It was nearly midnight on Sept. 16 when negotiators for General Motors and the United Auto Workers reportedly reached agreement on a new four-year contract.
With only rough details made public, the deal is being hailed as “a win for all” that “is likely to be embraced by Wall Street.” (Detroit Free Press, Sept. 18) It looks like it is a win-win — for the banksters and the auto bosses, that is!
The UAW website quotes their vice president, Joe Ashton, “The wages and benefits we negotiated in this tentative agreement reflect the fact that it was UAW members who helped turn this company around.”
In fact, workers are getting a raw deal. Concessions given during the 2009 Chapter 13 bankruptcy “which workers agreed to under coercion and with the assumption that givebacks would be restored when GM returned to profitability” are continued.
The 2009 concessions were made to the 2007 contract that — for the first time — introduced a divisive two-tier pay structure. New hires were to start at half the pay of “traditional” employees, with a top rate of about $12 less per hour. Annual lump sum payments replaced raises, reducing potential earnings by thousands of dollars. Retiree health care costs were turned over to a “Voluntary Employee Beneficiary Association,” to which GM would make a fixed contribution, relieving the company of “legacy costs.”
GM hailed the 2007 agreement, predicting that over a four-year period labor costs would be cut in half. Before the concessions, UAW President Ron Gettelfinger estimated these costs at only 8 percent of the price of a car or truck.
This was a huge transfer of wealth from labor to capital, but when the current Great Recession caused a worldwide collapse of vehicle sales, GM and Chrysler used their weak cash position to squeeze even more givebacks from UAW members in 2009.
The U.S. Treasury then loaned billions of dollars with the stipulation that workers make additional sacrifices. The only alternative presented to workers was a liquidation of the two companies. The White House Auto Task Force, whose members were from Wall Street and capitalist think tanks, drafted the final loan terms.
The 2009 takebacks turned back the clock on gains won decades ago. The bonuses — a poor substitute for annual pay increases — were eliminated. With mass unemployment today — when demands for a shorter workweek are in order — the union actually gave up 33 hours per year in paid break time and holiday pay. The Cost of Living Allowance was “suspended.”
As in nonunion shops, time-and-a-half after an eight-hour day was ended with the premium only kicking in after a 40-hour week. Supplemental Unemployment Benefits were curtailed. The jobs bank, which paid workers on indefinite layoff for 40 hours of charitable work outside the plant, was dropped.
Limitations on second-tier hiring, which might have eventually allowed “entry level” workers to move into “traditional” positions, were cancelled. So were incremental raises; second-tier pay was frozen at around $14.50 an hour.
A dozen plants were selected to be closed. The promise of the 2007 contract — job security — was trashed in 2009. The number of hourly employees at GM fell from 73,000 to 48,500.
The union also agreed that with the next contract — the one to be voted on — all “unresolved issues” would automatically be sent to arbitration. In other words, the UAW agreed two years ahead of time not to strike over this new contract!
So far, the only known improvements include a modest pay increase for second-tier workers that will still — by the end of the new four-year agreement — leave a gap of $9 to $12 between them and higher seniority workers.
What is, “likely to be embraced” by finance capital is an enticing “signing bonus” of $5,000 per worker. At one point JPMorgan Chase predicted it would be $7,500. Coming from a major GM shareholder and GM’s longtime lender of choice, this “prediction” was what this Wall Street titan was willing to pay up front to make the 2009 concessions more permanent. Wall Street also welcomes the “enhanced” profit-sharing formula that might “share” $1,000 to $2,000 more with hourly workers — or leave them with nothing if car sales and profits take another nosedive.
The UAW statement promised that new jobs were being created. Reportedly, at least one closed plant may reopen. The halving of production wages has made it affordable for GM to move work back into the U.S. from lower-wage countries, saving transportation costs. To call that job creation, when the company is just laying off workers somewhere else in the world, is to make a mockery of “cross-border solidarity.”
Workers feel that they deserve to get back what they gave up under duress. GM made $4.7 billion in net profits last year and $5.7 billion in the first two quarters of this year. Second-tier workers are tired of making half the wages of someone next to them doing the exact same work.
Many workers at all pay levels are angry and plan to vote “no.” Rank-and-file activists, including Autoworkers Caravan, have campaigned since negotiations began for a rejection of any contract that retains tiered wages. Should they succeed, or even muster up a sizable opposition vote, it will be an important psychological victory and a first step towards building a fightback movement to assert working-class power on the shop floor.