![]() The just-announced tentative UAW agreement with Chrysler - in which half the money the company owes to the union-run retiree health care fund will be paid in stock - is a gamble (albeit one the union probably had little choice in accepting). ![]() But capitalism does not operate through logic. To solve the economic crisis we need to put more money, not less, into the hands of working people. The long-term - and short-term - idiocy of this policy is that cutting the wages of workers and will only prolong and deepen the economic crisis. Though labor costs are less than 10 percent of the cost of producing a car, the pressure from those nonunion plants increases the pressure on unionized workers to give up even more than the mammoth concessions they have already given. Free trade agreements, advances in technology, a weakening of the labor movement and the quest for cheap labor all made it easier to export jobs and move production to nonunion areas of our country.Īn industry that once was almost all union and based in Michigan and other northern states is now moving south and becoming nonunion. Under capitalism, cars are built for profit and companies will build them where the profit is greatest. In contract negotiations with 4,500 employees at the Ford Fiesta plant in Mexico last summer, Ford gave an ultimatum to the union there: accept a two-tier starting wage cut of 50 percent - bringing it down to $2.25 an hour - or the company would move production out of the country. auto companies complain about competition from lower-wage countries, they in turn threaten their workers in Mexico, Thailand, South America and elsewhere to accept low wages as a condition of work. Volkswagen is building a new, billion-dollar plant in Chattanooga, Tenn., that will have cars on the market by 2012. ![]() Hyundai, Kia, Toyota, Honda, Nissan and Subaru are among those that already have or are building assembly plants here. This week we heard the announcement that Detroit-based American Axle will be moving almost all of its production to Mexico.Īs GM and Ford set up shop all over the world, auto producers from other countries are doing likewise in the United States - but these are nonunion operations paying their workers far less than what UAW-represented autoworkers won through decades of struggles and collective bargaining. GM is moving production of the Cadillac SRX SUV out of the country. The popular Ford Fusion is assembled outside the U.S., as will be the much-hyped Ford Fiesta slated to arrive here next year. Long before the current crisis, GM and Ford began exporting jobs and capital to all corners of the globe. DETROIT - In 1970, the United Auto Workers had 395,000 hourly workers at General Motors plants, but two years from now that number will have plummeted to 38,000.
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