Caterpillar leads the way in US capitalism's war on workers

Source: Bloomberg Businessweek

by Richard Mellor
Afscme Local 444, retired

US workers and the middle class have taken a pounding over the past 40 years.  We have shown in previous blogs the increasing inequality gap between the haves and the have not’s in US society. According to the Economic Report of the President this trend is continuing as real wages fell 2% in 2012, the 40^th consecutive year they have been below their 1972 high. Along with these new historic lows when it comes to workers’ pay, corporate profits hit a 60-year high as a percentage of US gross domestic product.

Caterpillar is one of the world’s most successful companies, a global giant with 70% of its sales outside the US. It provides the machinery the Zionists use to demolish Palestinian farms and homes. In 2012 the company made $5.7 billion profit on $66 billion in sales. While Caterpillar machinery is used to wage a war of sorts on Palestinians, its political and economic muscle is used to wage an equally savage war against workers at home.  When Canadian workers rejected a 50% pay cut in 2012 Caterpillar closed the plant and moved to Muncie Indiana where “workers accepted lower wages” says Bloomberg Business Week.  “Accepted” is the key word here.  Workers accept lower wages in the same way a rape victim accepts rape; it’s forced upon them.  Caterpillar and its boss, Doug Oberhelman is in the forefront of the war on workers.  After discarding Canadian workers the company waged a successful battle against workers on strike in Joliet Ill who after three months on picket lines ended up with concessions and a 6-year wage freeze for senior employees.

CEO Oberhelman explains why American workers must accept a lower standard of living. “We have to be competitive if we’re gonna win. And frankly, if we’re not competitive … we’re not gonna be here in the next 30 years. That’s a simple message…..”  he tells BW adding that it’s a tough decision as all these characters do when they destroy people’s lives. “I always try to communicate to our people that we can never make enough money….we can never make enough profit.”

Caterpillar’s success at driving down wages has been stellar with some of its workers qualifying for welfare. In other words, the taxpayer is subsidizing capitalism again. “I don’t understand how a company can make billions and billions of dollars in profits and have people on welfare,”, John Arnold who has worked for the company for 14 years tells Business Week. Understanding why this is so is important if we are to move from being victims of history to making it.

As its employees qualify for government subsidies, CEO Oberhelman and the company’s executives have been raking it in.  Oberhelman received a 60% pay increase in 2011 breaking the $16 million annually mark.  Then in April this year his pay took a leap again to $22 million according to BW.  “The average pay for an executive officer at Caterpillar has risen 56 percent over the last six years, to more than $10 million.”  A Bloomberg study finds.

“I love Peoria” says Oberhelman, and we can see why.  Him and his wife own a couple thousand acres outside town and when he’s not savaging workers’ living standards he’s transforming a former coal mine they’ve purchased in to a nature preserve.  Anything these types do that appears egalitarian is all about satisfying their own personal desires this nature preserve is a gift from the workers at Caterpillar.

I remember a Caterpillar strike in Peoria back in 1991.  It went on for months around the same time as the uprising in LA around the Rodney King beating.  This was part of the generalized offensive that heated up in the wake of the PATCO strike 10 years earlier. Business Week describes the effect of that strike on workers and their families:

“As production employees went without pay for months, several small Illinois towns were devastated. Desperate scabs crossed picket lines, pitting brothers against each other. The divorce rate soared, and a handful of workers committed suicide.”

This description of the effect economic terrorism has on workers’ lives could apply to any of the battles fought to defend our living standards and the living standards of the next generation.  These class battles receive little mention in the mass media once they’re over and media coverage laced with lies and bias during them, but despite the propaganda of the 1%’s media that workers are “strike happy” the decision to strike is not taken lightly, it always means great sacrifice for the workers involved.

Like the strikes before it, the strike at Caterpillar in the 1990’s was defeated. It was defeated due to the failed policies of the Labor officialdom that leave strikes isolated, individual workplaces or local Unions fighting what are global corporations independently of the rest of the organized Labor movement and the working class as a whole.  Appeals are made to Democratic Party politicians to write a letter to this or that CEO or walk the picket line for half an hour.  When workers struck Caterpillar’s Joliet factory last May, Illinois governor, Pat Quinn came to the picket line with a $10,000 donation to the strike fund, ”When people are united they can’t be defeated” he told workers.  It’s the same old failed strategy.

At the time of the Peoria strike in 1991, the same forces waging war on Caterpillar workers were savaging workers in LA and creating the conditions that led to the uprising in that city. The economic conditions in these communities were akin to those in the third world and still are, unemployment, lack of opportunity etc. which was exacerbated by the fleeing of the aerospace industry.  Part of a winning strategy in that instance would have been to link the two struggles, mostly white Unionized workers in Peoria and mostly non-union workers and youth of color in LA.  We have the same enemies. But for the Labor officialdom, a victory is a dangerous thing as it inspires people and moves us forward.  Such a development threatens capitalism and the Labor officialdom having no alternative to it undermine any encroachment on its rights by their own members.

When we read the more serious journals of capitalism like Business Week, journals the capitalist class produce for themselves about how best to manage the system they govern as opposed to the mass media which is designed for the rest of us, we can see why the Labor hierarchy’s strategy of damage control, of blaming individual CEO’s and having inflated rats on picket lines to discredit this individual or that has led to defeat after defeat for organized Labor and workers in general.

Guys like Oberhelman, Gates, Buffett, and their political representatives in the two Wall Street parties recognize they are in a class war and wage it consciously as they deny publicly that it exists.  They understand they are defending a system of production; that they are defending capitalism, they are fighting for their system.  Speaking of the former Caterpillar boss Don Fites who oversaw the concessions forced on workers in the nineties, “What we had going on was what I would call a labor rejuvenation,” Oberhlman tells Business Week, “It was over who was going to run the company.” 

We need to take heed of such statements. Every strike is about who is running the company.  But we are taught not to think of it that way.  We are taught not to think of economic systems except when their media talks of communism. When Stalinism collapsed it was the failure of communism.   The causes of the Great Recession or the failure of capitalist states in the former colonial world are not due to the failure of capitalism but of crooked individuals, corrupt CEO’s “accounting errors” and most commonly as “crony capitalism” which is in some way different to regular capitalism. There are crony (greedy) capitalists and good capitalists.  We must join with the good capitalists and help them make their profits at the expense of the bad capitalists for without the capitalists we cannot work; there will be no jobs.  Even if we work for good capitalists we must remain competitive, keep wages low, unions out so that our individual employers can increase their market share and profits. Profits that come from the unpaid labor of the working class.

When looked at objectively, the war waged by American capitalists on American workers has been far more violent and more successful than any terrorist attacks from forces outside our borders.  The rade Union hierarchy has no answer to such an offensive accepting as they do the bosses’ view of the world, that the market and capitalism is the only possible way society can be organized. They have moved from a pathetic almost childish response to open collaboration.

My first thought on writing this commentary was to direct it not to other socialists and leftists, not that I am not interested in those who have similar political views, but to those workers who are drawing conclusions about the battles we have fought and lost over the last 30 or 40 years, the defeated strikes, endless picket lines that accomplish nothing as individual locals are left to fight a global corporation, the state and the police.  We can see that all the gains we have made over 150 years are being taken back and that the US ruling class is becoming ever more aggressive in its assault on our material well being.  For the youth, there is only a future of debt, low wages, war and environmental degradation.  There must be many, many workers in the same position I was in before I was introduced to the ideas of scientific socialism as described by Marx, Engels and others. I was trying to understand the world around me; why they do what they do.

It is this competition, this rapacious struggle for profits that drives the bosses’ to attack our living standards as profits have their source in the unpaid Labor of the working class. It is not personal; it’s business as they say in mafia circles. They are driven by the laws of the system to attack us and it is the system that we have to change if we want to stop that.

This blog exists not simply to provide some information to readers or to satisfy the authors’ need for expression.  We have an agenda, a point of view.  In a nutshell, that point of view is that the way human society is organized, and by human society I mean how we produce, distribute and exchange the necessities of life and the superstructure that supports it, is not only driving us back to Dickensian conditions, conditions that are already the norm for millions of workers under its sway in the former colonial world; it is leading us down the road to extinction through its destruction of the environment, its complete disregard not only for human life but for the natural world that nurtures us.

We argue that we must transform society.  Capitalism, as Rosa Luxembourg once said, has “forfeited its right to existence”.  The class that governs the system has forfeited their historical right to govern. Capitalism when it emerged from the ashes of the decaying feudal system, socialized production. We must now socialize ownership of production if we are to feed the world’s hungry, end poverty, wars and disease and avoid environmental catastrophe.

While we defend every gain no matter how minor. While we wage every individual battle whether a strike, an occupation at our school or university, a rent struggle against slumlords or any other fight to keep what we need to live a decent and productive life, we must do so with the idea firmly entrenched in our mind that any victory is only temporary as long as the system remains intact, as long as the means of producing the necessities of life or the machinery that helps us produce the necessities of life like the products made at Caterpillar remain in private hands and are set in motion only if it swells the bank accounts of the 1%.

As I pointed out in a previous blog, in order to do that we must study our own history and events like the Seattle General strike and rise of the CIO and the US civil Rights movement as well as the great social struggles, strikes, revolutions, battles fought by our ancestors, workers throughout the world from the factories of Bangladesh to the mines of Asturias and South Africa.  We must learn the lessons of our victories and defeats. We must read the writings of revolutionists and writers who have waged an ideological struggle over the centuries against the propaganda and world-view of the mouthpieces of capitalism. We must not be afraid of these ideas and make up our own mind about them rather than rely on our history brought to us by the 1% and their institutions.   It is important always to remind ourselves that those that own the means of production of goods (economic power) also own the means of producing the dominant ideology in society.

It is the task of the class that does not earn its means of subsistence from the profit of capital to change society and change society we must if we are to survive as a species. We owe this to our children and future generations.