Showdown at Delphi:
What Happened to the American Dream?

By Lee Sustar

Jim Baemmert will tell you that he was always the biggest proponent of labor-management cooperation at the Delphi Automotive Systems catalytic converter plant in Oak Creek, Wis. He saw collaboration as the key to the survival of the plant’s former owner, General Motors, and U.S. industry as a whole. These days, Baemmert’s outlook has changed. A bankrupt Delphi is out to slash wages from around $26 per hour to $9.50.

Even retirees like Baemmert remain in the line of fire. Although GM promised in 1999 to pick up the tab for Delphi retiree benefits if necessary, the company got the United Auto Workers (UAW) leadership to agree to cuts in retiree medical benefits worth $3 billion a year and the diversion of a promised wage increase for active workers into a health care fund instead.

All this, said Baemmert, is part of a corporate attack on working people that’s backed by the Bush administration and Washington. As a result, the former advocate of what the UAW and the companies call “joint programs” now expects class confrontation to erupt across U.S. society.

“It’s going to come to a head, whether it comes at GM or just comes in a social uprising,” Baemmert said in an interview. “I don’t believe that corporations and governments today can continue to do what they are doing, without people finally getting to the point of hurting enough that they—well, civil war is a nasty word, but I see it coming.

“You can only go so far. I make more in a pension than I can get out in the open market for a job today. And my pension doesn’t give me a living that’s fantastic. The jobs that we had at one time, they’re just going away. Eventually, it’ll get to a point where enough is enough. I hope I don’t live to see it. But it’s coming.”

Baemmert was one of seven Delphi Oak Creek workers and retirees who, along with Local 1866 President Skip Dziedzic, gathered in their union hall November 4 to discuss their lives and battles in their plant.

All shared Baemmert’s sense of betrayal at Delphi’s drive to cut pay and benefits—and, if a leaked corporate memo is to be believed, shut down the plant entirely. This, after all, is a local union that has never had a strike since the plant opened in 1974, and that met every GM and Delphi demand for cooperation.

Cynthia Zanada was central to that effort. First hired into the plant in 1974, she works in the suggestion box, a cash-incentive plan funded by labor-management joint programs that paid workers for their ideas to make the plant work more efficiently. This process played a role in reducing the head count of hourly workers in the plant from a high of 1,500 in 1979 to under 500 today—owing to both lean production methods and a shift in increasing amounts of production to suppliers in Mexico and South Africa.

The biggest change, Zanada recalls, came during the 1998 GM parts plant strike in Flint, Mich., when management used the shutdown to pull out the old assembly lines and replace it with a work cell setup that, she said, could be loaded up on a few dozen semi trucks and hauled away in a couple of days.

Zanada, whose son is a veteran of the Iraq war, compared the Bush administration’s justification for invading that country with the reasons given for Delphi’s crisis. “They lied to us [about the war], and I am sure this is a lie,” she said. “This company in 1999 had no legacy costs. They had what—$11 billion in their pension fund? Where did that money go? It was mismanaged.”

“No,” interjected Mike Kahle, another 31-year veteran and recent retiree. “It was managed well. They built companies [overseas] so they could get out of here.”

“They actually did,” agreed Zanada. “But no one is holding them accountable.” She’s put in her own papers to retire a couple weeks before the December 16 deadline set by Delphi CEO Robert “Steve” Miller for the UAW to agree to concessions—or take their chances when Miller asks a bankruptcy judge to void Delphi’s labor agreements altogether.

Meanwhile, for the many Delphi workers who gave into management’s high-pressure sales tactics and bought company stock, there’s another bitter twist: Delphi stock is now worth just pennies, even though only the company’s North American holdings are in bankruptcy. “When I bought the stock, it didn’t say Delphi North America,” said Local 1866 member Michael Luepke, a trainer in the plant. “It just said Delphi.”

No one ever went to work at the Oak Creek plant expecting an easy job. But the money was good, especially to young people in their early 20s who had never seen a paycheck that size.

Jim Baemmert pointed out that a strong affirmative action program led to hiring from nearby Milwaukee, creating a diverse workforce.

Kahle remembers gearing up production before construction workers had even finished building the plant—walking around in a hard hat and being happy to do it. “We all grew up together” on the job, he said.

For Ruth Luepke, who took a job in the plant in 1978, it was a way to earn some money while she attended the local branch of the University of Wisconsin. But the union wages were good, and she met her husband, Michael, there. So she dropped out of college and stuck with the job—just like her mother, who met and married Ruth’s father at a nearby GM plant, where both worked until retirement.

The health care benefits were another attraction. Ruth was born with emphysema, but she’s never had any extended sick leave. “If I take FMLA [Family Medical Leave Act] time, you know I’m going to die,” she joked. Ever since Delphi’s bankruptcy filing, she, like most union members, is working seven days a week.

With Delphi rushing to stockpile parts in the event of a strike, management is using overtime to compensate for what some workers call an unofficial work-to-rule—running jobs strictly according to the contract and safety guidelines, an approach that slows down production’s usual breakneck pace.

As a result, Ruth is as busy as ever in her job coordinating the just-in-time steel deliveries that keep the plant running. The job is so vital that managers often call her at home to round up an emergency delivery to keep the lines running. “I told them if they call me at home anymore, they’re going to have to pay me overtime—and they said yes,” she laughed.

Ruth and Michael thought they could count on GM’s and Delphi’s medical plan into their retirement years. Now they live in fear that those benefits will be slashed and that serious medical bills would immediately overwhelm the proposed pay cut to $9.50 per hour demanded by Delphi.

“I don’t think we’re going to have a middle class anymore,” she said. “There’s just going to be rich and poor.”

The uncertainty at Delphi has put new stress on her health. “My lungs are failing,” she said. “I’m already on oxygen. I’m more worried [about Michael], because he wants to get a job with health benefits for me.”

Terry Gruenewald, a 31-year veteran, finds himself in a similar predicament. His wife is unable to work due to health reasons, but he hasn’t been able to get her on Social Security.

“I’ve got a wife who is teetering almost every month on getting pneumonia, which means a week’s stay in the hospital,” he said. “If I didn’t have health insurance to pay for it, that bill is going to rest on me. If I’m making $9.50 an hour, I can’t touch that first week, much less try and pay for my house, much less try and pay my heat and electric.”

While long-term Oak Creek workers suddenly face the possibility of retirements turning into years’ more work, their younger counterparts, such as Jennifer Grabcyk, face the pressure of raising children and making decades of house payments.

Before hiring on at Oak Creek six years ago, Grabcyk managed a Pizza Hut restaurant for $9 per hour. “I worked ridiculous hours, and it was crazy,” she said. “When I got into Delphi, it was just amazing. It was a great place to work. Everyone was so nice. I had great benefits, and I had never had that before.”

Would her Delphi job in joint programs be worth doing for Miller’s proposed Pizza Hut wages? “I don’t think I could survive,” she said. “I have a mortgage and a small daughter.”

Along with the wage cut, Delphi wants massive cuts in health care benefits. “Do the math,” Mike Kahle said. “Figure out the hourly wage, and then figure out what they’re talking about you having to pay for health care. I don’t know where that leaves any money for anything else. It comes out to a poverty level. You wonder when you should bury a company. If it gets down to $10 an hour, and there’s no health care and no pension, who would say don’t bury them? There’s nothing to lose anymore.”

Ruth Luepke put it bluntly: “I think we’re coming to be a Third World country.”

Who and what is to blame for the crisis at Delphi? In the discussion at the Local 1866 hall, Mike Kahle complained that the UAW should have stepped up a Buy American campaign years ago. Terry Gruenewald said the problems began in the 1970s when the Japanese electronics makers displaced U.S. ones.

Local 1866 President Skip Dziedzic said the unions also had themselves to blame for organized labor’s decline, and should have shut down the country with a national strike when President Ronald Reagan fired and replaced 11,000 striking air traffic controllers in 1981.

“I don’t think we’re going to have a
middle class anymore... ...there’s just going to be rich and poor.”

But again and again, the anger focused on the wealthy, the powerful, the politicians. Not on Delphi CEO Miller—he’s just a front man for the board of directors, Kahle argued—but those behind him, along with a Republican White House and Congress.

Gruenewald compared the situation in the U.S. to that in France and Russia on the eve of the famous revolutions in those countries. “Certain key people had all the money in Russia,” he said. “And what happened? The Tsar fell. There was a huge uprising. The United States has never seen that. The only time they saw that was back in 1776. What does history tell us? You beat the people down far enough, and they’re going to rebel.”

Rebellion was the order of business at a rank-and-file meeting attended by 150 UAW union activists from around the Midwest. The meeting was held November 6 at the UAW Local 1231 hall in Comstock Park, Mich., which represents workers at a Lear Corp. auto parts plant slated for closure. The meeting—the largest of its kind in decades—was initiated by Gregg Shotwell, a member of UAW Local 2151 at the Delphi plant in Coopersville, Mich., and author of the widely read Live Bait & Ammo newsletter. The meeting attracted dozens of workers from Delphi and GM, as well as other UAW members from plants owned by DaimlerChrysler, Ford and American Axle, a supplier spun off from GM in the 1990s.

The agenda included a discussion of the strategy of UAW President Ron Gettelfinger, who has so far kept mostly silent about Delphi while endorsing GM’s demands for $3 billion per year in concessions for health care.

Workers discussed the need for industrial action—including a possible strike at Delphi—with a work-to-rule campaign as a possible first step.

Many of those who spoke reported hostility to any action by union leaders, despite Delphi management’s extreme demands. “I’m afraid that [Delphi CEO] Miller is the one who is going to make the call” for a strike, Shotwell said, pointing out the need for rank-and-file activists to prepare the ground. “Work to rule is a safe and legal way of slowing down production.”

The meeting attracted veteran militants who have long been critical of the UAW leadership’s acceptance of concessions as well as those who have been supportive of the union.

Two veterans of the 1990s strikes at Caterpillar were on the agenda to discuss the lessons of the work-to-rule campaigns that preceded walkouts at the earth-moving company. “You still need that strike threat,” to make a work-to-rule effective, former UAW Local 751 President Larry Solomon told the meeting.

An active Caterpillar worker, George Cornwell of UAW Local 974 in Peoria, Ill., focused on how to win over coworkers into supporting action in the face of pressure from management and union leaders. Cornwell was fired by Cat earlier this year, but was rehired months later following a national effort by rank-and-file UAW members that pressured union officials into taking action.

Although he’s eligible to retire, he’s remained on the job to rebuild the UAW at Caterpillar after its defeat in the strike and the union’s acceptance of another concessionary contract last January. Delphi and GM workers, he said, now have to step up to the fight: “We have to take this battle upon our shoulders for our children.”

—Znet, November 9, 2005