Auto workers’ jobs & pensions threatened
By Martha Grevatt
“We think we can have a successful U.S. auto industry. But it’s got to be ... much more lean, mean and competitive,” President Barack Obama told CBS’s “Face the Nation” on March 29. The next day Obama presented the report of the Auto Task Force—composed of bankers and capitalist think tankers—which rejected restructuring plans submitted Feb. 17 by General Motors and Chrysler.
Workers on the shop floor know what is in store when they hear “lean, mean and competitive.” It was the bosses, now crying poverty, who paid auto workers to attend compulsory classes on “lean manufacturing.” What they call lean—which is supposed to mean less fat—in reality means tearing out the heart of shop floor operations: the hourly worker.
The “not lean enough” auto industry has reduced the active (not retired) membership of the United Auto Workers to 431,000, the lowest in six decades—and less than one-third of the 1.53 million members in 1979. It includes 132,000 hourly workers at the Detroit Three, many of whom are laid off. At GM 7,000 workers are either retiring or quitting for a lump sum. Thousands more are exiting Ford and Chrysler. If these workers are replaced it will be by a worker earning half their wages.
Workers of color and women have suffered the most from decades of downsizing. Some years ago one in 50 Black household incomes was tied to the auto industry. Now the figure is closer to one in 100. Cities with a majority-Black population like Detroit have been doubly hit by loss of jobs and erosion of the tax base.
Yet behind the rejection of the automakers’ proposals and the forced resignation of GM CEO Rick Wagoner is an assessment that the restructuring (including the cutting of 50,000 more jobs worldwide) does not go far enough.
The banker-advisors, as Obama stated, want a new “set of sacrifices.” (Detroit News, March 30) It could entail a “surgical” bankruptcy, presented as a quick fix that would, in a period of weeks or months, rid GM and Chrysler of their secured and unsecured debt. However, the experience of steel, airline and most recently UAW Delphi workers demonstrates the real purpose of bankruptcy: to break union contracts. It would force even more drastic concessions than those demanded with the $17.3 billion government loan to GM and Chrysler.
“We need to go deeper and we need to go faster,” concurred Fritz Henderson, who has assumed GM’s top post and is open to a “prepackaged” bankruptcy. (Detroit News, April 5)
GM has 60 days to revise its plan in order to receive further federal assistance. Chrysler has 30 days to finalize an alliance with the Italian automaker Fiat. Both must get lenders and bondholders to substantially reduce debt. Failure to meet these conditions could trigger bankruptcy proceedings and, for Chrysler, possible liquidation.
Workers’ pensions in grave danger
“GM does not provide golden parachutes. Rick [Wagoner] will receive the retirement benefits he accrued based on his nearly 32 years with GM,” said company spokesperson Greg Martin. It’s fair to assume that even if GM declared bankruptcy, Wagoner’s $23 million “pension” would be protected.
The pensions of current and future retirees, however, are in grave danger. Fearing that if they continued working they would lose their jobs and pensions, many younger workers with 30 years seniority retired. Now falling stock values have left their pension funds underfunded.
If GM or Chrysler were to declare bankruptcy they could halt additional contributions. If the automakers stopped issuing pension checks the quasi-governmental Pension Benefit Guarantee Corporation would cover at best 80 percent of earned benefits, but could pay as little as 30 percent to a retiree under 65 years old.
Furthermore, the PBGC does not guarantee health benefits. In 2007 the UAW agreed to set up a Voluntary Employee Beneficiary Association for retiree health care with a one-time sum paid by the automakers. The VEBA could run short of money, especially with a government requirement that half the payment be made in potentially worthless company stock.
Three-quarters of Chrysler’s secured debt is held by four banks—Goldman Sachs, Morgan Stanley, JP Morgan Chase and Citigroup. Together these banks collected $95 billion in bailout money and $16.8 billion in federal funds via the AIG rescue. One-twelfth of that sum could wipe out the $6.9 billion debt held by these thieves since the 2007 sale of Chrysler to Cerberus.
UAW members have been ordered to make sweeping contract changes in a possible violation of the National Labor Relations Act. Meanwhile, a federally orchestrated debt-for-equity swap stands to make these same four banks part owners of a reorganized Chrysler.
The new amalgam of owners, which also would include Fiat, Daimler, Cerberus and the federal government, could still find it in their interest to declare bankruptcy. The 39,000 Chrysler workers and hundreds of thousands at parts suppliers and dealers would just be collateral damage in the battle for more profit.
A job is a worker’s property right!
The only thing the UAW leadership seems to be thinking about is how to give more concessions to save the industry. Autoworkers need their own survival program. If technology and overproduction make fewer workers necessary, then it is time to demand a shorter work week with no cut in pay—and to insist that workers have a property right to their jobs. If the bosses can’t run a “viable” company, turn the plants over to the workers. If trillions can go to bail out the banks, why can’t billions be used to bail out pensions, which are workers’ deferred wages?
Some autoworkers have begun to fight back. Workers at parts suppliers are getting quite militant in Europe and Canada.
In March in Windsor, Ontario—across the river from Detroit—members of the Canadian Auto Workers staged a one-day sit-in at two plants of Catalina Precision Products, a Chrysler supplier. They were demanding the severance benefits owed them after operations closed.
In Belfast and two English towns workers at Visteon, a Ford spin-off, have occupied three plants since April 1. Spokesperson for the union UNITE, Davy McMurray, stated, “Ford gave these people an assurance that their terms and conditions would remain the same, including redundancy packages. ... the workforce intends to stay in the plant until Ford comes to the negotiating table.”
In Chatham, Ontario, members of UAW Local 251 are blocking entrances and exits to a plant owned by Transcast. They are determined to keep parts and tooling from leaving the factory. Their action affected production at Chrysler’s two Canadian assembly plants.
Now is the time for autoworkers and retirees to expand the fight from the extremities to the heart and take on the Detroit auto industry.