Against the Current editor on GM strike

Louis Proyect lnp3 at
Wed Jul 1 08:09:28 PDT 1998

The Stakes of the GM Strike

by Dianne Feeley, Detroit

Thirty-four hundred GM workers at the Flint, Michigan Metal Fabricating Facility, a stamping plant, walked out June 5. The United Auto Workers (UAW) Local 659 voted to strike last January over health and safety issue, but the International union authorised the action only after management removed new dies (used to form parts for GM's 1999 pickup trucks) from the plant. They were spirited out over a traditional three-day holiday weekend and sent to GM's Mansfield, Ohio plant; at least one was damaged in transit.

Officials from the Canadian Auto Workers union (CAW), when faced with a similar problem last year, occupied GM's Oshawa, Ontario plant, disassembling and hiding the dies before negotiating with the company. But in Flint union officials at the local and regional level did not take pre-emptive action. Two days before the strike, however, when management attempted to move racks holding metal parts, 300 workers--including workers from nearby plants--blocked the loaded trucks. Later the racks were removed by train.

As soon as the dies were brought to Mansfield, the union local got in touch with Local 659. But they didn't launch a sympathy strike because under the UAW/GM contract those are outlawed. The UAW International leadership could have authorised them to strike on the basis of ongoing health and safety violations, shutting down the Ohio plant, but that didn't happen either.

The GM publicity department has been working overtime to portray the workers in the stamping plant as unreasonable and unproductive. In many plants it has been a long-standing tradition for operators to be assigned a daily quota. They (not assembly line workers) are then free to meet it however they decide. Some choose to work at a furious pace and finish early while others finish only by the end of the shift. As long as the operator meets the quota, the job is satisfactorily completed. But in the "lean" system of today's factory, foreman are demanding continuous production. Workers on one shift are supposed to compete with workers from another shift-- and all are encouraged to surpass yesterday's production. This intensification of the work day--and the attempts by workers to maintain the set quota--is one of the subtexts of the struggle at the stamping plant.

On June 11 5,800 members of UAW Local 651, who work across town at Delphi East, a major GM parts factory that produces fuel pumps, speedometers and other small parts, went out on strike.

By the end of June twenty-six out of the twenty-nine GM assembly plants in North America and over 100 parts plants--including independent parts suppliers that produce for GM--were shut down. About 150,000 workers are out--but only 9,300 are on strike. This phenomenon of a relatively small strike having a domino effect on the entire GM North American chain is the result of "just-in-time" production, which reduces inventories to a minimum. The shutdown is now costing GM $75 million a day in lost profits.

The two strikes in Flint, home of the 1937 sit-down that led to the formation of the UAW, are over work rules, health and safety issues and job security due to out-sourcing and subcontracting. These are not only local issues, but challenge the reorganisation of work at the end of the twentieth century. GM backed out of its commitment to invest $300 million in the metal-stamping factory because it claims the union did not go along with changing work rules to increase productivity (i.e. speed up and downsizing).

Local 659 strikers on the picket line explain that GM is comparing apples to oranges in its productivity measurements. They point out that their plant makes larger parts--hoods, fenders and engine cradles for light trucks--while other stamping plants make much smaller ones. They cite the number of concessions they have made to management over the past decade, and point out that these have not resulted in job security, but only more demands by GM. As one striker put it, "After ten years of 'co-operation' the company decided that we still weren't giving enough, so they felt justified in ignoring the contract and written promises we had spent almost two years negotiating."

Michael Moore's 1989 satirical film, "Roger and Me," documented the plant closings that devastated Flint throughout the '80s. But despite losing nearly 50,000 jobs over the last twenty years, Flint is still home to 33,000 GM workers and remains the largest concentration of GM workers in the world. While GM accounts for 65% of the local economy, announced plant closings and downsizing could decrease that to 35% within five years.

Flint strikers feel that they have to take a stand now, before the jobs have left. Strikers complain that the union had gone too far in co-operating with management, and management had not lived up to their end of the bargain.

This is not the 1970s or '80s, when the US economy was in a downturn. Indeed, GM is sitting on more money than they know what to do with. And yet, the company is demanding more downsizing and out-sourcing. The response has been a wave of strikes. During 1996-97 GM lost $1.5 billion from nine strikes, most of them demanding the hiring of more workers.

Last year GM surprised everyone by announcing that it would close the Buick City Assembly plant in Flint after producing the current (1999) model. It revealed to GM workers that there is no relationship between quality and productivity on the one hand and job security on the other. Buick City's LeSabre has received numerous quality awards as the best-built domestic vehicle and as one of the top quality-built vehicles in the world. And Buick City is ranked #2 in productivity on GM's list of assembly plants.

Simultaneous with GM's announced closing of Buick City, the corporation confirmed the closing of its Flint-based Chevy V-8 engine plant. The two plants scheduled for shutdown employ over 5,000 workers. GM promised to build a new engine plant somewhere in the greater-Flint area ­ but it will employ only 800. Nonetheless city and state governments have put together a tax abatement package that would subsidise GM by $153,000 per job. (GM already enjoys $2 billion in tax abatements from Flint-area communities.)

GM claims it must eliminate jobs, change work rules and have the flexibility to send work to outside suppliers. It has delayed investments in many U.S. plants and demanded that the union accept the combination of job classifications. This means that each worker must be able to perform a variety of jobs, wherever and whenever necessary. This more "flexible" and lean workforce is also forced to put in more overtime.

GM is also selling off some of its parts plants. The second striking Flint plant is part of the Delphi division of GM, the world's largest auto parts producer, posting sales of $27.8 billion in 1997. Delphi is currently merging with another GM division, Delco Electronics. Delphi-Delco will become a "smart systems" operation for electronic engine controls, as well as steering and braking systems. These are high-tech, computer driven and highly profitable lines. Whatever parts of Delphi don't meet that definition may be sold off or closed.

By shedding much of its parts work, GM will be able to buy in its parts from non-unionised factories. Only 10% of U.S. workers in the parts supply industry are unionised. They make less than 70% of the UAW-organized workers' $20 an hour, with considerably fewer benefits. Additionally, most UAW workers have a local contract which specifies the maximum number of daily hours a worker is forced to work and regulates the number of Saturdays required. Non-union plants have more flexibility regarding hours. (Though even UAW-organized auto workers are forced to work more than fifty hours a week!)

In Brazil, GM has used outside suppliers to assemble various components for new cars before delivering them, along the lines of Japanese manufacturing practices. For example, instead of sending speedometers, gas gauges, radios and glove boxes, the suppliers send partially assembled dashboards. This decreases the amount of floor space necessary in an assembly plant and reduces the number of assembly workers--what Wall Street calls "efficiency."

Since the strike began the *New York Times* reported that GM has been quietly talking to the UAW about building a Brazilian-style factory in the United States. These factories have an "L" or "T" shape, to accommodate the large number of loading docks needed to deal with the large number of outside suppliers.

In 1997 GM made $6.7 billion. Over the last two years it paid the top executives more than $22 million in cash plus an additional $35 million in stock options. Jack Smith, GM chairman, president and chief executive officer, received a 26% increase in combined salary and bonus in 1997--$4.3 million, up from $3.4 million in 1996. But judging by Wall Street's measure, GM's profit margin is a narrow 3% and its market share stands at 32%--down from the 50% it held in the 1970s. In comparison with Ford, GM is less "efficient." And although it has trimmed 212,000 jobs over the last dozen years, according to Wall Street GM still has "too many workers and factories."

Wall Street is encouraging GM to stand tough in its negotiations with the UAW. During the first week of the strike two internal GM memos were leaked to the press, obviously to undermine the confidence of the union. The first revealed GM's plans to double the number of vehicles assembled in Mexico over the next four years. The second lays out a plan to shut down by 2003 the Lordstown, Ohio assembly plant, which employees 6,300 workers.

Yet the strikers feel confident. Although the UAW has not called for mass picketing or organised support rallies, contingents of auto workers from various locals as well as other trade unionists drop by to help with the picketing. And certainly the number of cars and trucks honking support to the strikers makes it clear that Flint supports the workers' struggle--even if the town's mayor does not.

By the end of the first quarter of 1998 GM was sitting on $13.6 billion in cash. With all that money it still cannot afford to delay the 1999 launch of the Chevy Silverado and GMC Sierra full-size pickup trucks. Pickups account for 15% of GM's North American sales with each pickup a clear $7,000 profit. A quick start-up is needed in order to race past Ford and regain first place in market share.

Since the beginning of the year GM and its suppliers have been working to get all the bugs out of the new-model changeovers. This means that the Oshawa, Ontario truck plant has be to running at full speed--about sixty trucks per hour--by early November, with Pontiac, Michigan and Ft. Wayne, Indiana assembly plants following closely behind. Crippling GM's North American production will disrupt what *Business Week* described as "A Launch GM Can't Afford To Blow."

The UAW strikers should be in a position of maximum power. Except that the union has undermined its position all along by its "partnership" programs with GM, Ford and Chrysler. *Business Week* asks why GM and the UAW can't work out the same sort of deal that Ford has with the union. According to *Business Week,* a UAW vice president meets with Ford Chairman Alexander J. Trotman for breakfast every other month and there are "no nasty surprises." When Ford closed its Thunderbird factory in Ohio last year, laying off 2,500 workers, the union didn't protest. Instead the UAW worked out a deal for those workers transferring to a Kentucky pickup truck plant to receive a $45,000 bonus.

Much of Ford and Chrysler's downsizing took place during the 1980s and as a result Ford has surpassed GM's productivity--33.3 vehicles per blue-collar worker to GM's 27.3. It's also true that the UAW's GM department does not have the cosy, high-level relationship with the company that the Ford department does. But it would be folly to believe that "labour peace" has been achieved just because Ford and Chrysler workers haven't gone out on strike.

It's clear that the fight over downsizing at GM is occurring in a tight labour market, where the corporation pays management outrageous salaries and nickel-and-dimes those who do the work. It's an explosive situation as industry analysts discuss GM's need to shed an estimated 30,000 workers. Yet the advice that the industry analysts trot out is that GM can only meet its objective if it negotiates a new, more co-operative pact with the union.

For GM workers the answer is quite different. It involves rejecting "partnership" deals with the corporations, fighting against the deterioration of working conditions on the shop floor and opposing forced overtime. It means developing a strategy to organise the unorganised parts sector. It means developing close ties with the CAW in Canada and the struggling independent unions in Mexico to work out a common strategy. It means replacing union officials who may sound militant but end up taking the bosses' side.

Obviously a strike settlement in Flint will not resolve all of the problems the strike has so effectively highlighted. But just as in the case of the UPS strike, people all around the country are seeing a diverse group of working people on strike--African Americans, Latinos, whites, men and women. The strikers explain their issues to reporters, obviously knowledgeable about the processes of their jobs and willing to fight back against injustice. Some are third generation autoworkers with a sense of how the union was built in Flint. They talk about corporate greed. They don't yet articulate demands for a shorter work week at no loss in pay. Instead, they stress that they want to ensure good jobs for their children.

[Sources: *Business Week, Labor Notes, New York Times, The Voice of New Directions.)

Louis Proyect


More information about the lbo-talk mailing list