By Frank Hammer • International Representative, UAW-GM (retired) • Past President and Chairperson, UAW Local 909, Warren MI
As the fate of the Detroit auto industry is being debated, the arguments and positions are becoming crystal clear. There is now a chorus of right wing ideologues who are pushing to let GM go into bankruptcy. No argument here about “too big to fail.” No regard for consequences, which is all we heard for why the public should be willing to turn over a $700 billion stash for the banking and financial industries. While we hear repeated claims about how poorly managed GM has been, I don’t recall hearing anything similar about the financial giants that we’ve been convinced must be saved. Why the double standard?
The reluctance to bail out GM and the other Detroit automakers has everything to do with the UAW, as if the impending collapse is the fault of the workers at the bottom of the heap. What the free marketers want is to use the current crisis that the US auto industry finds itself in to force what they are describing as a “restructuring” of the companies’ “relationships” – principally with the UAW. Over and over they are talking about “bloated UAW contracts”, or contract terms that “GM can’t live with,” or references to “overpaid” autoworkers, etc. Never mind that just one year ago UAW autoworkers agreed to take concessions in what President Ron Gettelfinger describes as a “transformative agreement” (for which, in the Detroit media, he was heralded “man of the year.”). That agreement, according to Gettelfinger, was designed to make the UAW labor force cheaper than their non-union brethren at Honda, Toyota, etc. This from a once proud union which set the industry standard.
It should be understood that even before the 2007 agreements were negotiated, the average total UAW labor cost per vehicle was $2,400, or a little over 8% of the price of a vehicle!! UAW workers then were some of the most productive in the world, producing value added worth $206 per worker per hour. This is far more than he or she was earning in wages, even when benefits, statutory contributions and other costs are included. The margin of difference in labor costs with non-union Toyota before the transformative agreement of 2007 was already then just $250-$300!
Autoworker Healthcare
The free marketers also complain about the “lavish” costs of autoworker healthcare, obscuring the fact that the UAW accepted all the risk for their retirees’ health care when it negotiated - at the Big Three’s behest - to establish a “Voluntary Employee Beneficiary Association,” or VEBA. To the forces which have conspired for many years to establish a union-free domestic auto industry, none of these concessions matter.
One word about UAW retirees is in order (I’m one of them). One of the reasons the free marketers love the non-union auto companies in the Sunbelt is that they have no retiree pensions and healthcare obligations to speak of. They ascribe this to the fact that they are union-free. The reality is that - unlike the domestics (with GM, for example, celebrating its 100th year) - the auto workers in the non-union plants are relatively new and young. They don’t have many retirees – at least not yet. The advocates of pure capitalism wish that the domestics would cut free their retirees. Retirees, in their eyes, no longer add value and therefore don’t contribute to corporate profits, and are useless to the operation of the free market. Never mind that we retirees are now being swindled of the company’s part of the bargain. The Detroit 3 got the value they wanted from our decades of labor, but now the health care that we got in the bargain…well, that’s now another story.
The UAW in the Bulls-Eye
Here are two quotes from the free marketers which make the real target of the crisis very clear:
"It is a mistake to use part of the $700-billion rescue package to reward high-tax, non-right-to-work states such as Michigan, says Peter Flaherty, President of the National Legal and Policy Center (NLPC). The automaker bailout is actually a UAW bailout. The union will not allow companies to deploy capital in ways that the market would dictate, such as closing plants and layoffs.”
The facts demonstrate how preposterous the last line is, considering the absence of any protest by the UAW over the past twenty years of plant closures! If these right-wing capitalists could have it their way, workers in Detroit would be making no more than they make in Mexico. That way, the Detroit 3 wouldn’t have to move there.
Here’s what the Grand Junction Sentinel had to say from Colorado:
"But the GM jalopy needs a complete overhaul, and putting taxpayer funds into the company as it now operates would do little but bump the problems down the road while keeping destructive United Auto Workers union contracts in place.”
“Destructive” UAW contracts, indeed!!! The deregulators are not satisfied to dismantle government regulations so the financial market can run wild. They must rid industries of contractual obligations negotiated by that other democratic institution: workers’ unions. The “destructive” contracts of which they speak have protected many lives in the factories, enabled workers to enjoy a good standard of living, and retire with dignity and security. Now this has been made out to be un-American, even un-patriotic. “Joe Six-pack” is back to being the villain.
Union Busting
The financial catastrophe unfolding before our eyes is the means to finally thrusting a dagger in what’s left of the UAW’s heart, long sought by American capital. Congressman Barney Franks said as much when he explained that forcing the Detroit 3 into bankruptcy court was all about “union busting.” From the moment that autoworkers forced GM to sign an agreement in the midst of the last “Great Depression,” the union has been vilified as the interloper in the company’s prerogatives. Except today we in the UAW are now described as interfering with the “free market” and the real wages it would and should deliver - as if the “free market” were ordained and ordered by God Himself. What stands between capital and their “free market” is our union’s mindset of solidarity, our organization and our collective strength. This is now what is being put to the test. The union either must stand up for itself, or we will all face millions more of so-called “low wage” earners, as part of the growing class of the “working poor.”
Each time the de-regulators have insisted on more de-regulation, it’s been like a crazy man pouring more gasoline on the already raging fire. It’s only making the financial crisis worse. The financial class will be offering consumer loans but there won’t be anybody to sign up. How many working poor are taking out loans for, say, a new car or a house for that matter? What will trashing of the UAW contracts get us? Fewer people to purchase the cars we produce? More citizens confronted with foreclosures and being kicked out of their homes? Even fewer sales at the local Mall? Or maybe a second New Orleans (without the water) in the place once known as the “Arsenal of Democracy?” What madness is there in this? This is nothing less than the mentality that pressed our government’s war in Vietnam, “destroying villages in order to save them.”
UAW Must do More
The UAW has done very well by the rest of US workers, even if they don’t know it. The media has pounded the UAW for years taking advantage of flaws in its organization and errors by its leadership. Not surprising that there’s much less sympathy for the UAW than there once was. But it would be a tragic error indeed if ordinary working people would turn their backs on the UAW now. Make no mistake that even the non-union workers in Kentucky and Tennessee are benefiting from the wage and benefit standards set in Detroit by the UAW. With a UAW trashed – whether by (a) the fine print in a bailout agreement or (b) because GM is allowed to file for bankruptcy – the devastating consequences will serve to even further undermine the standards enjoyed by all working people.
This week UAW President Ron Gettelfinger is testifying in Congress to beg the case of the auto companies and the UAW before unsympathetic Republican Senators representing so-called “right-to-work” states. Apparently Alabama Senator Shelby and his friends think it’s quite patriotic to have the foreign brands produce and make the profits from the transportation that the USA needs. There is a political subtext to all this, too. President-elect Obama’s victory was due in large part to the crescent of blue states stretching from Minnesota through Indiana, Ohio and Pennsylvania right up to the tip of Maine. Don’t forget Michigan, whose autoworkers rejected McCain’s crooked talk and sent his campaign scurrying. Why would Republicans now reward a hostile constituency, when their remaining political base weaves itself through non-union workplaces in America’s “Sunbelt?”
This moment is a defining one in the life of the UAW, and the union movement in general. For the past twenty five years the labor movement lamented how PATCO was crushed by the deregulators’ champion in the White House, Ronald Reagan. Now it is us confronted by another PATCO of a much larger devastation at the hands of the Republicans and the outgoing George W. Bush.
Testimony by the UAW’s chief is fine along with emails and phone calls by members and retirees to their representatives, but they are not enough. In this, the most severe challenge to the life and blood of the UAW, the union can and should do more. We need to put a human face to the plight that UAW members and retirees are in. There should be an immediate “media day” at each of the UAW’s regional offices to give workers and retirees a platform to speak out in defense of their own jobs, pensions and health care. Other unions, dealers, salaried personnel – you name it - should be invited as well. There’ never been a time when the saying “we’re all in this boat together” has been more true. Perhaps the leadership should contemplate organizing a car caravan around the headquarters of the Detroit 3 or, with the help of the AFL-CIO, organizing a caravan to Washington, D.C. or even Wall St. There’s no guarantee to what we could achieve, but we should nevertheless proclaim, “Not without a fight!” We are running out of time. Wouldn’t having UAW members out in the streets be a good way to let everybody know that we're not dead?