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Auto workers make no gains

Behind the UAW-General Motors contract

Published Oct 6, 2011 8:27 PM

Before workers even began to vote on the four-year contract between General Motors and the United Auto Workers, accolades were streaming in from finance capital. It “seems to have kept with the spirit of market expectations,” said J.P. Morgan Chase analyst Himanshu Patel. “We see the agreement as adding only modestly to costs,” noted Brian Johnson of London-based Barclays Capital.

After the UAW reported Sept. 28 that GM workers had passed the agreement, the financial service company, Standard and Poor’s, immediately improved GM’s credit rating from BB- to BB+. Rival Moody’s has indicated it will likely follow suit. A higher rating lets a company borrow at lower interest rates.

Why have these high priests of the market bestowed their blessings on this contract?

All the givebacks from the 2007 contract will continue. Nothing that GM workers gave up during the 2009 bankruptcy will be restored. “Traditional” workers hired before 2007 get no raises. The pay increase to newer “entry level” workers will leave them making at least nine dollars less per house than their higher-seniority coworkers.

GM CEO Dan Akerson plugged the contract in a conference call Sept. 28 with investors. Upfront “signing bonuses” of $5,000 and buyouts to get high-paid trades workers to leave would cost just a few hundred million dollars. Labor costs, which have fallen since 2007 from $16 billion to $5 billion, might go up an average of 1 percent per year. If vehicle prices follow the current 3.8 percent inflation rate, investor income will pull ahead of labor costs. Barclays is predicting an even bigger boost to GM profits, which are already $5.7 billion for the first half of 2011. “With the cap on lower-paid Tier 2 workers lifted,” an analyst suggested, “attrition could materially lower GM’s all in labor cost … by about $300 million annually.” (streetinsider.com, Sept. 21)

Union leaders push agreement

N ot only are the capitalist media hailing this contract as a win-win for workers and bosses, so is UAW President Bob King. “Now that GM is posting profits again, our members are sharing in the success, while ensuring GM’s continued profitability,” King stated. (www.uaw.org)

What are workers gaining? There is a promise to “create or retain” 6,400 jobs, but many jobs will be offset by attrition (workers quitting, dying or retiring and not being replaced) and the closing of an assembly plant in Shreveport, La. Reopening the former Saturn plant in Spring Hill, Tenn., is tied to “innovative staffing,” the same language used to reopen the Lake Orion, Mich., assembly plant. The 40 percent with the lowest seniority were to be called back at entry-level pay. To avoid a 50 percent pay cut, workers had to transfer to Lordstown, Ohio, 200-plus miles from their families and communities.

Retirees, who number over 400,000, got nothing and are losing a $700 annual holiday bonus. Why? The pension fund is underfunded due to “Wall Street’s continuing problems” and the fact that the ratio of UAW hourly workers to retirees is 48,500 to 405,000. (Detroit Free Press, Sept. 30) Just five years ago there were 111,000 UAW GM hourly workers.

How was this attack on workers and retirees passed? It took more than a $5,000 bonus. Workers were told by UAW staff that if they voted “no” the contract would go before an arbitrator, who might take more away. The clause sending “unresolved issues” to binding arbitration, presumably robbing workers of the strike weapon, was demanded by the U.S. Treasury during the 2009 bailout.

The corporate-owned media did not go a day without saying that GM workers “can’t strike.” The intent was to have workers resign themselves to a lousy agreement. At some UAW locals, less than half the membership voted. Significantly, more than one-third of those who did vote cast a “no” ballot.

It is not true that workers can’t strike; it’s a question of legality. A strike could be ruled a breach of contract and GM could seek a court injunction forcing workers back to work. Legal or not, a strike would be against GM — along with the banks, the state and an unfriendly media. With 30 million workers unemployed or underemployed, these forces have a huge army of potential strikebreakers. Still, the UAW leadership should not have used the anti-strike clause to sell a contract that will strip away what previous generations won after months on the picket line. No union should tell members they “can’t strike.”

Now Ford wants their employees to swallow the same rotten deal. Standard and Poor’s already said it would grant the same credit rating upgrade if that happens. As of noon on Oct. 3, Ford and UAW negotiators are still meeting.

Ford workers, however, are not bound by a no-strike clause. In 2009 Ford workers voted down contract modifications patterned after the GM and Chrysler concessions. The main reason was to uphold the right to strike. The recent vote to authorize a strike if necessary was 99 percent in favor. There may not be a strike, but Ford workers will be acting with an awareness of their own leverage.

Now is the time for autoworkers to exorcise the demonic “spirit of market expectations” and reinvigorate the spirit of working-class solidarity.

Grevatt is a 24-year Chrysler autoworker and member of UAW Local 689.