DETROIT — In 1970, the United Auto Workers had 395,000 hourly workers at General Motors plants, but two years from now that number will have plummeted to 38,000.
How did we get to this point?
Long before the current crisis, GM and Ford began exporting jobs and capital to all corners of the globe. The popular Ford Fusion is assembled outside the U.S., as will be the much-hyped Ford Fiesta slated to arrive here next year. GM is moving production of the Cadillac SRX SUV out of the country. This week we heard the announcement that Detroit-based American Axle will be moving almost all of its production to Mexico.
As GM and Ford set up shop all over the world, auto producers from other countries are doing likewise in the United States — but these are nonunion operations paying their workers far less than what UAW-represented autoworkers won through decades of struggles and collective bargaining. Hyundai, Kia, Toyota, Honda, Nissan and Subaru are among those that already have or are building assembly plants here. Volkswagen is building a new, billion-dollar plant in Chattanooga, Tenn., that will have cars on the market by 2012.
While the U.S. auto companies complain about competition from lower-wage countries, they in turn threaten their workers in Mexico, Thailand, South America and elsewhere to accept low wages as a condition of work. In contract negotiations with 4,500 employees at the Ford Fiesta plant in Mexico last summer, Ford gave an ultimatum to the union there: accept a two-tier starting wage cut of 50 percent — bringing it down to $2.25 an hour — or the company would move production out of the country.
Under capitalism, cars are built for profit and companies will build them where the profit is greatest. Free trade agreements, advances in technology, a weakening of the labor movement and the quest for cheap labor all made it easier to export jobs and move production to nonunion areas of our country.
An industry that once was almost all union and based in Michigan and other northern states is now moving south and becoming nonunion. Though labor costs are less than 10 percent of the cost of producing a car, the pressure from those nonunion plants increases the pressure on unionized workers to give up even more than the mammoth concessions they have already given.
The long-term — and short-term — idiocy of this policy is that cutting the wages of workers and will only prolong and deepen the economic crisis. To solve the economic crisis we need to put more money, not less, into the hands of working people. But capitalism does not operate through logic.
The just-announced tentative UAW agreement with Chrysler — in which half the money the company owes to the union-run retiree health care fund will be paid in stock — is a gamble (albeit one the union probably had little choice in accepting). If Chrysler goes into bankruptcy, retiree health benefits won over years of struggle would likely be lost.
This deal, if it goes through, which is highly uncertain, reportedly could give the union a voice on the board, but it would be far short of decision-making control over the company.
The crisis hitting auto workers and their communities is hurricane-like — with the worst effects hitting the racially oppressed. But unlike Katrina, we are not caught totally off guard. We can take steps to lessen the impact. And we can start working on long-term solutions. But fast action is necessary.
* Passing the Employee Free Choice Act to make it more possible to organize workers in nonunion plants, and winning nation health care, not dependent on employers, are more important than ever.
* If auto plants cannot be kept open for production of cars, they should be kept open to produce other things we need.
Certainly mass transit is one. Why can’t auto plants in Michigan be retooled to make passenger rail cars for the high-speed lines the president recently proposed?
Shouldn’t the president’s auto task force or Ed Montgomery, the administration’s point person on dealing with distressed communities, require that stimulus money be used to retool plants to produce wind turbines, solar panels, materials to weatherize our homes and offices and other products needed to rebuild and “green” our infrastructure?
In the buildup to World War II, plants were quickly retooled to support the war. No less an effort is needed today to make our economy “green,” carbon-free, and our nation energy independent.
Many are raising these same ideas, but what is missing is a broad movement organized at the grassroots to give people a say in their own future. Workers, the communities they live in and the political leaders they elect all have a stake in coming together to find solutions that will benefit America’s working class majority.
While it is fortunate we have a president who wants to help working families, such a movement would insure the Obama administration and all other political leaders take the necessary steps to save our livelihoods, our families and our communities.
John Rummel (jrummel @ pww.org) writes for the People’s Weekly World from Michigan.