It's auto showdown time.
As the April 30 deadline nears, we're entering the final week of negotiations between Chrysler and its union. GM is close behind with its June 1 drop-dead date. (Sorry the term is so applicable.)
As he sits at that negotiating table, CAW head Ken Lewenza faces a nightmare-scape filled with different ways to lose. What's a union leader to do?
Unfair as it may be, it's a dark road ahead, and sacrifices are going to be made. What are the offsetting gains that might come with them and sustain the best outcome for auto workers and Ontario taxpayers called upon to be generous in their support?
I'm hoping both union leaders and CAW members will be employing some new thinking as they truck on through the political and economic minefield ahead. If they are, they'll be saints in a land of sinners, because the other sides are offering up the opposite of a new perspective.
Judging by the media portrayal of the issue and listening to the likes of Tony Clement, you'd think CAW workers' wages -- yes, they're higher than non-union auto pay -- are the main cause of Chrysler's and GM's problems. But that's just blatant ideological big-business, Tory "never let a crisis go to waste" claptrap. It doesn't add up.
The union says assembly workers' wages account for just 7 per cent of the price of a Chrysler. But let's say they have it wrong and the number is really 10 per cent.
And what if the company were to succeed in lowering its wage expenses by a hugely ambitious one-third. The price of a $20,000 car would go down only $666. That inflated number is just not a game-changer.
We all know the issue isn't mainly price point. It's demand. People interested in hardy, well-designed, fuel-efficient vehicles haven't been looking to North American cars for decades. That's why the only hope for the badly managed Chrysler is to become Fiat.
But even then, it's clear that the free-flowing credit biz is responsible for a huge over-supply of vehicles now in the hands of North American drivers. And as demographer David Foot has pointed out, a population dominated by aging boomers isn't going to be snapping up new cars like in the good old days.
For that reason and more (think environment here), demand isn't going to match auto's pre-crisis numbers even when the economy improves.
So no matter what, there's no doubt that jobs aplenty are going down. But why would government justify its bailout of Chrysler and GM by beating down good wages and promoting as many layoffs as possible?
Surely, the social purpose of government investment would be the opposite: high wages and low unemployment. What Clement is demanding is a travesty of public policy. Easy to imagine the effect on auto workers.
Even without that provocation, CAW leaders and members could be expected to fall into their own typically self-righteous union culture of us all good, them all bad.
But these times demand a more enlightened perspective. In the world of mature relationships, nothing is ever completely one-sided. Yes, management has sucked among the Big 3. But how has the union contributed to the financial demise of the companies? And more importantly, what are the union sacrifices that will make a difference in the future?
Here's my three-point peace plan, and it isn't easy.
What to give
Since the days when Bob White was at the helm of the CAW, pension provisions have been the fondest flower in the union's bouquet. But that's where concessions are most required now if the auto sector is going to find the more nimble place it needs to survive in a diminished marketplace.
The financial crisis shows that you can't predict the future. Yes, when the province devised the 1992 loophole for GM in the Pension Benefits Act, it was wrong to lower the requirement for company funding. But how can a pension plan be affordable and still cover situations like the one we're now facing, with up to 40 per cent declines in investment values?
And how can companies with vastly declining job-holders be expected to carry a number of pensioners that potentially exceeds the size of its actual labour force? Here's where the numbers start to really fray on the union side. Some rejigging in this area will obviously make a huge difference to Fiat's estimation of the company's chances of survival. Companies acquiring other companies are averse to unknowable future liabilities for understandable reasons.
The CAW says its pensioners are being paid now for huge profits they generated while they were working, which may indeed be true. But the union must admit that it was mistaken if it believed it could count on such a deferred payment plan forever.
Most importantly, pension concessions must be made because saving Chrysler and GM from bankruptcy is all about public money. And the reality is that millions of people on this continent who are either near or at retirement age are facing huge pension losses because of the market downturn.
Taxpayers cannot be asked to come in and rescue only those who work in auto. Period.
What to go for
Risk and reward are demanding more public attention than ever before. Security has been the main concern of union members, but the fact is, they are engaged in the business world of making and selling cars.
A future auto sector, to be sustainable in a smaller, even more competitive marketplace, will need employees who are prepared to enter into a more entrepreneurial relationship with their employer. That means earning more when profits increase and less when sales are lower. That would be the prize to go for in return for pension changes.
Also, shares in return for certain financial considerations owed by the company are on the table, at least in the United States. The union should look positively at this, because once again, if the public is being asked to believe it's wise to invest in auto, the union and its members should do likewise.
I know this is a huge shift in thinking, but if I were Ken Lewenza I'd go further and seriously consider trying to leverage share ownership into a place at the boardroom table. That would be a good place to be to make sure the workers get a great deal while the company succeeds in its business mandate.
What to hold on to
Every cent of wages at the negotiating table. The reason? Knowing that huge job cuts are inevitable, I would embrace across-the-board job-sharing right away, with everyone going down to three or four days a week, with the right to less if desired.
This would take advantage of the fact that EI supplements this kind of job-sharing as a one-day layoff. And, of course, it would keep a far greater number of individuals and families from falling out of the job market.
In addition to making room for more family, education and healthy living time, maybe working less and getting involved with the entrepreneurial spirit could spawn new business ventures by some of our hard-working auto workers. And that might mean a more resilient local economy to get us through the hard times, which seem likely to linger.
These bargaining directions are unpalatable, but they may be the most constructive of a seriously limited range of options.
Amy Goodman is the co-founder, executive producer and host of Democracy Now!, a national, daily, independent, award-winning news program airing on more than 450 public broadcast stations in North America.
Thank you for reading this story…
More people are reading rabble.ca than ever and unlike many news organizations, we have never put up a paywall – at rabble we’ve always believed in making our reporting and analysis free to all, while striving to make it sustainable as well. Media isn’t free to produce. rabble’s total budget is likely less than what big corporate media spend on photocopying (we kid you not!) and we do not have any major foundation, sponsor or angel investor. Our main supporters are people and organizations -- like you. This is why we need your help. You are what keep us sustainable.
rabble.ca has staked its existence on you. We live or die on community support -- your support! We get hundreds of thousands of visitors and we believe in them. We believe in you. We believe people will put in what they can for the greater good. We call that sustainable.
So what is the easy answer for us? Depend on a community of visitors who care passionately about media that amplifies the voices of people struggling for change and justice. It really is that simple. When the people who visit rabble care enough to contribute a bit then it works for everyone.
And so we’re asking you if you could make a donation, right now, to help us carry forward on our mission. Make a donation today.