Needed Against GM Threats
Jobs, Health Care to Be Slashed in Auto
by Andrew Pollack
General Motors bosses hit the United Auto Workers with a double-whammy in early June. First they announced they were cutting 25,000 jobs, then they demanded billions in health care cost savings from both active and retired workers by the end of June—savings which they threatened to implement unilaterally if an agreement wasn’t reached. They claim they could slash retirees’ benefits without reopening the contract, which the UAW denies. But UAW leaders are promising to give health care concessions that they believe are permitted by the contract.
In an industry where plant closings, layoffs, outsourcing, and job combinations have flourished for decades, the companies have been saving billions on health care all along by relying on overtime rather than hiring new employees for whom it would have to provide benefits. But now that corporate America has latched on to health care costs as its new all-purpose excuse for squeezing more out of workers to rescue its failing profits, even that isn’t enough for the Big Three (GM, Ford, and Daimler-Chrysler).
Early indications are that UAW President Ron Gettelfinger is ready to throw in the towel on health care. But he’s no dummy: he—and the local officials he’s primed for this maneuver—are combining “reasonable” rhetoric, about understanding the need to help GM, with “tough talk” warning GM against unilateral moves, including implied threats to strike. All of this is designed to come up at the last minute with health care concessions that will be just enough to stop GM from demanding that the contract be reopened before 2007.
The UAW VP in charge of GM, Richard Shoemaker, is also talking out of both sides of his mouth. He has already come forward with his own helpful suggestions for retiree health care cuts totaling about $12.7 billion. Yet he told local officers at a June 9 meeting laying out the line to take back to members: “If GM does anything unilaterally, they’ll have a very hard time making automobiles in this country. You can go back and tell your membership that.”
Autoworkers are resentful at being asked to give back benefits that they rightly feel they’ve earned by decades of foregoing wage increases in return, supposedly, for more secure retirement and better health care benefits. Even the much-bandied-about claim that it costs GM $1,500 per car to provide health care is based on questionable calculations. UAW dissident Greg Shotwell points out that the supposed health care cost of $1,500, based on dividing the number people covered into the value of vehicles sold, does not take into account the fact that “retirement benefits are covered by a trust fund, not vehicle sales. What’s more, the size of that trust fund decreased dramatically NOT because of increased health care cost, but because it was used [by GM, unilaterally] for capital investments.”
GM is not just stealing already-earned money; it’s playing with people’s lives. One retiree told the media that if benefits are cut, he and his wife may have to skip medications for high-blood pressure, arthritis, and allergies.
But instead of mobilizing the members’ anger, UAW leaders are calling for management and investors to “share the pain” by taking reduced salaries and dividends. Plus they’re questioning whether GM needs as many givebacks as it’s demanding. Gettelfinger said GM had not presented him with enough information to convince him of the severity of the financial situation. While its debt is in the hundreds of billions, and is rated at junk levels, that debt comes due over several decades.
Gettelfinger and others also point to management’s responsibility for poor product choice and design and costs from recalls. “To us, product is No. 1, first and foremost,” he said. What’s more, he said of GM, “they are paying out dividends; their equity in their stock is up a lot; they have a lot of cash on hand; they’ve stated that they have no intentions of going into bankruptcy…that means they will expose us to a lot of internal information that we normally would not have access to…If somebody makes a claim about how bad things are, then I’m assuming they want to support that and back it up, and we’ve got experts in place that are taking a look at those kinds of issues.”
Open the Books
Of course what’s really needed is the ranks’ expertise: the bureaucracy’s “experts” are used to coming up with the numbers Gettelfinger wants to justify concessions. The union should be demanding that ALL company ledgers be opened—and that the members have a chance to do their own analysis of where GM’s hiding the money.
But despite their discounting GM’s claims of need, Gettelfinger and Shoemaker still said they were prepared to work with the company to find “mutually agreeable ways to reduce costs in health care and other areas.” In fact talks on health care cuts began weeks before the company board meeting at which, according to media reports, GM President Richard Wagoner was told to attack the union.
Another plea of the bureaucracy is
for more time to put the concessions over on the members: Oscar Bunch,
president of a
And finally union officials are pleading with management to be reasonable, saying a strike would only hurt both the union and the company.
GM’s claimed weakness in the face of competition could be turned into a leverage point for the union. Wall Street analysts say unilateral cuts by GM are unlikely since it could result in a strike at a time when GM is preparing to launch important new additions to its vehicle lineup. This may or may not be an accurate prediction of GM’s willingness to attack; but certainly the possibility of losing billions won’t help their “competitive” standing much.
(Of course the talk about the Big
Three’s “competitive” woes in the
The official UAW goal is to help “our” companies, proven most recently in the health care sphere with concessions in March to Chrysler, which won tens of millions in savings when the union allowed it to exercise a little-known and never-used contract provision negotiated in 1982 that lets the company raise deductibles and co-payments if it can prove health care costs have risen substantially. When this happened it was predicted that GM and Ford would make similar demands. But after the union officials had rolled over at Chrysler, it was never in the cards that they would prepare union members at GM and Ford to defend their health care rights.
But this corporate swashbuckling is
countered by union pleas for reason and understanding. “Right now, we’re doing
everything possible to help G.M., because it helps us too. We don’t want G.M.
to go under,” said Don Swegman, president of an
After GM made its demands, GM spin-off
In fact union officials at
In May the UAW agreed to let Ford
parts spin-off Visteon restructure by sending workers and plants back to Ford.
Most of those plants will then be closed and buyouts offered to 5,000 autoworkers,
with the result that Visteon’s North American manufacturing operations will be
even more concentrated abroad. As at GM, union officials accept it stoically: “Obviously,
we’re all very apprehensive about what’s going to take place,” said Eugene
Morey, the president of an
But workers transferring back to Ford are going to a company that an industry analyst says “is in no position to absorb additional labor costs. There’s no real place for them to transfer in Ford.” Ford will sell most of the repossessed plants—which surely means that most of those workers will either be laid off or have their wages and benefits slashed drastically. And the entire remaining workforce at Visteon will be in the lower tier negotiated in 2003.
The net result of this failed
strategy was to let
Ironically the shuttling of workers from Ford to Visteon and back is actually proof that the bosses’ claims about individual corporations’ needs are never as set in stone as they claim. In some industries spin-offs mean total separation between the parent and offspring. In others—such as the “double-breasted,” nonunion subsidiaries in trucking—ownership remains the same even if corporate boundaries are erected. At Ford/Visteon, the ties remained even closer: the UAW insisted that workers have the right to go back to Ford if necessary (and Ford all along subsidized Visteon financially). So there’s nothing inherent in auto industry structure preventing the union from making even broader, cross-company demands for job protection, portability of benefits, etc.
Also included in the 2003 pact were givebacks from members in core assembly plants, such as more “team concept,” more combined job classifications, “flexible work schedules,” etc. Most of these givebacks were left out of the scanty contract summaries provided to members. The contract also furthered the whipsawing trend by encouraging locals to make work rule changes if new production is moved into the plant.
This defeat at
Needless to say, this logic lets management play the union for a sap and provides potential members with little incentive to sign up: why join a union that wants to give away wages, benefits, and jobs? And in the end jobs go overseas anyway.
The union’s dismal organizing record was combined with betrayal of struggles at existing plants. At Accuride the union abandoned workers after a four-year lockout, voluntarily giving up its right to represent members after earlier trying (and failing) to force them to return to work. Throughout, scab parts made at Accuride fed union-organized assembly plants. And at American Axle and Manufacturing, another company spun off from GM, the UAW “International” leadership helped management impose a three-tier system (using one of their favorite tactics: “vote till you get it right”). Nor, despite the growing internationalization of production and sales, did the bureaucracy establish effective ties with autoworkers in other countries.
So UAW members at GM face this
June’s job and health care cutbacks with a divided workforce and a union
bureaucracy that has fostered that division by its collaborate-with-management
strategy. A worker in one UAW parts plant in
In the last few years members have
several times shown their willingness to fight—and have taken advantage of the
new “just-in-time” production process to launch crippling strikes where one
plant shuts down most or all of an entire company. At one Visteon plant
(Bedford) just last year there were pitched battles with local and state cops
and private security guards, cars overturned and set on fire, and blocking of
scab buses. The strikers were members of International Union of Electronic
Workers (IUE-CWA) Local 907. But UAW members in the region, including GM
workers, came to the picket lines to show their support. UAW officials, however,
refused to organize solidarity. This was due in no small part to the fact that
At GM itself workers vividly
remember the eight-week long strike at
Workers today say “Remember Flint,”
by which they mean remember the union’s ability to inflict pain on the company.
But the lesson of
Wider Fightback Potential
Since GM has chosen health care as a key battleground the ranks have another potential ally on their side: the entire working class. Virtually all organized workers have seen cutbacks in their own health care, with higher premiums, deductibles, and co-pays, and this has been the central issue in almost every strike of the last decade. The unorganized sector of the working class has keenly felt the cutbacks in Medicaid and Medicare—or the lack of any health insurance at all (for over 45 million people).
What’s more, since GM is particularly targeting retirees’ health care benefits, the union could appeal to millions of retirees already enraged by, and many of them mobilized against, recent attacks on Social Security and Medicaid. The recent termination of pensions in the airlines makes clear the need for a class-wide defense of retirees’ rights.
When talking out of the noncollaborative side of his mouth, Gettelfinger says GM’s health care cuts won’t solve the broader problem and that a society-wide health care fix is needed. But of course neither he nor any past UAW president has ever mobilized the membership behind a demand for a single-payer, universal health care system (such as the Labor Party’s “Just Health Care” campaign).
It’s interesting to note that GM
In the words of Greg Shotwell, “The only legitimate solution is universal health care. The UAW should take the lead and refuse all concessions until all Americans have full and equal access to health care.” Instead of using the lack of single-payer as an excuse for concessions, as Gettelfinger does, the fight for it must begin with defense of existing, contractual benefits.
Such a fight could put wind in the sails of the reorganizing UAW dissident movement. Shotwell says union reformers will soon “introduce a plan calling for a national pattern contract [at parts companies], portability of pensions, a national benefits pool and preferential hiring and transfer rights for UAW members.”
There’s still time to prepare for a fight. Even if GM were to take unilateral action on June 30, the scheduled date for the two-week summer shutdown normally would mean that plants reopen July 19. Late June announcements by Ford of possible job cuts make even clearer the need for industry-wide solidarity and mobilization.