On Class Warfare and the Auto Industry

By Miryam Ehrlich Williamson

In late November, CEOs of the three major US automakers, accompanied by the president of the United Autoworkers, came to Congress to ask for $25 billion in aid. Two of the three said they faced bankruptcy if the aid didn’t come by the end of the year.

Congress sent them home to Detroit without a nickel, ordering the companies to come back with a plan showing how they could survive if the government loaned them the money.

A few days later Citibank, which had already been given (as opposed to loaned) $25 billion asked and received another $20 billion without having to appear before any legislative committees or come up with a plan of any sort.

Leo Gerard, president of the Steelworkers International union, nailed it on his blog, writing:

The message here could not be more clear: Washington will bail out out those who shower before work but not those who shower afterwards.

The difference, Gerard was saying, is class warfare, pure and simple.

If ever an industry was too big to fail (which is how the Bush administration justified demanding $700 billion dollars to save the financial services industry) it’s the one that makes American cars. If the so-called Big Three go down in flames, some three million workers go with them. These people either work for Ford, GM, or Chrysler, or they work for their suppliers, or they work on the lunch counters that serve the people who work on the shop floor, or who make the tools and machinery that the autoworkers use, and so forth.

[Full disclosure here: Until early this year I was a member of the UAW, which has been branching out over the past 15 years or so to recruit groups of nontraditional workers, in my case independent writers. I left because my integrity required me to, and I’m plenty disappointed with the UAW’s so-called leadership, but I’ll stand by my former union brothers and sisters, the folks who work on the shop floor, with pride.]

By the way, if you believe that UAW members have spit in the industry well by demanding and getting paid $70 an hour, drop a comment below and I’ll tell you where that lie came from and how it was made up. The average autoworker gets $28 an hour. There’s plenty of blame to go around the industry, but it’s flat wrong to aim it at the workers.

The Republican Party saw the auto industry’s vulnerability as a way to destroy organized labor. In a December 10 memo to GOP legislators, the party wrote

Republicans should stand firm and take their first shot against organized labor, instead of taking their first blow from it.

Keith Olbermann of MSNBC’s Countdown posted the memo on his blog.

Here’s where things stand today:

President Bush announced details Friday of a $17 billion dollar loan to boost the failing U.S. auto industry. The loan will give $9 million dollars to General Motors, $4 million dollar to Chrysler, and an additional $4 million in future aid.

Funds will come from the $700 billion dollar wall street bailout. The loans must be repaid in three years, and both companies must prove financial stability by March 2009.

Automotive News adds:

[T]he two automakers [are] to get $17.4 billion in loans over the next three months, provided certain conditions are met. Mainly, the companies must agree to limit executive pay, stop shareholder dividends and give taxpayers warrants for stock.

Beyond the binding conditions, the administration set additional restructuring targets. One is that UAW members’ pay and benefits be made comparable to those of employees at the mostly nonunion import-brand factories in the United States.

GM and Chrysler must either meet the targets or explain in restructuring plans, effective March 31, how they will achieve equivalent cost savings and become viable for the long term. The administration of Barack Obama, who succeeds Bush on Jan. 20, will pass judgment on the restructuring plans.

Did you get that part about UAW members’ pay and benefits being “made comparable” to those of workers for non-American auto manufacturers?

By that they mean that UAW workers should get pay cuts to put them on a level with those who work for the Toyotas and Hyundais of the world.  Since when is it OK to lower American standards to match those of other countries? If the Republicans get their way, where will it stop? Should American farm workers be paid the way their counterparts are paid in Korea?

And don’t let anybody call this a bailout, either.  The guys in the white shirts who shower in the morning got a bailout.  This is a loan, with strings attached. The only good part of this is that the Obama administration gets to decide in march whether to call the loan and force the companies into bankruptcy.

When corporate executives bargain for the best deal they can get, that’s business. When unions do it for their members, that’s greed.

Bah, humbug.

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9 Responses to “On Class Warfare and the Auto Industry”

  1. […] Read the rest of this great post here […]

  2. And just today an article about Wall Street big wigs still flying high with corpoarate jets made me wonder why their bailout didn’t require a few strings like fly commercial if at all and sell the damned jets.

    I believe in strings attached for government help no matter the form.  Need a handout for your mortgage department losses? Help design a reasonable refi mechanism to save people from foreclosure.  Need a loan to save your auto plant?  Submit a plan for the future so we’re not throwing good money after bad. 

    Genuine need versus corporate greed shows its true face when conditions are accepted without copmplaint and not by whacking the little guy down the bottom of the corporate welfare food chain.

  3. The bailout of Wallstreet and the auto industry is wrong for many reasons but most importantly because the federal government is far more powerful than it was ever intended.  As a condition for bailing out the auto industry the fed can now be a stockholder?  Sounds like socialism.


  4. Miryam
    I’m completely with you on not blaming the workers.

    However, before you compare moving employees of domestic manufacturers to the working conditions of the importers (NB their factories in the US) with the end of civilisation as we know it, it might be worth doing a bit of investigation into the happiness (or, to be fair, otherwise) of the workers there.
    Certainly at Toyota, you should find that the Toyota Way doesn’t demonise the people who shower after work; it treats them with respect and makes the shopfloor a much more fulfilling place to be. I can’t speak for the Hyundais and Hondas, but I expect them to be similar.

  5. […] Vote On Class Warfare and the Auto Industry […]

  6. […] These people either work for Ford, GM, or Chrysler , or they work for their suppliers, or they work on the lunch counters that serve the people who work on the shop floor, or who make the tools and machinery that the autoworkers use, …[Continue Reading] […]

  7. […] Vote On Class Warfare and the Auto Industry […]

  8. Right now, I’d rather work for a supplier of Toyota’s than a supplier of GM’s

  9. […] Still on the Bush administration’s watch, Congress demanded more from auto industry CEOs than Wall Street, for a fraction of Wall Streets &#82…. […]

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