The B u l l e t Socialist Project E-Bulletin No. 172 December 31, 2008 Saving the Detroit Three, Finishing Off the UAW: Learning From the Auto Crisis Sam Gindin
At the end of 1979, President Carter offered loan guarantees to Chrysler to prevent the company's imminent bankruptcy. The loans were conditional on wage concessions of some 10% and the outsourcing of half of Chrysler's work. In August 1981 a newly elected President, Ronald Reagan, ended a strike of 13,000 air traffic controllers by firing the strikers en masse (the controllers' union had ironically been a supporter of Reagan in his 1980 presidential campaign). In these cases, the American state was not just following the private sector's bidding, though corporations of course cheered it on; rather, the state was leading the assault on workers' conditions and rights. The result was a redefinition of American labour relations for a generation to come, with implications for workers everywhere. The American labour movement proved incapable of mounting any resistance through that period and assumed it couldn't get much worse.
It just did. It was expected that the economic crisis, like past crises, would intensify pressures for concessions from auto workers. And it was understood that in responding to the loan requests from General Motors (GM) and Chrysler, the American state would likely reinforce that pressure. But the U.S. Treasury and the Bush Administration went stunningly further. By formally linking UAW conditions to those in the Japanese transplants, the union whose independence had already been compromised through years of concessions was pushed to effectively act as an agency of the state.
The loan conditions asserted that "By no later than February 17, 2009, the Company shall submit to the President's Designee ... [a] term sheet signed on behalf of the Company and the leadership of each major U.S. labor organization [essentially the UAW] that represents the employees." Over and above the elimination of any layoff benefits above customary severance pay something the union had already conceded the terms called for a reduction in workers' wages, benefits and working conditions to match "no later than December 31, 2009" levels that are "competitive with the average as certified by the Secretary of Labor" at the U.S. operations of Nissan, Toyota, and Honda. As well, the union had to accept that at least half of each company's obligations to the union administered health care plan would now include company stock (the full terms are available at www.ustreas.gov/press/releases/hp1333.htm).
While American unions were waiting for the inauguration of a new president to bring them legislation that would make it easier to establish unions, the current administration (with no dissent to date from President-elect Obama) essentially declared, in a standard-setting industry, that: "You can have unions but you can only have non-union outcomes."
There are a number of lessons to learn from this unfolding event and we raise a few of them here.
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