In the face of a deteriorating economic climate and concerns about the ‘investment competitiveness’ of Canadian plants, the CAW leadership made a startling move this spring. It had an air of panic about it: the leadership quietly asked the Big Three – GM, Ford and Chrysler – to open their collective agreements early, offering a new ‘pragmatic’ settlement. Ford ‘bit’ and bargaining was over before anyone, including the Ford workers, had a whiff that anything was going on. The tentative agreement was announced to the press on April 28 – almost five months before the agreement was to expire, three months before bargaining was set to open and, most notably, two months before the CAW Collective Bargaining Conference, where elected delegates gather to discuss and debate the unions’ bargaining priorities. That summer conference, set for every third year, addresses the union as a whole, but is generally dominated by the fall’s auto negotiations.

On May 4th Ford workers ratified the proposed agreement that is set to run to September 2011. The union initially announced that 78% of workers voted for the agreement, only to correct this later to a much lower 67% being in favour. At the critical Oakville plant, the agreement was rejected by almost 60% of the production workers. In the history of the Canadian autoworkers, there has never before been such a low overall acceptance vote, nor a rejection of a settlement in a major plant after the leadership recommended a tentative agreement.

The CAW literature claims that it has remained true to its convention-established policy of ‘no-concessions’ in bargaining. The union has insisted that there was really no choice and that comparison with the early 1980s – the high point of CAW resistance and leadership within the North American (and international) labour movement – is not valid. If new investment is to be attracted, the union argues, it can simply not ignore the rise of the Canadian dollar, the turmoil in the industry and the concessions made by the UAW. And had the CAW waited until the normal September deadline, the union asserted, things would have been much worse.

The critical concessions in last year’s UAW agreement were twofold: the dramatic agreement to shift the risks of future health care costs from the companies to the union, and the acceptance of a permanent two-tier structure with new hires being paid half the wages and less than half the benefits of current workers. The former is of secondary importance in Canada because of our socialized health care system (though it does reduce one of the cost advantages of Canadian operations). The permanent two-tier system, however, has been resolutely opposed by CAW President Buzz Hargrove, and its rejection has been made central to bargaining.

The rejection of the permanent two-tier structure is indeed of crucial importance. But renaming the losses made in exchange as ‘cost savings’, ‘offsets’, or describing them as a ‘creative and nimble’ response, hardly negates the fact that the concessions in this collective agreement are as large or larger than those the American UAW made in 1982. Those concessions lead to harsh criticism from the Canadian wing of the union and, shortly after, to breaking away from its American parent.

As many CAW members know from experience and the union’s educational programs, concessions don’t guarantee jobs. Jobs depend on so much else beyond the control of workers – from the economy, trade policy, exchange rates and the chaos in financial markets, to the age of plants, technologies used, and especially the models placed in the showrooms. Currently, jobs also depend on the extent to which the new vehicles are sensitive to the implications of escalating oil prices and environmental concerns. At the end of the 1970s, when the concessions period began to unfold, UAW Big Three membership totalled some 760,000 in the USA. In spite of the concessions, the UAW repeatedly accepted over the following years, that membership is now down to about 165,000 – almost 80% of the jobs gone.

What concessions do guarantee is more of the same: why would any company that found this golden egg, not keep coming back for more? They also tend to confirm the belief that workers are the problem: if workers are making concessions to save jobs, aren’t they essentially admitting that the gains they won earlier were the problem? So, aren’t more concessions, rather than other policies, the answer? Most dangerously, concessions leave workers cynical about the worth of their union: why get active if unions aren’t in fact fighting back? This concern with the potential cynicism of a new generation of workers was one of the reasons that Hargrove rightly opposed the UAW permanent two-tier system with its discrimination against young workers coming into the factories.

What then are we to make of this agreement? Is it the best that could have been done in the context of the UAW settlement and a looming recession? Does it bring a victory against the two-tier system or, like the American UAW’s agreements of 1982, signal the decline of the CAW’s earlier prominence as the leading union in Canada? Most important, is this just about the CAW or does it highlight a larger crisis within Canadian trade unionism and the left – a left which was always dependent on, as well as crucial to, the dynamism of the working class?

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This does not mean that unions can no longer be looked to in defending the working class, but it does mean that it can’t be taken for granted. Activists and members need to start having discussions about where their unions are going, why the base so often has such little effective input, how to forge links with others asking the same questions across workplaces and unions, what building a rank-and-file capacity and ‘changing’ their unions actually means, and how to engage in resistance now. The socialist left, today largely marginal to working class life, once played a prominent role in creating spaces for such discussions and providing relevant analysis and resources. Unless that creative link between labour activists and socialists can be revived, the union movement will only stagger on from smaller defeats to larger ones. [emphasis added]

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The discussions exist. We've had some here. Even talked about making them more wide-ranging.

It's the most disadvantaged that need help first and they are also the ones that would most likely be receptive to socialist ideas that could accompany such attempts at organizing. Canadian union bureaucracies are already antagonistic to socialists, and I can still remember being looked at as a space alien by a union organizer not that long ago, and I fear that much of the kinds of efforts Gindin encourages would be wasted. There is more than one way to strengthen the union movement and it seems rather obvious to this humble socialist that making it bigger is the first priority.

Help the most disadvantaged first, I say. That's where socialists, who aren't already involved in the union movement, belong.

[ 07 May 2008: Message edited by: N.Beltov ]

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Originally posted by blake 3:17:
[From Sam Gindin's article:]
The rejection [by Hargrove and the CAW] of the [UAW's] permanent two-tier structure is indeed of crucial importance.

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Sam's article is very sharp, and while blasting the CAW for "panic bargaining", he recognizes that it held the line against the worst kinds of concessions bargained in the U.S. Perhaps GM is making them pay for that now...

But I was thinking of Sam's article when I spotted this incredible story:

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Mexico's auto unions agree to cut wages:

Race to the bottom: Mexico lowers wages to snare international auto production

Wage concessions were apparently key to persuading Ford Motor Co. to direct many of the 4,500 new jobs involved in building Fiestas to the Ford plant in Cuautitlan, on the outskirts of Mexico City. Union leaders at the plant told The Associated Press they had agreed to cut wages for new hires to about half of the current wage of $4.50 per hour.

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Originally posted by blake 3:17:
Thanks for the article. Could you find a backgrounder on the Mexican auto workers unio(s)?

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For example, getting that Fiesta production was a big deal, but I'm unclear how much it means.

The Fiesta is an example of how Ford works and GM bounces around pillar to post. GM talks about producing new small and mid sized cars where everything is still getting worked out how it all fits together. Ford on the other hand has the Fiesta which has already done well in global markets, tweaks it a bit, and brings it to North America. They already have the Focus which they can sell as many as they can make. The Fiesta is to supplement then replace against the inevitable slacking of their Focus gravy train.

If it was GM they'd be saying we're going to make millions of these within 2 years, etc, etc.

I don't know whether Ford is just planning modest production of the Fiesta in Mexico, with a broader distribution of production in US/Canada after they prove the sales.

I'm curious to know whether the Big Three consider Mexican auto production capable/reliable for doing much production for the whole continent. The Asian manufactures are still expanding their US/Canadian bases- albeit a bit more slowly- and not shifting to Mexico in a big way.

There are clearly limits how much Mexico is seen as ready for final assembly on the continental scale it happens in the US and Canada.

[ 07 June 2008: Message edited by: KenS ]

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Sam's article is very sharp, and while blasting the CAW for "panic bargaining", he recognizes that it held the line against the worst kinds of concessions bargained in the U.S. Perhaps GM is making them pay for that now...

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I've also been wondering about Sam's analyis in light of recent events.

While Sam recognizes that the CAW concessions could have been worse, he also explains how significant they are and mentions they may just be the beginning of tracking the UAW downwards.

IE, that concessions do tend to continue and that the CAW has not made any of the past internal education and mobilization efforts that preceded negotiations when the leadership wanted to hold against concessions. Instead of education and discussion this time, they opened up the contract early.

Sam's alternative offered was that the CAW could have waited till September, refused concessions, and gambled that this would fire up existing dissent within the UAW to the degree concessions there were rolled back.

In the best of circumstances that would be quite a gamble for the members to take. And Sam seems to have been ignoring how the UAW two tier concessions are linked to buyouts of a huge proportion of the existing workers, which are unfolding now- gathering momentum as UAW members increasingly bow to what appears inevitable, and the Big Three even upping the buyout amounts when necessary to get the expected results. I suspect that undoing those concessions is becoming numerically impossible, if there was ever a real possibility at all.

Sam doesn't exactly go out on a limb making that case. He had been making it for a while already. It would be pretty risky, to say the least.

Getting back to GM.

The concessions that Ford got from the CAW were pretty modest compared to what they got from the UAW.

But Ford is in good shape, labour costs are only 10% of the picture, the gap in US/Canadian hourly labour costs don't work in for quite a while and are not huge even with those UAW concessions, they need those Canadian plants for new products that recent events have made even more important, and there are big front end costs to getting those concessions from the UAW.

So going for modest gains and stability makes sense for Ford.

Pattern bargaining being what it is, it was very difficult for GM to get more concessions from the CAW... whatever they may have been expecting to get come the November new contract.

The Ford early contract forced their hand. After what the American Axle strike did to GM, and already being weak, GM is in no shape for a strike. Their cash horde despite their troubles has been their saving grace, bt in the last several months they have been burning their way through that.

I'm wondering if GM simply went along with the pattern but always intended to both have their cake and eat it. IE, thats fine for Ford, not us. So we'll sign the contract to get the stability we are desperate for, and get more concessions later.

And not more concessions three years from now, more in the near future.... through plant specific 'shelf agreements'.

The CAW has in the last few years already opened that pandora's box... and in principle, the sky is the limit for what could concessions be in a shelf agreement to ensure production at the plant.

And what better way for GM to set the tone than with massive layoffs that they were already planning when they signed the new early contract with the CAW.

[ 07 June 2008: Message edited by: KenS ]

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General Motors Corp. on Monday launches one of the biggest and most crucial logistical operations in its history.

That's when the automaker begins hiring new workers in preparation for a mass exodus following the latest round of hourly buyouts.

Some 19,000 GM hourly employees are leaving as part of the labor deal GM negotiated with the United Auto Workers last year that allows the company to replace departing workers with lower-paid new hires. Most are slated to leave July 1.

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Wages halved for some jobs
Unlike in 2006, when 34,000 hourly workers took buyout offers, the goal in the latest buyouts wasn't to dramatically shrink the work force, but to make way for a second-tier of lower-paid autoworkers.

So even though fewer workers are leaving than in 2006, more are coming in.

GM's deal with the UAW allows the automaker to pay new hires about half the $28-an-hour wage earned by veterans to do jobs that are considered not central to building a vehicle.

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