International – The CAW and Magna

The CAW and Magna:Disorganising the Working Class

The Canadian Auto Workers union (Caw) has always been a beacon of light for progressive unions in other parts of the world.

However, Sam Gindin, a past Caw official, argues that a recent October agreement that the union has signed with auto parts company, Magna International, is casting serious doubts on its continued militancy.

This startling agreement raises two sets of questions.* What is in it for Magna?* Why did the Caw do this (other than dues)?Before getting to these questions, it is useful to return to the foundations of independent unionism and consider how they relate to the 'Magna Model' the Caw has turned to.

What are unions as independent organisations?The contradiction that has always faced working people is that they are dependent on their employers for work, yet need to create a degree of independence so they can address their own, distinct needs.

The foundation for that independence was a democratic organisation of workers — a 'union'. It resonated with workers because it was truly 'theirs'; it was a space within which the employer had no say.

In practice the innovation of shop stewards, workers elected from various sections of the workplace, was crucial. The stewards represented workers in their daily struggles with management and also acted as mentors and leaders in the development of a culture of solidarity.

Against the god of profits and the devil of competitiveness, workers and their unions developed their own understanding of the world and formulated distinct working-class values.

But all this would come to naught if workers didn't also have an independent basis of power to offset, if not match, the power of the employer.

That power rested on the right to withdraw their labour — a basic democratic right that was only reluctantly recognized, and even then limited, by governments and employers.

Pierre Trudeau summarized this well in his early years, before he entered formal politics:“In the present state of society, in fact, it is the possibility of the strike which enables workers to negotiate with their employers on terms of approximate equality. . . . [Without it] the trade union movement becomes nothing more than one institution among many in the service of capitalism: a convenient organisation for disciplining the workers, occupying their leisure time, and ensuring their profitability for business.” (The Asbestos Strike, 1956)

What's in it for Magna?Magna has been able to limit the Caw to only three of its 45 units and faces no major organising drives today.

Why then has it suddenly opened the door to the Caw (even if it's on Magna's own terms)? Bringing the union in, even on the company's terms, does mean new administrative headaches (at a minimum, more meetings and consultations take time) and possible hazards for Magna (things are stable now — why risk something blowing up in your face?).

Other companies, even if they could get the CAW deal, would likely reject it unless the point was to co-opt an actual organizing drive. In fact, it's no secret that even most of Magna's top management is not all that enamoured with this new step.

The new relationship to the Caw starts and ends with Frank Stronach. Stronach, Magna's founder and current top officer, has always had a paternalistic vision of workplace relations.

Fairness is good as long as he gets to define it. Unions are okay if they are certain kinds of unions. The Caw, which left the American international union in the mid-1980s over how close its leadership had gotten to the companies and how far they had gotten from the membership, was certainly not a potential partner for Stronach.

Nor was the Buzz Hargrove of the years following that separation Stronach's ideal labour leader. But over the past few years Stronach had clearly decided that the new Caw — made desperate by a loss of jobs and with a president vain enough to declare victory no matter the scale of the concessions — does get his stamp of approval.

And so Stronach moved ahead to, as he says, 'transform North American labour relations.'In the Magna model, these foundations for independent unionism are, to all intents and purposes, erased.

It is true and important that the company has agreed to open the door to the union contacting its workers. But that comes at the cost of the kind of union the workers can then have.

Key points of the Magna agreement:

* The right to strike is fully erased. As the Caw press kit puts it: 'There will be no strikes or lockouts under this system' (emphasis added). When the agreement ends, if the members reject the new offer, it goes to arbitration.

* Shop stewards do not exist. The Caw has accepted this. Stewards are replaced by a 'fairness committee' staffed by equal numbers of labour and management reps (who are part of the 'concern resolution process').

The key union rep under this structure is the 'Employee Advocate', a carryover from Magna's traditional practice who seems to be the formal equivalent of a plant chairperson.

According to the Toronto Star (October 16, 2007), the Employee Advocate is not elected from the membership at large but screened by a committee which includes both labour representatives and management(!).

To date how the final selection is made is not public. * The Magna units will be part of one Canada-wide — effectively Ontario-wide — amalgamated local. (This in itself may tend to isolate each unit from interaction with other units in the community).

The above Employee Advocates will make up the executive of that local and constitute, along with representatives from the national union, the bargaining committee.

The local officers — for example, the President and Secretary-Treasurer — will be chosen by this executive rather than, as in current Caw practice, via a vote of the membership.

* As for ideology, the Caw president has proudly declared his enthusiasm for a 'non-adversarial' relationship, repeating (without embarrassment) all the mushy clichés about 'teamwork' and 'being in this together' that he not so long ago scorned for their rank hypocrisy.

This, it is important to emphasize, is not just about rhetoric. The attitude to labour-management relations is one of the criteria that will be used in evaluating acceptability for being the Employee Advocate.

Trouble-makers — those who challenge the system, 'stir up trouble', and have always been the backbone of independent unionism — need not apply.

Magna workers, it is clear, need a union. There are, for example, questions of internal wage parity, equity across jobs, and contract workers.

And Magna has often undercut other Canadian producers in overall wages, benefits, and working conditions.

Magna argues that it sets its wages at the average manufacturing wage for the particular work, that its raises follow that average, and that it has no intention of changing this practice.

Given that Magna is the largest employer in the industry — larger even than General Motors — and in the face of its profitability and provision of outrageous compensation to its executives (Stronach's earnings over the past three years have totalled over $100 million), it would seem that the union is positioned to demand that Magna should actually lead in setting higher standards.

But given the constraints on the union of the Magna model, above all with the possibility of a strike not on the table, it's questionable how much collective bargaining will accomplish.

The union has already agreed to set aside its own practice of establishing defined benefit pension plans at major employers and accept Magna's alternative of a savings and profit-sharing plan.

As for the workplace itself, Magna is steadfast on its absolute control in running the plant; with the union agreeing to ensure the company's competitiveness, it is not simply credible to suggest that the union will introduce any significant challenge to the company on working conditions.

Why Did the Caw Do This?The union might be defended on two grounds. The first is that the union is engaging in a scam: once it has a foothold it will revert to traditional unionism.

But suggestions that this is the hidden agenda do not stand up. In the 1980s, when the Caw was at its peak in terms of confidence, it might have been argued that such an experiment would draw Magna workers into the Caw orbit.

Today, when the Caw has itself been drifting more and more towards corporatist partnerships with the Detroit Big Three, other Caw locals are likely to be drawn into the orbit of the type of trade unionism this deal with Stronach represents.

In any case, it is difficult enough to build a union presence in the best of circumstances; it is virtually impossible when, as in the Magna model, the ideological framework and internal structures all work against you.

The path to the full unionization agreed to here is spread over a 9-10 year period in which the Caw gets access to about five plants yearly.

This implies a self-disciplining incentive: if the union wants all the plants, it will have to behave — and get the members to behave in the initial plants where the union is recognized — in a way that doesn't disrupt the agreement before all the units are in the Caw.

And by the time all the plants are in the union, a decade or so from now at best, a culture will have been established that will not be easily changed.In fact, the more likely scenario for the development of a 'real' union might come from the outside.

Frustrated with a union that draws dues but acts like the industrial relations arm of the company, workers might rebel and look to another union to come in, this time to join workers ready to challenge the status quo.

It should however be noted that this leads to murky legal territory.

Since the units will be under one collective agreement, the Labour Board might rule that they must all stay or go together and can't be picked off one at a time — making a change in unions difficult if not impossible (as was seen in the failed attempt at organizing the banks in the 1980s).

A more traditional defence of this new Caw policy would be that the unionization of Magna is critical to the rest of the parts industry and the auto industry more generally, but the only way to accomplish this is by way of a tactical retreat from principle.

The problem addressed in this argument is serious. There is no question that unionization in today's climate of overwhelming restructuring is extremely difficult and this is all the truer at Magna where keeping unions out has been one of its major investments.

The main point of course is one raised earlier: it doesn't make much sense to kill the patient to cure the disease; the union is better off without Magna than getting Magna but giving up what the union stands for. Sam Gindin teaches political economy at York University. This essay was first published in Socialist Project's E-Bulletin The Bullet (No. 65) on 19 October 2007.

What CAW says about the new agreement

Caw press statement, October 15 2007 Frank Stronach, Chairman of the Board of Magna International Inc., and Buzz Hargrove, President of the Canadian Auto Workers, signed a historic agreement in Toronto today that will usher in a new relationship between Canada’s largest automotive employer and Canada’s largest private sector union.

The agreement, called the Framework of Fairness, will allow Magna employees to participate in secret-ballot votes regarding membership in the CAW.

It also establishes an innovative new structure for labour relations involving workplace elections and referenda; a multi-faceted dispute settlement process; and the use of final-offer arbitration instead of work stoppages to settle contract disputes.

With this agreement, Magna and the CAW will develop a new way of working together,” Hargrove said in signing the agreement. “It will strengthen the CAW’s ability to support auto parts workers at an incredibly challenging time, but in a way that also strengthens Canada’s auto industry.

Magna and the CAW have established an effective working relationship through our existing unionised facilities, and through our participation in joint industry initiatives like the Canadian Automotive Partnership Council,” Hargrove added. “The Framework of Fairness takes our relationship to the next level.”

The Framework of Fairness is not a collective agreement. It is a set of principles that will govern the process whereby Magna workers vote on union membership, negotiate and approve their contract, and resolve concerns.

Magna employees at each plant will have the chance to vote (in secret-ballot elections supervised by independent officials) on whether to approve a new contract and join the CAW.

If a majority of workers in a facility support CAW membership, then that plant will be covered by a new CAW-Magna national collective agreement, and its employees will join the CAW.

The national contract, CAW membership, and subsequent changes negotiated to that national contract must all be approved by Magna employees through secret-ballot votes.

Once fully implemented, the Framework would cover up to 18,000 Magna production employees working in about 45 manufacturing facilities in Ontario.

Magna International is the world’s most diversified automotive supplier, with worldwide sales of over $25 billion (U.S.).

It employs 83,000 people in 23 countries, including over 20,000 in Canada. The CAW is Canada’s largest private sector trade union, representing 260,000 members working in 16 different sectors of the Canadian economy.

The union currently represents over 25,000 production employees working for independent auto parts firms, including in three Magna facilities.

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