This past 12th of September, 2005, Ford's labor agreement with the Canadian Auto Workers Union (CAW) reached its three-year expiration date, and was remade and renewed after negotiations between the two parties. Talks focused on questions of wages, benefits, retirement plans, and other economic issues, as well as possible downsizing and job cuts. The finalized agreement for Ford employees includes minor wage increases as well as 1,100 layoffs in the next three years. In this agreement also, Ford and CAW set the precedent for the next big three auto companies' – Ford, General Motors, and DaimlerChrysler – upcoming negotiations. Following industry standards, it is very likely that the next two companies will finalize very similar deals with CAW. After an overview of Marx's theories and works, we will discuss what he himself - were he alive today – might have to say about this labor deal.
[...] Marx is successful in shaking us out of our usual perspective on labor relations, which is often blinded by intellectual environments that rarely question private ownership of the means of production or the extraction of labor surplus. For instance, the CAW-Ford pact would seem upon first pass a simple compromise of two side's demands, but Marx reminds us that the worker is inherently at a huge disadvantage. Still, Marx makes little compensation for some structural disadvantages faced by the company. [...]
[...] Since machines are the most economical workers possible, and since one company's technological innovation is soon made obsolete by another's, Marx theorizes that capitalists will therefore continually implement more machines and improved technology. The capitalist then takes these dual techniques of labor subdivision and mechanization, and multiplies their beneficial effects by expanding the scale of his company to near infinity. According to Marx, these are the major steps in order to increase the company's capacity to undersell the competition and develop capital. [...]
[...] Still, since it wanted to regain the year's profit declines from competition, Ford entered the labor negotiations of this past month with a desire eager for cutting the cost of production even further, and was successful in reducing over one thousand positions. Since we know that Ford already operates on a huge scale, subdivides labor, and mechanizes the production process, it comes as no surprise that this final step was indeed to cut jobs. A reasonable counterargument here would say that, to Ford's credit, the company in fact raised wages, rather than lowered them as Marx says they would have. [...]
[...] This is evident when we consider that, when business booms, the capitalist does not proportionately share the increased earnings with his employees. Similarly, in economic depressions, the business owners will first lower his workers' wages excessively in order to minimize damages to the profits. Still, the relationship between wages and profit should be understood as inverse, since a rise in one will create a depression in the other, and vice versa. The subtlety that Marx emphasizes here is that increases in workers' wages are always minimal, while increases in capitalists' profits are always maximal. [...]
[...] This profiteering, compounded by the obvious fact that Ford workers are not in control of the factory or distribution, encourages workers to ban together in labor unions such as the CAW. Such collective organization, according to Marx's theory, is the best way for workers to make demands to and get their needs met by the bosses. From the article, it is clear that Ford's profits were challenged in the past year by competition from cheaply-producing foreign companies and various other companies that were selling cars with better gas mileage. [...]
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