The Detroit Free Press reported Friday that the United Auto Workers union (UAW) is secretly negotiating with the Big Three US automakers to revise current contracts in accordance with demands from both Democratic and Republican leaders that major concessions be imposed on auto workers in return for any government loan to avert bankruptcy by one or more of the companies.
The Free Press said that the UAW was offering to end the jobs bank program that allows laid-off union workers to receive 95 percent of their wages and benefits, and is considering other concessions.
That the UAW is working behind the backs of its members to impose a new round of give-backs to the auto companies should come as no surprise to those who follow the actions and policies of the union bureaucracy.
From the outset of the effort by General Motors, Ford and Chrysler to obtain emergency funding from the government that the collapse in auto sales and profits would be used to slash wages and jobs and gut pensions and health benefits for both active and retired workers, and that the UAW would agree to whatever concessions were demanded to protect the interests of the union bureaucracy.
The elimination of the jobs bank will result in the impoverishment of tens of thousands of auto workers whose jobs will be wiped out as part of an imminent and drastic downsizing of the Big Three companies, whether it takes place under the auspices of bankruptcy courts or as a condition of an eventual government bailout package. As with the Chrysler bailout of 1979-80, but on a broader and more brutal scale, the assault on auto workers’ jobs and conditions will spearhead an attack on workers in every part of the country and every sector of the economy.
I was wondering how long it would be before the UAW caved to the automakers.
Is it caving in or is it addressing the reality of the situation? A union is of little use when the entire company closes its doors.
After watching their last two contract negotiations with GM, the fact that GM is about to go under should be of little surprise. The UAW has been very stubborn about making concessions that would help Detroit achieve parity with Toyota and Honda in terms of labor costs. The higher labor costs is one of the reasons that their cars are junk which in turn causes them to lose customers (myself being one of them).
Morning Terrant–sorry but I disagree—labor has been giving back to GM and the others in the last 20 yrs. GM is going under for really bad management and what about those CEO bonuses, last year GM gave theirs 20 million….now how many workers would that had paid or how many other things would that had paid?
Labor is not the reason that these companies are failing…..auto comapnies have been trying to buy up other companies even when they were not proifitable…it is management that is killing the industry…..
I’m not laying all of the blame on labor as I think that management is the #1 reason for the problems. Management not adapting to the changing market along with a myriad other reasons is why they are where they are.
If you compare the costs that GM and others have to the costs that Toyota and Honda have, there is a significant difference. To make up that difference they would have to make less profit per car or cut corners in quality. Saying that they have to keep the shareholders happy (they do look at the profits made by competitors), they have to go with cutting corners and it shows.
I know that cutting corners is a management decision but if there was more parity in labor costs, GM would have more options to be able to make a better quality product. Unfortunately, this is one of the consequences of having a global market; nobody’s job is safe.
I will agree with you about investors….they want a good return on there money…that is also figured into the price of the car. Now I ask what about the economy around auto plants? When workers get a pay raise the local cost of living goes up, does it ever come down when workers take a pay cut? Answer is no…then that adds to the people defaulting on their homes, and such.
I also agree with you about uninios but on a different level. The prostration and complicity of the UAW are a testament to the utter failure of so-called labor organizations that base themselves on the defense of American capitalism and opposition to socialist policies, the promotion of economic nationalism, and hostility to a political break with the parties of the US corporate elite.
Auto workers bear no responsibility for the collapse of the auto companies. Their labor, and that of generations that went before them, built the industry and created the vast wealth that was monopolized and squandered by the corporate heads and the American financial elite. Sorry had to get that shot in…it is a weakness…lol
BTW…thanx for the exchange…I ewnjoy a good exchange of ideas and opinions.
“When workers get a pay raise the local cost of living goes up, does it ever come down when workers take a pay cut? Answer is no…then that adds to the people defaulting on their homes, and such.”
Unfortunately, that is already happening especially in the technology sectors with the H1B visa abuse and outsourcing to Russia, India, and China. Like technology workers, when organized labor has to compete with workers who are content with a small fraction of the wages and worse working conditions, there are going to be jobs lost.
The biggest threat (in my opinion) to organized labor is globalization. I believe the whole point of globalization is to allow companies to maximize profits by exploiting cheap labor overseas thinking that the US economy will not suffer when all of the jobs are lost.
Morning…Terrant…once again we are in agreement….most of it started with NAFTA and the globalization snowball started to roll downhill. Back in the early 90’s I was a very vocal opponent of NAFTA. In my opinion the biggest threat to organized labor are the trade unions. The unions in the US are toothless tigers and cave in to the management at almost every turn.
Now my question is, why did the automakers take a grilling in Washington and Citi did not….is it blue collar vs white collar?
“Now my question is, why did the automakers take a grilling in Washington and Citi did not….is it blue collar vs white collar?”
I think you’re correct in your assessment. The fact that when it came to “Wall Street, we have to do now but for Detroit, we need to take our time and have a plan” has not not been lost on me.
I do not think that the Obama team will be much better….did you noticed that when he announced the team stocks shot up? That means that investors are not worried about anything changing.