UAW President Ron Gettelfinger spoke at the Michigan State University School of Labour and Industrial Relations in East Lansing, Michigan on April 10th on ‘Global Trading Practices and the impact on American industry’.
He said that ‘The UAW thinks it is imperative to have open dialogue and public debate on issues of importance and it is through forums such as this that makes those opportunities available.
‘So let’s get to the matter at hand: our perspective on the important issue of global trade and US manufacturing.
‘I can think of no more compelling example of the impact of global trade practices on US manufacturing than that of Swedish-owned Electrolux, once the largest employer in Greenville, Mich.
‘The Greenville community and the UAW welcomed the investment and commitment to US production by this European-based corporation.
‘Indeed, for years, Electrolux appeared to have a stronger commitment to the US economy than did traditional American appliance manufacturers who long ago made a conscious decision to source products by searching the globe for low-wage, union-free workforces.
‘Twenty seven hundred workers built refrigerators at the Greenville plant – 2,500 were UAW members.
‘It was a profitable plant with good productivity and high quality. Workers’ pay averaged around $15 an hour, or approximately $30,000 per year – hardly excessive.
‘Yet, the plant shut its doors last year because the company said they weren’t making enough profit.
‘The UAW offered to reopen the contract and was willing to make contract changes that would save Electrolux $31.6 million a year. Governor Granholm offered incentives and tax credits worth $120 million over 20 years.
‘And, the city of Greenville came forward with a proposal for new land and a new building, worth $30 million.
‘Electrolux didn’t respond to any of the offers. They simply said no. They wanted more.
‘Today, the company is building those refrigerators in Juarez, Mexico, just across the border from El Paso, Texas.
‘The company says that wages in Mexico are 10 times less expensive than the $13 to $15 hourly wage earned in Michigan.
‘An economist at Calvin College in Grand Rapids estimated that another 3,000 Greenville-area workers would also lose their jobs due to the multiplier effect of Electrolux closing.
‘Greenville has a population of 8,000.
‘To bring home the ripple effect of these plant closings, we can recall the testimony of David Doolittle, a member of UAW Local 137’s bargaining committee to a Senate Democratic Policy Committee in March of 2004.
‘At the end of his testimony, he talked about his daughter in college and two more kids who will be going in the next couple of years. He said he did not know where he would find another good-paying job.
‘David Doolittle described his worry about his future and his children’s future this way: “It’s like a stomach ache that won’t go away.”
‘The story of Electrolux sums up the horrific impact that global trade practices have on America’s industrial workers and their communities. And, it also exposes the broken promises of NAFTA, the North American Free Trade Agreement bet-ween,the US Canada and Mexico, which went into effect in 1994. Those who supported NAFTA in Congress – both Republicans and Democrats – said the agreement would create jobs in the United States and would raise the living standard for Mexico’s workers.
‘But, that has not happened.
‘The Economic Policy Institute estimates that NAFTA alone has resulted in a loss of over one million US jobs.
‘And, since NAFTA, real wages in Mexico have been falling. And, to escape their country’s poverty, workers from Mexico continue to come North looking for jobs to support their families.
‘Numerous economic studies have demonstrated that real Mexican wages – wages adjusted for inflation and the peso devaluation – are just half of what they were two decades ago.
‘The extreme poverty rate for the Mexican people, which was unacceptably high before NAFTA, is now astronomical.
‘NAFTA, in other words, has had an adverse effect on both Mexican and US workers.
‘But, for some global companies, the wages in Mexico are not low enough. Many multinational producers are shutting their plants in Mexico and moving them to other countries in Central America as in the case of apparel, or, China and Southeast Asia which is especially true in electronics.
‘This has expanded the pool of Mexican workers desperate for viable employment opportunities.
Thousands of workers have flooded into the expanding auto parts sector in Mexico, putting further downward pressure on wages and living standards in this important industry.
‘But, even this is not enough for some auto supplier companies. Professor Harley Shaiken of the University of California at Berkeley tells of meeting two young women who worked at an automotive parts plant.
‘Their plant was relatively new with up-to-date technology and equipment. Productivity and quality were high. Labour-management relations were good.
‘One morning the workers were brought together and were told they had priced themselves out of the market, and their jobs were moving to China.
‘This plant was in Tijuana and these women and the workers there were making $1 an hour.
As Professor Shaiken noted, globalisation is creating a new reality for workers: instead of high productivity prosperity, the race to the bottom is creating high productivity poverty.’
Gettlefinger’s solution to this world crisis of capitalism and the poverty and super exploitation that it is bringing to the working class of the world is to appeal to the political leaders of the US ruling class to be ‘reasonable’.
He states: ‘The question becomes: Is globalisation an irresistible force of nature beyond our power to shape and control?
‘It is not. It is the result of conscious choices by government and corporate policymakers around the world.
‘And, in our view, US policymakers have made a number of wrong choices: NAFTA, CAFTA, the US- China PNTR agreement, and now, the proposed South Korea Free Trade Agreement.’
He states: ‘Rather than glorify this economic phenomena, as some economists do, we ought to pursue economic policies that raise global living standards instead of undermining them. As Governor Jennifer Granholm has eloquently stated, we need to level the playing field “up”, not down.’
This reformist appeal to capitalists not to act like capitalists has never worked and will never work.
This leopard can’t change its spots.
Instead the workers movement has to have a policy of defending every job, with a policy of occupations and with demands that ‘bankrupt bourgeois industries be nationalised under workers control.
The US workers movement must break with the two bourgeois parties and launch a Labour Party that will fight for socialist policies and a Socialist United States of America.
It must reach out to the working class of the world by conducting this fight nationally and internationally.
Leaders like Gettelfinger are incapable of leading this struggle to halt the race to the bottom by putting an end to capitalism.
Instead they believe in surrendering all of the gains of the working class in an attempt to appease the bourgeoisie.
This is why a section of the International Committee of the Fourth International must be built in the US to lead the struggle to defend the jobs, wages and basic rights of the US workers through organising the US socialist revolution.