The idea of a strategic retreat is an essential element of good conflict planning. Faced with an opponent that cannot be defeated or a situation in which victory would be pyrrhic, a strategic retreat allows you to withdraw from the field of conflict rather than risk losing everything. A strategic retreat differs from a defeat because it is a planned, orderly, withdrawal from direct conflict that plants the seeds of future action even as it gives ground to the opponent. The UAW could have exercised a strategic retreat in its conflict with GM and the other auto companies. Instead its strike and contact agreement were just another skirmish in a decade long rout.
September’s strike was hardly an epic battle. One writer likened it to two invalids flailing away at each other with crutches. Another, echoing a widely held sentiment in the press, wrote that the strike was “a fake”, called by the union to show a skeptical membership that it did everything in its power to get a decent contract. In fact, after Wednesday’s 6 hour Chrysler strike, the New York Times wrote from Detroit, “ A new expression is making the rounds here in the nation’s automotive capital: “Hollywood strike,” as in, “just for show.”
The UAW is clearly in a fix. It is up against the epochal forces which are reshaping the auto industry and the global economy, forces which are gradually gutting union power and eroding work standards everywhere. Now, after decades of defeats, it seems the UAW has chosen to circle the wagons to protect its graying—and rapidly shrinking—membership as they hold on for dear life trying to make it to retirement. And the end is in sight for many: the average age of GM’s existing workforce is 50 years old, and 63.4% are eligible to retire in 5 years. In the process, the UAW has abandoned a significant portion of its existing membership—those employed in “non-core” jobs—and any newcomers to the industry, should there be any.
It is a cautionary tale which should give pause to those who think that building union membership and increasing union density will lead to a revival of the labor movement. Union density in the auto industry is over 50%--unimaginable in any other sector of the economy. Even in the lagging parts industry density is far higher than in the most of the private sector economy. In a world of globalized production national union membership and density does not necessarily translate into union power.
Is the situation hopeless? Not at all. The UAW and other similarly situated unions need to exercise a strategic retreat to regroup. We offer some suggestions about what that might look below. But first a look at the current settlement and some historical background.
The settlement
The settlement creates a union administered voluntary employee beneficiary association (VEBA)—a type of trust—to pay health care costs for GM’s 340,000 retirees and their dependents. GM initially will kick in $24.1 billion in cash and stock (start the presses!) with an additional payment of $5.4 billion before the fund is activated in 2010. It’s not at all clear whether the UAW could have done much better on health care. In principle, a VEBA could be a reasonable bridge to the only possible solution to the health care crisis: national health insurance. In reality these trusts have a mixed history. A UAW administered VEBA established at Caterpillar in the late 1990s was underfunded and went broke in 2005. The UAW is betting this one will have the resources to survive.
The true extent of the UAW’s capitulation was the acceptance of a two-tier wage system for new hires. It’s not entirely clear how many jobs will be paid at the second tier wage scale. But it appears that 16,000 workers currently in “non-core positions”—cleaners, workers who prepare parts from suppliers for the assembly line, parts and material movers, drivers, and others not directly involved in production—will be pushed out of these jobs by early retirement and buyout schemes and replaced with new hires earning between $14 and $16 an hour—about half the current rate of $28.12. New hires will not be in the pension plan but will instead get a 401 (k).
The rest of GM’s workforce will get no new raises during this contract cycle. Instead, they will receive a lump sum payment of $3,000 at signing.
In return for these concessions, 3000 temporary workers will become full-time and 3,000 outsourced jobs will be brought back in-house—it’s unclear at what wages.
Most importantly, from the union’s perspective, the union received so far unspecified guarantees that 16 of GM’s 18 US assembly plants will remain open producing new or existing products.
GM got the relief it wanted. Some industry analysts say the gap between GM’s labor costs and those of Japanese and European transplants—currently $25-$30 an hour—could be cut in half.
Compare and contrast
The last time the UAW called a national strike against GM was in 1970, a generation ago. That strike and last week’s strike are bookends on an era in US labor history.
In 1970, 400,000 GM workers walked out for 67 days. They won major pay increases, improvements in health insurance, and the right to retire after 30 years. Last week, 74,000 workers struck for 2 days for a concessionary agreement.
In 1970, GM primarily produced and sold its products in North America, where it had the lion’s share of the automobile market. Today GM has slightly less than 25% of US market share. Over the last decades it has restructured, spun-off major divisions like Delphi, and set up global supply chains to take the place of in-house production. It now produces in 33 countries and the majority of its 284,000 employees are outside of the US.
In 1970, the GM strike was part of a massive strike wave that swept the US. A total of 2,468,000 workers participated in 381 “major work stoppages”—events involving 1,000 workers or more. (By way of comparison, in 2006 70,000 workers participated in 20 major work stoppages.) But perhaps more telling were the countless strikes involving less than a thousand workers and the daily actions on the job: the wildcats, the protests, the slowdowns. (For a good account of the Vietnam era strike wave see the 25th Anniversary Edition of Jeremy Brecher's book, Strike!)
The turmoil of the early 1970s changed the labor movement for the better. Those of us who participated in those struggles will remember that many were directed not just against the company, but against what many considered complicit unions. Reform movements were launched, and over time, in many unions, a more progressive leadership emerged. But the industrial relations system and the fundamental structure of unions have remained pretty much as it was back in 1970. And that has been the problem, because the world has changed dramatically.
In the early 1970s the long post-war economic boom came to an end. Global growth rates plummeted and corporate profits fell sharply in the 7 richest industrialized countries. Manufacturing profits were cut in half. Global competition increased as Europe and Japan now fully recovered from the war challenged US economic dominance. In response to the crisis, over the following decades the process that came to be known as globalization unfolded. Corporations, especially US based corporations, sought to increase profits by reducing labor costs, moving to low cost areas, radically restructuring their operations to achieve more flexibility, attacking unions and national policies that increased costs, and creating a global economic system that supported these efforts.
But while corporations went global, unions stayed national. Last week’s strike and concessionary contract were the price they paid. Even a strong union in an industry where union density is over 50%--unimaginable in most sectors of the economy—is no match for today’s footloose corporations.
What is to be done?
Go global. GM is a global company; most of its production, the majority of its workforce, and the lion’s share of its profits are outside of the US. Yet the UAW bargained as if it were still 1970 and it was confronting a big national corporation. It’s time to face reality and start building the kind of global alliances needed to confront global companies like GM.
The challenges facing the UAW are being faced by auto workers around the world. GM has been laying off workers and seeking concessions throughout its global operations. Workers are being pitted against each other domestically and globally to see who will offer the most concessions to keep plants open.
Indeed the job guarantees agreed to in this contract may only be possible at the expense of Canadian and Mexican jobs. (GM may be planning to move Canadian jobs to the US anyway to take advantage of the relative fall of the US dollar.) Instead of this “beggar thy neighbor” approach the UAW needs to find common cause with the CAW, with Mexican workers, and with workers throughout GM’s global system. And beyond that to auto workers everywhere. This effort has to be at the top of the UAW’s to-do list and built into the fabric of the union at all levels. Such an alliance could make it possible to develop a union response to the crisis in the auto industry that is not based on concessionary contracts.
Make health care a social issue. Access to health care is a social issue that cannot be adequately addressed through collective bargaining. The UAW understands this and has been on record as supporting universal health care for a very long time. Most Americans support universal health care and there is a major public debate underway on ways to achieve universal health care. As part of its settlement, the UAW took a step forward when it won a commitment from GM to provide $15 million over the next 5 years to establish a National Institute for Health Care Reform to study health care reform issues. For its part, GM has made vague statements about the need for reform. A spokesperson said, “[GM] believes that all Americans should have access to insurance, and we are working with key players to make sure that everyone has high-quality care at low cost.” Now the UAW needs to hold GM’s feet to the fire. The Union must also make sure that the new Institute moves beyond simple policy analysis to developing political and social movement strategies for achieving universal care.
But the UAW missed a powerful teaching moment. Instead of making its demand that GM back health care reform a main feature of its contract campaign and strike, the union hardly mentioned it. By publicly taking a narrow approach to bargaining on health care, the UAW looked like a special interest group looking out for some of its members. They should have learned from the Teamster strike at UPS in 1997. Faced with company demands to hire more part-time workers to replace full-timers, the union turned a collective bargaining issue into a social issue with the slogan: “A part-time America won’t work.” In doing so they tapped into widespread anxiety about the disappearance of decent jobs and garnered widespread public support. And the labor movement looked—and acted—like the champion of all workers. Importantly, the Teamsters managed to get a better deal for their members than if they had pursued a conventional approach to the contract. In this case the UAW should have made “health care for all, not just a few” their slogan and featured their demand that GM go on record in words and deeds in favor of universal health care. In doing so they could have made a major contribution to the national debate on health care. Then they could have accepted the VEBA as a bridge to the future and not an end in itself.
Jobs for the future, not jobs for the past. It’s not just global competition that has undermined GM’s business and reduced UAW employment. GM has made inferior gas guzzlers that not enough people want to buy. The UAW has rarely challenged GM’s products and has joined GM and other auto makers in opposing stricter mileage standards as recently as this summer. But global warming and its consequences will change the kind of cars, trucks, and busses that are produced. The UAW could have used this contract to demand that GM produce quality cars that address global warming concerns. Shifting to cleaner more energy efficient climate vehicles could be a genuine anchor for job security. And this would have positioned the union to be a voice for clean jobs and a clean environment.
These suggestions give some idea of what it might mean for the labor movement to replace routs with strategic retreats. Strategic retreats are built on two elements. First, they lay the basis for future advances. Second, they allow for re-grouping and the building of new alliances. Properly done a strategic retreat can change the balance of forces in a conflict. This is a necessity today when national unions do not have the capacity to defeat even a weakened global giant like GM in a head to head fight. Unions like the UAW need help from the public concerned about the loss of good jobs, from friendly politicians worried about the economy, and from other unions here and abroad. But building and deploying that kind of support successfully requires a new a-symmetrical strategy.
In this case, an a-symmetrical strategy means that when GM asks for relief on health care costs, the UAW says only if you fully commit to fight for national health insurance and universal coverage. When GM says it wants other concessions in exchange for job security, the UAW says only if you start producing clean cars that people want to buy since a job guarantee won’t mean much if people don’t want to buy the products. After that, we will, if necessary, consider concessions but only those that do not undermine our solidarity and reduce our ability to take future action. And when GM tries to whip-saw GM workers around the world in a bidding war for jobs, the UAW just say no because it has build the necessary mutual support with other unions around the world to stop it.
It’s not over yet for the UAW. Even in its weakened state, it commands considerable resources and a large membership. The coming inevitable shift to clean vehicles to combat global warming could give the industry and the UAW new life. But in the final analysis, the UAW, and labor in general, will only survive if it succeeds in linking the specific needs of its members with the general needs of all working people.
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