[Marxism] Auto workers make concessions to keep jobs in U.S.

["Walter Lippmann" <walterlx@xxxxxxxxxxxxx>]

("The union makes major concessions that will help the 
company bring down labor costs, and in return it wins
the hope of retaining many of its remaining US jobs.")
=======================================================

COMMENT: If the union had been serious about helping US
employers to compete with foreign companies, they would
have come out of the negotiations and made a declaration
supporting a single-payer national health-care system
which would cover everyone in the Unites States along
the lines Micheal Moore was talking about in SiCKO.

Well, at least some of these union officials will get
nice meals and feels for handling the medical insurance 
for the members. One wonders if they'll be motivated to
try to save costs by holding down member health claims?
=======================================================

from the September 27, 2007 edition -
http://www.csmonitor.com/2007/0927/p01s01-usec.html

Auto workers make concessions to keep jobs in U.S.

But innovative fund secures healthcare for retirees even if General
Motors goes bankrupt.

By Mark Trumbull | Staff writer of The Christian Science Monitor

A historic deal between America's largest carmaker and the industry's
labor union promises to help Detroit become more competitive with
Asian rivals.

In that sense, the tentative agreement reached Wednesday represents a
win for both sides. But for workers, it's as much about sidestepping
defeat as declaring victory.

At the core of the accord between General Motors and the United Auto
Workers is a simple trade-off: The union makes major concessions that
will help the company bring down labor costs, and in return it wins
the hope of retaining many of its remaining US jobs.

"They have to have GM invest in North America in order to ensure
their long-term viability as a union," says David Cole, who heads the
Center for Automotive Research in Ann Arbor, Mich. The price of
getting a degree of job security, he says, is to help GM bring its
labor costs much closer to those enjoyed by Asian rivals such as
Toyota.

The deal Wednesday morning ended a two-day national strike against
GM. The details were not immediately made public, as the union
communicated first with its own membership.

But according to news reports, the broad outlines of the pact
involved gains for both sides. It includes a groundbreaking move to
shift responsibility for retiree healthcare from the company to a
union-administered trust fund. This lowers GM's hourly labor costs,
which include healthcare, and removes uncertainty about its long-term
health-cost burden.

For the union, the healthcare arrangement provides assurance that
hard-won benefits won't disappear if GM is ever forced into
bankruptcy. GM will kick billions of dollars into the fund, known as
a VEBA (voluntary employee beneficiary association).

On wages, the company will pay some new hires in nonmanufacturing
jobs a lower rate than its current employees in those jobs. Instead
of formal pay raises, the company agreed to annual lump-sum payouts
to workers.

All this amounts to a carefully choreographed plan that both sides
hope will help GM restore profitability to its North American
operations.

In the talks, the company in effect gave the union a choice, Mr. Cole
says. Under Plan A, the UAW makes big concessions, and GM is able to
keep jobs in the US. The alternative, if the union refused to cut
costs enough, is Plan B: "Disinvest in the US."

Investment in US plants - especially ones whose future has been in
doubt - is what the union means when it talks of "job security" as a
top goal in bargaining.

According to the Associated Press, GM generally agreed that with the
reduced costs from the new contract, investment in the plants would
make good business sense.

"We're very comfortable with this agreement, and we're happy to be
able to recommend it to our membership," UAW president Ron
Gettelfinger said. "I'm pleased to say that we have a VEBA in place
that will secure the benefits of our retirees."

That arrangement with GM probably paves the way for a similar deal at
Ford and possibly Chrysler in the UAW's ongoing contract talks with
those companies.

The VEBA is key - and not only because those retiree healthcare costs
account for a sizable share of the labor-cost gap between GM and its
competitors.

"It will change a very longstanding principle" for the UAW, says
Joseph D'Cruz, a University of Toronto expert on the industry.
Hard-won social-welfare elements of past contracts have long been off
the table, he says. Now "they've actually become negotiable."

Both sides knew that the status quo wasn't working. Labor costs are
far from the only key to Detroit's success, but the cost gap weighs
down the US companies in an era of rising competition. In addition to
Japan and South Korea, the threat of China and India as automobile
exporters now looms.

Adding pressure on the union, GM itself is increasingly a global
company, with fast-growing foreign markets competing with the US for
its investment dollars.

America remains the core market in terms of revenues. But GM now has
more factory workers - and makes more cars - outside the US than
inside. That trend, even more than the union's two-day strike this
week, hung as a threat over contract talks.

GM is more global than Ford or Chrysler, but all the automakers are
moving that way. Chrysler, now under private-investor ownership, has
a deal with Chinese manufacturer Chery to build small cars for
export.

"That's obviously the thin end of the wedge," Mr. D'Cruz says. "If
they can build the lowest end [models] in China, then what about the
next level?"

No one is expecting US production to disappear. This week's deal
offers the union hope that its job base won't shrink too fast.

"This is really a win-win solution," says John Wolkonowicz, an auto
analyst at the consulting firm Global Insight in Lexington, Mass. But
"is Detroit out of the woods with this? No way."


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