The U.A.W.’s Policy:
A Dead End for the Workers

Mar 31, 1981

In discussing the 1981 Chrysler contract, Doug Fraser, president of the United Auto Workers union, called it, “the worst economic settlement the union’s ever been involved in.” But then, of course, he recommended its ratification and signed the contract.

This was the third round of concessions to Chrysler in a little more than a year. Each contract made ever greater concessions to Chrysler than the previous one. The latest concession will mean a wage cut of almost $50 a week starting March, 1981. And since the newest contract gave up a cost-of-living allowance, the workers’ wages will continue to fall ever further behind inflation. Altogether by September, 1982, when this contract expires, Chrysler workers are expected to earn $4 an hour less in wages and benefits than GM or Ford workers. (This is assuming that their wages are not cut also.) Moreover, there is little chance that most of the 60,000 Chrysler workers, half its 1979 work force, who are now permanently laid off will get their jobs back.

The UAW says that Chrysler’s financial situation made it a special case which gave the union no choice. Said Fraser, “These conditions were imposed on us.” But is Chrysler so special? During a crisis any company can be or pretend to be in bad financial shape. According to Fraser’s logic, every company can expect the workers to bail it out. This should serve as a warning to all workers that the union will not protect them.

The UAW has already proven this in the case of Ford, which has not taken long in shoving its foot in the door by demanding $1.50 an hour wage cuts for the over 5,000 workers in its steel-making operations. The UAW leadership – as we might expect – pushed the Ford steel workers also to accept these cuts.

The UAW is not alone in pushing the companies’ wage cuts. The other union apparatuses act no differently. Already several rubber companies have gotten wage concessions from the United Rubber Workers. The Teamsters union at Braniff Airlines accepted a 10% wage cut. If the UAW has become a kind of symbol, it is because of its reputation in the past for militancy and for being in the forefront of winning gains for its workers. For this reason it can be used by the government and the bourgeoisie to make the idea of wage cuts more acceptable to all workers.

Economic Facts – Not Economic Power

The UAW’s policy was summed up by Walter Reuther in 1949:

“We would like to see a situation in America where we can raise collective bargaining above the status of a struggle between competing economic pressure groups. We would like to resolve our economic demands on the basis of the economic facts and not upon economic power…. Table pounding and picket line marching are part of the problem but you have to base your demands and struggle on sound economic facts. We keep saying to our workers that they have to understand these facts because these facts are the arithmetic of our future.”

Implicit in Reuther’s statement is the fact that the UAW accepts the capitalist system, and it does not see the need to make a fundamental change in that system. Since it accepts the society the way it is, it also accepts the rules of the game as laid out by the bourgeoisie. For the union bureaucracy, the first rule is that the unions and the companies have mutual interests, and the union can work together with the companies to assure these interests.

For the union apparatus, the means to assure the workers’ interests is collective bargaining with the company. The workers are supposed to be able to guarantee their future, not through their own struggles, but through company and union negotiations and the product of negotiations, a contract. In the contract, the company promises certain wages and benefits for a fixed period of time. In return, the workers promise that they will respect so-called management rights. This means that management runs its business and organizes production the way it sees fit, with no interference from the workers. The no-strike clause is the union’s pledge that the workers will not disrupt production during the length of the contract. And the company and the union supply a grievance procedure in which the workers are allowed to protest company practices. But the grievance procedure is merely a way to take the protest out of the hands of the workers. When all else fails, the union can resort to a strike – at the end of the contract.

Behind this so-called civilized relationship between the company and the union is the idea that not only are workers tied to the capitalist system, but also workers in each company are tied to the fate of that particular company. If that company does well, these benefits will trickle down to the workers. And also the inverse follows in this logic: the workers have no interest in hurting that company, because it would be the equivalent of hurting their own interests.

On the general level, the UAW takes the same stance toward the bourgeoisie and its government as it takes toward the individual capitalists. The needs of the workers which go beyond what can be met in the contract, can be met by government legislation. And this legislation can be influenced by working with the Democratic Party. By supporting and pressuring the Democratic Party, the workers could make it more progressive and responsive. The UAW holds up as an example of what can be accomplished with the Democratic Party what has been accomplished in Michigan. Thus, Michigan’s laws for unemployment compensation and workmens compensation for many years were more liberal and generous than in most industrial states. And Michigan had far reaching legislation which protected women workers and early civil rights laws. The UAW leaders explain that these things were won because in Michigan the UAW made itself into a major force in the Democratic Party by providing much of the money and precinct workers for the party.

What Were the Results?

Did the UAW’s policies benefit the workers? The leadership claims that since World War II, the UAW has made unprecedented gains. On the level of the contract, it led other unions in winning health and dental insurance, automatic annual productivity increases, cost-of-living adjustments, paid vacations, retirement pensions and supplemental unemployment benefits. These were supposed to protect the workers against all adversity.

In fact, almost each gain in the contract had its own built-in limit. So, the SUB fund, which was advertised as a kind of guaranteed annual wage, was not guaranteed at all, rarely lasted a year, and was never meant for periods of high unemployment. In short, the SUB fund was underfunded, and in the 1970s it ran out at various times of high layoffs at all of the Big Three, leaving the workers high and dry. The cost-of-living allowance has not kept the workers up to inflation. According to the UAW, in 1979, with both COLA and the productivity increase, Ford and GM workers’ wages increased by only 11% while inflation rose by 12.7%. The much touted health insurance has not covered doctor’s visits, much less does it cover anything for those workers who lose their jobs.

In fact, the much heralded UAW package has big limits. This was all the UAW could win – even in the good years of the period. Even in these years, when the last thing the auto industry wanted was a disruption in production, the UAW did not use such favorable circumstances to make substantial and permanent gains. While the auto companies raked in the money, the workers got only a few crumbs.

And nothing prevented the auto companies from a speed-up which kept the work force down even though production rose during the good times. Since World War II, when auto production increased by 75%, overall employment has increased only by about 20%.

During the cyclical downturns, that is, in auto much of the 1950s and early 1960s, there weren’t even crumbs. During the bad times, the workers were advised to be happy with nothing, in order to restore the companies to profitability again. In the late 1950s and early 1960s tens of thousands of workers lost their jobs, and although most of the gains were not wiped out of the contract, they were for those workers.

Chrysler is not the first major auto-maker to have problems. Companies such as Hudson, Packard, Nash, Studebaker have gone bankrupt and closed their doors. And once before, in the late 1950s when Chrysler was floundering, workers with up to 15 years seniority were laid off for years at a time. Many workers were forced to sell back their seniority. The 1950s should have been a warning that the contract was not a protection.

In fact, the very basis of the contract is an unequal relationship between the capitalists and the workers. For the contract specifies the concept of management’s rights: that is, of its right to lay off workers when it sees fit, and its right to increase productivity through speed-up and deteriorating working conditions, when it sees fit. The contract specifies that management has the right to decide, while the workers have the obligation to produce – and not strike.

What Results Today?

The current auto crisis is part of a larger world-wide financial crisis. In fact, the auto companies are making use of this period of crisis to lower their labor costs. They look for every pretext to bully the workers into agreeing to make concessions to the company. The threats that hang over the workers’ heads come down to this: if the workers don’t accept the concessions, they will lose their jobs. Faced with these threats, the UAW offers the workers no alternative but concessions.

In fact the UAW’s policy has been demonstrated to be worthless.

What about the UAW’s famous contract which was supposed to guarantee the workers’ wages and benefits? This contract was easily torn up by the companies and redrawn to guarantee wage cuts at Chrysler, and now at Ford, and perhaps soon at GM. And while the renegotiated contracts give guarantees to the companies, there are no guarantees for the workers. So a company like Chrysler can go broke, and the workers will be left with nothing.

And what about the UAW’s ties to the Democratic Party? The Democratic Party, which the UAW has supported and supposedly pressured, was the party which imposed the conditions on the workers for the Chrysler loan guarantees. Carter, the man the UAW supported in the elections, was the politician who imposed the wage cuts.

What about the famous Democratic Party in Michigan? In Michigan, the UAW’s social legislation, such as workmens compensation, is being reworked so as not to be such a big financial burden on the poor companies. And the Democratic Party does not prevent its demise.

Just at the time the workers need them the most, the benefits are disappearing. Word is already going out to laid off Chrysler workers, that they may as well sell their seniority if they have less than 10 years, because they will never get back. The union’s answer for the workers is to move out of the state, not necessarily because they can find jobs elsewhere, but because the government doesn’t want too large a concentration of unemployed workers in Detroit.

So all of the contractual guarantees, all of the ties with the Democrats which the UAW claimed would benefit the workers today are appearing under the harsh light of the auto crisis to be what they are – traps. In the good times, they were meant to prevent the workers from fighting for what was there to be taken. In the bad times, they are meant to convince the workers that there is nothing that they can do, except rely on the government and hope the crisis ends soon.

What Policy for the Workers?

As long as the workers view the problem of the crisis in the way the UAW leaders present it, they will not be able to defend themselves. For the workers cannot rely on the very corporations, the government, the Democratic Party, which have been imposing the sacrifices on the workers. A workers’ policy, which really represents workers’ interests must be the opposite of the UAW’s policy.

Neither the workers nor the capitalists can avoid the crisis. The only question that remains is who is going to pay for it. If the workers follow the capitalists’ rules, it will be the workers who will continue to pay for it. In a time like this when the capitalist system is going broke and plunging millions of people into poverty, the workers must make a conscious refusal to follow the capitalist framework and its rules.

Today, the workers do not have to accept the rules of the capitalists. From their own actions, the workers can make their own rules, and they can get results.

An example of this is what happened as the result of the uprising of black people in Detroit in 1967. For decades, most parts of the auto industry were closed to black people. This was despite the so-called progressive stand of the UAW, despite the hypocritical well-wishes of Democratic presidents from Roosevelt to Kennedy and Johnson. One week in the streets in the summer of 1967 changed what could not be changed before by decades of playing by the rules. After the riots, the auto companies rushed to open up employment for black people and for the first time masses of black workers were hired into the auto industry.

Certainly today, it will be hard for the workers to defend themselves against even the smallest attacks. But the Detroit riots in 1967 point to the way that workers can begin to protect themselves. For the only policy for the workers when they are under attack is to attack back. A fight of the workers is worth more than all the bargains and the deals the UAW can possibly come up with.

Chrysler is in bad shape. But sacrifices by the workers to save it only save the capitalists and their investments. Chrysler today hasn’t enough money for both itself and the workers. But the money is there, in the vaults of Chrysler’s bankers, in the hands of the state, in the pockets of the whole bourgeois class. They took it from the workers during all the good years. And even though they don’t want to give it back now, the workers can force them to give it back. The workers can make these parasites understand they will pay a high price if they refuse.

Perhaps a fight started by the Chrysler workers could be isolated and fail; but just as easily we might see such a fight ignite struggles by other workers who are also facing attacks today.

Such a policy is possible for the auto workers. But the fact is that the UAW bureaucracy, tied as it is to the bourgeoisie, will never offer it. For in a period of crisis like today’s, when the capitalist system even on its own terms does not work, really there is no other road out for the working class except a revolutionary policy.

The UAW bureaucracy may try to give the appearance of being militant and progressive. But it sticks with the same bourgeois policy that brought the workers only crumbs in the good times, and only sacrifices today.