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Socialist Project • E-Bulletin No. 702
September 27, 2012

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Culture of Concessions
Has Gutted Organized Labour

Sam Gindin

At the end of the 1970s, just before the era of concessions began, the U.S. section of the United Auto Workers included some 700,000 members at the Big Three (GM, Ford and Chrysler). In each subsequent round of bargaining, the union accepted concessions in exchange for the promise of ‘job security.’ Today, after three decades of this charade – sold by the union as well as the companies – there are 110,000 UAW members left at these companies, a stunning loss of almost 85 per cent of the jobs.

The Canadian section of the union resisted this direction for a time. In fact, it was tensions over the response to concessionary demands that led in 1985 to the Canadians breaking away from their parent and establishing the Canadian Auto Workers. As it turned out, the new union did somewhat better in terms of jobs for a significant period, but today their numbers too are dramatically down: from some 70,000 at the end of the 1970s to under 21,000 today, a fall of some two-thirds.

Since the early 1980s, real productivity in the Canada-U.S. auto industry (i.e. after discounting for inflation) has more than doubled. Real wages, on the other hand, have actually fallen in the U.S. and only increased moderately in Canada.

Worse for New Hires

For new workers, the change is even more shocking. An American autoworker hired at the Big Three today will be working at a lower inflation-adjusted wage than he or she would have gotten a half-century ago. In Canada, the real starting rate will now be 12 per cent below where it was when the Canadians split from the Americans a generation ago. And whereas new workers could expect to reach the top rate in 18 months then, they will now have to wait 10 years.

There are four crucial lessons to be taken from all this.

First, it is simply not credible to argue that concessions are a strategy for autoworkers ‘ultimately’ achieving a better life. Concessions not only increase inequality and dampen demand, leaving corporations reluctant to invest, but also are a diversion from addressing what really needs to be done to create jobs.

Second, the great productive potential of this sector cannot be met if we restrict that potential to making cars. With productivity improvements in the auto industry of 3 per cent per year when long-term demand is growing at less than 2 per cent per year, jobs will inevitably shrink over time – and this is aside from whether we really want or can sustain more cars on the road.

Rather than watching the disappearance of the productive assets we have in this sector, we should be talking about how to convert its flexible tools and equipment, creative engineering capacity and proven worker skills into meeting the obvious needs that environmental pressures will imply through the rest of the century.

Such transformations will have to include not just our energy and transportation systems, but also our factories and offices, the nature of our homes and appliances. This cannot happen, as experience shows, through reliance on markets and unilateral corporate decisions; a sustainable future demands placing some notion of democratic planning back on the agenda. (The technical feasibility of such changes was demonstrated as long ago as World War II when industries were converted to war production and back again in remarkably short periods.)

Renewed Labour Movement?

Third, it is hard to imagine a significant move in this direction without a push from a renewed labour movement. Unions themselves need to radically rethink their structures and role as representatives of working people. It isn't enough to lament corporate and government attacks or to look to better PR or technical fixes. Two-tier wages for the same work, for example, alienate the very young workers on whom unions depend for their revival, and that lack of solidarity within the workplace destroys credibility in promises of broader solidarities beyond the workplace.

Unions will have to demonstrate in practice that they are leaders in the fight for needed social services, that they have ideas for job creation, and that they are ready to put their organizational resources into winning such directions. The right has radically and aggressively championed an agenda that has brought greater inequality and greater insecurity for working people. Only an equally radical and determined response can reverse this course.

Finally and more generally, we must come to grips with the fact that private investment is not going to lead us out of the immediate economic crisis. Though productivity has grown and costs have been restrained, the resultant hordes of cash – as has been much noted – are only sloshing around in corporate treasuries or in the financial ether. Neither further cuts in interest rates nor tax cuts will change this reality. Only direct government intervention in massive infrastructural spending and the expansion of needed public services will create jobs – and induce the private sector, in spite of itself, to meet the consequent spending. •

Sam Gindin is retired from the CAW, where he served as assistant to the president. He is the co-author with Leo Panitch of the recently released The Making of Global Capitalism: The Political Economy of the American Empire (Verso, 2012). This article first appeared in the Toronto Star.


#6 SIOttawa 2012-09-30 12:16 EST
CAW Concessions
Thank-you Brother Gindan for your continued insight!

The CAW "proposals" for a two-tier pension system seems to have taken some resonance with the Harper Government:

Has the Canadian labour movement learned nothing from the student movement in the Province of Quebec?

#5 Pance 2012-09-27 10:44 EST
two quotes...
"What if I told you" is paraphrased from the Matrix movie... it's not an exact quote, but it sounds like something the Morpheus character would say to Neo.

And the second quote about "class struggle" is by Marx and/or Engels from the Communist Manifesto:

Hence the image of Marx (as Morpheus) reminding us all about the most important and inescapable fact of our existence in a class-divided society - class struggle.

#4 Garry Lawrence 2012-09-27 09:17 EST
Sam on the Mark(x) about Concessions
Insightful anaylsis - as usual. Our union bureaucrats are very short sighted not to mention stuck on reformist solutions to capitalism. I'm not sure the current crop of leaders have the political desire to rise their role in the capitalist system and ferment class struggle. Union activists must enourage young people - not be complicit in slashing their wages! I have faith in our youth to transform not just our unions but our society.

Nice picture of Karl too. Was that a quote from Karl or Sam? (I didn't see a reference) :-)

... gary

#3 Jim Reid 2012-09-27 09:08 EST
To blame concessions alone for job loss in the auto industry is a huge stretch that ignores key factors such as imbalanced trade, foregn competition producing vehicles in North America, hugely restrictive rights to organize, especially in US right to work states and the arrogant, narrow behaviours of D-3 companies that until 10 years ago put out an inferior product. As well the move to automation and outsorcing of everythng from parts production to who cleans the toilets has also been a key driver in the reduction of D-3 auto jobs.
It is the Unions reaction both in Canada and the US that brings into question their efficacy and their continued role of representing autoworkers both inside and outside of the Union. The previous CAW othodoxy of no concessions and fighting back has gven way to self preservation. To what end? We know that history teaches concessions beget concessions and that may be the most valuable point of the article. The question is what will stop the Union's slide to irrelavance.

#2 marjorie griffin cohen 2012-09-27 08:49 EST
Bravo Sam. Discussions of how to 'plan' for the future are crucial for redesigning our miserable system. Climate change and inequality will not be addressed with this mindless race to the bottom.

#1 David Lidov 2012-09-27 08:47 EST
What are specific examples of the kinds of products that car factories could be converted to manufacture?

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