CAW - TCA: Open Letter to GM Workers

The letter below was sent by the Canadian Auto Workers' GM Master Contract bargaining committee to the CAW's membership. It follows the demand on May 7 by the Canadian and Ontario governments that GM and the CAW come to a new àgreement to secure government bailouts for the sector.

GM and the CAW had already reached a new agreement in March, however the Ontario government has insisted that a new contract be drawn following Chrysler forcing greater concessions from the CAW in their contract.

There are also signficant battles looming in Europe following FIAT's take over of Chrysler which has also included FIAT taking over GM's European subsiduries Opel, Saab and Vauxhall. There are battles looming accross Europe acrross all FIAT's plants over jobs losses and to defend conditions.

The struggle in the global auto-industry reflects the extent to which both capital and governmetns are attempting to use the current crisis in order to both restructure and deepen the neo-liberal offensive against workers and unions.

Chris


An Open Letter to GM Workers
We Are Fighting For Our Lives

Dear Brothers and Sisters;
This has been an unbelievable, frightening time for auto workers. Our industry was weakened for years by government neglect and a one-way flood of imports from offshore. Then the global financial crisis hit, auto sales seized up, and we’ve been fighting for our lives ever since.


As you know, the CAW has been pro-active in trying to be “part of the solution” to this mess–a mess that auto workers did not create. Our contract in May 2008 provided $300 million per year in cost savings to the three companies combined. Then this March, as instructed by the government, we signed and ratified an extraordinary contract with GM that provided further savings as part of GM’s restructuring plan.

However, on March 30th U.S. President Barack Obama, in a televised address, rejected the GM plan, and told all stakeholders to go back to the drawing board. The Canadian government rubber-stamped this decision.

General Motors is already technically bankrupt: it cannot pay its bills without government aid (including the first $500 million in Canadian aid that flowed earlier this month). The federal and Ontario governments rejected our March contract, and have ordered the CAW to reach a new deal with GM or else they will pull the plug on the Canadian arm of the company. Without government support, GM Canada would be liquidated. Our plants would close, and our pensioners would be left to fend for themselves.

We feel angry and betrayed about having to negotiate a new collective agreement with GM, for the third time in one year. We know that you share that frustration.

But your bargaining committee has decided that we must respond positively to the government’s ultimatum. GM’s future in Canada is too important for us to walk away. However, it will be a massive challenge to try to reach a fair deal in the coming days. Because the governments and the company are trying to make workers pay for this economic crisis that we did not cause, and that we cannot possibly fix.

In particular, the government has made an outrageous demand that GM’s labour costs must be equivalent to Toyota Canada’s – including the cost of GM’s pension deficit! Toyota Canada has virtually no retirees. GM Canada has almost 25,000. What’s worse, thanks to GM’s greed and government’s incompetence, the GM pension fund is many billions of dollars in deficit.

The Ontario government allowed GM to underfund its pension for decades, through its special funding regulations, which the CAW is on record as opposing. Yet now they want workers to bear the cost of the resulting massive deficit through massive cuts in our pensions.

It can’t be done.
Obviously, the active GM workforce cannot solve a multi-billion dollar problem that took the company and the government decades to create. Remember, the pension deficit grew and grew even when GM was the most profitable company in Canada (GM Canada earned over $30 billion in profit, in inflation-adjusted terms, from 1978 through 2007), including periods when GM fully funded its U.S. plans.

The CAW has committed all along that our active labour costs will remain fully competitive. The CAW has consistently reminded GM Canada that our plants are 23 per cent more efficient than Toyota Canada’s (according to the independent Harbour Report).

But the long-term crisis in pension funding was not caused by the workers. And it can’t be fixed by the workers. We are holding the line on this issue – to defend our current retirees. And to defend you – the active workers of today, and the retirees of the future.

Stand by for more updates. Above all, be ready to support your union in the coming crucial days. We will not allow the workers to be made the scapegoats of this crisis.

Thank you for your continuing solidarity.

Signed, The CAW-GM Master Bargaining Committee

What does CCAA mean for our jobs?
It is possible, and even likely, that GM will file for Chapter 11 bankruptcy protection in the U.S. in coming weeks, and for CCAA protection in Canada. What does this mean?

First, it does not mean that GM is bankrupt. Rather, GM is receiving court protection for a period of time, to restructure its business and escape from some of its debts.

The Canadian government has confirmed that if we reach a new deal with GM, they will protect that agreement through the CCAA process (so that no further bargaining is required).

This also means that the Canadian and Provincial governments will continue to provide the financing needed to assist GM through the CCAA process.

The best case is that GM would quickly exit Chapter 11 and CCAA protection, with the active support of the Canadian and U.S. governments, and then begin operations as a revitalized company.

Without government financial aid (which the government says is contingent in part on a deal with CAW), then GM Canada would likely be liquidated.

In any event, the CAW will use all its bargaining and legal resources to protect the interests of our current members and our retirees.

Furthermore, the CAW has been in the forefront mobilizing its membership on a range of issues from pension security to fighting for fair trade (instead of free trade), pulling out all stops in defence of our members, our families and our communities.

The activism of our leadership and members has been very much appreciated and those actions must continue if we are going to influence elected parliamentarians in defending the interests of the Canadian economy.

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Interview with Sam Gindin on Canadian Auto Workers

Lisbeth Latham
[The following article was written in July last year but had previously not been published. Considering the depth of the crisis in auto manufacturing globally and failure of auto unions to effectively respond to both save jobs and conditions I'm posting it now as start to more detailed articles that I'm hoping to write over the coming weeks]


The North American car manufacturers (Chrysler, Ford and General Motors) like many other car manufactures are facing increasing difficulties of profitability. In response to these pressures on profits the US United Auto Workers (UAW) have sort to limit job losses by entering into agreements that give up working conditions in exchange for the auto-manufactures giving commitments for ongoing production. In late 2007, the UAW signed new agreements with Ford, GM and Chrysler. The most dramatic elements of these agreements included the shifting of the risks of future health care costs for workers from the companies to the union, and the acceptance of a permanent two-tier structure with new hires being paid half the wages and less than half the benefits of current workers and the first time creating a differentiation between “core” and “non-core” workers, with “non-core” workers receiving half there former wages.


In April the Canadian Auto Workers (CAW), which had split from the UAW in 1982 as they rejected concession agreements, approached the North American manufacturers with a proposal for a new agreement which while rejecting the permanent two-tiering of the UWA contracts, included a number of concessions including the freezing of current Ford workers’ wages for the life of the three-year deal, cuts 40 hours of vacation pay per year, and freezes cost-of-living (COLA) adjustments for the remainder of the current contract and the first year of the new deal. The CAW’s offer was made five months prior to the expiry of their agreements and two prior to the CAW’s Collective Bargaining Conference. Initially only Ford accepted the proposal, however following the agreements ratification by 67% of the membership (the lowest ever return in favour of an agreement, with one plant rejecting the agreement); both Chrysler and GM accepted the proposal which was subsequently ratified by 87% and 84% of members respectively. I spoke to Sam Gindin about the significance of these agreements for the auto industry unions and the broader North American labour movement. Gindin is a former CAW research director who has been a prominent opponent of concession bargaining and of the shift in orientation by the CAW’s leadership. He is a regular contributor to the Socialist Project’s publication The Bullet.

The approach adopted by the CAW’s leadership reflects a sharp departure from its historic approach to bargaining. Gindin told Green Left “at the Big Three, the three year agreements were due to expire mid-September. Normally the period leading up to involves mobilization of the members as well as putting our case before the public via the media. A particular focus for the union is the Collective Bargaining Conference in the spring that was scheduled in June, where all sections of the union get together to establish general priorities and to support the big three negotiations because of their prominence and influence within the union and nationally, despite the Big Three now represent under 15% of the total membership.

“This time, the union itself asked Ford to open early negotiations early in April, the rationale to the members being that conditions would get worse in the fall. The result was that discussions amongst the members, the conference itself, and especially any mobilization were pre-empted”.

The offer by the CAW reflects an embracing of concession bargaining by the union’s leadership, which reflects a significant shift in the orientation. Gindin said “Historically, the CAW saw jobs as depending on political factors and lead in the creation of the 'Auto Pact'. In essence, anyone wanting to sell and profit from the Canadian market had to make a commitment to jobs and investment here. As well the union opposed concession bargaining to get jobs - seeing this as a diversion from the real issues as well as undermining the union. This was especially important in the early 1980s, when the first round of major concessions in North America. The Canadian resistance to concessions led to a split in what was then an international (Canada-US union)”.

More recently, the Canadian union has moved in the same direction as the US union, though it has not gone nearly as far as the UAW. In the context of the general shift to neo-liberalism and free trade, the CAW argued for subsidies (public concessions) as a way of limiting private concessions in bargaining, but the logic of having to 'buy' jobs from the companies soon spread into the reality of both public and private (bargaining) concessions”.

The change of course by the CAW leadership has the capacity to the broader Canadian labour movement. “In the earlier period, the CAW inspired the rest of the Canadian labour movement. Now it is more likely to reinforce the general sense of fatalism and defeat in Canadian labour. Particular struggles do of course occur in the Canadian labour movement, but they are sporadic and their cumulative impact is limited”.

Gindin argued that following the low vote at Ford, including the agreement being rejected at the Oakville plant, the leadership of the CAW moved to limit discussion amongst the membership for the GM and Chrysler agreements with “the settlement reached on a Thursday and the vote quickly held on the Friday and Saturday of a 4-day long weekend”. However even if “workers had been given the democratic time to discuss the agreements, it is unlikely that these votes would have been overturned. Workers voted in fear of losing their jobs, a fear both reflected by the union leadership but also reinforced by that leadership the difference in Oakville were both the limited impact of fear because some hiring was occurring and initiatives taken from below”.

Although the high votes at both GM and Chrysler appear to vindicate Gindin explained that “below the surface, there is a great deal of frustration and some anger, and a network of activists across plants determined to revive the union as an independent working class institution has surfaced (Workers for Union Renewal)”.

According to Gindin the CAW’s change in course reflects the pressures on the auto-industry internationally, but particularly in North America.

“In the immediate period, the issue is the economic uncertainty in the US and the explosion in gas prices, which are now affecting the Japanese based companies as well. Both are related to the particular kinds of vehicles the NA majors have emphasized because of their higher profit margins: pickup trucks and SUVs. Both are gas guzzlers and pickups are also used in construction, which has been especially hard hit. The growth of an environmental consciousness - still in its infancy - seems to be becoming an additional factor in the most recent dramatic turn away from SUVs.

“On the cost-of-production side, the NA companies have been very hard hit by the cost of healthcare in the US, where no public system exists. These costs include not just the present workforce but the growing numbers of retirees (at GM, for example, there are now five retirees per active worker). The Japanese plants, because they are newer have a younger workforce and virtually no retirees have dramatically lower costs. To offset this disadvantage, as well as models which have seemed less attractive to consumers, the NA producers offered large price reductions (especially since 9/11) and those subsidies have undermined corporate bottom lines.

While all car manufacturers face these challenges, the CAW’s difficulties at the North American Big Three, are partly of their failure to organise the Japanese transplants. Gindin says that “in Canada, the Japanese companies have largely followed the Big Three monetary settlements in order to avoid unionization and thereby maintain 'flexibility' in dealing with 'their' workers (e.g. speed-up; overtime - Toyota has scheduled 60 hours overtime on a regular basis; accommodation; workers with injuries are often let go). The inability to unionize these plants affects the membership base and therefore the finance's of the union but, more importantly, it means greater competitive pressures on the Big Three workers, even if the larger issue goes beyond Canadian labour costs to the models available and the health care costs in the US which affect us through integration into the US industry”.

Gindin said that it is also important to “note that we are especially affected by developments in the US Big Three, where though unionized, the union has been in such a headlong retreat. The two-tier system is the best/worst example of this”.

Gindin also identified the substantial excess capacity in the sector as a major issue, at a more general level. “The US has been attracting investment because of its market and costs even before the collapse of the dollar and this means excess capacity and closures elsewhere. In the short run, the economic downturn aggravates the capacity issue and the effectiveness of strikes, but there are two qualifications:

“Even in bad times, sales are uneven, some models are still selling, and the corporation is dependent on those sales so a strike MAY be possible, if the concessionary demands are severe enough;

“Conditions for striking the companies may block the feasibility of striking, but its crucial to distinguish between recognizing the limits of the moment and waiting/preparing to respond a different day versus turning that moment into a permanent defeat - i.e. by accepting the corporate logic, teaching workers that the world has changed and they can not fight anymore, reinforcing fatalism re the longer term;

“To sustain our fights we DO have to think about the larger context and this means joining with others in those fights. But if there are no fights going on in daily life, people are unlikely to have the confidence to join larger battles. That's why, even in bad times, unions must find some ways to resist in the workplace and in the community”.

For more of Sam Gindin’s writings on the North American auto-industry visit The Bullet.

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