Congress vs. the UAW

When General Motors President Charles E. “Engine Charlie” Wilson was in line to be U.S. secretary of defense, he was quoted as saying, “What’s good for General Motors is good for the country.” It turned out to be a slight misquote, but the phrase became symbolic of the tremendous political clout held by the captains of the auto industry. After Wilson, Ford Motor Co. President Robert McNamara inherited the job.

What a contrast to the humiliating drubbing by Congress of the CEOs of GM, Ford and Chrysler, who swallowed their executive pride and agreed to work for a dollar a year as they begged for $34 billion to help them survive in the next few months.

The only one to get a pat on the back during the bailout hearings was United Auto Workers President Ron Gettelfinger. This was after several hundred local union leaders voted, with only five dissenters, to eliminate the “controversial” jobs bank - which merely grants laid-off workers an additional two years of income security.

The union also agreed to let the automakers delay scheduled payments on the Voluntary Employee Beneficiary Association, a UAW-administered fund designed to relieve the employers of their obligations to fund retiree health benefits. Working UAW members have already been paying for the VEBA through cuts in the Cost Of Living Allowance; five quarterly adjustments have left workers making seven cents less per hour now than in 2007.

Watching the congressional hearings, you’d almost think that these self-righteous elected officials were genuinely appalled by the excessive salaries and perks, the disregard for the environment, and the managerial ineptitude of the three corporate leaders.

In fact, the Democrats and Republicans remain loyal servants of Big Capital. What has changed? One difference is the shift in the capitalist economy in the past quarter century. Now the bulk of surplus value—profits—comes from the super-exploitation of low-wage workers in the service sector and of workers in oppressed countries producing goods and services for slave wages. This in part explains the diminished influence of the U.S. auto companies.

The debate over the spoils taken from the workers in the form of taxes reveals finance capital’s political power. The same Wall Street financiers who, in the glory days of the automobile industry set its rapid expansion in motion, now have Treasury Secretary Henry Paulson putting up a fuss over giving a fraction of the $700-billion-dollar Troubled Assets Recovery Program funds set aside for banks. The banking executives unapologetically enjoy the same obscene compensation and indulgences as GM, Ford and Chrysler LLC CEOs Rick Wagoner, Alan Mulally and Bob Nardelli, respectively.

The real stakeholders—those whose livelihoods directly or indirectly depend on the car industry—are treated like so many extras in a drama of corporate-government conflict.

The latest development in Washington is a plan to grant the car manufacturers “bridge loans” of $15 billion. Even this paltry sum could be rejected by the House, the Senate or the White House. Why? For the cost of a fraction of the Fannie Mae/Freddie Mac bailout, or a few weeks of warfare in Iraq, why not just cough up the money and go on recess as planned?

These politicians aren’t concerned about abusive executive compensation; if they were they would pass a law against it. As their names imply, the Senate Banking and House Finance Committees are beholden to the banks, whose fortunes ultimately depend on maximizing surplus value created by the exploitation of wage labor at the point of production. They want to see the union wage scale and ultimately the union itself destroyed.

According to the Detroit News, “Sen. Bob Corker, R-Tenn., said Saturday he was ‘disappointed’ with the still-unwritten rescue because it did not require major union givebacks or debt restructuring moves” while “the White House wants a trustee named by Bush to wring concessions from the automakers and their unions before any loan money can be released.”

What the Senate Banking Committee chair, Democrat Christopher Dodd, is demanding is even more extreme: “Chrysler, is, I think, basically gone, probably ought to be merged.” A GM-Chrysler merger would create so-called “overcapacity,” leading to plant closings and mass layoffs. (Detroit News, Dec. 7)

For the 139,000 UAW-represented Big Three workers—whose numbers will drop again by year’s end—two options are presented. The lesser evil is a federal bailout ordering drastic restructuring. The greater evil, a Delphi-style bankruptcy, would have the same purpose of wiping out jobs and driving down wages and benefits. Either scenario gives the bosses a convenient excuse—“government orders”—to impose cuts now to reap big profits in the future.

The worst case scenario, liquidation of a company, could affect some 2.5 million to 6 million jobs.

The attack on the UAW is an attack on the whole working class. Historically, when the UAW won a wage increase, it set the standard for other industries. As union wages rose, non-union wages had to follow close behind to discourage unionizing. Likewise, if wages are cut in auto, that will exert downward pressure on all workers’ wages. When one union is weakened, all unions are weakened.

The rank and file are being urged by their union officials to contact their congressional representatives and ask them to support the bailout. Yet as a grassroots car caravan against concessions demonstrated, many want to do more.

When one Chrysler UAW local held an emergency meeting on a Saturday, hundreds turned up. One worker spoke on the need to tell Congress that we oppose any merger, while another asked why we don’t have the government give us the money to run the company. “Yeah, let’s get rid of the bosses,” a third worker chimed in. “Let’s tell Congress: hands off our wages, hands off our pensions, hands off our jobs and hands off our union!”