The GM-UAW Agreement and the G20 “Global Jobs Pact”

[Note: Following are the remarks delivered in Geneva, Switzerland, on June 6 by Alan Benjamin, Executive Board member of the San Francisco Labor Council and Co-Coordinator of the Workers Emergency Recovery Campaign. The remarks were presented at the 16th Meeting of the International Liaison Committee in Defense of ILO Conventions and Trade Union Independence.]

Dear Sisters and Brothers,

I am happy to be able to represent at this meeting in Geneva the 150 union affiliates and 75,000 members of the San Francisco Labor Council (AFL-CIO), and particularly our Council President Mike Casey and our Executive Director Tim Paulson.

Over the past five months, our Council has promoted a campaign across the United States to demand that our government bail out working people — NOT the banks. We have opposed the close to $4 trillion in U.S. Treasury and Federal Reserve funds that have gone to bail out the speculators while close to 1 million workers per month over the past seven months, according to the statistics of the AFL-CIO, have lost their jobs — and while millions of working families are losing their homes to foreclosures, and countless numbers are losing their healthcare coverage.

We have campaigned to demand a halt to every single layoff in the auto industry and a halt to every penny in budget cuts to our public services. We have said that the money exists to provide jobs for all and to stop all cuts in essential services; what is needed is to redirect the funding that is going to the speculators and warmakers to bail out working people, to establish a massive jobs-creation program.

And we have insisted that to win our most pressing demands today, we need strong and independent unions that fight to preserve and advance the interests of their members — as opposed to helping the employers make their companies “more competitive” in this period of growing recession that is moving fast toward a global Depression.

So it was quite natural for our San Francisco Labor Council to accept the invitation to be here with you today to (1) insist on the urgent need for unions to preserve their full independence in relation to the government and the bosses, and (2) help sound the alarm about the so-called Global Jobs Pact that is being concocted in the framework of the G20 Summit, with the active participation of the IMF, World Bank and WTO.

In the United States, the recent bailout agreements at Chrysler and GM reveal for all to see the real face of the Global Jobs Pact that will be at the center of the discussion at the ILO Summit on the Global Jobs Crisis this coming June 15-16.

The Obama administration put together an Auto Task Force headed by investment banker Steve Rattner with the task of restructuring the industry to make it more competitive in relation to foreign auto corporations. The other main task, or so we were told, was to preserve workers’ jobs.

Rattner’s task force got to work immediately. It was necessary, Rattner said, to slash tens of thousands of autoworkers’ jobs, close dozens of auto factories, gut the autoworkers’ union’s collective-bargaining agreement, and impose “sweatshop” working conditions at the new GM and Chrysler. If this could be done without entering into bankruptcy proceedings, all the better; if not, bankruptcy and reorganization, hopefully expedited, was an option to be pursued.

And to accomplish all of this, it was essential, Rattner explained, that the autoworkers’ union — the UAW — be made to take direct responsibility for implementing this destruction of workers’ jobs and working conditions … to the point of taking direct responsibility for destroying the union itself.

As you may know, Rattner succeeded — at least for now — in this task. The UAW leadership agreed to this national “Jobs Pact,” signing agreements with Chrysler on April 30 and with GM on May 28 that represent a dagger aimed not only at the heart of the autoworkers’ union, but at the heart of the entire labor movement in the United States and around the world.

It is no accident that the International Auto Manufacturers’ Association and the European Association of Auto Suppliers, both of which will be participating in the ILO Summit on the Global Jobs Crisis, are pointing to the UAW agreements at GM and Chrysler as a model to be followed for the auto industry worldwide. (1)

What, then, are these agreements at GM and Chrysler?

The union agreed to forfeit the $20 billion owed by GM to its retirees’ healthcare fund in exchange for an Employee Stock Ownership Plan that gives the union 17.5% “ownership” of GM. In the case of Chrysler, the “ownership” is 55%. (2) In reality, these shares are virtually worthless at this point. Both GM and Chrysler have filed for bankruptcy under Chapter 11 of the bankruptcy code — and many auto industry analysts predict that with the growing economic crisis, both “new” companies will likely go under again before long.

In addition, with GM and Chrysler now in bankruptcy proceedings, there is a deep fear that the retirees’ healthcare fund — known as the Voluntary Employee Beneficiary Association (VEBA) trust fund — may soon run out of money, leaving the 377,000 retirees at GM and the 78,000 retirees at Chrysler without their healthcare benefits. What good will a valueless share of GM do a retiree when he or she has to go to a doctor for a dialysis?

The union also agreed to give up between $1.2 billion and $1.3 billion per year in wages’ and benefits’ concessions at GM over the five years of the new contract. It also agreed to a no-strike clause during the new contract.

Most important, the union agreed to close 17 GM plants and slash 21,000 jobs, bringing the workforce down to 40,000 — from a workforce that once numbered 600,000. At Chrysler, it was pretty much the same story.

Job preservation? Job creation? Hardly. This is but a cruel joke. It’s job destruction and a “slave labor contract” (to quote Larry Christensen, a retired UAW local shop steward) … all in the name of a Jobs Pact to protect workers’ employment. It’s an “armed holdup” of the union’s retirement healthcare fund, to quote another UAW retiree.

And it’s all done with the direct participation of the UAW. It’s the cruelest form of “corporatism” — that is, the ultimate form of “labor-management cooperation” schemes — so cherished by the IMF, World Bank, and WTO.

No! The role of the trade union movement is not to become a partner of the bosses, or to help make their corporations “more competitive” in the global economy.

There has been a lot talk about “shared sacrifices” at GM. Not so: While the workers are asked to shoulder the brunt of a crisis that was not of their making (job loss, wage cuts, decimated contract), Steve Rattner, President Obama’s car czar, made sure that JP Morgan Chase and Citibank were promptly repaid, in cash, the $6 billion owed to them as part of the restructuring deal. They were paid in cash, not worthless stock certificates.

This is why the Economic Crisis Committee of the San Francisco Labor Council is calling for the nationalization of the Big 3 automakers — under the management of a labor-community board and with a strict mandate to prevent any and all layoffs, to put the tens of thousands of workers who were laid off back on the job, and to retool the industry in the framework of a national Workers Economic Recovery Plan. (3)

What has been the reaction of the union members to the agreements at Chrysler and GM?

Both contracts were put to a hurried, “gun-to-your-head” vote of the members.

GM workers were told that 47,000 jobs would be slashed if the union contract were rejected and the company were forced to enter into Chapter 11 proceedings. They were told that if they accepted what industry analysts have called a “quick rinse” restructuring plan, bankruptcy would be avoided. On May 29, the UAW leadership announced the totals from the vote that week: 74% of the 54,000 workers who voted approved the contract; 26% opposed it. (At Chrysler, one month earlier, the contract was ratified by the members, with 89% in favor, 11% against.)

No sooner had the GM workers voted to approve this proposal, than GM filed for bankruptcy on June 1. Instead of 47,000 jobs eliminated, 21,000 were slashed.

At Chrysler, a similar swindle occurred. Chrysler bargainers did not mention any plant closings if the new contract were ratified. Workers believed when they voted that all plant closings would be halted in exchange for the drastic concessions they were compelled to make. But the very next day after the contract vote, it was announced that plant closings had actually been part of the plan — despite the fact that there was not one single reference to plant closings in the contract approved by the workers.

Both these serious violations of contract-bargaining procedures indicate that there may be a legal basis — not just a political basis, which is compelling in and of itself — for re-opening the contracts at GM and Chrysler and having the union withdraw its support for the agreements.

It’s also important to note that a large percentage of the autoworkers who voted YES did so because they felt they had no choice; the alternative of losing everything was so drastic — not because they approved the contract.

The workers were — and remain — angry. On June 1, the very day GM filed for bankruptcy, more than 300 UAW members in Lansing, Michigan, took to the streets. The local president of the UAW, Brian Fredline, told the rally, “Our job must be to represent our members, not to run the corporations.” One worker held a hand-made sign that read, “Auto Workers Now, Who Is Next!?” (International Herald Tribune, June 4, 2009)

All workers will be next — whether in the United States or internationally — if the upcoming ILO Summit on the Jobs Crisis is able to get away with its swindle and use the GM-Chrysler model as the basis for its Global Jobs Pact.

Yes, this fight will be difficult, but the autoworkers — and the U.S. labor movement — haven’t said their last word. There is bound to be defiance of the anti-strike clauses and “sweatshop conditions” imposed by Obama’s task force. That is why many of us in our country are campaigning for the UAW to withdraw its endorsement of these anti-labor pacts at GM and Chrysler. “It Ain’t Over Till It’s Over,” as we say in the United States.

There is one other topic I wish to address here, and that is the very right of workers in the United States to be able to join a union of their choice, an international right guaranteed in ILO Conventions 87 and 98 — two fundamental conventions, I should note in passing, to which the United States is NOT a signatory.

In the United States, it has been extremely difficult, if not close to impossible, for unions to organize new workers in their workplaces. This right exists only on paper.

A small percentage of union-organizing drives are successful. Not only are these drives very costly, as 80% of employers hire outside “union-busters” to run million-dollar campaigns against union-organizing drives, the bosses have virtual free rein to harass and fire workers who sign cards asking for a National Labor Relations Board election in their workplace. (4)

That is why the U.S. labor movement has pulled out all stops to win passage of the Employee Free Choice Act (EFCA), a bill currently in the Congress that Obama said he would support during his election campaign.

EFCA would give union recognition in any workplace where a majority of the workers sign a card in support of the union. There would be no need for the phony, gun-point elections. This “card-check” provision, as it is called, is at the very heart of EFCA.

Not surprisingly, after the historic November 4 presidential election, the U.S. Chamber of Commerce earmarked more than $200 million to stop EFCA, stating that the recognition of unions — in fact, the very existence of unions that fight for their members’ interests — would represent a major obstacle to economic recovery.

For the captains of industry, the only path to recovery is to bail out the banks and corporations … out of the hides of the workers. And even on this level there has been no recovery. The speculators are taking the government money and sitting on it, waiting for better times to make a profit.

Under this pressure, Obama has backed off from supporting EFCA in the name of finding “common ground” with the employers. Obama is now urging all social partners to find an “alternative” to EFCA that is acceptable to the Chamber of Commerce.

But the new “alternative” that is being cooked up in the corridors of Congress is no alternative at all for working people, as it would eliminate the card-check provision that is so central to EFCA.

It is understandable that the employers should be pushing this alternative. But what is most unfortunate — and frankly unacceptable — is that a number of high-level officials in the U.S. labor movement are telling workers that they must accept this so-called alternative, that they can no longer fight to win EFCA, that they have to refrain from being “confrontational” on this question.

Our San Francisco Labor Council, our Workers Emergency Recovery Campaign have joined up with unions across the country to say that we cannot accept what is unacceptable, that we can still win passage of EFCA … provided we are willing to take our fight to the streets and mobilize our members.

It will be necessary to call on President Obama to make good on his pledge, expressed throughout his campaign, to fight for, campaign for, and lobby for EFCA. Were Obama to do this, as he promised, there is no doubt that EFCA would become the law of the land in short notice.

But for the labor movement to succeed in pressing Obama to fight tenaciously for EFCA, it must assert its independence in relation to the government-corporate agenda, in relation to the New World Governance promoted by the IMF and World Bank, and in relation to the Global Jobs Pact that would have the unions renounce their demands in the name of so-called “shared sacrifices.”

In the San Francisco Bay Area, the trade unions will be mobilizing this summer, in alliance with their community allies, to win passage of EFCA and to fight the Draconian budget cuts imposed by our governor. We are certain you will be able to follow our activities in the pages of the ILC International Newsletter.

Our tasks, collectively, are not easy. But if we wish to remain faithful to our mandate of representing the interests of our members, we have no choice but to fight back, on an independent course. That is why this meeting organized by the International Liaison Committee is so important. And it is why we have to get our message out widely to the labor movement the world over.

I would like to conclude my remarks by paying tribute to an historic labor leader in the United States. This past Thursday [June 4], Jack Henning, past Secretary-Treasurer of the California Labor Federation, passed away, at the age of 93.

Brother Henning was a close friend of the International Liaison Committee in his capacity as co-convener of the Western Hemisphere Conference Against NAFTA and Privatization in 1997 and the Open World Conference in Defense of Trade Union Independence and Labor Rights in 2000, both of which were held in San Francisco with the active support of the ILC.

I would like to recommend that Brother Daniel Gluckstein, international coordinator of the ILC, send a message in the name of the ILC to the San Francisco Labor Council honoring the memory of Jack Henning.



(1) A press release issued May 22, 2009, by the ILO’s Communications and Public Information Office notes that on May 20-21, senior experts from the auto sector from Europe, Asia and the Americas met with officials of the International Labour Organization to discuss the state of the auto industry worldwide.

The press release quotes Thomas Kodan, a professor from the MIT Institute for Work and Employment Research, as follows: “The challenge at hand is to forge a new social contract for the industry worldwide, to understand the workplace, and to make the workers stakeholders of the restructured industries.” Kodan went on to point to the examples of the Employee Stock Ownership Plans used at GM and Chrysler to make the union a major “stakeholder” of the “new” companies.

The ILO press release also notes that already a joint effort called the European Partnership for the Anticipation of Change in the Auto Industry has been created. This is a joint project of the European Metalworkers’ Federation and the European Association of Auto Suppliers.

The ILO press release concludes by noting that the ILO Summit on the Global Jobs Crisis will study the U.S. restructuring agreements in the auto industry as it addresses a Global Jobs Pact, including industry- and enterprise-level strategies for dealing with the jobs crisis.

* * *

(2) The concept of union or government “ownership” is far off the mark. Right-wing pundits are quick to point out that GM has become Government Motors, now that the U.S. government owns 60% of the new company’s shares (with the Canadian government owning an additional 12.5%). But the Obama task force made it clear from the get-go that it was not “nationalizing” the auto companies and assuming day-to-day management of operations. All control was to be entrusted to private corporate CEOs. (In the case of Chrysler, control over all operations has been handed over to a FIAT CEO, even though FIAT’s percentage of shares is minimal.) It was also clear that the union — both at GM and at Chrysler — would have virtually no say in the running of the company.

* * *

(3) A document by the Economic Crisis Committee of the San Francisco Labor Council, titled, “Not One Single Layoff in the Auto Industry!” reads, in part:

“The government-appointed task force on the auto crisis, headed by investment banker Steven Rattner, announced a debt-for-equity restructuring plan at General Motors, claimed to be a last bid to avoid bankruptcy. In fact, it is part of a ‘controlled bankruptcy’ plan aimed at destroying the United Auto Workers union and further dismantling the largely unionized auto industry within the United States.

“If approved, the GM restructuring plan would leave the government and a healthcare trust managed by the UAW with more than 70% of the company’s equity. This means that the UAW is being asked to become a financial partner of the very financial institutions that are dismantling the industry and destroying the workforce and union. Having majority equity in the company does not give the government and the union the ability to save jobs, as they must function under the guidelines of a restructuring plan that is based on the destruction of tens of thousands of jobs. The union is thus being asked to become an accomplice of its own destruction. …

“On April 30, Chrysler announced that it will seek Chapter 11 ‘restructuring.’ Under the agreement, the UAW’s VEBA fund [Volunteer Employee Beneficiary Association fund for healthcare and retirement] will be used to finance the plan, leaving the UAW as a major financial partner of the government and the company, with the union implementing the job cuts, speed-up, etc., as part of the restructuring packet with FIAT. (Many of the Chrysler plants, moreover, will be offshored to Mexico.)

“This Chrysler plan will place the union in a position of pitting retirees against current workers. It will place the entire pension fund at great risk, as the fund will go toward bailing out a corporation that has been losing money hands over fists. More important, the new agreement at Chrysler makes the union jointly responsible with management for cutting workers’ jobs, wages and conditions. If not stopped by the collective power of the labor movement, this agreement, like the GM restructuring plan, will transform the union into an instrument of its own destruction and set a model for union-busting for all industry. …

“On January 12, 2009, the San Francisco Labor Council’s Economic Crisis Committee issued a Report that focused on the urgent need to stimulate the economy, preserve all jobs, and thus stabilize workers and their communities. The Report stated, in relation to the auto crisis:

“‘Government loans must first stabilize unions wages, contracts and employment. … This is the perfect time to begin redirecting transportation production toward rapid mass transit. … In the event that any of the auto companies does not meet this mandate to preserve all jobs and benefits, the government must place these companies under public ownership and public control to make certain that these objectives are met’.”

“Eight days after this SFLC Committee issued its report, on Inauguration Day, more than 500 unionists and activists, fearful of a failure to bail out working people, sent a letter to President Obama calling for a Workers Emergency Recovery Campaign. They demanded among the planks of their 10-point platform: “Stop the layoffs in auto and other industries across the country. Nationalize the Big 3 automakers. Re-tool the auto industry to build rapid mass transit, solar, and wind systems.”

“The financial crisis of the auto corporations was not caused by the autoworkers anymore than the financial crisis of Wall Street bankers was caused by the working class. The crisis was created by continued corporate practices of unbridled greed, a failed government entirely owned and controlled by the same corporations, and a corporate structure utterly unresponsive to the needs of the population and the environment.

“We strongly reject the administration’s drive to make the unions a partner in the effort to resolve the corporations’ financial crisis. The unions were not created by the workers to join the employers in their corporate assault on workers’ jobs and rights.

“The unions are told they must accept this deal or face the total liquidation of their jobs. This is the same blackmail unions are faced with at the bargaining table by employers demanding huge concessions or else. This deal, presented as inevitable, should be unacceptable. It is a setup by government fronting for the corporations.

“What is really happening is that the government, Wall Street, and the auto industry owners are imposing a massive restructuring on the autoworkers (reduction in wages, cuts in benefits, changes in conditions, undermining of the pensions) through the application of shock therapy to the workforce. This is instilling deep ongoing insecurity and fear.

“There should be no layoffs. If the government can find trillions of tax dollars to bail out a handful of bankers, it can surely find the funds to prevent layoffs and put all laid-off workers back on the job. The U.S. labor movement must draw a line in the sand to say: ‘Not One Single Layoff in the Auto Industry!’ The only real stimulus for the economy is to keep workers on the job, and to re-tool industry. This formula absolutely applies to auto — as it applies to every other sector of the economy, including the public sector.

“The Obama administration must nationalize the Big 3 and place the management of the companies under the control of an elected labor-community board of directors, halt all further layoffs, re-tool the auto industry, re-train its workforce, and ensure that all laid-off workers can return to work immediately with union contracts at union scale. This is the way to ensure the defense of the UAW and of trade unionism itself.

“Anything less will mean the further destruction of jobs and entire communities. It will mean a major blow to the entire trade union movement — a 21st century PATCO. It will have a staggering negative impact on communities across America.

“The auto deals at GM and Chrysler were imposed by the banks to screw the autoworkers. These deals should be a wake-up call to all of us.”

* * *

(4) Labor journalist David Bacon, explains how the bosses get away with this travesty:

“Even though today it’s illegal to fire a worker for union activity, pro-union workers were fired in 30% of union-representation elections in 2007, according to the Center for Economic and Policy Research, up from 26 percent in 2001-2007, and 16 percent in the last half of the 1990s.

“There are no fines or penalties for employers who fire workers for union activity – just reinstatement and back pay, and employers even get to deduct unemployment benefits. The NLRA is the only Federal law where violators get no punishment. That just encourages employers to fire workers. Legal bills are less than the cost of a union contract, so it’s cheaper. And workers, knowing they can be fired so easily, are understandably afraid to join unions. …

“Today employers demand secret ballot elections, and then wage an anti-union fear campaign that peaks on election day. According to the International Longshore and Warehouse Union, at Blue Diamond in Sacramento, for instance, the company told workers two days before the election that many might lose their jobs if the union won, because growers wouldn’t bring any more almonds into the plant.

“In the weeks before these tainted elections, 51% of employers threaten to close if the union wins; and, 91% force employees to attend one-on-one anti-union meetings with supervisors. Companies use outside ‘union-busters,’ who’ve created a billion-dollar industry managing these anti-union campaigns. This conduct is effectively unpunishable. On top of anti-union firings, it makes free elections a mockery. ” (Why Workers Need the Employee Free Choice Act)

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  • Lawrence says:

    This is nothing more than a hijack of all organized labor Robinhood style in reverse the thought that we the members of the UAW are paying our union to Misrepresent us and to take away from us what we have earned through the process of negoitations,sweat,blood and many tears I never in my wildest dreams would have ever envisioned such as this and the thought that my union would play such a role makes that dream a nightmare.It is time that we the members take a aggressive stand and this conflict of interest just what it is a bloody coup and lets start our own union one that truly represents its members and their collective interest.

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