The Squeeze is on at Delphi

While poverty levels grow and living standards fall, the American bosses keep up the pressure to drive down real wages even further. The latest example is what is happening at Delphi (that supplies parts to GM) where the bosses asked workers to take a 63% pay cut. In December the UAW votes on what response to give and GM are bracing themselves for possible strike action.
United Auto Workers Vice President Richard Shoemaker recently issued a statement on Delphi's latest contract proposal:

"The UAW received Delphi's contract proposal today. In light of Delphi CEO Steve Miller's recent public comments, we were not surprised that Delphi's proposal displays a total lack of concern about the impact it would have on Delphi workers, their families, their communities and our nation. Delphi's proposal is designed to hasten the dismantling of America's middle class by importing Third World wages to the United States. In short, the proposal faithfully reflects a vision of an America in which an elite few live in luxury while everyone else struggles to make ends meet."

These are fine words indeed, but the current situation with GM and Delphi is the direct result of the trade union bureaucracy's long-standing "partnership with the bosses" approach. This is the bitter fruit that results from collaboration with the bosses.

Delphi has supplied parts for the auto giant General Motors since its spin-off from GM in 1999. In 2004, Delphi lost $4.8 billion, and another $403 million in the first quarter of this year. The company was forced to file for bankruptcy, and Delphi CEO Steve Miller has asked its workers to take an astonishing 63 percent pay cut! This means workers currently make an average $27 an hour could possibly be making $9 to $12. Union workers must also give up many health benefits including dental and vision, pay higher insurance premiums, and the freezing of GM pensions will be in effect as of January 1st. The company also plans to close down several plants and cut 8,500 jobs, including 3,000 in the U.S.

Steve Miller claims that these cuts are necessary to keep the company competitive in the world market. To do his part, Miller has taken a pay cut himself this year. From his current $1.5 million salary he will only receive $1 in 2006. But many point out that this insulting self-imposed cut comes only after Miller received a $3 million signing bonus this past July. To make the contradictions even more obvious, Delphi's board approved large increases in top executive severance packages the day before the company filled for bankruptcy!

Even if the bosses at Delphi can successfully halve the pay of their workers, they will not be content. As Marx and Engels pointed out, the bourgeoisie will constantly squeeze more and more out of the workers in the pursuit of profits. The vise will never loosen even if profits shoot through the roof. In the 1980s, parent company General Motors infamously laid off tens of thousands while posting record profits. This became the subject of the film "Roger & Me". Now history is repeating itself at an even higher level.

The next decisive part of the struggle will be decided by the workers. Many of them feel that faced with such drastic cuts, they have little to lose. The UAW must vote on the new terms mid-December. If the workers do not agree, Delphi will ask bankruptcy courts to cancel the union contract. If the union contracts are cancelled, the UAW no-strike agreement will also be cancelled. Steve Miller has threatened workers considering going on strike: "That is a quicker way to bring an end to their jobs."

In response, General Motors is bracing for a possible strike by Delphi's 33,000 workers. Several assembly plants are currently running twenty-four hours, increasing vehicle production by 8 percent in October despite a 26 percent sales dip. A 1998 strike at just two Delphi plants virtually shut down GM, who is just as vulnerable today as it was then. It is therefore believed that Delphi is "banking" parts so that they will have an eight week supply to fill customer orders if and when a strike does occur. They will then begin the process of bringing in scabs to replace the jobs of union workers.

The current situation does not just affect Delphi and General Motors. Automotive contracts are used as a base model for negotiations for non-automotive unions. The outcome will undoubtedly have an effect on the current struggles at the airlines, as well as on the teachers' union, garment workers, etc. This is an all-out attack on the working class and the labor unions. Delphi is using the sledgehammer of bankruptcy to not only cut wages, but to steer the company non-union.

Working Americans can no longer allow corporations like Delphi make a mockery of them. This is not just about dollars and cents: its about mortgages, families, and communities. Time is not on the side of the workers, as the bankruptcy courts will undoubtedly side with the bosses. A wildcat strike now would show that it is the workers who are needed at Delphi, not the over-paid bosses and trade union bureaucrats who have driven the company into the ground.

The only way forward for American workers is to take on the offensive, not the defensive. Political commentators who advise the workers to "cooperate" with Delphi's bosses are so naive to think that a mouse should "cooperate" with a snake. There is another way: the way of class independence and militant struggle. In the 1930s, determined and relentless trade union struggles led to vastly improved wages and conditions. In South America today, factories occupied and operated democratically by the workers are doing tremendously: raising wages, raising production, and reducing waste and corruption in factories deemed "unprofitable" by the bosses. For starters, a mass party of labor must be built here in the U.S.; not only to defend and increase workers' rights, but to fight for political power and the implementation of socialist policies in the interests of all working people.