Auto layoffs continue as new round of givebacks begin

On Dec. 22 Chrysler LLC took the unprecedented step of shutting down every plant in the corporation for four to six weeks to reduce inventory. As production resumes, however, many workers are hopeful about the new deal that gives Italian car maker Fiat a 35 percent ownership in exchange for access to small car technology. The perception is that Chrysler will use the existing Fiat platform to build fuel-efficient subcompact and mini cars in the United States.

With the threat of bankruptcy hanging over their heads every day, the workers are understandably positive about the arrangement with Fiat. Many would be willing to make additional concessions to facilitate a deal that would seemingly protect or even expand jobs at Chrysler.

This fear factor plays into the hands of Fiat CEO Sergio Marchionne, who has stated that “if the right level of concessions are made, we can find a way to make this work.” (Detroit News, Jan. 22) Fiat’s push for givebacks from the United Auto Workers follows the trend set by the Treasury Department. Government loans to Chrysler and General Motors are contingent on the union granting previously unthinkable concessions.

On Jan. 23, workers on indefinite or permanent layoff learned it was the last day of the “controversial” jobs bank. The jobs bank allowed workers to collect a paycheck even after their plant jobs were eliminated by technology or outsourcing. Some worked for charities and received 40 hours’ pay, while others not placed in a “nontraditional” job were paid 85 percent of that.

Hundreds of workers are now on “enhanced layoff” with no advance notice. They receive Supplemental Unemployment Benefits on top of state unemployment insurance. How long they will collect SUB remains to be seen, as the loan terms call for SUB to be eliminated.

Another big question affects not only the workers who were in the jobs bank but thousands who were supposed to be placed in the bank after a maximum 48 weeks of layoff. What happens now after the 48 weeks? UAW officials have yet to answer that question.

Are workers worrying needlessly? Should they assume the crisis is only temporary and will soon be alleviated when they start cranking out the minis? Chrysler will have the new small cars in the showrooms within two years. The catch, however, is that “details such as which Fiat model, how it would be badged or where it would be built have not been determined.” (Detroit News, Jan. 22)

The Fiat-Chrysler partnership could prove detrimental to workers on both sides of the Atlantic in the long run. Marchionne’s expressed strategy—and he is articulating the long-range perspective of every auto boss in Europe, Asia, and North America—is to exploit the present downturn to foster a permanent restructuring of the industry. “Viability” is to be achieved by paying less and less money to fewer and fewer workers.

“The Chrysler arrangement is a first step in this direction,” Marchionne said. “By far, it’s not the last.” (Detroit News, Jan. 22)

Meanwhile, GM has announced another round of layoffs. Another whole shift will be cut at the Lordstown, Ohio, assembly plant, which went from three shifts to two in 2008. Talks are in progress for the jobs bank to end at GM, with the expectation that Ford will also expect the UAW to follow the pattern.

The corporate media routinely characterize the jobs bank as “controversial.” During the bailout hearings the southern Republican senators whined repeatedly about paying workers—laid off through no fault of their own—not to work.

But isn’t that what profit is all about? Consider the billions of dollars in profits the automakers made before the current downturn. If labor costs are roughly 10 percent of a vehicle cost, and a sport utility vehicle—popular before the recent spike in gasoline prices—was being sold for $30,000, the cost of labor came to around $3,000. Profits on those vehicles, however, averaged close to $10,000. So weren’t the profiteers being paid not to work? Worse, they were paid for work done by someone else.

Consider also the example of interest. How much labor on the part of a lender is involved in closing a mortgage? Maybe 40 hours or less. Yet on a 30-year mortgage a bank might collect as much as three times the value of a home in mortgage payments. Aren’t finance capitalists paid for not working, as they exploit the fact that working-class home buyers aren’t paid enough for their labor power to afford to pay cash for a modest home?

UAW needs to get off the concession train

It is time for the UAW to recognize the obvious: Concessions do not save jobs. No matter how big, givebacks are no guarantee against bankruptcy in the future.

Delphi UAW workers have already learned this painful lesson. After they granted major concessions the company declared bankruptcy, closed most plants, and slashed wages and benefits even further. Delphi is still in bankruptcy and may never emerge.

Sen. Bob Corker of Tennessee is using the Fiat-Chrysler agreement to argue that Chrysler is now a foreign company and must pay back the loan immediately.

It would be worthwhile for auto workers to study Italian labor history. In the 1920s workers at Fiat and Alfa Romeo (now owned by Fiat) took over the plants. They showed they could build cars without bosses, and raised the demand for workers’ control.

The UAW rank and file can provide ample proof of managerial ineptitude, and can easily demonstrate its capacity to run a “viable” company. It’s time the union leadership advance the slogan of workers’ control. Let the government forget about bailing out the bosses—give the money to the workers with no strings attached.

Bosses: What are they good for? Absolutely nothing.