Givebacks and Handouts are not a Viable Model for the Big Three, Unions or Government

Travis Fast

The leadership at the CAW can call it whatever it wants but it already has a name and it is called concession bargaining. And the problem with concession bargaining is that it does not work if the desired goal is to preserve the health of the company and above all jobs. Workers do not control the means of production they tend to them and they do so in terms dictated by management. All the concessions in the world will not fix the problems at the Big Three auto makers. Those are larger structural problems of which the union has no control.

Here is Sam Gindin on the problem with concession bargaining as outlined in his article:

The CAW and Panic Bargaining….As many CAW members know from experience and the union’s educational programs, concessions don’t guarantee jobs. Jobs depend on so much else beyond the control of workers – from the economy, trade policy, exchange rates and the chaos in financial markets, to the age of plants, technologies used, and especially the models placed in the showrooms. Currently, jobs also depend on the extent to which the new vehicles are sensitive to the implications of escalating oil prices and environmental concerns. At the end of the 1970s, when the concessions period began to unfold, UAW Big Three membership totalled some 760,000 in the USA. In spite of the concessions, the UAW repeatedly accepted over the following years, that membership is now down to about 165,000 – almost 80% of the jobs gone.

What concessions do guarantee is more of the same: why would any company that found this golden egg, not keep coming back for more? They also tend to confirm the belief that workers are the problem: if workers are making concessions to save jobs, aren’t they essentially admitting that the gains they won earlier were the problem? So, aren’t more concessions, rather than other policies, the answer? Most dangerously, concessions leave workers cynical about the worth of their union: why get active if unions aren’t in fact fighting back? This concern with the potential cynicism of a new generation of workers was one of the reasons that Hargrove rightly opposed the UAW permanent two-tier system with its discrimination against young workers coming into the factories.

And if you find Gindin too left for your taste here is a comment from the right, Stephen Gordon

And if you give food to raccoons, they won’t come back

From the Toronto Star:

More money for GM despite layoffs, McGuinty says:

Premier Dalton McGuinty says Ontario will give General Motors more money for new projects, despite thousands of layoffs announced by the automaker.

GM wants the Ontario and federal governments to contribute about $140 million towards a new engine plant in St. Catharines, Ont., and a new research centre in Oshawa.

GM has received about $250 million in provincial money, and recently announced layoffs of 1,400 workers in Windsor and about 900 in Oshawa.

But McGuinty says Ontario is still competing with U.S. states to land new automotive projects and must be prepared to pony up some cash.

Why do governments still think that they can win this game?

What both Sam Gindin and Stephen Gordon are pointing to is the tendency of the Big Three to rely on givebacks by workers and handouts by governments in place of developing a truly coherent and viable business model. And when things go wrong the companies revert to their model: Givebacks and Handouts. Neither of which preserves wages or jobs; both of which Unions and Governments were hoping to preserve.


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