Labor’s potential strength is mighty, greater than any other social force on earth, because of what workers produce worldwide and because labor represents the interests of the overwhelming majority of humanity. The current attacks on labor are driven by capitalism’s deepening contradictions, its growing weakness, not strength.
Labor productivity at General Motors, including what is now Delphi, has climbed over 300 percent since the early 1970s, at the cost of brutal speedup and physical and mental wear-and-tear on workers. The average price of a car has jumped more than 400 percent in the same period. Yet Wall Street and Delphi management say they cannot afford the contracts they have signed. They are demanding plant closures and 60 percent or more cuts in United Auto Workers and other union members’ pay, benefits and pensions.
GM/Delphi management and Wall Street paint a picture of a struggling corporation caught in a fierce global competition to build and sell cars. They want the UAW to believe that the health care, pensions and benefits owed U.S. workers make it impossible for them to compete. They argue that they must renege on their obligations and slash wages, or go bankrupt. They threaten bankruptcy in the U.S. as if GM and Delphi did not have investments and profits all around the world.
In fact, GM has manufacturing operations in 32 countries across the globe. GM and Delphi have both opened major new facilities in recent years in Mexico, Eastern Europe and Asia. Delphi has invested over half a billion dollars in new plants in China alone in the past 12 years. Last October, when Delphi filed for bankruptcy of its North American division, The Wall Street Journal reported that Delphi’s Asian division is profitable and hiring even more workers as it expands across the region. It supplies not only GM, but also Toyota, Hyundai, Nissan, Honda and Volkswagen.
Delphi workers in the U.S. are fighting for their lives against the theft of their benefits and brutal demands for wage cuts and plant closings. Labor and progressives can’t for a minute neglect this immediate fight. If Delphi workers are forced to strike, then they will need all-out help to build labor and community support. And labor must join in all campaigns to challenge the unfair use of bankruptcy law to tear up contracts. Bankruptcy law reform should include putting workers at the top of the list of creditors whose claims must be paid, not last as under current law.
Needed: worldwide union standards
When GM, Ford and Chrysler dominated the U.S. market, the UAW had to organize them all to have leverage. To be effective, the union had to put a floor under wages and working conditions for the Big Three nationwide in order to secure a decent standard of living. That in turn raised standards for millions of other workers in the U.S., including for unorganized workers.
Isn’t that what has to happen now on a global basis? The car companies charge the same for a model whether it was built in Mexico, the U.S. or Canada, despite the differences in pay and benefits between the plants. The claim that lower wages mean lower prices does not stand up — all they do is make more profits off the lower wages.
The step up to worldwide union standards, like the step up from craft to industrial unionism in earlier times, has to be part of the solution. Even as we fight the day-to-day battles, we need to figure out how to develop worldwide standards. The auto industry is one of the largest and most central in the world economy today. Fewer than 10 manufacturers dominate it, operating on practically all continents.
Working-class globalization vs. capitalist globalization
The WTO and “free trade” agreements like NAFTA, CAFTA, FTAA and the newly proposed U.S.-Korea Free Trade Act all seek to increase competition among workers worldwide, to weaken and cheapen labor internationally. They do this in part by facilitating capital’s ability to move in and out of countries, and thus to whipsaw workers against each other, in the infamous race to the bottom. And that is just what the companies are now trying with the workers at Delphi and GM.
Capitalism’s weakness
It is helpful in these difficult times to see that the challenge to labor is growing out of capitalism’s weakness, not strength. Overcapacity drives capitalists to try to weaken and cheapen labor, cut benefits and pensions, close plants, skimp on education, health care and the infrastructure, ravage the environment, and plunder outright.
Auto producers, financed by banks drowning in too much capital, now have worldwide capacity to build 20 million more vehicles than they can sell annually — an overcapacity of 25 percent. Yet they continue to open more and more nonunion plants, while closing those that are unionized! There is a 3 – 4 million vehicle overcapacity in the U.S., even with record sales. The mass media have been feeding into the anti-labor frenzy, claiming that no one wants to buy GM’s cars. But the fact is, GM is the largest automaker in the world to this day!
GM management has been doing its part with widely publicized firings of thousands of engineers and support staff in North America, and cuts in salaries and benefits. These firings and cuts send the unmistakable message to consumers: “You cannot have confidence in our vehicles.”
The GM/Delphi numbers don’t add up
GM management is claiming huge losses that force it to renege on contracts, close dozens of plants, lay off tens of thousands and hire temps. Yet at the same time it is opening up billion-dollar plants around the world, including a big Opel plant in Slovakia and new facilities in China. Delphi management likewise claims bankruptcy, yet it has been opening up numerous plants in Asia and Eastern Europe, and reports those are highly profitable. Something does not add up.
Days after GM claimed a loss of $323 million in the first quarter of 2006, it revised results to report a profit of $445 million. How does a corporation make an “error” of $767 million? GM is already being investigated for its questionable Enron-like accounting practices domestically. The truth is, there are literally thousands of ways that large corporations, especially those that operate in many countries, can cook their books, shifting losses where they are needed and profits where they help most.
Time to open up the books
It is time for their books to be permanently opened to unions and union-loyal accountants and experts. And not just their U.S. books but all the books on all their operations globally. After all, management readily opens up the books to inspection by Wall Street banks and credit-rating agencies, which then collude with management against labor.
How about a race to the top!
Pushed by the deepening contradictions of their system, the capitalists are trying to divide, weaken and cheapen workers worldwide, in a terrible race to the bottom.
Communists are dedicated to uniting the workers of the world in a race to the top! Over the years, Communist Party USA members played key roles in building not only the UAW, but the Mine, Steel and Longshore Workers and the other CIO industrial unions, and in helping organize movements against racism and unequal treatment everywhere.
Workers of the world, unite
Does the Communist Party only support struggles for socialism? No. We believe day-to-day struggles to meet human needs also point the way to and are consistent with the struggle for socialism. We support and have historically been in the forefront of struggles to defend and improve wages and work conditions, for good jobs for everyone, to build and strengthen our unions, to organize the unorganized, for peace and equality worldwide and for quality and affordable housing, education and health care for all.
The Communist Party stands for the unity in action of the workers of the world.
Scott Marshall (scott@rednet.org) is secretary of the Communist Party USA’s Labor Commission. Jim Gallo and Wadi’h Halabi contributed to this article.
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