[Marxism] UAW busting, Southern Style

[Greg McDonald <sabocat59@xxxxxxx>]

UAW busting, Southern style
Foreign carmakers are enlisting the help of GOP senators from states  
in the South to break the union.

By Bruce Raynor
December 18, 2008


The foreign nonunion auto companies located in the South have a plan  
to reduce wages and benefits at their factories in the United States.  
And to do it, they need to destroy the United Auto Workers.

Last week, Senate Republicans from some Southern states went to work  
trying to do just that, on the foreign car companies' behalf. Senate  
Minority Leader Mitch McConnell (R-Ky.), Sen. Bob Corker ( R-Tenn.)  
and Sen. Richard C. Shelby (R-Ala.) -- representatives from states  
that subsidize companies such as Honda, Volkswagen, Toyota and Nissan  
-- first tried to force the UAW to take reductions in wages and  
benefits as a condition for supporting the auto industry bailout  
bill. When the UAW refused, those senators torpedoed the bill.

They claimed that they couldn't support the bill without specifics  
about how wages would be "restructured." They didn't, however,  
require such specificity when it came to bailing out the financial  
sector. Their grandstanding, and the government's generally  
lackluster response to the auto crisis, highlight many of the  
problems that have caused our current economic mess: the lack of  
concern about manufacturing, the privileged way our government treats  
the financial sector, and political support given to companies that  
attempt to slash worker's wages.

When one compares how the auto industry and the financial sector are  
being treated by Congress, the double standard is staggering. In the  
financial sector, employee compensation makes up a huge percentage of  
costs. According to the New York state comptroller, it accounted for  
more than 60% of 2007 revenues for the seven largest financial firms  
in New York.

At Goldman Sachs, for example, employee compensation made up 71% of  
total operating expenses in 2007. In the auto industry, by contrast,  
autoworker compensation makes up less than 10% of the cost of  
manufacturing a car. Hundreds of billions were given to the financial- 
services industry with barely a question about compensation; the auto  
bailout, however, was sunk on this issue alone.

UAW President Ron Gettelfinger realized that the existence of the  
union was under attack, which is why he refused to give in to the  
Senate Republicans' demands that the UAW make further concessions. I  
say "further" because the union has already conceded a lot. Its 2007  
contract introduced a two-tier contract to pay new hires $15 an hour  
(instead of $28) with no defined pension plan and dramatic cuts to  
their health insurance. In addition, the UAW agreed that healthcare  
benefits for existing retirees would be transferred from the auto  
companies to an independent trust. With the transferring of the  
healthcare costs, the labor cost gap between the Big Three and the  
foreign transplants will be almost eliminated by the end of the  
current contracts.

These concessions go some distance toward leveling the playing field  
(retiree costs are still a factor for the Big Three). But what the  
foreign car companies want is to level -- which is to say, wipe out  
-- the union. They currently discourage their workforce from  
organizing by paying wages comparable to the Big Three's UAW  
contracts. In fact, Toyota's per-hour wages are actually above UAW  
wages.

However, an internal Toyota report, leaked to the Detroit Free Press  
last year, reveals that the company wants to slash $300 million out  
of its rising labor costs by 2011. The report indicated that Toyota  
no longer wants to "tie [itself] so closely to the U.S. auto  
industry." Instead, the company intends to benchmark the prevailing  
manufacturing wage in the state in which a plant is located. The Free  
Press reported that in Kentucky, where the company is headquartered,  
this wage is $12.64 an hour, according to federal labor statistics,  
less than half Toyota's $30-an-hour wage.

If the companies, with the support of their senators, can wipe out or  
greatly weaken the UAW, they will be free to implement their plan.

But their plan will not work. The Bush administration is likely to  
keep the Big Three alive long enough for President-elect Barack Obama  
to construct a real solution. Democrats and even most Republicans  
understand that a nation that has already lost 2 million jobs this  
year cannot afford to put at risk 3 million more.

What the economy needs now is rising wages so the country can get on  
the path of wage-driven consumption growth. That means stronger  
unions. Indeed, I believe eventually it will mean the unionization of  
the entire U.S. auto industry.

Bruce Raynor is the general president of Unite Here, a union of  
465,000 workers in the apparel, textile, laundry, food service,  
distribution, hotel and gaming industries.


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