NEWS & LETTERS, June - July 2008
Sellout ends American Axle strike
Detroit--"I didn't walk the picket line for three months for this!" shouted a rank-and-file worker at the information meeting on May 18 to consider the concessionary contract negotiated between the UAW and American Axle. The applause and howls of support from the overwhelming majority of the workers present clearly demonstrated their opposition to the new contract that cut their wages, pensions, health care benefits, vacation time, holidays, relief time, union representation and right to strike--and froze their wages for five years, the length of the contract.
Yells of "Sellout!" and "Renegotiate!" met the disclosure of the contract's details. Wages were cut almost in half, from about $27, and now start at $14.35 at two plants and $l0 at another. The company will also close two of its five plants in the U.S., the Forge plant in Detroit and one in New York.
Pensions will be frozen in January 2009, replaced by a 401(k) plan. Health costs will be $l0 a week for single workers, $25 for family members. Overtime pay is eliminated for work over eight hours a day short of 40 hours a week, and relief time is cut from 23 to l5 minutes.
Strikes will be prohibited for speed-up, health and safety issues; subcontracting or bargaining in bad faith. There are changes in the grievance procedure to favor management, and more workers are assigned to each committeeperson.
UAW officials were booed when they tried to placate the workers, insisting that this was the best contract possible under the circumstances. Knowing that the workers no longer trusted them, the UAW brought in a Lehman Brothers financial expert to back them up with financial data. Axle made a profit last year of $37 million and would make a projected annual profit of $185 million from the workers' concessions.
He also raised the specter of the company moving operations to Mexico, where it has a plant that doubled its production during the strike. That helped relieve some of the pressures from GM, Axle's main customer, to settle the strike.
When the strike first started, the union and many workers thought it would be a short one, since GM would pressure Axle to settle in order to have the axles to produce its trucks and SUVs. But the strike dragged on for three months until a tentative agreement was reached. While angry and frustrated, the Axle workers nevertheless reluctantly approved the contract on May 18 by a surprising 78% margin.
Many of them will now be taking buyout plans the company has in place to cut some 2,000 workers from its payroll. The workers who remain, however, will feel the full brunt of their decline in living standards. National inflation nearing 4% will raise their cost of living for every one of the next five years, but their wages will not change. Twelve cents per hour from workers' wages will be diverted into the COLA fund, so they will be paying more here too for inflation costs.
In stark contrast to this dire outlook for the Axle workers, the top executives of Axle will be able to enjoy obscene incomes. CEO Dick Dauch of Axle received a bonus of $8.5 million to bring his total compensation for the year to $l5.7 million. Three of Dauch's top executives also received an average bonus of a half million dollars each.
The expression used by management during the strike was "We're all in the same boat." The executives may be in the boat (or yacht), but the workers are drowning in the water.
--Andy Phillips
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