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Auto Workers and the Race to the Bottom

by Todd M Jordan |
January 26, 2007
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New jobs and new ‘opportunity’, but at what cost? There isn’t much talk anymore about Honda’s new plant or the “new jobs” and the “opportunity” that Indiana was supposed to get from it. Indiana gave $141.5 million in incentives to Honda, which included tax credits and abatements, training assistance and a promise to expedite the long-sought interchange upgrade at US 421 onto I-74. The Indiana plant will be Honda’s sixth North American plant.

Historically foreign companies like Honda often talked about building new plants up North, in places like Indiana, then typically built down South in the end. After stirring the pot a little - with state governments that are for sale to the highest bidder, and then spinning big business economic rhetoric to the masses, the majority of foreign auto makers almost always moved down to where majority of all the other foreign corporations are, the South. And for good reason: there are no unions. ‘Right To Work’ (for less) laws have played a role in this too.

Nowadays though, setting up shop in the South is not the issue for foreign companies like it was in the 1980s and 1990s. When was the last time you heard of workers in a Toyota plant being organized into a union? Indiana, Alabama, North Carolina, Michigan, it makes no difference. In 2005, American Honda sold 1.5 million Honda and Acura cars and light trucks, and North American counted for half of Honda’s annual global sales. 2005 was the ninth straight year of record annual sales.

To avoid unionization and to control wages and benefit levels the foreign-owned automakers generally match the unionized Big Three production wages. But they have a brutal policy of contracting out all the work that is not directly tied to production. What we need to realize is nearly a quarter of all the production workers in these plants are ‘temporary workers’ who do the exact same job as the old ‘permanent workers’ for half the pay and no benefits.

The pensions of workers at foreign-owned automakers are similar to the Big Three, but their legacy costs, such as retiree health care, are far less. What we must understand is that many of these workers will not last long enough to ever collect a pension at companies like Honda. Without an organized work force and a union contract they have a monstrous injury rate. As a result of this injury rate these temporary workers, our neighbors, are simply fired for the injuries they received while on their job.

Honda was hailed by Indians’s Governor Daniels and business leaders as a great opportunity for our state. Honda boasted about how they make the most profits per vehicle in the auto industry. What they did not boast or hail about was Honda’s industry wide record for worker injuries. Honda, according to reports from the United Auto Workers Union, injured workers at four to ten times the rate of comparable union represented plants.

According to another report in 2002 by UAW organizers, Honda accounted for over 1% of all reported ergonomic injuries in all industries in the United States from 1998-2000, peaking at 1.25% in 2000.

It is not just Honda. Nissan, Toyota and most other foreign auto makers moving factories to the United States have similar reports.

As wages and work rules decline at the Big Three through buyouts and plant closures, we can all expect these foreign automakers to follow suit. Without union contracts and representation in place, workers like those that Honda will employ in Indiana will suffer the brunt of these policies and changes.

Union leaders would tell us that we need to, “buy American” as the solution, but the strategy of protectionism here has failed. This strategy continues to keep organized labor around the world from uniting together. Unions needs to reformulate our strategy. Building a union hall across the street from every foreign owned auto factory in the country might be a good start. But we are going to need to first put current and new members in the ones we have built already.

The ultimate problem and challenge of organized labor is more than anti-worker laws, foreign companies in the South or big business politicians. The ultimate problem is labor’s own policies and strategies.

Until workers begin to understand their collective interest in organizing themselves, workers’ rights will continue to erode. As we have seen at Delphi Corporation, it only takes a few loopholes in the law and a $4 million hit man to pillage a company. Laws, just like politicians, serve only to divide and neither one can unite workers to their common collective interests.

The first step must be for workers around the world to dismantle their top-down bureaucracies and to build our unions into real, democratically organized, bottom-up fighting machines.

Todd Jordan is a member of UAW Local 292 and has played in the important role in the rank-and-file autoworkers movement.