Unions and the downward auctioning of working conditions

16 February, 2022

Union referendum at Ford Almussafes this week. Every time the unions organize a downward auction of working conditions they resort to the atomization and silencing ceremony of the ballot box and the secret ballot, a "democratic" alternative to the open discussion and the vote by show of hands during a collective assembly... lest it becomes apparent that there is a collective interest capable of imposing itself over individual fear.
Union referendum at Ford Almussafes this week. Every time the unions organize a downward auction of working conditions they resort to the atomization and silencing ceremony of the ballot box and the secret ballot, a "democratic" alternative to the open discussion and the vote by show of hands during a collective assembly... lest it becomes apparent that there is a collective interest capable of imposing itself over individual fear.

The ideas and even the expressions of bidenism are beginning to seep into European state propaganda. The most eye-catching one relates to the supposed benefits of “strong trade unions”. According to Biden, the weakness of the unions in the USA made it possible for large automotive companies to convert multi-localization into wage dumping. However, the European experience tells us exactly the opposite: within the EU and even within the same country, in sectors with “strong unions” it is the unions themselves which organize competition between factories of the same company and the downward auctioning of working conditions.

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This week at Ford Almussafes: downward auction of labor conditions between European factories of the same manufacturer

Assembly line at Ford Almussafes
Assembly line at Ford Almussafes

The trade union news of the week was the referendum at Ford Almussafes (Spain). The unions proposed a draconian plan to the workers: a wage freeze for the next four years, an increase in working hours and the obligation to work up to 18 Saturdays.

This time they did not even allege that the factory or the brand was incurring losses. The aim, according to UGT, the majority union at the plant, is for the managers of the European branch of the company to “take into consideration” allocating electric car models to Almussafes in the future.

In other words: the unions are organizing competition between workers at different sites of the brand in different countries, pitching some workers against others in pursuit of cost reduction for the multinational company.

Is this an inevitable product of offshoring and the territorial limitations of unions unable to reach factories in distant low-wage countries under authoritarian regimes? No. In reality such competition is organized between factories that lie all within the EU, where all the big unions are part of some larger confederation, such as the “European Trade Union Confederation” to which UGT belongs.

Moreover, such downward auctions of working conditions often do not even occur between countries but, increasingly, within the same country where the same “strong unions” control the works councils and where there are inter-center committees and collective bargaining agreements established by law.

PSA Figueruelas 2018: downward auction of working conditions within the same group and the same country.

Union referendum at PSA Figueruelas in 2018. Every time the unions organize a downward auction of working conditions they resort to the atomization and silence ceremony of the ballot box and the secret ballot, a "democratic" alternative to open discussion and the vote by a show of hands in collective assembly... lest it be seen that there is a collective interest capable of imposing itself on individual fear.
Union referendum at PSA Figueruelas in 2018. Every time the unions organize a downward auction of working conditions they resort to the atomization and silence ceremony of the ballot box and the secret ballot, a “democratic” alternative to open discussion and the vote by a show of hands in collective assembly… lest it be seen that there is a collective interest capable of imposing itself on individual fear.

Let’s take for example the Figueruelas factory of the PSA group (formerly Renault). In 2018 it was one of the most profitable of the group, produced the majority of Opel Corsa cars and was at the forefront of the brand’s exports.

Although Figueruelas was one of Opel’s most profitable factories, it now has to go hand in hand with PSA Vigo’s costs and profitability. According to data from ‘El Mundo’, the wage difference between Figueruelas and Vigo is 17.2%, so PSA is obliged to reduce this difference between the plant in Zaragoza and Galicia.

PSA agreement with Opel workers in Figueruelas: the five keys. Autobild, 1/2/2018

Did the unions organize a fight for all the workers to support those in Vigo to bring their salaries in line with other centers? No. Quite the opposite, they signed an agreement and “fought” for the Figueruelas workers to approve it, accepting…

  1. Wage freeze during 2018.
  2. Wage increases in 2019 and 2020 of 50% of the CPI [inflation] and up to 60% in 2021 and 2022. In other words, decreases in real wages and therefore in the purchasing power of wages.
  3. A 5 % reduction in bonuses, and the gradual reduction of bonuses for special calendars.
  4. A reduction of pause time by 5 minutes.

And “in exchange”… the Corsa would remain on the assembly line… until this year, when a new auction of working conditions will take place, like at Ford.

Weren’t the unions justifying their existence for the exact opposite reasons?

Unions and employers, two groups of managers with common interests in the progress of the companies, reach a pre-agreement to put an end to the metal strike in Cádiz by the hand of a body specialized in promoting agreements between them. In Seville, of course, as far away as possible from any workers' assemblies.
Unions and employers, two groups of managers with common interests in the progress of the companies, reach a pre-agreement to put an end to the metal strike in Cádiz by the hand of a body specialized in promoting agreements between them. In Seville, of course, as far away as possible from any workers’ assemblies.

Unions are wholesalers of labor power. As such, they have long been integrated into the state like any other aggregator or monopolist. As an agent within state capitalism their function is to maximize the contracted quantity and price of labor power within the limit set by profitability.

That is to say, its primary goal is to ensure that the capital of the company, the sector or the national capital, depending on the level at which they negotiate, remains competitive. As we know and experience in all the sectors “in crisis”, when the profitability of the invested capital enters in contradiction with the needs, however basic they may be, of the workers, unions do not hesitate for a second.

They exist in the first place to defend the viability of the business. And they say it openly when they pester us with the deceitful “we cannot ask from the company what it cannot give” or when instead of extending the strikes to unite workers in the struggle for common needs they turn to the state to request “workload” or preferential prices of raw materials for the companies.

But it “assumed” that in profitable companies and sectors their goal was to maximize wages given the average profitability of the sector. Why don’t they work like that in automotive or big industry?

Unions and competition between capitals

2020, Alcoa's unions ask for a better electricity tariff to ensure the company's profitability and its competitiveness to attract new capital.
2020, Alcoa’s unions ask for a better electricity tariff to ensure the company’s profitability and its competitiveness to attract new capital.

Within each country, and especially in the very monopolistic sectors where there are few companies raising a lot of capital, the unions manage comfortably around the expected average profitability for the sector, regulating large masses of contracts and driving wages to slightly above average levels. These are the “strong union” sectors. This was the case for a long time in banking – until the 2009 crisis – and in telecommunications, and continues to be the case in the large electric utilities.

The common key: monopolistic sectors, of concentrated capital, with national production for the national market in which there is practically no competition between companies to obtain new capital because, as in the electricity sector, their position in the capital market is practically guaranteed by state regulation.

But the automotive, shipbuilding, defense and steel industries are a different matter. The companies do not have nationally secured investments on a local monopoly, they depend on foreign investments and are owned by foreign multinational groups.

The goal of national capital in them is to maintain the demand for the auxiliary industry -this one being generally in the hands of national capital- and to benefit from the general productivity pull produced by massive investments with superior technologies.

In other words, national capital and the state struggle to be attractive to international capital not because they participate in direct capital rents but because it improves their global competitive situation and in the medium term tends to increase the profitability in terms of profit of local capital in other sectors.

What does this matter to trade unions? In the youthful epoch of capitalism, the role of trade unions within the system of accumulation (= capitalist economy) was limited to the commodity market – labor power is a commodity in it – but they did not enter the capital market nor did they show any interest in how the location of investments is determined between one enterprise and another.

But now, the unions are institutions of state capitalism, i.e., their first loyalty is to national capital and the state which maintains them. They do not even need to be reminded of this. Real “patriotism”, the defense of national capital, permeates their entire ideology and attitudes. That is why, for instance, the big unions have been the first to call for wage increases to be lower than inflation for at least the next two years in all sectors.

And if normally the part not to forget in the expression “national capital” is “capital”, when we talk about the localization of investments, “national” is the key, because from the national point of view -that of national capital- competition in the capital market is the central part of its goals.

Obviously workers have no vested interest in the technologies used by their employer. But the national capital which hosts it does. And with it their unions. It is no longer enough for them to have a profitable factory. They want it to be the most attractive factory in a multinational group so that the firm’s management can locate the most advanced technologies and chains there.

That is why, even if they are part of the same European organization, the unions of each country compete with those of the others to generate the conditions for investments and capital to flow to their own national capital. And that is why when two factories of the same company in the same country have different working conditions, they will also bid downwards, equalizing downwards even if not even reaching average profitability is at stake.

During the Kelloggs strike the unions not only divided the workforces, they also launched xenophobic messages against Mexican workers who allegedly "steal work" from U.S. plants when they are exploited by the same company in Mexico.
During the Kelloggs strike the unions not only divided the workforces, they also launched xenophobic messages against Mexican workers who allegedly “steal work” from U.S. plants when they are exploited by the same company in Mexico.

Obviously the unions are not going to put it this way. Many unionized colleagues feel they are victims of “an insurmountable trap” resulting from “globalization”. But this is not the case. The problem is that the whole union logic and ideology aims at and necessarily produces the corporatization of workers, that is to say, the framing of their collective action within the iron framework of the interests of capital, whether invested in the factory, the company, the sector or the country.

This is obvious when they subordinate the needs of the workers to those of the capital invested in the enterprise (“ensure viability before increasing wages”) by systematically refusing to raise the struggle at the level where the alternative is no longer “swallow or close”. But even more so when they refuse to wage a joint struggle even within the same company simply because the factories are in different countries and instead they become the whipping boys of a downward auction of workers.

But there is nothing “insurmountable” about “the situation”. Faced with corporatization, necessarily suicidal, the formula is simple: centralism, that is, bringing assemblies together, deciding what to do among all the workers, no matter where they are in the factory, and of course internationalism, radical refusal to compete with workers from another country. Because in the competition between national capitals in the market, as in war, the struggle can only be fought by standing up to “one’s own” national capital and its interests – the national interest – not by beating other workers and ourselves in an alien fight against our brethren.

Read also:
The entries union, centralism e internationalism in our dictionary
Our "Understanding capital to confront challenges ahead" communiqué

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