Thursday, September 19, 2019

CORRUPT UAW HAS $760 MILLION STRIKE FUND..... But hands out only $250 per work for workers - BUT THE CORRUPT EXECS FILL THEIR POCKETS AS USUAL

The UAW’s $760 million strike fund: A bonanza for Solidarity House executives but only $250 per week for striking GM workers

19 September 2019

The powerful strike of American autoworkers against General Motors pits 47,000 workers against one of the world’s most profitable corporations. The strike is winning widespread support from workers who are looking to the strikers as the forward battalion in the global struggle against corporate domination and social inequality.
A struggle of this magnitude requires the mobilization of immense social and economic resources. Just as soldiers in an army must be adequately equipped in order to fight, workers engaged in a strike—a form of class warfare—must be adequately provisioned.
But the UAW officials, ensconced in the comfort of their corporate offices at Solidarity House, are refusing to provide GM workers with the support and resources they need to win this struggle.
Norwood Jewell, left, at opening of 2015 contract UAW-Fiat Chrysler talks (Credit: uaw-chrysler.com)
First, the UAW is keeping Ford and Fiat-Chrysler workers on the job, thereby leaving GM workers isolated and minimizing the impact of the strike.
Second, Solidarity House is limiting strike pay to $250 per week, far below the minimum required by autoworkers to cover their basic necessities during the strike. Even this does not begin until the second week of the strike, thus intensifying the financial burden borne by GM workers.
Calculated on the basis of a 40-hour week, the strike pay comes to $6.25 per hour, which is $3.20 below Michigan’s poverty-level minimum hourly wage of $9.45.

The financial expenditures of the UAW

The reason for the low strike pay is not because the UAW lacks the resources to pay workers more. The strike fund controlled by the UAW is $760 million. This money comes directly from contributions made by the workers. But only a fraction of that amount is being allocated by Solidarity House to the striking workers.
The subminimum wage being doled out by Solidarity House places the striking workers in a financial situation that will become increasingly desperate with each passing day. It is no secret that GM is counting on the economic distress facing workers to force them to accept another concessionary contract.
On Monday, the Detroit Free Press gleefully wrote: “What does $250 a week in strike pay really add up to these days? Not a lot. UAW strike pay is below the national poverty line, below the Michigan minimum wage and even below what the average retiree gets in Social Security.”
Noting that the low strike pay benefits the corporation, the Free Press added, “All those numbers give some perspective of just how tough it will be for strikers at General Motors to live on strike pay of $250 a week.”
But why is the UAW refusing to provide the workers with the support they need?
The UAW claims to be a union that defends the interests of tens of thousands of dues-paying members. In reality, it functions as a midsized corporation. Its primary business is providing and policing a low-cost workforce for General Motors, Ford and Fiat-Chrysler. The massive corruption scandal engulfing the organization is merely the naked expression of this fact.
The beneficiary of this corrupt business is a privileged group of approximately 450 salaried union executives, managers, office personnel and scores of flunkeys without any clearly defined job description. Their sole purpose—like mob characters in a Martin Scorsese movie—is to provide “muscle” for union officials whose patronage they depend on.
The Department of Labor filings show that there are over 450 UAW executives who made more than $100,000 in 2018. Even with the strike underway, the UAW has continued to issue paychecks to this gang of freeloaders. By the time workers receive their first strike paycheck, the UAW will have paid its own staff a total of $1.9 million.
According to 2018 Department of Labor filings, the UAW spent more than $72 million in salary and salary-related disbursements to UAW staff, equivalent to $276,483 per day. This includes those currently under indictment, who are getting paid between $2,000 and $3,000 a week. The UAW paid $3.7 million to its 30 officers in 2018, up from $2.4 million in 2017—a 54 percent increase in one year.
Most of these employees occupy placeholder positions with limited or no actual function. For example, the Department of Labor filings show there are 258 servicing representatives, 134 assistants, 83 secretaries, 42 organizers, 27 bookkeepers and 25 temporary campaign associates on the UAW payroll, most of whom make over $100,000 per year. What, for heaven’s sake, do these people do?
The UAW filings identify 18 typists and 10 stenographers! It would appear that Solidarity House has not updated its job functions since the 1950s. What are the actual jobs of the individuals holding these posts, pulling down salaries just below $100,000 annually? Are autoworkers to believe that UAW President Gary Jones and Vice President Cindy Estrada dictate their email to stenographers, who write down their pearls of wisdom and then turn their shorthand jottings over to typists? Don’t Jones and Estrada know how to send a text message on their own cell phones?
According to a recent job posting for a servicing representative at UAW Local 2322 in Massachusetts, the job of servicing representative entails “coordinating member-driven contract negotiations” and requires service representatives to “enforce contracts, resolve disputes,” “process grievances,” and “maintain regular and effective communication with workers.” As autoworkers know, however, servicing representatives do not perform any of these tasks. They make an average of $120,000 to $140,000.
The 42 “organizers” consist largely of bureaucrats past the age of 45 who make between $130,000 and $140,000. They do not actually organize anyone or anything. From 2017 to 2018, the UAW reported to the Department of Labor that it lost nearly 10 percent of its membership, dropping from 430,871 members in 2017 to 395,703 in 2018.
The rate of union executive-to-worker pay is grotesque. In comparison with autoworkers, a UAW service representative making $150,000 per year takes in over twice as much as a better-paid skilled tradesman making $75,000. The executive would make triple what a more senior autoworker making $50,000 per year makes and five times a temporary-part-time worker making $30,000 (if they work year-round).
Beyond salaries and fixed assets, the UAW spent an additional $25 million on other “representational activities.” Included in “representational activities” in 2018 were $359,815 in catering expenses, $1,337,357 on airplane tickets, and $5,395,442 in hotels and resorts.
In addition, in 2018 the UAW spent $30.8 million in benefits, $23.9 million in “general overhead,” $13.8 million in “union administration,” $10.4 million in “political activities and lobbying” and $4.7 million in improvements to UAW property like the Black Lake facility.
This money comes from the workers themselves. The average autoworker pays roughly $1,200 a year in union dues, meaning a worker with 5 years has paid $6,000 in dues (equal to 24 weeks of strike pay), and a worker with 25 years would have paid $30,000 in dues (the equivalent of more than two years of strike pay).
The UAW reported that the average monthly dues of a UAW member is $51.65. That means that by the end of 2019, Big Three workers will have paid over $100 million in dues since the beginning of 2015, while all UAW members will have contributed roughly $250 million during that period.

The UAW uses its “strike fund” to finance the apparatus

A significant portion of worker dues goes to maintaining the UAW’s “strike fund.” In 2001, the UAW strike fund was at $1 billion. Today, the fund contains $760 million.
Ostensibly, this fund is for financing strikes, but in fact it is used to finance the apparatus. The UAW has a massive strike fund but almost no strikes, and it intends to keep it this way. So why, without having called a substantial strike in over forty years, has the strike fund fallen $240 million over the last 18 years? The extent of the depletion is even worse when one calculates what the strike fund would be if its assets had been properly invested.
The fact is that Solidarity House has been using the strike fund as its executives’ own multimillion-dollar piggy bank.
In 1980, the UAW first amended its constitution to facilitate direct cash transfers from the strike fund to UAW salary payments and other expenses. At that time, 50 percent of all interest and dividends from UAW investments in the strike fund were directed to a fund set up by the union executives for salary and other non-strike expenses. In 1989, this was raised to 75 percent, and in 2006 the UAW moved to siphon off 100 percent of interest and revenue from strike fund investments.
Through the 1990s and 2000s, the UAW transferred large amounts of money out of the strike fund, including $50 million in 1995, $75 million in 2002, $60 million in 2006 and $160 million from 2010-13. Last year, the UAW agreed to transfer another $25 million from the strike fund. As a result, the UAW now spends significant amounts of money derived from the strike fund on non-strike-related activity.
In 2018, the UAW only spent $208,970 in strike benefit payouts. In comparison, the UAW spent $748,239 purchasing furniture—more than triple the amount they spent on paying workers’ strike pay.

The need for rank-and-file committees

The UAW has a vested interest in shutting down the strike, not only to protect their slush fund and their salaries, but to protect the exploitative business model of the UAW.
Hundreds of UAW officers are fearful that strike pay will drain the UAW’s assets and cut off the endless flow of workers’ dues money into their own pockets. The UAW officers hope to use the organizational apparatus and its resources to isolate workers and force through a concession contract to end the strike, thereby maintaining their position as policemen of the workforce.
In functioning as a strikebreaker, the UAW is giving expression to the nature of the unions as a whole. Last year, during oral arguments in the Supreme Court case of Janus v. AFSCME, union lawyer David Frederick made the explicit point that the role of the unions is to prevent strikes. The so-called “agency fees” (the equivalent of mandatory dues) are “the tradeoff for no strikes.” Without “union security,” he argued, “you can raise an untold specter of labor unrest throughout the country.”
Frederick’s argument was clear: the financial stability of the trade unions is essential in preventing the growth of working-class opposition in the United States. They are an industrial police force in the service of the corporations and the state.
This is the role that the UAW is playing in the current struggle. It is not a question of reforming this organization. The UAW is staffed by and serves the interests of the affluent UAW executives.
What workers need is their own rank-and-file committees that they democratically control. Such rank-and-file committees must be premised on sharing information between workers, facilitating democratic decision-making among all workers, and ensuring that workers can take common action based on the decisions they reach.
The formation of rank-and-file committees is urgently required to prevent the defeat of the strike. The autoworkers must gain full control over the financial resources that are being misused by Solidarity House.
The outcome of the strike will not be decided by the size of strike pay alone. A comprehensive social and political strategy is required to mobilize the full strength of the working class within the United States and internationally behind the strike. But as the autoworkers fight to expand the strike, they must have at their disposal the necessary resources. Therefore:
  • The strike pay must be raised immediately to $750 per week.
  • The regular bloated salaries of all UAW functionaries should be immediately suspended. All nonessential personnel should be furloughed, pending the successful conclusion of the strike. Remaining union functionaries should be paid no more than striking workers.
But more importantly—since money is not everything—workers must take control of the political direction of the strike.
In fighting General Motors, they are not just engaged in a trade union struggle against CEO Mary Barra and her board of directors. They are in a political struggle against the massed power of the Wall Street banks, who stand behind GM, willing to back up its anti-worker demands with billions in credit.
And behind the banks stands the capitalist state, from Republican Donald Trump in the White House down to Democratic Governor Gretchen Whitmer in Michigan and Democratic Mayor of Detroit Michael Duggan, and an array of other governors and mayors, all prepared to mobilize the armed power of the police and the repressive forces of the federal government against the workers.
Against the corporations and their union partners, backed by the capitalist government at all levels, rank-and-file committees will advance the interests of all autoworkers and will make a broad appeal to workers and youth in all countries and all industries: the struggle against the corporations requires a broad, united movement of the working class against social inequality.


GM shuts off healthcare for striking autoworkers, begins to use scabs in attempt to break strike

On September 19 at 7:00 p.m. Eastern Time, the WSWS Autoworker Newsletter is hosting an online meeting to discuss the strategy and perspective needed to win the strike. To participate, visit wsws.org/autocall.
Auto giant General Motors is moving aggressively to break the strike by nearly 50,000 autoworkers in the US.
The company has already cut off healthcare for striking workers, forcing them onto substandard insurance provided by the UAW strike fund. The move was seen by commentators as a major and deliberate provocation, with the Detroit Free Press describing it as “pouring gas on the fire.”
The company is already hiring scabs to reopen key facilities, including plants in Arlington, Wentzville and Flint.
The giant auto company is losing up to $100 million a day due to the strike, which has already led to a shortage of parts and production slowdowns in Canada and Mexico. GM has announced 1,200 temporary layoffs at its assembly plant in Oshawa due to a shortage of parts. Parts supplier Lear has laid off an entire department at its facility in Ramos Arizpe, Mexico.
Pickets at Detroit-Hamtramck Assembly
The global impact of the strike demonstrates the unity of interests between American workers and their brothers and sisters around the world, who are integrated in a global process of production and who face the same transnational corporations. Moreover, GM workers have overwhelming support from workers in other countries, as demonstrated by the meetings held by autoworkers in Silao, Mexico in support of the US strike.
Autoworkers are not only fighting CEO Mary Barra and other corporate executives in Detroit. Behind them stand Wall Street and powerful global investors who want an intensification of the assault on the working class to fuel the endless rise on the stock markets.
Just a few weeks after Wall Street threatened to reduce Ford’s credit rating to “junk status” for not implementing a savage cost-cutting drive fast enough, the Moody’s credit rating agency issued the same threat to GM if it does not quickly defeat the strike and impose its dictates on workers.
In a New York Times column Tuesday, Steven Greenhouse warned that the “Autoworkers strike is bigger than GM.” It is part of a wave of strikes over the last two years by teachers, supermarket, hotel and other workers, which has been fueled by “Americans’ widespread dismay with wage stagnation and income inequality, even as corporate profits are flying high.” Greenhouse writes that “successful strikes beget successful strikes.”
The seriousness with which the ruling class takes this struggle is shown by the rapid intervention of the Trump administration, which wants an end to the strike and to push through a deal in which the UAW accepts management’s terms in exchange for keeping one or two plants open and supposedly “saving American jobs.”
As for the Democrats, they are the false friends of autoworkers. While claiming they support the strike, their main concern is to maintain the organizational domination of the UAW and force through further concessions. It was the Obama administration, working with the UAW, that led the assault on autoworkers during the 2009 restructuring of GM and Chrysler, which included expanding the two-tier wage system and eliminating overtime after eight hours.
As for the UAW, it does not have a strategy for victory, it has a strategy for defeat. The UAW, whose top leadership faces indictment for embezzlement and bribery charges, has forced 110,000 Ford and Fiat Chrysler workers to stay on the job even though both automakers are demanding similar, if not worse, concessions from workers.
At the same time, the UAW is not paying any strike benefits for the first week, and after that a pitiful $250 a week, guaranteeing that workers will face financial pressures to end the strike.
The UAW has also not called for mass picketing and mass demonstrations to stop strikebreaking. In at least some locations, it is explicitly ordering workers to allow scabs through unhindered, cynically using the threat of arrest to intimidate workers. Moreover, the strike was only called after the union ordered production workers on Sunday to cross the picket lines of maintenance workers, who are also in the UAW.
The UAW fears that even a perceived victory would encourage other workers to rebel against decades of union-backed concessions, disrupting its decades-long relations with the corporations. Its “negotiations” with the company are little more than a grand plea bargain, whereby figures such as Gary Jones hope to avoid lengthy jail terms by demonstrating their value in shutting down the strike as soon as possible.
To carry out a serious fight, workers must break the UAW-imposed isolation of the strike and mobilize the full weight of the working class in defense of the autoworkers.
This requires the formation of a network of rank-and-file factory committees operating in every plant, democratically controlled by the workers.
GM workers organized in factory committees should make an urgent appeal to their brothers and sisters at Ford and Fiat Chrysler, who are no less determined to fight, to join them in their struggle.
They must turn out into the neighborhoods, to student youth, teachers, warehouse workers, and other sections of the working class in order to make their struggle the focal point of a broader movement of the entire working class.
Above all, autoworkers must link up their struggle with workers internationally, who confront essentially the same conditions and the same globally organized capitalist system. In particular, this means linking up with the tens of millions of autoworkers and auto parts workers throughout the world.
Without such an international strategy, based on an understanding of the international scope and character of the class struggle, it is impossible even to organize a unified movement in the American auto industry, which is composed not only of the Detroit automakers but the dozens of foreign-based transnational auto companies that operate in the United States.

As GM tries to cut health benefits for workers on strike, Federal Reserve prepares more handouts to Wall Street

Forty-six thousand US autoworkers went on strike this week to fight efforts by GM to cut their healthcare benefits, based on the claim that workers’ healthcare plans are “unaffordable” for the multi-billion-dollar corporation.
Other US and international companies, together with the banks that control them, are looking to GM to set a benchmark for reducing labour costs to offset the impact of a slowing global economy.
Workers, in other words, will have to pay for a mounting global economic crisis, as they did after the 2008 financial crash, when pay cuts ensured a decade of record profits for corporations and banks.
But the Federal Reserve is taking exactly the opposite attitude to Wall Street, providing billions of dollars in free cash to ensure that the looming global economic downturn does not affect corporate bottom lines.
A striking GM worker (left) A stock market trader (right) [Credit: Associated Press]
On Wednesday, the US central bank cut its benchmark federal funds rate, reducing the borrowing cost for banks and major corporations that are already posting record profits.
Perhaps even more importantly, the Federal Reserve Bank of New York made two emergency injections of $75 billion into financial markets, in the first such actions since the 2008 financial crisis. The Fed is on track to make a third emergency intervention on Thursday.
This week’s events have made clear that the trillions in free money given to the banks after the 2008 financial crisis were only a down payment.
The Financial Times wrote that the move is “a step towards more QE.” This is a reference to the “quantitative easing” programs that, over the decade following the global financial crisis, saw the printing of $4 trillion by the US central bank and its infusion into the financial system.
That was in addition to the nearly $7 trillion of “emergency lending” by the Federal Reserve and treasury to the financial system, which was used to prop up over $30 trillion in financial assets after the 2008 crash.
Commentators drew far-reaching implications from this week’s developments. “How significant is this? Extraordinarily…The Fed [lost] control of monetary policy,” the Financial Times quoted one US banker as saying.
The fact is a decade of massively expansionary monetary policy has distorted elements of the economy in profound ways. It raises the prospect that the next economic crisis will throw into question, not just the survival of the financial system, but the stability of the dollar and solvency of the government.
However, the Fed’s only answer to the mounting crisis is to throw more money at the banks.
The Fed’s actions this week sent a clear message to Wall Street that more money is on tap. “After the New York Fed’s temporary injections of money into the financial system, many in the market think a lasting solution will require the central bank to start expanding its balance sheet once more,” the Financial Times wrote.
The article concluded, “The resumption of quantitative easing… appears closer than many think.”
But even the extraordinary actions of the Federal Reserve this week were too little for US President Donald Trump, who wanted an even bigger rate cut.
In response to this week’s announcement, Trump tweeted, “Jay Powell and the Federal Reserve Fail Again. No ‘guts,’ no sense, no vision! A terrible communicator!”
The real estate conman turned president has repeatedly and consistently demanded that the US central bank explicitly pump up the value of the stock market.
“If the Fed would cut, we would have one of the biggest Stock Market increases in a long time,” Trump tweeted in August. Left unsaid is the fact that rising stock market prices overwhelmingly benefit the super-rich, who hold the vast majority of financial assets.
Amid a slowing global economy, the Fed has manifestly failed in its attempt to “normalize” monetary policy. Instead, it is once again opening the money spigot to ensure that the wealth of America’s financial oligarchy is protected, while corporations ramp up their attack on workers’ jobs, pay, and benefits.

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