THE UAW President Ron Gettelfinger has made a submission to the Congressional Roundtable on the Crisis in the US Auto Industry.
He told the Commission: ‘In the past few years, numerous auto parts suppliers, including Delphi, Tower Automotive, Collins & Aikman and Meridian, have filed for Chapter 11 bankruptcy, and are seeking to close plants, eliminate thousands of jobs, and slash wages and benefits for workers and retirees.
‘GM and Ford have announced their intentions to close scores of plants and eliminate 50,000 jobs. About 58,000 workers are expected to sign up for the attrition programs that have recently been offered by GM, Ford and Delphi.
‘Unfortunately, to date the Bush administration has displayed little interest in addressing this crisis. Indeed, the administration has tried to convey the impression that the overall industry is doing just fine, with any losses at the traditional Big Three automakers being offset by the new plants and jobs being added by Japanese and German companies.
‘The brutal truth, however, is that the US has lost 240,100 automotive jobs since February, 2000. Most of these job losses have occurred in the auto parts sector, as companies have increasingly outsourced their production to Mexico, China and other low-wage nations.
‘Our auto trade deficits have continued to climb, reaching $27.3 billion with Mexico; $50.2 billion with Japan; and $4.5 billion with China. GM and Ford have announced their intentions to double the amount of parts they source from other countries. Delphi and Visteon have already moved most of their operations overseas. And, at the same time Steve Miller is pleading poverty, and trying to use the bankruptcy process to close most of Delphi’s US operations and force huge cuts in the wages and benefits of active workers and retirees in this country, Delphi is continuing to invest heavily in expanding its foreign auto parts operations.
‘Delphi’s Vice President for operations in India recently stated that the company has $1 billion in cash for non-US operations, and “is not envisaging any issues for funding growth in India.” Since 1994, Delphi has invested $500 million in China; $380 million in Poland; $300 million in Singapore; $100 million in India. Delphi employs about 60,000 workers in Mexico.
‘The UAW submits that we are faced with two very different visions for the future of the American auto industry. One vision – articulated by Steve Miller – is that the bankruptcy process should be used to allow auto manufacturers and auto parts companies to shed their pension and health care obligations to workers and retirees, and to move the “foot print” of their operations from the US to other countries.
‘No one should be under any illusions about the implications of this vision for the industry. It means that eventually we will simply be left with a few assembly operations, with much of the content of vehicles being produced in other nations.
‘As a result, overall employment will be sharply decreased. And wages and benefits for those workers who remain will be slashed. Retirees will be left out in the cold entirely, with their health care benefits eliminated and pension benefits diminished. Auto communities across this country will be devastated. Of course, at the same time this is happening, the auto executives will continue to be showered with lucrative bonuses and other forms of executive compensation.
‘The UAW emphatically rejects this vision. We reject the notion that American auto workers and companies cannot compete in the global marketplace, and that our country will inevitably lose the bulk of its auto industry to third world nations. We reject the notion that the bankruptcy process is an acceptable mechanism for forcing change in the industry, and that the only way to keep a few auto jobs is through a race to the bottom in wages and benefits. And we reject the view that American workers can no longer aspire to have a piece of the American dream.
‘Our vision for the American auto industry is quite different. The UAW believes that American auto workers and companies can compete and win in our global economy. We believe this can be accomplished if the workers, companies and the federal government join as partners to pursue policies that encourage investment in the production of cars and trucks of the future – investment that can create tens of thousands of high-skill, high-paying jobs, while at the same time providing a path towards greater energy security and a cleaner environment.
‘To achieve this vision, the federal government needs to change course and follow a different path. It needs to stop pursuing policies that punish domestic companies and their workers, and that actually encourage the movement of production and jobs overseas. Instead, Congress and the administration need to pursue policies that establish a level playing field in the industry.
This includes fair trade policies that:
• put an end to unfair currency manipulation by other countries, which is being used to make U.S. built vehicles less competitive by thousands of dollars;
• require other countries to dismantle their tariff and non-tariff barriers that effectively keep their auto markets closed to U.S. built products; and
• require other countries to honour internationally recognized human and worker rights.
It also includes health care reforms that:
• guarantee quality health care for all Americans;
• contain escalating health care costs; and
• provide equitable financing for legacy health care benefits so that retirees receive promised benefits, and older manufacturing companies are not placed at a competitive disadvantage.
It includes reforms to the tax code that:
• eliminate the incentives to shift production and jobs overseas;
l ensure that all auto companies are able to benefit from the incentives for domestic manufacturing that were included in the Foreign Sales Corporation (FSC) legislation that was enacted several years ago.
And it includes balanced pension reforms that:
• encourage better funding of pension benefits, without driving companies out of business or out of the defined benefit pension system. . .
‘To make sure that these types of initiatives will truly help to reinvigorate the US auto industry, it is essential that the incentives be tied directly to domestic production. In addition, the incentives must be structured so that all companies can participate in the programs, regardless of their current financial condition or tax status.
‘There must be a level playing field, so that all companies are encouraged to make investments in the US that will create jobs for American auto workers in building the vehicles of the future. We believe this can be done through various approaches, including properly constructed investment tax credits, as well as provisions that give companies the option of getting relief for their legacy health care costs.
‘In conclusion, the UAW commends you for holding this Congressional Roundtable discussion today on the crisis in the US automotive industry. We look forward to working with you and other Members of Congress to fashion measures to address this crisis.’
However, US capitalism is not interested in forming a partnership between trade unions, employers and the government to safeguard US automobile jobs, and the wage levels of US workers.
In fact the government and the employers are desperate to destroy the same, as their only sure way out of their crisis.
UAW members are demanding action to defend jobs. This will involve strikes, occupations and political action to break with the Democrats to establish a Labour party on a programme to expropriate the Big Three automobile companies.