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NEWS & LETTERS, November-December 2005Workers pick up tab for GM and Delphi bailoutsDetroit--In a rare mid-contract negotiating deal, United Auto Workers (UAW) union leaders agreed to health care concessions amounting to billions of dollars of worker benefits to GM. Hardest hit are retirees, who will pay monthly premiums, annual deductibles and increased prescription costs. Workers will have future wage and cost-of-living increases diverted into a fund to pay health care costs. GM now has about 500,000 retirees, their spouses and dependents, and 106,000 workers. In l965, when it had 409,000 workers, 58,000 received retirement benefits. The company is planning to both close more plants and lay off 25,000 more workers in the next year. Since profits can only come from the unpaid labor of workers, this huge slash in the workforce results in an uncontrollable decline in the rate of profit, despite the fact that worker productivity has increased at least 100% in the last decade through automation and speedup. There is no doubt that these worsening conditions on the production line have taken their toll on the health of the workers, which also increases health care costs to the company. Retirees now pay nothing in monthly costs, deductibles, co-insurance or emergency room services. The proposed changes will have them pay a $10 monthly fee, $150 deductible, $100 co-insurance, all roughly doubled for family coverage, and $50 for emergency room service and increases on some prescriptions. Workers will have the same increases in prescription costs as retirees, but will not have any of the other charges. However, they will have future wage increases of 83 cents per hour deferred in September of 2006, as well as cost-of-living increases of 17 cents per hour over three quarters of next year, plus an additional COLA deferral of two cents per hour near the end of next year. These concessions still have to be ratified by a vote, but since the heaviest blow will fall on the retirees who can’t vote, it is expected that they will go into effect. The last time that mid-contract concessions were negotiated was in the l980s, when then UAW President Douglas Fraser negotiated away benefits that Chrysler workers had fought for decades to win--all in the name of saving Chrysler from bankruptcy. Chrysler workers still haven’t recovered all they lost, and never will. Today, it is UAW President Ron Gettlefinger who is giving away the workers’ benefits that they have fought for so long, and who is no more than a lackey for the auto corporations. The UAW bureaucracy long ago adopted the corporations’ motto that "We’re all in the same boat," and has worked cooperatively with them. When the auto corporations were making billions of dollars in profits, the UAW did not make any mid-contract demands on them. Ford and Chrysler, not surprisingly, are now demanding the same concessions from the UAW that GM has won. The auto companies don’t want to break the union. They know without the union the companies would be facing the rebellious fury of rank-and-file workers. The hard fact is that no concessions can save GM--nor any other company. The crisis in production continues, and despite great increases in worker productivity through automation and other technological changes, the problems keep escalating. The class struggle is increasing and growing more fierce. --Andy Phillips * * * Flint, Mich.--The Delphi Corporation filed a large number of Chapter 11 petitions for its U.S. operations in the United States Bankruptcy Court in New York City shortly before the effective of a tougher bankruptcy law on Oct. 17. The non-U.S. operations of Delphi are not affected, but it allows them to continue to operate while arranging to make payments to creditors. The bankruptcy judge will have the power to void collective bargaining agreements. Delphi wants to slash hourly rates from approximately $27 per hour to approximately $10-12 per hour, eliminate a jobs bank that guarantees pay and benefits for laid off workers, a reduction in health care and pension benefits, and the right to close, sell or consolidate the majority of Delphi’s UAW-organized factories over the next three years. To twist the knife more effectively, Delphi announced that it wanted to increase the severance packages for 21 top executives as an incentive to keep these executives who have done a "heck of a job" (as George Bush would say) in managing Delphi. Delphi Corporation is an automobile parts manufacturer that was formed from GM components in 1999 as a "spin off." GM agreed to continue to buy parts from Delphi for at least five years and to underwrite some of Delphi’s pension and benefit costs. Delphi has acknowledged irregular accounting practices dating back to its origin that have overstated its income. In at least one instance, Delphi treated a $20 million loan from another GM spinoff, EDS, as income. Delphi has 33,000 unionized workers in the U.S. and 185,000 workers worldwide. The great majority of its plants are already outside the U. S. Delphi claims that unless it slashes wages and benefits drastically, it cannot compete with auto parts manufactured in Mexico, South America and Asia. Bankruptcy of corporations is nothing new. Railroads in the 19th century commonly went through bankruptcy and reorganization many times over. What is new, however, is using bankruptcy to put the power of the state behind wage slashing. The airline and steel industries have already had similar experiences with bankruptcy. The current CEO of Delphi, Robert S. Miller, took another auto supplier, Federal Mogul Corporation, into bankruptcy. While bankruptcy does not prohibit the UAW from calling a strike, the union has to in essence bargain with a bankruptcy judge who has the federal government backing him up. Globalization is not the cause of the declining rate of profit of corporations such as Delphi, it is the response to the declining rate of profit. There is no reason to think that $10 per hour is the last word in wage slashing. Auto workers have historically responded vigorously to much less drastic anti-worker actions than Delphi has just thrown at them, and they undoubtedly will do so now. --Dan B. |
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