On Nov. 21, General Motors Corporation announced it was laying-off 30,000 union members and closing 12 plants in the United States and Canada as part of a corporate restructuring to address what management claims to be a $3 billion loss in fiscal year 2005. The layoffs are part of an industry-wide attack on autoworkers designed to reverse decades of gains in salaries and benefits.
 Delphi executives are on the front lines of a Wall Street assault on autoworkers. Photo: Larry Lettera |
This devastating news for GM workers came less than two weeks after the union announced that its members voted by a margin of 61 percent to 39 percent to accept cutbacks in healthcare benefits and wages. The multi-year cuts will amount to $15 billion in increased healthcare costs for United Autoworkers retirees. UAW members working at General Motors will pay $3 billion in increased annual healthcare costs in addition to deferring or eliminating a $1 an hour pay increase. (Reuters, Nov. 11, 2005)
Reaction by autoworkers and their union to the layoff announcement was justifiably angry. The UAW issued a statement from the president and vice president of the union stating, “Today’s action by General Motors is not only extremely disappointing, unfair and unfortunate, it is devastating to many thousands of workers, their families and their communities. … Being successful in this regard [being profitable-SK] is the exclusive responsibility of management: Workers have no control over GM’s capital investment, product development, design, marketing and advertising decisions.”
Workers not responsible for GM’s problems
The UAW statement rightly puts the onus of the company’s financial position with the corporate owners. Unfortunately, the UAW has carried out a policy of collaborating with GM management to increase productivity to make the corporation a more attractive investment opportunity for Wall Street. This has led to the workers at GM competing with the workers at other auto companies to make “their” company more successful.
Wall Street responded to the attacks on GM workers by claiming that they did not go far enough. Investment analysts have been quoted in the big business media saying that the layoffs and cutbacks in healthcare benefits are just the start of a long road to making GM a worthwhile investment. A senior research analyst with the Gimme Credit financial research newsletter wrote to investors, “We were underwhelmed by General Motor’s big announcement of future plant closing and job cuts. … We acknowledge that a journey of a thousand miles starts with a single step, but at this rate GM will never get to the land of milk and honey.” (www.freep.com, Nov. 24, 2005) GM stocks dropped the day after the announced layoffs and plant closings.
While GM autoworkers are reeling from this latest attack on their living standards, Ford and the Chrysler Group of DaimlerChrysler AG are looking to impose more cutbacks on their unionized workers. Ford has used a pretax loss of $2.1 billion as the basis for demanding workers at Ford pay for the company’s losses through givebacks. Contract negotiations are underway between the union and Ford management.
 A one-day strike in February 2004 by workers at American Axle parts supply factories immediately rippled through GM production lines. Photo: Jim West |
Chrysler announced a $374 million profit in the third quarter of 2005, the ninth consecutive quarterly profit. Nonetheless, Chrysler is demanding healthcare givebacks from the UAW in contract talks.
Autoworkers began receiving increasing social benefits from the unionization drives that succeeded following the great labor struggles that began in the 1930s. At that time, massive strikes, sit-ins and demonstrations won union representation in the auto industry. As a result, significant gains were made in the miserable conditions on the auto assembly lines.
Wages and benefits continued to expand between 1945 and the late 1970s.
The primary concern of the corporate owners is to make as much profit as possible. Whether profitable on paper or not, the companies are always looking for ways to lower the costs of production in order to maximize profits. This can be done several ways: buying cheaper materials, making workers work faster, or by cutting wages and benefits.
When given the opportunity, the bosses will attempt to lower the wages of the workers as much as they can. Whether they can do so or not depends on the balance of forces between the corporations and the organized working class.
Many workers may wonder how General Motors can operate at all if it is losing money, as it claims. GM management always tries to hide the fact that it is sitting atop a vast pool of wealth generated over its close to a century of existence. According to industry analyst Gerald Meyers, “GM is sitting on a cash hoard of $20 billion and has access to another $20 billion.”
What is happening in the auto industry and across the United States is an offensive by the capitalist class to lower the standard of living of the working class. Enormous advances in technology since the 1930s, and particularly over the last 25 years, have resulted in a dramatic increase in labor productivity. But instead of easing the burden of work for the vast majority of society who work for a living, this increased productivity has resulted in layoffs and a lower living standard for millions. At the same time, billions of dollars in profits are amassed by a small group of capitalist owners.
This phenomenon is being replicated in every country across the globe that is part of the capitalist system.
Looming battle at Delphi
Another battle over working conditions and wages is taking place at Delphi Corporation. Delphi is the world’s second largest producer of auto parts. In October, Delphi filed for reorganization under Chapter 11 bankruptcy.
Spun off by General Motors in 1999, it has 185,000 employees globally including 33,000 in the United States. In 2004 it had global sales of $28 billion and posted a loss of almost $5 billion. The bankruptcy filing is only for the U.S. division of the corporation.
Delphi bosses are using the bankruptcy reorganization to void the union contract. They are demanding a 60 percent cut in wages from an average of $27 to $12 an hour. They also want to free the company from the financial obligations of the workers’ pension plan.
The UAW believes the company is also planning to cut 24,000 of the 33,000 hourly workers in the United States. This latest attack comes after the implementation of a two-tier wage system in 2004 at Delphi and other parts manufacturers who have contracts with the UAW.
While union spokespeople have denounced these drastic attacks on the living standards, the union leadership is looking by and large to politicians and the courts to protect the interests of the workers. This ineffectual policy can only lead to disappointment and ultimately defeat because it rests on the illusion that the courts and politicians are neutral institutions that answer to democratic demands, as opposed to class institutions beholden to the same corporate owners that are unleashing these attacks.
Corporations are using the globalization of capital to set up factories to produce cars and car parts where the wages paid are significantly less than what U.S. workers receive. As corporations threaten to relocate, the unions have offered one concession after another to keep the companies from moving elsewhere.
Class solidarity needed
The companies have the upper hand in the courts and with the politicians. But the strength of the union lies in its membership—their ability to withhold their labor and the common interests they share with the hundreds of thousands of working and poor people in the surrounding community who will be devastated by the cutbacks and plant closings planned by Delphi and GM.
Over the decades it has been the labor of the autoworkers that has produced the millions of cars and hundreds of millions of auto parts. This has been the source of all the wealth and profits of the automotive industry.
Growing numbers of workers in the auto industry are showing a willingness to fight. Almost 40 percent of the GM workers voted down the proposal to surrender health benefits to GM. At Delphi, workers are angry at the plans announced by the company to cut pay by 60 percent.
Protests by Delphi workers have taken place at plant gates with the encouragement of the union leadership. Meetings of grass-roots groupings of Delphi workers have shown that there is a desire to fight the ongoing assaults on the workers. These grassroots meetings have called for “work to rule”—strict adherence to the contract—to slow production as well as to build solidarity in concerted activity to fight back.
The intervention of the workers in this struggle can turn around the attacks by the capitalist class. It was the mass sit-down strikes of the 1930s that forced Frances Perkins, Roosevelt’s labor secretary, to declare that a job was a property right, thus implying that the workers had the right to occupy the plants to protect their jobs. It was only the mass struggle of the workers that led a high-ranking government official to suggest that the workers, too, along with the capitalist owners, had a “property right.” Of course, in capitalism, “property rights” are supreme.
The communities that will be most directly affected by these cutbacks, layoffs and bankruptcies are also untapped forces in the struggle—not just to stop the cutbacks—but also to turn around the decades-long attack on the living standards of working and poor people in the United States.
The need for solidarity across company and community is not limited to the United States. The globalization of capital has the corporations ignoring all national boundaries in the interest of profit. The protectionist policies of the labor movement that seek to “protect” workers in the United States through tariffs and what they present as more “U.S.-worker-friendly” trade policies plays into the hands of pitting U.S. workers against workers in other countries. It results in racist attacks on Japanese, Mexican and other workers.
The whole U.S. working class, employed and unemployed, has a stake in the battles shaping up between autoworkers and the billion-dollar mega-corporations and banks that they are challenging. If the auto giants succeed in decimating the gains of the UAW, it will encourage other corporate giants to do the same.
The autoworkers’ battle can be a rallying cry for organized labor to develop a coordinated counterattack on the Wall Street offensive. That will require, first and foremost, a clear class orientation based on the power of the working class against the Wall Street bankers and corporations, along with their political allies in the Democratic and Republican parties.
Articles may be reprinted with credit to Socialism and Liberation magazine.
