Can workers stop the illegal sale of Chrysler?

While rumors continue to swirl, workers at General Motors and Chrysler hunger for concrete information concerning the possible sale of Chrysler, the number three U.S. automaker, to GM or some other entity.

They’ve heard not a peep at GM, but at Chrysler have received two “messages from our leader,” CEO Bob Nardelli. In the latest, workers were informed that they were in “truly unimaginable times” but that “working as a team, we have been right-sizing our organization to become as competitive as possible.” Therefore, more than 25 percent of salaried positions—that’s 5,000 jobs—are being terminated “in a socially responsible way, with respect and gratitude to those who have contributed so much to our company over the years.” What bull!

The salaried cuts were announced just days after workers in Newark, Del., learned that their plant would be closed at the end of this year, a year ahead of schedule. Whole shifts are being cut at assembly plants in Toledo and Windsor, Ontario, Canada. Are these aggressive moves to make the company leaner and more attractive to a prospective buyer?

Eager for some definitive word, the Phoenix Business Journal pressed former Vice President Dan Quayle, now chair of global operations for Chrysler LLC’s parent company, Cerberus. All Quayle would spell out was that “we’re not going to do the deal unless it’s a positive for our investors.” (Oct. 23)

The United Auto Workers union has been left out of the discussions, while financiers, including JP Morgan Chase, have had a seat at the table for at least a week. It’s their call whether any deal goes forward. (That’s nothing new. During the 1937 sit-down strikes the UAW rightly called GM “a Morgan-DuPont dictatorship.”) The big banks favor a merger that would increase GM’s market share while drastically reducing labor costs. Yet the banks and GM appear unwilling to finance any acquisition without government aid. According to the Detroit News, “General Motors Corp. is in talks with government officials about obtaining about $5 billion to help fund a possible merger with Chrysler LLC. GM Chairman and CEO Rick Wagoner was in Washington last week to meet with U.S. Treasury Department officials and make a case for a quick release of funds.” (Oct. 28) This would be on top of the $25 billion the Energy Department plans to loan the Big Three, who are lobbying to get that amount doubled.

Now that the taxpayers have given them some liquidity, the big banks might gamble on GM making profits by increasing market share while drastically reducing labor costs. Yet the banks do want help financing any acquisition. According to the Detroit News, “With credit markets still reeling from the banking crisis, a deal may hinge on state and federal authorities’ willingness to aid the struggling U.S. auto industry.” (Oct. 27) Now the Big Three want to see the pledged $25 billion in federal aid doubled.

Michigan alone could lose 30,000 good-paying union jobs if Chrysler is sold and eventually gutted. Ohio, Indiana, Illinois and Missouri would be hard-hit as well. “This is not a corporate event. This is a human event,” Molly Shor, whose husband is a Chrysler engineer, told the Detroit Free Press. “This is not just a merger or an acquisition or right-sizing or even the evolution of a company. This is happening to this community.” (Oct. 27)

Not one of the so-called industry analysts has questioned the legality of a Chrysler sale, but it would be a clear violation of the UAW contract. This concessionary contract passed by a slim margin last year.

“Chrysler has agreed that it will not close, nor partially or wholly sell, spin off, split off, consolidate or otherwise dispose of, in any form, any plant, asset or business unit of any type beyond those which have already been identified,” workers were told then. The only facilities identified for closing were two assembly plants, two parts plants and a parts warehouse. The contract further stated that “no employee covered will be laid off” except in certain defined circumstances. Selling the company outright would clearly be illegal, as would the inevitable mass layoffs.

In addition, the closing of plants might be a violation of state laws. Ohio law stipulates that a certain number of jobs be created and retained when tax abatements are granted by state or local governments. If the plant closes, the state can take measures to recover lost revenues.

That a sale of Chrysler or a GM-Chrysler merger is being considered—in flagrant disregard of both economic and legal consequences—raises a bigger question. Who should run the plants? Isn’t it clear that both GM and Chrysler (and for that matter Ford), with the big banks’ collaboration, have brought the industry to the brink of destruction? They became addicted to the huge profits they made on SUVs. Rather than retool for a fuel efficient vehicle, they are mothballing plants that build the gas-guzzlers now rusting on dealer lots.

Today the UAW represents only 165,000 workers on the shop floors of the Big Three. Repeatedly union members were told to “make changes.” Now they are presented with a scenario that Chrysler may not exist as a car company and that any one of the three could go belly up unless the government steps in. The bosses have failed!

Now is the time to raise the slogan of workers' control. The taxpayers should not give the bosses a penny. The funds set aside to help the industry should go to the workers to run the plants themselves. The first step to restore employment levels could be a shorter work week with no cut in pay.

Workers’ control is not as abstract as it sounds. In the period shortly before and after the Russian Revolution, workers kicked the bosses out and then ran the factories, with the support of the Soviet government. In Italy in the 1920s the workers took over the plants of Fiat and Alfa Romeo and made vehicles without supervision. In Venezuela today the Bolivarian government grants workers funds to run the plants after they occupy them.

It should not be assumed that a workers’ takeover would be illegal, even here. In 1912 the federal government established a Commission on Industrial Relations to investigate the causes of strike violence. The commission unanimously blamed John D. Rockefeller for the deaths of more than 60 miners, their wives and children during the 1913 strike in Ludlow, Colo. Remarkably, four of the nine commissioners, including Commission Chair Francis P. Walsh, recommended “that private ownership of coal mines be abolished; and that the National and State Governments take over the same, under just terms and conditions, and that all coal lands shall thereafter be leased upon such terms that the mines may be cooperatively conducted by the actual workers therein.”

Furthermore, in 1937 both Michigan Governor Frank Murphy and U.S. Secretary of Labor Frances Perkins challenged GM’s insistence that the 44-day occupation of its plants was illegal.

The class struggle here is not at the stage where workers establish control and demands for workers’ control arise organically. Nevertheless, the slogan can be raised now, in advance of battles sure to come.

Grevatt has been a UAW Chrysler worker for 21 years. E-mail [email protected].