Don't Let Them Destroy Our Union

 By Frank Hammer

Retired UAW Representative

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 like we heard when the Congress approved the $700 billion stash for the banking and financial industries. The Detroit Three are accused of mismanagement at a crescendo much louder than the financial giants we had to save.  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.  The "free market" types want to use the current auto industry crisis to force a "restructuring" of the companies' "relationships"  principally with the UAW.  We hear a chorus about "bloated UAW contracts", 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 huge 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.

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 among 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 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 agreed - to a "Voluntary Employee Beneficiary Association," or VEBA at the Big Three's behest.  To the forces which have conspired for many years to establish a "union-free" domestic auto industry, none of these concessions matter. 

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."  Unlike the mature domestics, the newer plants erected in the South don't have many retirees  at least not yet.  The advocates of pure capitalism wish that the domestics would cut free their retirees who, in their eyes, don't add value to the corporate bottom line.  Never mind that we retirees are now being swindled of the companies' part of the bargain.  The Detroit 3 got the value they wanted from our decades of labor, but now the health care coverage that we got in return well, that's now another story. 

The UAW in the Bullseye

Here are two quotes from the free marketers which make the real target of the crisis very clear: 

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! Here's what Colorado's "Grand Junction Sentinel" had to say:

"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. If these capitalists had their way, workers in Detroit will be making the same wages paid in Mexico.  That way, the remaining work could stay here.

"Union Busting"

The financial catastrophe unfolding before our eyes is the means to thrusting a dagger in what's left of the UAW's heart, long sought by American capital.  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 real wages that the "free market" would and should deliver—as if the "free market" were ordained and ordered by God Himself. 

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.  Credit may flow again, but how many of the working poor will be taking out loans for, say, a new car or a house?  What will trashing 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?  We are heading for a second New Orleans (without the flood water) in the place once known as the "Arsenal of Democracy?"  This is the same mentality that governed the US military's conduct in Vietnam: "destroying villages in order to save them." 

UAW Must do More

The union 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."  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, taking advantage of flaws in its organization and errors by its leadership.  Not surprisingly, there's less sympathy for the UAW than there once was.  But it would be a tragic error if working people turned their backs on the UAW now.  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 diminished 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 Richard 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, where autoworkers rejected McCain/Palin and sent their 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?"

With their younger workforces, the foreign brands manufactured here admittedly enjoy a distinct advantage.  The UAW agreed in the '07 negotiations to help the Detroit automakers be "competitive" by freeing them of the responsibility of the "legacy costs" of retiree healthcare with the VEBA in 2010.  It's not been a year, and it's already clear that it is a non-starter, as the automakers have yet to pay into the trust fund as had been agreed.  Besides, the value of the Detroit Three's payments into the trust are tied to the value of their stocks.  GM's has plummeted from $42 to $5 in the year since the agreement was made.  A $25 billion "bridge loan" for all three companies can't shore up both the VEBA commitments and the companies' need for liquidity.  It is politically untenable for the union to ask taxpayers to bolster the VEBA when so many workers are doing without health care at all.  If we are looking for real, lasting solutions that will also help our economy, the parties must demand that  Congress pass HR 676, the single-payer national health insurance bill that would cover not just UAW retirees, but the 45 million Americans who are doing without.  GM and the UAW agreed in principle to this approach back in 2005 modeled on the health care system in Canada .  Making it happen here and now would level the playing field for the Detroit Three.  

 This is a defining moment for the UAW, and the entire labor movement.  25 years ago PATCO was crushed by the deregulators' champion in the White House, Ronald Reagan.  Today we are faced with a much larger devastation at the hands of the outgoing George W. Bush and his Republican friends.  Testimony by the UAW's chief along with emails a by members and retirees to their representatives is fine, but it is not enough.  We need to put a human face to the devastation facing UAW members.  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 truer.  The leadership should organize a car caravan around the headquarters of the Detroit 3 or, with the help of the AFL-CIO, organize 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?

Frank Hammer is a retired UAW-GM Dept International Representative & Past President and Chairperson, UAW Local 909, Warren, Michigan

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Democrats Set to Offer Loans for Carmakers— Faced with staggering new unemployment figures, Democratic Congressional leaders said on Friday that they were ready to provide a short-term rescue plan for American automakers, and that they expected to hold a vote on the legislation in a special session next week. Seeking to end a weeks-long stalemate between the Bush administration and House Speaker Nancy Pelosi, senior Congressional aides said that the money would most likely come from $25 billion in federally subsidized loans intended for developing fuel-efficient cars. . . . G.M. is seeking $18 billion in loans, but says it needs $4 billion immediately to survive past the year. Chrysler, which is also running out of cash, wants $7 billion. Ford, the healthiest of the three, is asking for a $9 billion line of credit. NYTimes

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When a Job Disappears, So Does the Health Care— December 7, 2008— About 10.3 million Americans were unemployed in November, according to the Bureau of Labor Statistics. The number of unemployed has increased by 2.8 million, or 36 percent, since January of this year, and by 4.3 million, or 71 percent, since January 2001. . . . . Some parts of the federal safety net are more responsive to economic distress. The number of people on food stamps set a record in September, with 31.6 million people receiving benefits, up by two million in one month. Nearly 4.4 million people are receiving unemployment insurance benefits, an increase of 60 percent in the past year. But more than half of unemployed workers are not receiving help because they do not qualify or have exhausted their benefits. About 1.7 million families receive cash under the main federal-state welfare program, little changed from a year earlier. Welfare serves about 4 of 10 eligible families and fewer than one in four poor children. NYTimes

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Hoover Time—In their last obstruction, Mitch “Dr. No” McConnell’s Senate Republicans blocked a bridge loan for the auto companies, unwilling even to sustain them long enough for a new administration to sculpt a responsible response to their crisis. . . . No. Led by benighted Tennessee Senator Bob Corker – known previously solely for his “call me” race-bait campaign ad that helped him win his 2006 election – Republicans wanted to break the union and punish the workers.

They insisted that the United Auto Workers agree to cutting workers wages and benefits immediately to match the average hourly compensation paid by non-union foreign auto companies based in the South. This would entail cuts in pay by about 50 percent within the next months. For Republicans, the problem wasn’t the worst economic downturn since the Great Depression. It wasn’t wrong-headed management that was skewered when soaring gas prices wiped out their SUV cash cows. It wasn’t the Wall Street dominated trade policies that sacrificed US manufacturing behind a high dollar that made it profitable to move plants and production abroad and benefited foreign competitors.

No. For the Republican senators, the bailout was a chance for a little class warfare. Why should an autoworker make $50,000-$60,000 a year, plus health care? The workers should accept half that and be happy. Autoworkers have agreed to wage givebacks and benefit cuts over the last years. They pledged even deeper cuts in relation to the agreement. But their sacrifices weren’t great enough nor the cuts fast enough for Corker and the Republicans.

Now imagine telling a family that lives on from $50,000 to $60,000 a year that they will make one-half that in six months. They’ve got mortgages, kids in school and credit-card debts just like the rest of us. Outside of the Wall Street bankers who the administration has succored without asking them to slash their wages in half, how many Americans could survive a cut of half their paycheck in a few months, without going bankrupt? How many senators who pay themselves six-figure incomes with lavish pensions and health care could manage an immediate 50 percent reduction in their salaries? (Most of them, come to think of it, since the Senate is a millionaires’ club).

Forget about the deepening recession. The Senate Republican position was essentially that the price of bailing out GM and Chrysler was to insure that the union was broken and the workers went bankrupt. OurFuture

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White House Ready to Aid Auto Industry—The Bush administration said on Friday that it was prepared to intervene to prevent the collapse of General Motors and Chrysler after Republican senators blocked a compromise proposal to rescue the automakers.

The decision came after a tense standoff this week in which senior White House officials pleaded with Senate Republicans not to block the measure, including a warning by Vice President Dick Cheney that they would be remembered for decades as the party of Herbert Hoover if the industry collapsed.

But while Senate Republicans stood their ground — in open revolt against President Bush — it was the White House that gave in.

Shortly before the American markets opened on Friday morning, White House and Treasury Department officials, concerned that steep declines in overseas stock markets could provoke a new round of market panic in the United States, said the administration would consider providing temporary relief.

After refusing for weeks to tap the $700 billion financial rescue fund, the administration suggested it would dip into the fund to at least permit the companies to continue their operations until the new Congress and new administration arrive next month.

“Because Congress failed to act, we will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the industry,” said Brookly McLaughlin, a Treasury spokeswoman.

Administration officials said they had not decided how much to loan the auto companies or on what terms, and were spending Friday examining their books and cash-flow projections.—NYTimes

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U.A.W. Chief and Senator Gain From Face-Off—For more than 70 years, the United Automobile Workers union has known who its adversaries were: company executives, foreign automakers and right-to-work advocates who fought its organizing drives. Now it has another: Senator Robert Phillips Corker Jr.

On Thursday night, Senator Corker, a freshman Republican from Tennessee, pushed the U.A.W.’s president, Ron Gettelfinger, to agree in principle to tough contract concessions before the Senate Republicans would agree to provide a lifeline to General Motors and Chrysler.

But Mr. Gettelfinger, after giving ground in recent years on health care, job security and pay issues, would not agree to let the concessions take effect next year. The impasse effectively killed the chances for a $14 billion bailout package from Congress.

While the deal was lost, both Mr. Gettelfinger and Senator Corker can claim a victory of sorts, perhaps setting the stage for future showdowns. Mr. Gettelfinger’s tough stand risked pushing the companies into bankruptcy, which would abrogate the union contracts he was trying to protect.  But on Friday, President Bush and the Treasury said they would consider using money from the $700 billion financial bailout to help automakers. NYTimes

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The United Auto Workers Must fight Back! —The UAW leadership seems to have gone out of its way to operate under the cape of the auto companies rather than staking out any independent turf of its own. Worse, when UAW President Ron Gettelfinger has

been publicly asked about the mismanagement of the auto companies—a softball question that should have been knocked out of the park—he walks around the answer. Instead of pointing out the shortsightedness of the auto owners in the cars they have built, their approach to emission standards and fuel consumption, Gettelfinger has done dances that would put a smile on the face of the late Gregory Hines.

On top of all of this, the UAW, which remains an important and large union, has done little to mobilize its members into the streets to make their case. The only face we see is that of Gettelfinger, and particularly for those of us of color, unless you have an auto worker in your family, you could forget that a substantial proportion of the auto workforce is African American and Latino!

The lack of UAW visibility and militancy weakens their case. Instead of being an independent force and voice for the auto workers, they have ended up looking more like a lobby for the auto companies. None of this, however, should take away from the fact that the loans need to be instituted and that serious consideration should be given by the incoming Obama administration to nationalization.

I just want to see the UAW make plain THEIR case and touch the hearts of people of the USA who are completely fed up with Wall Street, the Bush administration, and the cavalier antics of corporate America. The UAW has allies across this country if they—the UAW—are prepared to throw down. BlackCommentator

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Bill Moyers Interviews Douglass A. Blackmon, author of Slavery by Another Name:  The Re-Enslavement of Black Americans from the Civil War to World War II (2008) http://www.pbs.org/moyers/journal/06202008/watch2.html

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posted 10 December 2008