How Concessions by UAW Lost Jobs

Seventy years after the breakthrough strike that first established the United Auto Workers (UAW) as a powerhouse of organized labor, the union faces new demands for concessions that could sweep away decades of gains by workers.

The issues were highlighted at the UAW’s bargaining convention in Detroit on March 27-28, where UAW President Ron Gettelfinger threatened a strike if bankrupt auto parts maker Delphi follows through on its threat to void union contracts.

Delphi, the former parts division of General Motors that was sold off in 1999, has been in high-profile negotiations with the UAW since it declared bankruptcy in 2005. The company wants to sell or close 21 of 29 plants in the U.S., and it has already taken advantage of earlier UAW concessions to cut pay to $14 per hour for the new hires replacing the 20,000 union members who took buyouts to retire early (another 13,000 union members remain).

The question remains as to whether Delphi will try to void its contracts, and whether GM will make good on its previous commitment to Delphi’s pension funds. “If they void the contracts, we are going to shut them down,” Gettelfinger told reporters.

But Gettelfinger and other UAW leaders pointedly did not rule out concessions to Detroit automakers, which have been losing billions as high gas prices cut sales of profitable SUVs, vans and trucks.

Givebacks to the Detroit automakers–General Motors, Ford and Chrysler–have been frequent since 1978, when the UAW membership stood at 1.5 million. The result is that the union soon will have only about 500,000 members, once the latest round of early retirements and buyouts are completed, according to Gettelfinger.

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THE LATEST round of concessions, which began in the midst of the current contract that expires in the fall, have already included cutbacks in retiree health care worth $1 billion to GM and $850 million to Ford, as well as buyout programs that allowed workers to retire early or take a lump sum in cash and give up their jobs and benefits. Some 70,000 accepted.

Meanwhile, UAW locals gave in to demands to reopen plant-level contracts, agreeing to the elimination of long-established work rules that once gave the UAW the power to resist management’s constant pressure for speedups and preserved union jobs. As of March, Ford and the UAW had renegotiated 34 of 41 local agreements, according to the Global Insight news service.

“The contract was broken up and renegotiated before we even went into the convention,” said Gregg Shotwell, an activist in the UAW opposition group Soldiers of Solidarity.

For example, Ford plans to close 16 plants by 2008. Whether or not the company keeps a plant open often depends on whether a union local will accept concessions, and the company routinely pits workers at one plant against another. This practice, known as whipsawing, is formally opposed by the UAW, but has long been routine.

Thus, Ford has been able to extract givebacks that were previously unimaginable. In one case, UAW Local 900 voted to approve a four-day week and 10-hour-per-day shifts at Ford’s Michigan Truck Plant to reduce overtime pay–plus the outsourcing of UAW jobs and changes in work rules. This “Competitive Operating Agreement,” or COA is expected “expected to lead to millions of dollars in cost savings,” as the Dow Jones news service put it.

The picture is similar at Ford’s transmission plant in Sharonville, Ohio, near Cincinnati. In exchange for a $200 million investment, members of the 1,350-member UAW Local 893 agreed to eliminate key work rules in a COA.

Yet even new work usually means fewer jobs. Ford installed a $214 million auto press in its Woodlawn, N.Y., stamping plant, but the number of jobs has declined from 1,800 to 1,400 following buyouts, according to the Buffalo News.

The Wall Street Journal profiled how COAs work at the Dearborn Truck Assembly plant near Ford’s headquarters in Michigan. Janitorial tasks are outsourced, and nonunion contractors now work on the shop floor. The four-day workweek will cost some workers tens of thousands of dollars per year in lost overtime way–a total of $30 million per year, according to Ford.

“At an engine plant in Lima, Ohio, Ford has achieved savings a different way,” the Journal noted. “Workers there were faced with the threat that engine work could be shifted south to Mexico or another plant.

“In addition to accepting outsourcing of work, they agreed to shift many managerial duties to union employees. This allowed Ford to cut the nonunion head count at Lima from 280 people to about 90. With the new agreement Lima’s union workforce dropped to about 800 workers, from 1,100.”

Workers who become “team leaders” get an extra 50 cents per hour for becoming the de facto boss of their fellow UAW members.

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AT GM, the method is somewhat different but the result is the same. Since the company has already announced which plants it will close, whipsawing isn’t as effective. And when the GM engine plant in Tonawanda, N.Y., launches production of a new V8 engine, it isn’t expected to see an increase in the head count of 1,600 hourly employees–a figure that’s down by half over the last five years.

Elsewhere, the carrot of new investment is still being used to eliminate traditional work rules altogether. Two new GM assembly plants in Lansing, Mich., opened with “flexible” labor agreements in place of old-style work rules.

UAW locals at Chrysler plants have accepted similar terms. At the company’s Belvidere, Ill., assembly plant, the company last year hired 1,000 temporary workers for two years at 70 percent of union scale, with no health insurance for eight months.

At the big Chrysler Jeep plant in Toledo, UAW Local 12 first agreed to eliminate 100 work rules; then in 2003, the local allowed management to build a new plant where nonunion subcontractors would employ 75 percent of the workers.

“It’s the Toyota model,” said Shotwell, a former Delphi worker who transferred to a GM parts warehouse when his plant was slated for closure. Following the Japanese automaker, Detroit aims to eliminate work rule to reduce employment to a minimum and rely on outside contractors and temporary employees wherever possible.

And the failure of the UAW to organize “transplants” in the U.S. operated by Toyota, Honda, BMW, and other companies means that the nonunion plants are beginning to set the standards for unionized ones.

For the UAW the choice is stark: Continue to accept the logic of partnership and enable companies to seek profitability at any expense, or revive the class-struggle unionism that the UAW exemplified in its early days.

Justin West, former president of UAW Local 2488 at the Mitsubishi plant in Normal, Ill., and a delegate to the bargaining convention, was among a handful of UAW rank-and-file activists who spoke from the convention floor about the need to draw the line against further givebacks.

“Brother Gettelfinger: We gave Delphi the GM plants; we gave Delphi two-tier wages; we gave Delphi the GM workers’ pensions,” West said of the UAW’s acceptance of GM’s sale of the parts company. “These concessions have not sated that corporation’s thirst for more blood in this race to the bottom. Delphi has declared a bankruptcy organized to destroy every last shred of dignity and security that generations of union members fought and sacrificed to achieve.

“My point is, Brother Gettelfinger, concessions do NOT save jobs! To you, the International leadership, I urge you not to confuse ‘victory’ with ‘concessions.'”

LEE SUSTAR is a regular contributor to CounterPunch and the Socialist Worker. He can be reached at:



LEE SUSTAR is the labor editor of Socialist Worker