Over the past year, the major US auto-makers have suffered an ongoing profit squeeze. In the first nine months of 2005, General Motors and Ford lost several billion US dollars. These losses, which reflect the increasing competitive pressure within the global car market, have been blamed by car makers on the high costs of wages and entitlements for both current and retired auto workers.
In November GM, with support from the leadership of the United Auto Workers (UAW), won concessions on health benefits from workers and retirees that are expected to reduce GM costs by US$1 billion, after 61% of workers voted to accept the concessions. On December 16, Ford announced its own cost-saving measures on employee health benefits, expected to save the company $650 million. Ford’s plan was passed with support of just 51% of its workers and there have been a number of complaints of voting irregularities from UAW members.
The December 16 Detroit News reported that voting was not conducted via ballot boxes, but by officials walking along assembly lines with large buckets to collect ballots. A number of workers at Ford’s historic River Rouge factory reported intimidation to vote for the deal. Regardless, GM announced that it would close 12 plants in North America, with the loss of 30,000 jobs (a third of its work force). Ford is expected to announce its end-of-year performance on January 23, which is likely to be accompanied by the closure of 10 plants and the loss of up to 30,000 plant jobs and 4000 white-collar jobs.
On October 8, after losing $2.4 billion over the previous year, Delphi filed for Chapter 11 bankruptcy. Chapter 11 is a unique US law that allows companies to renege on and renegotiate collective contracts with workers. It provides companies with a battering ram, backed up by the courts, with which to strip wages and conditions from contracts.
Until 1999, Delphi was the parts arm of General Motors. GM then spun it off to create a separate company. In the short term this was seen as a way to boost profits once the GM contract came to an end in 2008, as it made it easier for the auto-makers to apply leverage to workers to drive down costs, and to shift the burden of capital investment in the parts industry away from the motor companies. However these shifts came at a cost, as profits that had historically flowed from the parts industry now had to be divided between both auto-makers and the new companies.
Delphi executives have argued that the company is not viable due to the amount it is forced to spend on wages and conditions, particularly health care, for current and retired workers. In mid-November Delphi demanded that auto workers accept 65% wage cuts, slashing pay from $27 per hour to $9.50 per hour. An alternative plan discussed by Delphi chief executive officer Steve Miller has been to slash US jobs from 33,000 to 10,000.
Delphi looms as a major threat to US auto-workers on two fronts. First, the spectre of a total collapse of Delphi is being raised as an event that must be avoided due to the knock-on effect that it would have on GM through the drop in the availability of parts. It’s unlikely that Delphi would be unable to continue to function at some level — this claim is being used to apply pressure on workers.
The following was written by Caroline Lund, a member of UAW Local 2244 at the NUMMI plant in Fremont, California, for the plant’s newsletter The Barking Dog. The plant has 5000
workers and is a joint venture of GM and Toyota.
The assault on workers’ conditions increasingly threatens the UAW’s survival. Over the past two decades, membership numbers have dramatically fallen and less than half of current members are employed in the auto industry. In response to Delphi’s aggressive move, the UAW joined with other Delphi unions to form the Mobilize @ Delphi coalition. It has started a petition drive and has organised informational pickets against the cut-backs.
But it is rank-and-file Delphi workers who have launched a real fight-back — establishing websites and holding meetings in Delphi plant towns in Michigan, Indiana, Wisconsin and New York, drawing between 100 and 175 workers at each. They have chosen the name Soldiers of Solidarity (SOS), and they are calling for a strike throughout the auto industry to stop the concessions. In preparation for a strike, they are organising a “work-to-rule” movement. Work-to-rule means doing your job strictly according to the job description and safety rules, and nothing more. Don’t go the extra mile, don’t use your expertise, if something goes wrong, let the boss tell you what to do.
Under pressure from the rank-and-file meetings, UAW president Ron Gettelfinger endorsed the work-to-rule, but has refused to organise members to carry it out.
On January 8, SOS organised mass picketing at the Detroit Auto Show to protest Delphi’s attack on workers. According to SOS the pickets attracted 700 UAW members and their supporters from across Michigan and from other states.
Delphi activist Gregg Shotwell says the UAW petition to the bankruptcy judge is pointless. “[It] doesn’t have one legal leg to stand on. The judge will never read it. His secretary will file it under Useless And Worthless.”
Shotwell says, “I appreciate the rank-and-file members who in all sincerity have written and circulated petitions seeking public support for Delphi autoworkers. They are genuine.
“But wishful thinking is the notion that someone else will take care of your business and fight your battles for you. Hope is fighting like hell against all odds. I don’t believe in wishful thinking, but like many other UAW members, I am full to bursting with hope.”
The UAW’s informational pickets will not do the trick either. Delphi CEO Miller even gave them his blessing. He said the picket lines “are to be for information only, and we don’t expect any disruptions to our operations”.
Soldiers of Solidarity have a more realistic idea. Shotwell explained: “The rank and file have a plan and we don’t mind telling everyone it is based on inflicting economic hardship on GM-Delphi until management understands that a fair contract is cheaper than industrial combat.
“We have no intention of sheepishly walking off the cliff of economic self destruction. We have no intention of handing our union to Miller on a silver plate. Delphi’s failure is the result of mismanagement and fraud. We refuse to bear the punishment for their crimes and incompetence.”
In response to the rank-and-file upsurge, Delphi and GM have recognised that the UAW needs more time to deal with its rebellious members. Delphi postponed its deadline for tearing up its union contracts from mid-December, to mid-January, then to mid-February.
Soldiers of Solidarity look back to how the UAW was founded. Shotwell said: “When sit-down strikers in Flint won recognition for the UAW in 1937, they didn’t win it by writing letters to the editor. They didn’t win it by donating to V-CAP [a voluntary contribution by members to fund the UAW’s donations to candidates in elections] and voting Democrat. They won by taking power into their own hands.
“We have been indoctrinated with the policy of helplessness. It’s a lie. We are not defenceless victims. We have power. We control production. We can bring General Motors to its knees. The sit-downers won because they seized control of the shop floor. They won because they shut down GM. Our challenge is no less.”
The concessions that Delphi is asking for are unprecedented in any industry. If Delphi gets away with it, the rest of the corporations will follow their example. All management will feel the wind in their sails.
But more unions are fighting back. The November 21 Wall Street Journal reported, “The number of work stoppages in the U.S., including strikes by unions and management-sponsored lockouts, is on the upswing as tensions rise between workers and companies that are seeking to cut wages and benefits”.
The article speculated that “workers could be drawn to unions willing to strike to resist cuts to health-care benefits, in particular”.
For more information visit http://www.futureoftheunion.org/
Originally published in Green Left Weekly #653
Wednesday, January 25, 2006