The Weaponization of Investment

It’s useful to begin by noting how constrained collective bargaining has become in the private sector (and to a significant degree in the public sector as well). The threat of losing union jobs — with alternative jobs, even if found, bringing lower wages, inferior benefits, troubling shift schedules, and even worse working conditions — has come to dominate union strategy.

In this context, corporations have “weaponized” their control over investment. Decisions on investment and collective bargaining were once relatively distinct. Today, however, the auto majors routinely delay key investment announcements until bargaining. This serves a double purpose: a sword hanging over workers’ heads to restrain their demands or force concessions and, after a tentative settlement has been arrived at, job announcements that aid the union leadership and bargaining committees in selling the agreement as an “unprecedented” victory.

What’s further lost here is the asymmetry of the trade-offs. What workers give up in order to get the investments is enshrined in the collective agreement. What the corporations promise, on the other hand, “depends.”

Guarantees or Contingencies?

The investments flagged by Unifor will hopefully come to fruition. But they are intentions, not guarantees. They depend on corporate strategic decisions which can change and also on circumstances that are beyond corporate control.

This contingency is explicitly flagged in the letters each corporation sent to the president of Unifor. The Chrysler language is typical, emphasizing that the investments “will be predicated on both competitive operational practices and appropriate government financial support to build a strong viable business case for future investments.” Chrysler goes on to emphasize that “as always,” the commitments are “subject . . . to market demand, consumer preferences, Company business plan requirements, Group Executive Committee approval and economic conditions.”

The language at Ford and GM echoes all this with GM adding the conditional need to “continue producing profitably” and “the full execution of GMS” (“GMS” refers to GM’s Global Manufacturing System, which enshrines “lean production” — a management approach that intensifies the physical and mental stress on workers).

The uncertainty is greater the further out the investments are. Who can really say what the economy will look like in 2024, when Chrysler looks to restore the third shift and the present collective agreement has already expired? Who knows what the extent of international competition will look like by the time Ford reaches full electric vehicle production in 2027 — after not only the expiration of the present collective agreement, but also after the end of the subsequent agreement?

But even in the case of GM, where the idle assembly lines are expected to be running again in early 2022, the cloud of uncertainty will persist. For one, the Oshawa work will, as under the 2016 agreement, be overflow production — that is, work vulnerable to ending once the extra demand for the vehicles levels out. For another, Oshawa isn’t getting electric vehicles but large pickups with internal combustion engines; in this case, the vulnerability lies in the inevitable acceleration of environmental standards shortening the production life of these vehicles.

A third factor is that the Oshawa plant in particular will be populated by young workers (see below). They will likely — and for good reason — be thrilled with the job opportunity in their first years. But as they settle in and extend their personal time frame into the future, they will have reason for concern and may be open to previously unconsidered alternatives.

Leadership Bravado

Whatever the role of union leaders in lobbying the companies and the government, their actual influence on corporate investment decisions — especially in the absence of the active engagement of the members, a readiness to disrupt production and corporate profits, and the solidaristic mobilization of the broader working class — is distinctly secondary. Moreover, if the investment and jobs really depended on their magical persuasive powers, these union leaders would then also be vulnerable to blame when their magic can’t stop the multiple plant closures workers suffered through in recent years.

Consider, for example, the investment trajectory in Oshawa. In 2016 GM grabbed devastating concessions from Unifor — lower wages and pensions for new workers doing the same job as other employees — in exchange for investment and promised work through the life of the agreement. That work was made available not because GM was “forced” to do so — no such pressure was applied — but only because GM needed extra production to meet the demand that its US plants couldn’t meet. The work that came was therefore “overflow” assembly of Sierra and Silverado pickup trucks. As soon as the extra demand was gone, GM’s promise went with it.

With US plants again feeling stress in meeting demand for these same truck models, Oshawa is once more on GM’s radar. US plants could have been retooled, but not without interfering with production plans already in place. The massive Canadian plant, sitting largely empty, was consequently yet again attractive to GM. And given the long-standing quality of Canadian workers, the 70 cent Canadian dollar, and the cost savings from the Canadian health care system, reverting to Oshawa offered lots of short-term gain to GM.

There was as well an additional factor. When GM was shut at the end of 2019, GM workers retired early or took increased severance packages, severing their future rights of return. What this now means is that the vast majority of the 1,700 workers GM expects to hire will be paid far below the top rates. When the Sierra and Silverado pickups come off the Oshawa lines again in early 2022, assemblers whose rate would have been $36.42 will have been replaced by workers many of whom have a starting wage that is 65 percent of that rate ($23.67). That wage differential of $12.75 per hour — some $26,000 annually for these workers and only phased out over a long eight years — is a hefty further bonus for GM.

In short, there were all kinds of factors involved in the investment coming to Canada: demand trends, production bottlenecks, labor costs. These weighed much heavier than the union leadership’s table-thumping or its sweet-talking attempts to sway corporate priorities. Leadership can of course matter, but the kind of leadership that matters most is one that prepares its members for confronting their employers, not simply waiting to see what the employers will decide.

Rebirth of the Auto Industry?

Declaring a “rebirth” of the Canadian auto industry is, to say the least, premature. When the auto union went into pattern bargaining with Ford, Chrysler, and GM at the end of 1999, Unifor’s fact sheet listed the numbers it was negotiating for as 48,000 workers (this excluded GM-CAMI whose contract came up later). By 2016, this was down to 21,000, and by the beginning of this round, the numbers had fallen to under 17,000 — an overall drop of almost two-thirds.

Though some of these losses will be offset as the new investments come into play, the ultimate numbers are still projected by the companies to remain below the 2016 level. The Oakville investment comes with 500 fewer jobs than are currently there; the Chrysler investment basically makes up for the loss of a third shift this summer; and according to GM, the work coming — 1,700 jobs — will still mean perhaps 500 fewer jobs than those promised in 2016.

Nor does the longer-term future of the industry support it providing large numbers of additional jobs. For both technological and especially environmental reasons, jobs in the industry are not expected to grow at anywhere near past rates. Autonomous vehicles will likely have a negative impact on the number of vehicles on the road (though it is too early to assess how far this will go), and high tech will continue to lower the number of workers per vehicle. The swing to electric cars will be significant, but the environmental limits of even electric vehicles (EVs) — questions remain about the environmental impact of producing and running their batteries — will limit the impact of EVs on auto jobs. So, too, will a shift to public transportation.

At best what we’re seeing so far is not a rebirth of the industry but its “stabilization” after decades of decline and a likely flattening out of job growth.

Conversion?

This raises a different kind of challenge than looking to new auto investments as a savior for workers: Should we be limiting our vision to auto? If the future of the industry involves more plant closures, whether due to economic slowdown in this sector or its restructuring, is there no choice but to bear witness to that? Could we not instead take advantage of the productive potential of Canada’s plants and equipment, its impressive high-tech know-how and engineering capacities, and the documented quality of its workforce, and convert this to producing products beyond auto?

Such transitions are tricky and can be messy. Leaving this to “the market” is unlikely to match the scale of what is involved. The pace will be too slow, the changes too piecemeal, and corporations may be both too reluctant to address the changes needed or too aggressive about searching out other regions of the world to produce the alternative products.

One example of addressing such other needs via domestic production was the campaign by Green Jobs Oshawa, supported by the Canadian Federation of Nurses Unions and the Ontario Council of Hospital Unions, to pressure GM to use its space, resources, productive skills, and ingenuity to make the N95 respirators so desperately needed by frontline workers but not available in Canada.

A more dramatic example relates to the environmental crisis. If this crisis will, as is becoming evident, require transforming everything about how we live, work, travel, and relate to each other, then each and every loss of productive capacity undermines that requirement. Every potentially productive facility must — whether profitable or not in corporate terms — be identified as a social asset to be saved, converted, developed, and used productively in the interest of social demands and particularly environmental necessities.

Environmental Contradictions

The news that Ford and Chrysler were planning to bring electric vehicles to Canada generated great excitement across Canada. But it also exposed the limits of addressing the incredible scale of the environmental crisis by waiting for piecemeal, profit-driven corporations to set the pace and direction of environmental advance. At Ford Oakville, the makeover is only arriving six to seven years from now; at Chrysler, the electrification of Brampton’s assembly plant wasn’t raised; at GM, the new product — a large pickup with a regular internal combustion engine — is the antithesis of an environmentally sensible product.

As for the federal government, its environmental “strategy” involved providing vast amounts to expand pipelines carrying oil, while at the same time establishing a fund to invite investments that discourage the use of oil. And even then, the feds are simultaneously subsidizing electric vehicles and vehicles that are anything but environmentally friendly. Hardly a feasible and urgent plan to address the environmental emergency.

After witnessing how unprepared we were for the COVID-19 crisis, there is every reason for concern with our unpreparedness for addressing the looming environmental catastrophe, a threat of infinitely greater scale. As with providing working people with a measure of job security, the development of the productive capacity to comprehensively address environmental needs cannot happen without extensive planning — and such planning can’t occur without controlling what is to be planned. Confronting this dual task of truly fixing the environment and developing the productive capacities to carry this out will be a central challenge for the rest of this century.

Green Jobs Oshawa

Emerging out of the 2019 closure of Oshawa, a group of workers laid off or retired as a result of the GM closure joined community activists to establish Green Jobs Oshawa. It challenged both GM’s action and the union response. That challenge led Jerry Dias to decry, without directly naming Green Jobs Oshawa, his displeasure with its criticism. His critics, he dismissively proclaimed, were “naysayers.” They were “impractical” and “unrealistic.” They were unengaged “textbook socialists.” (See particularly the CBC film on the closure, Company Town, and the press conference announcing the new investment in Oshawa.)

Green Jobs Oshawa, for its part, took this attention as praise. It had, with few resources, done all it could to get the closure in the public eye and to expose GM. It commissioned a highly respected feasibility study to document an alternative: the possibility of assembling fleet vehicles for various government departments and agencies.

GJO organized forums and educationals and got sympathetic stories into the media. And knowing that good ideas were not enough, it worked to build support among auto workers at both GM and its related suppliers. It established relationships with other unions, including public-sector unions. It developed links to communities across the country as well as with sympathetic environmental groups. And it is now looking to win a core of labor councils in establishing conversion committees that would prepare for the closures or massive layoffs that every community will, at one point or another, also confront.

Far from being disengaged from the reality of what was happening to workers, Green Jobs Oshawa highlighted the chaos and stress in the lives of GM workers as the vagaries of the market and corporate profit decisions pressured workers to make decisions (like severing their relationship to GM) that many would later regret. This was all the more destructive in the parts sector, where the reopening of plants to supply GM may not happen and where the employers involved may not include the presence of basic union standards.

Some cynics see all this as part of a conscious corporate plan that was anticipated back in 2016. If, as is more likely, GM didn’t foresee the need to return to Oshawa, what do we make — as one parts worker put it — of an economic system that puts workers through hell, while production ends up where it was a few years ago and the uncertainties continue on?

It was Green Jobs Oshawa’s broaching of the larger, socialist-inspired questions about thinking beyond GM that seemed to especially irk Unifor’s leadership. GJO supported the new auto investments but also emphasized moving beyond strategies that depended on being competitive with China, Mexico, or the United States. It raised the notions, noted earlier, of converting facilities that may not have been profitable but represented socially productive possibilities, linking industrial restructuring to the environment, and tying both to the need for public ownership and democratic planning.

Such issues are indeed “impractical” if the alternatives are restricted to working within the capitalist rules of the game. But surely questions need to be raised, in spite of the recent auto investments, about whether what has been proven to be especially impractical, in Canada and elsewhere, is continuing on a trajectory that has left workers ever more dependent on the very corporations and economic structures that have steadily undermined their lives. It’s been the refusal of many unions to think in more ambitious and more radical terms, and their lack of confidence in the potential of their members to rise to the occasion if given the information, analysis, and structures through which to struggle, that is at the core of the current crisis in trade unionism.

Thinking bigger has for some time now been critical to even winning the smaller battles. Accepting the confined options that are now described as an unchangeable “reality” has led to a downward spiral of lowered expectations and a decay in the once-inspiring purpose and spirit of unionism. While there remain crucially important exceptions to this decline, unless such exceptions become generalized, unions will remain vulnerable to the slide of their members into the kind of alienated and fragmented self-preservation that was so dangerously exploited by Trump.

A spokesperson for Green Jobs Oshawa has well expressed both the sober reality and the potential facing Oshawa and the young workers about to become GM workers:

We do not feel confident that GM has a long-term plan for Oshawa, as no electric vehicle production was announced. Our community is going to be strengthened by truck production coming back. We have to use this new strength to fight for the future.