UAW Socialists Stumped

Robert Farago
by Robert Farago

We haven’t said much about the United Auto Workers (UAW) lately. That’s because the union has kept a low profile. And why wouldn’t they? At the expense of nothing very much, their members continue to either draw the same paycheck (on the government’s dime) or cash-out (on the government’s dime). They also get billions in (federal) cash money into their VEBA health care superfund. And stock in both New Chrysler and New GM. Not that they really wanted a stake in their zombie masters, but, hey, it’s better than getting slapped in the face with a wet fish. Still, ’tis the nature of the beast to bitch. On the union’s far left, the The Party for Socialism and Liberation (“a newly formed working class party of leaders and activists from many different struggles, founded to promote the movement for revolutionary change”) has a thing or two to say about the UAW’s New Deal with New Chrysler. Only it doesn’t sound like the stuff of barricade manning.

The contract, which covers 26,800 UAW-represented workers, is full of concessions. The contract allows Chrysler to hire as many new workers as it can at a wage and benefit rate roughly half that paid to current UAW workers. Cost-of-living increases are suspended. Workers will lose two paid holidays in both 2010 and 2011 and will also lose performance bonuses and Christmas bonuses in 2009 and 2010. Meanwhile, the prices of food and gas continue to increase.

The contract calls for binding arbitration on a new contract through 2015. If no agreement can be reached on a new contract, the arbitrator must base total hourly labor costs on a rate comparable to Chrysler’s U.S. competitors, including foreign-owned manufacturers.

That’s a lot of concessions . . .

In the Wiggles World perhaps. Here in the real world, the UAW comes out of this smelling of roses. Despite ChryCo’s bankruptcy, not one union worker was thrown out on the street without a paycheck, a payoff, a pension or benefits. The new hires are the new hires. And their medical benefits took a symbolic hit.

Reading the PLS’ diatribe, you kinda get the impression that the union agitators understand this. Hence their call for a “broader fight back initiative,” and a conclusion that doesn’t really conclude much of anything.

What should labor do? Would it have been enough to reject the contract concessions and launch a fight against Chrysler? There is no guarantee that such an approach would have been effective, and it would have put labor even more on the defensive, allowing the media pundits to paint the UAW as the obstacle to “saving Chrysler.” Simply fighting a defensive contract-by-contract, company-by-company struggle is a recipe for defeat.

Workers have shown that they are ready to fight back, as the Republic Door and Hartmarx struggles have illustrated. Labor needs to launch a broader fight-back initiative, a political fight against the attempt of the capitalists to solve their economic crisis on the backs of the workers.

Robert Farago
Robert Farago

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  • Vento97 Vento97 on Jun 30, 2009
    indi500fan : Why has no Republican been able to make the obvious case that Joe Taxpayer is shelling out tens of billions to provide $3200/month pensions and silver (formerly gold) plated benefits to 50 yr old UAW retirees? The same reason said group won't make the obvious case that Joe Taxpayer is shelling out tens of billions to provide golden parachutes to 50+ yr old Wall Street and Banking executives from firms who TOOK THE GOVERNMENT BAILOUT MONEY....
  • Pch101 Pch101 on Jun 30, 2009
    Accounting of labor costs must be missing some key element or cost within union shops. Not particularly. Wages are operating costs, just as they would be anywhere else. What you are missing is that auto making is a capital intensive business where labor is a small piece of the overall cost picture. Cutting the cost of a minor category does little to the total. That's just arithmetic, and is true in this case because of the nature of what an automobile is (a complex device consisting of thousands of parts and assemblies.) There is a reason why car makers have opened plants in the US, while other industries have been shutting then down and offshoring them. The cost structure in automaking is different, and the ways in which profits are generated are different. It is possible to make a car in the US and turn a profit, whereas that can be quite tough with cheaper commodities. If you do the math on GM, as I have on other threads here, you can see that GM loses money largely because it has no brand equity or pricing power, so it sells cars for less than it would cost anybody to make them. It's a revenue problem, not a cost problem. If GM is to have a future, it lies not in fixating on cost reductions for the sake of them, but in making cars that Americans want to buy at a price above the normal cost of production. It's quite possible that unit costs would have to increase in order for that to happen; the focus needs to be placed on making better vehicles, which may require more investment, higher parts prices and wage stability.
  • Dartdude Having the queen of nothing as the head of Dodge is a recipe for disaster. She hasn't done anything with Chrysler for 4 years, May as well fold up Chrysler and Dodge.
  • Pau65792686 I think there is a need for more sedans. Some people would rather drive a car over SUV’s or CUV’s. If Honda and Toyota can do it why not American brands. We need more affordable sedans.
  • Tassos Obsolete relic is NOT a used car.It might have attracted some buyers in ITS DAY, 1985, 40 years ago, but NOT today, unless you are a damned fool.
  • Stan Reither Jr. Part throttle efficiency was mentioned earlier in a postThis type of reciprocating engine opens the door to achieve(slightly) variable stroke which would provide variable mechanical compression ratio adjustments for high vacuum (light load) or boost(power) conditions IMO
  • Joe65688619 Keep in mind some of these suppliers are not just supplying parts, but assembled components (easy example is transmissions). But there are far more, and the more they are electronically connected and integrated with rest of the platform the more complex to design, engineer, and manufacture. Most contract manufacturers don't make a lot of money in the design and engineering space because their customers to that. Commodity components can be sourced anywhere, but there are only a handful of contract manufacturers (usually diversified companies that build all kinds of stuff for other brands) can engineer and build the more complex components, especially with electronics. Every single new car I've purchased in the last few years has had some sort of electronic component issue: Infinti (battery drain caused by software bug and poorly grounded wires), Acura (radio hiss, pops, burps, dash and infotainment screens occasionally throw errors and the ignition must be killed to reboot them, voice nav, whether using the car's system or CarPlay can't seem to make up its mind as to which speakers to use and how loud, even using the same app on the same trip - I almost jumped in my seat once), GMC drivetrain EMF causing a whine in the speakers that even when "off" that phased with engine RPM), Nissan (didn't have issues until 120K miles, but occassionally blew fuses for interior components - likely not a manufacturing defect other than a short developed somewhere, but on a high-mileage car that was mechanically sound was too expensive to fix (a lot of trial and error and tracing connections = labor costs). What I suspect will happen is that only the largest commodity suppliers that can really leverage their supply chain will remain, and for the more complex components (think bumper assemblies or the electronics for them supporting all kinds of sensors) will likley consolidate to a handful of manufacturers who may eventually specialize in what they produce. This is part of the reason why seemingly minor crashes cost so much - an auto brand does nst have the parts on hand to replace an integrated sensor , nor the expertice as they never built them, but bought them). And their suppliers, in attempt to cut costs, build them in way that is cheap to manufacture (not necessarily poorly bulit) but difficult to replace without swapping entire assemblies or units).I've love to see an article on repair costs and how those are impacting insurance rates. You almost need gap insurance now because of how quickly cars depreciate yet remain expensive to fix (orders more to originally build, in some cases). No way I would buy a CyberTruck - don't want one, but if I did, this would stop me. And it's not just EVs.