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Yesterday’s Defeat ... Tomorrow’s Revival?

Canadian PoliticsLabour

In the early 1980s, the auto majors reversed four decades of steady growth in wages by successfully forcing concessions out of the once-powerful United Auto Workers. That working-class defeat had not only continental, but global, ramifications. So, when Delphi, the largest parts manufacturer in North America, declared a little over two decades later (2004) that it would reduce workers’ wages by over 60 per cent, it seemed that another, even more dramatic round of concessions was about to begin. But this time a remarkable resistance emerged from below to defeat the auto majors and their strategy. This unexpected victory, combined with worker skepticism of union-negotiated concessions at GM and Ford (with Daimler-Chrysler workers expected to be even more critical), raised instead a new possibility. Could we be on the verge of a revival of the American labour movement?

Putting National Health Care on the American Agenda

The crisis in the U.S. auto industry has many elements. But both GM and Delphi have highlighted one thing that autoworkers must recognize: the contradictions in the privatization of the welfare state, particularly in health care. Unlike in every other developed country, no national health-care plan emerged in the U.S. Nevertheless, organized workers were able to negotiate private protection through collective bargaining. What this meant was that, so long as the economy was growing and competitors were marginal, things went relatively smoothly for these particular workers.

But as competitors emerged the Big Three began to downsize. The smaller workforce found itself carrying not just its own rising health-care costs, but those of the retirees. As these costs helped lead to a fall in the Big Three’s share of the market, the ratio of retirees to actives began to rise. This meant that the burden of health-care costs got even worse. Incentives to retire early as a way of limiting layoffs further exacerbated the problem.


One way the auto majors try to solve this problem is by demanding worker concessions. This is not only unfair, it also sidesteps the larger issue: the absence of a national health-care program. American workers should be declaring loudly and clearly: “Don’t talk to us about concessions, talk to us about National Health Care!” What’s more, if the companies start screaming “Crisis!” and putting a national focus on auto and other organized workers, workers shouting out “No to concessions, yes to national health care!” will be heard.

Why will they be heard? Here are a few reasons:

  • Forty-seven million Americans don’t have health care – even though half the total health-care expenditures in the world occur in the U.S.
  • All organized workers in the U.S. are increasingly feeling they may soon be joining the 28 million other Americans who now have to buy their own health care (because they are not part of company plans).
  • Health care is the number-one American concern in national polls, ranking even ahead of the war in Iraq.

Even American business is now looking for government intervention to bail them out of what they feel that their companies – and the country as a whole – can no longer afford. (The reason for this is simple: The U.S. spends almost 16 per cent of its GDP on health care. If it spent the same proportion that Canada spends, the savings would exceed the total U.S. Defense and Homeland Security budgets!)

If Delphi, GM and other autoworkers are able to say no to concessions and thereby place health care on the national agenda, the union leadership will be forced to support the issue. If this then spreads to other unions, there is a chance that the labour movement might once again become a social movement that really matters.

Canadian workers are extremely interested in developments south of the border. This is because Canadian autoworkers are negatively affected by American health-care costs because of our integration into U.S. auto production. What’s more, a fight for national medicare in the U.S. would surely reinforce our fight against the erosion of health care. And, finally, as happened in the 1930s, an American labour movement in motion would create space for us to intensify our own struggles.

Rejecting the Logic of Free Trade

Obviously, whether you are a Canadian or an American worker, no one thing is going to solve all the problems. But it is clear enough that rejecting free trade is a condition for sustaining any future progress. Free trade is essentially about the freedom of corporations. Typically, their freedoms come at the expense of ours. Free trade not only allows corporations to make unilateral decisions that may harm us, but it also increases the power of corporations to pressure workers and governments to conform to their needs. By rejecting the logic of free trade we are better able to raise the larger question of power in society. We are able better to question whether we can really have a democratic society if the most important decisions affecting our lives and communities are made by a small minority and not by ourselves. We begin to see that there is a contradiction between saying our society is democratic because we have the right to vote and actually leaving corporations with the economic power to limit who or what programs we can vote for.

In this context, it is important to be focused on who the enemy is. We must not be diverted into blaming Chinese workers for our problems. Like us, Chinese workers are trying to address their needs. What’s more, the level of struggle amongst Chinese workers has been escalating against both state companies and the multinationals. In the case of Delphi, for example, investments in China to meet the growing Chinese market are one thing, but moving production from plants in North America and then expecting to export the products back here is quite another. Delphi can’t be allowed to sacrifices workers’ livelihoods and standards in the name of “free-trade freedom.”

Regulation Competition and Excess Capacity

As important as it is to challenge free trade, it is not enough. Honda, for example, now assembles more vehicles here than it does in Japan. Japanese companies are not just shipping vehicles here but are actually producing them here. The problem with this is that every new plant creates excess capacity – excess capacity which then

leads to the closure of an existing plant. Take as an example the recently announced investment by Toyota in Ontario. They received a $250-million subsidy from the two levels of government, but at the end of the day there will be no new jobs as Toyota sales replace other sales.

In fact, because Toyota’s content is lower than existing plants, there will actually be fewer plants. There will also be no new tax revenues. Quite the contrary: Because of the subsidy, there will be less money available for other social programs. And, finally, the industry will become less unionized and democratic as unionized plants are replaced by non-union plants.

Given these realities, it might be asked how this kind of investment is a plus.

If the plant was going into a depressed area, or where a previous plant had recently closed, that might be another matter altogether. But that’s the point: To make sure that depressed areas get redeveloped or that new plants replace old plants that have closed down, there must be some democratic input into such decisions.

This may seem pretty radical. The reason it seems radical is because it involves questioning the right of private investors to do as they please. We shouldn’t underestimate the kind of opposition we’ll get once we challenge property rights in any way. But there are some precedents for this kind of successful radical thinking:

In the early 1970s, a Liberal minority government introduced the Foreign Investment Review Agency (FIRA) with the common-sense notion that before being approved it had to be shown that the foreign investment was “in the national interest.”

In the 1980s, European governments raised concerns similar to those raised in North America about the increasing share of the auto market being captured by Japanese producers. But the North American experience was also showing that limits on imports could be circumvented by the Japanese companies – by investing and producing directly in North America and Europe they could continue to increase increase their share of the market. To contain the negative impact of such added investments on existing plants, Europe moved beyond controlling imports to also control Japanese expansion through new investments.

In the U.S., foreign investment has often been limited in the name of national security. Why can’t worker security also be given such national status?

A further example is the successful mobilization against Wal-Mart’s advances into some local communities. Though not quite comparable to auto plants (where communities have fought to attract plants even though there may be no net advantage, from an industry-wide perspective), this does point to the possibility of blocking anti-social investments through both legal and political means.

Overtime, Work Time, Free Time

One way to share jobs in industries with better-paying jobs is reduced work time. Overtime is particularly harmful to class solidarity when takes place as others are being laid off or as young workers are looking for jobs but see opportunities limited by unequal work distribution. In these circumstances, what we should be doing is limiting the use of overtime after a layoff until everyone is called back. This is especially important when layoffs are used as a mechanism for downsizing by not bringing everyone back even when the market returns. The current policy of the CAW at Ford of work sharing, which is currently affecting Ford Engine workers, has been controversial. The policy requires some weeks on and some off for the whole workforce, as opposed to a few losing their jobs. But the policy is a central part of building the union. It is something younger workers will remember and appreciate. The alternative is the bitterness created with the argument that seniority layoffs cost them their jobs.

In the early days of the union at Ford, when the survival of the new union was so tentative and solidarity so crucial, the work week was contractually lowered

to 32 hours before any layoffs occurred. Back then, limiting the hours of work was so crucial because workers saw it as being about regaining control over their own time. It was a matter of preserving their dignity, of having time to develop as a human being. This is a dimension of work time that must be revived. Without the time we can use to learn and to be more active in our lives, it’s hard to believe that we will ever be able to really change things for the better for ourselves, our families and our communities.

The Struggle for a Better Life

Without struggles and mobilization from below, nothing is possible. As we’ve seen over the past decades, localized struggles come and go, and may in the end not add up to much – no matter how heroic and impressive they are – if they are not able to extend their reach.

While it’s easy to identify obstacles in the way of improving our lives, it’s more important to know how to develop the collective capacity to overcome those obstacles. What this means is making links across plants, across unions and across the labour movement and other social movements. We have to educate ourselves so that we fully understand what we are up against and where the openings for resistance might be. It means learning from every struggle. Defeats carry lessons, too; partial victories must be consolidated. We must develop a sense of strategy and a vision that provides some direction as we look toward our immediate and our longer-term goals. At any point in time the choices seem limited, and so expanding those options is what we must also focus on.

This article appeared in the January/February 2007 issue of Canadian Dimension (Indian Country).


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