The Big Three & UAW Usher in a New Round of Attacks on Autoworkers

General Motors and the UAW ushered in a new round of attacks on autoworkers by hammering out a new contract while allowing a token strike to be held by some 72,000 GM workers nationwide. The strike itself forced GM plants in Canada and Mexico to halt production. In a historic attack on the benefits and wages of GM workers, UAW President Ronald Gettelfinger, shamelessly attempted to pass off this defeat as a gain for job security. This defeat recalls other historic defeats for workers over the last thirty years.

Since 1978, the UAW has co-presided with the auto industry in the destruction of some 600,000 jobs, all the while talking about “job security”. For a huge number of workers this means a substantial and permanent drop in their standard of living. The Union apparatus staggers onwards, into an ever more acute crisis of capital, in its role as the arbiter of losses and concessions for workers. So while the AFL-CIO is now giving $200 million dollars in campaign funds to the Democratic Party, the UAW pays a strike benefit of some $200 per week. This absence of a decent strike benefit fund is part of the very means the unions employ to force workers into wage concessions through the threat of financial disaster that a strike would pose to the workers in absence of adequate strike pay. This deal even surpassed the defeat handed to the workers at Delphi Automotive plants in February 2006.

The nasty details of the contract include the creation of a trust, called the Voluntary Employees Beneficiary Association or VEBA.

The UAW will maintain this trust, allowing the GM to reduce the cost of retirement and healthcare benefits to GM workers and their dependants. The UAW will be able to control benefits payouts, allowing them to cap payouts or giving payouts of benefits in the form of a flat subsidy. While Gettelfinger claimed that this VEBA would be solvent for the next eighty years, similar such plans at Detroit Diesel and Caterpillar ran out of funds after only a few years. Furthermore the UAW will also be able to use pension funds to pay for parts of its contributions to the VEBA trust.

The contract creates a two-tiered wage system where new employees would be paid around the $27 per hour level on average, where the older employees who once earned $73 dollars per hour would find their higher waged jobs replaced. The Cost of Living Adjustments GM workers have received since 1948 will be eliminated and be replaced by four bonuses per year and no wage increases.

Worse still, the company makes no commitment to preserve auto workers jobs, only going as far as saying that the company commitment to maintaining staffing levels will hinge on the unions’ agreement in the future to more flexible work rules. Workers at some positions in GM plants will see wages as low as $12 to $15 dollars per hour. It comes as little surprise that the voting, for or against the contract by union members, was jammed through by a union leadership that in most cases failed to tell workers the full story about this contract, or allow them to see the details of it.

This contract is now the model for other UAW contracts at Chrysler and Ford. At Chrysler, the UAW staged an even shorter token strike of six hours before coming to a similar agreement as their contract with GM with the added detail that the UAW here has agreed with Chrysler’s parent company Cerebus to the potential break-up of Chrysler with the elimination of whole production lines. The UAW threatened to make Chrysler workers vote for the contract again if they refused to ratify it the first time. Chrysler workers ultimately did approve the contract despite considerable resistance to it. As of this writing Ford has followed suit with a similar contract affecting 60,000 workers.

Workers at some positions in GM plants will see wages as low as $12 to $15 dollars per hour.

Following the union’s announcement of total surrender, GM stocks closed upwards the following day by $3.26 per share ⁽¹⁾ by the closing bell, on the news that the contract that representatives of the Fed and Wall Street had demanded had been handed to them by the UAW itself. While pleasing the markets by reducing the share of costs of variable capital, the capitalists have also contributed to the long-term process of cutting back their productive capacity. GM has done this worldwide, eliminating the jobs of GM workers in Europe and even eliminating the entire Oldsmobile line. One day GM too could go the way of Rover or get bought out by a private equity firm, as Cerebus bought Chrysler. Indeed this contract agreement will be seen as a model for the entire automobile industry in the US and spells a drastically reduced workforce, earning dramatically lower wages, while at the same time cannibalizing their own productive apparatus, thus ensuring that GM will lose its own productive capacity while looking good on paper for the big Wall Street brokerage firms.

While the anger and discontent of workers with this contract was strong and a clear majority of GM workers supported the strike, the union clearly acted against workers interests, and again demonstrated their role as the means that management uses to bargain away concessions and control unrest. With such a defeat, the need for workers to form their own open and free workers assemblies, separate from and in opposition to the capitalists of GM and the UAW cannot be clearer.

While the anger and discontent of workers with this contract was strong and a clear majority of GM workers supported the strike, the union clearly acted against workers interests, and again demonstrated their role as the means that management uses to bargain away concessions and control unrest.

A system of transportation built by and for the profit system has financially milked workers for decades and left in its wake pollution and declining living standards for workers.

The fact that the apparatus of the UAW itself is agreeing to take over pensions and benefits in the form of an employee trust fund, because of a declining union membership that has as its complement on the sphere of capitalist markets a flight from capital investment in production, this in itself reveals the union in modern capitalist society as the instrument of the capitalist class, one that contains an official membership of workers whose sole purpose is to ratify the management decisions bargained by the union.

The Big Three automakers have left workers with pollution, falling wages and working conditions, and gaping holes of poverty and unemployment in communities where the auto industry has come and gone. Under capitalism a truly ecologically sound, efficient and safe means of transportation is an impossibility, despite the technological capacity that exists to actually do so. GM will succeed in employing fewer workers to produce a few more vehicles per person per year, and this might look cost effective and profitable, but will result in fewer vehicles produced and ultimately fewer vehicles sold. In a communist society, labor could work to produce means of transportation that would be a cleaner, larger and a more efficient system of transport.

Something to which GM, the UAW and indeed all of capitalist society is diametrically opposed.

The lie that unions defend workers can only become more threadbare as capitalist society lurches from war to war, crisis to crisis on its own road to ruin. Many left organizations still simply speak of the problem with unions being one of leadership. Unions have become one of the means that capitalism has to control key sectors of its labor force while extracting wage and benefit concessions.

Unions have become credit card brokers, pension trust funds, and vote herding machines, anything but an organization of workers themselves fighting in their own interests.

Unions have become one of the means that capitalism has to control key sectors of its labor force while extracting wage and benefit concessions. Unions have become credit card brokers, pension trust funds, and vote herding machines, anything but an organization of workers themselves fighting in their own interests.

(1) Sholnn Freeman and Frank Ahrens. GM, Union Agree on Contract to End Strike: Deal Seen as Model Across Industries. Washington Post. September 27, 2007. pg A01.