4-04-06, 9:24 am

There is a very dangerous development in U.S. labor relations which was reported and then buried in the mass media over the last few days. The Delphi corporation, a major auto parts supplier to General Motors, has proposed to a Federal Bankruptcy Court that it 'rewrite' existing labor contracts to sharply reduce wage rates and benefits presently in effect. The dangers involved in this 'proposal' should be fairly obvious and widely discussed.

While this has happened with airlines, such a development in the auto industry would have far greater ramifications. Specifically, Delphi in what appears to be an alliance with GM, is attempting to reduce wages. At present workers receive $28 an hour, which is the standard of the GM contract. The reported Delphi 'proposal' would cut this wage over a two year period to $16.50 along with benefit cuts. Delphi has also suggested that a $50,000 be given to workers to 'compensate' them for these losses. The press speculated that GM would put up the money, a sort of 'rebate' to workers, who would lose much more than $50,000 in wages and benefits over time in their jobs, if of course they kept their jobs.

Karl Marx contended in Capital that capitalists essentially do business with each other, in effect creating both the products and their prices, the former created entirely by labor, the latter developed to achieve the maximum profit after they have deducted wage, machinery, and raw materials costs.

Although there is a union here, GM and Delphi are doing business among themselves and see the union as a hindrance to their business relations. That GM no longer controls Delphi, a former subsidiary, limits GM’s liability and makes it harder for the UAW, an industrial union to deal with both. While monopoly concentration is always both capitalism’s natural developmental tendency and long-term strategic goal, questions of centralization vs. decentralization, ownership vs. divestment, like questions of protectionism vs. 'free trade,' are always tactical questions linked to gaining or maintaining 'competitive advantage.'

Toward this end, individual employers, companies, and the capitalists as a class seek to reduce labor costs as much as they can get away with in good times and bad. The fact that workers have gained next to nothing from the huge GDP expansion of the last 25 years while corporate profits have soared is evidence both that the 'market' is in no way self-correcting and that passive acceptance of 'deindustrialization,' negotiating givebacks, wage freezes, work rule changes, etc., which has been labor’s real policy for nearly 30 years, only accelerates individual workers and the labor movement’s marginalization and decline.

If corporations can get the judiciary to overturn negotiated collective bargaining agreements, they can largely destroy collective bargaining and take labor relations back to the pre-New Deal period, a goal that they are been advancing since Ronald Reagan became president. While they are by no means in a position yet to do this, both the present administration’s extreme anti-labor positions and decades of right-wing Republican court packing of the federal judiciary makes such an outcome a real possibility.

Along with the reduced contracts, Delphi also plans to sell or close 21 of its 29 U.S. plants, including one in New Brunswick, New Jersey. In Ohio alone, media reports are the closings would cost 7,500 jobs.

There are a number of issues here that labor should address. First, the dialectic of escalating interactions between huge wage and benefit cuts and plant closings and job loss which has characterized large sections of the U.S. industrial economy since the 1970s is being carried forward here without even any pretense of reviving the domestic economy and bringing jobs back. Robert Miller, Delphi’s CEO, explained the company position thusly: 'emergence from Chapter 11 requires that we make difficult yet necessary decisions. These actions will result in a stronger company with future global growth opportunities.' Such arrogance has become the norm for corporate leaders, as it was in U.S. history until a militant and radicalized labor movement wiped the smirks from business leaders faces in the 1930s.

While some union activists have called for an immediate strike, others have contended that a strike might drive GM, which is losing money at the moment, into bankruptcy and lead to all GM workers suffering the fate of the Delphi workers.

The 'neo conservative' pundits in labor management scholarship have come forward in the media with their usual 'neo' conventional wisdom that these events show that 'traditional unions' are no longer viable, a point that have been making since the 1980s. Instead, these 'industrial relations' analysts contend that the UAW can’t do much of anything and will definitely lose more influence unless it begins to rethink its whole relationship to collective bargaining and act more as a 'social worker' to and for workers and a buffer and de facto supervisor for workers.

The dialectic of labor costs and globalization makes all of this inevitable for these industrial relations pundits, who are largely restating CEO Miller’s contentions, in a more abstract manner. Karl Marx, one should remember, made the point that capitalists themselves are often more honest and direct in explaining their actions than the economists and other thinkers who rationalize and apologize for their acts.

I call these writers 'neo conservative' to distinguish them from older conservatives who simply saw unions as barriers to the working of a free market, 'monopolies' taking away workers 'freedom' to sell their labor. Just as the 'neo conservatives' guiding Bush administration foreign policy hail imperialist conquests as the necessary expansion of freedom and democracy, so these industrial relations writers see downward 'restructuring' of wages and benefits and the limitation if not elimination of trade union power to bargain over wages and benefits independently as a necessary adaptation to '21st century globalization.'

Besides the 'neo-con' labor analysis, the media has focused on the human interest aspects of the story, that is, workers explaining how their lives are being devastated and comments that the plant closings and wage cuts will sharply reduce the tax base for affected communities, negatively impacting everyone in those communities in terms of public education and other necessary social services.

But there is something that labor can do about this situation if it is militant and class conscious, an activist rather than an onlooker to events, seeking a 'new deal' rather than merely playing out a bad hand to inevitable defeat.

CEO Miller spoke of 'difficult and necessary decisions,' by which he meant negatively impacting the lives of thousands of workers, tens of thousands of people in communities, and eliminating thousands of jobs. Another example of a 'difficult and necessary decision' would be to do what the Social Democrats did in Europe after World War II, that is, nationalize and run certain plants and firms in the red in order to maintain jobs, purchasing power, and living standards. While such policies were in effect buyouts and bailouts, as the Communists rightly contended, of capitalist investors, and were not really socialist policies, they were a necessary and vital policy to keep the devastation and decline created by WWII from undermining postwar reconstruction and reconversion.

In the U.S. today, there are few political parties with the political commitment to nationalize anything, beyond the police power of the state. However, there are other ways to achieve these ends. First, workers and community activists can mobilize to buy plants threatened with foreclosure at the local level. This is being done today in communities, for example, in Youngstown, Ohio, steelworkers with their union and community allies purchased Market Forge, a facility on the verge of clsoing. Here the labor movement can use its political influence to get local governments and state legislatures to assist in these activities.

The plants that a company like Delphi plan to close can be taken over at the state and local level and the union can use its power with GM and other automakers to keep from sabotaging the effort buy refusing to purchase parts.

Nationalizing firms like Delphi or General Motors for that matter would require the creation of a mass labor party, something like the British Labor Party when it nationalized the Steel Industry after World War II (when it was committed in principle to the long-term development of a 'Socialist Britain') unless of course the Democratic Party could somehow transform itself into such a mass labor party.

While I have very strong doubts about that happening, one should remember that the Democrats, the oldest continuing political party on earth under the same name, were calling themselves 'the Democracy' before the Civil War when they represented the interests of slaveholders and were led by slaveholders like Andrew Jackson (the party’s founder) James K. Polk (the architect of the conquest of the contemporary Southwest) and non slaveholders like Franklin Pierce and James Buchanan ('Northern men with Southern principles' they were called) who were supportive of the slaveholders.

They were able to make the painful transition after the Civil War from supporting slaveholders to supporting capitalists, even though it meant having minority party status until the Great Depression. When they attained majority party status, it was largely because they, or rather the New Deal government of Franklin Roosevelt, became associated with working-class gains and interests. It is unlikely, although not impossible, that they can make the transition from supporting capitalist interests narrowly to supporting working-class interests at least on the level that European Social Democrats did in the past.

Certainly, it would be the only way that they could regain majority party status in the present political system, since labor’s decline has dialectically stimulated their decline and their failure to act to defend labor’s rights has accelerated labor’s decline.

There are historical examples of labor calling for public ownership. Walter Reuther called for transforming the war production plants built with public funds and using public planning during World War II into publicly owned and operated industries that would produce vehicles for a greatly expanded public transportation system and other goods and making permanent the millions of new jobs that war production had made.

While the public ownership plan was never enacted – the plants, which had been 'leased' to companies like Ford, were sold off to those firms after the war at a fraction of their cost – it was an example of what labor could advocate and seriously put forward. Reuther’s victory in the UAW leadership struggle and his ruthless purge of Communist trade unionists helped to bury his plan for a postwar public sector of the economy.

We still have a war economy as we have had since World War II, and a government that is on the lookout for wars to sustain and expand it. That war economy has been exporting millions of jobs outside of the United States since the 1970s and using cheap imports and a mountain of public and consumer debt to cover up the decline in working-class living standards and quality of life.

Public ownership of companies like Delphi, while not a long-term solution, is an act that would inform corporations that they cannot close plants and eliminate jobs by thousands as they see fit and that labor is seriously coming back and fighting back. It would also convince tens of millions of workers, both inside and outside the labor movement, that there is something they can do to both protect themselves and advance their interests.



--Norman Markowitz may be reached at