Earlier this year, I filed a complaint with the Securities and Exchange Commission on behalf of autoworkers pointing out that GM and the UAW had failed utterly to warn GM employees of the risk of bankruptcy and its impact on the proposed VEBA health care plan.
To the Editor:
A. H. Raskin heralds the opening of a new era in labor-management relations in the start-up of production at the Fremont, Calif., auto plant jointly managed by Toyota and General Motors (”An Industrial Breakthrough,” Op-Ed, July 23).
But those familiar with both Toyota and G.M. as trade unionists have a different view. Is the price of cooperation the permanent loss of jobs to speedup and automation? Of the original 6,000 workers employed at the plant, the new company, New United Motor Manufacturing Inc., will hire only 2,500. And those only after careful screening of attendance records, disciplinary incidents and attitudes toward labor-management relations. Nummi has pledged only that a majority plus one of these 2,500 will come from the old union shop.
A company rule book promises dismissal of any worker guilty of poor housekeeping, immoral conduct or indecency. Defining those concepts is to be left up to management.
The new arrangement is, in large part, the result of the United Auto Workers international going hat in hand to Toyota and General Motors. The union was willing to dissolve the original Fremont local with its long tradition of democratic activity. Old union activists must run a gantlet to return to their old jobs, and they have given up much of their former input in the new contract. The local no longer has the right to strike over work standards, there is no guarantee of time off for shop stewards for plant-floor representation, and everyone must participate in a work-group structure imported by Toyota from Japan.
If the labor record of Toyota in Japan is any indication, management will be able to take every advantage of the new labor structure. Despite persistent rumors on this side of the Pacific, job security is the privilege of a few who work at final assembly plants. Those who work for the thousands of subcontractors that provide up to 70 percent of an assembly line’s inventory are subject to brutal working conditions, irregular work and no effective union representation. Even the lifetime jobs have forced overtime, a pace that results in high illness and injury rates, and company housing compounds reminiscent of those in South Africa.
The teamwork system serves not to widen the skills of auto workers but to absorb from them as much information and loyalty as possible. The result for management is valuable: a constant hold over the work force 8 to 10 hours a day.
It was once thought by many of those who proudly defended the traditions of the trade-union movement that an independent and democratic organization was the single guarantee that workers’ interests would be protected. It was this principle that influenced the original Wagner Act and has motivated the American trade-union movement for a century or more. Now we are to toss blithely aside this tradition of democratic dissent, for cooperation, consensus and joint participation. These ideas seem more like Stalinist emulation campaigns than the principles of Eugene V. Debs and Samuel Gompers.
It’s not about competition – it’s about our standard of living
Opponents of the government loans to the Big Three Auto companies contend that if American companies cannot compete they should be allowed to go bankrupt. Thus, the Big Three executives received a cold shoulder when they showed up in Washington, D.C., this week, even after giving up their private jets.
But this misstates the problem. The real problem is not figuring out how to “compete” with organized labor’s brothers and sisters in Asia and Europe.
Instead, it is about all workers – here in the United States and around the world – fighting to maintain their basic standard of living in the midst of catastrophic financial crisis.
This crisis is about all workers not just autoworkers.
Big Three Management has failed its social responsibility
The key to defending and improving workers’ standard of living is the availability of good jobs for all producing socially useful products for all.
The current management of the Big Three has failed that basic social responsibility. And the leadership of the United Auto Workers has been unwilling to challenge the Big Three for their failure, choosing instead to “go along in order to get along.”
Instead, the UAW should draw on its finest traditions as more than just a narrow bread and butter labor union – when, for example during the civil rights era, it backed a broader concept of the public good.
Time for a new transportation industry
The valuable physical plant and skilled workforce of current workers and recent retirees of the Big Three can be the basis of a new transportation industry that manufactures a wide range of products for both mass and individual transportation that are environmentally responsible. This new industry can be the basis for a revival of economic growth.
But such a solution cannot be entrusted to the titans of Wall Street, of hedge funds and private equity funds. The collapse this year of major investment banks makes clear that Wall Street no longer knows how to manage workers savings responsibly.
From the Big Three to a Public Trust Company
A new public trust company, or PTC, should be established immediately. The PTC will be managed transparently by trustees who will be elected by autoworkers and members of the communities in which the auto plants are located.
The PTC should be provided a government guarantee to issue long-term bonds at low interest rates that would be held by major pension funds and mutual funds. The cash raised should then be used to purchase the assets of the Big Three auto companies that will then be folded into the PTC.
The PTC will create a new national transportation plan that will be part of an effort to revitalize our cities and move to an environmentally and socially responsible economy managed democratically and transparently in the public interest.
Looking for something more to take out of the hides of workers to satisfy Wall Street, Republican Senator Corker demanded that the UAW take a haircut in the value of VEBA assets to match the write down taken by bondholders.
Unsecured debt of GM is now trading at a significant discount to its face value. Would the UAW be willing to write down the value of its VEBA assets in a similar fashion? Corker wanted to know.
Gettelfinger seemed caught off guard by the question and said he couldn’t reply until he consulted with HIS Wall Street friends, Lazard Freres, the investment bank advising the UAW.
The reality, of course, is that a huge chunk of the assets held by the GM VEBA is in the form of a $4 billion convertible note that is already far less valuable than the day it was issued. It is no stronger a financial instrument than the unsecured debt held by Corker’s Wall Street friends.
So the right answer – which Brother Gettelfinger should have known – is that the UAW retirees are already suffering, right alongside those bondholders, from the travails of GM and the other two auto giants. In fact, that is precisely why the Big Three set up the VEBA’s the way they did – they hardly wanted fixed obligations knowing full well they would need “flexibility” to work through this period of trouble.
It seems that only the UAW leadership is unaware that they too have been caught in the financial collapse in value impacting their industry.