Report to the National Committee of the Communist Party June 24, 2006

US auto workers and their union face many challenges:

The industry is increasingly non-unionthe number of foreign transplants is growing60,000 non-union workers at Toyota, Honda, Hyundai, etc.

Auto companies have growing ability to quickly shift production between plants in the US or their plants/partners throughout the world;

And, as in the case with Delphi, bankruptcy courts too easily allow companies to dump their union contracts.

Leading the race to the bottom is Delphi, General Motors parts supplier, with proposals to slash wages from $26 per hour to $16 per hour and the talk is it could go lower.

Delphi has no problem finding more money for its top executives, or money to send them on week-long cruises, but has made the decision it will no longer pay for union contracts when it can produce parts abroad. Delphi now has 240,000 workers throughout the world but only 60,000 here in the U.S.numbers that make the UAW (United Auto Workers Union)s job much harder.

It is clear if Delphi has its way, that what would remain of the company will be a workforce that is much, much, smaller and non-union. They are now advertising for jobs at between $10 and $14 per hoursaying they want to have enough people if many opt for a buyoutbut it seems much more like a threat to the union in case of a strike.

The possibility of a strike will probably depend on a combination of what the judge grants Delphi and what GM assumes, if anything, of the wages and benefits of Delphi workers and if the UAW feels it can win something from a strike.

Hearing in bankruptcy court will resume the beginning of August with the judge saying a decision will come by the end of August.

GM may have falling market share in the US but it still has huge cash reserves and is a profitable worldwide company with operations in 32 countries. It is a big investor in China.

GM too is working to shed its union workforce

Over next several years it has plans to close twelve plants and drop 30,000 workers;

It is offering buyouts to all of its employees,

Part of the reason for GMs domestic decline has been its insistence on building big SUVs where profit margins are high. But with fuel costs up, sales of those vehicles are falling.

They purposely sacrifice market share for profit but many are questioning the wisdom of such a policy both for the company and for the environment.

Crisis for autoworkers is of course industry-wide.

Ford and Daimler-Chrysler are moving operations out of the country and are using the pressures of globalization to get concessions at home.

Ford plans to close fourteen plants, ridding itself of 30,000 workers. Its Way Forwardthe term Ford uses to characterize its restructuringwill have engineers and designers at Ford facilities and partners in Sweden, Japan, England, and the US work together to share experiences and develop cars with similar platforms that can be built by any production facility, no matter what country its located in.

Auto companies are way ahead of workers in developing a worldwide-unified approach.

The pressures on the UAW can be seen in their agreement with Daimler/Chrysler at the Belvedere plant in Illinois. They agreed to a third shift hired for two years where all workers will be temporary, receive no healthcare until theyve completed their 8th month and be paid $18.00 an hour.

Such concessions will make it even harder to organize the transplants.

Solutions to these problems are not easy, but autoworkers still MUST fight. The dominant thinking in the unions leadership and part of the membership is that victories cannot be won and concessions are necessary.

The problem of course is that concessions lead to more concessions and a race to the bottom. In an era of globalization when operations can move to Mexico, Eastern Europe, China, etc, companies are whipsawing plants in the U.S. against countries where wages benefits are low.

Of course auto execs are not seeing their wages or benefits race to the bottom; the opposite is the case.

We have to end the lie promoted by the media that autoworkers are overpaid.

Truth is, we are going through a period of unprecedented theft of wealth from the working class by the rich. While workers see their wages and benefits slashed, CEOs are seeing theirs magnified many times. Its a threat to democracy when so few have so much, and autoworkers are fighting to keep the theft from growing larger still.

In 2007, the current contracts with the Big Three U.S. automakers expire. The companies will be coming to the table with a range of concessions: healthcare co-pays, end the jobs bank, flexible work rules, more union jobs to be outsourced to name a few.

We have to help both the UAW and the rest of the labor movement see that this is a fight for the union and the whole class, and that the entire class has a stake in its outcome.

As Communist Party Labor Secretary Scott Marshall points out in his excellent paper on globalization, the growth of foreign transplants in the USToyota will soon have eightand the global operations of the US auto companies, the door is open for UAW to fight for the a winning solution: unity between workers here in the US and throughout the world. Autoworkers in China, Korea, Eastern and Western Europe, Mexico, Canada, Japan, and the US are all facing the same companies. Workers must be united internationally to win in any individual country.

It would be good to distribute Scotts paper on globalization as widely as possible in the labor movement. It will have an impact on peoples thinking. In Michigan we should think of a mailing in the range of 2000 to UAW locals, other unions, and their allies.

UAW President Gettlefingers speech at the recent convention did place more emphasis on the need to organize. He also talked about the need for single payer healthcare system. If a Toyota, Hyundai, or Nissan plant could be organized, it would open the door for the union seeing the necessity of international unity and of seeing the need of fighting for some sort of worldwide auto standards for wages and benefits.

The unions failure to organize is not just the unions fault. A far right, anti-labor, Republican Party in Congress has tied labors hands when it comes to organizing making this Novembers elections crucial for autoworkers.

The problems of autoworkers, or other workers, will also not be solved by regulating the movement of people as Republicans are trying to do through immigration legislation. Instead we need a Congress that will regulate the movement of capital both into and out of the country and hold it to standards of union wages and benefits.

Finally, I want to say something about our approach to the UAW. We should be critical when they give in without a fight, but we have to go in the direction of offering solutions, of offering help.

At Delphi, a small grouping, Soldiers of Solidarity (SOS), sprang up and they equalize the blame between Delphi, GM, and the UAW. Their leader has gone so far to say if the UAW is destroyed, so be it.

They have little following except in the media (the Detroit Free Press, no friend of labor, will go to SOS for quotes before turning to UAW). They offer no real solutions and their approach is to split the union or worse.

Autoworkers are not alone in witnessing defeat after defeat for the last 25 years, and there is anger in their ranks. Our criticisms need to go in the direction of solutions and then we have a chance of moving the leadership and gaining credibility from the rank and file.

John Rummel is District Organizer of the Michigan Communist Party

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