The UAW-Fiat Chrysler deal: A conspiracy against autoworkers
17 September 2015Tuesday’s joint press conference by Fiat Chrysler (FCA) and the United Auto Workers marks a new stage in the corporate-union conspiracy against auto workers. In the wake of the announcement of a tentative agreement covering FCA’s 36,000 workers, the union is moving as rapidly as possible to push through the deal, with votes planned as early as next week.
Autoworkers must be warned: Absolutely nothing the UAW says can be believed. The intention of UAW President Dennis Williams and the rest of the executives who run the organization is to conceal or sugarcoat massive concessions and force through the contract before workers have had time to study its contents and implications. This will pave the way for similar agreements at General Motors and Ford.
At the press conference, both Williams and FCA Chief Executive Officer Sergio Marchionne refused to reveal any details of the agreement. However, its basic components are clear from what was said and what has been reported in the media. These include:
* A sharp and permanent lowering of base pay for autoworkers:
In the name of “closing the gap” between senior (tier one) and newer (tier two) workers, the wage ceiling for tier two workers will reportedly be gradually raised over eight years from $19.28 an hour to approximately $25 an hour. This is significantly less than the $28 currently received by tier one workers, who have endured a decade-long wage freeze that has sharply cut their real wages (adjusted for inflation). They will be driven out of the plants by means of grueling work schedules and other measures. The result will be a work force uniformly paid substantially less than what Big Three workers received a decade ago.
By means of “profit sharing” arrangements, nominal wage increases will increasingly be tied to increased levels of exploitation. At the same time, the UAW has already indicated that it is preparing to accept a third tier of even lower paid workers into the factories.
* A fundamental assault on health benefits for current workers:
Both the UAW and FCA stressed the need to “find a way to deal with the escalating cost of health care” (Williams) and ensure a “cost-effective way of managing health care costs” (Marchionne). Proposals to shift the burden of health care costs onto workers have centered on the UAW’s call for the creation of a health care fund for current workers modeled after the union-run Voluntary Employees’ Beneficiary Association (VEBA) set up for retirees in 2007. The company would pay into the fund much less than it is currently paying for health care, leaving the UAW to cut coverage and services, as it did for retirees.
The UAW would gain control of an expanded multi-billion-dollar health care trust, providing a new source of income for union officials.
* A further restructuring of the auto industry:
At the press conference, Marchionne declared that the economics of the agreement were relatively insignificant compared to the “capital usage” issues confronting the auto industry. This is a reference to plans for a possible merger of FCA with GM, which would lead to the destruction of thousands of jobs. The Wall Street Journal noted Wednesday that the negotiations have been aimed, in part, on “testing whether [Marchionne] can rely on UAW President Dennis Williams as an ally in his grander vision.” Williams may attempt to sell such a deal during upcoming discussions with GM.
Tuesday’s press conference, held at the UAW-Fiat Chrysler Joint Training Center, was a spectacle of union-management collusion. It demonstrated that the negotiations exclude the interests of the workers. Both parties to the talks—Chrysler Fiat and the UAW—are businesses that derive their income from the exploitation of the workers, with the union serving as a labor contractor and industrial policeman for the company. The negotiations concern how the spoils from wage-cutting, speedup and the destruction of the workers’ benefits are to be divided between the two parties.
Williams and Marchionne lauded one another, hailed the “alignment of interests” between the company and the union, and spoke of an end to any “adversarial relationship.” Both the union and the company hope to use the new agreement to cement their corporatist alliance, with Marchionne declaring that the UAW “has pulled off what I believe is a necessary next step in our industry.”
An essential part of the conspiracy between the company and the union is keeping the workers in the dark. The mutual back-slapping between Williams and Marchionne thoroughly exposed the union’s claims that it has to maintain secrecy in order to fight for the workers against management. The purpose of the news blackout is to keep the rank-and-file off-balance and, the company and union hope, foster divisions and demoralization among the workers.
The companies and the UAW both know they confront a workforce that is deeply hostile to their designs. On the eve of the press conference, the UAW had to resort to threats at FCA’s Warren Truck Assembly Plant to stop workers from walking out when the contract expired at midnight on Monday.
The UAW also blocked reporters from the World Socialist Web Site from attending Tuesday’s press conference. This is in line with the campaign of intimidation by union officials directed at WSWS reporters and emails from union officials warning workers not to “believe everything you hear or read.” The union is desperate to prevent the truth from getting to the workers.
To fight this new sellout and defend their interests, workers at FCA, GM and Ford must begin organizing now. They should form rank-and-file committees, independent of the UAW, in every plant to discuss the agreement, develop lines of communication with other factories, and mobilize opposition. The WSWS urges workers to reject the fraudulent “highlights” that the UAW will present and insist that workers be given the entire contract weeks in advance of any vote. They must reject the attempts pit workers against each other and to use meager signing bonuses (reportedly $3,000) to pressure workers to agree to a sharp attack on their pay and benefits.
A successful fight by autoworkers requires an understanding of the forces arrayed against them. Behind the corporations and their demands for an intensified assault on wages and benefits are the major banks and Wall Street investors—the financial aristocracy. After receiving trillions of dollars in handouts following the 2008 economic crisis, the ruling class is determined to force workers to pay for the massive debts than have been built up.
The entire political establishment, both Democrats and Republicans, stand on the side of the corporations and the banks. The Obama administration intensified the assault on autoworkers through the 2009 restructuring of GM and Chrysler, which expanded the two-tier system and imposed deep cuts in benefits for workers and retirees. The health care overhaul proposed by the UAW is in line with “Obamacare,” which aims to dismantle employer-paid health insurance and slash health care costs for corporations and the government.
The UAW has long since ceased to be a workers’ organization. It has transformed itself into a business whose financial interests are tied to the increased exploitation of the working class. With the VEBA health care fund, the union has established itself as an insurance provider and a major shareholder in the auto companies. The extension of this fund to current workers means that the UAW executives will have an even greater incentive to ensure the continued rise in the stock prices of the auto companies.
Autoworkers have powerful allies: the working class as a whole, in the United States and internationally. Everywhere, workers confront the same demands, the same coordinated attack, whether it is steelworkers, telecommunications workers or teachers in the US, or workers and youth in Europe, Latin America and Asia.
Alongside the mobilization of the industrial power of the working class, there must be a new political strategy. Any struggle to defend jobs and living standards is a political fight against the companies and the government and requires a rebellion against the unions. All of these institutions defend the capitalist system, which is based on the exploitation of the working class in the interests of corporate profit. The WSWS and the Autoworker Newsletter are committed to aiding autoworkers in carrying out this struggle.
Contracts to expire at midnight for 141,000 US autoworkers
By Jerry White
The four-year contracts covering 141,000 autoworkers at US factories owned by General Motors, Ford and Fiat Chrysler expire at midnight tonight. The first section of industrial workers to be hit with deep wage and benefit cuts after the financial crash of 2008, autoworkers are determined to recoup their lost income now that the automakers are flush with cash and are funneling billions to wealthy investors.
14 September 2015
The negotiations between the United Auto Workers and auto executives have been carried out in an atmosphere of unprecedented secrecy, with UAW officials making the specious claim that telling workers details of the negotiations would lead to damaging rumors. In fact, the framework of another concessionary deal is largely in place, and the conspiracy of silence by the UAW is aimed at preventing opposition from rank-and-file workers.
Autoworkers hired before 2007—so-called legacy workers—have not had a wage increase in more than a decade. Those hired after 2007, or some 40,000 workers, have been dumped into the hated two-tier wage and benefit system, where they earn little more than half the $28.50 per hour paid to older workers. Autoworkers, determined to abolish the two-tier system and win significant pay increases, voted by a 98 percent margin to authorize a strike.
During Obama’s 2009 restructuring of GM and Chrysler, the UAW agreed to a sharp expansion of the two-tier system, the elimination of overtime payments after eight hours, the wiping out of tens of thousands of jobs and the ending of income security for laid off workers. In return, the UAW was handed billions of dollars in corporate stock to fund a retirees medical benefit trust, one of the largest private investment vehicles in the world.
In the current round of talks, the UAW is once again collaborating with the Obama administration and the auto bosses to impose an unprecedented attack on autoworkers and by extension the whole working class. This involves plans to replace employer-paid health care benefits, won by autoworkers in the 1940s, with a union-run medical plan that would sharply increase copays and force workers into inferior plans.
The UAW has already indicated it will extend the current contracts and that a strike, according to UAW President Dennis Williams, would represent a “failure.” In a Labor Day speech in Detroit last week, the UAW president said union and company negotiators “were not at each others’ throats.”
It is not excluded that the UAW might call a meaningless one- or two-day strike in order to allow a restive workforce to blow off steam while the union works to impose a sellout. This is precisely what happened in 2007, when it called what became known as “Hollywood strikes” at GM and Chrysler, before ramming through a “transformational” contract that included the two-tier wage system.
At the same time, talks could drag out for weeks under extended contracts as they did in 2007 and 2011 when agreements were not reached for a month or more. This would allow the UAW to continue to collect union dues and temporarily sidestep the impact of “right to work” laws in Michigan and Indiana, which will make union membership and dues payment voluntary. In 2012, Obama’s National Labor Relations Board changed 50 years of labor law and ruled that companies had to continue deducting dues from workers’ paychecks and pass the money onto the unions even after the expiration of contracts.
On Sunday evening, facing increasing unrest among workers, the UAW announced that it had chosen Fiat Chrysler Automobiles (FCA)—the smallest of the Big Three automakers—as the lead company in contract talks.
In a statement, GM pledged to “continue working with our UAW partners” to obtain “an agreement that benefits employees and strengthens GM’s long-term competitiveness.” Ford said it was still negotiating and that “our represented facilities will continue to operate under the 2011 UAW-Ford contract until further notice.”
Before the UAW was transformed into a complete tool of management in the 1980s, the auto corporations sought to avoid being designated as the strike target because it meant they would face the union’s maximum demands for wage, benefit and workplace improvements. Those days are long gone. Now the companies virtually trip over one another to be the first to get a deal from the UAW tailored to their business needs.
FCA has the least cash on hand as well as the highest percentage of lower-paid second-tier workers—44 percent, compared to 29 percent at Ford and 19 percent at GM. FCA Chief Executive Sergio Marchionne has made it clear he considers higher-paid legacy workers to be a “dying class” and that there should be a cap on wages below the current $28.50. He also wants wages tied more firmly to profits and productivity.
Marchionne enjoys close relations with UAW President Dennis Williams, who collaborated with the Fiat boss in imposing a six-year concessionary deal on farm equipment workers at CNH Industrial (Case New Holland) in 2010, which paved the way for the spinoff of the company and hundreds of layoffs. At the opening of auto talks earlier this summer, Williams and Marchionne skipped the traditional handshake and embraced each other after the UAW president introduced “My friend, Sergio.”
Marchionne is also reaching out to various shareholders, including the UAW, to carry out a merger with GM or another automaker that would lead to the destruction of tens of thousands of jobs.
In these contract talks, the UAW is not negotiating on behalf of autoworkers, which it falsely claims to represent. It is seeking to defend the income and business interests of the UAW apparatus and the aspiring investment managers who run the union.
This is underscored in a Detroit Free Press article Saturday entitled, “UAW wants to pull in suppliers but pay could be controversial.” The article notes that far from eliminating the two-tier wage system, both the corporations and the UAW are seeking to establish a third tier of workers who will make even less than the current second-tier workers.
The Free Press wrote: “Management values the flexibility of paying less for people who provide logistics and janitorial services, stamp metal parts or package small kits that are attached to vehicles along the assembly line. And the union, for its part, sees an opportunity to gain new dues paying members, some of whom might see their wages and benefits improve.”
Such workers, union and non-union, making as little as $9 or $10 per hour, are already employed by suppliers or dummy companies such as GM Subsystems Manufacturing. Under the proposed scheme, they would be hired directly by the Big Three automakers and pay the UAW, in the form of monthly dues, for the privilege of being union members.
University of California-Berkeley Professor Harley Shaiken told the Free Press that explaining the scheme to UAW workers hoping their new contract eliminates the two-tier wage system would be “difficult.” Williams “would face a very difficult sales job on it,” Shaiken said, “but I think what Williams is concentrating on is what is the best approach for the long-term future of UAW.”
In a lead editorial Saturday, entitled, “UAW contract must contain health costs,” the Detroit News hailed Williams’ proposal to expand the union-controlled retiree medical benefits trust to hourly and even non-union salaried employees. “UAW members don’t want to pay any more for health care than they currently do, but they also must realize they enjoy some of the best health care plans in the country at some of the lowest costs.”
In this battle, autoworkers confront a gang-up of the corporations, both big business parties and the UAW. In order to fight, workers need new organizations of struggle (See: “The way forward for US autoworkers”), including rank-and-file action committees elected and democratically controlled by the workers themselves. Such committees must fight for the broadest mobilization of the working class in the US and internationally against the dictatorship of the banks and big business and for the right to a secure and good-paying job for all.