Wednesday, November 26, 2008

Auto Workers Need Bailout, Instead Congress Threatens UAW

Auto workers need bailout, instead Congress threatens UAW

By Martha Grevatt
Published Nov 24, 2008 9:28 PM

During the week of Nov. 17, the CEOs of General Motors, Ford and Chrysler, along with United Auto Workers President Ron Gettelfinger, testified before Congress on the need for a government bailout of the auto industry. Specifically, they requested an emergency measure of $25 billion of the $700 billion in the Troubled Assets Recovery Program.

Without help, they claimed, one or more of their companies would go bankrupt, possibly before year’s end. This would threaten the 200,000 who work for the automakers in the U.S. and some 700,000 who build components for vehicles. It has been stated that 2.5 million jobs could be lost if one of the Big Three goes belly-up.

Treasury Secretary Henry Paulson balked at the proposal, arguing that the money was for the banks–which he represents. Speaking for his party, Republican Sen. Spencer Bachus stated, “My constituents do not understand why their taxpayer dollars should go to support less-efficient business.” (Detroit Free Press, Nov. 19)

Christopher Dodd, chair of the Senate Banking Committee, proposed the companies declare bankruptcy first as a condition for getting a little piece of the TARP. (, Nov. 13)

In the end Congress called for the CEOs to come up with a nine-point plan by Dec. 2, explaining how the billions would be used and demonstrating long-term viability and ability to repay the loan. Congress then adjourned for Thanksgiving recess, leaving autoworkers as nervous as ever about their futures.

Rick Wagoner of GM, Alan Mulally of Ford and Bob Nardelli of Chrysler were all grilled on their high executive salaries, private jets and other perks, but the real target of the bipartisan compromise was the union.

The letter signed by House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid asking for “significant sacrifices and major changes to their way of doing business” is a thinly veiled demand for yet more givebacks by the workers. (Detroit News, Nov. 21)

When asked about the UAW, Pelosi stated, “I think everybody has to participate in ensuring the viability of the auto industry.” (Detroit Free Press, Nov. 22) Would a bankrupt GM make the same outrageous proposals to the UAW as its former parts division, Delphi, did in 2005? At that time Delphi President Steve Miller wanted to trash the entire union contract with the exception of the no-strike clause.

Newspaper columnists from Detroit to Washington are going out of their way to demonize the UAW. Detroit News auto writer Daniel Howes complained Nov. 18 that Gettelfinger “isn’t doing himself or his union any favors by insisting that the union... wouldn’t consider accelerating historic gains [read concessions] scheduled to take effect in 2010.”

Conservative ideologue George Will opposes any government bailout. “The answer,” said Will, is to “do nothing that will delay bankrupt companies from filing for bankruptcy protection, so that improvident labor contracts can be unraveled, allowing the companies to try to devise plausible business models.” (Washington Post, Nov. 18)

First to face the axe in any “plausible business model” would be what is known as the “jobs bank.” Since its inception in the 1990s, the bank has provided a measure of job security for autoworkers who would otherwise be laid off. In the bank they perform “nontraditional” work, often for charities, and receive 40 hours pay.

Originally the jobs bank was a concession to allow the companies to eliminate “traditional” jobs through the use of high technology when contracts contained a moratorium on layoffs. When a three- or four-year contract expired, the workers in the bank were no longer protected. Yet in a limited way the job bank upheld the premise that a job is a right.

Now the jobs bank is portrayed as “a symbol of excess and inefficiency.” Clearly on the defensive, Gettelfinger argued against officially eliminating the program by stating, “It’s not gone yet, but it’s almost gone. We’re on the verge of eliminating that provision.” (Detroit Free Press, Nov. 22)

Presently the three companies combined have only about 3,500 workers in the bank, but the numbers could swell. Under the contract workers enter the bank after 48 weeks of layoff.

People are supposed to think that auto workers are overpaid and that they created this crisis for themselves. The reality is just the opposite. People are not buying cars for two reasons: higher unemployment and lower wages. Both are the end result of the capitalist drive to increase profits by reducing the price of labor power.

This is done by decreasing the number of hours needed to manufacture a product—resulting in layoffs–or by pushing down costs through wage and benefit cuts. Either measure reduces the purchasing power of the masses. Workers become increasingly unable to make payments on mortgages, car loans and credit cards. Now there is no more easy credit through which people bought what they otherwise were unable to afford.

The deliberate destruction of the union wage scale throughout the capitalist economy has yielded a glut of products that few can now afford to buy, even on credit. Car sales have hit a 25-year low, and workers pay the price with loss of their jobs.

What shape the bailout takes, and if it ultimately saves all three companies from insolvency, remains to be seen. GM’s Board of Directors is, according to Reuters, considering the bankruptcy option. (Nov. 22) Completely missing in the debate is the notion that jobs, health care and old-age security are not luxuries but basic workers’ rights.

Whatever scenario plays out, what is central to the UAW now is how to restructure itself to again become a fighting machine that can forcibly assert its members’ right to their jobs.

Articles copyright 1995-2008 Workers World. Verbatim copying and distribution of this entire article is permitted in any medium without royalty provided this notice is preserved.

Workers World, 55 W. 17 St., NY, NY 10011
Page printed from:

Detroit's blue-collar aristocrats face fight if bail-out comes

By Bernard Simon in Toronto
November 26 2008 02:00

Ron Gettelfinger, president of the United Auto Workers union, normally shuns the limelight. But these are not normal times for the union. Mr Gettelfinger now pops up regularly in media interviews, press conferences and, last week, at congressional hearings with the chief executives of the three Detroit-based carmakers.

The UAW chief is one of the most outspoken of those demanding $25bn in emergency funding that cash-strapped General Motors, Ford Motor and Chrysler are seeking from Washington to prevent them sinking into bankruptcy.

"The consequences of a collapse by the domestic auto companies would be truly devastating," the UAW says on its website as part of what it describes as "talking points designed to get the facts out". But the consequences of a bail-out could also be costly for the union.

Although the headlines have been dominated for the past week by the chief executives' decision to bring their begging bowls to Washington in their corporate jets, numerous politicians, analysts and bloggers have insisted that shopfloor workers also tighten their belts.

UAW members have long enjoyed a reputation as America's blue-collar aristocrats, with wages and benefits far above the average. Members of Congress questioned Mr Gettelfinger last week about the so-called Jobs Bank, which allows idled car workers to collect full pay just for showing up at the plant each day or performing community work.

"There's little question that there's going to be pressure on existing wages and salaries," says Harley Shaiken, a labour relations expert at the University of California at Berkeley, who is normally sympathetic to the UAW. "The union and its allies will resist that, but it's going to be a tough fight."

The union has been in a tight spot for several years as the carmakers have slashed production in line with their falling market share and, more recently, with the shift from sport-utility vehicles and pick-up trucks to more fuel-efficient cars.

In spite of actively recruiting in hospitals, universities and at other employers outside the motor industry, the UAW has lost almost a quarter of a million members in the past seven years, in large part due to motor industry job losses. Its membership dropped to 464,900 last year, the lowest since 1941.

The union made significant concessions in new contracts negotiated last year. It agreed to take over responsibility for healthcare benefits, and backed away from its earlier opposition to a two-tier wage structure. New assembly-plant recruits will start at about $14 an hour, half the wage for existing workers, and enjoy fewer benefits. Staying in the Jobs Bank is more difficult than it used to be. But the carmakers will not reap the benefit of lower healthcare costs until 2010 and a two-tier wage structure means little at a time when few workers are being hired.

The union takes the view that it has sacrificed enough. "They haven't fully utilised the concessions we've given them", says Fred Swanner, head of a UAW local at a GM transmission plant in Baltimore. Mr Swanner also points to more flexible work practices negotiated at the plant level.

Mr Shaiken adds that "what's key for the automakers is to have the right products. If you slash the wages of everyone remaining, that won't get you through the current crisis."

Mr Swanner says that in considering further sacrifices, he will be guided by Mr Gettelfinger and other union leaders. Workers at the GM plant in Baltimore, he adds, "are just as concerned and worried about the company going into bankruptcy".
Copyright The Financial Times Limited 2008

No comments: