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The Ugly Truths of Corporatism

A Cruel and Shameless Ideology

by RALPH NADER

Like ravenous beasts of prey attacking a weakened antelope, the forces of subsidized capital and their mercenaries sunk their fangs into the United Auto Workers (UAW) and its organizing drive at the Volkswagen factory in Chattanooga, Tennessee. The UAW narrowly lost – 712 to 626 – and the baying pack of plutocrats exalted, as if they had just saved western civilization in the anti-union, lower-wage South.

The days preceding the vote were a corporatist frenzy with corporatist predators bellowing ‘the sky is falling.’ VW, which sensibly stayed neutral, but privately supported the UAW’s efforts and its collateral “works councils” (an arrangement that had stabilized and made their unionized, higher-paid workers in Germany more productive), must have wondered on what planet they had landed.

First out of the growling caves were the supine politicians, who always offer those proposing a factory big taxpayer subsidized bucks to bring crony capitalism to their region. Senator Bob Corker (R-TN) who, without citing his source, warned “I’ve had conversations today and based on those am assured that, should the workers vote against the UAW, Volkswagen will announce in the coming weeks that it will manufacture its new mid-size SUV here in Chattanooga.” VW immediately denied that cause and effect claim.

No matter, Senator Corker then assailed the UAW and its negotiated wages and work rules for bringing down Detroit, along with the Big Three Auto Companies – GM, Ford and Chrysler. That’s strange because for decades the UAW lifted up industrial labor while the auto companies made record profits. Apart from the mistake the UAW made years ago when they sided with the auto bosses in lobbying in Congress against fuel efficiency standards, which would have made domestically produced vehicles more competitive with foreign imports, the responsibility for the auto industry’s collapse lies with management. It was all about “product, product, product,” as the auto writers say, and Detroit’s products fell behind the Japanese and German vehicles. The J.D. Power ratings, year after year, had U.S. cars bringing up the rear. The foreign car companies rated higher on fit and finish, other quality controls and fuel efficiency, while, as one former Chrysler executive told me about his industry, “We were producing junk.”

Add these losses of sales to the speculative binge of the auto companies’ finance subsidiaries, like Ally Financial Inc., previously known as General Motors Acceptance Corporation, which got itself caught in the huge Wall Street downdraft in 2008-2009. The result was that the auto giants rushed to demand a huge taxpayer bailout from Washington, which they were given.

Business associations warned of a UAW invasion of other southern states if the union organized the VW plant.

Nevertheless, the big lie the corporatists tell is that it was all the UAW’s fault for getting decent wages for its workers, who face more than a few occupational hazards.

Then something strange happened. In jumped anti-tax leader, Grover Norquist, with a new group, having the Orwellian name of Center for Worker Freedom (CWF), to put up 13 billboards in Chattanooga accusing the UAW of supporting Obama and “liberal politicians.” Perhaps Mr. Norquist thought this would influence a majority of the factory’s workers who are Republicans.

The CWF’s website also put up ludicrous postings such as “UAW wants your guns.” Was all this anti-unionist Grover Norquist’s bizarre way of promoting the idea of cutting tax revenues by keeping wages down?

It gets stranger. Powerful Republican state legislators joined with the local State Senator Bo Watson who said that if workers vote to join the UAW, “I believe any additional incentives from the citizens of the state of Tennessee for expansion or otherwise will have a very tough time passing the Tennessee Senate.” He was referring to a continuation of the $577 million already granted (in state and local subsidies) to the existing VW plant to locate there, with an additional bonanza of 700 million more taxpayer dollars should VW open up a new line of SUVs.

This is big time corporate welfare which Grover Norquist repeatedly has said he is adamantly against. How to reconcile? Who knows? He dominates Congressional Republicans with his no-tax pledge, but Grover Norquist may be spreading himself too thin when he takes on the livelihoods of American industrial and commercial workers.

There is another anomaly operating here. As Jay Bookman, the Atlanta Journal-Constitution politics writer observes, these legislators and Governor Bill Haslam “are clearly threatening to use tax subsidies to punish VW for what it believes to be a good business decision.”

What were the factors among the 89% of the workers who voted in the union election?

The no voters felt that VW was paying them wages and benefits equivalent to what workers get at other UAW or organized factories, following the union’s major concessions in recent years. So why should they pay monthly union dues? They also took in the warnings of the politicians that a possible extension of the plant may not be given “tax incentives.”

The “yes” voters, on the other hand, wanted a collective voice through the “works councils,” which, under U.S. law, require a union. Such a combination has worked in all other European VW plants. Plant worker Chris Brown said it helps efficiency. He explained that “on the assembly line, the process changes each year because [of] new models. A voice in the company would help smooth the process from year to year.”

The non-union foreign transplants, as they are called, have to date opposed the UAW’s unionizing efforts, including Nissan, Toyota and Honda. But the UAW will keep trying.

It’s not the end of the world for the union that Walter and Victor Reuther built, which in the nineteen thirties lifted up exploited, voiceless auto workers to a decent living standard with benefits, at the same time of the auto industry’s enormous expansion.

As the two-tier auto industry wage system moves more workers to the lower tier, the appeal of a unified labor voice will become clearer.

Ralph Nader is a consumer advocate, lawyer and author of Only the Super-Rich Can Save Us! He is a contributor to Hopeless: Barack Obama and the Politics of Illusion, published by AK Press. Hopeless is also available in a Kindle edition.