The dismantling of the American auto industry, the US government’s bailout of a bankrupt GM, and the deal being cut with the UAW to savage a diminished workforce, if carried out according to Obama’s plan, will be a historic defeat for the working class, with far-reaching consequences. The UAW leadership, which long ago abandoned class struggle methods for classic business unionism, knows it can save its bureaucracy’s privileged position, which enjoys all the perks of Stalinist-era commissars, by selling out the membership, cutting the workers’ pay and benefits, and accepting mass lay offs. Meanwhile, there is not even a glimmer on the horizon of the new industrial jobs desperately needed to build the “green economy.”
The American auto worker’s pay and benefit package (known as the “gold standard for labor”) was won by hard-fought battles on the picket lines, backed by heroic acts of solidarity on the part of tens of thousands of union members, together with their families and communities. Victory could not have been achieved without efforts such as the six-week factory occupations at the Flint Chevrolet and Fisher Body plants in 1937, and the “Battle of the Overpass” at the Ford Motor Company’s Rouge Complex later that same year.
Those historic battles ended in victories for the entire working class, as other industrial and manufacturing workers set their sights on, and fought for, equivalent benefit packages to those won at the “Big Three.” American workers became accustomed to the promise and expectation of vacation pay, lifelong medical benefits, pensions, and a “decent” paycheck. The working class became redefined, in the public discourse and in workers’ own consciousness, as a new “middle class.” Ironically, in part because of their own past victories, workers no longer identified themselves as a class condemned to sell their labor power to the owner of the means of production. The Marxist concept of class, defined by relationship to the means of production, had been displaced in workers’ minds by a concept of class defined by income level.
Meanwhile, a witch-hunt was loosed upon the left within the unions, resulting in the displacement of left-leaning organizers by “loyal” careerists, and even criminals, as union officers. Workers had little natural sympathy for the majority Stalinist left that was still trying to peddle the class peace they had sold the UAW in wartime, so no one noticed the “speedup” at first—or so the story goes. Consequently, business unionism displaced militant trade unionism, and “labor relations” became both an academic discipline and a profession committed to binding labor to capital. The end result was a commitment to capitalism, on the part of the rising cadre of business union bureaucrats, that labor had stopped playing hardball. The crimes of the turncoat labor parasite caste against workers here at home are outweighed only by their role in tying the subjective allegiance of American workers to the overseas exploits, wars, and military interventions of imperialism. These labor fakers traded on the workers of the world for their bowl of porridge. We must demand and fight for a democratic rank and file leadership, with wages and benefits capped at the level of the best paid workers in the union!
Busily selling the “middle class” hype to their members, these labor “leaders” never seriously challenged the Taft-Hartley Act (which, among many other anti-labor provisions, prevents unions from launching sympathy strikes). Our dues and energy should have been used not only to force the repeal of Taft-Hartley, but also to organize the unorganized, educate our membership, build strike funds, and launch a fighting Workers’ Party. Instead, for decades the unions’ parasitic rulers wasted our dues dollars and volunteered our energy electing Democratic Party “friends of labor,” who can’t ever deliver anything of real value to working people (e.g., the ERA, single-payer health care, EFCA, etc.), and who have promoted—and billed us for—every imperialist military action in our history. Meanwhile, generations of labor leaders became accustomed to living the good life along with their corporate counterparts. Now, today, when labor needs to recapture its militant traditions and to fight like hell, the UAW leadership is giving it all away without a shot being fired.
General Motors has announced it is firing another 29,000 American UAW members. Workers fear for their pensions; they see their neighbourhoods abandoned to foreclosures; schools and the social safety net are being destroyed. And what do the “friends of labor” in the White House and Congress have to offer these and the other millions of unemployed? Despite the fact that between them, the UAW and the US government will own a large share of “New GM,” neither the union nor the federal government will be making any use of the leverage this could give them over the company’s future plans.
Revolutionary Marxists do not advocate the nationalization of industries under the control of pro-capitalist governments, rather than under the direct control of the working class. But workers should be told the truth: that the Obama administration, despite its ostensible commitment to the environment and to creating badly-needed “green economy” jobs for US workers, has bent over backwards to avoid even the slightest appearance of nationalizing the company for the benefit of society as a whole. Instead of taking an active role in setting a new direction for New GM, the Obama administration has made it clear that all will remain business as usual. The government will assuming the risk, but retain no decisionmaking power; the workers will make the lion’s share of the sacrifices; and any eventual profit will go straight into the pockets of management and the shareholders.
Meanwhile, the Obama administration boasts in its Fact Sheet on the GM deal that “[t]he UAW has made important concessions on compensation and retiree health care. . . . In virtually every respect, the concessions that the UAW agreed to are more aggressive than what the Bush Administration originally demanded in its loan agreement with GM.” Among other things, the $20 billion that GM owes the UAW for retiree pensions and benefits will not be paid. Instead, the existing pension and benefit trust will be replaced by a new trust that will be given a bunch of currently worthless stock in New GM. This places the UAW in a total conflict of interest with its own members. If the value of New GM stock does not go up, the stock owned by the pension trust will continue to be worthless, and UAW retirees will lose their benefits. But in order for the stock value to rise, New GM will have to make as much profit as possible—on the backs of current UAW members! That is, the UAW’s bureaucracy, as one of the owners of New GM, has a direct interest in increasing the exploitation of the union’s members in order to raise the value of the pension trust’s stock!
To make matters worse, even though the trust will own 17.5% of New GM, it will only have the right to select one independent director, and will have none of the other normal shareholder rights. In other words, instead of taking advantage of its position as one of GM’s major creditors to demand that New GM remake itself into a source of green economy jobs, the UAW has given up any claim to having a say in the company’s future that is proportionate to the trust’s ownership. Meanwhile, the only “green economy jobs” measure to which GM has agreed is the token concession that it will use one idled plant in the US to build a new small car model. This will increase GM’s domestic production by a measly four percentage points.
Who Stands to Gain?
GM’s secured lenders, who stand to benefit from the bankruptcy deal, include Citibank and JP Morgan Chase. These and the other organs of global finance capital have historically exploited and oppressed our brothers and sisters in Africa, Latin America and Asia even more than they have US workers.
Consider all those cell phones, ipods, laptops, and other high-tech toys. Much of the metal for their components came from the Democratic Republic of Congo (DRC). JP Morgan Chase, through its major share in Anglo American Mining has been extracting these metals from the DRC in competition with other banks. The result has been an ongoing war in the DRC since 1996 which has killed over 4 million people.
And working people should never forget that it was Citibank which financed the 1973 overthrow of the democratically elected government in Chile. In the course of that coup, Pinochet and his goons herded thousands into stadiums and executed them.
Obama talks about “change” and a “new beginning,” but what we see is the final nail being placed in the coffin of the “gold standard of labor” by the unholy alliance of Obama, the UAW leadership, and representatives of big finance capital like JP Morgan Chase and Citibank.
Stagnation of the US economy and falling profits
For the past 20 years, the rate of inflation may have been kept nominally low, but in real terms, workers’ wages have fallen. In the struggle to maintain and keep their families afloat, workers resorted to taking loans against their homes, and got into hock up to their ears to credit card companies at usurious rates of interest. What did the banks do with the surplus cash they extracted from workers as interest? Unless it was invested, this capital would have had no value. The banks found these usurious loans and the “financial instruments” that were derived from them more profitable than actual productive investment, thus they offered more and more loans. After the market crash in 2000, the banks were forced to lend at cheaper rates. To make the same profits their shareholders had become accustomed to, they had to issue more loans. A saturation point was finally reached where workers could not afford any more loans, and started to drown under this excessive debt. At the same time, unsecured speculative lending and recklessly risky investments in derivatives left banks wildly overleveraged.
Now the US, European, and Japanese governments are bailing out the banks to the tune of trillions of dollars. But this means nothing in the context of a stagnant world economy. In order to extract more profit from the working class, we see the beginning of inter-imperialist rivalry that threatens to explode on an international scale as the race for raw materials and cheap labor pits the imperialists against each other. The massive displacement of manufacturing facilities into China and third world countries, to exploit the lower wages there and reap the benefit of the consequent higher rate of profit, has cut like a scythe through the gains of working class in the rest of the world. The crisis of the banks and the overall economy is so great that mass unemployment, which has risen to 9% in the US even by official estimates (meaning the real rate is closer to 16%), has not been enough to “stop the bleeding” and increase profits. These western finance capitalists running the US government, who have not hesitated to resort to wars, coups d’état, and punishing workers abroad, are now turning their guns on the American worker, stealing from our pensions, depriving us of medical care, and shredding the safety net for the poor and indigent.
What can workers do?
The Chapter 11 bankruptcy of GM has just been declared; there is still time to intervene!
We call on workers to organize factory committees to coordinate an immediate occupation of all GM plants and dealerships! Tear up the six-year no-strike pledge!
We can have no faith in the sell-out leadership of the UAW; only a revitalized democratic rank and file movement can lead us out of the crisis! An emergency delegated conference of representatives of factory committees must be convened to elect an entirely new union leadership.
Working class communities around the factories should be mobilized to defend the occupations; workers will need to prepare for self-defense against the reaction of the state!
The demand that will mobilize the rest of the working class to take solidarity actions must show the way out of the economic crisis.
Therefore we must demand: Nationalize GM under workers’ control and without compensation! Open the books to give workers full access to all financial information about their company! Workers must take control of all “bailout” funds used to shore up the company. Not a single worker should be laid off. All work should be shared among all those who can work, without loss of pay.
But we need workers’ control to make this happen. It is only under workers’ control that the auto plants can be transformed and retooled to manufacture the infrastructure for green power (e.g., wind turbines, solar panels, and electric vehicles) and clean and ubiquitous public transport (e.g., electric bullet trains and light rail systems). The workers could hire any specialists, such as engineers and designers, that they deem necessary to assist the transition.
Occupations of auto factories aimed at implementing these demands will inspire the entire working class to follow suit, and will be a beacon to the workers of the world, even in China. The international economic crisis is propelling the working class around the world, in countries like France, Greece, and Peru, into massive struggles.
If the UAW rank-and-file undertake mass actions like sit-ins; if they fight for workers’ control and confront the state and its forces of repression as they did in the 1930s, this will provide inspiration for every worker in the world, particularly the many workers in the semi-colonies who produce parts for GM. Nothing could be more inspiring than seeing a key sector of the workers in the belly of the beast take the lead in the struggle to smash US imperialism.
Around the world, every workplace needs to set up factory committees, and these committees need to be united with delegate council meetings in each industrial area, right up to national and ultimately international level. Such structures would be the precursor to the launching of a fighting workers’ party in the US that unites workers across nations, one that sees the struggles of the workers around the world as their own. This is a scenario out of which the Fourth International can be reborn, and all the power of JP Morgan Chase and Citibank be shown for naught, to be as fictitious as the capital their paper accounting purports to represent.
The capitalist class long ago ceased to be progressive. Only the working class has a material interest in rational planning for progressive growth of the productive forces. Capitalist anarchy is all that stands in the way. The time has come for the US working class to put its stamp on events and take a lead in the international struggle against capitalism.
In this struggle, the HRS, FLT and WIVL will be your ally!
Joint Leaflet of Humanists for Revolutionary Socialism (USA); Workers' International Vanguard League (South Africa); Leninist Trotskyist Fraction (Argentina, Bolivia, Brazil, Chile, New Zealand, Peru).
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