The restructuring of GM has cost 27,000 jobs in the United States, reducing its total U.S. workforce to 62,000. (Thirty years ago the company employed over 466,000 in the U.S.) An additional 15 plants will be closed. GM is also shutting plants in Canada. As part of a deal negotiated with the United Auto Workers, workers who retain their jobs will have their wages frozen. A no-strike pledge until 2015 was agreed by the UAW. How do you assess the restructuring plan? And what is the response of rank and file unionists to the plan and to UAW’s concession? If there is division of opinions among them, what is the debate about?
Why would any autoworker have confidence in a management-restructuring plan? We know that the restructuring will be done at our expense and by a management that chose to build SUVs and trucks rather than fuel-efficient cars! In the 1990s GM built an electric car but didn’t produce design more than a few hundred. The story is told in the documentary “Who Killed the Electric Car?”
GM, Ford and Chrysler (the “Big Three”) made $10,000 profit on each truck and SUV coming down the line. It was a conscious choice to focus on producing these vehicles, leaving the bulk of the smaller and medium-sized car manufacturing to their overseas plants or to the transplants [foreign-owned plants in the United States with a U.S. work force].
The GM and Chrysler restructuring plans reveal more layoffs and more plant closings. At the beginning of 2009 GM had 62,400 production and skilled trades’ workers [also called “hourly” workers to distinguish us from non-union office workers, engineers and management, who are “salaried” workers]. By 2014 GM’s plan is to have only 46,400 U.S. hourly workers. (In 2005 Canada GM had a workforce of 20,000, by next year they will downsize to 7,000.)
Since the last auto crisis of thirty years ago, the United Auto Workers (UAW) has lost more than 80% of its manufacturing membership at the Big Three. In 1978 there were 466,000 GM workers, 192,000 Ford workers and 97,000 Chrysler workers, for a total of 755,000. I’ve mentioned the number of GM workers today—Ford has 47,000 and Chrysler has only 14,000.
We never recovered from the concessions accepted in the 1979-83 period. More and more the UAW promoted the idea that our fate is tied to the well being of the corporation for which we worked. Whenever environmentalists brought a bill to Congress to raise emissions standards not only did the Big Three oppose the legislation, but the UAW did too, mobilizing the membership for letter-writing campaigns and demonstrations.
As a result of the restructuring that came out of the ‘79 crisis, the auto companies adopted a “lean production” model that constantly re-examined the process of production and recombined and eliminated jobs. Along with this method, they introduced “team concept” whereby management and hourly workers met weekly or biweekly to discuss how jobs could be done more efficiently. This has led to a greater intensification of work. It used to be that an assembly line worker spent 45 seconds of every minute working, now it is 57 seconds. This “management by stress” has increased stress on the job, leading workers to “keep up the pace” by working too fast, thus resulting in more injuries.
As the vehicles from the transplants began to eat into the Big Three’s share of the U.S. market, GM and Ford decided one way they could meet the growing competition was by selling off their own parts plants: American Axle and Delphi were formed from GM’s parts division, Ford’s parts plants became Visteon. This significantly reduced their work force and the liabilities associated with them (health care and pension benefits).
All three continued to build plants in the North American market, where they received generous incentives from state and local governments, but as the supply chain extended globally, they kept building, particularly in areas where there was a “cheap” work force. Globally auto plants can produce 94 million vehicles a year, at least a third more than they can sell.
This overproduction can then be used to “whipsaw” workers in one plant against workers in another, whether it is in the same region of the country or on the other side of the world. By having this overcapacity, the auto companies can demand concessions from workers every time an old product is winding down and the plant needs a new product in order to continue.
So the logic of concessions, and the innovative methods introduced by the corporate elite to undercut what workers had previously won, have been in place for more than a generation.
Perhaps it’s necessary to explain that U.S. workers, unlike workers in other industrialized countries, have very few social benefits. We have no national system of health care; we have only a limited, government-run social security system for our retirement. Since World War II unionized workers, who once represented more than one-third of the work force, have won health insurance and pensions from their employers. But since the 1970s fierce employer pressure has led to a sharp decline in unionization. Today, less than 10% of all private sector workers belong to a union. The decline in unionization, the lack of social benefits and the sharp rise in low-wage jobs mean that workers who do have decent benefits are tied to their jobs. If they leave, they loose their benefits. It also means that higher-paid workers are like little islands in a sea of low-wage work.
At the same time, the media and politicians do their best to convince low-wage workers that their enemy is the unionized worker. Because of this constant anti-union barrage, the politics of resentment against those who have a bit more job security and benefits is quite strong.
Given this history, it may be more possible to understand why the higher-paid, unionized workers in the auto industry, who have seen the work at the Big Three disappear, are scared. They don’t have much confidence in their union to lead them in a fight against the employer, they don’t feel they have much public sympathy, and since strategy is never discussed at union meetings, they are not used to thinking about how to change the situation in the face of the economic crisis.
Objectively autoworkers face a three-fold crisis: the generalized economic crisis, the crisis of the auto industry and the environmental crisis.
Insofar as rank-and-file workers discuss strategy, probably the majority support a “Buy America” perspective. When I ask, “but what is made in America?” they don’t have a clear answer. After all, cars produced in transplant factories are made in America and often contain more U.S. auto parts than Big Three vehicles. What about a GM product made in Canada, or Mexico or China? Are those “American”? Nonetheless I’d say most autoworkers see NAFTA and other trade agreements as harmful to us as workers, and think they should be scrapped. But they don’t understand that those agreements are also harmful to the workers in other countries.
Recently the rank-and-file group I’m associated with (www.autoworkercaravan.org) went to a Sierra Club meeting to discuss the idea of retooling auto plants. We met a peasant farmer from Oaxaca, Mexico. He explained how NAFTA has hurt farmers, forcing many to abandon their land for jobs in the cities, particularly in the United States and Canada. It was great to have a first-hand account of how we have to look at trade agreements from the point of view of not just ourselves, but of workers and farmers in the other countries as well. All of us are hurt—it’s only the corporations that gain.
I think the idea that “Buy America” is the solution will continue to be the dominant viewpoint of U.S. workers. Yet I don’t think the attitude is as racist as it was in the early 1980s, when the UAW encouraged workers to smash foreign cars and speak disparagingly of Japanese workers. Now I feel there is a frustration with U.S. companies who go abroad to find the cheapest work force. Auto workers feel that somehow the corporate elite ought to be patriotic and can’t understand why they aren’t. Nonetheless, it’s a reactionary strategy and doesn’t really lead to the kind of solidarity we need to have among workers.
We in the Autoworkers Caravan have tried to open space for thinking about collective solutions. Outside of half a dozen U.S. cities (New York, Boston, Chicago, the Bay Area and Chicago) there is very little mass transit and little train travel. A hundred years ago we had better transit within our cities than we have today—then, in cities across the country, GM lobbied to get the trolleys dismantled and replaced by buses, which GM once manufactured, but no longer does.
Much of 20th century public works revolved around government-funded roads and the development of the suburbs with the GI bill. We now have an auto-centric society that is unsustainable. Let’s use this moment to reorganize and retool our world for the 21st century! The Autoworkers Caravan calls for rebuilding our infrastructure with light rail, buses and a high-speed rail system. We take into account the overlapping crises and call for a retooling of the auto plants, just as they stopped auto production and retooled during World War II. Then retooling took just eight months. If we had started retooling at the beginning of the economic crisis, we might already be manufacturing fuel-efficient buses.
#2
The new GM is 60 percent owned by the government. There are calls from leftwing unionists to bring the failed car plants under public ownership with workers’ management. What is the response of rank and file unionists to this call?
Because of the concessions, the plant closings and the lack of vision that the government displayed in its bailout of the car companies, workers don’t see it as a friend they want taking over the industry. Whenever we have an opportunity to talk about retooling, people ask us why that isn’t being done—it makes so much sense! Of course the reason is that the corporate elite aren’t willing to carry out such a bold and innovative program. In fact, the Big Three still see their mission as primarily building the high-profit vehicles in the United States and using Mexico (where autoworkers make $3.50 an hour) for the smaller, fuel-efficient cars.
Autoworkers are still stunned by what has happened in the industry over the last year. They are also surprised by the role the Obama administration has played in demanding a restructured GM and Chrysler, where the burden is placed on the work force, and on the dealerships (where the cars are sold). It is the government that demanded GM and Chrysler submit a revised restructuring plan in which wages of autoworkers are pegged to the non-unionized work force at the transplants. It is the Department of the Treasury that demanded retirees at GM and Chrysler lose their vision and dental benefits as of this July.
Most autoworkers felt the auto industry should get a bailout, and noted how the politicians attempted to demonize autoworkers as lazy and overpaid.
When I raise the idea that workers (production, skilled trades, office workers and engineers) should run these retooled plants along with input from environmental and community activists, that makes a lot of sense. But unfortunately it’s just an idea at this point.
#3
Is there a substantial difference in attitudes towards UAW’s agreement with the management between union and non-union workers?
It used to be that the working class saw that high-paid workers set a standard that other workers, whether union or non-union, could aspire to having, but over the last 30 years the percentage of unionized workers has decreased and the number of low-wage jobs grown. Auto parts workers were once 90% unionized and some made just a few cents less than workers in the Big Three. But now auto parts workers are 90% non-union and the wages and benefits are much lower.
Helped by the media and politicians, many low-paid workers resent that others are so much better off. They say “we work hard and we have to pay for our health care; we don’t have pensions, why should they?”
I think the ability of the corporate elite and politicians to influence one section of the working class not to have solidarity with another section was aided by the narrow focus of the UAW and other unions. Unions have to represent the broad interests of the entire class, not just our own membership. If we fail to do so, we can’t really even defend ourselves!
Originally the UAW fought for national health care and pensions, but the Big Three decided they’d prefer to offer private benefits to their work force. This became a mechanism whereby workers were tied to the company, because they were the source of benefits. At one time, nearly 30% of the work force was covered by health care and pensions. Now health care costs have gone up dramatically, so over the last decade the most contentious issue in our contracts has been health care, with companies demanding higher and higher co-pays. Of course for low-wage workers, there is little possibility of health care coverage. We are a country that has almost 50 million people without any health insurance at all.
Among the unionized work force there is more solidarity with the UAW workers, particularly the Steelworkers, who organized a series of rallies in support of autoworkers throughout the country. The Steel Workers union is also rock solid in support of a single-payer government-paid health care system.
#4
Are there any car plant workers in some U.S. cities who are more advanced in defending their jobs and wages?
Let me give you four examples:
1. New Process Gear in Syracuse, New York was once a Chrysler plant but now it is owned by Magna, an important Canadian parts supplier. When Magna bought the plant there were 4,000 workers; currently 1,000 are employed. Over the last few contracts the UAW local accepted a series of concessions, including giving up janitorial jobs to a non-union company and lowering workers’ wages in order to keep the company from closing. The local accepted a no-strike clause so there couldn’t be one even in the case of health and safety, nor informational pickets.
Recently the company came back with demands for cutting the pay further; the workers voted no. They knew the company would probably close if they voted the contract down, but they decided enough is enough, and voted it down three times, against the wishes of the national UAW. The plant is slated to close in 2011 or 2012.
2. Last year there were only 15 strikes of more than 1,000 workers in the entire United States. One was at American Axle and Manufacturing (AAM), a first-tier parts supplier that was sold off by GM in the mid-‘90s. AAM was a profitable company so the UAW leadership thought workers there shouldn’t have to take the concessions they had agreed to at the Big Three. However, the CEO at AAM wanted those concessions, and prepared a battle plan to outlast the strike. He had two strategies: use his Mexican plant to produce a minimum of axles for GM, (and he got GM to pay the freight during the strike), and use low-level management to produce axles to fulfill the Toyota contract. GM had to open and shut different assembly plants in order to limp along with the few axles it was getting, but by using this strategy AAM and GM were able to force the union into accepting a terrible contract.
By taking the workers out on strike without developing close ties to the Mexican union, the UAW left itself wide open. Additionally, union officials wouldn’t allow the strikers to keep the picket line going when trucks or foremen came in or out of the gates. It’s true it would have taken massive civil disobedience and community support to stop the scabs, but that was a realistic possibility.
After 87-days on strike (twice as long as the sit-down that established the first union contract at the GM Flint plants in 1937), the AAM workers decided to cut their losses and accept a contract that lowered their wages. The majority then took “buyouts.”
3. In general, Chrysler workers have fought harder to oppose concessions. Partly that is because they have a more independent leadership structure and partly because they are facing several impending plant closures. Their local leadership has held demonstrations, lobbied politicians at the local and national levels and organized car caravans in opposition to their plant closings.
4. Only Chrysler and GM asked for a government bailout, which led to the latest round of concessions. Ford would like to get these too. It’s just the beginning of the discussion to reopen the contract between the company and the UAW, but local UAW-Ford officials are opposed. Clearly the top UAW officials know they will have to get Ford to sweeten the concessions in order for the workers to reluctantly agree to go along. This struggle will be unfolding over the next several months.
#5
The Big Three’s failure is commonly understood as their failure to remain as competitive as Japanese auto makers like Toyota. High wages is one of the key things which made the Big Three uncompetitive, it is said. As early as 2007, the Wall Street Journal noted, “Toyota Motor Company...now sets the bar for labor costs in the U.S. auto industry.” According to a report, the average labor cost of Japanese car plants in the US is 25 US dollars an hour, while the Big Three is twice as high. Is there really such an immense gap between wages at Japanese plants and the Big Three’s car plants in the United States? Do you think that this is the reason for the Big Three’s failure? Will the cut in wages and benefits help save the Big Three? NOTE TO AU: I PUT THE LAST SENTENCE HERE, BELOW AS #5a.
Wages at the Big Three and the transplants are roughly the same. In fact, at least one Toyota plant has a higher wage than at the Big Three. In any case, wages represent between 8-10% of the total expense of making a vehicle.
However, the transplants have only been around for 25 years or so. All together they have less than 1,000 retirees while GM, Ford and Chrysler have more than a million. When the Big Three talk about wages, they bundle the benefits that the retirees are collecting with the wages and benefits of the current work force. That’s how they come up with the astronomical “wage” of $70-73 per hour, which is really an inflated version of “labor cost,” not a wage. It also includes all the companies’ other expenses of employing workers, including benefits and taxes of various kinds. The reality is that the UAW agreed in the last contract to two-tier wages, with new hires only making $14 an hour; those new-hires will never have a pension. They have more co-pays for their health care too.
By law, the money set aside for retiree pensions is in a separate account. But management throws this into the cost of a current worker.
As for health care, under several previous contracts some of the money from our cost-of-living adjustment was diverted to cover these benefits. Yet the company acts as if all the current health care costs come out of their pocket. That’s not true.
What is true is that the price of U.S. health care has gone up, but the quality of our care hasn’t. We have an inefficient, profit-driven heath care system that needs to be dismantled. We need a system like the one every other industrialized country has—covering all those who live here and independent of one’s employer.
It’s ironic that GM boasts they save $1,500 on each Canadian-made vehicle, yet they don’t join in the campaign to change health care to a single-payer system that would ease their liability.
If we look at manufacturing productivity, the industry has never operated on less than an annual 3% increase in productivity. Over the last 30 years our wages and benefit increases have almost always been below productivity gains. The U.S. Labor Department just issued a 6.4% productivity increase for the whole economy during the 2nd quarter of 2009 (April-June); at the same time the department reported wages per unit per worker decreased by –5.8%.
Clearly what is happening is that the corporate elite are battling to grab more for themselves. The Wall Street Journal analyzed only wages/salaries in 2007 and reported that one-third of all pay goes to high-level management. This figure did not include stock options and other benefits, yet it’s lopsided. We are becoming a more unequal society. [http://online.wsj.com/article/SB124813343694466841.html#mod=testMod]
#5A
Is there nationalist sentiment targeting Japanese or Asians because of these problems?
There was a very racist attitude toward “the Japanese” during the early ‘80s. The UAW sponsored events where workers were encouraged to smash Toyota cars.
Then in 1982, one laid-off foreman and his buddy, after a night of heavy drinking, harassed Vincent Chin, a Chinese American out with his friends. Michael Nitz and Ronald Ebens assumed Chin was Japanese and harassed him so much that he and his friends decided to leave the bar. Nitz and Ebens retrieved baseball bats from their car, followed Chin, and beat him to death. Although they were convicted of the brutal murder, they were sentenced to three years’ probation and never served a day in prison.
I don’t think there’s that level of anger directed at Chinese and Mexican workers today, partly because people know these workers earn very low wages. U.S. workers know, on some level, that the outsourcing to Mexican and Chinese factories is the result of decisions made by U.S. corporations.
#6
What is the situation in Detroit now? The city has already been on the decline for over a decade: high unemployment, people are moving out etc. Is the restructuring dealing a further blow to the workers and residents there? Is there any sign of active defensive struggles?
Like most urban centers, Detroit has been in decline a lot longer than the last decade. Industry as well as better-off workers and the middle class began moving out in the 1950s when the highways and suburbs were built, mostly by federal money.
The uprising in 1967, which was more of a class uprising than a strictly Black uprising, led to an intensification of that flight. Then when Blacks won political control over the city apparatus with the election of Coleman Young in 1974, many more whites “gave up” on the city.
Today the Detroit area is the most segregated in the country! It’s 85% African American, with the rest a mix of Mexican Americans, Native Americans, Arab Americans and whites. The population peaked at 2.2 million; today it stands about 900,000. This means that 40% of Detroit is abandoned, with boarded up or burned houses, or vacant land.
There are no department stores left in the city, and only a handful of movie houses. No national grocery chains are still operating within the city limits, although it was just announced one is slated to open at the city’s edge next year.
Official unemployment stands at 22%, meaning probably one out of every three workers must be unemployed. Detroit has built an extensive water system, but 30,000 people live without running water. Once 90% of the working class owned their own homes; today many can’t afford to fix the crumbling front steps or paint the outside of their homes. And when they abandon their homes, scavengers come and take out the heating unit stealing everything valuable including the copper wiring. This leaves the neighborhood devastated.
We also have at least 20,000 homeless people, many veterans of Vietnam. But we are a city with plenty of housing stock— no one should be homeless!
At the same time Detroit remains a vibrant cultural center, full of jazz, blues, country western, world music, classical, gospel, Motown, techno and more. It has poets and spoken word artists who are preachers, students and workers. Many artists choose to live in Detroit because of its cultural eclecticism and cheap rent.
Although Detroit is Motor City, one-third of its residents don’t have a car. The transit system was better 100 years ago than it is today. Most cities have an efficient way to get people from the airport to the city. Not Detroit. The only public transportation is a bus that takes 2-1/2 hours to travel downtown.
The mayor just announced drastic cuts in the bus service. These include less frequent buses on some routes and ending bus service at 6PM Saturday, with no buses running on Sunday! There have been well-attended public hearings this week, and several demonstrations. Hopefully we will be able to stop the cuts in bus service, but stopping the other cutbacks may prove more difficult, particularly because most of the unions want to stop the cuts on their job but don’t necessarily see the need for a coalition opposing all the cuts.
#7
According to a report in the Caixun web, in the first half of 2009, auto sales in China reached 6 million, meaning that China surpassed the United States in becoming the world’s largest car market. This is one of the reasons for GM choosing China as its international headquarters.* China’s car industry is also upgrading itself over a very short time and is becoming an important country for the manufacture of vehicles. Despite the auto crisis all over the world, the German company MAN decided to become Sinotruk’s strategic partner and acquired 25% of the latter. This seems to show Western giant car makers’ faith in China’s car industry and its market. With Chinese car workers earning 2000 – 3000 yuan (293 – 439 U.S. dollars) a month, what implications do you think this has for Western and Japanese car workers?
* Not sure what you mean that GM has chosen China as its International HQ. As far as I know, their HQ is still Detroit!
Both China and the United States are big markets for cars, and since Chinese workers make significantly less than U.S. workers, auto corporations want to place more work in China. However, for the U.S. market, China is far away and transportation costs are uncertain. I believe the Big Three see Mexico, not China, as central to their small car operation. Mexican workers make $3.75 an hour ($600 U.S.) with few benefits; cars made in Mexico can be delivered anywhere in the United States within one week.
GM has invested $3.6 billion in Mexican plants over the last three years; Chrysler invested $570 million in a new engine factory near Saltillo. In 2008 Ford announced that it would invest $3 billion in three Mexican manufacturing plants. In fact one-third of all Ford cars built in North America are made in Mexico. While GM has more integrated parts production in Mexico than the others, all three are extending their supply chains there. (See EPI Briefing Paper #233, “Invest in America” by Robert E. Scott, www.epi.org.)
I suspect that GM, Ford and Chrysler do not intend to build cars in the United States. They will outsource them to Mexico and, to a lesser extent, China. In 2007 the Big Three made only 49.2% of all the cars built here; in 2008 Big Three U.S. car production was only 47.5%. (Transplants built about 3.3 million vehicles annually.)
#8
According to some reports, workers at the Big Three’s plants enjoyed so many benefits that they were ‘worker aristocrats’ or ‘middle class,’ and that is why they have not developed a class consciousness enough to act independently and resolutely in defending their rights, let alone act as agents of radical societal transformation. How do you assess this comment?
I believe all Americans live in a “consumer society,” even those who have little ability to consume. It’s part of our mass culture. Remember after 9/11 -- what President Bush told people to do: buy something!
While there have been tremendous movements for social change in U.S. society, people see those as a different era, before “globalization.” I think that presidents over the last 30 years have reinforced people’s sense that nothing could be done—we couldn’t stop Reagan from firing the striking air traffic controllers, we couldn’t stop NAFTA, we couldn’t stop the war in Iraq, we can’t stop the severe cuts in city services, etc. Many young people believe the right-wing propaganda that social security pensions won’t be around when they are old.
It is true that workers do not think independently. But where have we been encouraged to think? In school we are taught that if you don’t like the party in power, vote them out and the other one in. We are taught that it’s “American” to have only two parties—we aren’t like the Canadians or Europeans who have a parliament and several parties, even some that are socialist of one type or another.
Where are the institutions of the working class? Insofar as unions still exist, they are intertwined with the two-party system. There are differences between the Democrats and Republicans, but the corporate elite supports both. Most corporations supported the Democratic Party in the last election and it’s estimated that they spent at least $50 billion—and what did they get for all that money? Will Congress pass the Employee Free Choice Act, which the unions said was their highest priority? I doubt it. Will Congress pass a single payer health care plan? It’s not even “on the table.” Why? Because even though the unions spent a great deal of money and time supporting Obama and the Democrats, the corporate elite spent much more.
Even at union meetings, ordinary workers are not encouraged to discuss strategy. No, our job is to let the officials negotiate for us, and “back them up” when necessary. While the beginning of the UAW is presented as militant, its history is totally disconnected to today. In 1936 the sit-down at GM occurred because socialists went over Walter Reuther’s head to get the okay for their audacious plan.
The UAW leadership established a one-party caucus more than 50 years ago and has fought to eliminate any grouping that attempted to challenge it. They have no vision but they are certainly unwilling to honestly discuss the problems we face. This means there is little space to raise ideas.
The Autoworkers Caravan points to the reality that the federal government now “owns” GM and Chrysler. We demand that the plants be retooled for production for mass transit and green technology. We place our demands upon the federal government, which is supposed to operate in our interests but which demands that GM and Chrysler close more plants, lay off more workers and peg our wages to those of non-union workers. The Autoworkers Caravan shows that it is possible to fight for collective solutions rather than scurry around individual ones.
