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Class Bigotry Mars Auto DebatePosted on Dec 1, 2008
By E.J. Dionne There is a paradox at the heart of the proposed bailout of the auto industry. The rescue would have no chance of passing without the muscle of the Big Three’s unionized work force. Yet you can’t turn around without hearing someone trash autoworkers for the terrible crime of trying to earn a decent living. The CEOs of Ford, General Motors and Chrysler, having blown their earlier plea for help last month, deliver their revival plans to Congress on Tuesday and face their big test later in the week when they defend them. Democratic congressional leaders desperately want to help an industry that accounts, directly or indirectly, for some 3 million to 5 million jobs. But House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid were astonished at how unprepared these corporate titans proved to be the last time. By flying into town on private jets and offering few answers to their congressional interlocutors, the big shots suggested they didn’t understand that people begging for taxpayer money owe a certain deference to their potential benefactors. They must have thought they were running Citigroup. The auto companies are having trouble securing help precisely because members of Congress are overwhelmed, even appalled, by the hundreds of billions they have already shoved out the door on behalf of the finance industry. One of Pelosi’s top lieutenants referred to the phenomenon as “bailout fatigue.” Yet the auto industry will almost certainly be tided over precisely because the economy is in such turmoil. The dominant view in Congress is that the country can’t afford to risk the financial and human calamities that bankruptcy by the Big Three would inevitably trigger. Assuming the CEOs have done their homework, are reasonably humble and arrive here having used less ostentatious forms of transportation, Democratic leaders are likely to push for one of two forms of aid. The House and Senate leadership is inclined to give the industry the full $25 billion it seeks. But a top congressional aide said it is not yet clear that a bailout that large has the votes to pass both houses, let alone backing from President Bush, who would have to sign the bill. Plan B would involve passing enough assistance to keep the companies solvent until President-elect Barack Obama takes office. Obama—who carried Michigan by more than 800,000 votes and swept the rest of the industrial Midwest—has strongly signaled that he would support a properly structured bailout. But “properly structured” is in the eye of the beholder, and if this bailout happens, it should reflect the core reason it will pass: Long-term economic growth depends upon a well-paid middle class (and that definitely includes autoworkers) with real purchasing power. If saving our auto industry means moving GM workers ever closer to Wal-Mart wages, the bailout isn’t worth doing. A hideous class bigotry has disfigured this debate. The failure of the Big Three is regularly attributed to the high wages and benefits earned by members of the United Auto Workers union, and it’s true that the Detroit-based auto companies operate under heavy “legacy costs” for retirees’ pensions and health coverage negotiated during the industry’s fat times. But the blame-the-workers-first cant ignores the fact that if the Big Three had designed better cars, they would not have lost as much market share to Toyota, Nissan and other competitors. The unions did not stop management from producing a better product—and I say that as someone who has enjoyed driving Saturns for the last 15 years. It’s also nonsense to say that the UAW has been indifferent to cost issues. The last auto contract included so many givebacks that Ron Gettelfinger, the UAW president, was threatened with a rank-and-file rebellion. He told a House committee last month that because of “these painful concessions,” the gap in labor costs between the Detroit-based auto companies and the “foreign transplant operations,” as he called Toyota and the others, “will be largely or completely eliminated by the end of the contracts.” Appearing Sunday on CNN, Gettelfinger signaled his union was prepared to make further concessions. So the burden this week should be on the CEOs to explain how this rescue could be a good deal. Unlike the other bailouts, this one could provide a model for how management and labor might team up to create better companies in a fairer, more productive economy. If this actually happened, the taxpayers would get their money’s worth. But if all that’s on offer is a plan to buy the CEOs a few more months or years, they should drive back to Detroit empty-handed. E.J. Dionne’s e-mail address is postchat(at)aol.com. © 2008, Washington Post Writers Group TAGS:
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By Frank, December 5, 2008 at 10:03 am #
Tom Peters, you are wrong and had better do some more research. GM has received close to a billion in state, local, and federal incentives since 2000. More than any of the manufacturers you mentioned. Ford has also received hundreds of millions. Here are just a few articles about specific packages:
http://ref.michigan.org/medc/news/major/archive/combo. asp?ContentId=DFCD747C-EBBB-4470-B5F5-36CB5F550A24&Queu eId=2&ContentTypeId=7
http://www.ohio.com/business/27264544.html
http://www.ibtimes.com/articles/20080923/gm-gets-22 -5-million-in-michigan-tax-incentives.htm
Report thisBy Tom Peters, December 5, 2008 at 2:01 am #
There is more here than just “Class Bigotry Mars Auto Debate”, it is the unfair advantage awarded to the non-Domestic automakers when it comes to handouts from state governments.
I googled the following: “total toyota state provided incentives”
What I got back from this search was the following, showing dates going back to approximately the year 2000:
Mercedes in Alabama: $300,000,000
BMW in South Carolina: $150,000.000
VW in Tennessee: $577.000,000
Toyota in Texas: $301,500,000
—————-
Total: $1,328,500,000
I do not believe that this list is complete, and more important, these are not loans, but tax giveaways in terms of tax holidays, or specific custom construction or public works projects for these non-Domestic automakers.
These amounts are easily worth four times the amounts above in tax liability savings to these automakers.
Over a billion dollars to automakers who did not need it at the time, and most would have built a plant in the United States anyway, with or without incentives.
Again, they are building the same cars as the Domestics, not 1 mpg difference, in fact, in Texas they are building a full size truck that gets lower gas mileage then a comparable Chevy Silverado!
Where is the fairness?
Had Ford and GM received these types of incentives, would they have built a plant in Tennessee instead of Mexico?
Would they be in the same degree of trouble today if they had received these kind of incentives?
I believe if Ford and GM had received the same incentives, they would be in the same position as Honda and Toyota today.
And as I watched the Senate testimony, the Senator from Tennessee was dishing out the most criticism of the Domestic automakers.
Again, we should be in favor of issuing these loans. We would be loaning money to companies that actually make something (as compared to AIG), and whose knowledge base remains in the United States.
Report thisBy Anarcissie, December 5, 2008 at 1:28 am #
Or better, phase out industrial technology altogether.
Report thisBy katsteevns, December 4, 2008 at 11:26 pm #
All Hail Technology !!!
What most people don’t seem to realize is that we don’t need any of that crap to get along here on planet earth.If people would just take what they need from for themselves and their family without squirreling away loads of cash, there would be enough for all.
Robots eliminate jobs in a big way.
We invent new things every day, never thinking of the harm they will bring, but with tunnel vision towards profit.
Why the hell should someone have to spend 1/2 their life with their head buried in a technical manual in order to be able to raise a healthy family? You can worship science and technology all you want. Maybe one day someone will invent a way to bring back the hundreds of thousands of Iraqis who died simply because we want to worship automobiles. An industry whose founders bought up all the mass transit in the US that was eating up their profits.
I say, phase out all robots. Retrain the designers and software companies to do some real work for honest pay.
Because it feels good to ride the wave of technology doesn’t mean it is the right thing to do.
I say, feed that 1/6 of the planet’s population that is undernourished and having no clean water, then you can dream about your stupid robots.
Report thisBy Anarcissie, December 4, 2008 at 8:35 pm #
The main effect of getting rid of the robots would be to raise the cost and so the price of the cars, thus causing fewer of them to be sold and putting the auto companies in an even deeper hole.
Report thisBy Frank, December 4, 2008 at 6:39 pm #
What about the job security of those that design, manufacture, sell, and service robots? How about those that write the software for them? Those jobs have a future. Manual labor in auto manufacturing does not, for most.
Regressing to earlier, less efficient, less precise manufacturing methods would be the final nail in the coffin of US manufacturing. Robotics are the only reason the US can compete at all with foreign car makers.
People need to realize that the days of keeping one job your entire life and never having to retrain, re-educate, and promote yourself in the job market are virtually over. That have may have been the norm for your grandparents, but the world is changing too quickly for most people to have one lifelong job description.
Report thisBy katsteevns, December 4, 2008 at 9:43 am #
I think that getting rid of 90 percent of the labor stealing mechanical robots in industry would be a positive step in helping workers have more job security, not to mention work that is more meaningful.Imagine the flood of jobs that would be created!
Report thisBy Clash, December 4, 2008 at 1:34 am #
GM shares are only valued at 3 billion yet they are asking for 18, wish I could get a loan like that on my house, even better their plan is to reduce costs by laying off their labor force. I am not much on cages with wheels, 50 miles to the gallon, wind in my face on a 30 year old machine I built in my garage and when its done I probably will be to.
Report thisMaybe GM could by back the battery technology from the oil company they sold it to too so they could kill the electric car, I hear that maybe the future for four wheels.
Maybe people will have jobs that pay enough to go get loans from the banks that are ready to give our grandchildren’s money away.
Maybe workers will be paid for what they contribute.
Maybe it wasn’t Ford and Chrysler who in 1972 helped the military junta in Argentina by disappearing and torturing their union worker’s.
Maybe the obscene oil prices of last summer weren’t a calculated scheme to push this country into the recession that now will be used as excuse for more laws aimed at taking away more from us.
And just maybe pig’s fly out of monkey’s butts.
By Frank, December 3, 2008 at 10:08 pm #
While the unions may be partly to blame, the primary reason the Big 3 are failing is because they continue to market too many boring, outdated, inefficient, unreliable cars that few people want to buy.
I am convinced GM will live or die based on the success of the Chevy Volt. If the can deliver what they have promised without the myriad of electrical problems that plague GM cars to this day, they may survive as a leaner, downsized company. If the Volt fails to deliver, it is the end for GM.
Report thisBy Frank, December 3, 2008 at 9:53 pm #
UAW Losing Pay Edge: Foreign Automakers’ Bonuses Boost Wages in U.S. Plants as Detroit Car Companies Struggle
Thursday, February 01, 2007
From Detroit Free Press
The UAW is losing its edge in pay compared with non-unionized U.S. assembly plant workers for foreign companies, even as Detroit automakers aim for deeper benefit cuts to trim their losses.
In at least one case last year, workers for a foreign automaker for the first time averaged more in base pay and bonuses than UAW members working for domestic automakers, according to an economist for the Center for Automotive Research and figures supplied to the Free Press by auto companies.
In that instance, Toyota Motor Corp. gave workers at its largest U.S. plant bonuses of $6,000 to $8,000, boosting the average pay at the Georgetown, KY, plant to the equivalent of $30 an hour. That compares with a $27 hourly average for UAW workers, most of whom did not receive profit-sharing checks last year. Toyota would not provide a U.S. average, but said its 7,000-worker Georgetown plant is representative of its U.S. operations.
Honda Motor Co. and Nissan Motor Co. are not far behind Toyota and UAW pay levels. Comparable wages have long been one way foreign companies fight off UAW organizing efforts.
But Toyota workers’ pay topping that of UAW members comes as the union faces contract negotiations this year with struggling Detroit companies that will seek billions in concessions, partly because they face higher costs for retiree health care and pensions than their foreign-owned competitors.
Who’s to blame?
UAW Region 8 Director Gary Casteel said if Toyota workers were paid more than union workers last year, the blame lies with Detroit’s auto executives. The companies have lost market share because of past mistakes, which have translated into fewer bonuses for workers, said Casteel, who is on the union’s executive board.
“Our profit-sharing formula, I know, is better than theirs—if our vehicles are selling,” Casteel said.
Ron Lare, a 59-year-old Ford employee on pre-retirement leave, said Toyota workers shouldn’t get too excited about their wages because bonuses fluctuate. The only thing consistent, Lare said, is union protection.
“The floor beneath their feet is basically what the UAW has won,” said Lare of Detroit, who has worked at Ford for 28 1/2 years. “If the UAW gets beaten down, their pay is going to come down. You let there be a real recession in the auto industry—that bonus won’t be there for Toyota, either.”
Union perks vs. nonunion perks
The pay comparisons reflect the relative profitability of the foreign and domestic companies more than shortcomings of the UAW. But the situation chips at the argument that workers united in solidarity can get better wages, benefits and job security—especially as the UAW shrinks and growing foreign companies continue to ward off organizing efforts.
“How do you convince someone you’re better off with the protection of a union when they’re making more money than the union employee?” asked Alfred McLean, a 66-year-old hourly UAW member at General Motors Corp.‘s Warren Tech Center. He has 28 years of experience.
Workers for foreign automakers don’t pay union dues, but they do share the costs of insurance and retirement plans. UAW-represented autoworkers get health insurance and a full pension after 30 years—valuable perks they will fight to keep during contract negotiations this year.
But even accounting for Toyota employees’ health care spending—$700 per year on average, according to the company—the Georgetown workers still made more in 2006.
(continued, follow link for full article)
Report thishttp://www.aftermarketnews.com/Item/28594/uaw_losing_p ay_edge_foreign_automakers_bonuses_boost_wages_in_us_plants _as_detroit_car_companies_struggle.aspx
By diamond, December 3, 2008 at 7:56 pm #
Yes, you can be sure that the free-marketeers are salivating at the thought that they can use the economic downturn to de-unionize the car makers. These industries stand almost alone as US employers who have allowed strong unions which has resulted in good, safe working conditions and good pay for car workers while most other US workers don’t have the protection of strong unions and work in what are basically third world conditions for third world pay while they still have to pay first world prices for everything. The American working class is in a parlous state: overworked, underpaid and with no health care if they lose their jobs. The conditions are so bad that in any other country there would have been an uprising by now and if the laissez-faire fanatics get their way there will be no exceptions to the one and only rule they believe in: screw the workers.
Report thisBy Folktruther, December 3, 2008 at 4:22 pm #
Anarcissie- you raise issues I never thought about before. That many employess don’t want the responsiblity of owning their firm tends to ring true. Clearly this would have to change if any kind of cooperative or socialist power system were ever to emerge historically.
Jackpine- any suggestions as to why these car stats are so counter intuitive.
Report thisBy Leisure Suit Larry, December 3, 2008 at 12:40 pm #
(Unregistered commenter)
It’s a riot to listen to “moderates” discuss the minor tinkering “capitalism” needs to make it viable.
“capitalism” is a pyrimid scheme, never played better (by the dungeon masters)then during a “downturn”
I agree that our oil-fueled internal combustion engines are “dinosaurs” BUT the same can be said of our economic system which “sustains” failing banks, obsolete automakers, and a corrupt government while throwing families out on the street for the same malfeasence in money management as the big boys.
We just (once again) voted for more of the same forgeting Johnson, Carter, and Clinton were just as bad for middle class workers as was Bush, Bush and Reagan.
Report thisBy katsteevns, December 3, 2008 at 12:26 pm #
@happycamper.
Report thisNorth and South Dakota,Nebraska,Kansas,Missouri,Minnesota,Iowa,Wisconsin,Il linois,Indiana,Ohio, and Michigan.No Kentucky here.
http://hosted.ap.org/specials/election_night_2008/elec tion_map_premium/index.html?SITE=MASPDELN
There must be confusion on just what is a Midwest state.
Got a paper towel?
By Clash, December 3, 2008 at 2:10 am #
Conditions, one of the conditions should be that Ford and chrysler should be made to make the workers that they diaspeared in Argentina reapear and pay the tortured workers compensation for the torture they endured.
Report thisIt is great watching the freemarketeers come hat in hand for a socialist hand out. But watch out once they get their money from the great American robbery they will continue their free market propoganda.
By native, December 3, 2008 at 12:29 am #
(Unregistered commenter)
The problem is that we, as a country, have gotten accustomed over the last 70 years, to the “GM way.” It’s BS. The feds and GM contrived to kill the public transit systems that had begun to develop prior to the Ford megalopoly (think ‘20s and ‘30s). GM continued that blood-sucking legacy, connived their road-building plans into “our” government, and here we are, with an unmanageable national highway system and a combustion engine regime that is nearing it’s final days, like it or not. Living off of the dinosaurs (oil) is a dinosaur technology. So now we, the public, will pay the price for corporate control of our government’s spending (regarding road-building) over the last several decades. Not too different from the bank buyout, but taking much longer to reach fruition.
Report thisBy troublesum, December 2, 2008 at 9:37 pm #
If Americans can’t buy cars then there will be a revolution. Bloody mess.
Report thisBy jobart, December 2, 2008 at 9:28 pm #
(Unregistered commenter)
While these corporate “Giants” maximized profits by utilizing existing platforms to “create”, supposedly new, gas guzzling profits, they didn’t invest. They took a marketplace’s advantage (aided greatly through the marketing of tough and fearless vehicle owner’s (supposed) need to be percieved as such)and, without added the R&D;necessary to actually advance vehicles marketed, sold to the “marketed” need. Real cute behavior. So, they made high margin profits, paid healthy dividendes, and everything was “honky-dorry”. Now that this policy has failed, they are looking for a Gov’t. “fix-it”. That’s fine. But they now need to pay for that short-term goal. The “if you dance to the tune, you MUST pay the piper” becomes relevant. Out nation must come to the understanding that “shareholder” value is ONLY a “part”, but not a primary function, of our economic well being. The “jobs” and “people” HAVE to be primary if our society is to survive.
Report thisBy jackpine savage, December 2, 2008 at 8:45 pm #
Folktruther,
That is true, though it was actually GM that did the damage to public transport, not “the auto companies”.
It should be noted that November YoY numbers came out today. Everybody was down by 30% or more…including the Civic. The only model that i could find that made significant gains was the Toyota Sequoia…their supersized SUV.
Report thisBy Anarcissie, December 2, 2008 at 8:14 pm #
Answer to first question: my repeated personal experience, and that of many others of whose experiences I have read or heard. Note also that due to elevated wages during and after World War 2, and for several decades thereafter, it was financially possible for workers to buy out their bosses—the average capitalization per worker was about the same as a modest house, which in those departed days working-class people could actually buy without overextending themselves. They didn’t seem to be interested. I can only speculate as to the reason, but I do note that running a business is a lot of work and entails risk, which many people probably find unpleasant. Those who are strongly attracted to “being their own boss” probably seek out such economic roles as contractors, sole proprietors, co-op members or partners in small businesses, leaving the less attracted to autonomy to work for large corporations.
Still, the corporate workers could form strong unions or take a significant equity position in their corporate employers, or both, which would enable them to hire other people to look out for their interests, but there doesn’t seem to be much interest in that either.
I don’t get the passive docility, given the cultural roots of the United States in crime, adventure, imperialism, race war, religious fanaticism, and other sorts of action-movie stuff; but there it is.
Report thisBy Shift, December 2, 2008 at 8:03 pm #
A structure does not get built from the top down, it gets built from the ground up. Unless policy recapitalizes the poor and middle class, NOTHING will work to correct the economy. Once people again can afford to buy a car the auto companies problems, with some sensible changes, will go away. Fixing the Auto Companies without first fixing the poor and middle classes financially will result in failure, just as attempting to fix the banks will result in failure. It’s the people’s income that needs fixing. Then the people will pick the winners and losers in the auto industry.
Report thisBy mill, December 2, 2008 at 7:14 pm #
If high salaries by company employees are an impediment to getting bailout money, then none of the financials should have been helped out.
As a condition of getting tax money, private sector employees should kick in also by lowering their compensation demands. After all, if those high wages were justified, the company wouldn’t need the bailout, eh?
Report thisBy G.Anderson, December 2, 2008 at 6:38 pm #
This is part of the foolishness that got us into this mess.
Who is going to buy the products our corporations make when all of us are unemployed?
Outsourcing doesn’t provide jobs to Americans, and American’s without jobs, or American’s underpaid cannot afford mortgages, or cars or college educations for their children.
They also can’t pay their taxes, and since corporations have legal ways to avoid taxes that leaves everyone in a bind.
What got us into this mess was outsourcing, and corporate labor practises that made American’s unable to buy the products that the corporations make.
After at least last 30 years of a government that did everything possible to increase the profit that corporations make, look at where we are.. A country facing bankrupcy…
We need to roll back the other crazy ideas, pushed through congress by the crazy Neo con’s, credit card Reform and bankrucpy reform, both of which are currently digging a whole for consumers, much like the one that we face on mortgages.
We also need to outlaw the selling of credit derivatives..which is at the bottom of this financial crisis.
Report thisBy Happycamper, December 2, 2008 at 6:21 pm #
(Unregistered commenter)
To “Katsteevns”: You’re as untruthful as your misspelled namesake is nutty. Obama DID sweep the Midwest- he only lost (barely) Missouri. Yeah, Obama won 7 of 12 states, if you include the underpopulated Great Plains and states just south of the Ohio River, such as embarrassingly my state, Kentucky. Know your geography, then know your politics, or you will prove that you know nothing.
Report thisBy Chris, December 2, 2008 at 6:14 pm #
(Unregistered commenter)
The unions and the automakers are both at fault. However, I couldn’t help but notice the fierce anti-union fervor on the big name business tv networks. Crushing the unions won’t fix the problem but I think the unions need to be reined in and I think that has happened to an extent per the testimony of the UAW rep two weeks ago. It appears the UAW has made ton of concessions and probably more to come. I still find it amazing that boobus Congress gave Paulson a “blank check” for the banks which would explain why the banks are not lending since the “blank check” had no stipulations in it.
Generally speaking, businesses hate unions and hate having to deal with them. Unions have a violent origin because businesses didn’t want them and did anything they could to kill them, sometimes literally.
I think economic inequality in the U.S. is becoming harder to ignore and this economic mess has brought it to the forefront. It appears the U.S. is a country of have’s, have not’s, and have more’s.
Canada anyone? : )
Report thisBy troublesum, December 2, 2008 at 6:14 pm #
How to maintain slave labor conditions and produce a product people will buy. That’s the problem for the American auto industry.
Report thisBy prole, December 2, 2008 at 6:12 pm #
The wonder of it, is that citizens and taxpayers aren’t, ”overwhelmed, even appalled, by the hundreds of billions” a complaisant congress “have already shoved out the door on behalf of the finance industry.” After all, they’re not taking up a collection among these “appalling” congressional appeasers and their toady lieutenants to fund these corporate welfare programs - “bailout fatigue” belongs to the paying public for decades to come. Their bailout, our check. The auto industry is a wantonly wasteful and environmentally destructive industry and should be allowed to collapse under it’s own obsolete weight. Now is a perfect opportunity to debate a new democratic, green economy. To put the same $25 billion – let alone $700 billion! - toward ecologically sustainable sunrise industries and to create a new economy and ethic beyond the decadent car culture of suburban sprawl and conspicuous consumption. Discard forever, the Fordism model of economic growth that’s as bankrupt as the industry that invented it.” A hideous class bigotry has disfigured this debate.” Auto workers, who for years have been among the ‘labor aristocracy’ receiving wages and benefits far in excess of average workers pay, are now being cast in the role of indigent victims and used as pawns to ram through another corporate giveaway boondoggle. The high-powered executive pitch didn’t fly the first time, so now the corporate mendicants and their media shills will pitch it as a jobs program and try to pull at our heartstrings in a contrived Dickensian melodrama. The auto unions of course, for many years were happy to get fat off building environmentally-destructive gas guzzling vehicles, just like they were notoriously indolent in doing much when their union coffers were overflowing to help other segments of the labor force that were not nearly as privileged as they were. Fatcat union bosses paid themselves whopping salaries, lived the high life in plush offices with elaborate perks and hobnobbed with their corporate management class peers. In foreign affairs, the corporate unions have long supported the aims of American imperialism around the world and shown themselves time and again to be among the most jingoistic, flag-waving segments of society. The American Institute for Free Labor Development (AIFLD) founded in 1962 by the AFL-CIO to buttress American foreign policy was largely bankrolled by transnational corporations like ITT and Shell and over 90 others,; as well as generous support from government agencies like US AID and the CIA. The Chairman of the Board of AIFLD originally and also Chairman of the Board of the W.R. Grace Corporation, J.Peter Grace described the AIFLD mission as promoting “cooperation between labor and management and an end to class struggle” and “teaches workers to increase their company’s business”. And, of course, “prevent communist infiltration, and where it exists . . . get rid of it”. This guiding philosophy led them, for example to support the CiIA instigated coup against the democratically elected govt. of Allende in Chile in ’73. The original AFILD has since morphed into the new American Center for International Labor Solidarity – or Solidarity Center- in the late 90’s; and is a component of the government’s National Endowment for Democracy” (NED), created by the Ray-gun regime. Not much else has changed however, the ACILS was complicit with its Venezuelan partner organization in the 2002 coup against Chavez. Another “model for how management and labor might team up to create better companies” but not “in a fairer, more productive economy”. But since the corporate unions have “teamed up” with management to make very large contributions to the campaign of Obama Copacabana - and the Democratic Party over the years - they’ll probably get what they want.
Report thisBy troublesum, December 2, 2008 at 6:06 pm #
In his book THE BIG SQUEEZE, Steven Greenhouse explains that after WW11 the UAW union led the way in
Report thisgaining better wages and benefits for American workers. They established the standard for other industries to follow. There was an unwritten “Social Contract” to the effect that American workers deserved a decent share of the prosperity American industry had produced. In tearing down the whole idea of a social contract, the UAW was the first target of the new corporate agenda in the early 80’s. Today the country is practically union free. The fear is that if there is a resurgence of a market for American made cars what will happen is that the UAW will gain strength
thereby ushering in a new period of strong organized labor. That’s the last thing corporate America wants. Before you know it far out radical nut cases would be talking again about a social contract.
By Xntrk, December 2, 2008 at 6:05 pm #
(Unregistered commenter)
Jeremy Keith Hammond, It’s called “expropriation”, and it is a tactic used by the Anarchists in Argentina when they had their major depression in the ‘90s [thanks to the IMF and World Bank].
It’s been extremely successful, and has been used for hotels, as well as factories. According to the article I read, the practice is under threat by the Capitalists, now that the economy is going again. The hotel [its name escapes me] is one of the largest in Burenos Aires, and now that it is once again a going concern it is being sued by a one time creditor who has filed a lien for past debts. The original owners filed bankruptcy, and fled the country with all the movable assets.
The workers, most of whom had worked at the hotel since it opened, simply decided to continue coming to work, cleaning the rooms, doing the maintenance, and accepting reservations at the going rate. They had nothing to lose, without a job, they would be living on the streets anyway…
It will be interesting to see what the new ‘Left-Center’ administration does. I think if they fail to support the worker/owners, there will be violence and blood in the streets. Like many US workers, these people have been screwed by both the monied classes and the Government too many times to simply go quietly into the night.
Who knows? maybe they will even resort to using some “muscle”. IMO, that is only an insult if you are one of the effete, sheltered, members of our society, and there are fewer of them all the time!
Oh, the article is on http://upsidedownworld.org/main/ in the Argentina Section. This is an interesting site to thumb around, btw.
Report thisBy katsteevns, December 2, 2008 at 5:21 pm #
Obama carried only seven of the twelve Midwest states. I wouldn’t call that a sweep.
Report thisBy Gary R, December 2, 2008 at 5:15 pm #
(Unregistered commenter)
Forget the “bailout.” The Feds should just buy 100,000 cars sitting on car lots throughout the country. And pay the sales tax. And registration fees. And drive them around for awhile and then sell them. This will provide cash to cities and towns and people rather than CEOs.
OK don’t like the buy the cars idea? Then force the auto makers to merge (like the fed did to the banks)with aerospace companies. That would eventually lead to technologically advanced cars.
Report thisBy Folktruther, December 2, 2008 at 4:56 pm #
Anarcissie-What evidence is there that workers are uninterested in controlling their companies? And if so, why do you think this is?
Jackpine- you fail to point out that the auto and oil industry have lobbied against mass transit. Indeed, a conspuracy distroyed the electic street cars in the cities at one time.
Report thisBy yellowbird2525, December 2, 2008 at 4:33 pm #
sorry: that should have read while denying them to legal American citizens. IF the American people have NOT YET uncovered the truth that the “illusion” of “freedom” is simply that: that our Gov is busy trying to DECEIVE us yet again: like it’s so fantastically proud of doing that they are running over to other countries paying the heads of countries billions of $ to “do it their way” which is quite simply, the heads of countries let the giant Corps from America in, & they get it all the the people get NOTHING. WAKE UP AMERICANS! is not FREEDOM worth FIGHTING FOR?
Report thisBy yellowbird2525, December 2, 2008 at 4:28 pm #
isn’t it just so fascinating that the PEOPLE of the USA are always the FAULT! FACTS: the model T made 100 years ago for the common man was built WITHOUT FORMALDEHYDE or chemicals to cause any harm to humans (nothing is made NOW with that unless under attack from the USA Gov); it ran on GRAIN ALCHOHOL causing NO POLLUTION at all! The GOV was bought by the oil company THEN: go & look up Teapot Dome Scandal; reality is THIS: ALWAYS every alternative to OIL has been VETOED by the GOV! Biodiesel is going out because of NEW LAWS with all kinds of restrictions: which is LUDICROUS because our “leaders” making the laws, are themselves operating outside of laws of USA, laws of Congress, & international law, & even declare: there IS no international law; HORSE PUCKY FOLKS: TRUTH: every patent made to better cars bought & put into vault; Japan had to sign treaty guarenteeing it would ONLY produce cars getting 20-25 MPG before being finally allowed into the USA. Lyndon Johnson squashed bio diesel & alternative fuels during HIS RULE: make no mistake, it is DICTATORSHIP. ALL sides agree but pretend “not to” to cause PEOPLES PERCEPTION to be that “we are free!” “we are good” it’s now the “big bad Corps who cause us poor little things to do this”; A car bought & brought over from Europe getting 50 MPG in later 70’s DESTROYED by officials per Gov demand: claiming “accident” when the person went to get the $1500 for customs. TRUTH: while overpricing for Americans our Gov freely gives out 2 brand new cars & trucks to millions of illegal immigrants, along with $, job preferencial, food stamps, while denying them to many immigrants, no interest loans like $3,000 for dental work; while denying medical coverage to citizens & if you do have coverage, well, the insurance companies liabiliity STOP the moment you get ill & they don’t have to cover a thing. (Federal law); do NOT tell me THIS IS THE PEOPLES FAULT!
Report thisBy Ed Harges, December 2, 2008 at 4:28 pm #
It’s pretty clear that the sudden spike in oil to $140 a barrel just a few months ago played a major role in precipitating a massive and sudden contraction in spending, because overnight, people couldn’t even afford to drive to work or make their house payments, followed by a collapse of the mortgage and auto industries, bringing our economy to a state of acute crisis.
And guess why that happened?
It certainly wasn’t because there was a sudden, massive increase in oil consumption.
No; it was because there was a sudden ratcheting up of war threats against Iran from the Bush administration. And guess which constituency in the US has been lobbying longest and hardest and loudest for war against Iran? The Israel lobby, of course. Nobody else on God’s green earth wants there to be a war against Iran. But the US must always pursue a policy of maximum belligerency against anybody Israel doesn’t like, even if it ruins us.
Report thisBy Henry Cohe, December 2, 2008 at 4:24 pm #
(Unregistered commenter)
Why not try employee ownership? Back in the ‘70’s AMF owned Harley-Davidson and they were turning out junkers that no bike enthusiast wanted. The employees bought AMF out and began making bikes for -surprise -bikers. The rest is history. Don’t know if this would work with cars, but it appears to be worth a try.
Report thisBy jackpine savage, December 2, 2008 at 4:14 pm #
First, do not lump all three companies together as they are very different situations. Ford has invested heavily in making high quality products, and the dividends are beginning to show. In fact, the FoMoCo doesn’t want a bailout at all; they would like to know that if the market stays soft that there will be a bridge loan.
Second, a $25B package tied to fuel efficiency improvements has already been approved. Ford says that 75% of its next lineup will qualify for these loans.
Third, the fuel economy argument is a canard. Everybody’s been building the cars that Americans want to buy. The Toyota Tundra only gets 15 mpg; the FJ cruiser is at like 18; and my ‘87 Toyota pickup gets better mileage than a brand new Tacoma. The Camry of 2009 actually gets worse mileage than the Camry of 1985. And an ‘85 Escort diesel gets the same mileage as a Prius.
All the doodads that we expect and the safety that we “require” have physical costs. Cars today are significantly heavier than they were 20 years ago, partly because of governmental requirements for crash testing. Order a new car without AC and the mileage will increase drastically, but you’ll have to special order it because everyone wants AC.
Third, it is a myth that a UAW employee earns $70+/hr. GM, in particular, adds all of the legacy costs that were supposed to be prefunded into their hourly figure. The 2007 average was $28/hr with about $10/hr in insurance costs. The new contract starts employees at $14.50/hr with reduced benefits. Which, i might add, is less than a new hire at a US Toyota plant. All of the legacy costs are set to be transferred to the UAW in 2010, except that GM is already saying that they won’t have the money to make their contribution.
Fourth, Ford makes well regarded vehicles for Europe but is having a hard time bringing the designs here because of different standards for crash/safety testing. The government could ease this situation by working with the EU to make a single standard.
Fifth, keep an eye on GM/Chrysler. GMAC (half owned by Cerberus, which owns Chrysler) is applying for bank holding company status. If they get it they’ll be TARP eligible and i’d predict a bankruptcy filing shortly thereafter.
Lastly, Ford is still controlled by the Ford family, which made a decision to revamp the Rouge Complex rather than move (which would have been cheaper). It now has the largest industrial green roof in the world (454,000 square feet) and a great many other environmental facets. Not all of these companies are equally evil or practice fealty to the quarterly profits of doom equally.
And what right does the federal government have to harangue the Big 3 over bad management practices anyhow? Have they looked at the gov’s books lately? The Big 3 look like paragons of corporate governance compared to the federal government.
It was we who rushed headlong into the suburbs for long commutes. It was we who demanded that cars be rolling houses rather than means from A to B. It was we who didn’t care too much about long-term quality because we were just leasing anyhow.
We want a scapegoat for our own short-sightedness, and we’ve found one in an industry that reflected that short-sightedness perfectly. Nobody was forced to buy a full-sized truck that they don’t actually use. No guns were held to heads to force the purchase of SUVs (and the Japanese sell a lot of them too). Scapegoating is the American pastime and it is in full effect in this situation.
Report thisBy Ed Smith, December 2, 2008 at 3:09 pm #
(Unregistered commenter)
My wife and I,are GM retireesm and,by the way things are shaping up,there is a good chance that we could see our pensions cut and,a reduction in our health care benefits.If in fact this does occur,I believe everyone in congress should have their pensions and health care suspended IMMEDIATELY!! It is time that their lifestyle,and very generous perks at the expense of the MIDDLE CLASS is ended!! Bud Smith
Report thisBy David Klassen, December 2, 2008 at 3:07 pm #
(Unregistered commenter)
There should be a host of conditions applied to this bailout.
1) Before renegotiating with labor, renegotiate with former/retired execs—-cut off any/all deferred compensation, pensions, and perks for them.
2) Reset any/all exec/board compensations—-none of these should be allowed a total compensation package (including the value of perks) that is 100x greater than the total compensation of their lowest paid employee (including subcontractors, such as cleaning staff).
3) Sell off non-essential equipment—-e.g. private jets.
I’m sure others can add to this list…
Report thisBy P. T., December 2, 2008 at 1:58 pm #
Many middle class people seem to resent working class people without college educations who get middle class pay—even when the jobs are hard work. But bankers making millions destroying financial institutions don’t bother them. Go figure!
Report thisBy Anarcissie, December 2, 2008 at 12:50 pm #
It’s certainly feasible. The Federal government could loan the workers, or some organization thereof, enough money to buy a majority equity position. This would give the companies the money and the workers the control. But do the workers want this? Most American working-class people seem profoundly uninterested in controlling the companies they work at, that is, socialism.
Report thisBy Ham-Archy, December 2, 2008 at 12:40 pm #
bobo6: 20 TIMES??? NOOOOOOOO! Why? Maybe 4 times. I think jleman has a good concept but I don’t quite understand the incentive part. But the workers now can make much more than in the past largely because of ever improving automation. Far more work is done by robots. I know this, that is what I did for a living, design the firmware that operates robots. So a worker’s efficiency is greatly increased, and much more skill is needed than you might think. For sure the waste is in management, FOR SURE. This will get fixed because the greedy grabbers our way outnumbered. When it comes to push and shove, don’t you know.
Report thisBy Jeremy Keith Hammond, December 2, 2008 at 12:09 pm #
@Louise: This is not a bad idea and one that has been done before in Argentina. I can’t recall everything about it - and I can only assume that it’s still working - hopefully someone can fill in my cracks and correct me if I’m wrong.
Basically - workers at a factory in Argentina kept going to work despite the fact that the owners had shut the place down. They continued to produce and found a market for their products and the process took off and spread to other factories in the country. Workers meet in a forum to discuss business matters and elect a leader at each meeting to facilitate. Representatives are also elected to meet with reps from other factories to discuss the trade of goods.
We’ve seen the democratization of authoritative institutions before. Religion in western Europe was democratized when printing books became common and people started to read and think and eventually act on their own beyond the norm established by the church. Our minds were freed from restraining beliefs.
Governments were (re)democratized - sometimes violently - sometimes not. None-the-less we were freed from restraining laws.
Now we need the democratization of the economy - from the factory floor to global trade - it needs to be the people that decide how resources are managed - not an oppressive church, not a dictatorial government, and not profit-oriented banksters.
Report thisBy jleman, December 2, 2008 at 11:53 am #
Corporate welfare includes offering lucrative tax cuts and incentives to the Big Three for them to build 49% of their cars overseas and then offer them to American consumers as “Built in America”. End the tax scams for corporations and legalize for the consumers. Built in American means 100%. You get incentives for building better, efficient, longer lasting machinery and then competing against the global market. If they are in the range of competitivness, no incentives are needed. Take the money - with salary caps - which includes all compensation! Tie salary caps to worker’s wages. Give them a time limit of three years. If they can’t do it in three years, they can’t do it. Get someone else. Back an employee take over. Much like a cooperative. The workers can hire and fire their own managers.
Report thisIn this manner, you can incorporate the expertise of the workers to solve their own delimmas. Everyone working toward the same goal. Not the management working to line their own pockets at the expense of the company and ultimately the workers and shareholders. If the workers become the shareholders, you would see changes and a synergy not seen since WWII in the factories.
Corporate welfare has fueled the present management - and look what it has gotten the public? Overbloated management and salaries while the direct labor jobs were sent overseas.
Unions? Just another manager between the workers and management to try and keep the management honorable. Shift gears to worker owned companies. Get rid of the tyrants in the workplace.
By Purple Girl, December 2, 2008 at 10:46 am #
This is not a new agenda, it’s the same one Ronny was working so hard to accomplish during his Reign of Terror on the middle Class.
Report thisFunny how so many are demanding the Unions give up MORE wages & bennies (which they have been steadily doing since the ‘70’s auto collapse), Yet not a word about the top heavy white collar pencil pushers.
Heres an FYI for American Workers, the imatge they are painting of the Unions is Outdated by about 3 decades!
Another FYI the only reaosn American Workers are paid as well or even have Benefits is because the Original Union Organizers got their heads beat in to fight for them. Otherwise you’d be working 12 hour days, 7 days a week, in a shack behind the factory. You teeth would be falling out and your chronic illness would have debilitated you to the point you would be thrown in the ‘Debtors House’, Your Co worker would be some 8 yr old who can’t (and won’t be able to ) Read or write.
The Only Reason some have the Luxury of calling themselves White Collar is because a Blue Collar has produced enough to carry your Dead Weight! th eOnly reason You were Offfered the ‘Big bucks’ is because a Blue collar not only made the money to afford You a College education, they also afforded You a Middle mamangement position.
If the Middle management types haven’t figured it out already…If the Working middle class is destroyed, your ‘wealth’ and position in life with Tumble Too!
I fyou think the Top 5% gives a rats ass about you and assuring you have a decent living, or that your kids go to college or that you will be able to retire- You are dreaming. The Only thing holding the ‘Upper Middle Class’ Up IS the Working Middle Class (Notice the ‘Working’...Meaning Actual labor, to produce products which support your Salary and usefulness).
So go ahead cut the legs out from under the Unions one more time….It will cost you your Job Too!
By hippy pam, December 2, 2008 at 10:28 am #
Original ISSUES…Fair Days Work/Fair Days Wage…..But-as things go in ANY FREE ENTERPRISE SYSTEM[i.e.I’ll wash your hands if you wash mine]...There were those wanting ALL THE CHICKENS IN THEIR OWN POT and also THE RIGHT TO DOLE THEM OUT TO THEIR HAND PICKED PEOPLE…and when THEY REALIZED THEY COULD HAVE MORE CHICKENS WITH LESS OVERSIGHT and PAY PEOPLE LESS MONEY[even tho QUALITY would be sacrificed] in SOME COUNTRY WITHOUT E.P.A. LAWS>>>>>They JUMPED ON IT!!!Never Mind the LOYAL EMPLOYEES WHO BUILT AMERICAN and BOUGHT AMERICAN…Thanks to “ole bullshit” there IS NO WORRY ABOUT OUR “INDUSTRIAL BASE” since he has ALLOWED-[no>let me rephrase] ENCOURAGED IT TO LEAVE THIS COUNTRY…I DID NOT SEE THE PRICE OF CARS GO DOWN WHEN THEY WERE BUILDING THEM IN SOUTH AMERICA-I DID SEE THE QUALITY GO DOWN and THE COMPANIES C.E.Os GET BIGGER BONUSES….All at the EXPENSE of the AMERICAN WORKERS…When you DO NOT HAVE JOBS-YOU CAN NOT PURCHASE PRODUCT-THERE IS NO “TRICKLE DOWN” TO THE SMALLER “SUPPORT” EMPLOYERS[i.e.-goods and services]-I did not strike for higher wages-I struck to keep my job in this country foy your son or daughter-Another LEGACY to lay on “ole bullshits” GRAVE!!!
Report thisBy bobo6, December 2, 2008 at 10:19 am #
The first step that should be implemented is that no policy making individual should be paid more than 20 times the average wage paid to the workers There is not one of those people that can do the work of twenty line workers,Anything more than that is stealing. Then we go from there.
Report thisBy Louise, December 2, 2008 at 9:27 am #
OK, I don’t understand how such things work, but couldn’t some sort of plan be worked out where the workers became the owners of the companies?
I know the corporate CEO’s wouldn’t like this, but maybe it’s time we let them know they haven’t really earned their keep.
So turn ownership over to the folks who’s labor has kept the Big Boys fat and happy, and let the Big Boys answer to the workers for a change!
Report thisBy coloradokarl, December 2, 2008 at 9:07 am #
The $25 Billion should go to Low interest Low down payment loans for High M.P.G. cars. We should use the T.A.R.P. money and relax credit score standards so more people can qualify. The Auto Industry is, after all, In the business of selling cars. If this doesn’t help then NOTHING WILL!
Report thisBy LeaningRight, December 2, 2008 at 9:04 am #
(Unregistered commenter)
To say that the Union was only trying to earn a fair living does not provide the real facts. For sure the majority of the blame goes to the corporations, but the unions have to share the blame.
When the unions will not give up the job pools which pay workers 85% of their wages to stay home or 100% if they sit in the shop cafeteria and read a book, they are part of the problem. No other industry has paid workers $70,000 with less than 10 years service and $140,000 with over 10 year to leave the company. Most industries just lay the workers off they need to.
This bailout needs to be an overhaul of the both union and corporate practices.
Report thisBy Wilbur N.Rhodes, December 2, 2008 at 8:49 am #
(Unregistered commenter)
I don’t see the Big 3 fat cats taking a pay cut or giving up their their perks (privare jets, Platinum parachutes). Union wages are in keeping with todays costs. We don’t need the Wal-Mart syndrome in the auto industry.
Report thisBy HighHopes, December 2, 2008 at 8:30 am #
(Unregistered commenter)
I realize E. J. Dionne believes that he is attacking “a hideous class bigotry,” but where does the bigotry come from? Look at the second sentence of his article. There he cites the need for the unions to apply “muscle.”
Why is it that I cannot read an article mentioning unions that doesn’t use the word “muscle” to describe how they get their way? Apparently the Harvard educated lawyers and representatives that corporations hire negotiate and propose things, while sitting across the table, the Harvard educated lawyers and representatives that unions hire, probably from the same graduating class, use muscle and strong-arm to get their way.
I’d like to read at least one mainstream article that doesn’t have the unions using “muscle” to advance their cause. Maybe that way we can reduce some of that “hideous class bigotry” that Dionne doesn’t like.
Report thisBy boredwell, December 2, 2008 at 5:56 am #
The impotent 3 will get their bailout or tide-over simply because it is the political-rather than souundly economic-thing to do. We’re talking present and future constituents’ votes, here. The reality is thousands of jobs throughout the various automotive sectors will be lost: prior to this handout lay-offs had been scheduled to begin incrementally as part of the auto makers’ cost-cutting plans. These jobs will not be saved with federal largesse. But the bedraggled workers will believe someone tried to help them at their 11th hour. The Congress is betting on this smoke and mirrors, the collateral benefit of cost-overrun dementia.
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