The Other Shoe Drops

    No, I'm not referring to the indictments in the Plame affair (as I write this in the a.m., nothing announced other than it looks as if Rove might skate and Scooter will take the hit). It's Delphi's next shot at the UAW.

    You may remember it was the bankruptcy filing of Delphi that triggered the demand on the part of General Motors--which under its spin-off agreement with Delphi would absorb many of Delphi's liabilities--that the UAW agree to health care cuts in its members' benefits. The Wall Street Journal is reporting today (subscription required) that Delphi is not only demanding that wages be slashed from an average of $25 an hour to $9 an hour (!!!). It also is aiming at the heart of the UAW's ability to keep the work union by demanding big-time rights to outsource the work.

    It's one thing to have to sell painful concessions to your members but quite another thing to consent to a demand that will rip the heart out of the union. And if the UAW doesn't agree to these provisions, the company will seek to terminate the union contracts on January 17th.

    I don't see how the labor movement can stand by and allow Delphi to use the bankruptcy court, to toss away its union contracts without igniting some major disruptions. Is Delphi the new PATCO moment?

    Here's the beginning of the article:

Delphi Seeks Far-Reaching Givebacks
By JEFFREY MCCRACKEN
Staff Reporter of THE WALL STREET JOURNAL
October 28, 2005

Delphi Corp. is demanding concessions from the United Auto Workers beyond wage and benefits cuts that could, if implemented, undermine its ability to organize new members and hasten the dwindling of the once-dominant union.

In an offer put to the UAW on Oct. 21, the largest U.S. auto-parts supplier -- which filed for bankruptcy-court protection earlier this month -- said it wants to reduce wages from an average of $25 an hour to around $9. But a summary of the company's demands reviewed by The Wall Street Journal shows Delphi also wants greater leeway to hire nonunion temporary and contract workers without union input and to buy materials and parts from nonunion subsuppliers.

Delphi also is proposing to move large numbers of traditional union jobs outside the union's protection; jobs such as machine repairmen, carpenters and tool builders all would be outsourced to other companies."

Comments

[Brennan]

I'm all for doing something, but what do you do? Unions don't have a lot of power over the judicial process or bankruptcy court, to my knowledge, and aren't secondary strikes illegal? Boycott Delphi? Well, that doesn't seem to be possible. I haven't posted much on this because I honestly don't know what levers can be pulled. Any ideas? What do you suggest, JT?

[Bill Pearson]

How about roving pickets following the bastard running delphi and all his henchmen. They can pass out handbills everywhere he goes that state...Destroying American Workers...One Worker at a Time. Then feature individual pictures and stories of the hundreds of workers he is cutting their heart out of. Follow him to his church, out to dinner with his wife, to his clubs, social events and business engagements. Make the goddamn fight personal and in his face. Ruin his overpaid and bloated life just like he is doing to the workforce at Delphi. It's time to quit playing nice with our "business partners," and just start pissing back.

[Elly (UAW retiree)]

Folks to this blog might be interested in a statement put together by active and retired workers from GM and Delphi, entitled "Protect UAW Retirees: Their future is Our Future." It can be found on several websites:
www.mrzine.monthlyreview.org
www.uawndm.org
www.futureoftheunion.com
www.greggshotwell.net/LBA/php

[Roy]

Miller is daring the UAW to strike Delphi knowing that if they do it would shut down GM, moving them closer to bankruptcy and the ability to jettison their legacy costs. Last week a UAW Vice-President said they would probably strike Delphi anyway.

[Joe Hill]

The strategic problem here is "global competition": Delphi does not believe they need the 33,000 US workers now that they have 145,000 Chinese, Mexican and other workers abroad working for much less (ten times less in many cases). These are the chickens coming home to roost after the US labor movement's collective failure to undertake a serious global organizing effort. We let the multinationals build their overseas empire undisturbed, as long as they kept our plants open and our wages and benefits high, and thought that the low wages and sweatshop conditions overseas were someone else's problem. Now we see, it is our problem, and we are in no shape to deal with it.

So is there nothing to be done? There is no quick and easy solution, and we may not be able to save the wages or benefits of the 33,000 Delphi workers and the thousands of GM retirees in this round. But we can at least begin to improve our strategic position for the next round, by building the global union networks capable of taking on these corporate monsters.

How is this to be done? Quite simply, by looking at each industry sector and multinational company globally, finding where it is vulnerable to collective worker action, and then working to build the capacity to hit them where it hurts. This is not the kind of "labor diplomacy" that was created by the AFL and the US Department of State in the post-WWII era to fight the Cold War, or the kind of "social dialogue" favored by the European unions and the "Global Union Federations" that they dominate. This is good old-fashioned internationalist trade unionism, in which "workers of all countries unite, you have nothing to lose but your chains".

Can it be done? Look back to the UPS strike of the 1995 to see how powerful united worker action across borders can be. This was perhaps the best combination of US worker mobilization, public presentation and cross-border union action our labor movement has ever seen. French, German, Dutch and other European workers took militant job actions in support of the UPS strikers, and threatened the company with a huge loss in their fastest growing market. This is the kind of threat that companies like Delphi and GM will understand and take seriously, and like UPS, sue for peace.

Of course there are many difficulties in achieving the capability of joint action with workers in other countries, where labor movements are sometimes corrupt and often suppressed. But it is not impossible, as numerous recent examples (mostly in the textile industry, with campaigns against Nike and Gap, driven by the student "anti-sweatshop" movement) have shown. What it takes is commitment and vision, and the assignment of serious resources to the task.

If there is nothing else that can be done, why don't we try this?

[John Taylor]

Hell, these guys are going to make Delphi functionally non-union if they get their way. As Gregg Shotwell, a Delphi worker, put it in Labor Notes "what do you need a need to barter concessions for?".

Better to shut them down before it moves on to the GM, Ford, and Chrysler. Or work-to-rule like in the old days.

[John Taylor]

Getting sloppy in my old age. That should say
"what do you need a union to barter concessions for?".

[John A. Joslin]

J.Hill....... a good idea! ... good practice for trying it out might be figuring out ways for workers in this country to start working together a bit. On the other hand ,if you think we can't do that here ,but might have some talent for pulling it off internationally...you are pushing me close to the limits of my weekly ration of optimism. BUT, you may be right ... !! I just may need to see my OWN union card stamped " "worthless " before I can latch on to the big picture. That shouldn't be too far off.- J.Joslin,( still clinging to the wreckage in Detroit)

[Ty]

I like Joe Hill's post. What we need in the long term is a serious effort to organize internationally, as well as to organize the millions and millions of unorganized workers in the retail and service sectors. Organize, organize, organize!

But what about the immediate fights? Any long term international solidarity campaign mounted by the UAW or any other union, as necessary as it may be, will be too late to save Delphi workers. I think the UAW would be better off striking until Delphi closes up its American plants than giving in to concessions (especially if the concessions will effectively make the plants non-union in the near future).

The US is not the only country losing it's manufacturing sector. It's happening in Latin America too. And what are workers doing in Latin America? They're occupying the factories that would otherwise be idle, and running them themselves.

Sure, that's no simple thing to take on, but the situation in the American auto industry is reaching crisis proportions.

For more discussion of this (fledgling) idea, see http://www.sindicalista.blogspot.com

[Steve Diamond]

FYI.

Oct. 18, 2005

Financial Times

Everyone knew a hard rain was going to fall on Delphi

From Prof Stephen F. Diamond.

Sir, Steve Miller, restructuring artist and Delphi chief executive, says Delphi is broke and is demanding unprecedented wage cuts from its union workforce. To get his way, Mr Miller is attempting to use the bankruptcy laws as a sword to attack his workforce. As John Gapper wrote ("The danger of rewriting Chapter 11", October 13): "Organised labour, meet organised capital."

But there is a deeper story here. Delphi was created as a spin-off of the disparate parts (so to speak) of General Motors' internal parts supply divisions. A central purpose of the spin-off was to enable the new company to put greater pressure on its unions to cut wages and benefits.

The transaction was actually quite similar to the the privatisations of state-owned companies as a result of various forms of "shock therapy" in countries such as Russia, Poland, and China over the past decade.

Privatisation allows the capital markets to carry out the attacks on labour that politically sensitive governments are unwilling to undertake. Delphi made this clear to anyone willing to listen and said it explicitly in the prospectus it prepared for investors in its 1999 initial public offering.

But it also noted that it was losing money at its birth and that it faced liabilities associated with an under-funded pension plan. And it has remained overwhelmingly dependent on its biological parent, GM.

In a sense, then, Delphi was never really an independent company. It was, from the beginning, a political ploy to divide and conquer the GM workforce - a scheme hatched by GM officers and directors and carried out by GM representatives who controlled the Delphi subsidiary.

The key was sending Delphi off on its own but on a very tight
string - those losses and pension obligations hung over the newly born company like a dark cloud on a warm humid Detroit afternoon. Everyone knew, as Bob Dylan might have put it, that a "hard rain was gonna fall".

And now, apparently, it has. Nonetheless, there is a way out. GM remains not just solvent but positively flush with cash - more than $50bn at last count, and, as Mr Gapper noted, Delphi itself, far from being "bankrupt" in the ordinary sense, has a two-year supply of cash, apparently more than enough to reward its senior officers with bonuses for staying on the job figuring out what to do with all that cash.

Delphi belongs back inside GM, not in a bankruptcy court. Instead of rewarding its executives, the court should toss the case out, and together GM and Delphi should find another way to solve their problems rather than taking them out on the backs of American workers.

Stephen F. Diamond,

Associate Professor of Law,

School of Law,

Santa Clara University,

Santa Clara, CA 95053, US

[Ben Davis]

I would agree with Joe Hill, and also point out that in Mexico the Border Workers' Committee (www.cfomaquiladoras.org) has been working for several years to help workers at Delphi in Reynosa organize an independent union (these workers are making $70 per week, by the way). Of course, Delphi hs more than 50 plants in Mexico, most dominated by corporate unions linked to the Institutional Revolutionary Party that are not known for either internal democracy or defense of workers' rights. But where independent organizing efforts exist, they deserve much more support from the U.S. labor movement.