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UAW/GM Negotiations

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The latest in the United Auto Workers’ negotiations with the Big Three is pretty interesting. As I discussed earlier, the UAW forged an agreement with Chrysler that at least rolls back the despised two-tiered wage system instituted when the car companies were near death at the end of the last decade. The union has now negotiated a deal with General Motors. But there’s a lot of rank and file grumbling about this pact. There was at Chrysler too, and in fact the membership’s rejection of the first offer did lead to a better one.

Today ends the voting on the new contract. It looks like it will narrowly pass. UAW leaders are telling members that if they reject this, the only option is to strike. I always hate to see union leaders use the threat of a strike they don’t support as a negative. Maybe they do believe that GM won’t give a single inch more, I don’t know. But a strike led by union leadership that doesn’t want to do it in the first place is probably unlikely to succeed. In any case, it isn’t going to happen, which is probably a good thing.

Upcoming is a real bear for the UAW, with Ford opening using capital mobility as a threat against the union if it is forced to agree to the same terms as Chrysler and GM. The use of capital mobility has been a common threat against unions for decades now, and it’s real enough that labor has to take it seriously (as do those who criticize labor for not being militant enough). There’s plenty of examples of companies leaving because of unions forcing them to treat workers with dignity and respect. There’s plenty of examples of companies already choosing to leave and looking to blame it on unions. And there’s plenty of example of this sort of threat being pretty empty. With Ford, I’d guess that it’s somewhere between all three, with the company probably moving more production to Latin America anyway but certainly not all, largely because the political implications would be bad for the company.

And don’t think that workers don’t know this. One example from one of the linked pieces above:

Jennifer Sanders is a recently hired worker at GM’s Flint Truck Assembly plant.

“I’m pleased with the health care changes, but mostly I see job security as our biggest concern,” said Sanders, who was laid off earlier this year from the Orion Assembly plant because of declining sales of the Chevrolet Sonic and Buick Verano. “I’d like to get to the full Tier 1 wage right away, too, but if you give me a raise today and then send my job to Mexico next year it doesn’t matter.”

So long as unrestricted capital mobility is a threat, working-class people will never have security in this country.

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  • Phil Perspective

    So long as unrestricted capital mobility is a threat, working-class people will never have security in this country.

    Did anyone of the three discuss this at the Maddow moderated “debate” last night?

    • Brett

      No, but Sanders has bits and pieces in his policy platform, including direct federal employment for millions and a proposal to reverse trade pacts. The first could happen if the Democrats ever have combined control of Congress and the Presidency in the next ten years, the latter probably never – you’d piss off a lot of good will with allied nations, and they’d retaliate with protectionist measures of their own that would hurt US export industries.

      I don’t see a lot of support for making it harder for companies to close industrial plants in the US, or for nationalizing them outside of economic downturns and imminent collapse (like with the auto industry in 2009). The US government wants to encourage companies to open more factories here in the US.

  • shah8

    Honestly, I don’t think capital mobility is quite the issue here. It’s a collective set of institutions and practices…Everything from offshore banking (probably the biggest single ultimate cause of joblessness in the West) to imperial practices that dips monetary straws into third world and suck back out wealth (like privatizations) during the resulting debt and/or currency crisis that results.

    High international mobility of capital is probably a good thing, in and of itself. I mean, if it were just that, you’d see the third world consistently gain convergence (Solow growth) and people in both the first and third world would benefit.

    That’d mean there would be winners and losers, plenty of the “wrong people” who win and the “honorable people” who lose. Hence, there’s a LOT going on to create the sort of worldwide class rigidities and perpetual underinvestment (+ warmongering destruction of infrastructure, and intentionally so–policies in the Middle East is very much about prevention of any China Story on “our” oil) of people and regions.

    There are plenty of investment opportunities from the perspective of the State, worldwide. Take energy–If places like Nigeria, Ghana, Kenya, and the like had reliable energy and water–something all are technically positioned and capable of doing, they’d be pretty capable of moving up the industrial chain instead of depending quite so much on commodities+Nollywood/cultural exports. Existing powers don’t tend to let them do that, they aren’t allowed the trade barriers and currency control to establish any sort of long term industrial policy. They often have irregular armies funded and armed from the outside to disrupt as well.

    • J. Otto Pohl

      If only I had reliable energy. The power was out at work two whole days this week. The situation had gotten a little better for a while. But, now it is getting worse again with at least one whole day each week, Monday, with no electricity at work.

  • cpinva

    congress could actually do something about this, but as long as it remains controlled by republicans, it won’t. US companies with foreign sourced income rely on the Foreign Tax Credit (FTC) to avoid being taxed by both the US and the foreign country on the same foreign sourced net taxable income. while there is a built-in limitation to the FTC, it can still amount to millions of dollars a year, with any unused portion allowed to be carried back/forward. remove that FTC (it’s a gift from Congress, which Congress can take back), and it suddenly becomes a lot less profitable to move operations out of the US, regardless of lower costs elsewhere.

    again, it would require congress to amend the federal tax code, along with changes to tax treaties, but it could be done. however, as long as the GOP controls both houses, they aren’t going to intentionally cause their corporate overlords any harm.

  • Bitter Scribe

    This is one reason why Donald Trump has so much traction. When he threatens to penalize companies that move manufacturing outside the U.S. and import the product back, it resonates with people like these autoworkers.

    • Morse Code for J

      Never mind that he will have very little authority to do this on his own, or that his party would relinquish Congress to the Democrats before it would consider giving him that authority.

      • Bruce Vail

        I wouldn’t discount the bully pulpit factor. If the President of the United States continually calls out bad corporate actors, it has to have an effect.

        Agreed that Congress is not going to pass any legislation in the forseeable future. But a rehetorical showdown with Ford Motor Co. or Walmart is definitely going to affect corporate decisionmaking elsewhere.

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