No way for a union to act
UAW leader gives up wages to protect GM’s profits
Published Jul 29, 2011 7:23 AM
This July 26 is the day of the traditional handshake across the table —
when contract negotiations begin between Ford, General Motors and Chrysler, and
the United Auto Workers. UAW President Bob King is trying to convince the
membership that asking for raises is a bad idea at this time.
“The transnational auto companies have gained a large percentage of the
United States market, in part by keeping their total labor costs under what is
paid by the unionized automakers,” according to an article in the
July/August issue of the UAW magazine Solidarity. “The labor costs at
Toyota — the largest transnational company — set the pattern that
union workers had [WW emphasis] to follow.
“The dilemma is clear: If the UAW bargains fixed cost compensation from
the unionized companies that is higher than the nonunion companies, the added
fixed costs of the domestic automakers will harm the competitiveness of the
unionized companies, making our products more expensive or reducing the revenue
margin needed for new product investment.”
What isn’t stated is that, with concessions made in the 2007 contract and
the 2009 modifications, unionized U.S. autoworkers have caught up (or down!)
with their non-union counterparts in reducing hourly labor costs. At Chrysler
total hourly compensation — which includes health benefits, pension
contributions, life insurance, sick pay, vacation and holiday pay and more
— averages around $49 an hour. At Toyota the figure is about $55 an hour!
(Reuters, July 4)
Moreover, through decades of restructuring, productivity has skyrocketed. This
has led to drastic shrinking of the workforce and dozens of plant closings-cost
savings pocketed by the companies and by Wall Street.
Not one to appreciate worker sacrifice, Chrysler and Ford have stated that they
have no intention of giving any raises and GM is crying for cuts in health-care
Competitiveness on the backs of low-paid workers
A new wave of autoworkers-many of them women and workers of color-are coming
into the plants at half the wage of the previous generation.
GM’s subcompact assembly plant in Lake Orion, Mich., was the subject of a
front page article in the July 12 New York Times entitled, “With
Chevrolet Sonic, GM stands automaking on its head.”
“The radically revamped factory here,” explained the Times,
“operates with fewer and cheaper workers, many of whom are paid $14 an
hour rather than the full UAW wage of $28 an hour.” This came about
through a secret deal between the UAW and GM allowing the company to pay the
lower wage to 40 percent of the workforce now and eventually all production
workers in the plant.
The agreement, which rank-and-file workers were not allowed to vote on, was
cooked up when “negotiators from the company and the union began
brainstorming about what it would take to make a profitable subcompact car in
the United States.” Many workers had to transfer to out-of-state plants
to keep their normal rate of pay. Hundreds of contract employees are working
alongside UAW workers for only $10 an hour.
It doesn’t take much insight to figure that “fewer and cheaper
workers” equal higher profits. Towards this end GM invested a record $545
million in retooling Lake Orion. If the Sonic and the higher-priced Buick
Verano sell well, “fewer and cheaper workers” will allow GM to more
than recover its investment.
In the meantime, who is paying for this half-billion dollar gamble? That $545
million could allow the plant’s 720 lower tier workers to make the same
pay as everyone else for the next 27 years! If wage increases are
“uncompetitive” because they raise the price of union-made
vehicles, can’t the same be said for the billions spent on retooling and
building new, modern plants all over the world?
What about the billions in profits that Ford, GM and Chrysler are raking in? If
competitiveness is the goal, why not lower prices by reducing profits instead
of wages? In the 1950s the UAW demanded that the companies keep car prices
The UAW’s embrace of tiered wages, which began at Caterpillar in the
1990s and is now widespread, has had disastrous consequences. The situation at
Nexteer in Saginaw, Mich., should be a wake-up call.
Originally a GM steering plant, Nexteer became part of Delphi when GM spun off
its parts division. Then UAW-represented Delphi workers agreed to a lower wage
for new hires. In 2007, with Delphi in bankruptcy and lower-paid workers now
the majority, a new contract eliminated the higher tier.
When Delphi emerged from bankruptcy, GM bought the plant back, only to put it
up for sale. Union members reluctantly agreed to further pay cuts and
additional wage tiers demanded by the buyer, Nexteer, to keep their plant
Now members of UAW Local 699 work under a confusing and exploitive arrangement
with nine different pay “buckets.” Most are below the average U.S.
manufacturing wage of $18-an-hour-based on date of hire and the level of job
This is what UAW members at the Detroit Three — and if the trend is
unchecked the whole labor movement —could look forward to in the
Many rank-and-file workers view two-tier and multi-tier pay systems as a danger
to the union, and believe that reinstituting pay equality should be a priority
for these negotiations. They are responding favorably to leaflets from
Autoworkers Caravan calling on them to “defend union solidarity”
and vote down any contract with tiered wages. The group is holding a forum on
Aug. 13 on the devastating effects of unequal pay structures.
Autoworkers here — and all workers up against demands for yet more
concessions — would do well to adopt the attitude of the Greek working
class and refuse to pay the cost of a crisis they did not create.
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