The Militant(logo) 
    Vol.60/No.25           June 24, 1996 
 
 
UAW Faces Battle From Auto Giants  

BY FRANK FORRESTAL
CHICAGO - Initial contract negotiations between the United Automobile Workers (UAW) and the Big Three auto companies - Chrysler, Ford, and General Motors -began June 10 in Dearborn, Michigan. The current three-year contract expires September 14.

"It will begin with a gentlemanly handshake, but the Big Three automakers and the United Autoworkers Union could end up butting heads before it's all over," reported the Investor's Business Daily June 10. All three auto giants will be seeking concessions from the UAW.

Reports in the big-business press indicate that Chrysler will be selected as the union's choice for negotiating a pattern settlement for the industry. All of the Big Three companies have said they would like to be chosen by the union.

GM has stated that it plans to go along with a pattern- setting agreement only if it meets its cost-cutting agenda. "General Motors is preparing to attempt the most significant departure from industry-pattern labor contract bargaining in about 17 years - even at the risk of a paralyzing strike this fall," wrote the Wall Street Journal April 26. "GM's new tough labor stance is as much a message to Chrysler and Ford as to the UAW."

"GM is prepared," continued the paper, "if pressed - to take a strike that could last longer than last month's walkout."

One of the auto bosses' goals is to hire new workers at lower starting wages, with lower benefits, and in plants with harsher working conditions. The Big Three are even floating the idea of demanding a six-year contract. Ford chairman Alexander Trotman declared, "My personal opinion is that longer is better than shorter."

Hundreds of thousands of workers will be hired in auto over the next few years. Today the average age of an auto worker is 45, reflecting the fact that for most of the past 15 years little hiring has taken place. Auto workers are retiring at a rate of 30,000 a year.

At its April 1-3 National Bargaining Convention in Detroit, UAW delegates adopted contract goals, a summary of which is printed in the May 1996 issue of the union's monthly magazine Solidarity. They included among other things provisions to curtail outsourcing, win annual wage increases, preserve COLA protection, and eliminate "two-tier" wage schedules.

UAW membership has fallen from 1.53 million in 1979 to 800,000 in 1996. According to a resolution at the National Bargaining Convention, the picture in the auto parts industry is one of "deunionization on a massive scale." About 20 percent of the workers are union members in a sector that has added 100,000 jobs over the last decade.

Japanese and European automakers employ more than 100,000 workers in the United States. According to Business Week 92 percent of them are non-union.

Series of strikes over jobs, overtime
Since the 1993 contract UAW members have waged about a dozen brief strikes, including a handful of wildcats, against Big Three companies. Most of these have been at GM parts plants. The key issues in these strikes were outsourcing, failure to implement the 1993 contract in relation to jobs, excessive overtime, and health and safety.

In most of these short-lived strikes, the auto bosses acceded to UAW demands and promised to hire additional workers and curtail some outsourcing. "Halfway through the current three- year pact between General Motors and the UAW, it is clear that the contract, and the relationship it represents, stinks," editorialized the Jan. 30, 1995, Automotive News. "The UAW has GM over a barrel," the paper continued. "With lean production, a walkout at a single plant can cripple output at several plants." In a week and a half in late 1994, General Motor's stock plummeted 16 percent.

"The fact that virtually every strike ends the same way with GM accepting many of the union's demands - indicates a weakness in the company's labor strategy," wrote a reporter for the Wall Street Journal in early 1995.

Although the 1993 contract requires GM to hire one worker for every two that leave, the company has often not lived up to that provision. Following some of the strike agreements in 1994 and 1995, GM succeeded in reopening contracts and getting concessions.

The 17-day strike in March by 3,000 workers at GM's Delphi Chassis Systems in Dayton, Ohio, marked a shift in GM's stance toward the union. The strike was in response to GM's plan to outsource work to a nonunion supplier, which would result in cutting 125 jobs in violation of a 1994 agreement with the UAW.

The company was well prepared for the strike and showed its resolve by organizing what became in effect a countrywide lock- out. In all, 26 of GM's 29 assembly plants were closed, idling some 180,000 GM workers in the United States, Canada, and Mexico.

Not stopping there, the auto giant also attempted to cut unemployment benefits to laid-off workers. (This latter effort is still being played out. Kentucky, Michigan, and Delaware rejected GM's effort to cut unemployment benefits. Workers in Texas were refused compensation, no decision has been made yet in Ohio and Indiana, and so far workers at GM's Janesville plant in Wisconsin have been denied aid. The UAW is appealing the decision.)

Both the union and GM claim that each side won ground in the strike. Solidarity said the union was "buoyed" by its "recent strike victory at a GM plant in Dayton."

Despite losing $900 million in profits on the strike, GM had the support of its board of directors and many on Wall Street. Although the company made some concessions, on balance the auto giant was successful in establishing its ability to continue outsourcing. "Wall Street cheered GM on, especially when it won a settlement permitting it to continue outsourcing," reported the Investor's Business Daily.

GM strives for higher profit rates
According to Fortune magazine, in 1995 GM's "sales reached $168.8 billion and its profits $6.9 billion - both records for GM or any other American corporation." Return on assets, however, "skidded downward, from about 17% in 1965 to below zero a few years ago, before nudging up to 3.2% last year." GM's market share of 33 percent in the United States has barely grown in 10 years.

GM bosses have their eyes set on Asia as a way out to salvage their faltering profits. "It is no secret that the days of substantial growth in the U.S. automotive market are over - this is a mature market, so the growth must come from outside North America," said John F. Smith, GM's chief executive and president. In late May, GM announced that it had chosen Thailand as the location for a $750 million assembly plant. GM hopes to double its share of the Asian market to 10 percent by 2005.

The company is currently undergoing radical changes in its financial structure. To return to profitability, GM plans to downsize itself by spinning off some of its component parts. This month it spun off Electronic Data Systems, which was bought in 1984 for $2.5 billion from the company's founder Ross Perot.

Another target is GM's Delphi subsidiary, a vast network of 91 GM parts plants in which 73 percent of 68,000 GM workers are covered by the Big Three contract. According to Fortune, GM "would like to get rid of Delphi...Its products are pricey, reflecting the high wages and fringe benefits - $44 an hour on average - paid to members of the United Automobile Workers. GM would like to be able to shop more freely in non-union precincts."

In its parts plants, GM has adopted the slogan: "Fix, Close, or Sell."

For example, the Wall Street Journal reported June 7 that GM obtained work-rule changes at its Allison Transmission plant in Detroit from the United Auto Workers, "even as both sides are girding for new contract talks nationally. In this case, the local agreed to negotiate and sign a new local pact early."  
 
 
Front page (for this issue) | Home | Text-version home