While Ford workers in North America prepare to weather a new round of plant closings and layoffs, their bosses in Detroit have unveiled plans for new plants in China, a country with the world’s fastest growing car market along with rock-bottom wages. Meanwhile, Russian Ford workers have won an important victory not only against the company but against the new, repressive Russian Labor Code.
The big corporations in North America, Western Europe and Japan are moving more of their factories abroad in search of lower wages. But in the process they are tying the interests of the international working class more closely together. In global companies like Ford, the interests of a section of workers on almost every continent are directly linked. The answer to capitalist globalization is to link up workers’ struggle worldwide.
Ford Motor Co. is one of the world’s largest auto companies. The company owns more than 100 plants and employs 280,000 workers worldwide. In 2006, Ford produced 6.6 million vehicles, and controlled roughly 18 percent of the U.S. automobile market. It owns the Mercury, Lincoln, Jaguar, Land Rover, and Volvo brands. It owns a one-third controlling interest in Mazda, as well. Despite being one of the world’s largest auto makers, over the past decade Ford has seen a steady drop in its profitability. In 2006 alone Ford reported a net loss of $12 billion. As always, it’s the workers that are being forced to pay for the bosses’ problems with mass layoffs, wage and benefit cuts, worsening conditions and harsher work rules.
To claw back towards profitability by 2009, Ford has begun instituting “The Way Forward” plan of “restructuring” (i.e. downsizing) its operations in North America. Roughly half of Ford’s plants are in the U.S. and Canada. The company has already mortgaged its U.S. plants for a $23.4 billion line of credit. They want to use this money to pay for the restructuring plan, which will close 16 plants by 2012. So far it has already named 6 plants that will be closed. The plan also calls for cutting 40 percent of its total workforce in North America, and cutting its costs by $5 billion as compared to 2005.
In addition to “The Way Forward” plan, Ford unloaded its health care costs onto the shoulders of the United Auto Workers (UAW) union in September 2007. Through a VEBA (Voluntary Employee Benefit Association) scheme, Ford workers are now responsible for paying all of their health care costs while the company is no longer obligated to pay. The figures for Ford workers’ health care costs aren’t available, but to give an idea, the total amount that GM was responsible for to its UAW workers in 2007 was $51 billion. In the last round of contract negotiations with the “Big Three” – GM, Ford and Chrysler – VEBAs were imposed on UAW workers in all three companies.
Ford had an eager “partner” in this scheme: UAW International President Ron Gettlefinger, who initially proposed the VEBA plan to GM (and later Ford) before contract negotiations even began last year. The UAW tops who pushed for the concessions basically said: “Our health care costs are killing the company; if the company can’t make money they’ll ship our plants overseas, so it’s better to have a worse job than no job at all.” But no matter how many concessions the UAW gives to Ford, the company considers a unionized workforce a problem in itself.
UAW members produce 46 percent of Ford’s cars and trucks by volume, and North America is still the company’s main market. The UAW alone has the collective ability to shut down almost half of the company’s total world production. Despite the huge concessions the leadership has given to the company, Ford can’t reap profits anymore unless it cuts “costs” to the bone. The bosses would rather be rid of the UAW altogether, despite Gettlefinger’s “partnership”, and be free to impose its conditions on auto workers at will. One of the main reasons that Ford has been shifting more and more production outside the U.S. has not just been to sell more cars abroad, but also to weaken the UAW by building pressure for never-ending cuts.
Like every other big corporation in the world, Ford has gone to China. The car market in China has exploded in the past decade, and China is now the world’s second largest market. To give an idea of how fast car ownership is growing in China, McDonald’s Corp. recently announced that half of its new locations in China will have drive-through windows. And car ownership hasn’t yet even become as widespread as it is in most industrialized countries today – there are about 25 vehicles (and less than 7 cars) for every thousand people. This is about the same level the U.S. had in 1915.
Auto manufacturing in China has grown tremendously to keep up. The auto industry employs 1.7 million. In the southwestern city of Chongqing, auto plants spread over more than 5,000 acres. The city’s factories made 600,000 cars in 2006, and city officials want to double that by 2010.
According to the China Daily, Ford’s China spokesman, Kenneth Hsu, said that the company is “gauging the need for further expansion of our manufacturing capacity,” and that “local governments [in China] are keen to have a new plant from Ford in their regions.”
Ford, its Japanese subsidiary Mazda, and privately owned China partner Chang’an Motor Corp. have created a joint venture, Chang’an Ford Mazda Automobile Co., which owns two plants in Chongqing and Nanjing. The new Nanjing plant is expected to produce 50,000 to 80,000 cars in 2008, and move into peak production mode in 2009, producing 160,000 cars when it reaches capacity.
Another reason Ford is salivating over setting up plants in China are rock-bottom wage levels. The average wage for an auto worker at Geely, the biggest Chinese auto company, is only about $250 per month ($1.27/hour). Most workers are immigrants from the countryside, sending most of their wages home and living in company dormitories. But moving its factories outside the U.S. won’t solve all of Ford’s problems, as was recently seen in Russia.
On December 14th, thousands of mostly young workers at the ZAO Ford factory in Vsevolozhsk, Russia returned to work after winning most of their demands in a key strike. This was the first successful major strike in Russia since the fall of the Soviet Union, and struck a blow to the new, draconian Russian Labor Code, which makes strikes all but impossible. Most importantly it showed not just Russian workers but auto workers worldwide that it pays to fight.
The strike began on November 20, and lasted three weeks. The workers’ demands reflected the terrible conditions faced by Russian factory workers. The demands were: a 35 percent wage increase (the average monthly wage of ZAO Ford workers is $600-800), indexing wages to rapidly rising inflation, overtime pay of three times the base rate, raises tied to seniority, higher pensions, a reduction of the working day and regularization of working hours. The workers also demanded a reduction of night shift hours from seven and a half hours to six and a half hours.
When the strike began, management quickly invoked the Russian Labor Code, saying that workers would not be paid during the strike. The Ford bosses also attempted to “divide and rule” by paying workers who voted against the strike two-thirds of their wages during the strike. The union’s response was a daily mass picket that at times had as many as 1,500 workers.
Throughout the strike the union faced constant intimidation from the police, from physical harassment and violence to the ever-present threat of prosecution. In the first week of the strike a worker was hit by a police car. The workers maintained the strike, however, and did not give in to the pressures of the Ford bosses or the police. Management attempted to throw together a shift of office staff to work the assembly lines, but only a trickle of cars were produced, and most of these are undoubtedly junk as the quality control department was shut down for the duration of the strike.
Day by day the plant’s profit projections dropped as its reserve of cars to be sold on the market dwindled. The Ford bosses tried shipping cars from its plants and warehouses in Germany to make up for its lost production, but this was stopped by solidarity action of German Ford workers. Finally, management gave in and the Vsevolozhsk Ford workers voted at a general meeting to end the strike on December 14th.
Ford conceded to most of the workers’ demands, including indexing wages to inflation, paying overtime and recognizing seniority with pay raises. Perhaps the most important aspect was the fact that the company signed an agreement prohibiting any punitive actions against those workers who went on strike. Through collective strike action, and by refusing to cower to capitalist “legality,” the Russian Ford workers took on the Labor Code, which penalizes workers who strike with fines and possible prison time.
From the beginning of the strike, the Ford workers appealed to the international labor movement for solidarity, and to other Ford workers in particular. This is a necessary first step in linking up the class struggle in a worldwide company like Ford. The big auto companies, like all the big corporations in North America, Western Europe and Japan, want to increase their profits by abandoning highly unionized plants in their “home” countries and setting up plants abroad where they can squeeze even more out of the local working class.
But the class struggle follows capitalism wherever it migrates. Capitalist globalization makes it necessary for workers not only to build solidarity on an international scale, but ultimately to coordinate their struggle against the bosses internationally. Workers’ internationalism is the way forward!
Source: Socialist Appeal
- Russian Ford workers – a beacon to the working class as a whole by Tom Rollings (February 11, 2008)