Stewart Smyth reports as 50,000 US autoworkers continue to take a stand for better pay and conditions, solidarity builds across the sector, and Trump keeps shtum.
On September 16, nearly 50,000 United Auto Workers’ union (UAW) workers at General Motors (GM) plants across the US went on strike, and a Financial Times opinion piece about the strike read “Organised Labour Has Returned”.
Two weeks later and the strike continues making it not only the first strike for 10 years at GM, but also the longest at GM since the early 1970s and the longest at any US car manufacturer since 1982.
Many of the issues the workers are facing capture the zeitgeist of current US labour relations. There are bread and butter union issues such as underpayment and defending health insurance conditions.
The union’s top issue, and central to the strike, is the transition of temporary workers to permanent contracts and re-opening recently closed car plants, but their members are also fighting for a different kind of employer.
GM: an exemplar for our time
Following the financial crash of 2008, GM was one of the car manufacturers who went cap in hand to the US government to be bailed out. A year later, the company went into a government-back bankruptcy and received $49.5 billion in aid. Then in December 2013, the Federal government sold its shares for $39 billion; in effect giving GM a public subsidy of $10.5 billion.
Alongside this massive subsidy, GM management sought and secured “give-backs” from their workforce. In 2009, UAW members agreed to less funding for health insurance and increased use of temporary staff.
The years since the bankruptcy have been good to GM’s management and shareholders. The company has made nearly $22 billion in operating profit in the past three years alone, with shareholders getting dividends of over $2.2 billion each year. Even during the ongoing strike, on September 30, a quarterly dividend payment was made of $543 million – a whopping $11,000 for every GM worker going straight into the pockets of the shareholders, according to the New Hampshire Labor News.
The CEO of GM, Mary T Barra, is on a compensation package of $22 million, 295 times the average worker’s wage in GM, despite announcing the closure of 5 north American plants last November.
So far so typical – corporate greed trumps workers’ needs at every turn – and there are two other issues which illustrate how GM’s management is a product of our short-termist, financialised age. The company has been engaged in a long-term activity of share buybacks, whereby a company purchases and then cancels their own shares.
For shareholders this has a benefit of receiving cash, often at a very favourable price, for their investment. For management, share buybacks have the benefit of reducing the supply of shares and therefore increasing the price. This is especially attractive to senior managers as most compensation packages have a bonus-related element that depends on share price increases.
An economist calculated that between 1986 and 2002, if GM had held on to the cash instead of buying back shares, “it would have had $35 billion in 2009 to stave off bankruptcy and respond to global competition.”
But even since 2015, GM has spent another $10.6 billion dollars on buying back shares.
The priorities of GM management are clear – money that could be used to pay higher wages, or better benefits to workers, or to reduce the cost of cars or even spent on research and development to move more quickly to emissions-free cars, is funnelled into the pockets of private share-holders.
The point is further underlined by the issues being negotiated in the current strike, where management are being forced to talk about investing in new production by reopening plants, as part of the settlement agreement. An activity one might have expected to be part of normal business is now seen by management as a labour relations issue.
Unions get support when they fight …
The strike is generating solidarity in localities and starting to change the narrative about unions in car plants in the southern states. A local newspaper in Toledo, Ohio, reported how a pub in the city organised a show of support with a cavalcade of Jeep drivers past the GM picket line. Hundreds of members of different union branches were involved, accompanied by donations of pizza and hot dogs.
The importance of the GM strike is highlighted by one of the workers, Phil Reiter, from Jeep which is made by the Fiat Chrysler (FCA) group: “We could be next. We’re fighting the same battles”. “Toledo’s a blue-collar town. We’re a union town. We stick together”.
The UAW has tried to organise car plants in southern states that are owned by foreign companies (such as VW, Nissan and Mercedes Benz) for years, but southern US states have labour laws that are considerably more favourable to employers, as well as a deeply rooted ideological opposition to unions.
Thankfully the GM strike is challenging the prevailing ideas. As a worker, Kirk Garner, at the Mercedes-Benz plant in Alabama told Business Insider, “Most of the people I spoke with support the UAW on the issue. I have not had anyone tell me that they don’t support the UAW workers in their strike.
“Right now, all the automobile plants in the South pay them half what they pay a normal worker, so we feel their pain.”
… and Trump stays quiet
For such an important domestic issue, Trump has been very quiet during the strike, though this shouldn’t come as a surprise; an organised labour campaign taking off in key states that voted Trump in 2016 – GM is a major employer in Michigan, Ohio, Tennessee and Kansas – exposes the contradiction between his claims to be on the side of workers whilst also supporting the 1 percent.
Last November, Trump heavily criticised GM for the plan to close down four US-based car plants and maintain production in China and Mexico. Back then he was able to berate Barra for being unpatriotic, while wrapping himself in the stars and stripes. Although the closures still went ahead.
However, the strike poses pitfalls for Trump – if he were to attack GM management, it runs the risk of the UAW winning significant concessions, which undermines his longstanding position that unions do not advocate for their members.
One Family, One Fight
Across the picket lines, strikers and supporters have been chanting “One Family, One Fight.”
There is a wide recognition among workers in the car industry that what happens in the GM strike will set the precedent for the whole industry over the coming years. In part this is because the UAW negotiates with major car manufacturers on a four year-rolling basis and the UAW rolled-over the existing contracts with Ford and FCA, earlier in Sept.
With strong support for the strike from the rank and file UAW members and other supporters, and a GM management that is prepared for a protracted dispute, the strike looks set to continue.
Key to the outcome is what the UAW and local strike leaders do in building on the wave support they are currently receiving – escalation and solidarity actions are the next step.