US bosses set trap for workers

Submitted by Anon on 29 May, 2009 - 10:34

The crisis in the US car industry is leading quickly to savage attacks on working class pay, conditions, jobs and pensions. When Chrysler went bankrupt recently its assests were sold to a new entity headed by Fiat. As part of the deal Chrysler workers were offered “control” over the company. But, as the following comments from US journal Labor Notes, show these auto workers are being taken for a ride.

The government said Chrysler workers should take deep cuts to fend off bankruptcy. But the company decided on bankruptcy anyway. GM and Ford workers are likely to be asked to match ratcheted down wages and benefits.

The Chrysler workers retirees’ health care fund, run by the United Auto Workers (UAW) will be drastically underfunded with devalued Chrysler shares. Benefits have been cuts, but the bigger question is how long the fund will last at all.

Under the new contract that’s now up for grabs, wages of new workers would be cut in half, from $29 to $14 per hour, with no raises or bonuses for six years. New workers will also have reduced health care benefits. That gives the company strong incentives to get rid of current workers.

Chrysler bosses did not mention plant closures to the union negotiators, nor are they mentioned in the deal the workers approved.

GM and Chrysler have announced together that they will close 24 plants. In the best case scenario at least 25,000 workers will lose their jobs.

The union has given up the right to strike when the next 4-year contract is up in 2011. Unresolved issues will go to binding arbitration. Higher skilled work will become the exclusive province of contractors. Breaks, holidays are to be cut.

Some opposition to the Chrysler deal from rank and file activists has been met with a lack of information from UAW.

One trap that faces the workers is the idea that they now have real control over the company. The bankruptcy appears to hand union appointees a 55% stake.

But the union’s on-paper majority stake gives UAW retirees only one seat on the board of directors and “no other governance rights”, according to the government’s terms. The board will be controlled by Fiat (three seats), the Canadian government (one seat), and the US government (four seats). The US treasury will administer the union’s shares. The 55% “ownership” stake contains no shareholder voting rights and the government has gone out of its way top ensure there will be no element of “workers’ control” in the new company.

• The Labour Notes editors also quote rank and file union members discussing the need to propose the conversion of plants listed for closure into “green energy” sites. Bill Parker, who heads a local union in the Detroit area, suggests that skilled workers able to manufacture complex machinery should continue to work, retraining for “green jobs”. His suggestions include using exhausted car factories for wind turbine manufacture. It is better than letting them crumble, he adds.

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