U.S. Auto Industry: Bosses Win, Workers Lose

As the economic crisis continues, the U.S. auto industry has been hit especially hard. Already teetering on the edge of bankruptcy due to mismanagement, the “Big Three” are losing millions of dollars each month. Over the holidays, the Treasury Dept. approved a $17.4 billion emergency loan for GM and Chrysler, both of which are facing a steep fall in sales and bankruptcy. GM’s finance arm, GMAC, was recently given $5 million more in public funding. However, for the Big Business representatives in Congress and the White House, this bailout comes with strings attached: at auto workers’ expense.

The emergency loans come after the failure of a $25 billion Democratic-sponsored bailout bill in December. Although the bill contained provisions for plant closings and concessions, these were not enough for some Republicans. Led by Senator Mitch McConnell (KY), they demanded that in order to receive the bailout, the United Auto Workers union (UAW) would have to agree to a wage cut putting workers at the “Big Three” on par with workers in the non-unionized Japanese and Korean companies’ plants in the U.S. The Republican Senators were well aware that such a deal would be rejected by the UAW rank and file. Their hope was to sabotage any bailout in order to force the “Big Three” into bankruptcy, which would make it possible to break the UAW completely.

The overall goal of both parties is to use any financial rescue to lower workers’ wages and benefits in order to increase the auto bosses’ profit margins. They are not interested in re-opening closed plants, creating quality union jobs or defending workers’ interests generally. The UAW and the labor movement generally cannot rely on these “friends of labor” but only on the working class itself to defend its own interests. The “Big Three” remain a key component part of the overall U.S. economy, with nearly 5 million people working directly for the auto companies or in related industries, both union and non-union. Therefore, the fight of the UAW to defend jobs is one that impacts the rest of the U.S. working class in a very direct way.

Unfortunately, the UAW leadership has once again entered its negotiations with the bosses bargaining for concessions. Now more than ever, the UAW and the labor movement as a whole must give a bold lead in defense of jobs. Across the board, working people are faced with plant closings and cuts. What is needed in the auto industry is not a bailout for the bosses, but nationalization, putting the “Big Three” under public ownership and democratic workers’ control, producing on the basis of society’s needs. This is the perspective needed in the UAW.