Report: Bargaining Over Corporate Investment

Abstract

20 | International Union Rights | 23/3 REPORT | COLLECTIVE BARGAINING IN CANADA Bargaining Over Corporate Investment: Innovation or Trap? Ever since the sit-down strikes of the 1930s, the cycle of ‘Big Three’ auto bargaining has been a major economic and political event, an indicator of the progress of the class struggle in North America. If such interest has sagged of late, it charged back into the news with the aggressive declaration of Unifor’s president, Jerry Dias, that winning new investments for Canada is at the top of the union’s agenda in its current bargaining round with General Motors (GM), Ford and Chrysler. Dias followed up this challenge to management’s right to unilaterally decide investments with the audacious warning that if these US-based corporations don’t deliver on bringing a fair share of investments to Canada, they can expect a strike. This has set up a confrontation with GM in particular, which has adamantly stated that it won’t negotiate over where to put its profits. Its investment decisions, it asserted, will be made by GM alone and only after the contract has been put to bed – effectively saying, with GM’s typical amalgam of arrogance and paternalism, that it will decide once the workers have shown they will behave. A remarkable aspect of these incompatible stances between GM and Unifor is that both the company and the union are taking different positions than they have in the past. The truth is that when it suited GM, it regularly brought its investment decisions to the table. In every bargaining round in the US since the end of the 70s, GM used the threat of withholding investment and the promise of bringing new investments to get wage restraint or, more often, concessions from the UAW. And for its part, the Canadian section of the union has, over most of that same period cautioned, against its current position, that collective bargaining is not the terrain for dealing with new investment. Jobs were a political issue to be resolved at the level of the state and to attempt to deal with it in bargaining would, the Canadians claimed, only lead to disaster. In the current context, as courageous as it may seem for the union to declare that it will go on strike for investment and jobs, it does seem incongruous to threaten to close plants that the companies don’t seem all that interested in keeping going. Currently, North American sales have recovered since the deep crisis of 2008-9 (sales are strong in the US and have been at record levels in Canada). Profits are impressive by any measure. Yet the recovery of production has varied sharply across North America. US assembly of vehicles has surpassed prerecession levels and Mexican assembly is booming, but Canadian assembly seriously lags. Going forward, things look to be even worse; announced investments in North America have, as the media and the union have noted, dramatically shortchanged Canada. A good part of the Canadian auto components sector is under threat. It is true that workers can, even in bad times and in plants destined for closure, impose significant short-term costs on their employer and so defend or improve their compensation. It is, however, another thing to imagine that such short terms costs, on their own, could be enough to reverse long term strategic decisions over investment. The Unifor leadership certainly has enough bargaining experience and savvy to appreciate this limit. The union may be using the high profile of bargaining in the auto sector, and the drama of a possible strike, to highlight the jobs issue politically, and thereby place it firmly on the political agenda. This is where the union has argued in the past the jobs issue in the auto industry always belongs. But does Unifor’s attempt to secure new investments through collective bargaining represent a powerfully militant, innovative approach on its part? Or could it be walking into a trap the automobile companies have set? If the government offers subsidies – the only public response being bandied about so far in the media, the industry or the union – is this really a solution? The Quagmire of Investment Bargaining It...