With just 635 workers on the picket line, the lockout at farm equipment maker CNH Global might seem to be just one small battle in the endless corporate war on labor.
In fact, it’s a struggle that tests whether the United Auto Workers (UAW) is capable of maintaining any power in the agricultural implement industry–and whether organized labor as a whole can defend the dwindling number of good-paying manufacturing jobs.
“When I hired in back in 1977, there were about 1,200 people here,” Mike Edwards, a member of UAW Local 807 at the CNH plant in Burlington, Iowa, told me. “Four years ago, there were 787. Now we’re down to 235 members in the local.”
Another 350 workers, members of UAW Local 180, are locked out at CNH’s tractor assembly plant in Racine, Wis. Smaller groups of UAW workers at a CNH warehouse in Minnesota and a design facility in Illinois face Christmas on the picket line as well–in a fight to stop a pay cut and hold the line on health insurance costs.
The showdown at CNH highlights a series of trends hammering workers across the U.S.–the hemorrhaging of manufacturing jobs, outsourcing, falling wages, skyrocketing health care costs and the shredding of retiree benefits.
According to government statistics, some 2.7 manufacturing jobs have been lost since 2001–and in November, another 5,000 disappeared. November saw a net gain of just 112,000 jobs, half the number the White House predicted–even though Gross Domestic Product for the third quarter increased at an annual 3.9 rate.
That’s only part of the terrible jobs picture. While the overall jobless rate is 5.5 percent, long-term unemployment persists. Some 14 percent of the unemployed–1.2 million people–have been looking for work for more than 39 weeks, a level usually associated with full-blown recessions.
Edwards and the other workers on the picket line at CNH know something about long-term joblessness. Although Edwards hired in at CNH–it was Case Equipment then–nearly 28 years ago, he’s been on layoff for periods that total up to 13 years. That means he’s still a long way from making the 30-year mark needed for full retirement benefits.
Meanwhile, thousands of CNH workers who have lost their jobs in plant closures in recent years will find it nearly impossible to find a job that pays anything close to their old wages–and even harder to get the kind of benefits they used to receive. According to the Economic Policy Institute, wages in the expanding sectors of the economy–such as retail sales and health care–was 9.5 percent lower than hourly pay in sectors where employment was going down.
Pensions are under attack as well. United Airlines and US Airways have led the way in using bankruptcy court to stop paying into pension funds–and threatening to void union contracts altogether unless workers take another round of pay cuts.
Similar demands from CNH provoked workers to walk out November 3. When management declared an impasse in bargaining–a likely prelude to permanently replacing workers–the UAW offered to return to work, but management kept them out.
The CNH struggle will in turn affect a much larger fight at Caterpillar, where 9,0000 UAW members have been working without a contract since April. In fact, CNH management is mimicking the hard-line tactics that Caterpillar used in its six-and-a-half-year contract battle with the UAW during the 1990s in which the company defeated two strikes. If CNH can force the UAW to retreat, Caterpillar will be even more aggressive.
CNH is the creation of a 1999 merger between Case–which once employed thousands of UAW members–and the Dutch company New Holland N.V., which is controlled by the Italian auto giant Fiat.
After years of downsizing and outsourcing, CNH is determined to shatter the power of the UAW altogether. Company proposals would roll back 40 years of improvements in health care coverage, according to John Valko, president of UAW Local 180 in Racine.
Workers hired since 1998 would retroactively be deemed “new hires” and paid at a lower-tier pay rate without cost-of-living allowances–resulting in an immediate $4.92 pay cut. New hires won’t be eligible for bonuses, either. Today, base wages range between $17 and $20 per hour at the Burlington plant–well below wages in auto assembly plants. With the new cuts and additional health care costs, workers’ income would be reduced to 1984 levels.
Retiree health care is on the line as well. CNH ceased paying the retirees’ health insurance premiums–guaranteed under previous contracts–until a federal judge ordered the company to do so.
“The bottom line to me is that they want to break the union,” said Edwards, who is mayor of Burlington and a longtime Democratic Party activist. “They’ve whittled the jobs down to such a small number that we’ve got some 250,000 square feet of empty building. If push comes to shove, they can move this operation anywhere they want to and close this facility without too much impact on their overall business.”
That’s a risk that UAW members realized when they voted overwhelmingly to strike just before the previous contract expired in May. “Only one person voted no,” Edwards recalled.
Some point to CNH’s Italian management as the problem. But the last contract negotiated with the old Case management in 1998 opened the door to these latest attacks. That deal included annual bonuses of 3 percent instead of wage increases that are compounded annually. It also imposed four-day, 10-hour workweeks and three-day 12-hour workweeks. Piece rate incentives were largely withdrawn, cutting pay further.
UAW leaders pushed hard for workers to accept those concessions. When UAW Local 1304 at the Case plant in Moline, Ill., voted the deal down, the union didn’t reopen negotiations, but raised the pressure until the local voted to accept.
The Moline plant was closed in August as part of CNH’s cost-cutting moves–and the UAW is now in a weaker position in a fight that can’t be avoided any longer. Plus, by agreeing to two-tier wages in the auto parts industry, top UAW officials only encouraged management to be aggressive at Caterpillar and CNH.
In Burlington, the outcome of the struggle could well determine whether the town will face the plight of cities like Galesburg, Ill., where the recent closure of a Maytag plant has wiped out most of the few remaining good-paying unionized manufacturing jobs.
“If we lose these jobs in Burlington, it’s going leave us with one good labor shop in this town–the Federal Mogul plant, which is also a UAW shop,” Edwards said. “But even they have a two-tier wage system. And their contract is up in the spring.”
The UAW does have some leverage over CNH: the tractor plant in Racine is brand new, built with the help of tax subsidies. The company won’t walk away from that.
But with a well-planned scabbing operation under way, management is prepared to go for months–or longer–to break the UAW.
Waiting it out is not an option. The experience at Caterpillar shows that the only way to win is to raise the stakes by building solidarity and mounting large pickets that can challenge the strikebreakers.
For Edwards, the battle at CNH is part of a longer-term effort to reverse labor’s decline. Turning things around, he said, “is going to be one hell of a fight. It’s going to border on revolution, I’m afraid.”
Send messages of support to UAW Local 807 at 319-753-0179 and UAW Local 180 at 262-631-5980.