Caterpillar locks out CAW workers: threatens to move production to cheaper U.S.

CAW members out in the cold

I wrote recently of the Fiat bosses threatening workers in Italy that if they didn’t accept concessions that would make them more competitive in the global marketplace they would move production overseas.  One of the suggested locations was North America.

The Fiat bosses weren’t talking about Canada either.  The country for cheaper and more pliant Labor they were talking about is the United States.  After years of concessions, cutbacks and elimination of wages, rights and benefits that took years of heroic struggle to win, US manufacturing workers are becoming the apple in the global capitalists’ eye.  From Greece to Indonesia, Nigeria to Ecuador, workers and powerful indigenous movements are confronting the global offensive of capital with an offensive of our own, by comparison, there’s relative Labor peace.

So US workers, at the moment anyway, are a more secure bet.  With the help of the Labor hierarchy and under the banner of free competition, the US bosses have indeed driven the living standards of US workers closer to our brothers and sisters in the former colonial world and below that of workers in other industrialized economies. In the US there is now a low paid, fairly well educated working class by global standards. The bosses, with the help of a trade Union leadership who are on their team have convinced many of us against our gut instincts that we must lower our expectations and our costs if we are to help them win market share from their global rivals.  The heads of organized Labor have gone so far as to help them terminate union activists who dared stand in the way of this race to the bottom.

In Canada, Caterpillar has locked members of the UAW out of their workplace for refusing to accept major concessions demanded by the heavy equipment manufacturer.  The company is threatening to move and it won’t have to move too far.  Wage and benefit costs at a Caterpillar plant in LaGrange Illinois are less than half of those at Caterpillar’s plant in London Ontario. 

The US “has become much more efficient, making it more attractive for global manufacturers.” the Wall Street Journal reports. In 2010, US unit Labor costs in manufacturing were 13% lower than in 2000.  There are numerous commentaries on this blog under the “label” UAW to the right that explain how the bosses, with the blatant collaboration of the heads of organized Labor at the highest levels, have accomplished this.

Kudos to US workers and the middle class.  We bailed out the bankers and the auto bosses to the tune of trillions of dollars and now we have accepted with barely a peep the driving our wages and conditions back to the level of the thirties before the great uprising that lead to the formation of the CIO.  In contrast to the US decline, German unit Labor costs have risen 2.3%, Canada 18% and South Korea 15%.  “Manufacturing in the US is more and more attractive,” an economist for the Manufacturers Alliance for Productivity and Innovation tells the Wall Street Journal.  It is not all wages; a business friendly environment and tax system as well as total domination of the political process by the two Wall Street parties and a weak dollar has helped.  The inequality gap in the US though is well documented.

If the Canadians want to be as “attractive” as us then they need to put their thinking caps on.  All Caterpillar wants to do is cut their wages in half as auto manufacturers have done here in the US and those pesky Canadians are opposed to it.  But how can the boss make profit if the Canadians don’t agree?   Caterpillar says that it has to do this to be “cost competitive” in the global marketplace. 

“The United Auto Workers in the US showed more flexibility” says Dan Ustian, CEO of Navistar International after the company shut down a Canadian plant and moved production elsewhere. Wages and work rule concessions were not forthcoming which prevented Navistar from coming to an agreement with the Canadians. Electrolux, the Swedish manufacturer is about to shut down its Quebec plant and move production to its new facility in Memphis, Tenn.  The German manufacturer, Siemens closed a turbine plant in Hamilton Ontario and has moved production to North Carolina.  The owners of the means of production hold communities and entire countries for ransom, cheap loans, cheaper, no union Labor power, compliant Labor leaders and tax incentives helped Siemens bosses make up their minds to move to NC.  Cities, states and countries offer the global capitalists all sorts of taxpayer subsidies in order to convince them to invest as the rightful owners of capital.  Competition between workers over wages, or our communities over the level of tax and other subsidies, or between workers in the different nation states is a sure road to ruin for us.

Here in the US since the beginning of the decade and especially in the aftermath of the Great Recession and subsequent rise in unemployment, bosses have managed to squeeze more out of the existing and wary workforce.  As hiring pretty much languishes, US business has increased spending on fixed capital with spending on equipment and software at an all time high in the third quarter of 2011 according to Bloomberg Business Week.  US bosses get almost 25% more goods and services out of us than they did in 1999 with the same number of workers and as wages have declined.  “It’s as if $2.5 trillion worth of stuff---the equivalent of the entire U.S. economy circa 1958—materialized out of thin air” Business Week adds. It’s interesting how this magazine of the US bourgeois describes the products of human sweat and blood, of our life activity as “materializing out of thin air”.  It materialized out of increased exploitation of Labor power.

It’s quite possible that the products that comprise this $2.5 trillion might be worthless as far as their use value goes, but it is an example of the increased exploitation of Labor power by capital as the price of our Labor power has declined and the conditions under which it is used have worsened.  What is it like to have your wages cut by 50%? When you go to the store, pay the landlord or mortgage banker or go out to eat (not that you can do that anymore) they don’t lower prices to accommodate your new situation do they? There’s no sliding scale of prices.  Even if you rely on public subsidies like food stamps or any other social service these monies just like our wages is the value we have created returned to us in the form of money.   As Marx says of the wages of the worker, “It is the labor of last week, or of last year, that pays for his labor-power (wages) this week or this year.”

We cannot win if we accept that we have to compete under the terms the capitalist class sets for us.  We built Unions to protects us from competition not facilitate it, not to compete against each other for who can work cheapest, fastest and under conditions most favorable to profit taking.  It’s obvious to anyone that by competition we simply find ourselves in a race to the bottom.  And while the Canadian Auto Workers leadership may be a little more aggressive and militant than their US counterparts they still function within the confines of the market and its laws which means their members must lose ground.

The Canadian Auto Workers president, Ken Lewenza has made it clear that  “his union is willing to be flexible” the WSJ reports, so from the outset, the workers are doomed. Flexibility “is simply a code word for falling wages” wrote Lester Thurow in his 1996 book, The Future of Capitalism. So the response of the workers’ leaders in Canada is to be more “flexible” than us here in the US and we in the US have to be more “flexible” than the workers in Mexico or China.  There is no end to it.

In the aftermath of the Great Recession they nationalized, or took under conservatorship as the journals of capital call it, huge sections of US industry including auto and housing.  They also rescued the market from the edge of the abyss through massive infusions of public funds.  Capitalists took these public funds and speculated, bought other banks with them and stuff.  It is obvious that the only answer to this offensive of global capitalism and its inefficiency and waste is a global offensive of a united and conscious workers’ movement. 

Globalization has made the world smaller.  Workers migrate from country to country.  Agricultural production must liberated from the clutches of the clique that controls it and the production of food, as with the production of transportation and all the necessities of life, must be produced in a rational, planned way under the collective ownership, control and management of those of us whose Labor produces the wealth and the needs of human society.

There’s only one way outa here as they say.

Richard Mellor