Thursday, January 15, 2009

Capitalist State Wages War on UAW

Capitalist state wages war on UAW

By Martha Grevatt
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 Corporation.

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 a gamble.

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 to grieve.

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 jobs.

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 vehicle.

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 occasions. (

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:
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