On June 6 General Motors (GM) Chairman and Chief Executive Rick Wagoner told the annual meeting of GM shareholders that the company would close plants and eliminate 25,000 jobs by 2008. He said that GM had to reduce labor costs, preferably with the agreement of the United Auto Workers (UAW), but unilaterally if the union leadership refused to cooperate. He demanded that healthcare costs be reduced for both current and retired workers.
Wagoner’s “tough talk” was partly posing for stockholders dissatisfied with GM’s shrinking share of the US auto market, declining profits, and falling stock prices, and for lenders alarmed that the major rating agencies had just downgraded GM and Ford bonds to “junk” status.
The “big three” US auto companies – GM, Ford and Chrysler (now DaimlerChrysler) – have been losing market share to Toyota, Honda and other Japanese and, to a lesser extent, European companies. Rather than compete on quality, the “big three” have tried to entice consumers to buy heavily rebated cars and then move up to sport utility vehicles (SUVs) and pickup trucks. The latter are highly profitable, because they are produced by bolting various metal boxes on truck frames and drive trains that haven’t changed much in fifty years.
This strategy is failing, as the Japanese companies have begun building SUVs and pickups and oil prices have doubled in the past two years, making gas-guzzling vehicles less popular.
Wagoner’s talk was partly positioning for the 2007 UAW-GM contract negotiations. The US auto bosses still hope to regain market share and profitability not by improving quality but by reducing costs. Wagoner was threatening dire consequences, if the UAW failed to make concessions. The UAW leadership “bravely” refused to reopen the auto contracts for concessions now, but signaled their willingness to make future concessions, saying that they “understood” GM’s problems and were willing to discuss solutions.
Mainly, though, Wagoner’s talk was a declaration of where GM intends to go, if autoworkers allow it to do so. International auto production overcapacity, the capitalist crisis in general, and GM’s arrogance, stupidity and greed are forcing GM to become a smaller company. GM is too large a piece of US capital to go under or be bought out anytime soon. But in an attempt to put a cushion under profits while downsizing, GM wants to drop the hammer on workers’ heads.
As jobs move out of the “big three”, most older workers will hang onto most of their pensions and other retirement benefits, but the jobs they retire from are dwindling, and the remaining jobs are degenerating. The trend is toward hollowed-out corporations, where the façade company handles design and marketing, and poor-paying supplier companies do all the manufacturing but the final assembly. Even in final assembly some parts may be installed by outside suppliers.
The US auto companies have long sought to achieve “Japanese” shop floor discipline via class-collaborationist “teams” and “Japanese” efficiency through “just-in-time” inventory systems and other measures. The “big three” are also moving toward the Japanese corporate model by shrinking the core company and spinning off much of its in-house production to supplier companies.
The supplier companies are staffed largely by young, women and minority workers, low-paid and often on short-term contracts. Immigrants, including “illegals”, are increasingly hired by the second-tier suppliers, as at now-bankrupt supplier “Mexican Industries” in Detroit. This strategy is underway via GM’s and Ford’s spinoffs of Delphi and Visteon. These suppliers themselves are reducing wages further or putting themselves up for sale in pieces to other suppliers.
As the jobs go elsewhere, older workers have so far been retired out of the system without cutting them enough to make them fight. The burden is put on future workers who will fill the same jobs at half pay, now in supplier companies.
Many parts workers are ready to fight now. Last summer a Visteon plant in Indiana represented by the International Union of Electronic Workers (IUE), a division of the Communication Workers of America (CWA), saw scabs used to break a strike amid fistfights and overturned cars. Evidence was strong that some scabs were bused in from prisons in Michigan. The defeat brought new-hire pay down to $10 an hour, less than half of what it was when Visteon was still part of Ford.
This is the future for young workers in US auto jobs, if the companies have their way. When DaimlerChrysler sold a plant to Metaldyne, $26 per hour jobs went to $16. And there is no doubt that new hires will lose a large fraction of even that.
Retiree health insurance
The biggest GM-US news since the layoff announcement is GM’s threat to end health insurance for GM retirees. This is arguably legal in the US, because companies are required to bargain only over active workers’, not retirees’ benefits. Such a drastic move, however, would likely prompt some kind of UAW strike and even direct action by enraged retirees, and would be too unpopular with a US public and politicians already soured on GM.
Rather, GM is likely threatening to use the legal loophole for shock effect. GM hopes the UAW will then settle for a lesser reduction in retiree health insurance but also a broader range of concessions in other benefits and pay, such as the cost-of-living allowance. This in spite of the existing UAW contract – and culminating in savage reductions in the 2007 UAW contract.
The exact GM health insurance concessions contemplated are too complex to detail in this article. The big picture in the US is that at least 45 million people have no health insurance. The unions and other progressive forces call for a national healthcare system, something only the US lacks among the G7 capitalist powers. Meanwhile, GM, long the US’s premier industrial corporation, and the UAW are planning a retreat on healthcare. The UAW once led all US workers in conquering new benefit territory. Now it leads in surrendering ground.
Strike at GM?
The UAW bureaucracy’s lack of fighting response to the layoff and health insurance threats is so craven that even liberal capitalist media such as the New York Times are wondering aloud whether the UAW will strike. The 1990s saw important GM strikes over issues including staffing levels and health and safety. The most important strike was in Flint, Michigan, in 1996 led by UAW Local 599 president and reform movement leader, the late Dave Yettaw.
Yet today the UAW leadership’s main complaint about GM’s demands is that they haven’t been presented in enough detail.
Mass media interviews with GM workers have elicited passive replies by older workers who assume the UAW will ensure them a soft landing. At the left end of the GM workers’ spectrum, there are a handful of revolutionary socialists, but not enough for a revolutionary autoworkers’ “wing” of the UAW, even if the revolutionaries agreed among themselves.
So for a broad and like-minded enough sample of workers reflective of the vanguard as a whole, we have to turn to what is known as the UAW “reform” movement. Most of the emphasis among UAW “reformers” is on internal union democracy and bureaucratic union corruption, rather than on strike action. But this will change, as workers become more combative.
There are no overt signs of mass strike sentiment now. This is partly because workers are still waiting to see how far GM really intends to go and partly because they doubt the UAW bureaucracy will fight, no matter what. Some reformers oppose any strike led by the bureaucracy. But what is needed is a united-front policy that makes open demands on the bureaucracy and takes united action with it when officials respond, but tries to replace the bureaucracy wherever possible.
The cuts may be so drastic and the workers so angry that a national strike happens at least briefly, the first at GM since 1970. This means that UAW reformers’ attitude toward a united front with the bureaucracy is crucial.
The dissatisfaction with the bureaucracy has led to the election of some militant union reformers at a level below the radar of most of even the left media. These union officers seldom “go public” outside their own locals. But they often talk to the national union reform movement newsletter, Labor Notes (www.labornotes.org).
At the Ford spinoff company Visteon (now itself to be sold off in pieces, at least its US operations), some newly-elected local officers say the tensions are red if not white hot between upper and lower levels of the union bureaucracy behind closed doors. If nothing else, the reduction in jobs means fewer bureaucratic positions. Those left without an office turn on their former clique partners in the next election. The way to win elections is to sound more militant. That means that developments in this layer of union officials reflects in a distorted way the anger below.
The reform movement in the UAW got off the ground in the 1980s when UAW icon Walter Reuther’s brother Victor, a former regional director, Jerry Tucker, and some key local union presidents rode the ranks’ anger at the early 1980s concessions into the temporarily large opposition UAW New Directions Movement. That led to Yettaw’s strike in Flint and strikes by the mainstream bureaucracy. The concessions now contemplated would be even bigger than those of the early 1980s. We may see another layer of bureaucrats making common cause with the rank and file.
One interesting project by some union reformers is solidarity with the UAW organizing drive at the Toyota plant in Georgetown, Kentucky. If the UAW can’t organize the Toyota, Honda, Nissan and Mercedes plants in the US, the consequences are obvious for US workers. That these plants are not yet organized is among the chilling effects on GM workers’ response to layoffs and concessions.
But workers at the joint GM-Toyota “NUMMI” assembly plant in far-away Fremont, California, have bought pro-union billboards in Georgetown, urging the Toyota workers in Kentucky to vote for the UAW. The most activist of the NUMMI and Toyota workers involved in this solidarity have no illusions in the UAW bureaucracy. They realize that workers’ voting “yes” to a union led today by the UAW bureaucracy could leave international automakers no place in the US to avoid unions. This could help militants win power in the entire UAW.
Workers’ solidarity needs to go further. Lack of international solidarity is today a central problem for all autoworkers. What’s needed are joint contracts and strike action across borders. That in turn would open more possibilities for revolutionary socialist ideas in the vanguard, even in the US.
Some reformers say that the UAW can beat GM’s layoffs and concessions by returning to the militance and democracy of the UAW’s early days. But today that won’t work in the absence of international labor solidarity. Unless we have unions without borders, we’ll have borders without unions.
While there is a lack of overt strike sentiment among GM workers today, it may be closer to the surface than is evident, and there are at least some signs that workers are beginning to recognize the need for international labor solidarity. Not only the “big three” but Delphi and Visteon are international. For example, Visteon has set up shop just outside the Pacheco Ford plant in Argentina and is inside the new Ford-Brazil plant in Bahia.
Even among US workers affected by imperialist ideology, change can happen. At the Ford Rouge Plant, where one of the authors of this article works, a lower-level UAW officer was at one time a US Marine bodyguard for ousted Nicaraguan dictator Anastasio Somoza after he was driven from office. Yet today this worker says that what’s wrong is that “The companies globalized. We [the unions] didn’t.”