UAW Manages Austerity Against the Workers

After a 48-hour strike in September, General Motors and the United Auto Workers sealed a deal that will undoubtedly serve as a pattern setter for the rest of the industry, that will cut costs and sacrifice worker and retiree medical benefits forever. The UAW once again revealed itself as a full fledged partner in implementing austerity and cutting the workers' standard of living, and serving the interests of the national capital by helping keep the struggling auto industry afloat on the backs of the workers. The same scenario quickly followed at Chrysler in early October, following a 6-hour strike.

The big breakthrough feature in the GM contract was the creation of a VEBA-a voluntary employee benefit association - or a health care trust that will take over the GM's medical benefits program and be administered by the union. The deal frees GM from an estimated debt of $55 billion over the next 80 years to cover the health care benefits for employees and retirees. The trust will be funded with a payment of 70 percent of the $55 billion (or $38.5 billion) in cash, stock and other assets. According to the New York Times, the balance of the $55 billion will supposedly come from "gains on investments." In other words the deal lets GM unload its costly medical benefit program, to be run by the union, and the whole future of the program will rest on the profitability of the company. If the company should falter, the medical plan would collapse. The union will clearly have a long term commitment to bolstering GM's profits at the expense of workers for years to come.

The union announced that it had won a guarantee that medical benefits wouldn't be cut for two years-exactly how long it will take for federal authorities to review the details and approve establishment of the VEBA, and then it will be the union that will preside over cuts in medical benefits in order to assure viability of the program's future. The union also made a big deal that  it won a GM guarantee that the company would maintain the workforce at the current 73,000 employee level, which was initially interpreted as meaning a job guarantee for all workers. But it soon came to light that the company was merely promising to maintain a workforce "equivalent" to the current 73,000 level. It does not guarantee that all current workers will continue in the job; the company can and will close down plants - the number and location of which has yet to be announced - and hire temporary workers who will be required to become UAW members. So, the union is guaranteed 73,000 dues paying members no matter how many current workers are laid off or forced to take early retirements. The four-year contract runs through 2011and provides that workers will get a $3,000 lump sum payment when the contract is approved and signed by union officials, and additional lump sum payments in the last 3 years, but there will be no increases in hourly wage rates whatsoever.

To add insult to injury, the contract also imposes a two-tier wage system, dooming younger workers and new hires who perform the same work as workers who have been on the job for a number of years. This gives the company even more incentive to drive older workers out of their jobs. This divides the workers against each other on generational grounds, pitting young against old, turning on its head the courageous stand taken in December 2005 by transit workers in New York City who fought against imposition of a new tier system.

Yet again the trade unions reveal themselves as a weapon for capitalism against the workers. - JG, 10/13/07.