UAW-Chrysler ‘partners’ retain inequality

By BILL ONASCH

The first Tentative Agreement between the UAW leadership and Fiat Chrysler Automobiles was shot down by the ranks—by a two-to-one margin. It was the first defeat of a Big Three national TA in a generation. But while this venting of disappointment was widespread, it was not very organized or focused. Though an indicated first step, rejection alone is not a solution. An alternative program needs to be advanced.

Former dissidents, such as those in New Directions and the Auto Caravan, who once had influence in some Big Three locals, could have played a role in shaping a policy attractive to the naysayers. But those oppositionists are now mostly retired—some migrating to sunnier new locations. The fragmented rejectionist majority could not pull together a viable alternative on the fly through social media.

At least months of advance preparation on the shop floor around clear objectives is required. That is the perspective encouraged by the leadership of more adversarial unions like the Chicago Teachers Union and National Nurses United. But in the top-down structure of the UAW, such initiatives have to come from below.

In this absence of a unified opposition, the self-perpetuating Administration Caucus bureaucracy that has ruled the UAW without interruption since the days of Walter Reuther was able to recover from a stinging defeat. After retaining—at members’ expense—a prominent public-relations firm, they were able to work with their company “partners” to quickly craft a new deal. It was a grab bag of putative additional raises for some, spread out over eight years, offset by new immediate concessions to management. Little, if any, new money was on the table.

Not seeing credible options, the package was accepted as the best that can be done. The swing in the second vote was as dramatic as the previous thumbs-down. Seventy-seven percent of production workers, 72 percent of skilled trades, and 87 percent of salaried workers voted in favor of the second TA.

Chrysler was the targeted company to set the pattern for contracts with the much bigger General Motors—which recently announced a record third-quarter profit—and Ford as well. As this is written, on Oct. 26, the UAW and GM have reached a tentative four-year contract.

An article from Automotive News opened, “The UAW’s new contract with Fiat Chrysler will set the pattern for how first General Motors and then Ford Motor Co. fix the divisive two-tier wage system at their factories, said sources familiar with the negotiations. The UAW has no plans to resuscitate Tier 2 hiring caps at GM or Ford, aiming instead for the approach taken at FCA US that guarantees lower-paid Tier 2 workers an eight-year ladder of predetermined annual raises until they reach full wages of $30 an hour, the sources said.”

Downsizing inequality

Many news stories about the new contract proclaimed the second-class Tier 2—established in the historic give-back 2007 Big Three contracts—would be eliminated. This is an exaggeration to say the least.

The wage rate of the 43 percent of Chrysler’s UAW workforce in Tier 2, topping around $19 an hour in the expired contract, will catch up with the new Top Tier rate of $29+ change—in eight years. Since the contract just approved will expire in four, that requires faith—perhaps misplaced—in the company to voluntarily abide by today’s promise in the next negotiations. At best, it is a lengthy journey to the two rates coinciding, not merging.

No Tier 2 workers will actually be upgraded to Top Tier when the differences include not only wages but defined benefit pensions rather than a 401(k) and better health coverage as well. And, there are other new reminders of their still inferior status. The new contract increases the signing bonus for Top Tier by a thousand dollars while Tier 2 gets nothing additional.

The rejected deal provided bigger profit-sharing payouts to Tier 2; now, in this regard, they will be equal. Even if all goes as projected, in eight years Tier 2 will still be second-class members of Unequal Auto Workers.

Still, a $10 raise, even so spread out, looked attractive to many making $19 or less. The Wall Street Journal estimated the $25 goal for Tier 2 in the first TA would have increased Chrysler labor costs 10 percent. Since most of the $4 improvement is back-loaded to the next contract, the new deal should leave that 10 percent pretty much intact. Currently, Chrysler labor costs are somewhat lower than GM and Ford and close to the biggest non-union transplant, Toyota. To the relief of both UAW president Dennis Williams and Fiat CEO Sergio Marchionne, that won’t change much.

Deleted from the approved TA is any mention of Dennis Williams’ pipe-dream of establishing a health-care co-op covering all employees of the Big Three. This ill-advised proposal, vaguely mentioned in the first deal, would be a sort of super-VEBA, like the one that UAW pensioners got stuck with in 2007. This understandably made many members nervous. Except for a new emergency-room co-pay, current health benefits remain unchanged.

But unchanged isn’t so great for Tier 2, who have a six percent co-pay of sure-to-rise medical expenses. And the much better benefits enjoyed by the Top Tier are threatened with a steep tax on their so-called “Cadillac plan”—mandated by Obama’s Affordable Care Act. The UAW should be working with those unionists in the Labor Campaign for Single-Payer for Canadian-style health care instead of constantly sacrificing wages to feed the private insurance robber barons—who are the only winners in “ObamaCare.”

What workers don’t get

There’s no reinstatement of the Cost of Living Adjustment (COLA), pioneered by the UAW, that protects wages from inflation. For many years, the formula of annual three percent productivity raises coupled with COLA made UAW members the highest paid workers in manufacturing.

Top Tier workers will get two three-percent raises under the ratified contract—their first boost in a decade—and two four-percent lump-sum payments that don’t get folded into the wage rate. Inflation was one factor in the 21 percent decline in real wages in the auto industry in the last available comparison of 2003-2013.

A very big issue for affected workers is the Alternative Work Schedule, requiring rotation through different shifts of four 10-hour straight-time days. Not used by GM or Ford, this mean-spirited work change was solely devised to get 20 hours a day production without paying overtime rates. Most workers consider it exhausting and unhealthy and hate the disruption it causes to family and social life.

The Sept. 18 Detroit Free Press ran a story titled “UAW Wins Changes to Hated FCA Alternative Work Schedule.” But this tempting appetizer was followed by pretty thin soup:

“The UAW says its new [first] tentative agreement with Fiat Chrysler includes ‘significant alternative work schedule changes,’ designed to quell discontent among workers over the schedules. The tentative agreement, reached Tuesday, would pay workers more for Saturday shifts and prevent workers from being scheduled on consecutive Fridays.”

That hardly addresses the complaints about the loss of the eight-hour day, regular shifts and regular days off, much less exhaustion and safety concerns. There was nothing more in the ratified contract.

And what about jobs?

From World War II to the 1970s the American auto industry was nearly 100 percent unionized in the UAW. UAW membership peaked at 1.5 million in 1979. Today the number of active working members is about 390,000, along with more than 600,000 retirees who receive pensions and health-care payments negotiated by the UAW. Membership at Big Three plants has dropped 42 percent in just the last decade. Only 15 percent of parts-makers are unionized. A substantial number of today’s UAW members are outside the auto industry. For example, I pay dues to UAW Local 1981—the National Writers Union.

Much of the membership loss has been due to automation, outsourcing, and offshoring. But perhaps a bigger factor has been the game-changing rise of Asian and European-owned “transplants” building cars, SUVs, and light trucks in the USA—and taking nearly half the share of U.S. production away from the Big Three. Counting parts suppliers and transplants, the auto industry still employs 900,000 workers. The UAW has failed to organize any transplant start-ups.

The UAW strategy since the 1980s has purportedly been all about jobs. Saving jobs was the rationale for giveback bargaining.

Chrysler took advantage of unrestricted Tier 2 to go on a hiring spree, adding about 15,000 workers in the last few years. That’s coming to a halt. The union summary of the new contract projects adding 2959 jobs at some plants over the next four years while eliminating 2856 at others. That means a whopping 103 new jobs are expected. There has been no change in plans to move Dodge Dart and Chrysler 200 work to Mexico—where wages are about 20 percent of Tier 2.

Full-time adequate staffing has also been eroded since the introduction of temp workers to cover peaks of short-term absences and individual vacation days on Mondays, Fridays, and weekends. The temps currently start at $17 an hour and can earn up to $22. They have truncated health benefits, pay union dues, and are first in line for regular entry-level openings.

Once given an inch, the bosses always try to take a kilometer. Not included in the highlight summary of the TA provided to the ranks was a substantial new concession to the company—allowing management to use temps every day, with the potential of increasing temp share of all work hours from four to eight percent. This would get Chrysler close to nonunion Toyota.

After the rejection of the first TA, both union and management warned there wasn’t any more money available for improvements. Clearly, union bargainers granted Chrysler the ability to double temp usage to help offset the cost of ballyhooed raises for Tier 2 workers.

But that’s not all they gave away. Under the newly approved contract, new temp workers will start at less than $16 and top out at $19.28 an hour. (The national average wage of private-sector production workers is currently $21.08.) They also lose profit sharing that they would have received in the rejected first TA.

And the doubling of temp share of work means these workers will have a longer wait for regular Tier 2 openings. There was similar chiseling on wage rates for some MOPAR and Axle workers. These givebacks pay Fiat Chrysler today for promised gains for some workers eight years down the road. It is a fresh reenactment of the parable of lions being led by asses.

Lessons from history

A key historical turning point in the movement that led to the launching of the CIO United Auto Workers was the 1934 Toledo Auto-Lite strike. It took place at a time of mass unemployment. Class lines were quickly and indelibly drawn, and the whole city chose sides.

Instead of scabbing, most jobless workers followed the lead of the socialist-led Lucas County Unemployed League, and thousands stood with the union in defiance of court injunctions and even a mobilization of the National Guard. Two strikers were killed, dozens injured, and many arrested before victory was achieved.

The Toledo unemployed made such sacrifices because they saw the union as a broad social movement that benefited the working class as a whole. The Toledo example was a precursor to the later solidarity generated by the Flint sit-downs and other battles that transformed the auto industry from low-wage sweatshops to what became for a time the most rewarding jobs in manufacturing.

As we again see revealed in the Chrysler bargaining, the polar opposite class-collaborationist perspective of the ruling Administration Caucus has instead undermined the most basic solidarity even within the ranks of the UAW. They betray not only the union’s proud heritage but also present dues-payers. Whether their personal intentions are good or bad, they have paved the road to industrial purgatory.

It will take more than prayers of others to escape to a better destination. It begins with the UAW ranks’ asserting democratic control of their union. And in all industries, it will require the broader working-class majority to reclaim our stolen class identity and revive class-struggle strategy and tactics on the job, in the community—and in the political arena.

Photo: Chrysler workers at end of shift at Warren, Ohio, truck assembly plant. Bill Pugliano / Getty Images.