAW is a shell of its former self. Car workers are taking it on the chin. They face a combined onslaught from the companies, the bankruptcy courts and the leadership of their own union.
How did this state of affairs come about? It is not only the result of the current economic downturn. The UAW was built in mass battles, including the famous sit-down strikes that were part of the great labour upsurge of the 1930s that formed the industry-based unions. It was less bureaucratic and much more democratic than the other industrial unions. A large measure of workers’ control over shop floor issues was the norm. It was seen as part of a social movement that stood up for workers everywhere, not only its own members. However, in the second world war the UAW was swept up in the patriotic fervour and supported the “no strike” pledge. Car plants boomed as they were rapidly transformed into factories producing tanks and other war material.
Radicals driven out
The UAW was part of the short-lived labour upsurge following the war as pent-up workers’ demands exploded. The onset of the imperialist Cold War against the Soviet Union, and the resultant internal anti-communist witch-hunt, coupled with the great wave of capitalist expansion following the destruction of the war, cut this upsurge short. In the UAW, as in other unions, the witch-hunt helped drive out socialists and other class-struggle militants. In a shift away from its beginnings, the UAW leadership, now under the control of the Walter Reuther machine, abandoned in practice its support of class-wide demands such as expansion of Social Security into a decent government-paid retirement plan, and a national health care system for all. It also stopped paying anything but lip service to the idea of a union-based labour party.
Instead of fighting for these and similar demands, the UAW tops opted for pension and health care plans paid by the companies to cover UAW workers only. The failure to fight for such plans has now come back to bite car workers with a vengeance. For a time, this orientation worked as far as auto workers were concerned. It took struggles, to be sure, to win better pensions and health care. What was gained in terms of these and other “fringe benefits” was won at the expense of workers’ hourly wages, but the gains were real. These gains helped other workers to win similar advances.
‘Preserving jobs’
Working in an automobile plant was never easy. The line keeps moving, setting the pace of work. But control of working conditions, including over the speed of the line, rest breaks and so forth was gradually yielded by the union leadership to the companies. As Japanese, German and other west European economies recovered from the war, competition increased in the car industry as well as other industries. In the mid-1980s, the UAW officials made a major shift away from seeking to secure wages and conditions, at least in the US-owned companies. The shift was toward making concessions to the corporations in the name of keeping them competitive with non-US owned companies. The promise was always to preserve the jobs of US car workers.
How well has this promise been kept? In the late 1970s, there were 750,000 UAW workers at GM alone. When the current bankruptcy is over, that number will have shrunk to 40,000. Jobs were outsourced not only to other countries, but to largely non-union car parts plants in the US as well. Japanese- and European-owned companies began cutting into the US market and started to build factories, called “transplants” in the US. The UAW leaders failed to mobilise workers in the car parts plants in the US or the transplants, let alone reach out to automotive industry workers worldwide to build a united defence against the employers’ onslaught. Instead, they focused on maintaining their shrinking dues base in the Detroit Big Three. Even this short-sighted vision is failing.
2007 surrender
Two decades of concessions reached a nadir (or what was the nadir before the current giveaways in the bankruptcy process) in the contracts the UAW negotiated in 2007. There were two major concessions. One was the creation of a permanent two-tier wage system. Current workers would still receive about US$28 per hour, but new employees would come in at $14 and never catch up much beyond that. Health and pension plans for new workers were slashed. GM estimated that new employees would receive only one-third of what existing workers received in these different forms of wages. This would undermine union solidarity, as older workers would view the problems of younger workers as not their own. The new workers would look at their higher paid fellows as keeping their privileges at their expense.
The second major concession the UAW officials made concerned retirees’ health care. In past victories, the companies were compelled to set aside funds for these costs, which had already been won by the workers. What the UAW agreed to in 2007 was to take on the obligations for the retirees’ health plans itself, through a so-called Voluntary Employee Benefits Association (VEBA). This allowed the companies to rid themselves of a huge cost. The VEBA would have to cover $100 billion of future health care costs. The companies were supposed to kick in half that amount, but never did.
Bankruptcies
The worldwide crisis of overproduction and the financial collapse have come down even harder on car workers. What the UAW leadership has agreed to in the bankruptcies of Chrysler and GM (and Ford will soon follow suit) is not only the permanent two wages tiers. As well, the companies’ share of the VEBA will now be (worthless) company stock. Moreover, the UAW officials agreed that when the contracts are up for re-negotiation in 2011, the union will not strike. Strikes are not allowed until 2015.
They agreed that in 2011, the wages, benefits and conditions in UAW shops will be at the level of those in the transplants at that time. These terms were insisted on by the companies and the Obama administration, or GM and Chrysler would get no more bailout giveaways from the government. The workers were told that unless they agreed, there would be no more jobs in the Big Three. The UAW has in effect ceased to exist as a union, at least until 2015, and its future after that is doubtful.
Under the triple guns of GM, the government and the UAW leadership, the workers voted to accept the package. GM immediately announced more plant closings and lay-offs, and the shutting down of dealerships. The situation at Chrysler is the same. These lay-offs and the plant and dealership closings are further hurting the economy, already in deep difficulty.
The transplants had been keeping their wages and benefits at or near the level of those in the UAW plants, to help keep their factories non-union. Now the transplants have no such incentive. The whole industry will be restructured on the backs of the workers. As Jane Slaughter wrote in Labor Notes, the “concessions-or-die deal is the end of auto as the pace-setting, high-wage industry that it was for 60 years. No longer will it set standards all blue-collar workers could aspire to – nor outmatch many white-collar jobs. From now on, working for the auto companies will be just another bust-your-hump factory job.” In this sense, what’s happening in this industry reflects what is happening in the economy as a whole. The workers are being made to bear the brunt of the crisis, and the union officialdom is complicit with the government and the companies in imposing the capitalists’ “solution” to the crisis.
[The title of this regular column, “From the belly of the beast”, was how the great Cuban fighter against US imperialism, Jose Marti, signed his letters to friends back in Cuba when he was in the US.]