Strike against General Motors

[blackstone]

http://news.yahoo.com/s/ap/20070925/ap_on_...IK1tFeLrqSs0NUE (http://news.yahoo.com/s/ap/20070925/ap_on_bi_ge/auto_talks;_ylt=ApoV9K2gouJ62IK1tFeLrqSs0NUE)

DETROIT - If the United Auto Workers strike against General Motors Corp. lasts longer than a week or two, it could cost GM billions of dollars and stop the momentum the company was building with some of its new models, according to several industry analysts.


A strike of two weeks or less would not hurt GM's cash position and would actually improve its inventory situation, Lehman Brothers analyst Brian Johnson said Monday in a note to investors. But a longer strike would be harmful, causing GM to burn up $8.1 billion in the first month and $7.2 billion in the second month, assuming the company can't produce vehicles in Mexico or Canada, Johnson wrote.

Initially, the strike wouldn't have much impact on consumers because GM has so much inventory, the analysts say. The company had just under 950,000 vehicles in stock at the end of August, about 35,000 less than at the same time last year.

But Tom Libby, senior director of industry analysis for J.D. Power and Associates, said even a short strike could hurt GM because its new crossover vehicles — the Buick Enclave, GMC Acadia and Saturn Outlook — are selling well and in short supply.

"The momentum they've established for those products would be interrupted if there's a supply interruption," Libby said.

GM had about a 65-day supply of cars and trucks as September began, versus a 71-day supply at the same time last year, said Paul Taylor, chief economist for the National Automobile Dealers Association. The Enclave, he said, is at a tight 24-day supply.

It was unclear what would happen to vehicles that were en route to dealers. The Teamsters transportation union said its 10,000 automotive transport members would not cross UAW picket lines.

The strike will cost GM about 12,200 vehicles per day, according to the auto forecasting firm CSM Worldwide of Northville. If the walkout goes beyond 36 hours, CSM expects vehicle production in Canada to be affected because of a lack of U.S.-built engines and transmissions.

The strike began at 11 a.m. EDT Monday when 73,000 UAW members at about 80 GM facilities in the U.S. walked off their jobs. Talks resumed a short time later as sign-carrying picketers marched outside plant gates, but weary bargainers stopped to rest around 8 p.m. Negotiators were to return Tuesday morning for their 22nd straight day of bargaining.

Union President Ron Gettelfinger said the company wouldn't budge on guarantees of new vehicles for U.S. plants that would preserve union jobs. But he said the UAW is willing to bargain on the issue of the union taking over retiree health care obligations.

"Job security is one of our primary concerns," Gettelfinger told reporters Monday after talks broke off and the strike began. "We're talking about investment and we're talking about job creation" and preserving benefits, he said.

Striking workers will receive $200 a week plus medical benefits from the UAW's strike fund, which had more than $800 million as of last November, according to the UAW's Web site.

The UAW, Gettelfinger said, is willing to talk about taking money from the company to form a retiree health care trust, something he said the union proposed and the company rejected in 2005.

GM wants the trust, called a Voluntary Employees Beneficiary Association, or VEBA, so it can move much of its $51 billion in unfunded retiree health care liabilities off the books, potentially raising the company's stock price and credit ratings. It's all part of GM's quest to cut or eliminate about a $25-per-hour labor cost disparity with its Japanese competitors.

"This strike is not about the VEBA in any way, shape or form," Gettelfinger said. "We were more than eager to discuss it," although he said no agreement had been reached.

David Cole, chairman of the Center for Automotive Research in Ann Arbor, said before the strike began that the UAW leadership may need a walkout to show members that it did all it could to get the best deal.

"They're in a bit of a box, in that they need some drama to get an affirmative vote on this," he said.

GM spokesman Dan Flores said the automaker was disappointed in the union's strike decision.

"The bargaining involves complex, difficult issues that affect the job security of our U.S. work force and the long-term viability of the company," he said. "We remain fully committed to working with the UAW to develop solutions together to address the competitive challenges facing GM."

GM shares fell 20 cents to $34.74 Monday.

The UAW picked GM as the lead company and potential strike target in labor negotiations with the Detroit Three automakers that began in July. An agreement between GM and the UAW would become the pattern for pacts with Ford Motor Co. and Chrysler LLC, which have indefinitely extended their contracts with the union.

[blackstone]

GM workers in Detroit voice frustration at UAW leadership


http://www.wsws.org/articles/2007/sep2007/gmin-s25.shtml

A World Socialist Web Site reporting team was at the Detroit/Hamtramck Assembly plant Monday morning when workers walked out. The plant builds the Buick Lucerne and the Cadillac DTS.

Workers leaving the plant indicated they had been given no advance warning by the United Auto Workers union that there would be a strike and complained that they had been kept in the dark throughout the negotiations.

At 11 A.M. one union official, UAW Local 22 Plant Chairman Frank Moultrie, appeared at the gate. When asked by a WSWS reporter to explain the issues in dispute he replied, “We haven’t been given the details.”

Asked to explain why the union wasn’t providing workers with any information, Moultrie replied, “We can’t have any discussion in the media. When the time comes [UAW President Ron] Gettelfinger will make a statement. They’ll give us the details when they’re ready.”

Following the strike announcement, workers left the Hamtramck plant and congregated, along with others, at the Local 22 union hall in southwest Detroit. The hall sits across the street from a huge empty lot where the former Cadillac Assembly plant once stood. The plant, which once employed 10,000 workers, closed in 1987 and was subsequently demolished. Its sister plant—Fleetwood Body—where 6,000 UAW members worked at one time, also shut down that year. The Detroit/Hamtramck Assembly plant, built after razing the Poletown neighborhood, today employs less then 3,000 workers.

The GM closures devastated the area. One out of three people on Detroit’s southwest side currently lives below the national poverty line.

Workers at the hall expressed anger at the lack of information provided by the union and skepticism over the proposal for a Voluntary Employee Benefit Association (VEBA), under which which the companies would give the union control of retiree health care obligations, while paying only a fraction on each dollar.

Reginald, a worker with 22 years seniority who works at the Detroit/Hamtramck Assembly plant, told the WSWS, “I don’t want the VEBA. They have had one at Goodyear for only a year and already they are suing. The union should take care of union business and the company should take care of company business.

“I have watched the UAW get really, really weak. Now it seems they have union and management together, and that is the way they want it.

“You just get bits and pieces of information from the union. I get most of my information off the Internet. All you can do is to try and keep yourself informed as best you can.”

John, a worker with 28 years at the plant, said, “Two years ago GM began claiming it was not making enough money. How do you stay the number one company for 50 years without making any money?

“They’re making profits whether they are keeping up with the Japanese companies or not.

“The big investors are saying let’s make more profits by cutting these workers. Every one of these executives wants to make millions. They’re making more money than can be spent in an entire lifetime.

“The retirees worked under the worst conditions thirty years ago, with tools that had a maximum torque. They paid their dues and now the companies want to take their benefits from them.

“As for this VEBA, I don’t want the union to control the benefits. We think this is a joke. Look what happened at Caterpillar where they ran out of money and starting cutting benefits.

“Inside the plant we say the union is hee-hawing with management. Everyone knows that the union is part of management. Look at the union officials going off and partying at the Black Lake resort.

“I think this strike is just a smokescreen to make like the union is fighting.”

Kelly Williams, a worker at the Livonia Engine plant said. “I hired into Delphi after the 1998 strike, then I transferred to GM. I don’t want any wage cuts and I won’t vote for anything like this VEBA if it is going to take away benefits from retirees.

“At Delphi the workers took a $7 an hour wage cut. You can’t raise a family on that. I am a single mother with two kids. If they cut my wages it would be devastating. I have to drive from Toledo every day [a distance of 60 miles]. Every month I was paying $200 for gas. Now I’m paying $400. I may be forced to sell my house.

“The Livonia Powertrain plant may be closed if they don’t get a new engine product. There were 1,100 workers there when I got hired in 1999. Now they are down to 290 with all the people retiring, taking buyouts and transferring.”

Robert Kirby, another Local 22 member with 27 years at GM, said, “This VEBA is going to be paid for by the company handing the union billions of dollars. People don’t trust the union. I heard they’ll get millions just to administer the fund.

“Over the last 10 years the union has gone down. They don’t fight like they used to. Years ago when you called a union representative to get help they would come down to the plant floor and talk to you first before going to management. Now they talk to the boss first and work out a deal, or they just tell you wait a month for an answer.

“The company and union turn one plant against the other. A new car model will go to the plant that is willing to accept the most cuts, not build the best product. You’ve got to give up wages or your break time to get the job. If not, they’ll close your plant.

“They always want us to work for less money. But it’s not like we live in a low-cost state. They’re always talking about us making $30 an hour, but what about the $600 a month we pay for gas or the $4,000 we pay for taxes on our homes?

“The union doesn’t strike at the right time when it would really hurt the company. They let them stockpile tons of cars. GM is saying a strike is good because it will allow them to reduce their inventory.

“The company is crying broke but they are making profits hand over fist. It’s like they want to go back to the days of slavery where the rich sit back and we do all the work for nothing. I’m afraid for my grand kids and what kind of world they are going to grow up in.

“There are billions for the war and nothing for the 50 million poor people who don’t have health insurance. The president is an oilman and everybody knows this is a war for oil. If there was no oil in the Middle East, the US wouldn’t be concerned with terrorism.”

Another senior Detroit/Hamtramck Assembly worker told the WSWS, “There are only 2,500 workers at the plant now, including skilled trades. We realized that jobs would be eliminated due to technology, but it seems that whatever we do to make them more competitive, it is not enough. We gave up COLA, and it is still not enough. I don’t see how a company executive can get a $10 million bonus and yet you still have a loss.

“This two tier system is nothing new. We have temporary employees making $18 an hour and no benefits. They work them as temps indefinitely. If they complain, they get somebody else. We have one full line that is nothing but temporaries, and believe me, they’re working hard.”

[Red October]

From what I know of it, the UAW is a very corrupt union that is desperately in need of inside-out union reform. Most likely the workers will be screwed no matter what.

[Edgar]

Expect the class collaborationist union bureaucracy to do everything in their power to make sure this strike doesn't last long and doesn't significantly impact GM's profits.

[blackstone]

Yeah, that's why i posted that second post where the GM workers question the leadership of the UAW.

A worker said, "The union doesn’t strike at the right time when it would really hurt the company. They let them stockpile tons of cars. GM is saying a strike is good because it will allow them to reduce their inventory."

[black magick hustla]

There are some wobblies working in this, just so you know.

[Nothing Human Is Alien]

A positive note: Teamsters won't cross any picket lines, which means many cars won't be leaving the plants.

[Red October]

It looks like the strike is over, at least for now: http://money.cnn.com/2007/09/26/news/compa..._deal/index.htm (http://money.cnn.com/2007/09/26/news/companies/uaw_gm_deal/index.htm)

It's a shame the timing of this was so bad too. Though I don't really expect much from a union like the UAW, I was still hopeful the workers would go all out for this strike.

[blackstone]

Yeah, but the rank and file still has to vote and from my understanding most don't want the VEBA.

[Red Rebel]

How is it bad that the workers get $51 billion in retiree health care costs?

Congrats to UAW on the negotiations. :)

[Red Scare]

we need to get some IWW in there

[Karl Marx's Camel]

Wow, GM's stock price is increasing with 9,85 percent now. What?

[blackstone]

Yeah, the whole negotiation worked more so in favor for GM, especially with the whole VEBA situation.

[blackstone]

http://www.wsws.org/articles/2007/sep2007/ints-s26.shtml

General Motors workers oppose threats to retiree health care, jobs
By a WSWS reporting team
26 September 2007

Use this version to print | Send this link by email | Email the author

The World Socialist Web Site interviewed striking General Motors workers on picket lines in Michigan, New York and Delaware. Workers expressed determined opposition to further concessions by the United Auto Workers union, particularly on the crucial questions of jobs and health care.

It is widely recognized that the proposed Voluntary Employees’ Beneficiary Association (VEBA), under which retiree health care will be turned over to the UAW bureaucracy, threatens retired GM workers with devastating cuts in the near future. The average age of active GM workers is 49, meaning that many will be eligible for retirement in a few years’ time.

A WSWS reporting team spoke to workers at the GM Assembly plant in Pontiac, Michigan. It has been years since any Pontiacs have been produced in this city, where GM first produced its famous automobile brand named after the city. Instead after years of plant closings and mass layoffs nearly one in three people under the age of 18 lives below the official poverty line.

The 2,500 workers build the Chevrolet Silverado and GMC Sierra pickup truck. In 1997 Pontiac assembly workers, members of UAW Local 594, conducted a three-month strike, the longest in four decades.

James Parker, a worker with 30 years at the plant, said, “I think we are doing the right thing, we need to take a stand.

“I don’t want the VEBA. We should fight as long as we have to in order to keep our benefits. The only thing the company wants is for us to take more and more concessions. Less pay and more cuts. My position is no more concessions.”

An electrical worker told the WSWS, “I have been working at GM for 10 years. I am for the strike. I am not that familiar with the VEBA proposal but I can see why GM would want the union to take over the program. Health-care costs are going up and they want to put it on the union to deal with it. It seems to me they have placed the union in a bind.

“I only pay a $10 co-pay for doctors’ visits for my family. It’s a good program. But all they want to do is take the money and give it to the CEOs. I think they should spread it around.

“This strike is not just for us, it is for all working people. My feeling is support us and we will be there for them.”

Kendall Jackson has eight years at General Motors, five at the Pontiac plant. Kendall originally worked at the GM assembly plant in Janesville, Wisconsin.

“I stand behind the strike. The big issue in my mind is job security and health care. My dad just retired with more than 42 years at GM and he needs and deserves his health care.

“All we hear, however, is cuts. We just took a $1 an hour wage cut recently.”

Robert Swain has 35 years at GM, all at the Pontiac assembly plant, formerly known as the Truck plant.

“When I started in 1972 there were 17,000 people in this local. Now there are between 4,000 and 5,000. We are constantly being asked to give, give, give.

“I personally have a lot of questions about the VEBA program. I am not sure that I like it. I am 55 and I plan to retire in the next six months to a year. I could live another 25 years and I would like to have an insurance plan if I do.

Another worker added, “They just re-rated our plant because of the layoffs. Five hundred people were laid off in the last few weeks; 300 temporary workers and another 200 people who went to other facilities. As a result they cut the production from 54 vehicles per hour to 45.

“Everyone was laid off the week of August 27 to make the change. So everyone is worried about the possibility of more layoffs.”

Ron, a skilled trades worker at the Wilmington, Delaware assembly plant, spoke to the WSWS about the ongoing attack on jobs at his facility. The plant currently employs 1,500 hourly workers, down from over 3,000 in the 1980s. The planned closing of Chrysler’s plant in nearby Newark, Delaware will eliminate more than 2,000 jobs.

“GM has been consistently working to eliminate jobs for a long time now,” Ron said. “When I first began working here you’d be lucky to find a parking spot. Now half the lot is empty even with a full shift. Overall the company has been trying to transition to lower-paid labor, trying to cut costs wherever it can, and the temporary workers have the worst of it. They don’t get health benefits, pensions, nothing. The company uses them and ships them down the road.”

James, an electrician at the same plant, said, “The American autoworker is a dying breed, and the company is taking away everything we have bit by bit. We’re told we have to give up our pensions and retirement plans while the bosses are giving themselves million-dollar raises. That’s why we’re out here today.”

The WSWS also spoke to workers at the GM Powertrain Tonawanda Engine plant outside Buffalo, New York. The facility produces a variety of engines and transmissions and has recently been slated to produce modern fuel-efficient engines, and diesel, SUV and luxury engines. The plant employs 1,396 hourly and 261 salaried workers.

The area has been ravaged by plant closings, with the American Axle Manufacturing facility in Buffalo the latest plant slated to close. Strikers spoke to the WSWS on the picket line. Anthony DeMolato, employed for eight years, expressed deep concern about the UAW controlling the medical funds. “The VEBA issue should be off the table,” he said. Many workers echoed the sentiment that VEBA as presented by the UAW was unacceptable. Jim Gaffney, a 34-year GM employee, stated, “Workers about to retire have earned their rights ... the medical plan should be fully funded and put, possibly, into an annuity fund that no one could touch.” Strikers also supported an expansion of the strike to include other unions and auto companies. One worker commented, “All workers benefit from our struggle here.”

[blackstone]

http://www.wsws.org/articles/2007/sep2007/gmst-s26.shtml

As impact of walkout spreads GM strikers confront intransigence of US auto giant
By Jerry White
26 September 2007

Use this version to print | Send this link by email | Email the author

This article is posted in pdf format. We urge WSWS readers and auto workers to download and distribute it as widely as possible.

As 73,000 auto workers at General Motors enter the third day of their strike, it is clear that the automaker, with the backing of major investors on Wall Street, is determined to weather a strike in order to impose the most sweeping concessions since the formation of the auto union in the great sit-down strikes of the 1930s.

The walkout, the first nation-wide auto strike in three decades and the first by GM workers since the 67-day strike in 1970, has shut down all 82 domestic facilities of the country’s biggest auto producer. GM units in 30 states, including assembly plants, engine and metal fabrication factories, and parts distribution centers, have been closed. The company is reportedly losing 760 vehicles per hour—or 12,000 a day—at a cost of $100 million daily.

The strike has already had an impact throughout the US and international auto industry. Parts giant Delphi Automotive, which depends on GM for 44 percent of its revenue, announced it was temporarily laying off hundreds of workers, including as many as 1,800 at its steering plant in Saginaw, Michigan. Companies that supply parts to GM employ some three million workers in the US.

The Canadian AutoWorkers union said that over the next few days up to 100,000 members at six GM plants and several supplier plants would be off job. Four GM plants in Mexico will also be forced to close due to the lack of US-built engines and transmissions.

The Teamsters union has announced that its members will not cross UAW picket lines to pick up vehicles from factory lots for delivery to dealerships.

The strike has won sympathy from millions who see it as a struggle against years of corporate attacks on jobs and living standards. The cities where thousands of workers are picketing, including Detroit, Pontiac, St. Louis, Toledo and Buffalo, have suffered years of plant closings and growing poverty.

It is precisely because the action by GM workers has won such widespread support that a warning must be issued about the efforts of the United Auto Workers leadership to quickly wind up the strike and impose another betrayal on auto workers.

Several industry analysts have noted that a short strike would actually benefit GM. A walkout of two weeks or less would not drastically deplete the company’s cash hoard and would allow it to reduce its bloated inventory of unsold vehicles, an analyst from the Wall Street firm Lehman Brothers wrote in a note to investors Monday. GM had a 65-day supply, nearly one million cars and trucks, at the end of August, and had already announced plans to reduce production over the last three months of the year because of slow sales.

GM’s intransigent stand is also boosting its credibility with big investors, who are demanding that the Big Three automakers (GM, Ford and Chrysler) drastically reduce labor costs in order to compete against their Asian and European rivals. In anticipation of a brutal cost-cutting deal, investors drove up the price of GM shares by almost 14 percent in the month before the strike began.

The UAW has already agreed to GM’s major demand for the setting up of a so-called Voluntary Employees’ Beneficiary Association, or VEBA, under which the company would give the union control of retiree health care obligations, while paying only a fraction of the billions of dollars it owes to former workers and their families.

Similar trust funds set up by the UAW at Caterpillar and Detroit Diesel have run out of money, leading to a sharp rise in co-pays and premiums for retirees. The union also helped impose wage cuts on new hires, claiming the concessions were needed to guarantee the long-term solvency of the fund.

The UAW leadership, having already accepted major health care concessions, had calculated that GM would be willing to provide some token guarantees of future factory investments and limits on outsourcing. This, they hoped, would allow the UAW to come back to its members having said it won some concessions.

Instead, GM drew a hard line and refused to allow the slightest restriction on its ability to move production overseas, slash wages and benefits, and expand the use of temporary workers.

In a radio interview in Detroit on Tuesday, UAW President Ron Gettelfinger complained that he had been forced to call the strike because GM had refused to meet the union “halfway.�

According to an article in the Wall Street Journal, GM management said, “[T]he health-care trust would close only about half the cost gap with Asian auto makers, who are estimated to have labor costs of $45 to $50 an hour compared with $70 to $75 an hour at the Big Three.� An auto executive involved in the talks said the gap, “has to be gone by the end of the contract, or doing business in the United States in unsustainable.�

GM is reportedly demanding wage cuts and higher medical co-pays for active workers, the reduction of overtime payments, and the outsourcing of non-assembly line work. With much of its older workforce scheduled to retire over the next several years, GM is determined that the approximately 20,000 workers it will have to hire be paid substantially lower wages and benefits.

One insider told the Journal that GM is resisting job commitments unless it is allowed to give new-hires reduced benefits, such as 401 (K) plans instead of pensions fully paid by the companies—a gain UAW workers won in 1949 and 1950.

Gettelfinger and UAW negotiators returned to the bargaining table Tuesday, to plead with GM to give them some promises of “job security� so they can sell the VEBA concession to the membership. The overriding concern of the UAW is to get its hands on what would become one of the largest investment funds in the US. As for job security provisions, these have done nothing to stop the plant closings and mass layoffs that have eliminated 600,000 Big Three jobs since 1978.

Over the last three decades, the chief role of the UAW has been to suppress the class struggle and facilitate the efforts of Detroit’s Big Three automakers and corporate America in rolling back the living standards and working conditions of labor.

Auto workers are confronting a battle on two fronts: against GM and against the company stooges in the UAW bureaucracy. This struggle cannot be won if it is left in the hands of the UAW, which will seek to isolate the strike and use economic pressure (picketers only receive a $200 weekly strike check) to force workers back to work with a sell-out agreement.

Rank-and-file strike committees should be organized—independently of the UAW—to turn out to the entire working class for support. The strike should be extended to Ford and Chrysler, and to Delphi and the other parts suppliers. Mass meetings and demonstrations should be organized to win the support of salaried workers—who are also facing job, wage and benefit cuts—as well as to all working people and youth in communities targeted for plant closings and layoffs.

The nationalist poison peddled by the UAW bureaucracy to divide US workers from their class brothers in other countries must be rejected and a direct appeal made to workers in Canada, Mexico, Brazil, Japan and other countries to wage a common struggle against the global auto companies.

The VEBA scheme must be rejected. Rank-and-file negotiating committees should be elected to formulate the demands of the strike based on the widest democratic input of all workers. Negotiations must be taken out of the hands of the UAW bureaucracy and the behind-the-scenes maneuvering ended by opening the talks to the purview of the workers.

There should not be any illusions: to defeat the VEBA and stop the gutting of jobs, wages and working conditions a massive fight is required. Decades of UAW betrayals have led to the loss of conquests achieved by previous generations of auto workers. To halt and reverse this decline, the broadest possible struggle must be mounted to mobilize the entire working class.

This requires not only an industrial struggle, but also an entirely new political strategy. The necessary fight to expand the strike will be met with ferocious attacks by the corporate elite, its servile media, the courts and the entire political establishment, Democrats no less than Republicans.

The central political means by which the UAW has suppressed the struggle of auto workers and subordinated them to the dictates of big business is its alliance with the Democratic Party, one of the two parties of Wall Street. This deadly alliance must be broken.

GM workers should raise the demand for the building of an independent political movement of working people directed against the entire economic and political setup in America, which sacrifices the needs of workers to the further enrichment of the financial elite.

[Cheung Mo]

Auto workers must take some ownership for this situation: Some of the right-wing fuckheads they elect to their "union" "leadership" are worse than the bosses...Or am I the only here who's heard of Buzz Hargrove?

If they lose big, the only one's worthy of our sympathy are the runs willing to stand up to both the "union" and corporate bosses.

[blackstone]

http://www.wsws.org/articles/2007/sep2007/gmst-s27.shtml

Total surrender by US auto union


The union’s suppression of the strike after only two days, during which the workers shut down all of the auto giant’s US facilities, demonstrates the urgent necessity for auto workers to free themselves from the grip of the UAW and develop their struggle against the destruction of jobs, wages, health benefits and pensions on a fundamentally new basis and with new organizations entirely independent of the parasitic and corrupt UAW bureaucracy.

The new basis of struggle is, above all, political—the fight for the independent political mobilization of the working class against America’s corporate oligarchy and the twin parties of big business.

GM workers should emphatically reject the betrayal worked out by the UAW in connivance with General Motors. More fundamentally, however, they must draw the bitter lessons of the aborted strike.

The GM strike—the first national auto strike in three decades and the first at GM since the 67-day strike in 1970—was an expression of the growing discontent and resistance among workers in the US and internationally. The workers manned picket lines to fight against the company’s plans to destroy health benefits for retirees, slash wages, undermine pensions and continue the assault on jobs.

For the UAW, however, the strike was from the outset a cynical maneuver whose main aims were to provide a cover for its collusion with management, provide a harmless outlet for the anger of the rank-and-file, and use the workers as pawns in its tussle with GM over the terms of a deal that will relieve the company of its legal obligations to retirees and turn the union into a corporate entity controlling a multi-billion-dollar retiree health trust fund.

The union called off the strike just at the point when it was beginning to cripple GM’s operations throughout Canada and Mexico. There can be little doubt that the union’s conduct of the strike from the outset was coordinated with GM to do the least financial damage to the company.

The deal that UAW President Ron Gettelfinger announced Wednesday was in all likelihood agreed to before the strike. It in no significant way differs from the agenda for transforming the US auto industry into a low-wage, sweatshop operation announced by the company in advance of the strike.

At no point were the interests of auto workers represented in the negotiations. The closed-door talks had the character of haggling between two corporate entities, each vying for the best possible terms for its commercial interests. Except that the UAW exhibited none of the intransigence and combativity of GM’s corporate rivals, earning Gettelfinger the well-deserved contempt of those on the other side of the bargaining table.

The union will be unsparing in the lies it peddles in its attempt to convince GM workers to ratify the agreement. But the reality was demonstrated by the verdict of Wall Street, which celebrated the historic renunciation of the most basic conditions of auto workers by driving up GM shares by a huge 9.4 percent, or $3.22. Ford Motor Co. shares rose 6.5 percent, on the expectation that the UAW will grant it a similar cost-cutting deal.

The UAW sits on a “strike fund” of $950 million. This would be sufficient to sustain strike benefits—even if they were raised from the paltry $200 a week allotted by the union leadership—for many weeks. But, like everything else about the UAW, that cash hoard exists not for the purpose of struggle, but rather to sustain the bloated salaries and expense accounts of the thousands of bureaucrats who run the union.

To add insult to injury, none of the union’s millions will be used to cushion the financial hardship for the workers resulting from the loss of two days’ pay, since strike benefits kick in only after eight days.

If ratified, the new four-year agreement will have catastrophic consequences for current and future auto workers, along with hundreds of thousands of retired workers and their dependents. As the Wall Street Journal noted, the deal “includes a historic restructuring of GM’s obligations for UAW retiree health care and sets up a mechanism for GM to buy out many of its current workers and replace them with new employees at lower wages.”

Thousands of older workers will be forced into retirement to be replaced by younger workers making half the traditional pay, with massively reduced benefits. The new union-controlled health care scheme will impose ever greater increases in out-of-pocket medical expenses on retirees, deplete resources from the pension fund, and lead to new wage and benefit cuts for current workers.

With the establishment of a retiree health care trust, known as a voluntary employee beneficiary trust, or VEBA, which GM and the other automakers will partially fund, the UAW will get its hands on one of the largest investment funds in the US—estimated to be worth $70 billion—and become, in the words of the Wall Street Journal, a “major financial player.”

Gettelfinger and the other top UAW officials will become millionaires—at the direct expense of the jobs and living standards of the workers they nominally represent.

Contract terms

* Health care: The union has given up the right to employer-paid health care coverage for retirees, a gain won by UAW workers in 1964. The introduction of the VEBA ends GM’s legal and contractural obligation to provide such benefits to its more than 400,000 retirees and their dependents.

From the beginning the VEBA trust will be under-funded, with reports that GM will pay as little as $30 billion of the $51 billion it owes. The fate of retired workers and their families will depend entirely on investments made by the union in an increasingly unstable stock market. Any shortfalls in the fund will lead to skyrocketing co-pays and premiums, as UAW workers at Caterpillar and Detroit Diesel learned when their VEBA funds ran out of cash.

* Pensions: According to BusinessWeek magazine, the UAW gave GM a green light to raid the pension fund to pay for part of its contribution to the VEBA trust. This will endanger the future solvency of the pension fund and retirement benefits.

* Wages: The deal establishes a two-tier wage system that will include, according to the Wall Street Journal, “wage and benefit rates for some new hires that would probably be far less—maybe even half—the current wage-and-compensation package given to UAW-GM members.” Wages for current non-assembly line workers (maintenance, janitorial) will also be cut.

Current workers will receive no wage increases for the life of the contract. Instead, the company will pay lump sum bonuses in the last three years of the four-year agreement. GM will also be able to negotiate a diversion of cost-of-living adjustments and increased cost-sharing of health care for active workers.

This represents the extension to the Big Three (GM, Ford and Chrysler) of the drastic wage-cutting carried out by auto parts giant Delphi, and the achievement of Wall Street’s demand to put an end to the “middle class” auto worker.

* Jobs: The UAW claimed it called the strike to extract job security guarantees from GM. But the attempt to cast the contract as a boon to job security is an insult to the intelligence of auto workers. The agreement, according to all accounts, includes no job guarantees, but only empty promises that the company will consider investing new money in US plants.

GM will retain an absolutely free hand to continue downsizing and using the threat of plant closings and layoffs to wrench future give-backs from the workers.

The transformation of the UAW into a business by means of the VEBA is the culmination of a protracted process of degeneration, in which the union has become increasingly antagonistic to the interests of the rank-and-file and ever more the instrument of a privileged bureaucracy that is unaccountable to the members.

This is not just a question of personal corruption (although corruption is rife within all layers of the union bureaucracy). It is rooted in the failure of the entire outlook and policy of not only the UAW, but of the official American labor movement as a whole.

The leaders of the industrial unions that emerged from the sit-down strikes pitched industrial battles of the 1930s, including the UAW, rejected the fight for a labor party and instead aligned the unions with the Democratic Party. This signified the subordination of the interests of the working class to America’s ruling elite, and the abandonment of any struggle for universal, government-run social benefits, such as health care, as well as any struggle for industrial democracy. The UAW accepted the economic dictatorship exercised by American capital in every factory and at every job site.

This meant that the wages and benefits of auto workers were tied and subordinated to the profitability of the companies.

In the heyday of American industrial dominance—when six out of ten of the world’s cars were being built by Detroit’s automakers—the consequences of this betrayal were not apparent. But with the steep decline in the global economic position of US capitalism, which finds its sharpest expression in the decay of America’s manufacturing base, the disastrous implications of the union’s pro-capitalist and nationalist policy are being felt by every auto worker. Today, all of the past conquests of generations of auto workers are being destroyed.

The UAW responded to the crisis of the US auto industry by renouncing any form of class struggle, suppressing the resistance of auto workers to plant closures and wage-cutting, and embracing a corporatist policy of union-management partnership. On this basis it has collaborated in the elimination of 600,000 union auto jobs since 1978 and ever more brutal attacks on wages, benefits and working conditions.

The final nail in the coffin of not only US unions, but unions throughout the world, was the increasing globalization of production, which undermined all labor organizations based on a nationalist program of attempting to extract concessions from corporations within the framework of the national economy and the national labor market. From organizations that once pressured the companies for concessions to the workers, unions everywhere were transformed into organizations that pressure workers for concessions to management.

The central concern of the UAW bureaucracy over three decades of rapidly declining union membership, and the resulting contraction of its revenue stream from union dues, has been to secure its own interests even as it collaborated in the decimation of UAW jobs. By going into the health insurance business through its control of the massive VEBA trust fund, the UAW hopes to solve its problem. It has no problem sacrificing the jobs and living standards of UAW members to obtain the right to enrich itself.

The GM strike has highlighted the organic conflict between workers and the old, bureaucratized labor organizations. Its betrayal underscores the fact that workers cannot conduct any serious struggle without throwing off the dead weight of these organizations and developing a new political movement of the working class.

Such a movement must be independent of both parties of big business and base itself on a fundamentally different social principle: Economic life must be organized not to serve corporate profit and private wealth, but rather the needs of working people and society as a whole. It must be founded on the principles of social equality and genuine democracy—that is, on socialist principles.

The vast industries upon which modern society depends can no longer be the private domains of corporate executives and Wall Street speculators. The auto industry must be transformed into a public enterprise, democratically controlled by working people, to provide safe, affordable and environmentally sustainable transportation, and economic security for the producers.

[blackstone]

Details of General Motors contract underscore UAW betrayal
http://www.wsws.org/articles/2007/sep2007/gemo-s28.shtml

Additional details have emerged on the tentative agreement signed between the United Auto Workers and General Motors that shed additional light on the scope of the betrayal carried out by the auto workers union. The UAW reached the deal Wednesday morning and ordered an end to the strike by 73,000 GM workers—just two days after it began.

The front page headlines of several newspapers celebrated the historic rollback of auto workers’ conditions contained in the GM-UAW agreement. “GM Labor Deal Ushers In New Era for Auto Industry,” wrote the Wall Street Journal; “GM-Union Deal Could End Business As Usual In Detroit,” declared the New York Times; “A New US Auto Industry Emerges,” proclaimed the Detroit Free Press.

The Journal described the transformative significance of the contract as follows: “For much of the past half century, Detroit’s Big Three auto makers had collaborated with the UAW to create an industrial aristocracy of blue-collar workers whose pay and benefits set the standard for the American middle class. If the proposed contract announced yesterday is ratified by union members—and is subsequently replicated at Ford Motor Co. and Chrysler LLC—that era in American industrial history may be over.”

The lynchpin of the agreement is a proposal to free GM of its obligation to pay health care benefits to its nearly 400,000 retirees and their dependents by setting up a multi-billion-dollar union-controlled trust fund—known as a Voluntary Employees’ Beneficiary Association, or VEBA—that will pay out benefits. In addition, the agreement establishes a two-tier wage system—the first ever in a national UAW contract—that will drastically reduce wages and benefits for the next generation of auto workers.

From the start the VEBA trust will be under-funded, with GM contributing only $35 billion out of the nearly $55 billion it owes to retirees. With health care costs steadily rising—corporate medical costs have soared 46 percent since 2003—it is likely that the fund will be depleted and the UAW, now in charge of retiree medical benefits, will be in charge of cutting benefits.

In addition, cost-of-living increases—won by UAW workers at GM in 1948—will be diverted to help offset the cost of retiree health benefits. Given that the four-year contract includes three lump-sum bonuses but no wage increases, the effective end of cost-of-living adjustments will result in a substantial decline in pay for all GM workers.

The UAW has also agreed to allow GM to divert pension fund money to the VEBA trust, endangering the future solvency of the pension fund.

Retirees, who were already forced for the first time to pay out-of-pocket medical expenses in 2005, will again be compelled to contribute more to the cost of their health care in the form of higher premiums and co-pays, according to the Detroit Free Press.

For its part, the UAW will become one of the largest private insurers in the US and will control an investment fund worth up to $70 billion, once similar deals are reached with Ford and Chrysler. While UAW President Ron Gettelfinger claimed the trust would be solvent for 80 years, similar VEBAs set up by the UAW at Caterpillar and Detroit Diesel ran out of cash, leading to sharp increases in medical costs for retirees and their families.

“It is absolutely impossible that the VEBA will last that long. This is going to turn out to be a nasty boil that will continue to fester,” Nelson Lichtenstein, history professor at the University of California at Santa Barbara told MarketWatch. “Gettelfinger is making a mistake by dressing up defeat as a victory,” he added.

Under employer-paid medical coverage, won by UAW for retired workers in the 1960s, retirees had received “defined” benefits from GM that increased as health care costs rose. Under the union-controlled VEBA, there is no such guarantee for the workers. The UAW could forego guaranteed benefits and instead follow the example of many businesses by granting workers a flat subsidy or placing a cap on the cash value of benefits available to the workers.

The Wall Street Journal noted, “By disbursing fixed amounts, and limiting increases, administrators of health-care trusts can avoid running out of money,” adding that it was likely the UAW would receive such advice from the financial advisors and consultants who will be bidding for its business.

The two-tier wage scheme agreed to by the UAW will reduce labor costs (wages and benefits) for new-hires in so-called “non-assembly jobs” to an average of $27 per hour, compared with the current average of $73 per hour. The union and company will offer buyouts and early-retirements to move current workers out of their jobs, so they can be replaced with far cheaper labor.

While the UAW said it called the strike to win job security—and now claims the number of US jobs will remain the same until the contract expires in 2011—the Detroit Free Press, wrote, “GM stopped short of guaranteeing that specific new products will be assigned to union-staffed plants.” Any commitment to maintain manning levels, the newspaper continued, “comes with the caveat that the union must agree to flexible work rules in local plant-level negotiations.”

The jobs bank, which pays laid off workers while they are jobless, will be changed so that the geographical area within which workers will have to move to an open position or lose their incomes will be expanded.

If accepted, this agreement will devastate current, future and retired workers and their families.

The contract should be overwhelmingly rejected by rank-and-file workers at the ratification meetings being scheduled by the UAW bureaucracy. Rank-and-file committees should be organized to take the conduct of negotiations out of the hands of the UAW bureaucracy and launch a struggle to unite GM, Ford, Chrysler and other workers against the auto companies.

Above all, lessons from this betrayal must be drawn, beginning with the need for workers to break free of the UAW and organize their struggles on an entirely new basis. This means a political struggle to unite every section of the working class against the two parties of big business and the profit system they defend.

[blackstone]

General Motors worker: “The UAW doesn’t lose, but the workers do”
http://www.wsws.org/articles/2007/sep2007/inte-s28.shtml

Some media reports on Thursday expressed apprehension that as details of the UAW-General Motors contract become better known, momentum will grow among GM workers to reject the sell-out. This fear was doubtless a factor in the decline in GM share values on Wall Street on Thursday, after a sharp rise following the suppression of the strike on Wednesday.

The World Socialist Web Site spoke with a long-time GM worker who expressed opposition to the contract. Lyle, a worker at the Saginaw Metal Casting plant, said, “I wouldn’t vote for this. Maybe the union thought that by striking for two days we would go for this contract. The guys are very dissatisfied. I can’t see the membership ratifying this.

“I’ve read the Wall Street Journal and they’re gloating over the agreement. They took away our cost-of-living allowance and all we’re going to get are lump-sum payments. We fought hard for COLA to help against inflation and the union just dropped it. Now rising costs are going to continue to gnaw away at our hourly wages.

“GM will no longer be obligated to pay retiree health benefits when they set up this VEBA fund. Look at the history of these trusts—they’ve failed. Does the UAW think it can invest the money better than GM, with all their financial consultants? In ten years’ time the trust will be screwed up and we’ll be losing our benefits.

“Gettelfinger said the job security in the contract was the main achievement. If that was the main thing, then we’re in bad shape. For the last thirty years the union has talked about job security guarantees. At the same time the UAW membership has fallen from 1.5 million to 500,000. Two-thirds of us are gone. Is that job security?

“I’m now working at my fourth GM plant. I worked at three different plants that closed—Fleetwood Body in Detroit, Willow Run Assembly in Ypsilanti and Buick City in Flint. There were once 20,000 workers at Buick City before they all lost their jobs.

“That’s letting us go slowly under the guise of protecting us. This talk about job security—it’s lies, lies, lies.

“This contract doesn’t make sense for a worker who has been there a while or for the young workers who will be coming in at a reduced wage of $12-$15, instead of the current $27 an hour. They say that the lower wages will be for ‘non-production-related’ jobs. But that could be anything.

“The company wanted to outsource a lot of these jobs, but instead, with the agreement, they can keep them in-house and pay the same rate as they would to someone on the outside. The only difference is the union keeps these workers as dues-paying members. The UAW doesn’t lose, but the workers do.

“We want the details; they haven’t released anything to the members yet. When they do, it will be full of lies. I’m anxious to look at it because it will be entertaining. You never get the truth from the UAW.”

[blackstone]

http://futureoftheunion.com/

GM-UAW 2007 Lowlights by Gregg Shotwell/UAW Local 1753 [ The “white book” or new contract is available for your review in the Work Center.]

Seniority is irrelevant in the new UAW-GM contract. If you have a job on the line you will never be allowed to bid on an off line job unless you are willing to work for less. All the best off line jobs will go to new hires at $14 per hour. Earn less is what they mean by “job security” and “insourcing”.

There won’t be any raises in the next four years. A GM worker’s standard of living will decline from here on out. In 2011 we will be making .68 cents more than we are today. [page 2 of UAW GM Report “New Contract Protects Wages”] What can you buy for .68 cents? Not enough protection for a one night stand.

In 2011 GM will bring us all down to the lower tier. New hires and temporaries will be the majority. GM will make sure of that. If they have to hire a bunch of temps to stand around in the shadows ninety days before the contract expires, GM will make sure that the underpaid workers will be the majority. [pg 47 in the white book: “Long Term Temporaries”] The new underclass at GM does not have a pension. They have a 401k. [pg 120 in the white book] GM will contribute a dollar for every compensated hour in the new hires 401k for their health care in retirement. [pg 118 in the white book]

New hires will have no interest in bargaining for pension & health care improvements for top tier workers. Quite the opposite. The lower tier workers will have incentive to improve their own lot at our expense. It’s only fair. Check out the health care for new hires in the white book (pages 117-121). It is what we can expect for ourselves in 2011.

If you are presently in a “non core” job you will be grandfathered out, that is, you will have a target on your back. GM will have an incentive to fire top tier workers–a big one. New hires not only earn half as much in wages, they will never have a pension or health care in retirement.

What is “non core”? Page 116 Attachment A in the white book defines the new wage structure for: “truck driver, material handling, unitizing, warehousing, kitting, sequencing, repacking, sub assembly, inspection, non core stampings, non core blanks, machining (pt)-camshafts- connecting rods, and others.” Basically, non core is any job that isn’t back-breaking, ball-busting, gut-grunting labor.

New hires’ raises will be pegged at the average (i.e., non union) wage for manufacturing. [pg 112 in the white book] The “average” wages will de-escalate rapidly now that GM has taken a pay cut. Lear, American Axle, Johnson Controls, etc., will demand further pay cuts based on the GM-UAW deal. Thus, the average wage in manufacturing will decline rapidly.

Skilled trades need to check out pages 249-293 in the white book, which your bargaining committee is required to allow you to review. The changes in work rules, demarcation, full utilization, alternative work schedules, and work assignments to be “exited” are too numerous to be itemized in this flier. Suffice it to say, the foreplay is over.

“The parties have agreed to exit the following functions in their entirety as expeditiously as possible” [pages 299-300 in the white book] The tasks are too numerous to itemize but include: cardboard disposal, trash handling, janitors, line sweepers, chip handlers, filter changing, fixture relamping, etc., etc…

The Attendance Program is quick and dirty. “The reason for an absence is no longer relevant nor required.” [pages 169-175 in the white book.] So you won’t have to worry about not having a doctor’s excuse because management won’t accept it anyway.

As for Job Security, well, we’ve all seen how GM and the UAW honor Job Security promises. The only “moratorium” we’ll see in this contract is the funeral of the industrial middle class. Page 329 of the white book lists nine plants that will be closed and one that will be closed or sold. Doc 13 [moratorium on plant closings] on page 184 of the white book describes the conditions “beyond the control of the Corporation” which disallow compliance with the moratorium. A new phrase “market related volume decline” is underlined. When GM designs a loser it is beyond their control and thus releases them from accountability.