The Wall Street Journal is reporting that the long confrontation betwen GM-spinoff Delphi and its unions are nearing a deal that will lead to the shuttering of 10 Delphi plants, slashing wages by more the 50%, and the renunciation of contract guaranteed health benefits to workers.
A deal could soon be reached to offer thousands of workers at bankrupt auto parts supplier Delphi Corp. (DPHIQ.PK: Quote, Profile, Research) lump-sum payments of $70,000 to $140,000 to leave the company and their health-care benefits, The Wall Street Journal said on Thursday….
The lump-sum buyouts and early retirement offers could be announced as early as next week, the Journal said.
Delphi, based in Troy, Michigan, wants to cut wages to near $12.50 from about $27 per hour and cut four fifths of its hourly work force of 33,100. The company filed for Chapter 11 bankruptcy protection from creditors in October.
Solidarity Forever!
I await the criticism from the “libertarian” democrats in the crowd, that this is the market at work, and the condemnation of Delphi worker’s loss as a sign of moral failure, ie they are losing their jobs because they failed to get the “education” needed for where the jobs are. Criticism like this and we wonder why the Democratic party has lost the working class, and further I challenge those who attack the intelligence and work ethic of American’s union autoworkers to answer a simple question:
When’s the last time you changed your own oil? Like, I thought, automotive work ain’t so fucking simple, eh?
Over the last half decade, as the forces of globalization have worked their way up the economic ladder, it’s been entertaining to watch the white collar workers who thought themselves immune to the forces of market globalization, and the consequent phenomenon of offshoring realize that for the talk of blue and white collars, those who work for a living are all working class. And unless together stand, together we’ll fall.
Solidarity now, or Solidary for never, and we’ll all fall down.
The Velvet Bitch Slap
A soft-landing for most of Delphi workers could greatly reduce the chance that unions would feel compelled to call a strike to protect their contracts, the newspaper said.
The threat of using bankruptcy to void its contracts has prompted the UAW, its biggest union, to authorize a strike.
The strike authorization issued by the UAW in the case that contracts are voided by the judge handling Delphi’s bankruptcy case sent shockwaves through the automotive world, and created apprehension that the idling of GM plants during a Delphi strike would lead to GM declaring bankruptcy. And just today the Detroit News put out the 1st in a 3 part series entitled UAW: CAN IT SURVIVE?
What’s certain is that the hard fought gains made by the UAW are on the chopping block, and that the hatchet job done on Delphi workers will set precedent for courts to void valid contracts. The next time you hear country club conservatives talk about the sancitity of life and activist courts, tell them about how activist judges are busy helping Delphi take away contractually guaranteed health benefits from union workers. If Delphi and GM are allowed to place themselves above the law by using the power of federal bankruptcy courts to void legally binding obligatios, its only a matter of time before the worst abuses of the past return.
In the 1937 Battle of the Overpass the Ford Company committed one of the most egregious and ultimately counter-productive acts in American labor history.
The UAW began its campaign by putting up billboards saying “Fordism is Fascism” and “Unionism is Americanism”. Small clandestine union meetings were held throughout the Rouge plant in order to develop leaders. But Walter Reuther decided that the UAW had to make a bold move to show the workers that the union was as strong and powerful as the Ford regime. An initial attempt involving flying low over the plant in a plane with a loudspeaker was ineffectual. Reuther decided to make a stand, and scheduled a massive leaflet campaign at the Rouge plant for May 26, 1937. He got a license from the city of Dearborn, opened two union halls nearby, and made two reconnaissance trips to the Miller Road Overpass at Gate 4.
Knowing that it would be dangerous and foolish to go alone, he invited clergymen, reporters, photographers, and staffers of a Senate Committee on Civil Liberties to join the organizers. That morning he addressed 100 women from the women’s auxiliary of Local 174 who were supposed to hand out the leaflets to arriving and departing workers on Miller Road.
Two hours before the scheduled time, newspapermen arrived at the site and saw 25 cars filled with men in sunglasses who warned them to get out of the area, and threatened photographers.
An hour before shift change, just before 2 p.m., Walter Reuther, Richard T. Frankensteen, in charge of the overall Ford drive, Robert Kanter, and J.J. Kennedy, the UAW’s East Side regional director arrived. The Detroit News photographer, James E. (Scotty) Kilpatrick, thought the backdrop of the Ford sign would make a great picture, and obligingly, the union men walked up the two flights of iron stairs to the overpass.
Facing the photographers, Reuther and his partners had their backs to the thugs that were approaching them. The newsmen’s warnings were too late. They were attacked brutally: punched and kicked repeatedly. Frankensteen recounted how two men held his legs apart while another kicked him repeatedly in the groin. One man placed his heel in his abdomen, grinding it, then put his full weight on it. Reuther was punched in the face, abdomen and back and kicked down the stairs. Kanter was pushed off the bridge and fell 30 feet.
The Aftermath
Walter Reuther on the left and Richards Frankensteen to the right.
Source: Walter P Reuther Libary
The velvet bitch slap that Delphi and GM are serving up in US federal court doesn’t do physical violence to workers the way that the men of the Ford Service Department did at the River Rouge plant, but it does do grave economic violence to workers trying to defend their rights under legal binding agreements made by Delphi and GM. That the violence is done by pen and paper in place of a foot in the face doesn’t change the fact that it sets a precedent.
The Delphi bankruptcy case is a velvet bitch slap to bring labor to its knees so the the beating the ensues is all the easier. It’s time to wake up America, through subtle changes in labor law, and the destruction of the social safety net, America is increasingly unequal as those on the top now rest upon the rest of us in a manner not seen since the Great Depression.
Of Chinese Walls, and legal Shanghais
One of the most galling aspects of the Delphi bankruptcy is that at the same time that Delphi is pleading poverty before federal bankruptcy courts, the company is awash in nearly $3 billion ….overseas
Delphi does have a competitive wage disadvantage. But with more than $3 billion in cash and credit on hand, it was not really bankrupt. Arguably, Delphi’s problem stemmed from GM’s failure to design cars that could command its historic premium in the marketplace. Its cars even sold poorly with huge consumer rebates. Also, at least eight other lower-wage auto parts companies have declared bankruptcy in the past couple of years, suggesting deeper industry problems, like over-capacity and an unrealistic price squeeze from companies like GM…..
Delphi angered workers like Stover by declaring bankruptcy only on domestic operations, shielding its huge and profitable overseas investments. But “where did that money come from?” Stover asks. “Out of U.S. operations.” Even among its U.S. factories, only a few were big money-losers, and most–like the Kokomo plant–were profitable.
And what about those “legacy costs” for healthcare and pensions? Stover says that, starting in 1984, the union agreed to concessions and cost containment clauses in every contract to pay for those commitments to workers. “Where’s that money now?” he asks. “[It’s] in China, Korea and other countries, making everyone else look profitable. What happened to the money and benefits I’ve been giving up every year?”
What’s happening here is the wholesale looting of contractually guaranteed benefits at the same time as Deplhi has used its investments in China to create Chinese walls between their domestic and international operations. Were it not aided and abetted by a morally bankrupt legal system, this would be a crime on an unfathomable scale.
And the crime only grows larger when the legal Shangaiing that permits Delphi to break contracts leaving workers to decide between jumping ship or staying on board and working at half the wage they agreed to with reduced benefits, is taken into account. And instead of being forced to fulfill its contractual obligation to employees, Delphi is being allowed to take its profits abroad while sticking American workers with the bill for their mistakes.
This video produced by a group calling themselves Soldiers of Solidarity is interesting on several counts. While this is probably put together by 5-6 really pissed of guys in Kokomo, it’s actaully a really good snapshot into the way that alot of people losing their jobs feel. Skip to 4 minutes into the video.
Transcribed from the video
The idea of this isn’t a genuine bankrupcty. They’re paying their bills, they’re continuing to manufacture. The just want to break the contracts, and deprive us of pensions and health care. You know when Miller came back from Japan, he gave an interview, and said the Japanese don’t understand bankrupcty. They think when you’re bankrupt you don’t pay your bills and you shut down, and you stop producing. But in the United States, the airplanes keep flying and the factories keep producing…. In the United States bankruptcy is really about restructuring, breaking the unions, and not paying the legacy costs.
Something about that particular passage was profund to me. It isn’t about bankruptcy, it’s about breaking the union. How the hell did we come to this? When corporatons used Chinese walls to shield profits overseas, and the courts are being used to break the legal contracts and legal unions. This Delphi bankrupcty is a sham.
If they want to declare banrupcty, their foreign assets should be taken into account, and if needed seized by the federal government to fufill legally binding obligations to American workers. This isn’t likely to happen, but I do have a modest proposal for the men and women running for Congress under the banner of the Democratic party.
A modest proposal
The legal precedent set by allowing a corporation to shield foreign assets from domestic obligations is incredibly harmful to American workers. While I’d like to see an outright prohibition on the partioning of domestic and foreign assets in corporate bankruptcy, again this raises international issues that Congress has little or no power to regulate.
However, it’s entirely plausible that Delphi idles its American operations, the intellectual property needed to coninue operations will be shifted out of country, to be used in producing the same products with the same designs in Chinese factories for export to the United States.
If Delphi is able to use the power of border to shield assets overseas while failing to fulfill obligations to workers, the foreign affiliates not subject to the American bankruptcy should be forbidden from using the Delphi trademark, patents, and any other intellectutal property in foreign facilties where the product going to be exported back to the US. Delphi should lose the American rights to all of the corporation’s intellectual property, effectively locking them out of the American market until all their products have been rebranded and have been entirely redesigned so as not to infringe on any American patents they no longer hold the right too.
Delphi’s intellectual propery right in the American market should be awarded to unions representing Delphi workers to be held and administered by an independent board composed of union representatives in proportion to the percentage of the debt owed to the workers they represent. And Congress should pass legislation requring that the United States rights to intellectuall property held be corporations must be liquidated in cases where corporations are unable to fulfill pension or legacy costs to workers.