In the face of a deteriorating economic climate and concerns about the ‘investment competitiveness’ of Canadian plants, the CAW leadership made a startling move this spring. It had an air of panic about it: it quietly asked the Big Three — GM, Ford and Chrysler — to open their collective agreements early, offering a new ‘pragmatic’ settlement. Ford ‘bit’ and bargaining was over before anyone, including the Ford workers, had a whiff that anything was going on. The tentative agreement was announced to the press on April 28 — almost five months before the agreement was to expire, three months before bargaining was set to open and, most notably, two months before the CAW Collective Bargaining Conference, where elected delegates gather to discuss and debate the unions’ bargaining priorities. That summer conference, set for every third year, addresses the union as a whole, but is generally dominated by the fall’s auto negotiations.
On May 4th Ford workers ratified the proposed agreement that is set to run to September 2011. The union initially announced that 78% of workers voted for the agreement, only to correct this later to a much lower 67% being in favour. At the critical
The CAW literature claims that it has remained true to its convention-established policy of ‘no-concessions’ in bargaining. The union has insisted that there was really no choice and that comparisons with the early 1980s — the high point of CAW resistance and leadership within the North American (and international) labour movement — are not valid. If new investment is to be attracted, the union argues, it can simply not ignore the rise of the Canadian dollar, the turmoil in the industry and the concessions made by the UAW. And had the CAW waited until the normal September deadline, the union asserted, things would have been much worse.
The critical concessions in last year’s UAW agreement were twofold: the dramatic agreement to shift the risks of future health care costs from the companies to the union, and the acceptance of a permanent two-tier structure with new hires being paid half the wages and less than half the benefits of current workers. The former is of secondary importance in
The rejection of the permanent two-tier structure is indeed of crucial importance. But renaming the losses made in exchange as ‘cost savings’, ‘offsets’, or describing them as a ‘creative and nimble’ response, hardly negates the fact that the concessions in this collective agreement are as large as or larger than those the American UAW made in 1982. Those concessions led to harsh criticism from the Canadian wing of the union and, shortly after, to breaking away from its American parent.
As many CAW members know from experience and the union’s educational programs, concessions don’t guarantee jobs. Jobs depend on so much else beyond the control of workers — from the economy, trade policy, exchange rates and the chaos in financial markets, to the age of plants, technologies used, and especially the models placed in the showrooms. Currently, jobs also depend on the extent to which the new vehicles are sensitive to the implications of escalating oil prices and environmental concerns. At the end of the 1970s, when the concessions period began to unfold, UAW Big Three membership totalled some 760,000 in the
What concessions do guarantee is more of the same: why would any company that found this golden egg, not keep coming back for more? They also tend to confirm the belief that workers are the problem: if workers are making concessions to save jobs, aren’t they essentially admitting that the gains they won earlier were the problem? So, aren’t more concessions, rather than other policies, the answer? Most dangerously, concessions leave workers cynical about the worth of their union: why get active if unions aren’t in fact fighting back? This concern with the potential cynicism of a new generation of workers was one of the reasons that Hargrove rightly opposed the UAW permanent two-tier system with its discrimination against young workers coming into the factories.
What then are we to make of this agreement? Is it the best that could have been done in the context of the UAW settlement and a looming recession? Does it bring a victory against the two-tier system or, like the American UAW’s agreements of 1982, signal the decline of the CAW’s earlier prominence as the leading union in
1982 and 2008
It’s useful to start with a look back to the early 1980s, the defining period in the formation of the CAW. In 1982 the overall unemployment rates in the
In the early 80s, in the context of massive layoffs — 150,000 at GM alone (double the total GM union members today) — the UAW gave in to company pressures for early bargaining. The agreements were seen as concessionary not because of any cut in wages — wages were in fact frozen — but because the traditional increase of 3% for annual productivity gains was given up and cost of living allowances were postponed. In subsequent agreements, lump sum bonuses replaced the full return of the annual increases. As well, the union gave up its recently won 9 paid personal holidays. (The Canadian region of the UAW was able to maintain the principle of regular increases in base rates but also surrendered those paid days off.) Those scheduled days off had reflected a first step in the UAW’s earlier ambitions of moving towards a four-day week at full pay, and had contributed to inspiring the subsequent drive by the German Metalworkers for shorter work-time. Analysts estimated the
Like the 1982 agreement in the
The agreement also gives up 40 hours of paid vacation. Here, too, there is a lump sum that covers lost vacation pay during the life of the agreement. But the loss in paid time off will be very difficult to recover in the future and, with it, the job openings created by the need for replacements. At Ford, where a culture of all workers taking their vacation was collectively enforced in order to create more job openings, workers will now be ‘permitted’ to work through vacations. The CAW drug plan, with its limited cost to the worker ($.35), will move to a co-pay of 10% up to a maximum of $250 per family rising to $290 over the life of the agreement. And, surprisingly, given the Canadian public health care system, the union didn’t simply reject the UAW move to accepting responsibility for health care costs, but left a crack open with a commitment to ‘explore Canadian opportunities to establish a pre-funded, off-balance-sheet Retiree Health Benefit Fund’.
In what some may see as a ‘mini’ two-tier system, new hires — who formerly started at 15% below the base wage and moved to the full rate over two years while getting full cost-of-living allowances — will start at 30% below the base wage and move to the full rate over three years, with the cost-of-living postponed until the end of the agreement. New hires will also receive less paid vacation than under the current agreement and will receive lower benefits, most notably their exclusion until the end of their third year from the top-up of UI when they are laid off (and they will of course be the first to be laid off). But because these new workers will move to approximate equality by agreement’s end, it meets Hargrove’s commitment against a permanent two-tier system.
Along with other concessions, such as caps on long-term health care, and even with some positive improvements in benefits, the agreement will save — again like the 1982 UAW agreement — the companies about 10% relative to past agreements.
Labour Costs and Competitiveness
The basic economics of this package, based on data presented by CAW economist Jim Stanford to the bargaining committee, are as follows. The starting point for the leadership was, apparently, to negotiate the kind of agreement that will, through its control over labour costs, attract investment from the Big Three. The relevant comparisons are the hourly labour costs apart from ‘legacy costs’. (Legacy costs refer to future commitments made to retirees; these must be paid wherever the investment occurs, so they do not affect any particular investment decision.) On this basis, and with the Canadian dollar at parity, Canadian costs are $67/hr for all wages and benefits while US costs are $60. This differential of 10% is itself not of great concern because it is more or less offset by the higher productivity and quality in
Another way of thinking about this is to consider the impact of the UAW two-tier system on costs. At Ford, it is currently capped so it can ‘only’ affect a maximum of 20% of the workforce. Once implemented, this will reduce future
The value of the Canadian dollar has been very much at the centre of concerns with Canadian costs, and this does matter. According to the CAW analysis, if the Canadian dollar were to fall to $.90 US, this would more than make up for all the concessions the union is now making. Such a fall in the Canadian dollar is a distinct possibility in the near future, when the fall in the American dollar bottoms out. Why then accept a permanent sacrifice in wages, benefits and work time — as well as a transformation in the orientation of the union and its bargaining structures — based on a possibly temporary value of our dollar?
The problems with this agreement go beyond the economics, but let’s consider the economic arguments even on their own terms of Canadian labour costs harming Big Three investment in
It’s true that things may get worse in the fall. But this was always the case, yet the CAW consistently rejected the early-opening option. In part, that was simply about letting the democratic process unfold: providing the members with an analysis and arguments that are distinct from the companies’, letting the committees form their demands, and allowing for the pre-bargaining discussions and debates at the bargaining conference. But it was also due to the fact that speculating about what might happen in the economy can backfire. For example, the Canadian dollar may be lower in September, to the advantage of Canadian operations. As well, if bargaining looked tougher for the union later on, wouldn’t the corporations be expected to exact more in exchange for the early opening? But the main reason for waiting until the agreement expires has been to avoid the message — to the companies and to its members — of a union desperate for any deal.
This is not to deny that there would be risks in September, including the possibility of a strike. But such risks can ultimately not be avoided if workers want to defend their rights and conditions, and standing up to the company in this way allows workers to affirm their independence, participate in influencing events, and test what is possible — the only way to know if you could have done better. (Waiting until normal bargaining begins does, of course, still leave the union with tactical options: it can strike only key facilities and leave the rest operating or it can choose to delay a strike for a given period.)
The greatest danger with looking to win through deals at the top rather than fighting back and building the base is that workers can end up with the worst of both worlds: concessions AND job loss, concessions AND two-tiers. Suppose the Big Three use their foot in the door in the
But suppose, in contrast, that the CAW mobilized its members for a fight in September against the two-tier system and that this sparked or reinforced resistance to two-tiers in the
How Did the
The issue is not whether, given the constraints it imposed on itself, the CAW bargained ‘well’ or not. The CAW bargainers, from Buzz Hargrove down, have excellent bargaining skills. Once the alternatives are defined in terms of finding a way to reject the permanent two-tier system but pay for it in ways less damaging to union solidarity, a credible case might be made that the CAW bargainers did as well as was possible. The issue is why the union framed its options so narrowly and put itself into this box.
When Buzz Hargrove militantly declared his opposition to the two-tier system, there was clearly never any intention to actively mobilize the membership against it. Unlike past campaigns, there were no community meetings of stewards, no presentation of the economic arguments that made a fightback possible, no widespread distribution of pamphlets, no use of the union’s structures to arm secondary leadership so they could go home and organize, no building toward the Collective Bargaining Conference to develop workers’ understanding and confidence in why they must and can resist two-tiers, and therefore only a mixed message to the companies about how far the union would go to resist two-tiers. In that context, the determination to get a deal and get it now, shifted the CAW watchwords of ‘fighting back makes a difference’ to ‘fighting back is impossible’, leaving the union leadership and technicians to bargain within the straightjacket of parameters set by the company.
In the absence of any kind of campaign, and with the members all too aware of the union’s recent trajectory, the commitment to reject the two-tier system was widely viewed as being about how much would be given up to keep it out of Canada. That many workers may now be relieved — it could have been worse — doesn’t speak to the larger question of how the union got to this point of a leadership with no intent to fight and a membership passively waiting to see how bad things might get.
The problem, it seems, is that once the union accepts the argument that competitiveness is a goal workers must conform to — rather than as a constraint that must be stretched through broader policies and challenges to corporate power — the union ends up with no agenda independent of the corporations. Mobilizing the workers to fight the corporations is then largely irrelevant (in fact, it might even be seen as a potential problem). What is achievable comes to be viewed in terms of personal relationships to corporate and government officials, and other things follow. For example, when the union’s main strategy in responding to job loss is argue for corporate subsidies, it is essentially arguing to make the corporations stronger, rather than challenging, through building wider coalitions and alternatives, the corporate freedom to undermine our freedom and to disrupt the lives of workers and their communities. The unintended message is that workers must, one way or the other buy their jobs. Subsidies paid for by the worker as taxpayer and concessions paid by specific groups of workers are ultimately not alternatives, but part of the same logic; once you buy into one as the only alternative, you’re vulnerable to buying into the other.
That same reorientation from taking on power to accommodating to it was reflected in the union moving from strategic voting — once voiced as a criticism of the NDP’s lack of resistance to corporate pressures — to supporting the business-backed Liberal Party. It was also dramatically reflected in the Magna deal, where the union unconvincingly tried to argue that you can build union strength as you give up the right to strike forever and accept an in-plant structure without a shop steward system and an ’employee advocate’ appointed through a convoluted selection process to pose as a plant chair.
In this light, when the union repeatedly opened up Big Three local agreements to accept concessions — sometimes forcing workers to vote again if they didn’t get it ‘right’ the first time — what we were seeing with these ‘shelf agreements’ was a precursor to the present opening of the Big Three agreements. In some cases, these shelf agreements even introduced its own version of the two-tier system: work such as internal janitorial services or external part components would be outsourced and paid very much lower rates and those laid off as part of this process would be ‘invited’ to apply for the ‘new’ jobs. In the recent
The union now faces a new dilemma. The GM workers have insisted that they are not ready to accept any more concessions without a guaranteed product; the open and vague promises of concessions are not enough. The CAW leadership, in light of not wanting to see a repeat of the
Conclusion
There is something profoundly wrong with what passes for normalcy in our society. The President of General Motors, partly in reward for his role in preaching restraint and destabilizing workers’ lives and communities, gets a 40% salary increase to $14 million annually (and may declare that the Canadian concessions were not enough). His counterpart at Ford, hired from outside the industry to cut even further, is paid $21 million, meaning he makes more in a little over a day than Ford’s full-wage production workers make in a year of exhausting work. On Wall Street, the top 50 hedge fund managers together earned some $29 billion (yes ‘billion’) on the way to contributing to the current chaos in financial markets; according to data from the US Bureau of Labor Statistics, the pay of those 50 individuals equals the total compensation of some 390,000 US motor vehicle workers — over half the industry’s total hourly workforce.
Meanwhile, as the US dollar falls and the average compensation (wages and benefits) of
In
This does not mean that unions can no longer be looked to in defending the working class, but it does mean that it can’t be taken for granted. Activists and members need to start having discussions about where their unions are going, why the base so often has such little effective input, how to forge links with others asking the same questions across workplaces and unions, what building a rank-and-file capacity and ‘changing’ their unions actually means, and how to engage in resistance now. The socialist left, today largely marginal to working class life, once played a prominent role in creating spaces for such discussions and providing relevant analysis and resources. Unless that creative link between labour activists and socialists can be revived, the union movement will only stagger on from smaller defeats to larger ones.
Sam Gindin teaches political economy at York University, Toronto
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