Wage Slavery in the American Auto Industry: Obama’s Shame

The Wall Street Journal (WSJ) noted with glee, “Ford’s North American auto operations racked up $4.77 billion in pretax profit during the first half of this year, while GM North America reported $3.4 billion in earnings before interest and taxes.”

What’s the secret of these enormous profits? The WSJ explains:

…A newly hired Big Three [GM, Ford, Chrysler] factory worker now earns about $15 an hour versus $28 dollars an hour for veteran workers.

But lower wages are just one example of the “new” tactics that the automakers are using to make huge profits, sucked directly from the lifeblood of autoworkers.

Profit making comes as a direct result of pumping unpaid labor from the work force, what Marx referred to as “surplus value.” For example, the employer pays the worker a daily wage, the full value of which is created in only a small part of the workday, while the rest of the day is spent working for free — and creating profit — for the capitalist. Most workers instinctively know that they make more in profits for the boss than they themselves are paid; the theory of surplus value simply explains this obvious fact.

There are three ways that manufacturers can pump unpaid labor out of their workers:

production of Absolute Surplus Value
production of Relative Surplus Value
lower wages.

Absolute Surplus Value production happens when the working day is lengthened. When working more hours, the worker simply has more time to create profits for the boss beyond the value reflected in wages. The WSJ explains:

More flexible union agreements now allow the [auto] companies to build cars for 120 hours a week or more while paying less in overtime pay.

These “flexible union agreements” represent a major loss of power for the autoworkers that were once protected from the super-exploitation that has re-asserted itself in the auto industry.

The second kind of surplus value, “relative surplus value,” is produced through speed-ups, often referred to as “productivity gains” or “efficiencies.” The faster the commodity — cars in this case — are produced, the faster the value of the worker’s wage is created, thus allowing more time for the worker to work exclusively for the profits of the capitalist: the unpaid labor is increased in the same amount of hours worked; the workers simply has worked harder.

In all these methods the muscle and nerves of the overworked employees become frayed while taking a huge toll on the body. Speed-ups and longer hours have turned the American car industry around, says the WSJ article:

“We’ve been able to raise the output of the plant without buying a lot of hardware,” said Scott Garberding, Chrysler’s manufacturing chief.

The money saved on ‘hardware’ [machines] is instead pumped out of the muscle of the autoworkers.

The third way that the autoworkers have increased profits is the most directly exploitative: lower wages. Now that wages have been cut in half, the automakers are cranking up production. Ford’s VP of North American manufacturing enthused:

We didn’t think we could run plants 120 hours [a week] and now we’re doing it pretty routinely.

Now that the auto bosses have thoroughly demoralized the workers into working longer, faster and for less pay, they are bent on producing without any limits. One doesn’t have to be an economist to predict the glut of cars that will take place in the very near future, which will serve to further ruin the position of the auto workers via plant closures, layoffs, and consequently more demands for even lower wages.

President Obama has played an especially nefarious role in this process, through his “auto bailout” plan, which unloaded the whole crisis of the auto industry onto the backs of the workers. In exchange for using federal money to bail out the automakers, Obama demanded that the UAW water down its labor contract, and accept the above exploitative measures, in order to make the car companies “viable” against competing carmakers.

Obama’s quest to increase U.S. exports on the global market means that relatively high wage workers in the U.S. are pitted against workers in other countries in a speedy race to the bottom. Slave wages are the new norm in the American economy.

Instead of fighting against Obama’s auto bailout plan, the UAW leadership surrendered. The pro-corporate leadership of the UAW has even gone so far as to take on investments in the companies they are supposed to be confronting in the interests of the workers. With this poor logic, the union leadership can tell the workers that by working harder, faster, and for lower wages, the workers are really helping themselves, since the UAW has investments in the company.

For example, the UAW health care fund, known as VEBA, which provides health care for retirees, is also a mega-investment fund that relieves the car companies of having to pay health insurance. In 2010 the WSJ reported:

The VEBA relieves the car companies of responsibility of lifelong health-care benefits for 800,000 retired auto workers and their spouses…the fund trust [VEBA] still owns 68 percent of Chrysler common stock and 17.5 percent of GM common stock plus warrants for an additional 2.5 percent. Because of its holdings, the VEBA has a seat on each company’s board, giving the union a voice in running of the companies through the trust.

The United Auto Workers leadership has completely caved in to the logic of the capitalist system. They should be looking out for their members’ interests, not the stock prices of the automakers. The UAW leadership has gotten into a flagrant conflict of interest by owning stock in the companies they are supposed to be battling. The UAW leadership now has an economic incentive to insure that its members are exploited to the limit to raise the profitability of “their’ companies.

The United Auto Workers’ members have to set their house in order. No to the union investing in the companies they should be fighting. No to flexible contracts. No to giveaways on members’ hard won health care. Yes to the struggle for a living wage and humane operations. And in the final analysis, they are going to have to start championing the needs of people in the surrounding community in order to fight for their right to a decent standard of living. In this way the UAW can start to build a powerbase that can benefit not only autoworkers but all working people.