"The surge in auto profits, despite declining sales, demonstrates once again the treacherous role of the United Auto Workers (UAW) union, which has helped the auto companies slash wages and benefits while increasing the number of low-cost temporary and part-time workers. The increased use of temporary workers sanctioned in the UAW sellout agreement in 2015 has allowed the Detroit."
US auto profits soar as sales slowdown threatens more layoffs
By Shannon Jones
11 May 2017
11 May 2017
Sales of US-based automakers declined again in the month of
April continuing a four-month trend. After rising for seven straight years, car
sales appear to have a hit a peak and are falling back, raising the prospect of
significant layoffs.
Despite this both General Motors and Fiat Chrysler reported
record profits in the first quarter of 2017, with GM earnings up 34 percent to
$2.61 billion and Fiat Chrysler rising 34 percent to $698 million. Ford posted
a 35 percent year-over-year decline, but still took in a hefty $1.6 billion.
Higher earnings are not translating into job security for
production workers. General Motors has already carried out job cuts this year,
including the elimination of shifts at its Lordstown, Ohio Assembly plant,
Lansing Grand River and Delta Township factories and Detroit-Hamtramck
facility. This week it is being reported that GM plans to slow down production
at its Spring Hill, Tennessee manufacturing complex, raising the possibility of
layoffs. The plant is currently running three shifts with some workers on
seven-day, 12-hour schedules.
Ford has meanwhile announced production cuts at its Avon
Lake, Ohio plant, which builds the F-650 and F-750 pickup truck. The company
said it is eliminating 130 jobs and cutting production at the facility due to
lower demand for the previously hot selling cargo vehicles.
Meanwhile, auto parts supplier Gestamp has announced
layoffs. The Spain-based company is cutting 84 jobs at its plant in Lapeer,
Michigan. The company builds metal stampings and assemblies and will phase in
the cuts through July.
Industry-wide, US car sales came in at an annualized rate of
16.88 million vehicles, the second straight month where sales were below the 17
million level. Sales figures were in most cases significantly lower than
earlier projections. General Motors sales fell 5.8 percent in April while both
Ford and FCA reported sales down by 7 percent or more. Japanese automakers
Toyota and Nissan saw their sales fall by 3.5 percent and 2 percent
respectively. Honda’s sales fell 7 percent.
The surge in auto profits, despite declining sales,
demonstrates once again the treacherous role of the United Auto Workers (UAW)
union, which has helped the auto companies slash wages and benefits while
increasing the number of low-cost temporary and part-time workers. The
increased use of temporary workers sanctioned in the UAW sellout agreement in
2015 has allowed the Detroit automakers to slash jobs without paying out
supplemental unemployment benefits (SUB). Further, the 2015 agreement removed
the cap on lower-paid tier-two workers, whose SUB benefits are capped at 26
weeks and only provides 74 percent of their pay. The deal also permits
additional overtime, allowing management to use existing workers to take up
production shortfalls without re-hiring workers.
Altogether these measures mean that autoworkers are
increasingly a disposable workforce. Unlike in previous downturns, there are
few significant cost restrictions on the auto companies’ ability to slash jobs.
For its part the UAW has sanctioned layoffs, saying they are
justified due to “market conditions.”
A tier-two worker at the Fiat Chrysler
Jefferson Assembly plant contacted by the World Socialist Web Site Autoworker
Newsletter said, “They are increasing overtime. During our lunchtime,
they can mandate two crews to work and we have one mandatory Sunday every
month. At the same time, they have announced a one-month shutdown in July. We
haven’t had a shutdown in seven years.”
She said that while some autoworkers may have initially had
illusions in the Trump administration, with the recent spate of layoffs and the
attack on health care being orchestrated by the US Congress, “at this point it
is beginning to sink in that we are in danger.
“I don’t feel there is any real job security. We are
basically being told by the UAW to look out for ourselves. Everyone knows they
could be laid off any day.”
The slowdown in sales is being reflected in higher
inventories of unsold cars, which now stand at a level of 75 days across the
industry. A 60-70 day supply is considered normal.
For its part, GM had a 100-day supply of inventory on hand
at the end of April, up from 98 days at the end of March. GM says it is
stockpiling cars in advance of the closure of several plants later this summer
for re-tooling. Nevertheless analysts say there are likely to be more temporary
layoffs this summer, especially for plants that build slower-selling models.
One factor in the sales decline are rising interest rates.
The average interest on new car loans rose above 5 percent for the second month
in a row in April. There is also a shift in consumer preference away from
smaller sedans toward light trucks and SUVs that generally cost more money. For
example, sales of GM’s Chevrolet brand fell 10.4 percent in April and sales of
its subcompact Chevrolet Sonic were down 67.8 percent.
However, the sales slump is hitting more popular brands too,
with April sales of GM company’s top-selling Silverado pickup falling by 19.7
percent.
The market has been glutted with large numbers of previously
leased vehicles being offered for sale. In addition, auto industry experts are
concerned about the increase in the number of sub-prime auto loans and the rise
in the number of past due loans.
The New York Times quoted
a manager at a Honda dealership in Massachusetts who said, “The market is
tapped out. It is no longer expanding at the rate manufacturers thought it
would.” He said rising consumer sentiment “hasn’t translated into what’s
happening in dealerships where we are trying to sell cars.”
Despite its surge in profits, GM’s stock values have been
relatively flat over the past year. Neither has the recent multi-billion-dollar
stock buyback program instituted at the insistence of major shareholders led to
higher share values. In fact, auto start up Tesla Motors, which builds fewer
more than 100,000 electric vehicles per year, has a market capitalization of
$49.3 billion, larger than Ford and nearly on a par with GM’s $50.87 billion.
This has led to calls for a stock reorganization at GM to funnel
even more cash into the pockets of wealthy investors regardless of its impact
on the overall financial health of the company. General Motors has already put
billions into the pockets of investors through increased dividend payouts.
However, hedge fund Greenlight Capital, which owns over 2
percent of GM stock, wants the company to implement a dual stock plan. Under
this arrangement some stock would be dividend paying and the rest “growth”
stock. GM management has opposed the proposal saying it would undermine the
company’s credit rating. UAW executives who control the largest ownership stake
in GM, through union-controlled retiree health funds, have not commented on the
dispute yet.
New evidence of UAW
vote-rigging in 2015 Ford contract
Part
Two
By
Eric London
11 May 2017
On March 8, with a one-sentence decision, the UAW Public Review
Board (PRB) affirmed its December decision denying the request by a member of
UAW Local 600 in Dearborn, Michigan for an audit and revote of the 2015 Ford
contract ratification.
This was the eighth time the UAW rejected the Ford worker’s
requests for an investigation into his charges that the UAW violated its own
statutes and committed vote fraud. The UAW first heard the worker’s request for
an investigation in November 2015, shortly after the vote took place. They told
the worker he “lacked standing” to bring the issue before the International
Executive Board. The worker then requested and was denied a copy of the
ratification procedure from many UAW officials at Local 600 and Region 1-A. A Local
600 officer told him, “The document you are asking for doesn’t exist.” UAW
Regional Director Rory Gamble never indicated denial or approval of the voting
procedure that was used.
After taking the matter before the UAW PRB, the worker requested
an oral argument in accordance with standard procedure. On November 14, 2016
the UAW PRB denied the worker the right to testify in his own case. The denial
notice said: “The panel concluded that this appeal presented no issues of fact
or constitutional interpretation concerning which the PRB’s understanding would
be enhanced by oral argument from the parties.”
The Ford worker wrote in his rebuttal before the UAW PRB, “The
ballots used in the ratification vote were not only unnumbered, they were made
with a copier and no one had any idea how many were printed. The lack of any
attempt to identify the voters and check their names against a membership list
was a big failure. The elections committee should have challenged the ballots
found clumped together rather than trying to explain this phenomenon with talk
about a yardstick.
“The presence of one questionable ballot might be acceptable, but
the failure to account for 500 ballots at the DTP [Dearborn Truck Plant] and
another 300 in the M&C Unit [Maintenance & Construction] indicates
corruption and dishonest behavior. If nothing deceptive were taking place, why
did the local union fail to honor my original request for a recount of the
ballots? Why didn’t the local union put the membership lists and ballots into
the record?”
The UAW failed to disprove these connections. Instead, they
dragged out the worker’s request for nearly two years, leading him through an
administrative Alice in Wonderland.
In rejecting the worker’s appeal for an investigation of this
evidence of fraud, the UAW PRB wrote:
“We will not retroactively reverse ratification of a negotiated
contract that has been accepted by a majority of the covered employees based on
procedural objections raised by a local union member or group of members. Such
an order would disenfranchise the members who voted to ratify the agreement and
thereby violate the very democratic practices we are charged with preserving.”
What hypocrisy! The PRB has the nerve to accuse him of
disenfranchising his fellow workers by demanding a revote on a contract, which
he demonstrated only passed because the UAW manipulated the vote.
The ruling continues:
“If the ratification procedures put in place to obtain the
membership’s approval of a negotiated contract are deficient in any respect,
the membership can reject the contract … Article 19 of the Constitution gives
employees the means to reject their bargaining representatives’ framework for
ratification by voting to reject the contract presented in the context of that
framework. A vote to accept the contract, however, is a vote to accept the
process.”
This is what is known as a circular argument. If workers “ratify”
a contract because the UAW rigged the vote, they are giving their stamp of
approval to the rigged process. This begs the question: How is it possible for
workers to reject a contract—and the process as a whole—if the UAW can ignore
the actual vote and say it was ratified?
The review board also claimed the worker’s request for a fair
election “is a misreading of the Constitution” because Article 38’s requirement
that elections be “fair and democratic” does not apply to contract ratifications
but only to the election of union officers.
The PRB claimed the UAW is not required to have any transparent
procedures for ratification votes if the regional director follows some set
procedure. “The UAW Constitution allows a local union broad discretion to adopt
ratification procedures for negotiated contracts, subject only to the approval
of the Regional Director.” However, the UAW failed to provide evidence that the
regional director approved any of the shadowy procedures used during the vote at
Local 600.
The fact that the review board resorted to such rotten arguments
is proof it had no intention of seriously examining the worker’s evidence of
UAW fraud. If the UAW had nothing to hide, the PRB would have had no problems
refuting the worker with facts, transparency, and honest analysis.
The Public Review Board was constituted by the UAW in 1957 “for
the purpose of insuring a continuation of the high moral and ethical standards”
in the operation of the UAW. Its ostensible goal was to hear autoworkers’
claims regarding UAW constitution violations by the leadership. Its present
four members are law professors with ties to the trade union bureaucracy.
The review board has a long history as a rubber stamp for the
anti-democratic, anti-worker operations of the UAW leadership. It repeatedly
rules against workers on phony technicalities. It is the place where workers’
grievances with the UAW go to die. In a July 2016 edition of Solidarity
Magazine the UAW
boasted, “The board heard 64 appeals in the last four years and in no instance
has the union been found to have committed a serious ethical lapse.”
The review board’s decisions denying the worker’s appeal and
request for reconsideration were unsigned. This raises questions as to whether
the decision was actually written by the three law professors whose names
appear on the decision’s letterhead, or whether the decision was simply written
by Dennis Williams’ office.
The UAW’s efforts to shut up autoworkers and prevent them from
challenging the fraudulent 2015 contract is aimed at protecting the profits of
the corporations and ensuring the “right” of the companies to exploit the
working class however it chooses.
Under the fraudulent contract, Ford has subjected thousands of
workers to temporary layoffs and “secret” terms not previously disclosed to
workers. Third tier workers currently make $9 an hour at some Ford plants, for
example, and speed-ups and dictatorial shop floor conditions dominate. If the
vote was passed through fraud, that means the contract is not legally binding
and the workers have been cheated out of thousands of dollars over the course
of the life of the contract.
Their handling of the Ford worker’s appeal proves—for the
thousandth time—that the UAW cannot be reformed. This worker followed all the
UAW’s procedures at each step in the review process and his efforts were
stonewalled and rejected. At subsequent contract votes at John Deere in 2016
and Caterpillar in 2017, many workers raised similar
questions surrounding the legitimacy of vote outcomes.
The UAW is not a “workers’ organization” subject to the will of
its dues-paying members, but a tool of the corporations. In exchange for
imposing the dictates of big business, Williams, Settles and other top union
executives are rewarded with seats on corporate boards, direct cash transfers
from the auto bosses to UAW-controlled “training centers” and other business
opportunities.
The degeneration of the UAW is the product not simply of the
corruption of its top executives. It is rooted in the failure of its
pro-capitalist and nationalist program and long-standing political alliance
with the corporate-controlled Democratic Party.
In the face of the globalization of production, unions throughout
the world were transformed from organizations that pressured the corporations
for concessions into organizations that pressured workers to give up everything
to make their “own” corporations more competitive and profitable.
To defend their interests, workers must build new, fighting
organizations, democratically controlled by the workers themselves.
Rank-and-file committees should be elected in every factory. These committees
should bar UAW officials from their meetings and social media pages so they can
have a free discussion without the interference of company agents and spies.
Rank-and-file factory committees will create
the basis for a
genuine unification of workers.
They will establish lines of communication
across all industries and workplaces to bring
together all workers, black,
white and
immigrant, in the United States and
internationally, in a common
struggle to
assert their social rights against the insatiable
appetites of the
super-rich.
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