The Spark

the Voice of
The Communist League of Revolutionary Workers–Internationalist

“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx

New Auto Contracts:
The Worst Concessions in a Long Series of Concessions

Sep 24, 2007

The following is the presentation given at a Spark public meeting in Detroit on September 23, 2007, before the auto contract was settled.

I"m here to talk about the auto contract being negotiated that we aren’t supposed to know anything about.

Negotiations have been going on for six months at least–if not two years. And during this whole time workers have gotten not one solid piece of information. Only carefully managed "leaks’ designed to create high levels of fear in the workforce: fear about possible big job losses if the companies move plants overseas–and fear that one of these companies could go into bankruptcy.

They are trying to scare workers to accept harsh concessions, as GM-friendly analyst Sean McAlinden admitted to Bloomberg News yesterday. Commenting on a so-called "leak" that GM was demanding cuts like $5 an hour and threatening to move plants overseas if they didn’t get health-care concessions, he said this was "exactly what the UAW needed GM to do in order to be able to sell" the health-care cuts to the rank and file. Well, I"m not sold–and neither are many other workers.

Warning Flags

We don’t know exactly what package they will finally bring out. But, I"ll tell you this: their past performance shows they are not to be trusted. And I"ll tell you about some red warning flags I will be looking for when they do bring out a tentative contract–any ONE of which should be enough to make us vote NO.

They may come with a new two-tier wage scale. The companies want to hire everyone from here on out at permanently lower pay and benefits. They want me to be installing exhaust hangers for $27 an hour and the worker next to me is supposed to be hanging exhaust pipes at $14 an hour! They are even talking about denying new hires a regular pension. Real solidarity! No, anything like that, send it back! No one works second class!

Besides, once a second class is established, everyone will be pushed down to it quite soon, as they have just done at Delphi. The leaders say they are from "Solidarity" House, but their way of getting a YES vote on the contract is to attack solidarity, dividing us into groups, making make each group think the worst problems will fall on some other group.

Another red warning flag will be attacking us in all the ways that force us to work harder and harder, faster and faster–and with more injuries. Work rule changes so that the companies can try loading even more work on individual workers. More eliminations of classifications. An even worse attendance program. If you are working under one of the current programs you can’t IMAGINE there can be a "worse" one, but it’s coming. They"re talking about a "no fault" system where you only get so many days per year to be absent no matter what the reason, no matter if you have a doctor’s note or not. It’s nothing but a way to fire you as soon as you have health problems. The companies’ way to dump older workers and workers who have family members with serious health care problems.

Outsourcing will be another red warning flag. The companies have long shipped work out, but now they want sub-contractors paying lower wages taking over jobs inside the plant. Many places already have subcontractors doing the janitor and material handling jobs that used to allow higher seniority workers to move off the line. There are a few places like Toledo Jeep where whole departments like paint, and metal shop, and even chassis assembly are run entirely by subcontractors who hire their own workers at cut rates! At Ford’s Rouge truck plant, engine assembly and frame selection and driving trucks between plants are also handled by sub-contractors working inside the plant. It’s another way to try to divide workers into separate interests.

The red warning flag they"ve talked about the most is taking away health care benefits for retirees, which have been guaranteed since 1964. We all were told for 30 years that if we made it to retirement, our benefits were guaranteed for life. Well, I guess "life" just ended. They"re talking about changing the plans, getting out of company-guaranteed benefits, replacing it with a plan which will NOT guarantee benefits–a plan to be operated by the union. It’s called a Defined Contribution VEBA, it’s been tried already at Caterpillar, J.I. Case, and Detroit Diesel and it has FAILED at all three places. But we"re not supposed to worry about that! And now I just read that even active workers might be shifted to this new type of plan! Can you say, "Big Monthly Premiums Deducted From Your Check"?

Job Security: A Fraud

Attacks like these and others will be justified by saying they keep companies competitive, keep them out of bankruptcy, and ensure job security. Job security! I suppose it’s job security to outsource every job you can? I suppose it’s job security to overload jobs that permanently disable you before you make it to retirement? Job security negotiated in UAW contracts has been a fraud. Every contract since 1982 has promised Job Security! After every contract we have fewer jobs than ever. Just going back to l990, contracts promising Job Security covered 463,000 workers. Today there are only 178,000 left. In other words, "Job Security" has eliminated 285,000 workers, just since 1990–more than 60%! Since 1979 Job Security has eliminated 547,000 workers–half a million. False promises, false.

Companies Going Bankrupt–A Scam!

They claim the companies are nearly bankrupt. Please, let ME be that close to bankruptcy! None of my family would ever have to work again. The companies hide their assets off the books, off shore, or in "conduits’ or "special investment vehicles," like every good businessman. In 2005 when GM was supposedly near death and Kerkorian bought his 10%, Kerkorian’s own man Jerry York made a speech and congratulated Wagoner, GM’s CEO, for having done a great job of "warehousing cash." Or take Ford. (This example I really like.) Ford just made a big deal over "mortgaging the Blue Oval." Oh my god, we"re going to lose the company. Crap. Ford mortgaged itself to–Ford! Ford Motor borrowed some of its borrowed billions from guess what? The Ford Capital Trust #2. Ford borrowed Ford money and then will repay Ford–plus interest. All the while showing the "borrowing" on their books as an "expense!" Isn’t it clever? Ford still has all the money but it can run this game about "bankruptcy" to demand more sacrifices from workers. And who knows how many of these Capital Trust sort of things are out there?

I"ll just mention another way they hide their money. They separate out the money paid for new cars and put that money into special companies: GMAC, Ford Credit, Chrysler Financial. Then these FINANCIAL companies get the actual income from the car payments–leaving the MANUFACTURING company to look like it’s nearly broke. On paper.

How much profit do they make really? We only know what the companies tell us, and, like their man David Cole let slip last May to a Free Press reporter: "In business, lying is something you do all the time."

But even with all these ways of lying and hiding their money, they still admit to some profits. Take the 12-year period of 1994 through 2005. GM, Ford, and Chrysler admitted to profits that altogether came to 133 billion dollars. 133 BILLION. What did they do with it? They moved it off the books into special accounts, bought back their own stock, speculated with buying and selling other companies, gave out extra shareholder dividends and executive bonuses as quick as they could, that’s what.

And haven’t the corporations and their owners made out like bandits! Why do we see these unheard-of CEO bonuses like Mulally’s 39.1 million for his first 4 MONTHS at Ford? Or Chrysler’s Nardelli–his pay is secret now that he’s under Cerberus, but we know Home Depot paid him off 210 million dollars to go quietly. Matter of fact, if workers’ wages had risen at the same rate as CEO pay, today we would be making $200 an hour!

Tell the Truth! How Little We Make

These lying executives have the nerve to pretend that it’s labor costs that are killing the companies. Executives aren’t paid for managing, they"re paid for their acting skills! I asked some friends, what% of a car did they think were labor costs? They guessed 50 and 60%, more than half. Just what you"d think if you believe the company propaganda they call "news." But what is reality? Labor costs all told–wages, benefits, pensions–labor costs are only 8.4% of the average vehicle’s price. That’s a long way from 50%! It means that every hundred dollars a company receives when it sells a vehicle, they put $8.40 toward labor costs and then they have $91.60 for everything else–not only materials but CEO bonuses, payoffs, corruption, mismanagement, profits, country clubs, you name it.

Here’s another fact gleaned from company books: for every hour auto workers put in, we add $206 in value to the cars. And yet they cry because our wage and benefit package might approach $75–even using their own false inflated figures for our wages and benefits. They admit they are ripping us off more than $131 per hour!

This information is based on auto companies’ own figures. The UAW’s staff had them printed as part of a package for the media. IF you went on the UAW website and IF you printed out the package and IF you dug around for a while you too could find those figures. But if you were in the factories? Or in the local union meetings? Never a word! Not a hint!

Why don’t UAW leaders push this information in the locals, in the plants, why don’t they give workers this ammunition? Because if we found out, if we ALL knew these facts, we might vote NO! We might refuse to give any more concessions! We might demand to get back the stuff we"ve already lost! If we had this information, the UAW leaders might be pushed to act on it, by workers who want to draw the line against concessions once and for all.

But no. The policy the top UAW leaders push is "the partnership" to go along and get along with management.

I can’t tell you what is in the leaders’ minds, or what goes on in the back rooms, but to us they say: We are in a partnership with the companies and we have to help them do better before we can do better. Some of you may recall that they said we"d get further with a partnership than with an "adversarial" relationship. Now we see how far.

Results of a Partnership Policy

This "partnership" has been an UNSTATED policy since WWII, but I"m not going there right now, I"m just talking about since they STATED it up front in the early l980s. Partnership. If the companies aren’t satisfied with taking 8 cents per hour from our cost of living payments, then we have to give them 15 cents–in order to stay in the "partnership." If they aren’t satisfied when we have 17 minutes of break time, then we have to cut back to 12 minutes. If they aren’t satisfied when our jobs are overloaded at 110%, then we have to give them 120%. That’s the logic of partnership with the bosses.

It started with the Chrysler bankruptcy in 1980, giving Chrysler special concessions and then NEVER GETTING THEM BACK WHEN CHRYSLER RECOVERED. That was the partnership, giving up eleven paid personal holidays per year, giving up work standards, giving up attendance protections, giving up certain seniority rights and certain classifications–claiming it was only because the company was in trouble. BUT when the rich partner miraculously came back to prosperity, the other partner–us–didn’t get anything back.

The UAW leaders aren’t alone in pushing partnership. It’s the policy of nearly every major union across the board. This generation of leaders are the type who start from the point of view of keeping society as it is, keeping this bosses’ capitalist society in its particular kind of order.

And what has been the result?

The end result of 27 years of an open partnership policy is that the working class is very much poorer while the boss class is very much richer. The wealth of the upper 1/10 of 1% of the population has shot up more than 51% just since 2003. Because the corporations and banks and funds they own increased their profit 72% overall. They took over every single bit of the growth in the economy and then took extra by reducing our living standards! The richest 300,000 individuals in this country have as much income as the poorest 150 million people, that is, the income of half the entire population is matched by just 300,000 at the top. That’s the "better off" that their "partnership" got us!

Not Everyone Falls for It

But even if most of the top union leaders have signed up for the partnership dance and the concessions bandwagon, there still are other leaders especially at local levels who don’t want to go along with it. And there is still US, the workers. It may seem like we have been easy targets, with all that the bosses are getting away with. But in fact we have resisted all along. They have not been able to break us down all at once. Far from it! From 1980 to 2007–27 years–they"ve had to chip away little by little because they could not take us on in a big attack all at once. Our resistance during those years wasn’t very visible. Nor is it very visible yet. It’s basically unorganized foot-dragging. We do as little as we can, and we jam the gears in thousands of small individual uncoordinated ways. But even that much is helpful! Every voice makes a difference too. Every clipping or cartoon posted up at work. Every NO vote in the box. Every defeat of a concession-minded local leader. Every retiree that gets up in a meeting and says, "The heart is still beating!" All these little things taken together have weight, they slow the attacks a little, they make the company and union "partners’ stop and think how far they dare to push.

As the attacks got worse, more workers showed their desire to resist. The Delphi bankruptcy brought out and connected together a large number of Delphi workers who yelled, protested, picketed and worked to rule. The Ford workers’ vote against the 2005 concessions was so big that the union could only claim it passed by 81 votes nationwide–and that’s when workers didn’t supervise much of the voting! As ex-UAW president Fraser said, the Ford vote was "scary"–for the companies and top union leaders, and it kept UAW leaders from agreeing to the same thing with Chrysler. But just as in earlier hard times, the first fights often look like losses, the early ones like the Detroit Newspaper strike here for example. But the first fights prepare the way for the next ones; workers learn solidarity, they learn company tactics, they become the voices of experience within the larger working class.

It’s been done before. The working class has built up its fighting capacity while under attack.

It can be done today. We have learned who are false friends and who are our best leaders. All of this will be done in the days ahead of us. At what cost and through what struggles we can’t say. But in any case, the sooner the better–for our sakes certainly, but most of all so that our children and grandchildren actually inherit a better world.