The Big Three contracts stink: nationalize the auto industry!

Share with your friends


It would be hard to find a more stark illustration that concessions don’t save jobs than the events that unfolded at Chrysler in Nov. 2007.

Workers nearly rejected a contract filled with takeaways, but ultimately accepted the raw deal when union leaders showed no more fight than token strikes.

Just days after the head of United Auto Workers’ Chrysler Division told members “we have an agreement that secures jobs and wages and protects health care and pension benefits,” Chrysler announced 10,000 more layoffs on top of 13,000 already planned. Combined, the cuts represent a 30 percent reduction of Chrysler’s union workforce from 2006. In 1979, UAW had 1.5 million members. By 2005, it was only 557,000 members as jobs were lost to mechanization and outsourcing.

Meanwhile, General Motors also announced 2,000 layoffs right after their concessionary contract was signed. As we go to press, UAW leaders are urging workers at Ford, the third of the Big Three to negotiate a contract, to approve a pact that guts wage, benefit and labor standards.

This bargaining climate is in dark contrast to the rise of the UAW in the 1930s amid the militancy of workers waging sit-down strikes. Back then, class struggle – the idea that workers will win only what they are willing to fight for – was UAW’s playbook. Nowadays, UAW leaders push labor-management cooperation, and UAW is losing big. The latest contracts with GM, Chrysler, and Ford represent a new low, and threaten the future of UAW and pension rights of all workers.

Bosses slash and burn. All three contracts mark the end of employer-provided healthcare for retirees. Under the pacts, the three automakers will make one-time contributions to a Voluntary Employees Beneficiary Association, a trust that the UAW oversees. Beginning in 2010, the UAW will be responsible for covering all future retiree health benefits, using VEBA to cover costs. Management has no more obligations to its former workers. If healthcare costs soar or VEBA investments don’t perform, UAW will have to cut benefits of its members.

During negotiations, UAW President Ron Gettelfinger characterized the effort to save health benefits for U.S. auto workers as an “uphill battle.” He explained that in other countries, this item is off the table because workers have “some form of national healthcare that covers everyone.” He is absolutely right. Yet by letting auto bosses escape from their obligations toward workers’ welfare he removes management’s incentive to seek a solution and weakens the fight for national healthcare.

Equally terrible is the launching of two-tier wage plans. At Chrysler, workers such as drivers and janitors designated as “non-core” will earn half the wages of fellow “core” workers. At Ford, 20 percent of the workforce, starting with all new hires, will get wages around $14/hr. Their seniored co-workers started at $26/hr.

Two-tier systems destroy solidarity by creating second-class, lower-wage workers. They also give management incentive to drive out higher wage-earners or work them to death.

Strike for keeps! Auto bosses are handsomely rewarding themselves and investors with savings from lower labor costs. Ford CEO Alan Mulally, who engineered huge layoffs as president of Boeing Commercial Airplane, received $39.1 million from the auto giant. Other CEOs also received multi-million dollar packages, while Ford claimed to be losing billions.

As these companies ship jobs offshore, they are also buying foreign car companies in order to gain market share overseas. Thus they thwart UAW’s strategy of helping the company compete in order to keep jobs here. The companies leverage costs worldwide and whipsaw workers in different countries to get concessions.

There is a better way. Autoworkers angered by their losses this year can prepare now to take them back in the next contract in 2011. With a new, bold leadership the UAW could organize the entire U.S. auto industry including Toyota and Kia, and build its own multi-national ties.

A rejuvenated UAW could strike for keeps and demand that auto, and healthcare, be nationalized under workers control. They’re too important to society to be owned by a few rich folks. Like the sit-downers did in the 1930s, UAW could take over the factories again, but this time not give them back! For information about organizing among UAW rank-and-filers, see

Share with your friends