Twilight of the UAW
The past two years have seen the biggest attacks since the foundation of the UAW in 1936. This included cutting wages for new hires in half, eliminating company responsibility for retiree healthcare, the closing of dozens of factories, and the loss of hundreds of thousands of jobs. With the whole economy entering the worst recession since the 1930s, the auto companies are now trying to destroy the UAW completely. The demands being put on autoworkers will drive down union wages, benefits, and working conditions to be equal to or worse than those of non-union autoworkers. Joel Bergman. “In Defense of…”
After securing a deal for $17.4 billion in government loans in December, GM and Chrysler have been in negotiations with the UAW to restructure the companies to make them “viable.”. The proposed contract changes would be devastating: they would eliminate the cost-of-living-adjustment, limit supplemental unemployment benefits, reduce break times, and destroy other key benefits. There would also be major cuts in company payments into the UAW’s retiree healthcare fund, a key concession from the 2007 contract. Although Ford has not asked for government loans, they are demanding the same cuts from the UAW. GM and Chrysler have already announced plans to cut tens of thousands more jobs and close more than 15 plants in the next two years. Bret Hoven. “Crisis in …”
On top of it all, General Motors was unwilling to bail out its former parts unit, Delphi. So, in return, the Chairman and CEO Robert "Steve" Miller decided to file for Chapter 11 protection. Through bankruptcy, Miller reckons, he can get what he needs from the UAW and GM to make the money-losing company profitable again.
Delphi's failure means a massive and painful overhaul, possibly for all parties. The move by Miller, who has been involved in bankruptcy filings by Bethlehem Steel, United Airlines, and auto parts maker Federal Mogul Corp., has grave consequences for Delphi's 24,000 UAW workers and another 11,000 retirees. While the UAW gets penalized, so to speak, foreign auto makers get state and local tax breaks to build new plants in the U.S. Because of this, every big auto maker is expanding production in the Chinese market and exporting vehicles to the U.S. Durbin, Dee-Ann. “UAW Authorizes…”
The two-day strike by the UAW against GM illustrates clearly the steep decline of the importance of unions in the United States economy. Once perhaps the most powerful union in America, UAW membership among the big three auto companies has fallen by 40 per cent since the last national contract in 2003, and by much more since the 1980's.
This union represented about one quarter of a million workers at GM as recently as 1994, but its active membership there has shrunk to under 75,000. As a result of this latest contract, GM will unload its present and future health care liabilities into a trust fund run by the union. Apparently, GM reduced its liabilities for health care by over $15 billion. Also the company eliminated any uncertainty over its future liabilities concerning medicare towards its active and retired employees. In return, GM committed to keeping a number of plants operating in North America, and made a few other concessions such as cutting wages for workers and retirees. Joel Bergman. “In Defense of…”
In addition, GM offered retirement incentives, ranging from $35,000 to $140,000 to nearly all of its 113,000 U.S. hourly workers. The early retirement plan would trigger the largest retirement of union workers from a Detroit automaker in recent memory and help GM reach its goal of cutting 30,000 hourly jobs. GM will make the offers to workers in three categories: (1) Those with 30 or more years of service will receive a $35,000 incentive to retire with full pension and other benefits. (2) Those with between 27 and 30 years on the job will be given credits to bridge the gap to retirement, but no special payout. (3) Those with lower seniority will be offered more than $100,000 in a lump sum payment to leave the company with only the pension benefits they have accrued.
The WorkPlace. “Twilight of…”
In reality, these events are not independent market forces of global competition which just happen to have unfortunate results for some workers. Nor is it a question of foreign workers gaining what U.S workers are losing in foreign markets. However, we can expect to see the Chinese cars coming next year at a cost of 40% less than comparable American cars. Richard Freeman, a Harvard University economics professor stated that he was not sure if the UAW can hold on to its wages and benefits in the face of this ‘foreign wave’ of new imports.
The WorkPlace. “Twilight of…”
Therefore, it is absolutely necessary for autoworkers to fight against these attacks. The Big Three, with the help of Congress, are attempting to make autoworkers pay for a crisis they did not create and have no control over. They have been struggling to maintain profitability for several years, during which the auto industry has sold over 17 million vehicles annually in the U.S. Now, with rising unemployment, diminishing wages, and tighter restrictions on loans, it is unlikely more than 10 million new vehicles will be sold in 2009. Joel Bergman. “In Defense of…”
The solution as of now is that base wages for UAW workers will remain the same, but the deal limits supplemental pay that laid-off workers receive while they collect unemployment benefits. The ratified deal also ends the controversial “Job Banks” program that ‘let workers collect most of their pay from the company when laid-off.’ Other solutions that would eliminate future problems would include cutting wages and benefits, gaining control of health care issues, reducing production costs and material cost through merging with foreign auto makers, using low competitive supplier sources and leveraging scales. Sharon Silke. “UAW suspends…”
So, how did the UAW get into this position in the first place? Auto manufacturers, forced to increase production to maintain profits, could not simultaneously create a market that could keep up with today’s production levels. During this period, wages have fallen while manufacturers have significantly overproduced cars, trucks, SUVs and minivans that no one could buy. People were forced to take out low-interest mortgages, second mortgages, extra credit cards and car loans in order to maintain the same standard of living they enjoyed in the past. Joel Bergman. “In Defense of…”
People were unable to pay off their debts as banks foreclosed on their mortgages, forcing them to go bankrupt and even live on the street. All of this could have been avoided if the UAW had not fought off concessions that would have helped the U.S carmakers fend off imports in the 80’s and 90’s. Like the steel and airline industry, now the UAW is paying the price. The WorkPlace. “Twilight of…”
We should support unions because they are responsible for almost every advance made by working people. Rises in the standard of living don't just happen by themselves. The 8-hour day, the 40 hour week, unemployment insurance, disability insurance, and OSHA laws are all from the union movement. Carolyn Fninski. “Peace-Train…”
Concerning our economy and society, not having the UAW right now would have a horrific effect on society. The most productive auto manufacturing plants would probably be shutting down. Then, if U.S auto factories were to shut down, whole communities would be destroyed, families torn apart and millions of people would be forced into poverty. This would be a mortal blow to the UAW and the trade union movement in the U.S.
The UAW has always made fiercely loyal commitments to improve the lives of their workers. Among other things they were the first to improve job security, make available comprehensive training and education to staff, provide employer paid health insurance plans for industrial workers, and take a political stance for employees. The UAW has always allied with the Democratic Party, fighting for the American worker and not for the big bucks companies. They’ve undertaken many economic and social issues and, luckily for the American union workers, they have often prevailed. (Michael Goldfield 199)
Thanks to their hard work, the UAW has provided employees with rights and benefits that non-unionized workers could never dream of. UAW members have the right to seek justice through the National Labor Relations Board. They are protected from unfair labor practices. Even in a time of crisis like today, employers don’t have to limit productivity. Still, their workers are ensured jobs at all times. Whether non-union workers benefit from the above conditions or not, the UAW and it’s union counterparts and non-union counterparts, benefit immensely. That is why the UAW and the Big 3 (GM, Chrysler, and Ford) are still the driving forces of our economy today.
Bergman, Joel. “In Defence of Marxism.” 16 Jan 2009. The Financial and the Auto Sector. 18 Mar 2009 < http://www.marxist.com/financial-crisis-and-auto-sector.htm>
Durbin, Dee-Ann. “UAW Authorizes Strike Against Delphi.” 17 May 2006. Washington Post. 19 Mar 2009. < http://www.washingtonpost.com/wp-dyn/content/article/2006/05/17/AR2006051700449.html >
Fninski , Carolyn. “Peace-Train: Support Unions.” 4 Sept 2008. For The Colorado Daily.
19 Mar 2009. < http://www.coloradodaily.com/news/2008/sep/04/support-unions/ >
Goldfield, Michael, The Color of Politics, New York, New Press, 1997.
Hoven, Bret. “Crisis in the Auto Industry-Nationalize and Re-Tool to Save Jobs!” 11 Mar 2009. UAW Local 879. 15 Mar 2009
Silke, Sharon. “UAW suspends jobs bank, delays retiree fund payments.” 14 Dec 2008. USA Today. 15 Mar 2009 < http://www.usatoday.com/money/autos/2008-12-03-uaw-auto-bailout_N.htm >
The Workplace. “Twilight of the UAW.” 10 Apr 2006. Business Week. 17 Mar 2009