Capitalist state wages war on UAW
Published Jan 10, 2009 8:20 PM
On Jan. 1 and 2, General Motors and Chrysler LLC began the New Year by
depositing the first installments of a federal government loan in the bank.
Through the Troubled Assets Recovery Program, GM and Chrysler will receive
$13.4 billion and $4 billion, respectively, with an additional $6 billion
approved for GM’s financial arm, General Motors Acceptance
Meanwhile, all but a small fraction of Chrysler’s workers will spend the
first month of the year laid off. GM workers will be unemployed at least part
of the first quarter. None of them will see an improvement in their situation
due to the bailout. At best they can heave a sigh of relief that their final
paychecks of 2008 won’t bounce.
The terms of the loans, if imposed, will prove devastating to the United Auto
Workers. The Summary of Terms drawn up by U.S. Treasury Secretary Henry Paulson
calls for a “reduction of the total amount of compensation, including
wages and benefits ... by no later than December 31, 2009,” to “an
amount that is competitive with the average total amount of such compensation
... paid per hour and per person to [U.S.] employees of Nissan Motor Company,
Toyota Motor Corporation, or American Honda Motor Company.”
The government goes on to demand the “elimination of the payment of any
compensation or benefits to U.S. employees of the Company or any subsidiary who
have been fired, laid-off, furloughed, or idled” and “application
of the work rules to their U.S. employees ... in a manner that is
competitive” with the U.S. plants of Japanese automakers.
UAW retirees will also suffer if the Treasury has its way. At least half of the
negotiated payments to the Voluntary Employees Beneficiary Association, set up
to fund retiree health benefits, “shall be made in the form of the stock
of the Company or one of its subsidiaries.” With GM stock worth less now
than half a century ago and with market conditions volatile, that’s quite
With “non-competitive work rules” slated for elimination,
everything from seniority to safety to the already weak language on job
security could be undone. If negotiated wages and benefits go, if Supplementary
Unemployment Benefits and the jobs bank–which merely allowed laid-off
workers to survive on more than a paltry unemployment check—are a thing
of the past, what of the union contract would remain? The management rights
clause, the no-strike pledge and a grievance procedure—with nothing left
By March 31 the automakers must provide proof–to a Bush-designated
“car czar”–that the members of the UAW (and any union that
represents the workers) have agreed to Washington’s draconian demands.
Otherwise the loans must be paid back immediately, which could lead one or both
companies to declare bankruptcy, again jeopardizing wages, benefits and
This loan scheme has nothing to do with making the auto companies
“competitive” or “viable.” Wages and benefits of
current employees–who do not make anywhere near the frequently cited
figure of $80 an hour–come to less than 5 percent of the price of a
Hourly wages at Nissan, Honda and Toyota, when “profit-sharing”
bonuses are included, are actually higher than those at Ford, GM and Chrysler.
If the only real difference in compensation–that between union and
non-union benefits–was eliminated, it might shave $100 or $200 off the
cost of building a car.
Biggest attack on labor since Taft-Hartley
This is all about union busting. While the Detroit Three workforce constitutes
a tiny and shrinking fraction of the whole working class, the existence of the
UAW compensation package is viewed as an impediment to the ruling class’s
ongoing drive to level wages.
GM, Ford and Chrysler bosses are more than happy to lower pay and reduce
benefits further. They might prefer to negotiate down the price of labor power
with a compliant and fearful labor leadership–at least for the time
being. Of course the rank-and-file autoworker loathes a pay cut and is
bombarded with the message that “it’s better than not having a
company at all.”
The capitalist state, which is not so much concerned with this or that
individual boss but with the capitalist class as a whole, is ready to dispense
with such niceties. Ronald Reagan fired the opening shot when breaking the air
traffic controllers union in 1981. Bush is poised to finish the job by smashing
the UAW outright.
With bipartisan support, the state has brazenly violated the Wagner Act, which
during the turbulent 1930s gave workers the right to organize unions and to
“free collective bargaining.”
According to the Law Dictionary, the National Labor Relations Act
“requires the employer to bargain in good faith with the representative
of the employees. The results of the bargaining process, however, are left
wholly to the parties themselves, free from governmental intervention or
influence.” The Supreme Court has upheld this principle on multiple
With the Treasury Department’s Summary of Terms, the state has illegally
undermined the right to organize unions, whose purpose is to wrest concessions
from the capitalist class on behalf of the workers. This governmental trashing
of a major union contract may be the biggest attack on labor since
Taft-Hartley. That 1947 amendment to the NLRA so encroached on the right to
strike that it was called a “slave labor law.”
This is an act of war on the entire working class! Hands off the UAW!
Martha Grevatt, a Chrysler worker with 21 years of seniority, is currently
laid off. E-mail: [email protected]
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