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The UAW Strike Against American Axle

On Friday, May 16, negotiators for the United Auto Workers (UAW) reached tentative agreement on a contract with American Axle and Manufacturing Holdings Inc., which, if ratified (the membership votes on it later this week), would end the UAW’s 80-day strike against the company.  The union negotiating team has formally recommended the agreement.

The strike began at one minute after midnight on February 26, when approximately 3,600 employees from five U.S. factories walked off their jobs in protest of AAM’s plan to impose drastic, across-the-board pay cuts.  The company initially wanted to reduce non-production workers wages from $23 per hour to $14, production workers from $28 to $17, and skilled workers (e.g., electricians and mechanics) from about $32 to $25.

Following two decades of give-backs and takeaways that steadily eroded the UAW’s core package (while executive compensation continued to soar), these staggering pay cuts were the final straw.  Even though it’s a risky time be out of work—in the midst of a recession and creeping inflation—the membership nonetheless voted overwhelmingly to hit the bricks.

As far as work stoppages go, given its length, level of rancor, and overall scope, on a scale of 1 to 10 the American Axle strike was probably a 6 or 7.  During the shutdown, the company’s CEO, Richard Dauch, ominously threatened to move its entire U.S. operation to foreign countries; and the UAW was accused of orchestrating a couple of “extraneous” strikes against General Motors plants, AAM’s primary customer, in hopes of drawing GM into the fray and thereby raising the sperm count.  The union denies the accusation.

The 11-week strike has affected more than 30 GM plants nationwide, resulting in the loss of production, as of April 30, of approximately 230,000 vehicles.  According to GM, the strike had cost the company $800 million in the first quarter.

AAM supplies GM with axles, drive shafts and other components for its SUVs and pickup trucks, the sales of which, in response to high fuel costs and a shaky economy, have declined dramatically in 2008.

In fact, it’s been alleged that this drop in sales was partly responsible for the length of the strike.  Some union officials have suggested that AAM and GM not only were in no hurry to settle, but that they saw the shutdown as a convenient means of reducing inventory, and intentionally dragged it out.  The companies deny the accusation.

In regard to hourly wages, it’s confounding and a bit frustrating to note how readily an hourly rate is misinterpreted by disinterested salaried (non-hourly) people.  Maybe it’s just the way the numbers roll off the tongue, or the fact that most folks don’t take time to do the math, but whatever it is, an hourly wage almost always sounds “richer” than the annual figure it yields.

For example, salaried people who hear of a factory worker making, say, $14, often think that’s decent money, especially with the federal minimum wage being only $5.85.   You tell someone that so-and-so makes $14 per hour, and they’re apt to say, Hey, okay, that’s not too bad.

But if a person works 8 hours a day, 40 hours a week, 52 weeks a year, and never misses a day, his $14 dollars per hour computes to only $29, 120.  And if you tell people you make $29 K a year, you get a different response.  Somehow, that figure seems less than $14/hour.  In fact, they privately wonder how you can support yourself, much less a family, on it.

And when you tell someone you make $17 per hour, that sounds even more promising.  Hey, $17 bucks an hour, not too shabby.  But $17/hour is $35, 360 a year.  That’s barely above the poverty line.  Other than the guy making $14/hour, who’s going to gush when he hears that a full-time worker and head of household makes $35 K a year?

Another misreading of hourly wages relates to management’s “device” of taking every conceivable employee cost—not only base wages, but overtime, pensions, health insurance, retirees’ medical insurance, vacations, holiday pay, workers compensation, sick leave (even the price of company safety shoes and laundry)— lumping them all together and expressing the figure as an hourly sum.  This is what American Axle did.  It came up with an amount in excess of $73 per hour, a figure, incidentally, which the UAW president Ron Gettelfinger has challenged.

Besides scoring a public relations coup by making workers appear wildly overpaid, these “aggregate” hourly wage figures are going to appear bitterly ironic to anyone who’s been paying attention.  With health care costs having sky-rocketed over the last 25 years (some companies spend 35% of its payroll on employee medical costs), we’re painfully reminded that it was American businesses who most resisted adopting a national health care plan, scaring everyone away by labeling it “socialized medicine.”

If the U.S. had adopted a national health care plan in the late 1940s or early ‘50s, when the idea was first seriously lobbied for, we could have eased into the system, grown with it.  Like other countries with national health care, we could have weathered the subsequent increases in medical costs driven my new technology and procedures.  Now, however, even with Clinton and Obama’s modest plans for reform, overhauling our health care system is going to be a killer assignment.

Meanwhile, GM, Ford and Chrysler continue to compete with European and Canadian businesses whose governments underwrite their health care.  Not having to worry about the expense of workers’ medical insurance??  Talk about a competitive edge.

And because these cost differentials put American companies at an enormous disadvantage, what have American companies done in response?   Have they lobbied the Bush administration and Republican party to immediately restructure our health care system?  Have they acknowledged that, all that hysterical “socialist” propaganda aside, the system is begging to be nationalized?

While a few companies have tentatively endorsed these approaches, most have not.  Most see these radical notions as running counter to free market fundamentalism.  Instead, their idea of a “fix” is to pass on increased medical costs to the people who can least afford them . . . the workers themselves.

As for this American Axle strike, it’s going to end hideously, no matter what the final vote, or how bravely the workers fight.  There’s simply too much bad news packed into it, and management has too large an advantage.

There’s a growing sense that Big Business is looking to harvest as much short-term profit as possible, with little or no concern for the future of working people.  Whether it’s “globalization,” the natural fallout of a post-industrial society, or a crude example of runaway greed is a moot point.  But it’s no wonder that polls show that upwards of 80% of Americans believe the country is somehow “headed in the wrong direction.”

DAVID MACARAY, a Los Angeles playwright and writer, was a former labor union rep. He can be reached at dmacaray@earthlink.net

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David Macaray is a playwright and author. His newest book is How To Win Friends and Avoid Sacred Cows.  He can be reached at dmacaray@gmail.com

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