The Working Class Devours Itself

Social Darwinism in the 21st Century, the working class devours each other

In the weeks of the close of 2008, we have seen an amazing thing, that the fate of millions of working class families is being downplayed by the other members of the working class. I am talking about that dark night of disaster that could befall the members of the one of the greatest labor organizations to come out of the shadows of the Great Depression, the UAW.
We seen the financial giants of Wall Street stride smugly into the hearing rooms of the nation’s capital, and walk away with a bonanza of taxpayer bucks, with no questions and no strings attached in October. The Big Three or the US automakers announced that they are on thin ice financially and in need of some help, 25 billion dollars worth. When the big three CEO’s sat at the hearing tables in Washington, they were asked how they traveled to the meeting, and were roundly criticized for using their corporate jets. Then they were told to come up with a plan and come back and talk. Well, after traveling by hybrid vehicle back to DC, they submitted a plan for 34 billion dollars of assistance. This amount was reduced to 14 billion and is in jeopardy of being shot down by a block of GOP Senators from the Deep South. Why is there so much resistance to helping our US auto industry?

The UAW is the reason, for the white power paradigm has long hated this organization. When the UAW was created in the 1930’s, it represented all workers, white and black, fighting for better pay, benefits and working conditions for all. In the 50’s, 60’s and 70’s; it was the UAW who marched alongside the civil rights protesters. A presence at all of the demonstrations, from the march on Washington in 1963 to the Memphis Sanitation Workers strike in 1968, was Walter Reuther, the first President of the UAW, who became a icon and martyr of the movement. The UAW not only fought for its members, but for all who were marginalized in our society, all of the progressive policies from the New Deal to the present have the stamp of the UAW on them. Social Security, Unemployment insurance, Medicare, Medicaid to name a few, came from the social movements of progressive industrial labor organizations like the UAW.

Starting in the early Reagan years, the UAW came under attack, with the upsurge of imports eating away at the market share of the US automakers. This is when the concept of “team” came about, management and labor working together to increase efficiency and cut costs. Actually, if you examine this period of the 80’s and 90’s, it was management who came away from the table with the lion share of cost reductions, introduction of robotics, work rule changes and a declining worker population. The workers and the UAW were consoled with the fact, that they saved their jobs for the moment. The auto boom of the 90’s was not shared by the UAW by the big three, for the jobs kept declining, with plant closures, line consolidations and spinning off of the parts plants. This increased the profit share of the big three 1,000 fold, while the gain share by labor was nil, other than the profit sharing payments that some workers received at the time; which if considered alongside the rule changes, job reductions and plant closures were insignificant. The beginning of the new millennium was the start of another round of problems with market share for the big three.

This slide to the bottom by the US automakers was also dragging the UAW with it. The Big Three, who had a fascination with SUV’s and trucks, that when loaded up with accessories normally seen on luxury cars, yielded them fantastic profits. All made possible by the work rule changes, automation and job cuts agreed to by the UAW. The labor cost of a new vehicle had slid to only 10%, including wages, healthcare and pension; while the profit share had sky rocketed.
As energy prices started to spike, the US automakers made even bigger SUVs’ and trucks that were harder and harder on gas. They resisted calls from their dealers and the public to make more fuel efficient vehicles for one reason; the profit margin on them was lower. All the while, the big three whipsawed the members of the UAW, having them compete amongst themselves for product lines; who ever made the most concessions received the work. In 2007, the contract talks yielded the greatest step backward in the history of the UAW, with the members agreeing to a 50% wage reduction for new workers, increasing the timeframe for temporary workers to one year and eliminating or reducing healthcare, and pension benefits. The industry went through a series of buyouts of workers who are grandfathered under the older agreements. As a result the numbers of workers receiving the higher wages were cut. Now comes the final chapter in 2008 and the decimation of millions of worker families by their fellow workers.

Instead of being critical of the failure of the US automakers to react to the energy prices, calls for green cars and re-engineering the idea of the auto in our society, we have seen the tried and true method of bash the workers used by their enemies and surprisingly by their fellow working class members. I am constantly amazed that folks who have and still are being marginalized into poverty by wages that have lost purchasing power take delight in the plight of the autoworkers. They used the tired clichés and rhetoric, of the US Chamber of Commerce and the right to pour salt into the wounds of the autoworkers caused by the assault on them by the GOP.

Why cannot workers, all workers understand that the battles that other workers are fighting are really their battles too? For a loss of wages, benefits and other things that were hard fought for by our predecessors’ on the picket line, in the streets and in the courts; will come home to all of us eventually.

What can Big Three do in order to survive?

PATRICK SAUNDERS

As Yogi Berra said so aptly, “its déjà vu all over again.” The column by Mark Mix, spokesperson for the National Right to Work Committee echoed its same old tired refrain, blame the workers and the unions, and arguing against helping the U.S. auto industry — Ford, GM and Chrysler in their time of trouble.

Mr. Mix’s argument that lays all of the woes on the doorstep of the UAW simply does not hold water in the present time. The UAW leadership has worked hand and glove with the Big Three since the early 80s to make their operations more efficient, allowing drastic changes in work rules, the introduction of automation and robotics that lowered the labor cost per unit to its lowest point. While this allowed the Big Three to greatly increase their profits on larger cars and SUV’s loaded with accessories once thought to be luxuries. The UAW and its declining worker-membership base were not allowed to have input into the type of products being made.

If you look at the UAW plants in this region, the impact of the concessions by labor was shown in the drop in work force. The now closed Ford plant in Lorain once employed more than 5,000 workers. After the concessions of the 80s, the workforce there shrank by one half in the early 90s and by another 50 percent before it closed its doors several years ago. The former New Departure in Perkins Township that had thousands of workers now has about 800. The former Ford/Visteon/ACH plant in Margaretta Township has shrunk by half or more from about 2500. The UAW members have been forced into a defensive posture, ratifying contracts in 2007 that cut wages by 50 percent to an average worker wage of $29,000 a year and reduced benefits (pension and healthcare) won by years of negotiating to a mere shadow of their former selves. What this means is that auto workers with families cannot afford to buy the cars they make every day. So to picture them as an omnipotent power in the 21st century as Mr. Mix did in his column is far from the truth.

Mr. Mix talks about the foreign plants in our country, Toyota, Nissan, Hyundai and Mercedes being among them and their profitability. He points out that they are in “Right to Work” states, but does not discuss that those states took on major debt in infrastructure costs, economic aid and training of employees to lure those plants. In Alabama, the Mercedes plant located there costs the state annually more than the taxes it produces. The average wage in all of those plants is about $15 per hour and they are heavily automated to reduce the number of workers needed. Their workforce is also much younger than the Big Three’s and has not incurred the healthcare and pension costs of the big three. The ripple from these plants in the local economic pond has not helped those states to shake off the desperate poverty that traps more than half of their citizens.

One element that Mr. Mix does not discuss is healthcare costs, something that the Big Three cannot control, health care costs run about $1600 per unit in the US, opposed to about $250 per unit in Canada, the land of the hated socialized medicine, but where most of the new auto plants have been built. Healthcare, a central issue of the recent campaign is one of the causes of our inability to compete on a global scale, for all of the other developed nations have a single payer healthcare system in place. This allows manufacturers to concentrate on producing products, and not on negotiating increasing costs with HMOs, PPOs and Insurance corporations for health care services that rank 37th in the world in quality and first in cost. But that would cast aspersions on those who really fund the National Right to Work Committee and pay Mr. Mix’s salary.

The question we should be asking ourselves, what will happen if the Big Three are allowed to crumble? In our area, there are at least a dozen plants that will probably close or reduce operations drastically. Across the Great Lakes Region are hundreds of thousands of families who are directly tied to the future of the big three, either through employment or their retirement pension. What will happen to these folks? Retirees will find their income reduced by at least 33 percent when the Federal Pension Benefit Guarantee Fund absorbs them into its system, which is also running in the red from the increase of failures of private corporate pension funds in the last 10 years. Health care for the employees will end immediately and retirees will find their healthcare either drastically reduced or cease to exist as the payments cease from the auto companies into the UAW VEBA (the UAW took over the administration of the retiree healthcare from the Big Three) created last year from the new contracts. These folks are going to be forced to ask the government for help to live and their request has to be answered, for they are our neighbors, friends, and family. So instead of killing the messenger of bad news, which Mr. Mix advocates, what about discussing the shape that the U.S. auto industry should take in the future to compete in the global market? What about breaking the hold that the fossil fuel cartel (BP, Exxon, OPEC etc.) has over our economy? Involving the manufacturing expertise and trained workforce of the Big Three in creating a green solution for our transportation quandary in this country would be a better choice than letting them be bought up piece meal on the cheap by foreign corporations in a bankruptcy fire sale.

After all, we don’t want Toyotas to be the only make of car racing on the NASCAR circuit, do we?