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Frank Hammer: Obama and UAW leadership restructured auto industry in a race to the bottom, not a
stronger “middle class”

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PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay in Washington. In Detroit on Monday, President Obama delivered his Labor Day speech, introduced by Richard Trumka, the president of the AFL-CIO, who gave a roaring support to President Obama and his coming election campaign. He is a little bit of what President Obama had to say.


BARACK OBAMA, US PRESIDENT: If you want to know who helped lay these cornerstones of an American middle-class, you just have to look for the union labor. That’s the bedrock this country is built on: hard work, responsibility, sacrifice, looking out for one another, giving everybody a shot, everybody chance to share in America’s prosperity, from the factory floor to the boardroom. That’s what unions are all about.


JAY: A little later in the speech, President Obama showed how this principle from the factory floor to the boardroom was applied in the restructuring of the auto industry.


OBAMA: We said that American autoworkers could once again build the best cars in the world. So we stood by the auto industry and we made some tough choices that were necessary to make it succeed. And now the big three are turning a profit and hiring new workers and building the best cars in the world right here in Detroit.


JAY: Toward the end of his speech, President Obama further elaborated his conception of the role of trade unions in our society, also addressing the role of public sector workers in sharing in the national sacrifice.


OBAMA: And that’s true for public employees as well. Look, the recession had a terrible effect on state and local budgets. We all understand that. Unions have recognized that. They’ve already made tough concessions. In the private sector, we live in a more competitive global economy, so unions like the UAW understand that workers have to work with management to revamp business models, to innovate, so we can sell our products around the world. We understand that the world is changing. Unions understand that the world is changing. When union workers agree to pay freezes and pay cuts, they’re not doing it just to keep their jobs; they’re doing it so that their fellow workers, their fellow Americans can keep their jobs. We are all in this together. That’s why those crowds came out to support you in Madison and in Columbus. We are one nation. We are one people. We will rise and we will fall together.


JAY: So now joining us from Detroit is Frank Hammer. Frank is a former president of UAW local in Detroit. He’s also an activist in the Autoworker Caravan, which is autoworkers getting organized to deal with retired and active autoworker issues. Thanks for joining us, Frank.

FRANK HAMMER, FMR. PRESIDENT, UAW LOCAL 909: Good to be with you, Paul.

JAY: So tell me a little bit of your response to the speech. What did you make of this theme, which is from the factory floor to the board room? And he’s essentially saying that’s the story of the autoworkers and the auto industry and it’s a success story.

HAMMER: What’s come out of this now is that the UAW is really going to be basically an arm of the companies in being brokers of great labor, of great labor skills, and is going to be an instrument for getting workers to comply with the competitive agenda that they’re laying out. So this is the debate that went on during the restructuring, and now we’re seeing the results. The UAW in particular, my union, has been–basically had its wings clipped. It was odd to hear President Obama speaking about his support for collective bargaining when in the same breath two years ago they clamped a no-strike pledge on the UAW and GM and Chrysler. How do you retain collective bargaining rights without the weapon of a strike? There is no such thing as collective bargaining if you’re not able to exercise labor power.

JAY: And this was given up by UAW in the last contract, in the restructuring contract.

HAMMER: Structuring agreement, which added–Bush initiated the restructuring agreement. The ultimate agreement that was–came down from the Obama administration included a provision that autoworkers would not be able to strike for better wages or benefits until the year 2015. So what meaning is there to the term collective bargaining if workers don’t have what’s considered a universal right, and that is the right to strike?

JAY: Before we continue, just talk a little bit more, for people that don’t remember what was in that restructured agreement, in terms of wages and some of the other concessions that President Obama seems to be praising.

HAMMER: Well, in exchange for maintaining the companies, which–you know, I mean, workers, my buddies, my working-class friends here in Detroit can think that, well, it was better to have a job than to not have a job at all. So in exchange for being able to maintain these–some of these plants and to maintain some kind of jobs, the givebacks included what was already in the [incompre.], and that was that we had a two-tier wage structure that basically freezes workers at two different or maybe even in some cases three or four different levels of pay and benefits. And this is one of the things that we are now having to live with. And it’s become quite antithetical to–when Obama talks about basic union core values, one of them is solidarity. In fact, that is the core value. And with the restructuring mandating that these two tiers would stay in place and would continue to match the Southern nonunion plans, you have two components that are basically anti-union that were integral to the restructuring. One was nonunion plants in the South, and the other one that we would carry on with a two-tier wage structure–.

JAY: And just to remind people, that was, what, about an average of $28 an hour for workers that were already working, and new workers would start at somewhere between $14 and $16 an hour, almost about half.

HAMMER: Yeah, that’s correct. The new hires are hired in at $14 to $15 to $16, although I have to point out that we have many instances now where there are workers working–for example, at the Jeep plant that President Obama visited in Toledo, where workers are making $12 an hour. And there are now parts suppliers who are workers that are working for $9 an hour, which is barely poverty wage, that are part of the auto industry. And that’s what’s happened since 2009.

JAY: Now, there’s a Ford agreement coming up, and there’s a piece in The Detroit Free Press that quotes autoworkers saying that they’re ready to strike to get rid of this two-tier because Ford’s been making a lot of money. I can’t remember the number. I don’t know if you do. It’s billions of dollars of profits since 2009.

HAMMER: Ford made $14 billion, I believe it was, last year. And this year, combined with General Motors, it made $10.7 billion so far. So they’re having a very profitable years and during [incompr.] restructuring. Workers are seeing not only cuts in their wages, like the new hires that are coming in at $14 an hours or less, but they’re also–there are no–there’s no pension. There’s a 401(k). And the health care is a very stripped-down version of health care. So the new workers are actually not part of this middle class that Obama is wanting to say that the strength of our economy relies on the strong middle class. Well, the autoworkers that are making $14 or less are not thinking to themselves as they’re part of this middle class.

JAY: Well, what do you say, then, to autoworkers who say we had no choice and the union had no choice, that it was, you know, these kinds of concessions or see the American auto industry go down the toilet?

HAMMER: Well, we have a legacy of 20 years of not organizing the workers in the South, and we are now sort of reaping the rewards of that. In fact, I would say that what’s happened is that we had a seesaw between the organized north and the non-organized South, and there was a 20-year period there, a window where we might have won some of the Southern workers to seeing that a union was valuable. We were not able to do that.

JAY: So it’s not even so much the issue of globalization, global competition; it’s competition, nonunion competition within the United States that was helping create this leverage against the American, northern autoworkers.

HAMMER: Correct. The nonunion workforce in the South continued to grow. And it was–every transplant that set up shop in the South, they were paying, first, comparable wages to the UAW, so the workers were able to benefit from the unionization in the North. But the scales have been tipped, and now the Southern plants and the lower wages and so on are now bringing down the rest of the unionized workforce. And I sort of look at Hurricane Irene as a sort of a good metaphor, because all of a sudden we have the consequences of this hurricane reaching up into the state of Vermont, and we’re seeing the consequence of the nonunion South reaching up into the Northern unionized sector and bringing the unionized sector down, which of course is going to have negative consequences for the nonunion workers in the South, because, of course, Toyota and Nissan and the rest of them will say, well, we have to be more competitive with the workers in the North, so we’re going to have to cut it down a notch down here as well. So it’s a race to the bottom. And, unfortunately, we’ve been sucked into this race, and right now there’s no end in sight.

JAY: So, again, how, then, with President Obama saying unions understand this has to go from the factory floor to the boardroom, and unions understand we’re all in this together, we’re one nation, then what is the role of UAW leadership in all of this?

HAMMER: Well, that’s where the debate lies. And, you know, the UAW and the leadership believes that we have to maintain the competitiveness of the companies in order to survive. But I think that’s a quest with no end, because where do we stop with being competitive? Will we be competitive, essentially, with Mexican labor? Will we be competitive with Chinese labor when the Chinese cars start coming to Detroit, when they start coming to the US? So it seems to me that we have to adopt a different model, and the model has to grow in terms of global solidarity, so that workers at Ford here and workers in Mexico at Ford begin to speak a common vocabulary across our language barriers and begin to mount joint offensives against Ford Motor or General Motors or Chrysler or Fiat and so on.

JAY: Okay. In the next part of our interview we’re going to talk about did President Obama have another choice, could he have done something other than what was done to restructure the auto industry. So please join us for part two of our interview with Frank Hammer on The Real News Network.

End of Transcript

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