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Visteon workers protest in Belfast following mass redundancies in March

EVEN though the United States is often considered the most capitalist country on Earth, there are substantial parts of its industries that remain governed by the workplace relations last witnessed on these shores in the 1970s.

In his biography, Full Disclosure, former Sunday Times editor Andrew Neil claims that Rupert Murdoch would have never attempted a repeat of New International’s bitter move to Wapping at The New York Post because, even though union behaviour mirrors that of the printers who lost their jobs following the switch in the mid 1980s, the political climate does not provide for such a year zero approach.

The most organised union in the US is the United Auto Workers. For decades, it has secured for its members some of the best pay deals, improved working conditions and – most crucially – among the most generous pensions packages enjoyed by American workers. And, for comparable periods of time, motor manufacturers have been calling for salary reduction, arguing that paying an American assembly line operator an average $100 a day against around $60 for his Asian equivalent, was destroying competitiveness. Such arguments have often been all to no avail.

The UAW has an industrial pedigree comparable to that of the National Union of Mineworkers. Legend has it that it was born during perhaps America’s most celebrated industrial incident, the Flint sit-down strike of 1936. In fact, there had been a union in existence for around a year, but the action against General Motors in Michigan galvanised car workers and helped set it on the course to the powerful force it remains to this day, despite the recent hardships faced by the US car industry.

Prior to both the chapter 11 bankruptcies of GM and Chrysler, there had been an 11th hour scramble to find buyers for the ailing giants. In both cases, the size of their pension funds was an important factor in scaring off suitors. Even the relatively advantageous deal secured by Fiat, which holds a fifth of Chrysler, caused much pursing of lips and shaking of heads among industry watchers.

Ford became the only one of the Big Three that didn’t borrow huge slabs of tax dollars under the Troubled Assets Relief Program, but it remains in precarious shape, having made a record loss of $14.6bn last year. It also has to pay $7.3m in credit default swaps to underwrite every $10m of its considerable debt.

Naturally, Ford has been anxious to reduce its outgoings. But because of the UAW’s strong position, it has been denied wiggle room in the one area that it could make the most savings, in salaries. However, after months of tortuous negotiations, an accord between employer and union appears to be on the horizon. The proposal, which UAW president Ron Gettelfinger insists “isn’t a concessionary agreement”, would introduce wage freezes for entry-level workers, a reduction in the number of skilled-trade classifications, and an agreement to enter into binding arbitration on wage and benefit issues.

The UAW had given Ford almost $500 million in concessions in March, but the auto maker doesn’t get everything its own way. Because the union has successfully argued that labour costs should decrease, Ford has agreed to build new vehicles and parts, as well as giving a commitment to create over 2,000 jobs. Alongside this, bonuses of $1,000 return for the first time since March last year. The UAW has struck similar deals with the restructured GM and Chrysler, and Ford is attempting something similar with its unions in Canada, where the pension fund faces a reported shortfall of $1.8bn.

However, Ford’s Stateside industrial relations don’t appear to travel well elsewhere. Visteon, one of the world’s largest automotive suppliers, was spun out of Ford in 2000. At its height in 2004, it employed 70,000 staff at over 200 sites in 27 countries around the world, including the UK, and turned over $18.7 billion in sales.

However, just a year later, the company offloaded 17 less profitable plants and six offices and, in 2006, Visteon delisted from the New York Stock Exchange after its share price dipped as low as two cents. On March 31 this year, the company’s UK operation was placed into administration, having racked up debts of £669m since 2000. Some 560 jobs were lost at plants in Enfield, Belfast and Basildon in Essex. Staff, given less than an hour’s notice of the redundancies, quickly occupied their factories (in something of a replay of the Flint sit-down), claiming that they had been given guarantees on pay and conditions when Visteon had been separated from Ford in 2000. Several weeks of protest led to assurances from both Ford and Visteon that severance packages would be improved.

But the issue was to creep a little closer to home when it became known that the Visteon UK Pension Fund had entered the assessment period for the Pension Protection Fund. In July last year, just months before it went to the wall, Visteon UK sold off its Swansea operation to Canadian parts manufacturer Linamar. As a consequence, workers – but not pension holders – were able to escape the consequences of the collapse of Visteon’s British operation.

The PPF had been established by the Government following a long campaign involving Cardiff steel workers and Welsh politicians, after the collapse of Allied Steel and Wire in 2002 left those workers without pensions. However, the 3,000 ex-employees of Visteon UK, some of whom have been paying into a Ford pension fund for up to 40 years, have since discovered that they may only receive less than half of what they are owed if they are paid through the PPF. The Visteon Pension Action Group, which represents sizeable number of former Swansea workers, says it was promised mirrored safeguards over the fund when Visteon was spun off. It also argues that the PPF may well be unsustainable in the long run.

The action group is now planning to take Ford to court to compel it to the car maker to make good on its promises – promises that it says it has honoured. In the meantime, the pensions regulator is examining the group’s claims. What those workers might give now for UAW representation.