A Tall Order from a Tall Union Man
I told myself I was done kicking dead horses, sleeping giants, and inanimate movements. And then Right To Work For Less came to Michigan like a fiery cross staked in front of my house. This isn't someone else's fight in someone else's yard. These are my people. This is my turf.
At the capitol in Lansing, Michigan the day Right To Work For Less was signed into law, thousands of union staffers working on the clock, and local union officers collecting "lost time" wage reimbursements chanted, "Veto! Veto!" As if the governor who invented the Emergency Manager law to overthrow democratically elected city councils and revoke labor contracts would decide that Right to Work For Less wasn't fair. They may as well have waved feathers at birds and blown smoke rings at clouds.
Laid off construction workers in hard hats milled on the capitol lawn like cattle agitated by the smell of blood. They'd already felt the prod of too few jobs and nonunion wages. Retirees like myself flocked from all over the state scared shitless by the realization: we aren't safe, we're next. We know we are only as secure as the members we left behind on the front lines of the class war.
Bob King, the president of the UAW, told Crain's Automotive News that Right To Work For Less was not a threat to the UAW because his members are loyal to the union. The lackeys he appointed are loyal to the King and, yes sir, that's all he hears. The rumble from the shop floor doesn't penetrate his royal ears.
I wonder when King last walked the floor of an auto plant where new hires don't have to wait for Right To Work For Less to (1) cut their wages (2) deprive them of a pension (3) eliminate overtime pay with alternative work schedules that erase weekends and instigate sleep deprivation (4) enforce work rules that double down on repetitive stress (5) set break time shorter than a cop's warning (6) inform workers who demand a grievance, 'You're lucky to have a job.'
When was the last time King Bob had less than ten minutes to eat, drink, and ease the aches before he had to get back to bend-lift-twist-and-crank fifty-seven seconds out of every micro-monitored minute?
There's a whole generation of workers who've already been there (a workplace ruled by tyrants) and done that (gave up on a union that enforces company policy) and they, not the bureaucrats and their academic sidekicks, are the building blocks of the new labor movement. Ready or not, two tier is stalking the house of labor and UAW officers are hovering near the exit signs like shoplifters with shifty eyes, weak alibis, and pockets full of hot merchandise.
Hell, everything we are supposed to fear from Right To Work For Less has been a UAW program since the International embraced the corporate agenda —competition between workers and cooperation with bosses— thirty years ago.
Bob King told Crain's Automotive News that "90 percent of UAW-represented autoworkers in right-to-work states have chosen to stay in the union."
I'm not a statistician but I do know my autoworkers and I do check my sources.
It's true. At factories in Right To Work For Less states where the majority of UAW members transferred from plants up north with the golden handcuffs of top tier wages and pensions very few workers pull their cards. Even in Shreveport, Louisiana where there was a higher percentage of local workers hired than at most of GM's southern plants most workers stayed with the UAW.
Kevin Grace who retired from the GM Shreveport plant did choose to leave the UAW. Grace left largely for political reasons. He identifies himself as a Libertarian. Grace didn't suffer any repercussions. Federal law requires nonunion members to have the same level of representation as union members. Though many people agreed with Grace and admired his stand, very few according to him chose to withdraw from the UAW. "Most people don't like not belonging to a club," Grace said. "They don't believe in getting something for nothing. So they stay even if they don't agree with the politics."
But at the Freightliner plant in Cleveland, North Carolina where the International UAW supported the company when Freightliner fired the bargaining committee, and subsequent contracts dealt management a handful of aces, it's another story.
Franklin Torrence, a former union officer at Freightliner, told me that membership varies from 65 percent to 75 percent. "The number shifts" Torrence said. "It increases before contract negotiations and then decreases when members are dissatisfied."
After an election the losing faction pull their cards. If a worker isn't satisfied with the way a grievance is handled, he withdraws from the union and files a complaint with the National Labor Relations Board. The NLRB is more likely to help a nonunion worker who claims discrimination and who isn't obligated to "exhaust internal union remedies."
Sometimes, it's just the money. Prior to a bonus, members who want to save on dues cancel their membership. Second tier workers may begrudge every bite out of a check that won't stretch from payday to payday. Who's to blame for their resentment? The way they see it, the company and the union both are responsible for their second class status.
There's only one way to overcome anti-union laws and belligerent bosses. Everyone knows what it is and the class of people who live off unearned income do everything in their power to decimate it.
Panic pushers insist there is a conspiracy to disarm American citizens. While we oil our rifles and finger our bullets like worry beads, thieves disguised in suits and ties disable our earning power, devalue our homes, destroy our unions, and transfer the accumulated wealth of our labor overseas. Indeed there is a conspiracy, and the warning reverberates like a diddley bow strung between unemployment and debt, illness and bankruptcy, the prison and the mission.
Americans aren't controlled by automatic weapons and tanks. We are controlled by fear, by clamors of "fiscal cliff" echoing like foghorns in our sleep. We react like dogs barking furiously to defend the patch of dirt we're chained to.
The kettle of vultures that advocate a bunker mentality raze, ridicule, and undermine the only genuine security humans have ever known — community, fellowship, solidarity.
We really have our work cut out for us. It's tempting to express anger against a company dominated union by not paying dues. One might hope withholding dues would make the office rats accountable. Such reasoning overestimates their work ethic and underestimates the lucrative flow of kickbacks legally defined as joint funds. It pays to sleep with the boss. In a capitalist country the matrimony of labor and management is blessed and the dowry is filed as a tax deductible business expense.
Bob King in an editorial titled "The Lesson of Freightliner" declared that "success comes from strong partnerships between labor and management." If King's message sounds like Right To Work For Less sweet-talk, that's because it comes from the same playbook.
King, the son of a Ford industrial relations director, didn't mention that in 2007 the International UAW aided and abetted Freightliner in securing the termination of local union officers for calling a strike in response to management's declaration that "there would be no contract extension." As a result the Good Friday holiday was cancelled and workers were required to work for straight time.
Every union person worth the steel in the toes of their boots knows that you don't work without a contract. Hell, even CEOs won't work without a contract. Try telling a supplier that the contract is canceled and see how many parts you get on Monday. Any self respecting bargaining committee would call for a strike.
In arbitration hearings International UAW officers under the leadership of UAW Vice President General Holifield "testified as witnesses for the company." Now retired International UAW President Ron Gettelfinger and Nate Gooden, an International UAW Vice President now deceased, had made a secret agreement with the corporation prior to local negotiations. Freightliner acted on good faith that the game was rigged. The bet paid off. Five local union officers were terminated. Two survived the lynching.
Franklin Torrence is one of two local union officers who retained their jobs through arbitration. Three of the original Freightliner Five were fired. In light of this betrayal by the International UAW I asked Brother Franklin why he continued to be a member of the UAW and pay dues in a Right To Work For Less state.
"I take the good along with the bad because I believe in the labor movement," Torrence said.
If faith is the sword which cleaves the wheat from the chaff, herein lies the hilt and heft which enables a man like Franklin Torrence to keep his eyes on the prize in the midst of treachery, adversity, and injustice. He doesn't believe in the institution and its legions of office rats, he believes in the movement. Or to paraphrase Mark Twain: Loyalty to my fellow workers always. Loyalty to union officers when they deserve it.
What should we do when Right To Work For Less comes to our state or a union president gets in bed with the boss?
First and foremost, we must speak the truth. It doesn't help to pretend the institution of Labor isn't infected with opportunists who claim we can cure the afflictions of capitalism with a heavier dose of capitalism. No matter what King Bob and his ilk say, pitting workers against workers to reduce wages and foster inhuman working conditions is the agenda of the bosses not the labor movement. Competition between workers is a symptom of the disease not the cure.
A union is forged in trust and camaraderie. If a union stands for anything other than fellowship between workers, it's probably a front for a commercial enterprise. Working with someone who collects the benefits of a union contract but doesn't pay dues is like working with a scab. It must leave a bad taste in one's mouth and that poison is the boss's intention.
In the early nineties at the former GM Saturn plant in Tennessee the names of workers who pulled their cards were published in a "Hall of Shame" section of a union newsletter. It should come as no surprise that the company was footing the bill for printing the newsletter and the majority of workers who pulled their cards were angry at the bargaining chairman. The "Hall of Shame" scheme didn't win any hearts and minds but the boss had an ace in the hole.
After the UAW lost a long bitter strike against Caterpillar, union members, as part of the new contract, had to go back to work with scabs. I asked George Cornwell, a veteran in the struggle against Caterpillar and a Blue Shirt from UAW Local 974, "How does one deal with a scab?"
"You get close to him," George said. "You're at his side all the time. You go to break with him. You go to lunch with him. You become his best friend because as soon as you abandon him the boss will take your place."
That's a tall order from a tall union man but fellowship, not animosity, is what it takes to build a labor movement that can thumb its nose at Right To Work For Less and scour the carpetbaggers from the halls of Solidarity House.
Gregg Shotwell
Retired UAW member and author of Autoworkers Under the Gun from Haymarket Press
GreggShotwell@aol.com
AUTOWORKERS UNDER THE GUN
Tuesday, January 22, 2013
Sunday, October 21, 2012
The Gift of the True Organizer
In 2003 when I was researching work to rule —a process by which workers slow down production, drive up costs, and thereby leverage negotiations— I called Dave Yettaw. Dave, a retired auto worker and former president from Flint UAW Local 599 was an old hand and a trusted advisor. Dave told me that I should call Jerry Tucker which to me was like saying, 'If you want to learn about song writing you should call Bob Dylan.'
Jerry Tucker was the most notorious living organizer of work to rule actions in the United States. The 1991 version of A Troublemakers' Handbook by Dan LaBotz included a chapter which described Tucker's success with work to rule techniques at four different companies. Tucker was using work to rule to negotiate gains for workers at a time when the UAW was rolling backwards faster than a gerbil wheel.
Dave gave me Jerry's number. I got up the nerve to call and Jerry generously gave me a personal tutorial. It was the beginning of a friendship I will always treasure.
In the worst of times Jerry was there for me. I am not alone in this regard. That’s who he was. Jerry never told me what to do, but after talking with him I felt I knew what I had to do next. That’s the gift of a true organizer. It's because of such gifts that organizing will never die.
Jerry Tucker passed away October 19, 2012. When I got the call I expected to hear Jerry's voice. I am not ashamed to say that when his daughter Tracy told me the news I dropped to my knees and cried. I am not used to feeling so vulnerable. Even in death he had another lesson for me. Whatever strength I may possess is dependent on other people.
Jerry's passion for organizing was driven by his love and respect for fellow workers. If he was in it for the money, he would have kept his mouth shut. In 1986 when UAW members —frustrated by concession contracts, union cooperation with management, and lackluster leadership— asked Tucker to run for Regional Director in upcoming union elections, Jerry understood the personal risks.
A challenge to the reigning director could cost him his career in the UAW, lucrative salary and benefits, and a cushy retirement. At the time Tucker was the assistant Regional Director. If he followed protocol, he would inherit the position. Given his talents and experience, it was likely he could expect further advancement in the bureaucratic hierarchy. Protocol was the safe bet.
Tucker weighed the risk and came down on the side of his principles. It was, he told me, the choice he could live with. Fortunately, his wife Elaine is a woman who could live with a man most mothers of three children would call reckless and foolish. Without Elaine Jerry Tucker wouldn't amount to a footnote and Jerry was the first to admit it.
Tucker won the election after a federal court ordered a rerun based on evidence of the ruling administration's shenanigans. The victory cost him his career in the UAW but not his vocation as an organizer or his reputation. He went on to organize union struggles such as Stalely, a corn processing plant in Decatur, Illinois, where a sugar conglomerate, Tate & Lyle, was determined to break the union.
Tucker charged the members of the local union at Staley a hundred dollars for each day he spent on location. All expenses were on his own dime. Decatur is 120 miles from Jerry's home in St. Louis. I think it's fair to say it was a labor of love without mitigating the biblical weight of the phrase. He drove that long, hard road for forty months and left behind a struggle that organizers will draw lessons from for decades.
One of the hallmark's of Tucker's leadership in the UAW was the New Directions Movement. He was in his own words one of many cofounders of the New Directions Movement. Of the many he was the most prominent and the one who paid the heaviest price for challenging the UAW hierarchy's backflip into corporate model unionism.
Jerry Tucker was a tower of conviction, a welder's jewel of commitment, and a man whose charisma was grounded in humility. He began with the premise that the rank and file knew the answers, not him.
Like many who knew him I felt that Jerry Tucker was a great man. I didn't feel that I deserved his attention yet he always treated me as if my needs were more important than his time. He conferred his dignity upon me and I left our conversation a better, stronger person. I am not unique. Jerry treated every working person with the same regard. Such is the gift of the true organizer. He uncovered leaders among the followers.
May his wife, Elaine, his daughters, Nicole, Tracy, and Cynthia, and all of us who follow in his footsteps forever remember his most constant invocation, "Carry on! Carry on!"
Saturday, August 4, 2012
Live Bait & Ammo #172: When the Leopard Lies down in the Grass
When I posted "Defend the Right to Strike" a flurry of Facebook comments and emails protested that this proposed Constitutional Amendment from the "Protect Our Jobs" coalition was necessary to avert passage of Right to Work laws in Michigan.
None of the objectors questioned why the proposed amendment contained a no strike clause for public sector workers. It's pitiful what we have come to expect from union officials. Instead of a no strike clause, why not insert a no lockout clause; a no striker replacement clause; a no unfair labor practice clause; a no firing of organizers clause; a no covering up the bullshit with lies clause.
While King & Co. were performing this constitutional curtsy to the bossing class, the "Equality of Sacrifice" gentlemen's agreement in UAW contracts—whereby management is asked to sacrifice as much as union members—was ruled unenforceable. Arbitrator, David Grissom, said in his ruling, "Frankly, this notion is near preposterous."
The ruling reminds us that without the right to strike, gentlemen, we're just talking words.
Entreaties to capitalist ethics are like appeals to an alligator's hygiene. One lives in an actual swamp, the other in a virtual bog of moral turpitude. One has a voracious appetite, the other a licentious attitude, which brings to mind the outrage over GM's decision to sell pension assets to China.
Workers are appalled. I think our gut reaction to anything involving Chinese investment in the US is that China is an Enemy of the State and thus, the People—our people.
China is not an Enemy of the State. Underneath the communist bunting China is a capitalist regime and a business partner with the United States.
I am not surprised that the government sells US Treasuries to China anymore than I am surprised that Congress passed laws enabling corporations to export our jobs to China. I am not surprised that GM sells pension assets to China because GM is partners with China, the US government owns GM stock, and the UAW bureaucracy brags that it is partners with GM.
We are fighting a three-headed monster: the Company, the Government, and the UAW bureaucracy.
The question isn't, why is GM selling pension assets to China; or why isn't Ford willing to treat workers like equals; or why doesn't the US government protect our jobs; or why don't union bureaucrats defend workers; but rather how do we fight the three-headed monster?
I am using a metaphor to elucidate our dilemma, but I don't believe I exaggerate the abuse of workers. In 2007 GM produced a commercial for the Superbowl in which a robot exhibited the feelings of a human being. I am not the only one who uses literary devices like personification to convey factual representations.
In the commercial the robot works on the assembly line. The robot drops a screw and the line stops. Everyone turns and stares at the nameless robot. She is shamed. She is walked out. She struggles to find new employment but fails at every menial venture. She is unfit and inadequate for life on the outside. She feels lonely and alienated. In despair she jumps off a bridge and commits suicide. Then she wakes up relieved to be back on the line and lucky to have—not just a job—but a place in life.
In this Superbowl ad GM humanized the robot and dehumanized workers.
The stated message of the video was: quality is built not only into the product, but also into the mind of the employee. The unstated or subliminal message was: workers are mechanized entities for which consumers should feel neither sympathy nor responsibility.
The stated message was: while autoworkers are incompetent to perform the most menial jobs, they are dedicated to the perfection of their minute task and content to have a trivial role in the corporation. The unstated message was: GM sucks the life blood out of workers and reduces them to mechanical functions.
The stated message was: excellent work ethics. The unstated message was: the price of quality is spiritual, emotional, and intellectual death for workers.
In this melodramatic video produced for the Superbowl, the corporation is a vampire and workers are zombies. I didn't make this up, GM did. The stated message was: workers are not safe outside the parameters of the corporate plantation. The unstated message was: neither the government nor the union will protect workers from corporate domination.
The question persists: how do we fight the three-headed monster?
I have been criticized for reducing every struggle to a Work to Rule adventure and soldiers of solidarity to a clandestine operation. The conventional rationale is that Work to Rule is limited in scope and difficult to sustain. The conventional belief is that we need institutions to guide and protect workers and that we can't have functional organizations without membership rolls, a dues collection mechanism, official representation, and jake-leg Democrats.
Except for the jake-legs, I agree with my critics. It makes sense to me. The trouble is, they ignore the stench emanating from the back end of the elephant better known as government sanctioned company union partnership.
If the government protected workers rather than corporations, and if the unions weren't in bed with the company, old fashion strikes and democratic worker organizations would be the order of the day. But our institutions have betrayed us and workers must be cautious about how they exert power until the movement crests.
The reduction of inventory and the organization of rank and file workers into engaged activists is the nuts and bolts of Work to Rule—a rudimentary precursor to any strike.
We are living through an era similar to the nineteen-thirties in which autoworkers met in basements with blacked out windows to organize resistance against corporate control.
Workers won't feel safe from retaliation, and they won't be liberated from intimidation until they discover how to cripple the three-headed monster by exerting control of production.
Power respects power, not elections.
Work to Rule is not simply sabotage. It is an invocation for workers to reject dehumanization and to rule collectively in pursuit of just rewards and humane conditions.
Soldiers of solidarity is like the leopard who lies down in the grass. She's not sleeping. She's hunting.
sos, GreggShotwell@aol.com
The World is in their Care is available at Partisan Press
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Wednesday, July 18, 2012
Defend the Right to Strike
Bob "No Strike" King, the president of the UAW, is leading the charge for a Constitutional amendment to protect collective bargaining in Michigan. My guess is that King is angling for an appointment from Governor Snyder. A spot on the bench, hell, even the Michigan Supreme Court is not improbable if this Constitutional con job passes muster. After all, King went to law school while he worked as an apprentice at Ford.
If you've ever been an apprentice, you know that King either bullshitted his way through law school or bullshitted his way through apprenticeship. If you're a lawyer, you know he bullshitted both ends against the middle and played the UAW like a devil's fiddle. We know damn well whose souls were sold when the deal went down. There may be a tier in hell for working class traitors like King, but if you're working the line for half pay and no pension, you're already there.
Item three of the so called Job Protection amendment prohibits "strikes by employees of the state and its political subdivisions." In other words, this amendment protects collective bargaining at the expense of workers in the public sector, not only state, but county and municipal as well.
Conservatives will wave their arms and yell, but secretly they pine to lock unions in a pillory of legal restraints where the only movement left for labor is squirm. No strike equals no rights.
We shouldn't be surprised. King is the progeny of Gettelfinger who famously put 73,000 UAW members on the street in a strike against GM in 2007 and then stared straight into the unblinking eye of the TV machine and said, "No one wins in a strike."
The UAW cut its teeth in strikes. King wouldn't have a union to denude if it wasn't for strikes, occupations, and bare knuckled fights. The largest local in the UAW is the state of Michigan workforce. King wants to bargain concessions without the inconvenience of a membership that would rather strike than roll over.
The no strike clause for public sector unions puts all workers on notice: the government is an enforcer not a protector.
In "the land of the free" labor is a commodity, and the terms and conditions of the sale tilt the bargaining table in favor of the employer. If workers can't legally strike, bargaining collectively is moot. All they can do is cop a plea.
The bended knee is not a winning posture. Whether we labor under the burden of right to work laws or the no strike clause, our ability to prosper and pursue happiness is limited to the kindness and generosity of bosses. Screw that shit as they say on the shopfloor.
The power to break the bonds of servitude and assert autonomy is essential to human dignity. If workers are prevented from withholding labor while employers violate contracts or impose wage cuts, then law is merely a tool of power, a whip in the hands of bosses.
A Constitutional amendment that restricts strikes under the guise of defending collective bargaining is a con job. The Protect Our Jobs coalition only seeks to protect the union bureaucracy. Screw that shit. All workers deserve the right to strike.
Defend the right to strike not the right to pay double-jointed lawyers like King to plea bargain collectively and deduct dues for the service.
sos, Gregg Shotwell
Bob "No Strike" King, the president of the UAW, is leading the charge for a Constitutional amendment to protect collective bargaining in Michigan. My guess is that King is angling for an appointment from Governor Snyder. A spot on the bench, hell, even the Michigan Supreme Court is not improbable if this Constitutional con job passes muster. After all, King went to law school while he worked as an apprentice at Ford.
If you've ever been an apprentice, you know that King either bullshitted his way through law school or bullshitted his way through apprenticeship. If you're a lawyer, you know he bullshitted both ends against the middle and played the UAW like a devil's fiddle. We know damn well whose souls were sold when the deal went down. There may be a tier in hell for working class traitors like King, but if you're working the line for half pay and no pension, you're already there.
Item three of the so called Job Protection amendment prohibits "strikes by employees of the state and its political subdivisions." In other words, this amendment protects collective bargaining at the expense of workers in the public sector, not only state, but county and municipal as well.
Conservatives will wave their arms and yell, but secretly they pine to lock unions in a pillory of legal restraints where the only movement left for labor is squirm. No strike equals no rights.
We shouldn't be surprised. King is the progeny of Gettelfinger who famously put 73,000 UAW members on the street in a strike against GM in 2007 and then stared straight into the unblinking eye of the TV machine and said, "No one wins in a strike."
The UAW cut its teeth in strikes. King wouldn't have a union to denude if it wasn't for strikes, occupations, and bare knuckled fights. The largest local in the UAW is the state of Michigan workforce. King wants to bargain concessions without the inconvenience of a membership that would rather strike than roll over.
The no strike clause for public sector unions puts all workers on notice: the government is an enforcer not a protector.
In "the land of the free" labor is a commodity, and the terms and conditions of the sale tilt the bargaining table in favor of the employer. If workers can't legally strike, bargaining collectively is moot. All they can do is cop a plea.
The bended knee is not a winning posture. Whether we labor under the burden of right to work laws or the no strike clause, our ability to prosper and pursue happiness is limited to the kindness and generosity of bosses. Screw that shit as they say on the shopfloor.
The power to break the bonds of servitude and assert autonomy is essential to human dignity. If workers are prevented from withholding labor while employers violate contracts or impose wage cuts, then law is merely a tool of power, a whip in the hands of bosses.
A Constitutional amendment that restricts strikes under the guise of defending collective bargaining is a con job. The Protect Our Jobs coalition only seeks to protect the union bureaucracy. Screw that shit. All workers deserve the right to strike.
Defend the right to strike not the right to pay double-jointed lawyers like King to plea bargain collectively and deduct dues for the service.
sos, Gregg Shotwell
Saturday, June 16, 2012
The Yoke of Teamwork: Voting and Profit Sharing
The UAW is like a crotchety old grandfather too pickled to die and hell bent on blowing the family farm on video slots and lap dances.
Rank and file members know what I mean, but for the sake of academics, let me explain.
A rabid scheme to outsmart the video slots is tantamount to the UAW's investment in capitalism, and lap dances is all the UAW will ever get from it's love affair with the Democrats.
Rank and file autoworkers will have to decide whether the UAW can be reformed, or if it would be wiser to euthanize the comatose bureaucracy and organize a new union.
There's a lot of money on the table, about a billion dollars in the strike fund alone.
It's tough to walk away from a legacy of dues earned the hard way. On the other hand, chasing a losing game is a gambler's curse. The stakes are high and the need for a new direction in the labor movement is urgent. More urgent than sacred blood or ideology. We need soldiers of solidarity not philosophy.
Some union activists are convinced that unions can be reformed through elections and that the right slate of candidates can revitalize the labor movement. But without a militant rank and file, new leaders soon find themselves leading an empty charge.
The notion that we can vote our way to victory is lazy and wishful as thinking trout will jump in the frying pan. Remote control is for changing channels, not power structures.
Struggle, not hope, is the real lever of change. The best way to organize the rank and file is with a strike not an election. (Reviving the Strike, by Joe Burns)
Voting for representation is an expression of powerlessness. If a reform slate wins a local union election, less than one percent of the membership is involved. If the rank and file strike, one hundred percent have a stake in victory.
The company doesn't fear a bargaining committee. Neither does the UAW International bureaucracy. They both fear a rank and file that recognizes power is control of production and the only way to prevent scabs from crossing a picket line in the United States is by occupying the target, that is, by striking on the inside.
Now that General Motors is gaining market share and grinding out record profits in North America will that mean more investment in the US? As in new plants? Or will it simply mean more low paying jobs, more temporary assignments, more mandatory overtime, more precarious employment, and more risky retirement?
GM sold more vehicles in China (2,547,171) in 2011 than in the US (2,503,820) But most of GM's profits were generated in North America where operating income leaped from $5.7 billion in 2010 to $7.2 billion in 2011.
So where do the profits come from? More efficiency?
The company and the union have agreed to shorter break times, more flexible schedules, and weak-kneed work rules. But the numbers tell another tale.
In 2007 General Motors sold 3.87 million vehicles in the US and employed 73,000 UAW members which equals fifty-three cars per person.
In 2011 General Motors sold 2.5 million vehicles in the US and employed 48,500 UAW members which equals fifty-one and a half cars per person. Productivity dropped, but profits skyrocketed. What the hell? GM sold fewer vehicles and made more money.
GM's profits in the US weren't the result of manufacturing efficiency, marketing expertise, consumer confidence, innovative design, or managerial excellence. GM profits were hand picked from the wallets of workers. UAW members gave up cost of living adjustments—the single most important economic safeguard in a union contract—and fortified the two-tier wage system by forfeiting raises for legacy members while promising entry level workers an upgraded seat in "the Jim Crow section of this merry-go-round"
The bosses, the so called job creators, didn't improve the product or the process, they whipped the horses and skimmed the cream.
New hires will get raises over the course of the 2011 UAW contracts with the Detroit Three, but after four years they will pull up ten bucks short of the benchmark set by legacy workers and a full life time short of retirement since they don't have a pension or health care in retirement. A robot couldn't work the assembly line until it was sixty-five. Excuse me, with social security age creep that's sixty-seven and climbing.
In 2007 the official UAW web site under the title "The Union Advantage" claimed that nonunion workers in goods producing industries earned $19.62 per hour. That's about what second tier workers at GM will earn in 2015. We aren't sliding backwards, we're getting mugged and buggered by bandits in two hundred dollar ties and Italian loafers that cost more than a set of truck tires.
Legacy workers will face another stiff arm to the chin when they retire. Pensions for hourly workers were frozen at the level negotiated in 2007. My income as a retiree may be fixed, but their's is broken. An autoworker today can't afford to retire.
GM reported that it froze salary pension plans. What they didn't admit is that hourly pension benefits were also frozen. Though hourly workers may continue to accumulate seniority, and thereby pension credits, retirement security is eroding faster than farms in the Dust Bowl.
Salary workers will be compensated with increased bonuses and an extra week vacation as well as a company matching 401-k account. All that hourly workers can expect is a diminishing return on compensation they earned over a lifetime on the assembly line. Their fixed income life style won't begin when they retire, it kicked into reverse gear in September 2011.
New hires are not vested in the defined benefit pension. Instead, they are eligible for a defined contribution 401-k. The rub is, they can't afford to save enough to compensate for the disadvantage. So what do new hires expect when they round the corner toward the golden years?
Retirement benefits in the UAW for both new hires and legacy workers plummet in direct proportion to inflation. Given the accelerating price of gas—on which every retail swipe in this mother truckin' nation depends—retirees stare aghast as their standard of living slides down the drainage ditch that runs parallel to the highway of record corporate profits.
What the hell should UAW members do? Wait for union elections so they can elect new pork choppers? Petition the rigged—one party state—Constitutional Convention? Vote for Democrats, that corporate machine with union labels and Bank of America lapels? Demand economic justice from co-conspirators working with their feet up at Solidarity House, the UAW headquarters for noncombatants?
Organizing toward reform of the UAW through a Constitutional Convention controlled by the one party state is a prescription for demoralization, apathy, and more head-down-back-bent drudgery. Instead we should raise the demands and expectations of the rank and file for a strike in 2015. But why wait? Start now.
Strikes are illegal in the middle of a contract. But the only strike that is illegal is the one you lose. I'm not talking about losing.
I'm talking about kicking ass and winning things that workers value in their everyday work lives. Things like longer break times and more days off. Things like firing a boss who thinks workers aren't human. Things like slower line speeds and lower production quotas. Things like protecting fellow workers from job cuts, firings, and harassment. These are the battles that strengthen solidarity, prepare workers for a strike, and soften the target by reducing inventories on the car lot and teaching workers to work to rule both inside the company and inside the union.
The trouble with strikes today is that the Concession Cons don't play to win. They plan instead to soften the membership and compromise with management. We don't have to eat that shit.
2015 is too far away. If we want to win, we need to start fighting now. The first thing we need to do is slow down and demand more help and more jobs. The more workers we win jobs for, the more soldiers we have in our army.
The notion that all profits depend on workers breaking their backs so that executives can bring home tax deferred booty by the bucketful is bullshit. The only way we can win equal pay for equal work, a restoration of COLA, annual improvement factors, and a pension for all UAW members is by striking at the heart of vampire capitalism with a stake as sharp as a strike.
The apologists for investors who pay the lowest tax rate of any group in the US and who produce exactly nothing of value say we shouldn't hurt the company. The Detroit Three closed dozens of factories in the last thirty years and we should be concerned about how they feel about us? GM favors Chinese gangster capitalists over crooks in the US and they expect us to act like patriots? Vying for favors is a chump's game.
I'm an alcoholic and a drug addict. Note, I didn't modify the nouns with the adjective "recovering." Alcohol and drugs are my enemy. I don't pretend that calling myself a "team member" or an "associate" will make the disease less predatory or the enemy less dangerous. The poet George Oppen once said, "The purpose of poetry is clarity." I'm not much of a poet but at least I'm not a bullshitter.
I don't pretend that cooperating with the enemy will make the exploitation of labor easier to swallow. I don't believe that pretending I am someone I am not will strengthen my resolve to resist the temptation of immediate gratification like signing bonuses or profit sharing. I don't pretend that a disease that kills 90 percent of the people it attacks will magically alter its ruthless predatory character if I crawl on its back. A ride across the turbulence of addiction will not be safer if I call the perpetrator a partner.
I'm not a recovering addict anymore than I am a company team member or an associate. I'm a union member and my recovery depends on my commitment to the fellowship of others who are working to defeat a mortal enemy. I am not a company associate, I am a soldier of solidarity anywhere, any time, any place anyone who works for a living confronts the enemy.
Addicts who pretend they can control the disease die from the disease. Addicts who form a partnership with the disease profit from the exploitation of others and leave a legacy as shameful as a two-tier union that collects dues from temp workers.
It's not for me to decide whether the union can be reformed or not. But it is my responsibility as a writer to call a spade a spade, a traitor a traitor, and a system that depends on the exploitation of labor an enemy of working people rather than a safe sex partner.
Whether one chooses to reform the union or form a new union as did the CIO in the nineteen-thirties, one must first organize. I contend that organizing in the workplace means winning conflicts with management and that if you work in a union shop, organizing for victory includes winning elective office and/or working on committees. Why? Because I am logical and tactical not ideological. I believe in fighting to win not making concessions to fight another day in the dismal future.
Winning elective office or working on a committee may be construed as reform. If it does achieve some measure of reform, so be it. But the purpose of holding elective office or working on union committees is leverage and access to inside knowledge.
The UAW under the direction of Bob King cannot organize because the Concession Caucus gave up everything that unorganized workers want out of a union. If you think the purpose of a union is outsourcing, subcontracting, two tier wages, collecting dues from temp workers, and stabbing retirees in the back, join the Bob King UAW.
If you think the business of a union is organizing workers, then look around at your fellow workers, including the unorganized, and ask what they need. Then fight for it. Fight like you know damn well that compromise kills 90 percent of its victims, that cooperation like denial is, in fact, a symptom of the disease.
The Concession Caucus cons argue that if we don't collaborate with management, the companies will go elsewhere. The facts are indisputable. Since the UAW began its partnership with the company we have lost more than two-thirds of our members. The Concession Cons believe the union's business is selling cars "made in America." The facts are indisputable. GM sells more cars in China than in the US and GM plans to build more cars in China than in the US.
The union's purpose is organizing. We can't organize workers by cooperating with management anymore than we can win a war by collaborating with the enemy or defeat addiction by switching poisons.
I know where my true fellowship is. I don't doubt my purpose because I don't count my blessings in profit sharing or my dues in dollars. Either we all win or we all fail. That's the old religion. If it sounds like socialism or back in the day unionism that's because it works for a living.
Watch each others' backs, or prepare to live side by side on your knees as the bosses apply the yoke of teamwork: voting and profit sharing.
sos, Gregg Shotwell
The UAW is like a crotchety old grandfather too pickled to die and hell bent on blowing the family farm on video slots and lap dances.
Rank and file members know what I mean, but for the sake of academics, let me explain.
A rabid scheme to outsmart the video slots is tantamount to the UAW's investment in capitalism, and lap dances is all the UAW will ever get from it's love affair with the Democrats.
Rank and file autoworkers will have to decide whether the UAW can be reformed, or if it would be wiser to euthanize the comatose bureaucracy and organize a new union.
There's a lot of money on the table, about a billion dollars in the strike fund alone.
It's tough to walk away from a legacy of dues earned the hard way. On the other hand, chasing a losing game is a gambler's curse. The stakes are high and the need for a new direction in the labor movement is urgent. More urgent than sacred blood or ideology. We need soldiers of solidarity not philosophy.
Some union activists are convinced that unions can be reformed through elections and that the right slate of candidates can revitalize the labor movement. But without a militant rank and file, new leaders soon find themselves leading an empty charge.
The notion that we can vote our way to victory is lazy and wishful as thinking trout will jump in the frying pan. Remote control is for changing channels, not power structures.
Struggle, not hope, is the real lever of change. The best way to organize the rank and file is with a strike not an election. (Reviving the Strike, by Joe Burns)
Voting for representation is an expression of powerlessness. If a reform slate wins a local union election, less than one percent of the membership is involved. If the rank and file strike, one hundred percent have a stake in victory.
The company doesn't fear a bargaining committee. Neither does the UAW International bureaucracy. They both fear a rank and file that recognizes power is control of production and the only way to prevent scabs from crossing a picket line in the United States is by occupying the target, that is, by striking on the inside.
Now that General Motors is gaining market share and grinding out record profits in North America will that mean more investment in the US? As in new plants? Or will it simply mean more low paying jobs, more temporary assignments, more mandatory overtime, more precarious employment, and more risky retirement?
GM sold more vehicles in China (2,547,171) in 2011 than in the US (2,503,820) But most of GM's profits were generated in North America where operating income leaped from $5.7 billion in 2010 to $7.2 billion in 2011.
So where do the profits come from? More efficiency?
The company and the union have agreed to shorter break times, more flexible schedules, and weak-kneed work rules. But the numbers tell another tale.
In 2007 General Motors sold 3.87 million vehicles in the US and employed 73,000 UAW members which equals fifty-three cars per person.
In 2011 General Motors sold 2.5 million vehicles in the US and employed 48,500 UAW members which equals fifty-one and a half cars per person. Productivity dropped, but profits skyrocketed. What the hell? GM sold fewer vehicles and made more money.
GM's profits in the US weren't the result of manufacturing efficiency, marketing expertise, consumer confidence, innovative design, or managerial excellence. GM profits were hand picked from the wallets of workers. UAW members gave up cost of living adjustments—the single most important economic safeguard in a union contract—and fortified the two-tier wage system by forfeiting raises for legacy members while promising entry level workers an upgraded seat in "the Jim Crow section of this merry-go-round"
The bosses, the so called job creators, didn't improve the product or the process, they whipped the horses and skimmed the cream.
New hires will get raises over the course of the 2011 UAW contracts with the Detroit Three, but after four years they will pull up ten bucks short of the benchmark set by legacy workers and a full life time short of retirement since they don't have a pension or health care in retirement. A robot couldn't work the assembly line until it was sixty-five. Excuse me, with social security age creep that's sixty-seven and climbing.
In 2007 the official UAW web site under the title "The Union Advantage" claimed that nonunion workers in goods producing industries earned $19.62 per hour. That's about what second tier workers at GM will earn in 2015. We aren't sliding backwards, we're getting mugged and buggered by bandits in two hundred dollar ties and Italian loafers that cost more than a set of truck tires.
Legacy workers will face another stiff arm to the chin when they retire. Pensions for hourly workers were frozen at the level negotiated in 2007. My income as a retiree may be fixed, but their's is broken. An autoworker today can't afford to retire.
GM reported that it froze salary pension plans. What they didn't admit is that hourly pension benefits were also frozen. Though hourly workers may continue to accumulate seniority, and thereby pension credits, retirement security is eroding faster than farms in the Dust Bowl.
Salary workers will be compensated with increased bonuses and an extra week vacation as well as a company matching 401-k account. All that hourly workers can expect is a diminishing return on compensation they earned over a lifetime on the assembly line. Their fixed income life style won't begin when they retire, it kicked into reverse gear in September 2011.
New hires are not vested in the defined benefit pension. Instead, they are eligible for a defined contribution 401-k. The rub is, they can't afford to save enough to compensate for the disadvantage. So what do new hires expect when they round the corner toward the golden years?
Retirement benefits in the UAW for both new hires and legacy workers plummet in direct proportion to inflation. Given the accelerating price of gas—on which every retail swipe in this mother truckin' nation depends—retirees stare aghast as their standard of living slides down the drainage ditch that runs parallel to the highway of record corporate profits.
What the hell should UAW members do? Wait for union elections so they can elect new pork choppers? Petition the rigged—one party state—Constitutional Convention? Vote for Democrats, that corporate machine with union labels and Bank of America lapels? Demand economic justice from co-conspirators working with their feet up at Solidarity House, the UAW headquarters for noncombatants?
Organizing toward reform of the UAW through a Constitutional Convention controlled by the one party state is a prescription for demoralization, apathy, and more head-down-back-bent drudgery. Instead we should raise the demands and expectations of the rank and file for a strike in 2015. But why wait? Start now.
Strikes are illegal in the middle of a contract. But the only strike that is illegal is the one you lose. I'm not talking about losing.
I'm talking about kicking ass and winning things that workers value in their everyday work lives. Things like longer break times and more days off. Things like firing a boss who thinks workers aren't human. Things like slower line speeds and lower production quotas. Things like protecting fellow workers from job cuts, firings, and harassment. These are the battles that strengthen solidarity, prepare workers for a strike, and soften the target by reducing inventories on the car lot and teaching workers to work to rule both inside the company and inside the union.
The trouble with strikes today is that the Concession Cons don't play to win. They plan instead to soften the membership and compromise with management. We don't have to eat that shit.
2015 is too far away. If we want to win, we need to start fighting now. The first thing we need to do is slow down and demand more help and more jobs. The more workers we win jobs for, the more soldiers we have in our army.
The notion that all profits depend on workers breaking their backs so that executives can bring home tax deferred booty by the bucketful is bullshit. The only way we can win equal pay for equal work, a restoration of COLA, annual improvement factors, and a pension for all UAW members is by striking at the heart of vampire capitalism with a stake as sharp as a strike.
The apologists for investors who pay the lowest tax rate of any group in the US and who produce exactly nothing of value say we shouldn't hurt the company. The Detroit Three closed dozens of factories in the last thirty years and we should be concerned about how they feel about us? GM favors Chinese gangster capitalists over crooks in the US and they expect us to act like patriots? Vying for favors is a chump's game.
I'm an alcoholic and a drug addict. Note, I didn't modify the nouns with the adjective "recovering." Alcohol and drugs are my enemy. I don't pretend that calling myself a "team member" or an "associate" will make the disease less predatory or the enemy less dangerous. The poet George Oppen once said, "The purpose of poetry is clarity." I'm not much of a poet but at least I'm not a bullshitter.
I don't pretend that cooperating with the enemy will make the exploitation of labor easier to swallow. I don't believe that pretending I am someone I am not will strengthen my resolve to resist the temptation of immediate gratification like signing bonuses or profit sharing. I don't pretend that a disease that kills 90 percent of the people it attacks will magically alter its ruthless predatory character if I crawl on its back. A ride across the turbulence of addiction will not be safer if I call the perpetrator a partner.
I'm not a recovering addict anymore than I am a company team member or an associate. I'm a union member and my recovery depends on my commitment to the fellowship of others who are working to defeat a mortal enemy. I am not a company associate, I am a soldier of solidarity anywhere, any time, any place anyone who works for a living confronts the enemy.
Addicts who pretend they can control the disease die from the disease. Addicts who form a partnership with the disease profit from the exploitation of others and leave a legacy as shameful as a two-tier union that collects dues from temp workers.
It's not for me to decide whether the union can be reformed or not. But it is my responsibility as a writer to call a spade a spade, a traitor a traitor, and a system that depends on the exploitation of labor an enemy of working people rather than a safe sex partner.
Whether one chooses to reform the union or form a new union as did the CIO in the nineteen-thirties, one must first organize. I contend that organizing in the workplace means winning conflicts with management and that if you work in a union shop, organizing for victory includes winning elective office and/or working on committees. Why? Because I am logical and tactical not ideological. I believe in fighting to win not making concessions to fight another day in the dismal future.
Winning elective office or working on a committee may be construed as reform. If it does achieve some measure of reform, so be it. But the purpose of holding elective office or working on union committees is leverage and access to inside knowledge.
The UAW under the direction of Bob King cannot organize because the Concession Caucus gave up everything that unorganized workers want out of a union. If you think the purpose of a union is outsourcing, subcontracting, two tier wages, collecting dues from temp workers, and stabbing retirees in the back, join the Bob King UAW.
If you think the business of a union is organizing workers, then look around at your fellow workers, including the unorganized, and ask what they need. Then fight for it. Fight like you know damn well that compromise kills 90 percent of its victims, that cooperation like denial is, in fact, a symptom of the disease.
The Concession Caucus cons argue that if we don't collaborate with management, the companies will go elsewhere. The facts are indisputable. Since the UAW began its partnership with the company we have lost more than two-thirds of our members. The Concession Cons believe the union's business is selling cars "made in America." The facts are indisputable. GM sells more cars in China than in the US and GM plans to build more cars in China than in the US.
The union's purpose is organizing. We can't organize workers by cooperating with management anymore than we can win a war by collaborating with the enemy or defeat addiction by switching poisons.
I know where my true fellowship is. I don't doubt my purpose because I don't count my blessings in profit sharing or my dues in dollars. Either we all win or we all fail. That's the old religion. If it sounds like socialism or back in the day unionism that's because it works for a living.
Watch each others' backs, or prepare to live side by side on your knees as the bosses apply the yoke of teamwork: voting and profit sharing.
sos, Gregg Shotwell
Friday, June 15, 2012
"Never Trust the Deal"
GM wouldn't buy pencils from a blind man without a contract, but salaried workers never needed a contract with the company because they were family.
Now GM is offering the old and infirm members of the family a deal. Not a gratuity or a bonus after a record breaking year of profit, but a cash-in-your-chips kiss-off for a Cracker Jack-size buyout prize. Those who don't take the deal will get an annuity from Prudential, the company where GM decided to spin-off the pensions for die-hards.
Get this, while the amount offered may vary according to age and health among other factors, GM expects to save $26 billion on "the deal."
In which column will accountants inject this hypodermic savings? And where will the boost come from, if not from retirees who bought the deal?
Will the savings on salary pensions mean hourly workers will get a bigger profit sharing check next year? Guess again. Then ask yourself, who was it who first said, "Never trust the deal."
All we know for sure is that if it was a good deal for retirees, GM CEO Dan Akerson would have tucked it [$3.5 billion] up his golden parachute and ducked out.
GM claims it will add $3.5 billion to the currently underfunded pension plan to help buyout retirees under new laws that permit them to offer "an equivalent economic value to the stream of monthly pensions they replace" rather than a "higher premium value" per the old law.
Is this new law a change we can believe in? Perhaps. If you'd rather make your last lap around the casino than the chemo lab.
But if the choice is cash in hand or an underfunded annuity sold to Prudential, which according to Wikipedia manipulated "the payout of life insurance benefits due to the families of American soldiers in order to gain extra profits," you might take your chances that GM overestimated your life expectancy by accident.
Prudential, the company originally named, "The Widows and Orphans Friendly Society," made a pirate's fortune at the turn of the 20th century by charging industrial workers in poor urban areas double the rates others paid and learned its lesson well. The SEC investigated Prudential at the end of the 20th century and discovered that the company defrauded 400,000 individual investors on "deals" in the nineteen-eighties.
GM CFO Ammann claims "the deal" will help him sleep better so he can concentrate on something he knows absolutely nothing about: "building cars and trucks." But what the hell is he talking about? GM outsourced all their pension and benefit programs to Fidelity years ago. Has Ammann been asleep at the wheel?
UAW retirees are next in line for "the deal." Bob King as usual wasn't available for comment but the UAW-GM contract ratified in 2011 states in part: “The parties further discussed the possibility of amending the Plan to provide additional options for certain current retirees that would help GM manage its pension risk and benefit such retirees that voluntarily agree to participate. To this end, the parties agreed that the National Parties may mutually agree during the term of this Agreement to amend the Plan to add retirement options for some or all existing retirees that help GM reduce the volatility and risk related to the Plan and benefit existing retirees by providing an additional voluntary option.”
What troubles me, a GM retiree, is that the “parties” have given themselves legal cover “to amend the Plan” during “the term of this Agreement.”
Perhaps, dear reader, you are comforted by the word “voluntary.” It connotes a certain safety for those who don’t wish to walk the plank. In my experience parties that seek volunteers are inclined to influence choice with persuasive tactics that resemble a sword in the back. But the point is: since UAW members ratified this contract, the “parties” have legal justification to amend the pension plan and they have already "agreed" to "mutually agree" all over the place like untrained puppies at a pee on retirees party.
The UAW Concession Cons already agreed to help GM "de-risk" the pension. De-risk is a code word for shift the risk to retirees. GM expects to de-risk $26 billion on "the deal." With every whirl of the video slot The House wins even when they pay out. Don't take my word for it, just look at the size of the The House compared to your over-mortgaged shack.
I have a button from 1979, the year I was hired at GM, that says, "UAW Members Want Cost of Living on Pensions." You know what we got instead? The "Christmas bonus" that the UAW agreed to give up in 2011 along with the Social Security Age Creep Patch which, since I turn 62 this year, cost me over $18,000. Guess I won't be buying one of those new GM cars that Ammann will be focusing so hard on now that he doesn't have to tinker with other people's pensions.
GM is betting that W.C. Fields' old saw, "A sucker is born every minute," will outlive the older maxim, "Never trust the deal."
You may be laughing at my humor, but I don't think it's funny.
sos, Gregg Shotwell
Social Security Age Creep and UAW-GM-Ford-Chrysler Contracts
Whenever a contract is front-loaded, beware the busy little backhoe with the smiley face. It’s not loading a dump truck destined for any worker’s bank account.
Most UAW members understand that profit sharing promises and signing bonuses are warning signs not down payments. Whatever the company gives upfront will be taken off the back end—tenfold.
But future retirees should also beware of Social Security Age Creep, a phrase which insinuates either the loathsome gait of osteoporosis, or the sneaky trait of those who would defraud senior citizens.
UAW-GM-Ford-Chrysler agreements require retirees to begin collecting social security at age 62, if they retire early. Since the age of full social security benefits is creeping up from 65 to 67—and perhaps even higher if the frauds in Congress get their way—the amount that UAW-GM retirees may lose accrues accordingly.
Here’s how it works. If you begin collecting benefits before you reach full retirement age, Social Security will reduce your payments. For example, if your full retirement age is 66 and you start drawing benefits at age 62, your monthly benefit will be about 25% less than if you waited until age 66.
The percentage creeps up as your full retirement age creeps up. It used to be that at age 62 one would get 80%. But since the age of full social security has crept up, the percentage an individual collects has crept down from 80% to 79% to 78% and so on depending on your age.
Past UAW-GM-Ford-Chrysler contracts included a “social security age creep patch” which helped make up the difference. But the patch was only negotiated for those who became eligible to collect social security (turn 62) within that four year contract. Since the Social Security Age Creep Patch was contractual rather than part of our actual pension, the UAW was able to negotiate it away in return for helping the company.
Here’s how the age creep patch worked. When a UAW-GM-Ford-Chrysler retiree begins collecting social security, the supplement to his or her pension ends. But the patch allowed the retiree to collect both social security and the supplement for one more year. It helped offset the loss caused by social security age creep, that is, the advance of full retirement age from 65 to 67 and the subsequent reduction in social security payments for those who begin collecting at age 62.
In summary: Social Security Age Creep Patch permitted retirees to collect both the supplement and social security payments for an additional year.
sos, Gregg Shotwell
GM wouldn't buy pencils from a blind man without a contract, but salaried workers never needed a contract with the company because they were family.
Now GM is offering the old and infirm members of the family a deal. Not a gratuity or a bonus after a record breaking year of profit, but a cash-in-your-chips kiss-off for a Cracker Jack-size buyout prize. Those who don't take the deal will get an annuity from Prudential, the company where GM decided to spin-off the pensions for die-hards.
Get this, while the amount offered may vary according to age and health among other factors, GM expects to save $26 billion on "the deal."
In which column will accountants inject this hypodermic savings? And where will the boost come from, if not from retirees who bought the deal?
Will the savings on salary pensions mean hourly workers will get a bigger profit sharing check next year? Guess again. Then ask yourself, who was it who first said, "Never trust the deal."
All we know for sure is that if it was a good deal for retirees, GM CEO Dan Akerson would have tucked it [$3.5 billion] up his golden parachute and ducked out.
GM claims it will add $3.5 billion to the currently underfunded pension plan to help buyout retirees under new laws that permit them to offer "an equivalent economic value to the stream of monthly pensions they replace" rather than a "higher premium value" per the old law.
Is this new law a change we can believe in? Perhaps. If you'd rather make your last lap around the casino than the chemo lab.
But if the choice is cash in hand or an underfunded annuity sold to Prudential, which according to Wikipedia manipulated "the payout of life insurance benefits due to the families of American soldiers in order to gain extra profits," you might take your chances that GM overestimated your life expectancy by accident.
Prudential, the company originally named, "The Widows and Orphans Friendly Society," made a pirate's fortune at the turn of the 20th century by charging industrial workers in poor urban areas double the rates others paid and learned its lesson well. The SEC investigated Prudential at the end of the 20th century and discovered that the company defrauded 400,000 individual investors on "deals" in the nineteen-eighties.
GM CFO Ammann claims "the deal" will help him sleep better so he can concentrate on something he knows absolutely nothing about: "building cars and trucks." But what the hell is he talking about? GM outsourced all their pension and benefit programs to Fidelity years ago. Has Ammann been asleep at the wheel?
UAW retirees are next in line for "the deal." Bob King as usual wasn't available for comment but the UAW-GM contract ratified in 2011 states in part: “The parties further discussed the possibility of amending the Plan to provide additional options for certain current retirees that would help GM manage its pension risk and benefit such retirees that voluntarily agree to participate. To this end, the parties agreed that the National Parties may mutually agree during the term of this Agreement to amend the Plan to add retirement options for some or all existing retirees that help GM reduce the volatility and risk related to the Plan and benefit existing retirees by providing an additional voluntary option.”
What troubles me, a GM retiree, is that the “parties” have given themselves legal cover “to amend the Plan” during “the term of this Agreement.”
Perhaps, dear reader, you are comforted by the word “voluntary.” It connotes a certain safety for those who don’t wish to walk the plank. In my experience parties that seek volunteers are inclined to influence choice with persuasive tactics that resemble a sword in the back. But the point is: since UAW members ratified this contract, the “parties” have legal justification to amend the pension plan and they have already "agreed" to "mutually agree" all over the place like untrained puppies at a pee on retirees party.
The UAW Concession Cons already agreed to help GM "de-risk" the pension. De-risk is a code word for shift the risk to retirees. GM expects to de-risk $26 billion on "the deal." With every whirl of the video slot The House wins even when they pay out. Don't take my word for it, just look at the size of the The House compared to your over-mortgaged shack.
I have a button from 1979, the year I was hired at GM, that says, "UAW Members Want Cost of Living on Pensions." You know what we got instead? The "Christmas bonus" that the UAW agreed to give up in 2011 along with the Social Security Age Creep Patch which, since I turn 62 this year, cost me over $18,000. Guess I won't be buying one of those new GM cars that Ammann will be focusing so hard on now that he doesn't have to tinker with other people's pensions.
GM is betting that W.C. Fields' old saw, "A sucker is born every minute," will outlive the older maxim, "Never trust the deal."
You may be laughing at my humor, but I don't think it's funny.
sos, Gregg Shotwell
Social Security Age Creep and UAW-GM-Ford-Chrysler Contracts
Whenever a contract is front-loaded, beware the busy little backhoe with the smiley face. It’s not loading a dump truck destined for any worker’s bank account.
Most UAW members understand that profit sharing promises and signing bonuses are warning signs not down payments. Whatever the company gives upfront will be taken off the back end—tenfold.
But future retirees should also beware of Social Security Age Creep, a phrase which insinuates either the loathsome gait of osteoporosis, or the sneaky trait of those who would defraud senior citizens.
UAW-GM-Ford-Chrysler agreements require retirees to begin collecting social security at age 62, if they retire early. Since the age of full social security benefits is creeping up from 65 to 67—and perhaps even higher if the frauds in Congress get their way—the amount that UAW-GM retirees may lose accrues accordingly.
Here’s how it works. If you begin collecting benefits before you reach full retirement age, Social Security will reduce your payments. For example, if your full retirement age is 66 and you start drawing benefits at age 62, your monthly benefit will be about 25% less than if you waited until age 66.
The percentage creeps up as your full retirement age creeps up. It used to be that at age 62 one would get 80%. But since the age of full social security has crept up, the percentage an individual collects has crept down from 80% to 79% to 78% and so on depending on your age.
Past UAW-GM-Ford-Chrysler contracts included a “social security age creep patch” which helped make up the difference. But the patch was only negotiated for those who became eligible to collect social security (turn 62) within that four year contract. Since the Social Security Age Creep Patch was contractual rather than part of our actual pension, the UAW was able to negotiate it away in return for helping the company.
Here’s how the age creep patch worked. When a UAW-GM-Ford-Chrysler retiree begins collecting social security, the supplement to his or her pension ends. But the patch allowed the retiree to collect both social security and the supplement for one more year. It helped offset the loss caused by social security age creep, that is, the advance of full retirement age from 65 to 67 and the subsequent reduction in social security payments for those who begin collecting at age 62.
In summary: Social Security Age Creep Patch permitted retirees to collect both the supplement and social security payments for an additional year.
sos, Gregg Shotwell
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