The UAW Under Attack: Organize & Fight Back

On September 26th, after the first national strike by U.S. auto workers in 37 years, General Motors along with United Auto Workers union President Ron Gettlefinger, announced agreement on a “landmark” contract proposal. A similar agreement has been offered to workers at Chrysler. Ford Motor Co. will negotiate with the UAW next, and after losing $12.6 billion in 2006, the Ford bosses will be after big concessions as well. So what are the bosses and the UAW leadership offering? Pay cuts, a two-tier wage structure, “job security” provisions that allow for plant closings and casualization, and a serious attack on health benefits. Did GM and Chrysler workers go on strike only to roll over for massive concessions? The leadership must be sent back to the bargaining table!

UAW members at Chrysler will be voting on this contract against the backdrop of the generalized attack by the auto bosses against wages, job security, health and pensions. The UAW has been beating retreat after retreat in the face of the demands of the “Big Three” to cut costs in order to compete with Toyota and Honda. Toyota this year displaced GM as the world’s largest auto manufacturer, and has been opening new plants in the U.S. while the Big Three have been closing dozens of plants. Instead of producing better cars, the Big Three want to carve their profit losses out of the hides of auto workers. Assisted by the mainstream media, the auto bosses blame “legacy costs”(UAW wages, benefits and pensions) for the dire position of the U.S. auto industry.

UAW contracts with one company have traditionally strongly influenced the terms it gets from the other companies. But this year’s talks are proving somewhat different. Last spring, Daimler-Chrysler sold off its Chrysler unit to Cerberus Capital Management, a firm specializing in the gutting of troubled companies. This sent a clear message to auto workers industry-wide to prepare for attacks. Not surprisingly, Chrysler has demanded even bigger concessions than GM.

Ford, for its part, may even go beyond Chrysler in demanding concessions. Ford has already mortgaged its U.S. plants for a $23.4 billion line of credit. The bosses want to use this money to pay for its restructuring plan, which calls for closing 16 plants by 2012. It has so far named 6 plants that will be closed, leaving Ford workers wary of having their plants put on the list of future closures.

In June, the UAW leaders completely capitulated to the bosses at Delphi, a key parts manufacturer that supplies the industry, above all GM, which relies on its components to produce cars. Despite the efforts of the rank and file organization Soldiers of Solidarity to mobilize a “No” vote for the contract, the bosses were able to “divide and rule”, splitting the full-time workers and the temporary workers who overwhelmingly voted for the concession contract. The Delphi contract established two-tier wages, a phasing out of pensions, plant closings and pay cuts.

Bargaining for Concessions

As the initial talks with GM, Chrysler, and Ford entered September, the UAW announced that it would first seek to reach a deal with GM. The union also named GM as a strike target should negotiations fail. While talking tough, the UAW leadership, by naming GM as a strike target, entered the talks prepared not to fight for gains, but prepared to offer concessions. The UAW’s initial demands were: jobs, investment commitments, and pledges for new model production at U.S. plants. As important as these 3 demands are, what about wages? What about pensions? What about cost of living allowance (COLA)? What about giving temporary workers full-time status and pay? Last but not least, what about health care? On this last point, actually, UAW President Ron Gettlefinger did have a demand to make – for a VEBA!

A VEBA (Voluntary Employee Benefit Association) is a health benefit scheme where companies off-load their health care obligations onto the backs of the workers. In GM’s case, this would mean making the UAW responsible for paying the HMO bills for active workers and retirees. As was explained in the last issue of Socialist Appeal, VEBA funds work the following way:

“The company gives a one-time contribution to start up a stock market fund, the income from which will pay for the health plan. But the company is only required to give once, and in fact under certain types of VEBA plans, the company can take money out of the fund in order to pay for capital costs … After the company gives the fund its starting capital, it is up to the fund to make a profit on the unpredictable stock market in order to pay what are now the union’s HMO bills.”

VEBA plans have already been instituted at other companies represented by the UAW, including Caterpillar and Detroit Diesel. Both of these plans went bankrupt, causing retiree health care costs to skyrocket. Instead of learning from this painful experience, the UAW leadership proposed a VEBA for GM. According to Soldiers of Solidarity organizer Gregg Shotwell: “Gettelfinger admitted that he had approached GM about a union controlled health care plan – VEBA – two years ago. He never consulted UAW members and retirees about his VEBA idea. He consulted with Lazard Ltd. and came up with a plan to help the folks on Wall Street who live off unearned income, and union office rats who need a desk to put their feet on.” (Live Bait & Ammo #100: Highball the Strike)

The approach to the contract talks taken by the leadership could only produce confusion in the ranks. While mobilizing all 73,000 workers at GM to prepare for strike action, their demands amounted to concessionary terms. After 10 weeks of negotiations, Gettlefinger announced that the talks were stalled and that the UAW was prepared to strike GM. The talks then went into session for an entire weekend, around the clock. There was absolutely no communication coming from the UAW tops during the talks. GM workers learned what little they know about the negotiations through the media.

“Snatching Defeat from the Jaws of Victory”

GM sources leaked to the press that an impasse had been reached on VEBA, with the company saying it would only sign onto a VEBA in exchange for wage cuts and permanent layoffs. Put another way, GM would only accept major concessions for more concessions! The only agreement reached was on capping a profit-sharing plan. With GM unwilling to “concede” to Gettlefinger’s offer of concessions, on September 24th, the UAW called a national strike, shutting down each and every GM plant in the U.S.

How did the leadership prepare for the strike? According to a September 26 Washington Post article titled, “Ripples Felt Beyond GM On 2nd Day of Strike”:

“A United Auto Workers official said on Tuesday that the union had taken into account GM’s inventory before the strike and had warned the automaker before negotiations began to build up inventories of key vehicle lines.”

What kind of “leadership” tells the company before hand to stockpile products before negotiations even begin? This kind of “partnership” is out and out betrayal of the interests of working people!

After two days on strike, GM relented to the “demand” for a VEBA. The national strike was called off with Gettlefinger saying of the tentative contract: “It’s an agreement we’re proud to recommend to our membership.” The new contract will freeze wages for 4 years and GM workers have all but officially lost their COLA. New hires will now receive a lower wage than current workers, and the UAW has agreed to allow “long term temporary employees” – i.e. without union representation. The GM contract was ratified by 66 percent of assembly workers and 64 percent of skilled trades workers.

The main reason for this result was the fear of further plant closings. Many recognized the contract as a laundry list of concessions, but with the threat of even more closures over their heads, the majority voted “yes”. For its part, the UAW leadership is just as responsible as the GM bosses for forcing a “fear vote”. The leadership only presented the membership with contract “highlights”, encouraged members to vote “yes” and rushed them off to vote. But in locals representing secure plants, the “no” vote carried big majorities. In GM’s Wentzville, MO plant, where production had previously been guaranteed until 2012, 70 percent of both skilled trades and assembly workers rejected the contract.

At Chrysler, a similar pattern was followed. After talks broke down on VEBA funding, the UAW called a strike affecting 19 of 24 Chrysler plants and parts facilities (the 5 un-struck plants were already idled). But the strike was called off after only 7 hours. The result? Chrysler workers are now being asked to accept two-tier wages, a VEBA and ambiguous production “guarantees”. Chrysler has “agreed” to a VEBA. The company has $18 billion in health obligations to its 78,000 retirees and dependents. But it has made it clear that it will give even less to its VEBA than GM did, which does not bode well for Chrysler retirees. The UAW negotiators also agreed to give Mopar auto parts transportation workers the axe by instituting two-tier wages for new hires and a buyout plan for current Mopar workers.

The production “guarantee” is even worse – it only promises to maintain current vehicle production. This means that the company has only agreed to not shut down plants mid-production, but after that, they are free to close plants at will. This is a production non-guarantee.

The UAW international leadership may have a hard time selling this contract to Chrysler workers. Unlike the situation at GM, Chrysler workers are dealing with a company owned by a private investment firm that is only interested in selling off the company for a quick profit. They are not interested in staying in the auto industry long-term. Chrysler workers know this and will have a lot of difficulty believing in the “guarantees” being offered. It will be more difficult for the bosses to use the “fear factor” as a battering ram to push through a concession contract, and this gives rank and file militants at Chrysler an opportunity to mobilize a “no” vote.

A New Policy is Needed!

The 2007 auto contract talks and the GM and Chrysler strikes have proven once again that UAW “partnership” with the bosses only serves to undermine auto workers’ interests. Concession contracts have been foisted on GM and Chrysler workers and more than likely the same will happen at Ford. The strikes at GM and Chrysler were called for no other reason than to cover the UAW leader’s backsides while they sold out the wages, health and job security of active workers and retirees. Many workers at GM and Chrysler were prepared to fight, but the leadership mobilized for concessions, not for a defense of past gains. In the case of the GM strike, the “teamwork” between the UAW leaders and the GM bosses ensured beforehand that workers and retirees would get the shaft. Gettlefinger & co. surrendered without a fight.

It is one thing for a union to be forced into giving concessions to the bosses after a defeated strike. But this is not what happened at GM and Chrysler. Instead, the UAW leadership voluntarily came prepared to offer concessions to help the bosses’ bottom line. They have the perspective that what is good for the company is good for the workers; therefore workers have to be prepared to make concessions to bolster the bosses’ profits.

Unfortunately, we have again had to learn the hard way that what is good for the bosses is not good for us. “Partnership” with the bosses is like the partnership between a horse and its rider. The “teamwork” caucus in the UAW has led auto workers from one defeat to another and they can’t do otherwise. The only way that auto workers can turn their union around is by organizing and mobilizing the rank and file for change.

An industry-wide class struggle current is needed. It is clear that formal democracy is not enough to ensure that the elected leadership acts according to the rank’s interests and demands. A network linking rank and file militants across the UAW could counter the fear and confusion tactics used by the bosses and the pro-company leadership, and support those leaders that do mobilize the membership against the bosses’ attacks.

Militants in the UAW have an opportunity to use the justified anger and resentment in the ranks to organize for change in the union. A class struggle current basing itself on this experience is the key to the future of the UAW, to ensure the union does what it is supposed to do: fight in the workers’ genuine interests.

* “NO” to Concessions!

* For a Class Struggle Policy!