Subscribe to Workers Vanguard

View archives

	Workers Vanguard No. 849	27 May 2005

Union Busting at United Airlines

Capitalist Government and Pension Theft

Working people across the country were aghast when a U.S. bankruptcy court on May 10 backed up United Airlines management immunity in ripping off its union pension plans. Many of the 134,000 active and retired United workers will now likely be robbed of at least half their retirement benefits. The message from the bosses is clear enough: just shut up, work hard and die. From shrinking wages and givebacks to the potential shredding of Social Security, labor as a whole faces a similar plight. But this heist takes place at the world's second largest carrier, in a vital industry that is 60 percent unionized. Airline workers have real social power, so why is there no collective fight to stop the bosses' offensive?

It is because they are saddled with a leadership wedded to the rule of capital. The smashing of the PATCO air traffic controllers union in 1981 was the watershed in a decades-long drive by the bosses to turn the clock back against the entire labor movement. At the time, "Solidarity" with PATCO was the rallying cry, and the line should have been drawn then. It was not, and workers have paid dearly ever since. It's time to take a stand!

Despite the tremendous social power that the heavily unionized airline industry workers have, they have been picked off one by one in devastating rounds of wage-slashing, pension-stealing, union-busting giveback contracts. Instead of organizing a powerful, united stand by all airport workers—mechanics, pilots, flight attendants, ground personnel—to defeat the union-busting and shut down the airports, the union tops have played by the bosses' rules and are complicit in creating this disaster for airline workers. It is necessary to forge a leadership not hamstrung by the bosses' rules, one that will take the offensive—such as organizing non-union carriers like JetBlue—to advance the battle from the viewpoint of class war, not acceptance of capitalist exploitation and oppression.

As Leon Trotsky, co-leader with Lenin of the 1917 workers revolution in Russia, wrote in the Transitional Program (1938):

"The question is one of guarding the proletariat from decay, demoralization, and ruin.... If capitalism is incapable of satisfying the demands inevitably arising from the calamities generated by itself, then let it perish. 'Realizability' or 'unrealizability' is in the given instance a question of the relationship of forces, which can be decided only by the struggle. By means of this struggle, no matter what its immediate practical successes may be, the workers will best come to understand the necessity of liquidating capitalist slavery."

There is a lot at stake. The U.S. economy has undergone a significant deindustrialization in recent years, with many workers thrown out of production altogether. Seniors, desperate to make ends meet, are forced into low-wage non-union McJobs. Most young workers can't even get those jobs anymore. Layoffs, union-busting and recurring economic crises are all features of a system of private ownership, where capitalists make profits off the toil of the working class.

Other companies will undoubtedly use what is the largest pension default in U.S. history as a bludgeon against their own unions. In fact, United's major rivals objected to United's getting another chance at a federal loan application last summer, in part to force United to eliminate its pensions so they could follow suit! The industrial unions, organized in the mass struggles of the 1930s, won defined-benefit pensions after the end of World War II. As a result, tens of millions of workers were able to enjoy a level of economic security in old age. Today, ever fewer are covered by such pensions, and now there is an increasing likelihood of the bosses scrapping them altogether. Hobbled by debt, the Pension Benefit Guaranty Corporation (PBGC), the federal insurance agency responsible for taking over defaulted pensions, might itself go belly up, completely erasing even the reduced payments it offers retirees.

Going forward, United is replacing its pension plans with 401(k)s, mostly paid for by the workers themselves from their own paychecks, with the actual benefits dependent on the vagaries of Wall Street parasites. It is a shift in the onus of retirement security from the company to the individual worker, and parallels what Bush would like to do to Social Security.

It is telling that the bosses' government, through Democrats and Republicans alike, has hastened this shift to 401(k)s, while Congress still provides its own members with very generous defined-benefit pensions. Lawmakers can retire as young as 50 and collect in excess of $100,000 a year, with automatic cost-of-living adjustments. As for United CEO Glenn Tilton, his $4.5 million pension trust goes untouched.

Capitalism is marked by a relentless drive to wring more from the working class. Declaring bankruptcy, as United has done, is now a routine scam to turn the screws on labor and make the workers pay off the company's creditors. But while White House officials advise companies like Delta Airlines to file Chapter 11, Congress has imposed more than 100 new constraints on families facing bankruptcy. From single mothers sinking under a mountain of debt to the elderly trying to keep their homes, working people are to be sacrificed to the vultures at the banks.

"Employee Ownership": An ESOP Fable

Nowhere is this clearer than at United, where creditors like Citigroup and J.P. Morgan call the shots, not "employee owners." The myth of employee ownership dates from 1994, when union officials convinced workers to accept massive wage cuts in exchange for employee stock ownership plans (ESOPs) and three seats on the board of directors, promising that "ownership" would shield them against future layoffs.

The ESOPs epitomize the fraud of the partnership of labor and capital preached by the trade-union bureaucracy. Whether or not union representatives sit on the board of directors, the company must cut costs under the pressure of competition and the demands of investors for profit. We warned at the time that any such "partnerships" would only subordinate workers' interests to the company's bottom line:

"Even if the workers had 100 percent, it wouldn't make a fundamental difference. Workers have no control whatsoever over the capitalist market, which is inherently anarchic. At the first financial difficulty they would be at the mercy of the banks.... To 'save jobs' by making one airline 'more competitive' is to drive down the living standards of all."

—"Phony 'Worker Ownership' at United Airlines" (WV No. 593, 4 February 1994)

United's bankruptcy wiped out the ESOPs; since this carrier's profits first took a nose dive five years ago, United has shrunk to 60 percent of its former size, slashing some 40,000 jobs, including half the mechanics. When management demanded concessions in 2002, the response of the union misleaders was to form a coalition, not to organize a fight against givebacks, but as a measure to achieve savings for the company; they eventually negotiated away $2.5 billion a year.

Now management wants more and has turned to the courts to tear up union contracts. Flight attendants, mechanics and fleet service workers, insulted and harassed, their livelihoods at stake, have overwhelmingly authorized strikes to fight these concessions. But struggle is anathema to the union tops, who keep coming back to the membership with rehashed concessionary contracts. Last week, Aircraft Mechanics Fraternal Association (AMFA) officials rolled over, agreeing to a tentative settlement largely indistinguishable from the one United mechanics voted down in January. For its part, the Association of Flight Attendants (AFA) has hatched a campaign to pressure the board of directors into removing United CEO Tilton. It threatens job actions, not to fight for what workers need, but to get a new CEO who might rob them a little less!

Meanwhile, the International Association of Machinists (IAM) officials' deadline to sell out was extended to May 31 by the court. The treachery of the IAM leaders spurred United mechanics to vote in AMFA in 2003, a craft union trading on crass craft prejudice. AMFA leaders are known to show a contemptuous disregard for the unskilled, often immigrant, cleaners organized in the mechanic work groups they represent. This parochial unionism also finds expression in protectionist laments over the loss of "American jobs" as companies outsource more maintenance work to overseas contractors. Divisions by craft and company, which virtually all the union tops regularly reinforce, are a set-up for victimization. That AMFA is no "militant" alternative was shown when its national director advised United after its federal loan application was denied last summer: "You've got to gut the pension plans. I don't see any other way" (New York Times, 2 July 2004). Instead, airline workers need a single industry-wide union of all workers, from baggage handlers to pilots, to facilitate strike action. This would also assist in taking the pension money out of the hands of the companies and putting it under the union's control, as the mine workers once did with their health and welfare fund.

The future of the airline unions is on the line. The capitalists have their weapons: laws like the Railway Labor Act (RLA) and the state, embodied in the courts, the cops and ultimately the army, to enforce them. Workers have their own weapons based on their social power to shut down the industry. But rather than fight, the pro-capitalist union tops hide behind these anti-labor laws as an excuse to head off class struggle. In its place, they pursue government lobbying, which is nothing but an attempt to find common cause where there is none with the bosses' political representatives, especially those in the Democratic Party.

The Bush administration might take a sadistic pleasure in ratcheting up attacks on working people's living standards, but the Democrats are no friends of labor. It was Democrats like Ted Kennedy and then-president Jimmy Carter who unleashed the war on airline unions with deregulation in 1978. Bill Clinton invoked the RLA 14 times to ban potential rail and airline strikes, including a 1997 walkout by American Airlines pilots. In fact, the airlines were given a green light in their attack on retirement benefits with last year's Pension Funding Equity Act, overwhelmingly supported by the Democrats. This legislation allowing airline and steel companies to defer pension payments was supported by many union tops at the time on the ludicrous assumption that it would convince companies not to terminate their plans. Break with the Democrats!

For a Class-Struggle Leadership!

Workers at United, and more widely in the industry, are in a precarious situation. Mismanagement, high fuel prices and ruthless competition have put almost every company in the red. Companies may fold or merge, like US Airways and America West, throwing workers onto the streets. Yet as the votes rejecting concessions and authorizing strikes show, many airline workers want to take a stand. Fear that the company may go under is manipulated to intimidate workers into accepting devastating concessions. The best measure of protection is to fight together, as no single work group or even company workforce is likely to fend off the bosses on its own.

A hard-fought battle is necessary and could inspire a broader upsurge in class struggle—not fighting only assures greater misery in the future. The unions must make use of their weapons: their numbers, organization and collective muscle. The watchword should be "One out, all out; shut down the airports!" After all, the carriers cannot outsource everyone's job. Further, the crisis in the industry is worldwide; airline workers would find allies among unionized labor at their companies overseas and among those workers in struggle at foreign carriers. Organizing the unorganized at the non-union outfits like JetBlue and third-party contractors and fighting for equal pay for equal work at the carriers' regional affiliates are key.

Airline workers have enormous clout. Air transport is vital to a modern industrial economy, moving passengers, a significant volume of mail and highly time-sensitive cargo for businesses. While air freight is only a small fraction of the country's total trade when measured by volume, in dollar value, aircraft transport accounted for 26 percent of U.S. imports and exports in 2003. The U.S. military heavily relies on civilian airlines to move its troops and cargo rapidly during its war mobilizations, as in the imperialist attack against Iraq.

Due to the disruption to the economy it would cause, an airline strike would immediately come up against the capitalist state. United Airlines, for one, is now enforcing seldom-used rules and threatening to use the RLA to fire all who strike. This makes it critical for the unions to organize independently of the bosses' state and in defiance of its anti-labor laws.

When the smashing of PATCO opened a new era of union-busting, the AFL-CIO "labor lieutenants of capital" substituted an impotent consumer boycott for the effective strike action needed. In 1989 they betrayed the hugely popular Eastern Airlines strike by crawling to Congress and keeping the strike from spreading. The brutal givebacks and all-sided shredding of our rights today again pose pointblank the importance of having a class-struggle leadership. At the same time, the international crisis in this vital industry is an indictment of the anarchy and irrationality of capitalist production and screams out for centralized socialist economic planning. What's necessary is to forge a workers party to fight for a workers government and the expropriation of the capitalist class.