Global Labor Strategies

The End of an Era for Labor

Unless unions radically alter their conventional strategies, the future of trade unionism in the US is bleak. A narrow focus on collective bargaining as a way to expand and preserve wages, working conditions, and economic security is not enough in an age of aggressive global corporate capitalism. That is the sub-text of a chilling article that appeared in Sunday's New York Times (February 26, 2006)

The article reported on the end “of the high wage” era at Caterpillar plants in Illinois. Compensation (wages and benefits) for machinists has fallen by more than $20 an hour. Less skilled jobs that previously paid a base wage of $41,000 a year now pay about $26,000 after a concessionary agreement was signed by the company and the UAW 13 months ago.

In fact, the downward spiral at Caterpillar has been underway for a long time.

Here are the basics as reported by the New York Times.

After a decade of intense battles, that included official strikes, wildcats, slowdowns and whatever other leverage workers could muster, Caterpillar defeated its workers and the UAW and forced them to sign a long concessionary contract. The contract calls for a two tier pay scale that drastically reduces pay for new hires. The company says that it has “grandfathered” older workers pay rather than established a two-tier system, to reinforce the idea that this is a permanent change.

It’s a good term, ‘grandfathered’ because these folks were preserved at a wage-and-benefits level that was essentially twice the market,” Mr. Glynn [a company executive] said. Already 50% of the upper tier workers who were around in 2004 have left, through retirement or attrition.

Caterpillar says new pay scales are pegged slightly above the regional labor market so that it can attract the best workers, and still keep wages down. The result is a huge drop in compensation for some jobs. Rates were so low in some jobs that Caterpillar had to adjust them upwards after the contract was signed to retain and attract workers.

The current 6 year agreement calls for one across the board pay raise of 2% in 2008, although there are apparently bonuses available for some.

According to the Times:

New hires are encouraged to view assembly-line work as short term. The way up from the admittedly meager wage scale is not a better union contract, the message goes, but a promotion—if not within Caterpillar, that at another employer. Driving a forklift or working on an assembly line for 20 years should not be a career goal.

This approach fits nicely with Caterpillar’s personnel policies which, according to the Times are geared to shifting the loyalty of workers from the union to the company.

Caterpillar is not a corporation on its last legs looking for a way to survive by seeking concessions from its unions. But, like an increasing number of successful companies, Caterpillar is still demanding give-backs. As a result,

…the longstanding presumption that factory workers at successful companies can achieve a secure, relatively prosperous middle-class life for themselves and their families is evaporating.

Caterpillar is a powerful symbol of this process,’ said Harley Shaiken, a labor economist at the University of California at Berkeley. ‘It dominates its field. It is one of America’s largest exporters, and it is very profitable. If ever there was a company that could bring back the social contract of the mid-20th century, it is Caterpillar. But it chooses not to.

What Caterpillar has done is the very model of a modern corporation. Its North American operation serves as the hub of a ‘globally competitive’ production system that includes plants around the world that produce for global and regional markets. The company is currently planning to build a plant in China.

This southern network [a string of low wage plants recently opened in the US South], as well as plants in Mexico, feeds parts and components to the big Illinois factories, where most of Caterpillar’s tractors, earth movers, backhoes and excavators, giant off-highway trucks and other heavy equipment are assembled for sale in the US and, to some extent, for export…..

But the company itself… cannot succeed [according to a Caterpillar Executive] without the concessionary UAW contract, combined with the network of lower-wage ‘focus plants’ in the Sun Belt and in Mexico.

It’s a beautiful North American equation,’ Mr. Owen [a company executive] said.

The new concessionary contract has, in fact, increased employment in the Illinois plants. Work that might have gone to the low wage southern plants has stayed in the unionized Illinois plants now that wages have plummeted. UAW membership has increased as well. One Illinois local has increased its membership by 1,500 workers since 2004.

The union leadership in Illinois--at least as quoted in the Times--seems to be in of the
scale and of the problem it faces.

One Local leader says he tells new hires, “….that five years down the road, when the present contract expires, we in the union are going to improve their lot in life.”

“That does not seem likely,” the Times comments succinctly.

But there is much more to this story than what is in the New York Times article. It’s a long story of the failure of the US labor movement to adjust to corporate globalization.

Here’s a brief excerpt from what one of us wrote in the late 1990s.

Caterpillar began its attack unions in the late 1980s.  Caterpillar workers conducted a 103-day factory occupation in Scotland in 1987 and a six day occupation in Canada in 1991.

In the United States, the company and the UAW had a cooperation program in the 1980s that was oriented toward creating more efficient production so that American plants would be more competitive. While that was happening, the company also pursued its own restructuring program, which reduced the workforce by 30 percent and built new, non-union plants. In 1991, the Caterpillar Company demanded a whole range of concessions, including a two-tier pay scale, changes in health insurance, and a familiar litany of similar takebacks. Caterpillar Chairman Donald V. Fites said he needed greater flexibility to set wages, benefits, and working conditions, to protect Caterpillar’s preeminent position in competition with companies in Japan and Europe.

Workers struck in November, 1991 and the bargaining chair of the largest local told the press, "As long as we hold the line, and don't take our experience in there, we're going to be all right." In other words, the withdrawal of labor power by this group of workers in itself would be sufficient to win the strike and protect them from what the company was trying to do.

After five months, Caterpillar threatened to bring in replacement workers. Caterpillar workers were afraid of permanently losing their jobs, and the UAW leadership ordered the workers back to work. The New York Times commented, "The abrupt end of a five-month strike against Caterpillar showed that management can bring even a union as mighty and rich as the United Automobile Workers to its knees.

Two and a half years later, the UAW ordered its members back on strike. The company attempted to continue production with strikebreakers, and to a considerable extent it was successful. After 17 months on strike, the UAW negotiated a new agreement with Caterpillar which the workers voted down by nearly 80 percent. Then the UAW "recessed" the strike and ordered union members back to work anyway.

Conditions on their return were horrendous. The NLRB has filed over 250 separate complaints for unfair labor practices against Caterpillar and found that the company's "pattern of unlawful conduct convinces us that, without proper restraint Caterpillar, is likely to persist in its attempts to interfere with employees' statutory rights." That prediction has proved correct.

Yes, the prediction was true in the 1990s and it continues to be true today.

There are a number of grim lessons in this story. First, Caterpillar workers and their union acting on their own were no match against the company in a head to head battle. Caterpillar could draw on resources from profit centers around the world to sustain itself even during a prolonged fight. This was especially true because Caterpillar can use divide and conquer strategies against a global workforce that never managed to unite in a common struggle.

Second, global corporations are constantly changing and re-organizing so that they are moving targets. If the union recovers its strength and its fight at Caterpillar in Illinois the company is likely to respond in new ways, or by moving its plants.

Third, simply adding new union members and increasing union density is not necessarily a sign of strength—in this case it’s actually a sign of weakness, since the new members were a result of a collapse in wages. The real test is: can a union deliver for its new members.

And, finally, and most importantly, conventional collective bargaining is becoming less and less viable as a stand alone union strategy. New approaches to representation are needed—approaches that combine social movement style strategy and tactics; a new labor politics that challenges the need to slash wages to generate new jobs; and the creation of a global movement that links workers employed by the same employers, in the same industry, and in the global economy as a whole.

Some in the labor movement think it is defeatist to talk about the failure of conventional unionism and collective bargaining to adequately represent workers' interests. But it is our experience that people want the truth—workers know that globalization undermines union strength, it is obvious for all to see, and they are unlikely to place their trust in those that do not seem to understand this.

Labor's Search for a China Plan

Labor needs a China plan and it needs one fast.

The problem that the Chinese economy poses for the world’s workers—including Chinese workers-- is an extension of the core dynamic at work in today’s global economy. Corporations roam the world pitting workers and communities against each other in search of lower wages, lower taxes, more subsidies, few regulations, no unions or weak unions, and lax enforcement of any existing laws. The current final destination for this race to the bottom is China with its huge, disciplined, and very productive workforce on offer at rock bottom wages.

The downward pressure put on the world’s wages by China is enormous. Economist Richard Freeman estimates that the entry of India, Russia, and China into the world economy in the past few decades has doubled the workforce employed in the global economy.  China, alone, accounts for 50% of this increase. And because these countries did not add significant capital to the global economy, more workers are competing to be employed by essentially the same amount of capital, increasing the bargaining power of capital and decreasing that of labor. This contributes substantially to wage stagnation or decline in countries around the world.

Andrew Ross of New York University, who recently spent a year in China studying how workers are coping with the rapid changes of the last decade, writes:

But if [China’s] breakneck growth is a threat, it is not because Beijing harbors sinister ambitions for its industrial expansion. The real problem is that China is playing host to the largest, and most corrosive, environment for offshore labor in the global free trade economy. For more than a decade, it served as a fast-track incubator for foreign investment in the low-wage export sector, cocooned from accountability to any principle not devoted to raw profit…..

Free trade zones in other developing countries have hosted much the same kind of cynical runaway culture. So why is the China case so alarming? The answer lies not just in the jumbo scale of operations, but also in its all-encompassing spread. China is leapfrogging so fast up the technology curve it is attracting the highest level investments—in product design and innovation, for example—from industry leaders….

No industrializing country has been able to compete for the top-end slot at the same time as it absorbs jobs lower down the production chain….To command this spread---from the lowest assembly platform work to the upper reaches of industry and services—is to be in a position to set the global norm for employee standards as never before. Given the chronic disregard for job security and workplace rights in China’s foreign-invested private sector, such a norm is a clear threat to the stability of livelihoods everywhere. [From a paper delivered at the Cornell Global Labor Conference on February 10, 2006. Ross is author of the forthcoming book A Fast Boat to China : Corporate Flight and the Consequences of Free Trade; Lessons from Shanghai. April 2006]

Two recent stories in the New York Times lend support to Ross's observation about the range of China’s industrial reach. The first describes China’s efforts to produce high tech, high quality cars by producing fuel efficient engines using state of the art technology. A joint public-private Chinese venture is negotiating to purchase a sophisticated engine plant from BMW and Daimler Chrysler in Brazil, take it apart, and move it to China. The second article reports on the increasing outsourcing of high skilled R&D and design work to countries like India and China. A survey of more than 200 multinational corporations revealed that 38 percent planned to shift R&D work to countries like China and India. 

But if the Chinese economy poses a threat to the current or potential living standards of people around the world, it also offers a major opportunity: workers all over the world have a common interest in coming up with a solution to the race to the bottom. It’s no longer a North--South issue, it’s global. In a previous blog we told the story of what happened when the Namibian employees of a Malaysian based global corporation organized to improve their abysmal wages and working conditions: the company closed shops and moved the jobs to China. The message was clear: if you make waves, you loose your job. But the solution also becomes clearer: global action is needed to reduce the ability of corporations to pack up and move.

The issue for labor is not China vs. the rest of the world. The Namibian example highlights an essential point: the most powerful actors in the global economy are global corporations. It was a Malaysian based company that moved the jobs to China. And it is American, British, French, Japanese, German and other foreign based companies that are moving jobs and investments to China. According to Morgan Stanley’s Stephen Roach, “… 65% of the tripling of Chinese exports… – from $121 billion in 1994 to $365 billion in mid 2003 – is traceable to outsourcing by Chinese subsidiaries of multinational corporations and joint ventures” 

To take another example: according to Jenny Wei-ling Chan of Hong Kong University and the Chinese Women Workers Network, Wal-Mart alone contracts with 20,000 suppliers in China, and is the 5th largest export destination for Chinese goods, ahead of Germany and the UK. This gives Wal-Mart the power to set wages and determine working conditions for hundreds of thousands of workers around the world and to exert significant influence over both the Chinese and the US economies.

To reverse the downward spiral, labor needs a plan that moves along several tracks at the local, national, and global level. These tracks include: policies to create more jobs that stay put; providing more support for those workers who loose jobs; a renewed fight for new global institutions to replace the corporate dominated ones like the IMF, World Bank, or WTO; public policies at all levels to regulate corporate/capital mobility; and a global drive for labor rights including democratic unions and worker organizations. Together, these tracks have been characterized as “fair globalization” and global labor must make fighting for fair globalization part of its core activity. For more on fair globalization see the ILO report A Fair Globalization and our report, Outsource This? .

A critical part of any labor supported China plan must include reaching out to Chinese workers who are already fighting to improve their living and working conditions and for a greater voice in the direction of their country and their economy. In our next blog we will look at what’s happening in China and how the global labor movement can support efforts by Chinese workers in their struggles.

Toyota Workers in Philipines Seek Solidarity

Toyota employees in the Philippines are seeking international support to force Toyota to recognize their union.  Because of Toyota’s high global profile, they provide a promising target for international pressure.  Unions in Asia and Europe have demanded that Toyota recognize and bargain with them.  A modest effort by U.S. trade unionists could substantially increase the pressure on Toyota.

The fight illustrates that it’s not just in the United States that organizing is a difficult, time-consuming process that demands creativity, tenacity, and courage. The fight also demonstrates the power of international solidarity against global corporations.

In March, 2001 the Toyota Motor Philippines Corporation Workers Association (TMPCWA) won a certification election granting them the right to be recognized as sole bargaining agent for the rank and file workers of the Toyota Philippines Corporation.  Toyota subsequently unlawfully dismissed 233 workers, including the entire union executive committee.  It is now promoting the formation of a “company union” that has petitioned for its own representation election.

In September, 2003 the ILO Committee on Freedom of Association requested the Government of the Philippines to initiate negotiations and reinstatement of the dismissed workers (case 2252).  In a November, 2004 report (Report No. 335) it expressed regret that the Government had done nothing in response after a year.

In an innovative if not unique form of international labor action, in September, 2004 TMPCWA affiliated with an independent Japanese union, an action not precluded by Japanese labor law.  The union then asked the Toyota Motor Company headquarters in Japan to open negotiations. After a great deal of legal wrangling and direct pressure, Toyota agreed to begin negotiations in August 2005 in Japan.

As a condition of opening negotiations Toyota demanded a suspension of international activities by the union and an embargo on news of the negotiations. But this week important decisions will be made by the Philipine DoL and international pressure is needed. The talks have run aground on a number of critical issues, including re-instatement of the 233 dismissed workers, a new certification election involving the company union, and a dispute over who is eligible to vote in the election.

Toyota’s position, backed in part by the Philippines Department of Labor, ignores Toyota’s long history of union busting including the firing of union activists, the failure to engage in good faith collective bargaining, and interference in the right of workers to select representative of their own choosing to bargain for them. The Philippines DoL has made rulings that ignore Philippine Supreme Court and ILO rulings and recommendations. 

The Protest Toyota Campaign regularly prepares sample letters of protest that U.S. trade unionists can send to Toyota and the Philippines government.  Obviously such communications would have greater effect if combined with public statements and actions. 

There are also opportunities for innovate forms of action.  For example, in March 2003 the union and supporters filed a complaint with the OECD contact point in Japan charging gross violation of the OECD Guidelines for Multinational Enterprises.  The text of the complaint is available in English; a similar complaint could probably be filed with the OECD contact point in the US.

To US workers, this whole episode sound all too familiar. But the Filipino Toyota workers have shown real initiative and have developed an international strategy that has helped keep their fight alive and moving forward. Our task should be not only to respond to their requests for help, but to find ways to institutionalize this kind of global solidarity buy organizing appropriate contact centers within each national labor movement to facilitate cross border support and solidarity.

For more information about the Toyota Motor Philippines Corporation Workers Association (TMPCWA), and for sample letters of protest to Toyota and the DoL in the Philippines, visit the TMPCWA website at: http://www.tmpcwa.org. 

The China Syndrome

The China syndrome describes possibility of a nuclear reactor meltdown that burns its way through the floor of a reactor building into the earth and, figuratively at least, though to China. It’s a graphic, if exaggerated, image from the No Nukes movement of the 1970s in the US. Today there is a new China syndrome, this time it involves the threat that Chinese wages may burn a hole through the global wage floor and drag wages down everywhere in an accelerated race to the bottom.  It’s a fear that is based on a real dynamic at work in the global economy. And one that is widely perceived in both the developed and the developing world.

How to deal with the question of China was a key theme that threaded its way through many discussions at the Conference on Global Unions this past weekend in New York. The issue of China is among the most important questions facing the global labor movement in the coming decades. 

The entry of China into the global economy in the past decade has increased the workforce employed in the global economy by 50%, according to Harvard economist Richard Freeman. At the same time, the global supply of capital has not increased substantially. That means that 50% more workers are employed by roughly the same amount of capital. The result: falling or stagnant wages throughout the world.

Today it doesn’t matter whether you live in Cleveland or Caracas; footloose global corporations can move or threaten to move your job. The “privileged” position of workers in the global North is being rapidly undermined while the aspirations of workers in the developing world are being dashed as China becomes the wage setting country in many industries.

We in the global North tend to focus on the threat outsourcing to China poses to our own living standards. But today globalization is less and less about North-South competition and more and more about South-South competition. A story about the Malaysian transnational corporation Ramatex and its activities in Namibia, presented by Norwegian geographer Ann Ceicilie Bergene at the Conference on Global Unions, painfully shows exactly what’s at stake for the developing world.

Ramatex, a textile and garment TNC that supplies firms like Adidas, Puma, Target, Wal-Mart, Nike, and Sears operates plants throughout Asia. In 2002 Ramatex opened a major facility in Namibia which was the largest foreign investment in that country since independence. The company promised to hire 8,000 workers in a vertically integrated textile operation—doing everything from spinning to final sewing.

The jobs on offer at Ramatex turnout to be classic sweatshop jobs. The company—like many global suppliers-- wanted single women who had passed a pregnancy test. To add injury to insult, the women had to pay for the pregnancy test themselves. Namibian labor laws were violated, workers were cheated out of wages, overtime was forced, and workers were fired unfairly.

Namibia, in desperate need of jobs, had actively campaigned to get Ramatex to locate in the country, beating out competition from South Africa and Madagascar by offering major concession in labor law and taxes. But amazingly, one forth of the workers employed by Ramatex in Namibia were migrant workers, recruited mostly in Asia by global temp agencies. Ostensibly these temps were recruited to “train” Namibian workers, but according to unions, the workers were actually hired because they were in a more vulnerable position and therefore more passive. The migrant workers were kept segregated from the Namibian workers and worked under different rules; they sometimes fell into debt bondage; and, they had their passports confiscated so they could not easily leave Namibia. When some 400 Bangladeshi workers protested, riots broke out and they were immediately fired and deported. Throughout, Asian and Namibian workers were pitted against each other in a practice as old as capitalism.

Namibian workers went on strike in 2003. Strikers were beaten and intimidated and more than 400 were fired. Eventually Ramatex did sign a recognition agreement with the Namibian Food and Allied Workers Union, but the company refused to engage in collective bargaining.

The International Textile, Garment and Leather Workers Federation (ITGLWF) was alerted and intervened. The ITGLWF launched a campaign to alert global buyers of conditions in the Namibia. One effect of the campaign seems to have been a sharp drop off in orders as global buyers sought to distance from the negative publicity. Shifting suppliers is easy in a global economy where a ready alternative exists. 

As a result of the drop in orders, plants closed and workers were laid off. The Namibian government and the company blamed the union for causing trouble and driving the buyers away. (The end of Multi Fiber Agreement was a major factor as well.) Where did Ramatex move its business too after it closed its Namibian operation? China.  In fact, today, companies like Nike still do business with Ramatex in China, where many TNCs can operate with much less public scrutiny.

So here you have it all. Highly exploited Namibian workers employed under Dickensian conditions; Asian migrant workers recruited by global temp agencies and sent to Africa to work in slave like conditions; protesting workers deported, beaten, and fired; plants closed and production moved to lower costs countries.

Meanwhile, the global union federation and its Namibian affiliate got the blame from the company and the government for causing the company to move. The message is clear: if you organize, if you protest, you will loose your job, since production can easily be moved to a lower cost area with a more compliant workforce. For those interested in promoting a race to the bottom, it doesn’t get much better.

If workers in a poor country, desperate for jobs, like Namibia, can’t compete against China, is there any hope? The answer is yes, and for two reasons. First, today, the race to the bottom involves workers everywhere, giving workers in the developed and the developing world an organic reason to build a global labor movement to prevent Chinese wages from setting the global wage floor. Second, Chinese workers are far from passive and are essential allies in the fight to raise global standards—but the global labor movement must reach out and find ways to hook up with their stuggles.

In our next blog we’ll discuss steps that can be taken by the global labor movement to deal with the China syndrome.

What Management Thinks

The International Conference on Global Companies and Global Unions was held in New York from Thursday to Saturday of this week.  It brought together 570 academics and union representatives from around the world to discuss the changing terrain unions face in the age of globalization and the ways that unions can work together to be more effective.

The conference included the presentations of case studies on 10 global companies ranging from Alcoa to Wal-Mart and strategy sessions on how unions can confront these corporations. The studies detailed the scope of the companies, their business models, and their business practices---information which is essential for unions if they are to develop global strategies. The cases also provided research models that can serve as a foundation for future strategic studies.

A full program of workshops dealt with critical issues facing the global labor movement.

Plenary sessions included speakers from North America, Latin America, Europe, and Africa. The general drift of the remarks at the plenary sessions was that labor had not done enough to build a global labor movement but that it was absolutely essential that it do so if the labor movement was to continue to be a relevant social force. As one speaker put it, the forces of capitalism are global, so it was essential that labor become global as well.

Labor unity was stressed throughout the conference. The main global union institutions are in the process of uniting into one big international organization after a century of division. And in the US, speakers from both the AFL-CIO and CtW stressed that they shared common global goals.

The confererence was first rate and a big success. We’ll report much more on the conference in future posts in the coming days.

Meanwhile, what does management think of the new emphasis on building a global labor movement?  Two interesting items have appeared in the last week or so.

The first comes from a Conference Board of Canada report released last week and widely reported in the Canadian press. (The report itself can be purchased if you have a spare $850 Canadian.)

Here are some excerpts from a story in the Toronto Star :

Globalization has arrived at the collective bargaining table," said Christopher Hallamore, a senior research associate at the board and author of the report Industrial Relations Outlook 2006: Shifting Ground, Shifting Attitudes……

The 2006 study calls globalization a "two-edged sword" for management. It offers widespread opportunities to expand into new markets. But it also creates pressure to move production to less affluent new markets so the goods can be made at a much lower cost.

Management is coming to unions with a new (project) and saying, `We could send it to Mexico, we could send it to China, or we could do it here,'" said Hallamore. "`But if we do it here with your members, (these are the workers) you're competing against.'"

Management is demanding concessions and unions are resisting, he said. The board predicts average wage increases of 2.5 per cent for unionized employees in 2006, and doesn't see any major labour disruptions on the horizon. But the report says that a newly militant management is increasingly resorting to extremes like lockouts…..

But unions are fighting back.

... unions are trying to go global just like their multinational employers. Unions are reaching out to workers in developing countries, helping them organize to improve wages and working conditions. Hallamore [of the Conference Board] said there's a helpful impulse at work, but it's also a strategy to fight back. "If you raise wages in the Philippines (for example), maybe that makes a business case for sending work there from Canada a little less appealing to an employer."….

Masters [of Toronto University] says the website http://www.labourstart.org is another example of how labour movements are attempting to pull together around the world. "It provides a possibility of immediately sending a letter to management saying, `We're concerned with what's going on with your labour situation.'"

The unions can circulate thousands of protest letters aimed at management.

It's beginning to have a huge impact as individual companies see that there's a global arena out there that's aware of different protests."

Another very interesting—and quite good -- article appears in the journal Workforce Management It describes the increasing use of global strategies by unions and by global organizations like UNI. Here are a few excerpts, but the whole article is worth reading.

By creating international agreements with European multinationals, groups are gaining entry into American businesses that previously had fended off organizing efforts…..

American subsidiaries’ …..parent companies in Europe are signing off on union-organizing agreements that are binding here.

It’s a rude awakening for businesses that have for years been staving off union campaigns, often with the aid of highly paid attorneys and consultants….

The issue is that you can have a multinational company in Europe agreeing to these things and the executives at the U.S. subsidiary are planning their own labor strategies, unaware that those agreements are having a direct impact on them," says Gerald Hathaway, a partner in the New York law firm of Littler Mendelson.

And it’s not just parent companies that the unions are targeting in Europe, he says. In some cases they are targeting companies’ suppliers and customers there. Since the labor movement is much more a part of the social fabric in countries like Germany, where boards of companies are required to have union members, U.S. unions realize that they can accomplish more by beginning there than they can at home.

Unions are creating global agreements that affect all of a company’s subsidiaries," Hathaway says. "They are being very forward-thinking." …..

So far, seven companies have signed global agreements with the Union Network International: Carrefour, a Paris-based food retailer; Hennes & Mauritz of Sweden, which has its H&M stores in the U.S.; Denmark-based Falck; Internet Security Systems, based in Atlanta; Metro AG of Germany; Greek telecommunications company OTE; and Spanish telecom provider Telefonica.

Philip Jennings, general secretary of Union Network International, says that since the right to organize is in all of the agreements, the unions can address issues that come up even without formal neutrality agreements being in place.

Given the importance of these clauses in North America, however, UNI and other groups are focusing more on including them in their agreements, Jennings says. Fifty agreements have been signed, and another 50 are in the works, he notes….

The global unions are coordinating their efforts by focusing on specific multi¬national companies. Union Network International has a list of 100 multinational employers that they will focus on, Jennings says. "But that doesn’t mean if you are not a big name that you will not be targeted," he warns…..

Despite the conflict among the various unions in the United States, they all agree on the necessity of creating a global labor movement, members say. "In the U.S., unions are competing for members, but that’s not the case internationally," SEIU president Stern says. "Internationally we all have a common goal," he says.

How successful the unions’ international tactics are remains to be seen. Much of the work is still in its infancy, says Rosen, the Jackson Lewis attorney. "The next couple of years are absolutely critical to the labor movement, and I think they understand that," he says…..

He’s got that right!

Of Polish Plumbers

A case brought by Swedish unions before the European Court of Justice may alter the shape of European labor markets. At issue is whether a Latvian construction company doing work in Sweden can hire Latvian construction workers under terms and conditions that violate Swedish union agreements for construction workers.

In a related action, later this month the European Parliament is scheduled to act on a new “trade in services” law—know as a “directive” in the argot of the EU—that will make it easier for EU companies providing services—consultants, retailers, accountants, construction companies, etc.,--to set up shop anywhere in the EU and do business under the rules and regulations of their “country of origin.” While wages and some standards are exempted from country of origin rules, foreign firms are only required to meet minimum wages and standards—not what is known in the US as “prevailing wages” or negotiated standards. Firms can thus avoid agreements negotiated between unions and employer associations.

The new directive is similar to one introduced last year—known as the Bolkestein Directive after its drafter—and withdrawn after massive protests by unions and some governments. Many think that the French rejection of the European Constitution last May was in part due to a feeling that legislation like the Bolkestein Directive was a threat to working and living standards.

In Europe the trade in services issue is known as the “Polish plumber problem”, since it raises this question: if your sink breaks in Paris should you be able to call a Polish company with an office in Paris operating under Polish regulations and have them dispatch a Polish plumber working for minimum wages to fix it?

The European Trade Union Confederation [ETCU] argues that the proposed trade in services directive will lead companies to locate their headquarters in countries with the least regulations, the lowest taxes, and the worst enforcement of labor laws. This would create a race to the bottom since it would force countries with high standards to reduce regulations to maintain their job and tax bases. The result will inevitably be lower wages and fewer services and social protections. The unions have dubbed this downward spiral “social dumping”.

The problem of social dumping took on added importance with the entry of 10 Eastern European countries into the EU in 2004. Since wages were much lower in Eastern Europe than in Western Europe many in the West feared that large numbers of East European workers would move west to in search of work, potentially driving down wages. To avoid this, current EU members were allowed to impose restrictions on workers coming from the East for a transition period of seven years. All but 3 countries took advantage of this clause and imposed restrictions.

The service directive, to be acted on in the European Parliament this month, threatens to make an end run around the transition period by allowing the posting of service workers in other countries. More importantly, it highlights a critical problem with the entire process of globalization as it is now unfolding, even in highly regulated environments like the EU: instead of pushing standards up, the process pushes standards down. Thus, in the case brought to court by Swedish unions, the higher Swedish standards are pitted against the lower Latvian standards and everybody loses, except employers.

It is worth noting that Sweden was one of the three older EU countries that did not take impose restrictions on workers from the newer member states because it assumed that its strong industrial relations system would be able to maintain standards.

This whole issue (coupled with the fear of the outsourcing of jobs to Eastern Europe) raises concern among many in Europe about the entire direction of the EU. As John Monks the head of ETCU says, “Europe is not just a single market, it is also a community that shares strong social values. This [Swedish] case is of great political importance, because if Europe’s unions lose, there is a real risk of working people turning against free movement, the single market, and the EU itself.”

European Unions increasingly understand that the answer lies in aggressive trade union action across Europe, particularly in Eastern Europe, to raise the wages and working conditions so that Polish plumbers receive the same wages and working conditions as their peers in the West. The unions also know that aggressive political action is needed to prevent downward leveling and promote the upward leveling of standards by enacting laws requiring adherence to prevailing wages and standards in local labor markets.

For those of us outside of the EU, the problem of downward leveling may be even more of a challenge because we usually do not have the legal, political, and institutional standing that European unions have to help shape labor market policy. But the solution is the same: building a strong global labor movement based on solidarity and mutual support and engaging in aggressive political action to promote fair globalization.

Giving Local Unions Global Reach

Building a global labor movement can’t just be about creating international alliances between big national unions or national federations. Nor can it just be about top union officials getting together for an occasional conference. Building a global labor movement must be about involving local unions, staff at all levels, and the membership in developing ways to cooperate with allies around the world.

There is a very practical reason for this: the point of contact between global corporations and organized labor--especially in North America-- is usually the local union and the workplace bargaining unit. The confrontation with global companies happens—with few exceptions-- in a thousand little skirmishes and not in titanic battles.

In addition, it is in local unions that membership education and mobilization on critical political and public policy issues takes place.

Local unions have a good deal of tacit knowledge about local conditions but they frequently lack important information about the global corporations, markets, and industries that they deal with. They also lack the capacity to reach out to similarly situated workers around the world employed by the same firm or working in the same industry, since peer to peer contact and information sharing is rare indeed. Each bargaining unit therefore usually acts in isolation.

The problem is that local unions already stretched to capacity lack the staff and resources to develop global reach. Turmoil and re-organization in the US labor movement have meant cut backs in education and research programs that could help. 

Addressing this problem isn’t easy. Since collective bargaining in North America is highly de-centralized, most bargaining is done by union locals at the workplace level. There are tens of thousands of union contracts in the US. A single big local may have hundreds of contracts each covering fewer than a couple of hundred workers—the result of an obsolete labor relations system that fragments workers and undermines solidarity. It’s a bad system but we’re stuck with it for now and we’ll have to make do.

In a typical union, elected or appointed staff are assigned to service and negotiate contracts for individual bargaining units. They often bargain several contracts at the same time while doing the day to day work of the union. They are over-worked and stretched for time.

The system sets up a tremendous mismatch. Fragmented groups of workers in under resourced locals with over-worked staff confront companies—often global companies-- with plenty of resources, big HR and legal departments, and well developed bargaining strategies. Big battles like the auto workers’ fight to hold on to their benefits may attract our attention, but an equally important story is the erosion of wages, benefits, and working conditions happening in small bargaining units everywhere—often in the name of  “global competitiveness”.

Local unions face other global challenges. They face critical public policy fights at the local, state, national, even international level that increasingly involve global issues--from globalization-inspired privatization to immigration reform--issues that require membership education and mobilization. And, of course, locals must organize new members—which requires a huge commitment of resources.

During the past year we’ve talked with dozens of local union officials and staff from around North America and the world about how a to build a global perspective into the everyday life of unions. Almost invariably, they say that while it’s a good idea, they simply don’t have the time or the resources to do it.

As a result we offer a modest proposal. It calls for appropriate groups of union locals or regional organizations—possibly Central Labor Councils—to develop “virtual global resource centers”. These centers could be accessed by member unions and staff on an as needed basis. The centers could provide rapid responses to requests for research, communication, education, and action support during bargaining, for political work, or for organizing. We think that such centers would help to preserve the character of local unions while providing them global reach. The centers could be—to borrow a military term—important force multipliers.

Specifically, the centers could
•    provide up-to-date information and  research on globalization relevant to local unions in both the public and the private sector
•    provide briefings, talking points, op-eds for union leaders and staff with a local angle to frame critical global issues for members, the press, and politicians
•    develop membership education programs on global issues
•    provide direct support for collective bargaining and organizing campaigns involving global corporations or issues including industry and company profiles; the identification of potential allies; and, the development of  bargaining strategies
•    provide durable links to unions and allies around the region, the country and the world facing similar issues

By accessing available local resources and expertise the centers could operate with small staffs and limited budgets. They would be a practical way to help local unions with limited resources cope with globalization and contribute to building a global labor movement. 

Four Steps to Global Unionism

How do we move global unionism from idea to reality? It’s not an easy task. There are major obstacles to building a global labor movement as we pointed out in a previous blog.

Cementing relationships, fostering solidarity, and developing the strategic knowledge for unions to provide mutual aid in the global arena must begin long before battles are joined. The haphazard international labor cooperation of the past must be buttressed by proactive horizontal linkages between unions and workers at all levels. 

Here are four concrete steps unions can take to make international labor cooperation less haphazard and more proactive:

1. Create efficient communication channels at all levels

•    Increase exponentially the amount of information flowing among workers and their organizations at all levels.  This will require significant resources for everything from research to translation services.  Regular information exchanges with unions in other countries can be facilitated by internet-based knowledge networks; a Global Labor Solidarity E-Newsletter presenting experiences and analyzing lessons of cooperative efforts; and periodic conferences.  Communication-- swapping stories and reflecting on issues, strategy and tactics-- should involve local unions, staff at all levels, and the membership.

•    Institute regular work-to-worker exchanges: Traditional labor connections are funneled through national and international federations.  But to build support for the radical shift toward a global labor movement, workers need to be continually “rubbing shoulders” with workers from other countries who work in the same companies, industries, and occupations.  Such exchanges will not only build trust and solidarity, but also position workers to assist and encourage their own unions to go global.

•    Build trust overseas by offering concrete services to workers and unions in other countries: One way to overcome suspicions and cement relationships is to begin offering services to unions and their allies abroad.  At a recent conference on outsourcing, for example, Indian unionists asked US unionists to provide on-demand information about US companies.  Latin American labor networks have similarly requested regular updates on American trade policy and political developments.  Initiating networking overseas by offering such services will begin opening doors and building the trust needed for on-going coordinated action.   

2. Create global networks and alliances before the battles begin

•    Start reaching out to potential allies. Unions need to connect with national and local unions to build relationships far in advance of asking workers in other countries to commit risky acts of solidarity.  Such pre-battle networking should also include foreign civil society organizations and allied government officials.

•    Develop “intelligence” about countries, unions, and industries around the globe to spot new trends and construct new strategies. As any global corporation knows, going global requires staying abreast of an increasingly complex set of variables, such as national labor laws, political developments, and economic conditions.  Seeking regular “intelligence” about specific countries and global industries can ensure unions that they are not “flying blind” in the global arena.

•    Utilize immigrant members.  In the US, for instance, 15% of the workforce are immigrants.  They are playing a critical role in the growth of unions in low wage service industries.  They also form a vital resource for forming links to established and nascent labor movements around the world.  Unions should provide resources to help them utilize their ties with their home countries to promote on-going international connections.

3. Connect the local and the global

•    Build a global strategy at the local level.  Today even local unions must confront global corporations either at the collective bargaining table or in organizing campaigns as multi-national corporations extend their reach in the economy.  Unions should develop a set of practices and protocols at all levels to build global perspectives and global action into local campaigns. This should include creating task forces of workers specializing in bringing international pressure to bear in local campaigns through direct contact with unions and workers in other countries.

•    Establish educational programs about globalization so that workers can participate in an informed way in building a global labor movement. Unions need to begin telling workers the facts demonstrating what they already know viscerally: globalization is affecting their lives and is here to stay.  Such education is politically essential for dialogues about shifting resources into global networking and campaigns.

4. Take the offensive on global public policy issues

•    Promote alternatives to neoliberal policies at local, state, and national levels.  In the US, globalization has baffled both Democratic and Republican lawmakers.  This is an opportunity for unions to take the lead in defining solutions to outsourcing, contingent work, privatization, and other public policy issues.  By framing public debates, developing expertise, and proposing alternative solutions unions have an opportunity to be perceived as innovative and aggressive in solving workers’ problems.

•    Utilize immigrant members to educate the public, media, and politicians.  Immigrant workers are a rich source of knowledge and experience about the global economy.  They can help labor spearhead a progressive global agenda on migration in the global economy; develop alternatives to destructive trade deals that harm workers in both the North and the South; and launch a new discussion about human, labor, and citizenship rights in the age of globalization.

Unions have tried, with varying success, to utilize international solidarity in particular struggles.  Building a global labor movement next requires something further: proactive approaches designed to make international communication and cooperation part of the daily practice of the labor movement at local, national, and international levels.

In our next blog we will take a look at more detailed proposals to build capacity to deal with global issues at the regional, local union, and bargaining unit level.

Big Trouble for Auto Workers

The North American automobile industry looks more and more like a crash scene-- each day seems to bring more bad news for auto workers and their communities. The debris is everywhere.

In the past few months

•    GM announced that it will shut 12 plants and lay-off 30,000 workers over the next few years. Ford followed suit with a plan to close14 plants and lay-off 30,000 workers. Since 2000, 140,000 jobs have been lost in the old Big Three auto companies.

•    Both GM and Ford asked for and got mid-contract concessions on benefits from the UAW. GM now plans to ask for even more concession to help bail out its North American operations.

•    The parts industry continues to implode. Delphi—GM’s largest supplier and a company it spun off in 1999 in an earlier restructuring-- is now in Chapter 11 and has asked the courts to allow it to get rid of its union contracts covering 33,000 hourly workers. The company wants huge pay and benefit cuts. Many of Delphi 44 plants in North America are likely to close.  Tower Automotive, another large parts producer, is also on Chapter 11 and has also petitioned to dump its contract covering thousands of workers. . The outlook for parts workers is grim: some experts say that one-third of the parts industry is headed for bankruptcy court. Expect the massive shift to off-shore production to intensify.

•    Further “downstream”, car hauler Performance Transportation, which operates Leaseway and two other companies, has also filed for Chapter 11, citing reduced business as a reason. The fate of its 1,900 Teamster drivers is uncertain.

This crash has been a long time coming. The big US auto companies have been in a perpetual state of reorganization for decades as they struggled to come to grips with global competition. Each re-organization has been bad news for workers and each has failed to stabilize the companies or the industry.

The old integrated corporate structure has been replaced by much more decentralized “just-in-time” systems based on complex global supply chains. Some of companies in these supply chains—like Delphi--are spin-offs from the Big 3. On the shop floor work has been reorganized and intensified to increase productivity.

Meanwhile, Asian and European car companies built assembly plants in the US and gained a growing share of the US market. More are planned. They bring tons of money, build modern plants; institute state of the art production systems; hand-pick a more compliant workforce mostly in the non-union US South; and successfully use union avoidance schemes to stave off organizing drives. They have none of the “legacy’ costs of the Big 3 and provide much less generous benefits than those the UAW has negotiated over the years. To take one example: GM health care premiums add $1500 per car; non-union Toyota health care costs adds $300.  The newcomers also build higher quality products that people want to buy. Today, “transplant” account for 40% of sales in the US market.

But let’s not forget that Ford and General Motors are also global companies that produce and sell cars around the world and quite profitably. Last year GM sold more cars outside the US than it did within the US. It’s now the leading producer of cars in the growing Chinese market, where its plants operate at capacity. Ford turned a profit on its far-flung overseas operations as well.

The continuous reorganizations of the last two decades are part of a powerful and highly successful campaign to roll back wages and benefits for auto workers throughout the world. Global companies operating in global markets are outflanking auto workers and their unions everywhere. Despite the relative power of auto worker unions in many countries, conventional national union strategies are proving inadequate for blocking the auto companies attack.

That’s why, in the US, even though by the conventional measures of union strength—high density, active organizing, and good collective bargaining agreements—auto workers should be well positioned to resist the corporate attacks, they have been unable to do so.

Consider the following:

High density  60% of all of the cars and trucks sold in North America are assembled by union workers.(2003 numbers) While this is down from the 82% level of the late 1970s, it’s still a union density that is unimaginable in most sectors.

In the parts industry, union density is much lower. As a former division of GM, Delphi’s North American operations are essentially unionized wall to wall. Contracts basically carried over from GM meant that Delphi workers have wages and benefits up to core industry standards.  But Delphi and other union producers are competing against a growing number of companies producing in Mexico and other low wage countries and with non-union plants in the US. In the late 1970s some 56% all parts workers in the US were unionized, today it’s more like 25%.

Organizing There is active organizing in the parts sector and it’s meeting with some success. The UAW has been able to use its leverage with big auto makers to help organize 17,000 workers at parts suppliers like Johnson Controls and Metaldyne in the last few years. Union density rates actually increased in the parts sector from a low of 23% to 25% in 2004.  But workers have been unable to achieve wages and benefits at anything like those that have historically prevailed in the auto industry. The union has had little room to maneuver: in a highly competitive system since the alternative to pay cuts is often unemployment.

The UAW has made several unsuccessful runs at organizing the “transplant” assembly plants in the South. It’s still trying, but it’s likely to be tough going if workers perceive that the union can’t maintain wages and benefits or protect their jobs from going elsewhere.

Collective bargaining. The high union density in the auto industry gave the UAW the muscle to negotiate good collective bargaining agreements. But over the last two decades bargaining has been defensive--focused more on preserving rather than improving wages and benefits.

It’s difficult to say what more the union can do within the confines of the existing industrial relations system. Most of the key issues facing auto workers today can’t be adequately addressed through collective bargaining as it is currently practiced.

•    Management incompetence and poor product selection are both legally and customarily outside the scope of traditional collective bargaining.
•    A global glut of cars makes it difficult for companies to make adequate profit margins.
•    Preserving a private welfare system  puts union companies at a competitive disadvantage.
•    Global competition puts downward pressure on wages, especially in the parts industry.
•    Macro economic factors like the strength of the US dollar affect the cost of production in the US

The fact is, despite the best efforts of workers and their unions—despite high union density, aggressive organizing, and good collective bargaining agreements—auto workers are bumping up against the limits of conventional trade union strategies.

The situation is tough but not at all hopeless. Auto workers and their unions have been fighting corporate attacks on their wages, working conditions, and benefits for a long time. The lessons they have learned will serve them in the defensive battle that they must fight. But alongside that defensive fight new strategies must be created. A first step is building strong global alliances with other unions and allies to resist corporate attacks on wages and working conditions. These global alliances need to fight for new international agreements that reduce the ability of corporations to blackmail workers with threats of job mobility and disinvestment. And these alliances must be built into the fabric of the union at all levels. With the framework of such global alliances it will begin to be possible to  develop a labor alternative for the big questions that face the international auto industry and its workers.

In coming blogs we will look at what’s now being done to build alliances, how workers around the world are confronting the assault on wages and working conditions, and at suggestions from a variety of perspectives on what more could be done.

Obstacles to Globalizing the Labor Movement

Once employers were mostly local; so were unions.  When local companies became national corporations, unions too had to go national.  Now capital has gone global.  Today, there is little disagreement in the labor movement that unions now have enter the global arena. But this is easier said than done.

In order to jump-start a discussion on globalization and track some new global labor strategies, a consortium of labor centers and unions are meeting in New York City on Feb. 9-11 for the "Global Companies - Global Unions - Global Research - Global Campaigns" conference, to discuss new forms of "international organizing and bargaining campaigns and strategic research." (The conference promises to be excellent, although for whatever good reasons conference organizers had, the high registration fee of $350 feeds the sense among workers and lower level union staff that global issues are the concern of those at the top and not for those on the front lines.)

In last decade, unions have made intermittent efforts at international cooperation, but the obstacles to globalizing the labor movement are considerable.  Indeed, cooperation can be tough even among unions in the same country.  Over the last year we have been in  discussion with labor activists around the world in order to identified obstacles that arise when unions try to cooperate across international borders.  Here are some examples of what we found (Later we will lay out some of our proposals for overcoming these obstacles):

Beggar-your-neighbor

Unions are constantly tempted to pursue an aggressive economic nationalism, demanding that their own countries close their markets to foreign goods and services or that other countries open theirs.  But in the era of globalization the global economy is less a collection of nations trading with each other than a single market in which corporations compete to exploit labor anywhere.  This often renders economic nationalism counter-productive.  Bush’s pre-election tariff on steel imports promoted by steel companies and unions, for example, created few jobs for union steelworkers, but led to widespread job losses for American auto workers dependent on cheap imported steel.  Recent European restrictions on textile imports from China led not to jobs in Europe but rather to jobs in Bangladesh and Vietnam.

However ineffective in protecting jobs, such approaches have a devastating effect on international labor cooperation.  They replace solidarity against employers with a struggle among workers over which countries can keep or lure corporate investment.    Employers don’t have to worry about workers in different countries ganging up on them if those workers are ready to cut each others’ throats to beat each other out for jobs.  When one of us recently identified ourselves to a Bangladeshi activist as someone involved with the American labor movement, their immediate response was, “Oh, you’re the people who are trying to keep workers in my country from getting textile jobs.”

Global union diversity

Why not simply extend unions from one country into “global unions” representing workers in other countries?  This indeed has happened in the US and Canada, where law, politics, business structures, and labor traditions are similar.  But in most cases, differences in the labor movement, industrial relations institutions, and labor law deter such an approach.

In Scandinavia, for example, bargaining tends to be much more centralized than in the US.  Unions negotiate broad sectoral agreements with employer associations.  As is the case in much of the world, health care, vacations, and aspects of the grievance procedure – subjects for collective bargaining in the US -- are addressed by national legislation.  In Japan, in contrast, there are more than 30,000 unions, each representing white and blue collar employees of one employer.  Joint bargaining is rare.  Any group of workers in a company has the right to organize, demand recognition, and bargain with their employer, leading to forms of minority unionism unknown in the United States.  Strategies that are crucial in one country may be worse than useless in another. 
 
Accumulated distrust

Mutual solidarity is grounded in trust.  When American unions approach unions abroad, they face important – and in many cases well-grounded –reasons for distrust.

For many decades, US unions worked hand-in-glove with the CIA and other agencies of the US government to overthrow foreign governments, bribe politicians, break strikes, and favor unions that cooperated with US corporations.  Even in the Bush era, most of the money for AFL-CIO international operations continues to come from the US government.  How could foreign unionists not be suspicious of US labor activities abroad?  (The recent action by the AFL-CIO to demand the withdrawal of troops from Iraq as soon as possible may help open the door to greater trust by foreign unionists.)

More surprisingly, we have learned in conversations with ranking trade union officials in the US, Asia, Europe, and Latin America in the service, manufacturing, and telecommunication sectors, that global corporate campaigns can themselves sometimes be a source of distrust.  In such campaigns, which have been used during strikes and organizing drives for more than a decade, embattled unions often ask unions in other countries for help pressuring an employer. Sometimes those they ask have good relations with the employer, or are at a sensitive stage in a collective bargaining process, or are reluctant to pressure the employer for other reasons. This can lead to hard feelings rather than long term alliances. 

Campaigns initiated and controlled by unions in one country can generate distrust concerning their long-term commitments and agendas.  For example, European trade unionists and allied NGOs questioned us sharply about whether US unions would go the distance in a global Wal-Mart campaign.  Their big worry was that US unions are so focused on recruiting new members that as soon as they have organized a few US stores, they’ll call Wal-Mart a model employer and call off the campaign—leaving workers in the supplier firms in China and the developing world high and dry.