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.