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Bush’s Auto Industry Loans Come With Unfair Conditions for Workers |
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After letting the auto industry hang for weeks following the refusal by Republican senators to approve a loan to help automakers get through the end of the year—and a day after Chrysler said it will shut down all 30 of its North American plants for at least one month, putting 46,000 employees out of work—George W. Bush announced his administration’s offer to automakers today.
Bush says he’ll give automakers $17.4 billion in emergency bridge loans. Some $13.4 billion would be available this month and next—$9.4 billion for GM and $4 billion for Chrysler. Ford Motor Co. has said it does not need immediate help.
But the loans include some unfair burdens on workers, according to the UAW. Union President Ron Gettelfinger says workers are pleased that the Bush administration has acted to provide the urgently needed emergency bridge loans but that the workers should not be singled out for unfair conditions. Says Gettelfinger:
The [bridge loans] will keep the doors of America’s factories open, keep Americans working and prevent the devastating economic consequences for millions of Americans and thousands of businesses that would have resulted from a liquidation of operations by one or more auto companies.
All stakeholders—management, directors, bondholders, suppliers, dealers, workers—will have to participate in shared sacrifices to help the industry move forward.
Pointing out that autoworkers already have made concessions and scarifices, Gettelfinger says:
While we appreciate that President Bush has taken the emergency action needed to help America’s auto companies weather the current financial crisis, we are disappointed that he has added unfair conditions singling out workers.
We will work with the Obama administration and the new Congress to ensure that these unfair conditions are removed.
Bush said the rescue package gives the automakers three months to come up with restructuring plans to become viable companies. If they fail to produce a plan by March 31, the automakers will be required to repay the loans immediately.
Emptywheel reports on Firedoglake that the Bush loans will force union workers to accept the terms of a pay cut amendment introduced by Sen. Bob Corker (R-Tenn.), which would have required the UAW to accept deep concessions.
The Bush-imposed terms require that U.S. auto companies pay wages similar to those of transplant auto manufacturers by Dec. 31, 2009. As emptywheel says:
Bush is demanding that the UAW lower wages plus pensions to the level of Japanese wages plus pension (though since they have very few retirees, their pension number is basically zero). Alternately, they could lower this number by basically picking the pocket of a bunch of seniors, by taking away pension money those seniors already earned while they were still working. But one or the other will have to happen.
The Bush loans leave some room for the Obama administration to modify the terms. The automakers may deviate from the financial targets, provided that the companies report why they did so.
Some of the auto plants could be shut down into February, according to published reports. Ford will shut 10 North American assembly plants for an extra week in January, and GM will temporarily close 20 factories—many for the entire month of January—to cut vehicle production.
When Senate Republicans blocked the $14 billion emergency bridge loan needed to keep the auto industry operating, they knew it could cost between 3 million and 5 million jobs.
Experts predict that if even one of the Big Three automakers goes under, some 3.3 million jobs will be lost and the entire supply chain for all carmakers, including foreign-owned plants in the United States, will be seriously disrupted.
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Reducing wages and benefits is outrageous. Hard enough to buy food and medicine and other necessities in life. One question…Why isn’t Ford shutting down their plant in Brazil? They say they don’t need a bailout, but that they are shutting down some plants in North America, but not in Brazil? I’m a 30 year employee of a submersible pump company and have been laid off by my company for the holiday and also will lose my job by June 2008 to a Mexico plant.
We are all forgetting that the “world is flat”, and American companies must compete with global companies and markets. The UAW monopoly (i.e. they control employees in each of the Big 3 companies) is detrimental to our global competitiveness. In short, the UAW is holding America back.
The UAW is the primary culprit of the Big 3’s inability to change and significantly above-market costs per vehicle. The only way for the Big 3 to survive in the long-term is to utilize market-rate labor with domestic manufacturing or utilize their production facilities overseas.
I am hopeful domestic production is a plausible option but am fearful that the UAW has too strong a voice in Congress and will ultimately trigger the collapse of domestic American-owned auto production. Free-market competition is the fabric of our nation’s economy. Let’s not change that fact in favor of pro-organized labor ideology (i.e. a socialistic principle).
A consumer-driven approach must be taken; if vehicles can be produced most efficiently via overseas production facilities, lower vehicle price tags will be seen in fewer Big 3 showrooms.
The reorganization of the Big 3 is far more likely to promote innovation that “preserving the status quo”. We ask “what happened to the electric car”? A decision to save the Big 3 for the benefit of organized labor (i.e. the UAW) is nothing more than promoting the stagnation of the auto manufacturing industry.
My dear cmiles,
Flat earthers like you have been proven wrong in the distant past.
There is no such thing as “American” companies - they are are part of world wide conglomerates serving world wide markets.
The UAW does NOT control workers. The workers in every Union control themselves AND their Unions. Unlike Corporations, Unions are truly democratic. The Management of Corporations are what is detrimental to our global competitiveness. The GREED of the Corporations is what is holding America back.
The workers that joined together to form the UAW have always been powerless to change the Big 3’s business model - one that insists on large profits for the owners and top executives - and THEN covering Labors demands for a just wage… if Labor can make the Corporations do it.
Market rate Labor should and MUST consist of living wage Labor,
regardless of the location that the labor takes place in.
Free-market? That doesn’t sound right… how about a FAIR-MARKET? Doesn’t that sound better? Remember, we’ve never had a “free-market” - with the tariffs, taxes, regulations and laws… we’ve never had a “free-market”.
I am hopeful that the voters concerned with the Auto Industry will trigger the turn around that is needed for all Corporations in the world that would seek unbounded profits at the expense of those who Labor for them.
Throwing the word “socialist” around whenever people ask for a living wage, is like throwing the word “terrorist” around when people insist that their Civil Rights are respected.
A consumer-driven approach has failed over and over - the Corporations produce whatever they want. Vehicles have always been produced most efficiently in the US, but the profits were optimized overseas where the enviromental and labor laws and worker safety and human rights laws were weakest - in the name of attracting Coporate investment.
Prices of Vehicles did not go down to reflect the lower manufacturing costs enjoyed by the job exporting Big 3 - they actually went up. As did the Owners and Executives profits and benefits and wages
“What happened to the electric car”? A decision by the Big 3 for the benefit of organized manufacturers and oil companies.
I would appreciate it if you would share with us your bonifides…
for example; I am a Mail Carrier that belongs to the NALC, Branch 9 - I post under the name “hard workin ric”.
I only ask because your post sounds like the same Corporate propaganda that has led our people to the brink of economic collapse - if you actually are a worker and you believe that crap-trap you posted, please wake up and start thinking things through from a human standpoint.
Hang in there, cmiles. It is obvious to the rest of the nation that UAW pay and benefits, and getting paid to not work, won’t cut it in today’s global economy. Why should all the struggling American taxpayers be asked to provide corporate welfare to companies who pay people not to work, who pay more wages and benefits that the market will bear? It’s absolutely crazy. Sure, I understand why the UAW is trying to hang on to every $$ they have. But that does not make it right for the rest of us.
Why don’t you give up your golfcourse?
Ron Gettelfinger needs to be posing this question to the media and to Congress (using the actual wage number instead of the proxy I included) - Let’s assume there are 500,000 union auto workers each making $60,000/year. That equals $30 billion per year. How many CEO’s of hedge funds, financial institutions that have received TARP funding and business leaders that have actually caused this mess does it take to equal what all the inion auto workers? Can any of them actually build anything other than a real mess?
Our unions have to lead the battle for the right to decent jobs. Workers are ready to take a stand as evidenced by the UE Republic Windows workers in Chicago who captured the heart of the nation with their sit in. And they won.
One gigantic boost for our economy would be to pass HR 676, national single payer health care. This is the only plan that will assure that all of us get better coverage than we have now.
It’s the only plan that will end the health care bargaining crises we face with each contract deadline.
Join us in calling your congressperson on December 22 to urge them to sign on to HR 676.
Kay Tillow
All Unions Committee for Single Payer Health Care–HR 676 nursenpo@aol.com
This is the GOP answer for everything, lower wages to increase productivity, but with lower wages buying power is reduced, and as a result the demand is reduced and the the whole thing screeches to a halt.
I draw a weekly left of center cartoon and for several weeks now I have been focusing on the auto industry, but it is just the tip of the iceberg that we all are facing, unfair of shore competition
check out the cartoons at
http://www.whatnowtoons.com
Sold Out Again. When is the Labor movement going to stand up and hold these anti union Republicans as being UN -PATRIOTIC and ANTI -WORKER. Enough already. These jerks are no longer in power, but they are still pushing the WIMP Democrats around. Obama better remember all the UNION members who got him elected, one of which was me (IN OHIO).
I’m one of the hundreds of thousands of “legacy costs” all the talking heads keeps saying must be reduced. I worked for thirty years for my auto manufacturer while they profited billionsof dollars per year while flying in their corporate jets and offering golden parachutes to retiring execs.
Executives in the U. S. have yanked the rug out from under workers like me for decades. Hopefully this will be the turning point at which the American public starts to fight back!
The window and door workers in Chicago need to be heralded as the the sit downers of our era. Now lets hold the pols accountable to the citizens. Long live union solidarity!
Is it not ironic that we have reached the point in our country–at least in the view of reactionary,anti-union Senators like Corker,that the goal of American society is no longer to lift lower paid workers up,but to cut wages of middle class working men and women to match or go below lower paid workers.
I would like to know how much in political contributions foreign car manufacturers made to Senators who voted against the bridge loan to American car manufacturers.Also,who got their money?
How much are we spending in taxes to protect Japan,through the US Navy’s Seventh Fleet,against a possible attack by the Chinese?
How much are we paying in taxes to maintain 50,000 US troops in South Korea to defend against a potential attack by the North Koreans?
How much do we pay in taxes for our troops STILL in Germany,just in case the Russians get ideas?
In the meantime,these countries are destroying American manufacturing.They sell MILLIONS of their cars here,we sell a few thousand in their countries.
Their made in America profits go back overseas,while American car companies are near collapse.
Congress and Bush run up trillions of dollars in debt,when do Corker,Shelby,et.al. make concessions?
Why is it, the foreign automakers announced that thier management personal are taking pay cuts, but all the American automakers and republicans want to do is break the wallets of the working class? I cant believe the american people cant see whats happening here. if there are to be cuts, they should start at the top and trickle down.
The mismanagement from the top down has caused this whole problem in the first place.
There are no morals, integrity, or honor in corporate America, and this could lead to the fall of the great Empire.
They are all a bunch of thieves and crooks who want to blame someone else (the working class) for thier shortcomings. Just like most of our politicians.
These guy’s are the elite! (at least that’s how they compensate themselves) you would think with thier payscale, that they could part the red sea. Hmm… so wuts up?
Who was standing watch while all of this unfolded?
Why not tie wage cuts by UAW to The Senators and President that are requireing them, to their wages. They should take an equal percentage cut as auto workers and that money go toward our national debt that they helped create!
J.D. FRoster
I agree completely that it is outrageous to expect any more cuts from our pensions or wages.
We must not allow our Union leaders to even consider such a plan.
A better approach would be to demand that Foreign Auto Makers who employ American Workers must match our UAW Wages & Pensions or forgo all of the State & Local and federal tax breaks they now enjoy pluse face an additional surcharge on every auto sold in the US to match the surcharges and taxes that are placed on American Autos that are exported to Japan, Korea, China and other countries.
In any event if the loan deal should go through our Union Leadership must make sure that the terms can be re-adjusted when Barack Obama takes office and that Pensions and Wages are protected .
What we need to turn this Economy around is More Money in more People’s pockets not less…
UAW should not be ashamed about making good wages, providing a pension, taking care of retirees. Auto workers have been the envy of other workers for years and years–and now bush wants to make them poverty-level workers???SHAME!! I live in a right to work state, if bush has his way, auto workers will be underemployed, part-time, no benefit, poverty-level job–get real! stand strong, UAW!!!!!
Gosh, isn’t something how bush has always had the peoples interest at heart. What a terrible excuse for a president and supposed leader he and Cheney are. The trouble with you UAW people is, you aren’t rich. If you were all rich, you’d have had a stimulus loan months ago. Keep strong UAW; American working people need you.
Dar AFL/CIO:
Take a deep breath, hold tough and acept nothing from this Bush. Let him and his Republican dogs go out leaving the country in worse shape then it now is.
If we accpe his offer, we deserve to get what chickens get! If we test his will and let the ugliness fly in his face, I bet he pulls back.
The real question has never been bush. It has always been us and our ability to hang tough and inteligent. Unfortunately . . . .
Only 31 days and 18 hours to go!
I’m a car sales consultant at a GM dealership, former business owner from the U.P. and strong believer that that you MUST HAVE UNIONS to protect the checks and balances required to preserve our democracy! Yes, union members may need to sacrifice, but our goal should be to bring UP the wages of those less fortunate, not down to where the exploiting corporate elites want. Hang tough REAL AMERICANS, hang tough!
John Savolainen
Middleburg, Fl
IT SEEMS THE REPUBLICS ARE NOT WORRIED ABOUT THE TAX PAYERS MONEY WHEN IT COMES TIME FOR THEM TO TAKE A RAISE FOR THEMSELVES OR SPENDING BILLIONS OVER IN IRAQ AND HALIBURTION.
Bush bailed out the Big Three because friends of his are financially interested. Bush again proved he is not concerned with American Working Families at all.
The massive destruction caused by the collapse of gobal capitalism is forcing a re-thinking about the an economic system organized “of, by and for” working people: socialism. Here are two articles from a socialist perspective.
———————————————————————————————-
Capitalism and the auto crisis
20 December 2008
Joe Kishore
http://www.wsws.org/articles/2008/dec2008/pers-d20.shtml
The US government intervened directly into the crisis of the American auto industry on Friday, pledging temporary loans to General Motors and Chrysler in exchange for massive concessions from auto workers and the destruction of tens of thousands more jobs.
…
“In his public announcement Friday morning, Bush made clear that in providing loans, the government was insisting on certain conditions: above all, that workers would have to accept a drastic decline in living standards.”
…
“The necessity for these policies arises organically out of the objective crisis itself. Capitalism—the so-called “free enterprise” system—has failed. In response to this crisis, the American working class must come face-to-face with the basic question of socialism.”
===============================================================
No concessions! No job cuts!
Canadian auto workers must join with US and Mexican workers to advance a socialist alternative
Statement of the the Socialist Equality Party
19 December 2008
http://www.wsws.org/articles/2008/dec2008/cana-d19.shtml
“The US and Canadian governments were quick to come up with tens, even hundreds of billions of dollars worth of unconditional assistance for the banks and other financial institutions. No questions asked. But in both Washington and Ottawa the politicians have been reluctant to commit resources to stave off the imminent bankruptcy of auto companies upon whom hundreds of thousands, indeed millions of workers, ultimately depend for their livelihood.
This is because what is really under discussion is how the economic crisis can be exploited to restructure the auto industry at the expense of auto workers and the working class as a whole.”
Do not accept a lover standard of living. unions menbers have worked to damn hard all these years, to get where we are today. Thank god we have a new leader who will be on our side. Tell those southern republicans Go To Hell. STand fast as our brothers have in the past THANK GOD FOR THE UNIONS IN THE USA WE can not go down and lose all our gailns we have worked so hard at gettling
Obama had better not let this deal attack the retirees. We just had our health care co-pays and premiums doubled July 1st. I don’t know ANY UAW retiree who worked more than 30 years who does not have worn out body parts of some kind. I myself have had 8 carpel tunnel surgeries, asbestos in my lungs and lead in my bloodstream. I’ve been cut, burned and have had severe joint injuries from working 31 years as an autoworker. After the beating we’ve had to endure before “ergonomics” was even a word or an idea, destroying our pensions is a crime. Any Senator even suggesting such an idea should be investigated for accepting payoffs from foreign auto companies and imprisoned.
it may sound like the same old song… but… How many stock brokers, Bank Tellers, Loan Officers, Financial consultants or Financial industry lobbyists have been told to take a paycut in order to collect their HANDOUTS?
Remember when Republicans like Sen. Corker were calling Americans who were against the war in Iraq unpatriotic, well nothing could be more Un-American and unpatriotic then to give our American tax payer’s money to foreign owned companies without conditions and then demanding loyal American owned companies and their employees to give up their retirement and concede to lower benefits and wages. If Corker wants fair competition he should be pushing to remove laws like “Right to Work” and passing bills like the Employee Free Choice Act. Rather then having American workers race to the bottom we should be looking for ways to leave the next generation with a higher standard of living. Any Politician or Company that promotes outsourcing American jobs and/or demanding concessions from hard working Americans are not Patriotic…not to this country anyway!
The UAW can’t even make money running their own golf course!
http://www.americanthinker.com/blog/2008/12/the_uaws_gorgeous_golf_course.html
Maybe we should have a legacy tax of $30 an hour placed on the foreign transplants. That way they would be way ahead when their employees retire. That would give Big 3 American auto workers an even playing field.
IMO there are two glaring issues that need to be addressed in order to return the auto makers to ‘viability’. #1. No more jobs bank. When a company lays off workers it is because their services are not needed. And when workers are laid off they draw unemployment. NOT wages from the very company that laid them off! #2. No more bloated. over the top salaries and perks for upper management. I’ve been preaching this for years now. These excessive, obscene practices have been wholly repsonsible for where this country currently finds itself. The insatiable greed of the ‘elite’ is killing the US and it needs to stop now!
This is absolutely disgusting and it shows how the current administration really feels about Americans. The corporate greed that has befallen on this country over the past eight years is pitiful and harkens back to the 1920s and before when the great (not so great) robber barrons) made millions on the backs of everyone else.
This current administration has gone one step further though by . allowing these big corporate mogules take the jobs from the country and send them away for cheaper labor elsewhere with no regard to the very people that gave them their job in the first place. This to me is unAmerican and these people should be tried for treason.
We’re told to work harder and compete with the rest of the world while the rest of the world has government support of their industries. The foreign companies that have setup in the South and are obviously lobbying hard against this bailout, have received big tax breaks from the states where they setup shop as well as big support checks from their own governments. With this back-end pay, they can well afford to survive the downturn unlike the domestic companies that grew on their own hard work.
The adamant Republicans don’t realize the impact of letting Detroit go under. This not only affects the current workers, but it will shutter 100s of other small and not so small companies that support the auto industry including the railroads and steel workers. This won’t be a regional problem, it will become truely a national problem.
Unfortunately I smell dead rats in this deal and The sad part is the workers will get the shaft in this. It won’t effect the executives who will walk away with gold-lined pockets. The wages the autoworkers make is about average for today given the cost of everything these days. I make the same wages in the high tech industry where I haven’t seen a pay increase in 8 years. I can barely make ends meet and I keep my expenses to a minimum. I’d hate to have to support a family.
In the past I used to support management for some of the things that they did and actually looked up to the company owners, having been a small business owner myself at one time. What soured me on the upper crud was back in 2003 when we took a 15-25% cut in pay to “keep the company going.” The day we took the cut in pay, the CEO walks into the office and bragged to us about the great deal he got on his new $2,000,000 house.
The way I look at it is if the workers get screwed again, all of the unions should stand up for them and shut this country down. I’m not just talking about the autoworker’s union. I mean all including the various chapters of the Teamsters, BLE, CWU, CWA, and everyone else. Bring this country to its knees across the board.
FREE MARKET means we are free to win as well as loose. When our taxes are dealt out at the whims of politicians then BIG BROTHER decides who wins and looses. These decisions are made by putting our grand children in dept at the same time these arrogant %^&* are giving themselves a raise. A raise they are going to have to BORROW from somewhere cause WE don’t have the money.
The auto makers are doing well overseas but other than Canada, I don’t see other countries pitching in. I say NO to any bailouts to any company. Screw them. Let them crash. Then the companies that GM, Ford and Chrysler have held down and out of the market will have a chance to grow.
If we are to grow as a country we have to let the FREE market adjust itself. Survival of the fittest.
Look folks, if you want to get the nation’s attention, it’s time for a GENERAL STRIKE! Otherwise this is all just a lot of hot air. It’s time for our union “leadership” to start acting like leaders and less like “partners”. We need coordinated work actions to draw attention to the problems faced by real people every day. The press isn’t going to cover this story truthfully until they are forced to. Did you notice how sympathetic the coverage was for the UE workers at Republic? What they did was blatantly illegal yet they got away with it, because they TOOK POWER FOR THEMSELVES!
If our union leadership would get out of bed with management and start acting liking true leaders of people, or better yet, get out of the way and let the workers themselves do what they feel they need to, we’d see more such actions. And you’d also start to see public sentiment shift as people saw what unions are really about -workers having RIGHTS - and not just what blowhards like Hannity, Scarborough and the like define unions to be. Unions do not control their own identity and most have spent little to no effort doing so. When you had 35% of the workforce in a union, you didn’t need to “market” unions. But unions have let others define them, rather than the union movement defining itself.
It could start out really simply with an ad campaign reminding people that the 40-hr Work Week, Sick Leave, Vacation Pay, Overtime, hell, THE WEEKEND, was brought to you by the UNION MOVEMENT!
People don’t know these simple basic facts. All they see is people making more money than them and they don’t understand why…