The following article was originally published in Proletarian Revolution No. 77 (Spring 2006)
A series of vicious blows over the past months has been inflicted on workers in the auto industry. Mass layoffs at Ford and General Motors have been coupled with union concessions on pay and benefits, centered on health care. Those concessions, taking place apart from the auto contract rounds, are expected to be a prelude to yet more management demands for greater givebacks during the next scheduled negotiations. Delphi, the big auto parts supplier, has demanded monumental wage and benefit cuts in addition to layoffs and factory closings. And a huge offer of job buyouts at both GM and Delphi amounts to an added wave of layoffs and cuts through different means.
While the capitalist offensive against workers has found expression in the auto industry for years and years, the latest assault contains important new features. The cuts in health care provisions, in what has been the crown jewel of health care plans for unionized blue-collar workers, is a clear indication that even the most privileged production workers cannot expect to secure a stable standard of living under capitalism.
The cuts did not go over well with GM and Ford workers, and there are real indications that a huge struggle is in store at Delphi. But the fight must be taken up by other workers, and the issues expanded beyond just those at Delphi alone. The latest attacks are another good reason why the proletariat must build its own vanguard party and create an alternative society under its own leadership – not only to build a far better world, but to protect against the still coming assaults on its living and working standards.
General Motors (and to a lesser extent Ford) have experienced deteriorating finances for some time. Both lost billions in their North American automotive operations last year. GM signaled in the middle of last year its intentions to counter its problems in large part by taking it out on its workforce. In November, GM secured an agreement with the leadership of the United Auto Workers that would force many UAW retirees for the first time to pay monthly contributions, annual deductibles and co-insurance. Active hourly workers would have to defer about $1 an hour for pay increases due in 2006 into a fund to help pay for health care; the deferred amount would increase after 2006, as it would for workers on overtime. Ford quickly followed with its own similar agreement with the UAW tops.
In this same period, the bosses at Delphi suffered their own gigantic losses and are now trying to use the situation to impose far stiffer cuts on its workers. This effort is headed up by recently arrived CEO, Robert Steve Miller, a specialist at employing the increasingly favored tactic by bosses of declaring bankruptcy to force harsh penalties on unionized workforces. Miller successfully used his hit-man approach as CEO at Bethlehem Steel and was on the Board of Directors at United Airlines when a similar club was used. It was thus predictable (even though its effects were shocking) that Delphi declared bankruptcy in October and, using that lever, declared its intention to slash wages from an average of $27 an hour to about $12, make workers pay more for health care and cut the workforce by 20,000. (In an increasingly familiar but nonetheless telling display of class privilege, the very day before bankruptcy was declared the company’s board of directors approved lavish severance packages for top executives.) The Delphi situation remained completely unsettled when in March, GM, Delphi and the UAW leadership reached an agreement on a vast program of buyouts for workers at GM and Delphi. When Delphi was spun off from GM in 1999, GM pledged to cover union pensions and health care benefits for Delphi employees who were subsequently terminated by its former subsidiary. As well, GM largely depends on Delphi for its parts, so a disruption of production there could cripple the auto giant’s operations. Thus, any “solution” to Delphi’s precarious position necessarily involves GM’s active participation. About 100,000 hourly GM workers would be eligible for payouts of between $35,000 and $140,000 if they opt to retire. Under this same agreement, up to 5,000 Delphi workers would be eligible to return to GM, while 13,000 hourly workers in the U.S. would be eligible for a lump sum payment of $35,000. The Delphi portion of the agreement is subject to approval by the bankruptcy court. The buyouts also offered GM a chance to further shore up its own operations at the expense of auto workers. The eligible workers were forced to decide whether to take buyouts while facing the threat of reduced pensions and benefits in the future if they refuse them. It is expected that the package of buyouts will in the end save money for GM by reducing existing levels of compensation for employees; otherwise it wouldn’t be put forward. That the UAW tops signed off on it is more evidence that they are committed to the bosses’ interests at the expense of the workers. But after the buyout agreement, Delphi put forward a new “offer” that would cut wages to $22 an hour in July, and then to $16.50 a hour in September of 2007, when union members would get a $50,000 buyout payment. But this would just be for workers in plants that Delphi planned to keep open. For the remainder, expected to be the majority, the reduction to $22 an hour would last only until their plants are shuttered. Meanwhile, new workers would be hired at as little as $10 an hour. UAW leaders rejected the offer and threatened a strike of its 25,000 Delphi workers. The IUE-CWA, which also has members at Delphi, likewise rejected the offer and already has obtained strike authorization from its members. In turn, Delphi has filed court papers to cancel its labor contracts and impose the types of layoffs and cuts it had been demanding.
Auto workers have always worked hard for their money. But the good pay that came to be associated with building cars wasn’t achieved because of corporate charity. It was a concession won through enormous struggle, above all by the stirring strike wave of the 1930’s highlighted by mass factory sit-downs and occupations. Just after World War II, the still-militant UAW workers fought a major strike against GM demanding a sizeable wage gain coupled to no rise in auto prices.
That was the last attempt by the union to really counterpose working-class interests as a whole to the profit-grubbing of the bosses. In the post-World War II boom, the union leadership solidified itself as a broker for labor power, interested as much as management in securing labor stability. For three decades it was willing to sacrifice many of the shop-floor rights of the ranks while gaining the sizeable wage and benefit increases demanded by union members. This was a celebrated “labor relations” deal, made possible by good times and passing on costs to auto consumers, largely working-class themselves.
The pattern of surrender was sharply interrupted by a radical revolt of young Black auto workers in the late 1960’s and early 1970’s, which challenged the UAW bureaucracy head-on. The mid-70’s recession enabled the tops to undermine that struggle and marked the beginning of a downward spiral for the American auto industry. Facing a shakier domestic market and increased competition from foreign companies (who began building lower-wage plants in the South in response to protectionist demands for stateside jobs and production), the post-war arrangement began fraying. The ranks saw a bitterly familiar pattern develop: the auto bosses would demand layoffs and speed-up. The union leadership, concerned above all with preserving the system of labor brokerage for the bosses from which they drew their privileges, would squawk but refuse to mobilize the ranks in opposition. A pro-boss agreement would be crammed down the workers’ throats. All this despite the fact that unionized auto workers remained a large, powerfully concentrated workforce easily capable of shutting down production. While those union members who were able to hold onto their positions remained among the best paid production workers in the country, hundreds of thousands of union jobs were lost over time.
Time was when a job on the assembly lines was not hard to come by for those willing and able to do the work. But by the end of the century, an auto job in GM, Ford or Chrysler was an increasingly rare find, often involving connections and lots of luck. And the large slice of the American working class that could once look to employment in auto as a means of making a half-decent income from manual labor increasingly had to look at inferior job alternatives. This process has been particularly devastating on Black workers. For decades, the American auto industry, largely because of demands made by the Black ghetto riots in Detroit and other cities across the country, had been a Mecca for unskilled Blacks looking to escape poverty. The racially disproportionate elimination of those jobs has not only saved the auto bosses’ bottom line; it has also allowed them to rid themselves of much of the most militant sector of the workforce.
Despite their shedding of jobs and concessionary bargaining, the American companies’ competitive positions continued to decline. Much of the problem, particularly for GM and Ford, has been in the area of quality, design and marketing. American models (particularly compared to those of Honda and Toyota) were perceived, with a good dose of accuracy, as combining lower quality with higher price tags. (Chrysler, now owned by the German auto giant Daimler, has partly offset this problem with a recent spate of marketing successes). The car companies have also been hampered by the ability of their dealerships, backed by local and state laws, to resist desired changes.
What kept the domestic companies afloat in profits for years was their successful, intensive marketing of Sport Utility Vehicles (SUV’s), contraptions remarkable for their high gas consumption, safety hazards and high mark-up in sales prices. But the defects of these cash cows have become more obvious (particularly with rapidly rising gas prices), driving customers towards cars with smaller profit margins. As the SUV market itself faces stiffer competition from foreign companies, the losses have dramatically mounted for GM and Ford.
Detroit bosses moan that their companies suffer because of labor costs, a convenient scapegoat for management blunders. This argument is also the rationale for management assaults on workers’ job and living standards. Nonetheless, there is a real truth to the claim. Does this mean that the workers at domestic companies are actually living high on the hog, or getting an unfair share of company proceeds? Absolutely not. It is just that under capitalism, bosses generally earn more profits by compensating their workers less, and are better able to compete if they are more ruthless with their workforce than are their competitors. This condition could be moderated during the boom times, but no longer. We stress the word “compensation,” because relatively high wages are only part of the equation. Benefits, and in particular health care, are costly, and the drive to reduce health coverage is the cutting edge of the bosses’ attacks. The UAW bureaucracy, like other union leaders, long ago sought to buy off the ranks with contracted health plans rather than fight politically for socialized and guaranteed health care for all, and the strategy has boomeranged on them.
Foreign companies who pay workers less overseas indeed have an advantage. So in fact do the foreign-owned plants set up in the Sunbelt. Workers there get substantially less compensation, principally in their benefits package. But they still get more than the prevailing area rates – enough, the bosses calculate, to keep the union out. The treachery of the UAW leadership in abandoning its promise to mount serious organizing drives in the South meant not only a failure to expand the union base but a dire threat to the existing membership. The company bosses are now more determined to slash into the areas of pay and benefits that have been largely maintained through past years of crisis.
The attack on the Delphi workers is a more concentrated version of what is happening at GM and Ford. Like the auto makers, Delphi management complains about how much it pays its workers, even though there are a variety of reasons for the financial losses at home: it is dependent on GM for sales, it invests overseas rather than in domestic plants, it is squeezed for lower prices by the auto makers. But clearly they face a steep disadvantage in labor costs in a world of parts suppliers that are either non-unionized or blessed with contracts far cheaper than those at Delphi. Once again, the UAW bureaucracy’s failure to organize and fight for higher wages among the competitors is coming back to haunt the union, this time at its main union stronghold among parts suppliers. But Delphi is not simply looking for an American operation with a far less compensated workforce. It plans to come out of bankruptcy more as an importer of goods, largely from China, than a producer of parts. CEO Miller is exceptionally vicious, but that is exactly why he was recruited for the tasks that management and the capitalists behind it saw necessary.
But the rank and file workers in the cross-hairs of these attacks have not simply rolled over. Anger and resistance have been widespread. Yes, the workers at GM and Ford approved the health care concession – but only by 61 percent at GM and a bare majority at Ford (51 percent) of those who voted. And it must be remembered that the retirees who were most directly affected by the cuts in health care were not eligible to vote.
Meanwhile, rank and file anger has been mounting on Delphi’s shop floors for months. This has been a reaction not only to the proposed cuts but to the raw display of arrogance and venality by management. Faced with this outrage, and the knowledge that accepting Miller’s cuts would amount to the trashing of union power at Delphi, the union leadership made meaningful threats of strike action that would seriously damage not only Delphi but GM as well.
In the face of this opposition, Miller was obliged to soften his proposal. But he is still seeking major cuts, as was made evident by his last offer and the bid to cancel contracts. For its part, the union leadership was looking for a face-saving proposal that would at the same time help the bosses out. Coming to a three-way agreement with GM and Delphi on the buyouts would help by smoothing over the mass job losses that Miller would impose. But Miller did not yield enough, and the union leadership was forced by the ranks to reject his offer. A strike appears highly likely at this point, but the ranks are not waiting for that to take action.
Since December, much of the organized opposition to the attacks has centered on the Soldiers of Solidarity (SOS), a presently loose organization formed by leftists and other militants. SOS has held meetings and demonstrations, some of them attended by hundreds of rank and file workers. At these events the workers’ anger has been aimed at the top union leadership as well as the company bosses. However, it has not yet assumed the proportions of an active challenge to the UAW leadership. That would take a sustained mass effort and a conscious alternative leadership.
In a crisis-wracked industry like auto, there is a defensive psychology among the ranks, a desire to just hold on to what is still there – particularly when they still have more than many other workers. This relatively conservative consciousness has itself been encouraged, and the conditions for it created, by the union leadership and its past betrayals. But as events at Delphi are demonstrating, the ranks’ conservatism is being undermined. This is happening as a result of the immediate attacks and the growing awareness of the system’s hostility to the interests of those who make it work.
The UAW leadership may yet arrive at some “compromise” that will serve up many of the sacrifices Miller & Co. wanted in the first place. But the chances for a strike are high. What is needed is a no-holds barred winning struggle. The old adage says that you have to dance with the partner that you brought with you. Mass strikes are what got auto workers the gains they made; it is the only way they can retain them. For that to happen, the fundamentals of strike action itself have to be re-learned, like keeping out scabs and making sure the plants are shut. The Delphi ranks can be easily mobilized for mass pickets, mass demonstrations, etc., but even a strong strike along traditional lines is not going to fully address even the immediate problems.
While the alternative of backing down is far worse, there is little doubt that management has duly considered the strike threat and will try not to let it set back its long range goals. It will even try to use a strike as a means of securing severe cuts from the courts. Some strikes over the past years were militant actions that maintained the ranks’ loyalties and even succeeded in knocking firms out of business. But that was hardly a solution for the needs of the ranks, nor could it prevent further dents in union power.
There are rumblings among UAW workers to go out in support of a Delphi strike. This would be marvelous: aside from its obvious effect on Delphi, it would be a powerful statement to the auto bosses and capitalist class as a whole that there is going to be hell to pay for trying to take out union brothers and sisters.
If the auto workers as a whole were to shut down GM, Ford, Chrysler and Delphi, that would also be a powerful spur for a vast section of the American working class to join the struggle with their own job actions. Discontent, anger and frustration is rife just below the surface throughout the working class. It needs a powerful spark like one that auto could generate. Such a general strike would affect most directly the unions of the AFL-CIO and Change to Win federations, demanding their all-out support.
To be really successful, a general strike could be spread to the vast sections of the working class which are unorganized. This can be achieved by broadening the strike demands to reflect the interests of workers at large. Such a strike could shut down many industries, but of particular interest here are the unorganized auto parts plants and Southern assembly lines. We have also seen the combustibility of the growing and increasingly militant and energized immigrant workers. In the recent mass demonstrations against legislative attacks, they have shown that they will conduct work stoppages even without union organization.
Such a class-wide fight would inevitably be a political struggle. The demand for nationalization of the collapsing industry, without compensating its profit-grubbing owners, must be put on the front burner. Even immediate issues of layoffs, health care and bankruptcy are ones that far transcend contracts between individual companies and unions. Revolutionary workers would fight for strike demands to include the smashing of the bankruptcy laws and the achievement of free, universal health care; guaranteed jobs through nationalization of losing industries and a massive program of public works that would provide jobs for all. We would fight to include demands opposing racism and supporting the rights of immigrant workers.
Workers have seen decades of the massive state subsidies for big business while our class is looted, a policy justified by lies that a free market and privatization are beneficial for all. Mass struggle will show the necessity of fighting for jobs through nationalizing industries and guaranteeing productive jobs at decent wages. In our view, this struggle cannot be completed under capitalism. But by threatening the capitalists it can repel the current attacks even under this system. Successful defensive struggles could build working-class self-confidence in its own power, thus pointing the way toward workers’ revolution.
For this reason, we urge advanced workers to consider and champion the demand for a general strike, precisely the kind of broad, political weapon needed. We have argued for this demand for many years in a variety of struggles, and it is an absolutely fitting one for the automobile crisis. An auto-wide strike aimed at defending Delphi workers would be a wake-up call for all workers, a rallying point for action in defense of the working class in general.
When Delphi announced its package of attacks late last year, UAW President Ron Gettelfinger moaned that it “is designed to hasten the dismantling of America’s middle class by importing Third World wages.” There is a certain truth to this, insofar as it suggests the seriousness to the bosses’ attacks. But the wages are not “imported” and the protectionist language should be rejected. Protectionism does nothing to stop the lowering of wages in the U.S., which reflects decisions the bosses make based above all on the strength of the class struggle. It also serves the bosses, since it divides workers along national lines and diverts American workers from fighting their real enemy, American capitalists.
Note also that both bureaucrats and bourgeois academics employ the term “middle class” to denote workers, as if to suggest a non-contentious role for the working class. In fact, any semblance of a stable and comfortable existence even for the bulk of better-paid workers in this society was an illusion fostered by the temporary conditions of the post-war boom. That illusion has been punctured in a thousand places, with no better example than the privileged bastion of auto.
The gains of the past must be defended now. But the best way to do this is by understanding that unless the capitalist system itself is overthrown, those past gains and any temporary victories will be reversed by the needs and drives of the bosses who own and control it. Automobile workers, long the battle leaders of the American class struggle, can be expected to supply a major portion of the politically advanced workers for the revolutionary vanguard party.
The building of that party is the most vital necessity our class has. Its leadership is indispensable for the overthrow of the capitalist state, the creation of a workers’ state and the beginnings of a truly just society. By brutal means, capitalism has brought technology and the organization of production to a point where the potential to adequately feed, clothe and house the entire world population is reachable. But the creation of abundance would end exploitation and destroy profits, so the capitalists themselves stand as a barrier to a society fit for human beings. Socialist revolution is the only solution!