Cutting wages won't solve
Commentary By Mark Brenner and Jane Slaughter
December 4, 2008, The
http://www.detnews.com/apps/pbcs.dll/article?AID=/20081204/OPINION01/812040350/1008/OPINION01
In the 1980s, Chevrolet proclaimed itself the "Heartbeat of
registers a pulse. As
life support, the only place where pundits, politicians and
Big Three executives seem to agree is that auto workers must
make do with less or watch their jobs disappear.
Some lawmakers have complained that unions are the source of
the problem, but they fail to understand some inconvenient
truths. According to the latest figures from the
Commerce Department, every worker in Big Three factories
could work for free and only shave 5 percent off the cost of
their cars. The auto companies pay as much for hubcaps and
fenders as they do in wages.
Data from the Harbour Report -- the industry's gold standard
-- reveal that even including their benefits, labor costs in
the Big Three's plants account for less than 10 percent of the sticker price.
No matter how you cut the numbers, demolishing auto workers'
living standards will not transform the industry. The Big
Three have been trying for years. They have slashed at least
200,000 jobs since 2004, and they last year wrung billions of
dollars in concessions from the United Auto Workers. The
union instituted a second-tier wage of $14.50 an hour for new
hires, lower than pay in the nonunion, foreign-owned auto
companies in the South.
The impact is all too apparent in auto communities across the
foreclosure, and the unemployment rate has hit double digits
in many auto towns. That suffering will multiply if one of
the Big Three collapses, or if retired auto workers are
punished for decisions they had no hand in.
Automakers' decisions have been disastrous. While competitors
developed gasoline-electric hybrids,
guzzling truck and SUV market, making $104 billion in profits
between 1994 and 2003. Wall Street and Congress weren't
calling for more research and development or curbing the
company's dividend payments and high-flying executive salaries back then.
Pundits crow for us to "Dump
advertise that through a bailout or the bankruptcy courts
taxpayers will shoulder the burden of the automakers' colossal missteps.
feet-first. What's needed is not a half-measure, a cash
infusion in exchange for selling the corporate jets. Now is
the time to take a sweeping look at the country's needs.
Our first steps should confront global warming and oil
dependence through a comprehensive overhaul of the
transportation system. Federal policy hasn't changed since
the 1950s, when gas was a nickel a gallon.
Detroit, the Arsenal of Democracy, retooled in a matter of
weeks when we needed tanks, not cars, in 1941. We could
produce this century's answer to the interstate highway
system and build mass transit and high-speed trains.
That same sense of urgency is needed for vehicles that don't
run on petroleum. If American engineers can build satellites
that read your license plate from outer space, they can
develop an alternative to the gasoline engine.
Automakers need direction as much as financial support from
world-class performer.
In every other industrialized nation, government has stepped
in and given their auto companies a significant edge. Most
important, they all adopted national health care and pension systems decades ago.
General Motors alone provides health coverage to a million
people -- workers, retirees and families. The annual price
tag is about $5 billion, which, as CEO Rick Wagoner is fond
of pointing out, is more than GM spends on steel.
That burden could be lifted, to the benefit of 47 million
uninsured Americans, by adopting a Medicare-style program for
everyone. It would save the nation as much as $350 billion
per year now spent for insurance companies to shuffle paper and deny claims.
The fate of the
our future. For 30 years, politicians have bowed to Wall
Street, sitting by while wages for most workers stagnated.
Big Three workers have maintained their living standards
better than most, in no small part because they have a union.
In a country where investment bankers gave themselves $30
billion in bonuses last Christmas, have we reached a point
where $58,000 a year with benefits is too much to ask?
We once promised the pursuit of happiness to all, including
the workers who make our factories run, not just those who
trade credit default swaps. Now more than ever, we need to
recapture that spirit with a thoroughgoing plan to rescue the
environment, care for the sick and transform transportation.
Mark Brenner and Jane Slaughter work for Labor Notes, an independent monthly labor magazine in
The Auto Bailout: Save Jobs and Benefits and Restructure the Auto Industry
A statement of the Committees of Correspondence for Democracy and Socialism
November 25, 2008
The unfolding crisis of capitalism is fraught with pain and suffering for working people. Job losses, declining wages, plant closings, shuttered small businesses, plummeting government resources for public services and physical infrastructure " all remind us of the Great Depression of the 1930s.
The first eight years of the 21st century have been marked with the "normal" economic crisis of
capitalism: over-production and declining rates of profit. The crisis has been deepened by eight years of war and the largest military spending since World War II. Government polices of craven tax cuts and shrinkage of government services have led to a dramatic redistribution of wealth from the many to the few.
Key sectors of the
Now, CEOs from General Motors, Ford, and Chrysler claim that their companies are near financial collapse. Congress voted a blanket $700 billion bailout to the financial sector in October. Auto executives have just completed the first round of their appeal to Congress for an additional $25 billion to save the auto industry from collapse.
The American people are faced with a contradiction. Capitalism which is based on the exploitation of the working class, demands that the working class bail it out. Yet, if the working class says "no bailout"_ to key sectors of the capitalist system, they will suffer the most.
Arguments from right wing circles are that UAW wages, claimed to be $75 an hour, are the problem. There is no truth in this assertion, as the UAW itself explains that huge concessions on wages and benefits have reduced the autoworkers" share of the value they create to the same level (or less) in comparison with the U.S. non-union auto worker sector (Toyota, Honda, Nissan, etc). This can only lead to further erosion of wages and benefits as workers in the non-union sector are forced to accept a new round of the downward wage spiral.
Anti-union company campaigns have defeated several UAW attempts to organize the non-union auto assembly plants. Outsourcing of jobs to non-union plants, increased productivity and moving production to other countries has reduced active UAW membership from 1.5 million in 1979 to 460,000 in 2007. The "jobs bank"
that provided a measure of job security for laid off autoworkers was negotiated in the mid-1980s in lieu of wage increases and other benefits. Now the UAW is faced with mounting pressure to give it up.
It cannot be denied that if Congress refuses to act in support of some kind of bridge loan and allows the auto companies go bankrupt, there will be catastrophic pain and suffering far beyond the UAW membership. United Auto Worker (UAW) president, Ron Gettelfinger, estimates a loss of 3 million jobs, substantial cuts in pension and health benefits for 1 million UAW retirees and their dependents, and increased drains on public services at the same time as the tax base declines.
In testimony Nov. 19th before the House Committee on Financial Services, UAW President Gettelfinger called for a $25 billion loan "conditioned on stringent limits relating to executive compensation, as well as provisions granting the federal government an equity stake in the auto companies in order to protect the investment by taxpayers."
The Committees of Correspondence for Democracy and Socialism (CCDS) agrees with the UAW, and adds the following for consideration:
The loan guarantees must be coupled with requirements that the industry immediately
a.Pursue the production of new energy efficient, environmentally friendly low-cost automobiles;
b.Promote the development of a single payer health care system (HR 676) to guarantee health care for all, regardless of employment;
c.End the outsourcing of production of new vehicles to non-union plants;
d. End the drive to cut UAW negotiated wages and benefits and support the drive for unionization and livable wages for all workers in the industry;
e. Guarantee current and retirement benefits;
f. Radically reconfigure CEO salaries to the levels of CEOs in other auto companies;
g. End the threat of bankruptcy proceedings, particularly as they might relate to breaking union contracts.
Additionally, we call on Congress and the White House to move aggressively to take over idle auto production facilities and utilize them for an expanded public transportation authority for building high speed rail and other mass transit systems.
Lastly, but importantly, the workers who make the cars have poured their skills, their knowledge, their sweat and their hopes for the future into the auto industry. Their experiences make them best able to counter the greed and incompetence of the industry's owners and CEOs who have brought the auto business to its current disastrous condition. The auto industry should be restructured to give its workers controlling equity and a strong democratic voice in meeting the enormous challenges that it faces.
CCDS offers these proposals to help stimulate debate.
Our goal is to participate in a broad-based movement to protect the basic living conditions of the working class while we also work with others to create a new, humane society.
Committees of Correspondence for Democracy and Socialism
520
(212) 868-3733 national@cc-ds.org www.cc-ds.org.
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