Everything’s on the Line at AAM

Against the Current, No. 134, May/June 2008

Dianne Feeley

THE STRIKE OF 3,600 UAW-represented workers at American Axle and Manufacturing plants in Michigan and New York has forced the idling of more than 40,000 workers in 30 GM plants and shut down a number of parts plants throughout North America. Eighty percent of AAM’s axles, chassis components and forged products are shipped to General Motors, but AAM also produces parts for other automakers, including Chrysler and Toyota.

As snow was falling, third-shift workers walked out just after midnight February 25. Most were prepared to strike, thanks to the company, which announced at state-of-the-company meetings that wages and benefits needed to be slashed — an incredible 50%! — from the current $24 per hour, itself the product of an earlier concessionary contract. Yet AAM workers know the companyis profitable.

Through the winter’s snow, bitter wind and heavy rain, strikers have picketed plant gates at five facilities in Detroit and Three Rivers, Michigan and Cheektowaga and Tonawanda, New York. A sixth plant in Buffalo, despite “NO PLANT CLOSING” language in the 2004 contract, sits “idled.” Over the course of the two months the pattern of negotiations has been to start, recess and restart, but talks haven’t moved far from square one.

UAW President Ronald Gettelfinger has denounced CEO Dick Dauch for demanding concessions while his compensation package over the last 14 years stands at more than $257 million. But in the face of Dauch’s running ads for scabs, using his foremen to assemble axle shafts for Toyota, and trucking axles from his plant in Mexico, the UAW International has been pretty passive.

The Background

At the end of the 2004 negotiations only one plant, Detroit Gear and Axle, turned down the two-tier contract. While nine out of ten members on the bargaining committee voted for the tentative agreement, UAW Local 235 President Wendy Thompson supported the membership in opposing two-tier wages because they destroy solidarity, the basis of unionism.

Even before the “highlights” of the tentative agreement were published — and despite the opposition of the Local 235 Shop Chair and his appointed representatives — Local 235 members produced, distributed and wore a “No-2 tier/Solidarity Forever” button. One worker in my department commented, “Voting for two tier is putting a bull’s eye on your back. The company will do anything to replace you with a lower-paid worker.” Many concluded that once the bonds of solidarity are broken, veteran workers couldn’t expect new hires to preserve their pensions and health care benefits. We voted the contract down.

But other locals, including workers at the Buffalo plant, voted the contract up, hoping that by accepting concessions they would be able to keep their jobs. After all, that was the UAW International’s line. What the UAW leadership doesn’t “get” is that their surrender fuels corporate confidence to attack further, even at “profitable” companies like AAM.

Givebacks also undermine the drive to organize the growing sector of non-unionized autoworkers. Why support or join a union that is willing to take concessions?

Even with “NO PLANT CLOSING” language in the 2004 contract, the Buffalo plant was shut. So many concluded that concessions don’t stave off plant closings. As Kevin Bushouse, executive board member of Local 2093 at Three Rivers, remarked, “Why should I give Dauch money from my paycheck to shut down the plant? If he’s going to shut it, let it not be on my dime.”

In 1994 GM sold the plants to Dauch, a former executive. At that time most GM workers transferred out, so today’s work force is relatively young. Even though working conditions have deteriorated over the life of the last contract, buyout packages have not enticed a flood of applicants. There’s one exception, however: when the Buffalo plant was idled, all but 75 opted for the buyout. Given AAM’s relentless downsizing of these plants, and given a youthful work force, the two-tier agreement didn’t net the corporation much. The 100 or so second-tier workers hired in have subsequently been laid off.

Currently the base pay for AAM production workers at the former GM plants is $24 an hour plus cost of living (second- and third-shift workers also get a shift differential). Skilled trades earn approximately $5 an hour more. (Second-tier workers came in at $14.50 an hour.)

Dauch wants to half production wages, reduce skilled trades wages by more than $5 an hour (which would be a first in the auto industry), cut benefits and eliminate 1,000 more jobs — after having eliminated 2,000 since 1994. The company wants to “initiate capacity rationalization and production idling” of both New York plants by the fall of this year and move on to Three Rivers by September 2009.

Threats and Resistance

Although the former GM plants produce quality parts and on-time delivery, Dick Dauch has been moving work to plants he has built or acquired since. He bought MSP Industries in Oxford, Michigan and Colfor, three plants in Ohio. Although the UAW represents workers in those plants, they operate under inferior contracts with different expiration dates, earning $14 an hour.

Dauch’s latest ploy has been acquiring a factory across the road from MSP, planning to operate it non-union. He’s moved forging machinery from plants in Tonawanda and Detroit and plans to hire 200 workers at $10 an hour. A guy with lots of chutzpah, he applied to the Oxford City Council for a $7 million tax abatement on the basis of creating jobs. Editors of the rank-and-file “Shifting Gears” newsletter organized a petition campaign against the request. A couple of days before the city council vote, AAM withdrew their letter, undoubtedly because of the successful petition campaign.

Dauch has also built plants in Mexico, China, Brazil, bought a plant in Scotland and set up offices in India. He has thundered that he’ll move all his work to Mexico and China, but this isn’t a serious threat. AAM doesn’t produce small parts that can easily be transported, but large components.

Workers and auto analysts alike understand that transporting axles from the middle of Mexico up to a plant in Oshawa, Canada or Janesville, Wisconsin isn’t cost- or time-efficient. Of course Dauch’s run this game before, putting axles designed for a Pontiac, Michigan plant in Mexico, then working out a deal with the Three Rivers local for concessions in order to bring the axle to where it logically belonged.

Dauch is one of the auto industry’s most highly paid executives. In the middle of the strike AAM announced Dauch’s 2007 compensation package was $10.2 million, a 9.6% increase over the previous year. The next three highest-ranking executives received raises ranging from 6.7% to 27%.

A former Purdue University football player, Dauch is driving for a field goal. He seems to have kept GM off his back by telling them any concessions he’s able to get, they’ll be able to win in their next round of negotiations. So GM has been shuffling parts to various plants, closing one and opening another in order to keep producing the hottest-selling brands.

Solidarity Grows

Meanwhile strikers have been overwhelmed by support from other UAW locals in their regions. Chrysler workers, who almost defeated a concessionary contract last fall, are stalwarts. When UAW Local 140 mobilized to come to the two Detroit plants over Easter break, they brought both a bullhorn and their grill. After marching to all the gates and rallying at AAM headquarters, they set up their grill and served lunch to everyone!

In Detroit community groups, including Michigan Welfare Rights Organization, Detroit Greens and MECAWI, an antiwar group, come out to picket weekly. Centro Obrero has brought trade unionists from Mexico to meet strikers. In Three Rivers, workers from a GM plant in Fort Wayne, Indiana are regulars. The New York plants report similar support. Everywhere people arrive with material aid: food, money from various treasuries and plant-gate collections.

On April 12, during the Labor Notes conference in Dearborn, about 250 attendees (one-quarter of the conference) took three buses and more than 30 cars and vans to the Detroit gates. Strikers were amazed that unionists from around the country, and around the world, joined them. After walking the picket lines and organizing an impromtu rally, conference goers came away with knowledge of the strike and a committed to building support. United Healthcare West went back home and voted $5,000 for the strikers. Their next step: involving Central Labor Councils.

In glaring contrast, the UAW International called off a mass support rally scheduled for April 18th in downtown Detroit — because Dick Dauch asked them! Strikers were looking forward to a big turnout, and want the support rally rescheduled.

Meanwhile, UAW Local 235 passed a motion to rally in front of corporate headquarters on April 24, the day of the annual stockholders’ meeting. Then negotations took a turn for the worse and the press announced the time and place of the rally. UAW Region 1, the largest region in the UAW, called locals the day before to encourage them to turn out members — and they did. Strikers and supporters marched from Local 235 down Holbrook Avenue to “The Glass House,” spilling over into the street. They shut down one of the two driveways; shareholders were able to attend the meeting only under police escort.

A group of strikers who hold stock also entered AAM headquarters. In a meeting with Dauch they told him what he was demanding would cost them their homes and their children’s future. He repeated his mantra about needing to be competitive.

Two months into the strike morale is high. Strikers want to put on more “street heat” and avoid the possibility of a tentative agreement containing a big up-front signing bonus, large buyout and buydown packages but a cut in wages and benefits. Most realize the bigger the bonus, the more management will steal from their back pocket.

Last contract AAM workers received a $5,000 signing bonus, the largest ever offered in the auto industry. The local president calculated that if workers never took another concession, and worked 20 more years, the failure to rollover the entire cost of living into their wages would result in loosing more than $90,000.

Lessons from the Strike

After walking the picket lines and talking with each other, strikers have forged greater unity between skilled trades and production workers and between the generations. Local 235 President Adrian King pointed out that the local needs to become more outward looking, involved in community issues and in supporting other strikes. Three carloads of Local 235 strikers have already traveled to Lansing, where they walked the picket lines at a GM Delta plant that makes hot-selling midsize sedans, and at Alliance Interiors, a recently unionized plant that makes carpets for the auto industry.

The strikers came to the union meeting with stories and photographs from their trip. They reported what they’d learned, particularly from the Alliance strike, where workers make little more than $10 an hour. The strikers, primarily young and immigrant, face aggressive security guards who escort scabs into the factory. There were no snide comments about undocumented workers, only concern over their tough fight.

AAM strikers are increasingly aware of the broader struggle they’re engaged in. The stakes at American Axle, with a relatively small number of workers in a once-leading industrial union, are high, but not just for the strikers and their families. They have drawn a line against concessions — a line that needs to be drawn. It’s past time for labor to wake up to the reality that “pragmatic” surrenders undermine everyone’s future.

For more information on Detroit strikers, contact UAW Local 235 at 313-871-1190 or UAW Local 262 at 313-874-5770. To contact “Shifting Gears,” a rank-and-file newsletter, write Wthomp4490@aol.com.

ATC 134, May-June 2008

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