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UAW President: Millions Will Be Devastated Unless Congress Passes Bridge Loan |
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Testifying before the Senate Banking, Housing and Urban Affairs Committee this afternoon, UAW President Ron Gettelfinger didn’t mince words about the auto industry’s need for Congress to approve a bridge loan. The situation, said Gettelfinger,
is critical. It is a crisis….If the Detroit–based auto companies are forced into liquidation, the consequences would be truly devastating, not only for UAW members, but also for millions of other workers and retirees across this nation, and for the entire economy of the United States.
Gettelfinger and the three top executives of General Motors, Ford and Chrysler called on the committee and Congress to approve a $25 billion emergency bridge loan to help automakers weather the current credit and economic crisis that has driven car and truck sales to the lowest level in 25 years.
The automakers have been forced to burn through their cash reserves, and news reports say GM could run out of money and be forced to shut down by the end of the year. As General Motors CEO Rick Wagoner told the committee:
Our industry…needs a bridge to span the financial chasm that has opened up before us.…We’ve moved aggressively in recent years to position GM for long-term success. And we were well on the road to turning our North American business around. What exposes us to failure now is the global financial crisis, which has severely restricted credit availability and reduced industry sales to the lowest per-capita level since World War II.
Committee Chairman Christopher Dodd (D-Conn.) said if the automakers are forced into a bankruptcy,
the repercussions would be severe….If a major industry goes down, it could take huge swaths of the nation’s economy with it.
The $25 billion package would be carved out of the $700 billion Wall Street bailout Congress approved in October.
Says AFL-CIO President John Sweeney:
Our government moved quickly to help Wall Street because of its impact on the entire economy. With the American auto industry teetering on the brink of disaster as a result of the global economic recession, it’s equally critical to help families on Main Street by approving immediate assistance to Chrysler, Ford and GM.
Several Republican members of the committee said the car and truck makers should be left to fall into bankruptcy, and that labor contracts be thrown out and renegotiated with lower wages and benefits.
But as Gettelfinger noted, contracts negotiated in 2005 and 2007 reduced wages for active workers and cut health care benefits for retirees in “unprecedented ways…to help the companies remain competitive.”
Those contracts, said Gettelfinger, mean the
labor cost gap between Detroit-based auto companies and the foreign transplants will be largely or completely eliminated by the end of the current contracts.
At Firedoglake, Jane Hamsher says the more vitriolic attacks on the auto industry recovery and workers’ wages and benefits have nothing to do with economic concerns, but rather with deeply held anti-union beliefs.
All this screaming about bankrupting GM has everything to do with a conservative philosophical imperative that the free market will set all these things right, that unions are bad and they are an affront to free enterprise. It should have been thoroughly discredited by this point, but alas, some continue to cling to it. The problems being suffered by the auto companies right now are nothing more than a shock doctrine opportunity to destroy the UAW to them. They either have not come to terms with the fact that one in every 12 jobs in this country have income that is tied to the Big Three, or they simply don’t care.
The auto industry emergency loan legislation was attached to legislation extending unemployment insurance (UI) benefits for the long-term jobless that passed the House in October. That bill provides seven additional weeks of unemployment insurance for workers who exhaust their benefits, and adds six more weeks for workers in high unemployment states.
The bill also includes $37.8 billion to reduce states’ share of Medicaid costs, as well as $13.5 billion for building and repairing highways, bridges, airports and mass transit, thereby creating 470,000 jobs. In addition, there is funding for more than $3.3 billion in loan guarantees for advanced battery manufacturing and a temporary increase in food stamp benefits.
The Senate is expected to vote tomorrow on the legislation, but a likely Republican filibuster will force a vote that requires a 60-vote majority before final passage. The current Senate has only a slim Democratic majority.
Overcoming the 60-vote filibuster threshold was a major goal of the union movement’s Labor 2008 political mobilization efforts, and working family candidates gained seven seats in the Senate for a 58-vote majority in the next Congress. Two other Senate races remain undecided.
Click here to tell you lawmakers to support the auto industry loan package.
Gettlefinger and the auto executives appear before the House Financial Services Committee tomorrow.
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I have seen statements that the Unions caused the down fall of the auto industry. Bull ship. There is a need to tie the wages of the managers to the pay of the hourly employees. No bonuses. There also is a need for big oil to bail out the Autos. There is also a need to have progress in the direction of complete independence from imported oil and progress to eliminate gases in the air. R&D needs to get off its posterior. There are a lot of places to go. Diversification of fuel, some times two fuels, short and long distance combined.
Now would be the perfect time for the UAW to come out hard with an aggressive campaign to show the general public just what the unions have done to work with the companies in negotiations to improve the competitiveness of the big 3. Not just in Congressional hearings, but with hard number comparisons of union to non-union jobs in the industry. Labor standing up for what it believes in the forefront of this debate, now that would be something. It is time for some shock and awe.
Soothesayers and apologists representing the worst excesses of the neoconservative corptocracy that has seized control of our nation, and our nation’s capital, are now being afforded center stage by the media.
As an example, Cato Institute and Heritage Foundation bought-and-paid-for liars are busy spreading the false notion that autoworkers earn over $74 per hour. Sadly, few in the media are challenging those lies.
The average autoworker earns approximately $27 per hour in wages. That’s about 63% less than what the liars are saying.
Years and years ago we had many more autoworkers in the U.S. than we have today. Due to the introduction of automation and other labor saving devices, the ranks of the autoworkers have been substantially reduced. Labor, for its part, agreed to allow automation in exchange for job security for the then-employed workforce. Over time, the number of autoworkers has been subsequently reduced through normal attrition. In other words, the number of auto workers has been reduced due to the influx of automation.
What would have happened if years ago the autoworkers had refused to allow automation? Well, for starters, they wouldn’t have gotten away with it. Congress would have intervened while claiming that intransigence by autoworkers would prevent U.S. auto makers from competing in the world market. The question of “to allow” or “not to allow” automation is therefore irrelevant.
Autoworkers entered into good-faith agreements with the automakers, and with the blessings of Congress.
Fast-forward 30 years to today. Now many in Congress refuse to acknowledge those accommodations made by auto workers years ago.
During the 90s, Ford, et al, could not produce enough SUVs or pick-ups to meet demand. Both models sold like hotcakes! Everyone just had to have an SUV…city folk, country folk, urban and rural dwellers…everyone!
And boy-oh-boy, as a result of record sales, auto makers paid out very generous dividends to stockholders. CEO salaries spiraled upward. Utopia was at hand! (Have you noticed that no one is calling on CEOs and wealthy stockholders to give back part of the proceeds of the 90s boon?)
Alas, the bubble burst. Today, gas-guzzlers are no longer in vogue. Americans have turned to more fuel-efficient foreign imports. (We had a harbinger of things to come during the era of gas lines in the 70’s. Those warning signs were ignored by corporate big-wigs. They wanted to continue producing high-ticket, fuel wasting, maximum horsepower cars, trucks and SUVs.)
Here we are in 2008. The liars from Cato and Heritage are calling for reductions in compensation for autoworkers. Again! And some bought-off members of Congress are in on the scam. Those unabashedly anti-union lawmakers want to squeeze every last ounce of blood out of the working class before the GOP loses control in Washington D.C. And they are gaining some traction with supposed “friends of labor”!
In the 1990s, the richest 1% in America owned 18% of the wealth. Today, that same 1% owns more than 40% of the wealth!
Are US workers responsible for the economic malaise in our nation? Hardly! According to all objective criteria, the wages of American workers, when compared to cost-of-living, have stagnated over the past 30 years. While corporate profits mushroomed, while preferred stockholders raked-in huge returns, while CEOs and Boards of Directors were eating high on the hog, the purchasing power of US workers stalled.
From the price of warfare to an escalation of health care costs; from manageable mortgage payments to predatory lending; from gainful employment to loss of jobs; from support for public education to packed classrooms and overworked teachers, from security in retirement to insecurity, US workers have lost ground, and just not a little ground.
Why? Well, take health care for example. Over the past decade the medical-industry complex has lavished $2.2 billion on lobbying efforts in our nation’s capital. Divide that number by the 535 members of Congress. It works out to over $4 million per! Not all of Congress is on the take, so some lawmakers got more! Multiply that by all the lobbying dollars that flow into our capital to get a real glimpse at who is running what in our nation.
And the liars from Cato and Heritage and neoconservatives in Congress feeding from the corporate horn of plenty have the gall to blame workers for the plight of the automakers!
Here is something to keep in mind. It is a poem written by Pastor Martin Niemöller and is excerpted from speeches he made during the reign of the Third Reich
“In Germany, they came first for the Communists, And I didn’t speak up because I wasn’t a Communist;
And then they came for the trade unionists, And I didn’t speak up because I wasn’t a trade unionist;
And then they came for the Jews, And I didn’t speak up because I wasn’t a Jew;
And then . . . they came for me . . . And by that time there was no one left to speak up.”
If we abandon our fellow workers in the auto industry, or in any other industry, how much longer will it be before our jobs are scuttled?
If we allow the anti-labor forces in Congress to reduce or negate collective bargaining agreements, how much longer will it be before our compensation packages are subjected to Congressional approval?
From the Wall Street and auto industry bailouts to all the other bailout yet to come, working people must not be placed in the crosshairs.
If there is justice: 1) CEOs in auto and other struggling enterprises will be stripped of their authorities, and the ripcords on their golden parachutes will be severed. They should all be replaced by fairly-compensated, able Trustees. 2) Dividends will be frozen until the companies are restored to solvency. 3) Auto designs must be reconfigured in order to build more fuel-efficient cars.
There should be a deluge of phone calls, letters, and emails to Congress. We must tell our lawmakers to refuse to punish workers for the misdeeds of corporate CEOs.
Keep this in mind as you make those phone calls or write those letters: Imagine a guy wearing a vest with 50 pockets, 49 of which are overflowing with dough. His kid comes up and asks for a buck. The guy points to the one empty pocket and says “sorry, I’m out of cash”.
With the ability of the corporatisits to move money all over the world with the press of a botton, or to hide their ill-gotten gains in obscure locations, they are able to point to the one empty pocket in their otherwise bulging portfolios and say, “sorry, I’m out of cash”.
To help mitigate the current malaise in the auto biz, what would be wrong with the Fed offering say a $1500 buyers’ tax credit on new car orders made between now and years end. To be eligible, the new car purchased would have to have a mileage rating of at least 35 MPG; continue the program through 2009 on autos that have a minimum fuel rating of 40 MPG. It might be enough to keep things afloat.
The union’s voice needs to heard in defense of the auto workers. There is so much anti-union sentiment out there. The UAW hasn’t agreed to competitive contracts, they’ve taken it in the shorts. The unions have to be very careful not to throw away fifty years of hard work it took to get their benefits. If other non-union workers are jealous, the heck with them. Personally, I work in the airline industry which has been lousy for the last twenty years but the unions have been able to keep most of our benefits intact. One of the greatest things the IAM negotiated for us, was snap back provisions. At the end of the contract, we returned to our previous wages regardless of where the company was.
I can see exactly what’s going to happen in the future. The unions pressed from all corners will give in the kitchen sink. Then, in 2011 just two years away GM’s Chevrolet electric volt will sell like hot cakes, the company will make money hand over fist and the employees will be stuck with the non-union wages of Toyota.
The UAW may have to negotiate further concessions but they should have snap back provisions and bonuses tied to future profits so they are repaid for their sacrifices because of mismanagement.
I’d like to see all of the executives bitchin in blogs on FOX news, work for the new starting wages in the UAW contracts and see how THEY like working for such PLUSH wages! - HA!
Lets hope Clearer heads prevail and the necessary Bridge loans come through by Feburary.
Once again it sickened me to see Ron Gettlelfinger sitting there looking like a lap dog for the Big three.
Sure he made a case for protecting the Millions of AutoWorkers and protecting our Pensions, but his case rang hollow with many of the Senators at the hearing because he failed to Own up to the fact that he was dead wrong in siding with GM in supporting a reduction of the CAFE standards .
had he had the courage to admit he was wrong on at least that point perhaps he would have had more sway with the Senators.
I didn’t expect the republican corporate leaders to own up to their follys but I expect better from a Union Leader.
I say give them the 25 billion loan and on fair terms. If they pay it back with interest all well and good. If not take public ownership of the companies, fire the top leaders and install new leaders with vision and also lots and lots of oversite.
I am a lifetime union person. I have struck by myself on a one-man picket line, represented my union in arbitrations, was my school’s union rep, but on this one I am really torn. For years, when they were building those clunkers, those juck heaps whose panels did not fit, those heaps that burned oil after 60,000 miles–if they did not rust out first, for years when the industry fought every single one of the safety measure, guzzled gas,
the workers and the union held the position “Don’t say anything . . .Our jobs are at stake.” And we of course bought their junk in the true spirit of loyal Americans. Well . . . the chickens come home, and the bill is due. Short of the govenment putting severe conditions for future cars into an agreement–which the industry will surely have the nerve to moan about, the alternative will be very painful for us. Maybe, just maybe we ought to do the pain and work toward something more intelligent–if we have the latter in us.
Unions cause expert workmanship. American auto makers need expert CEOs which they don’t seem to have.
It is patently absurd to say “unions cause”. They have not, as some would like to have us think, caused auto manufactures to go broke, the clunkers they built have done that, but nor have they caused expert anything either!
Secondly, working families are not a classification of sainthood. Supporting a family is not a ground for my sticking it to my (distant) neighbors.
The entire industry, from management, to workers, to unions, to shareholders, to parts manufacturers, to local showrooms, to
consumers, all have a responsibility for the current mess. It hardly matters that some may have a greater degree of responsibility than others since there is hardly a way to establish where the greatest failure lies when anyone could have stood up.
shame on you for not posting my mild complaint that gettlefinger should have owned up to the fact that he was wrong to side with the corporate leaders to Weaken CAFE standards.
In a bailout, there has to be sacrifices but not by the working families who are struggling for survival.
While traveling to see Congress about a basilout,all the executives from GM. Ford and Chrysler flew in private jets to the meeting. This expense is in the hundrds of thousands of dollars yet they will complain about wages paid to the skilled workers.
Try to move American auto factories in on other First World countries — w/o legacy costs, paying less than their factories pay assembly line workers. In Germany, France, Italy, etc. you will not be able to pay less than others pay doing the same job BY LAW — and no legacy costs because health and retirement are all government. Ditto for Korea.
Wal-Mart just closed 88 big boxes in Germany after its business plan did not work paying their employees the same as competitors.
For all practical purposes, you cannot build significant competitive anything inside Japan no matter how much you pay — least of all undercutting domestic wages and benefits. But Japan jumps into our domestic market to destroy our industries.
Do foreign managements and engineers sometimes do a better job. Maybe that’s because our best were manufacturing SR-71s (Kelly’s Skunk Works) or now useless space stations while the nations we protected during the Cold War were able to concentrate on domestic appliances.
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In any case we are on the verge of an era in which cars are virtually as easy to design and build as your kid’s toy racing: easy to build — but as reliable as jet engines to run — electric motor and battery, no tricky transmission (goodbye 6 speed electric), plus a little one speed (rpm) generator engine…
…that should yield 100 mpg: the perfect to build, perfect to run, perfect performance technology.
Lithium ion batteries should in a few years be capable of holding, first, 4 times today’s (40 mile) charge and, eventually, 10 times — unbeknownst to a certain Republican presidential candidate who wanted to post a reward of $300 million for a more powerful battery.
http://news-service.stanford.edu/news/2008/january9/nanowire-010908.html
Allowing Japan to succeed at last in gutting America’s flag ship industries would snatching defeat from the jaws of long awaited victory.
What’s wrong with GM is what’s wrong with the American labor market. We allow other nations to come here and build factories to pay our workers less than they pay their own workers (e.g., German) and less than our domestic brands pay theirs. On top of that our “primitive” private health and pension insurance piles legacy costs on top of whoever came first, making permanent advantage for Johnny come latelys.
The ULTIMATE answer (my ultimate answer for everything) is instituting sector-wide labor agreements here, wherein (just like Germany, Italy, France, etc.) people doing the same job in the same locale (which can be the whole USA for nationwide industries) BY LAW work under a single collectively bargained contract for multiple employers.
Don’t do that and those who say the bridge loan could be a bridge to nowhere could ultimately be right — not necessarily; but could be. (The coming easy to engineer, perfectly reliable, 100 mpg electric technology gives auto manufacturing a more promising future.)
Want to understand the “economics” of the whole labor market — took me 7-8 years of digging to figure it all out. Understand what a last lot situation is like? That’s when you are buying up lots for a project and one seller holds out on that indispensable last lot.
Tishman in NYC a couple of decades ago wanted to build a skyscraper but one guy with a little four story taxpayer held out for $250,000 against Tishman’s offer of $100,000. Finally Tishman gave in but the seller then decided he wanted $500,000. At long last Tishman gave in to that only to have the seller jump his demand to $1,000,000, at which point Tishman told him to stuff it and built around him.
Take the last lot predicament and multiply it by billions — of employees that is — and you have the working model of the labor market since the beginning of industrialization. As long as the employer needs someone to work but not you in particular, the employer is the last lot seller. If you have proper unionization (sector-wide in today’s race to the bottom climate) or a high minimum wage then the employer needs you in particular you are both last lot sellers and you can come to a fair and balanced agreement that will give labor as high a price as its utility can justify. That is the whole law and the prophets about the labor market.
More of what’s wrong with the virtually unprotected by modern (sector-wide labor agreements) third, second and first world standards American labor market:
Last year Wall Street handed out $34 billion dollars* in bonuses to their (losing) gamblers: $180,000 apiece to 180,000 gamblers — on top of their $120,000 average gambler salaries. This year it will go down to $26 billion**!
GM has what, 266,000*** hard working assembly line employees? Earning what? Big deal!
* http://money.cnn.com/2008/11/04/news/companies/wall_street_bonuses/index.htm
** http://www.bloggingstocks.com/tag/FinanancialCrisis/
*** http://www.hoovers.com/general-motors/–ID__10640–/free-co-factsheet.xhtml