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From Labor Action, Vol. 12 No. 3, 19 January 1948, pp. 1 & 2
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
DETROIT – Auto industry production passed the 5,000,000 mark in cars and trucks for 1947 and brought the fabulous net profit of over $700,000,000 to the Wall Street owners of this giant industry, after all taxes, reserves, etc. were deducted from gross profit.
In sharp contrast, the 900,000 auto and allied industry workers finished 1947 in a desperate – and thus far losing – battle to eke out an existence from their wages, whose real buying power has dropped due to the inflationary trend of prices. This is the basic situation confronting. the recently elected International Executive Board of the UAW as it begins its sessions on wage policy on Janu- [Line of text missing – Note by ETOL]
Everything that Walter Reuther’s economists said would happen in 1947 came to pass. Production did hit the 5,000,000 mark. Profits were fantastic. Wages went to pot because of high prices. A similar economic forecast for 1948 is easy to make, unless the UAW and the rest of the labor movement drastically change their line of thinking and fighting on this problem.
Certainly, fighting for higher wages without price increases would have helped considerably in 1947. If the auto corporations had given 23½ cents an hour wage increase without car price increases, as demanded by Reuther early in 1947, the overall economic picture for the auto workers would be much brighter. The failure of the Reuther forces to drive at all costs for this program, first enunciated in the GM strike in 1945–46 and called the GM Strike Program, has put the UAW into the blind alley now reached on wage policy. The failure of the rest of the CIO and the anti-Reuther forces in the UAW to advance even as far as Reuther’s half-hearted attempts brands that leadership as bankrupt.
How do things stack up for 1948?
In order to foresee 1948, one must remind oneself again that the auto industry could have paid a 50 cent wage increase for 1947 or given a $1,000 cost-of-living Christmas bonus to every worker, and still the auto barons would have made over $100,000,000 profit The failure of the auto workers to get back in wages the wealth they produced put billions of dollars into the hands of the Wall Street owners and speculators and accounted for the pressure toward inflation.
In 1948, a continuation of the economic policies and trends of 1947 simply means an intensification of the process that marked the past year. The Wall Street boys will keep gathering millions of dollars for speculation, profit, and drive prices even higher, while labor will have less and less real purchasing power because it gets back less of what it produces.
Once again, and Reuther’s economists have already spoken out on this point, the idea that wage increases can be given without price increases, becomes pertinent. C.E. Wilson, president of GM, has hinted that car prices will go up another five per cent. The new Hudson already sells for more than the 1947 model.
The thinking of the auto barons was expressed perfectly by Wilson, who keeps repeating: “We are selling a $10 product for $7.00.” In other words, car prices are too low. When the auto barons read how new cars sell on used car lots for $1,000 higher than the factory sale price, their profit-crazy minds go completely mad. The $700,000,000 net profit could easily have been over one billion dollars, to their way of thinking, except that Reuther did so much to bring out the connection between wages, prices, profits and production, even if the corporation books were not opened to the public.
Of course, Reuther and his associates will be able to answer easily and effectively the propaganda of the auto barons for higher prices. Any argument that higher prices are required because of wage demands will fall flat simply by showing the profit figures of the big corporations. But winning arguments doesn’t solve a problem. It only shows the way. Even if the UAW does an excellent job against the auto industry in fighting for higher wages without price increases, this can be lost unless the whole CIO adopts a similar viewpoint and struggles unitedly for it. After all, it was Philip Murray, CIO president, who signed a steel contract in 1946 for higher wages with higher prices, and thus broke the back of the GM strike demand for higher wages without price increases.
This blunder of Murray’s must not be repeated in 1948 or the CIO again will suffer a setback similar to that of the past year, in the matter of the fight against the inflationary cost of living. Prices, profits, production as well as wages are as much of labor’s business as management’s, to say the least. Perhaps even Murray has learned something on this score.
Reuther was right as against Murray and other CIO leaders on this question.
Will Wall Street want to take on the CIO in a head-on battle this spring on wages, in view of the international crisis, especially in France and Italy? There are many indications that Wall Street wants to repeat the 1947 wage negotiations: A quick settlement of wage negotiations, without much discussion on wages, prices, profits and production, for the smallest amount possible to sell to the men in the shops. Already some Wall Street spokesmen speak of a ten to fifteen cents an hour wage increase as the figure they think they can get away with.
Certainly a wave of major strikes would hurt the world imperialist plans of Wall Street, and concessions in the 1947 style might be more satisfactory. But labor moves not on the basis of Wall Street’s aims or plans, but on its own needs. A repetition of 1947 wage contracts for labor would be fatal. It would mean more inflation, more profits, a lower standard of living for the auto workers and other working people.
Of course there is a temptation among the CIO bureaucrats to take the easy way put. Repeat in 1948 what was done in 1947 and hope the inevitable doesn’t happen.
The challenge in this situation is directly to the UAW and, above all, to the Reuther leadership which was elected decisively by the ranks precisely because it represented something more and better than the old trade union policies and conservatism. The UAW-CIO is the vanguard of the American labor movement, and its hour of leadership has again arisen.
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Last updated: 6 March 2018