Auto Workers Union Rules Out Concessions To Help Detroit Bailout

With the House of Representatives pledging an aid package for the auto industry, the United Auto Workers (UWA) union fanned the flames a bit by refusing to grant any concessions in a bailout of the big 3 Detroit automakers. UAW president Ron Gettelfinger adamantly stated that the auto industry's woes could be laid at the feet of the stumbling U.S. economy overall:

The US United Auto Workers (UAW) union has ruled out concessions - at least for the time being - to help rescue the ailing Detroit-based car industry.

Ron Gettelfinger, the union president, said at the weekend that "the focus has to be on the economy as a whole as opposed to a UAW contract"...

..."We're here not because of what the auto industry has done", Mr Gettelfinger said during a rare press conference. "We're here because of what has happened to the economy." The union represents blue-collar workers at assembly plants, as well as several parts suppliers.

High labour costs are seen by many outside the UAW as part of the reason for the carmakers' distress. UAW members' generous pay and benefits have gained them a reputation as the aristocracy of the US labour movement. Much of GM's debt was taken on in the early part of the decade to finance its blue-collar pension plan.

President-elect Barack Obama reiterated his support for some kind of bailout for the auto industry in an interview tonight with 60 Minutes. Top Republicans have heaped scorn on a Detroit bailout as nothing more than "put[ting] off for six months or so the day of reckoning."

Comments

[EdgedInBlue]

Here's a thought that I have raped from another poster... the workers in the auto industry will accept wages on par with the Japanese and German autoworkers only if their CEO's and upper-management do the same. Rather than expect the worker to bear the brunt of the economic downturn, we ask management to do the same to set an example of their commitment to their workers.

Let's all give till it hurts!

[JBSaunders]

Congrats, the UAW has forced the Big 3 into bankruptcy. That was always the risk they ran by asking for the moon in labor negotiations.

Rather than bail them out, I say we should just give the Big 3 to them--they can contribute their massive pension obligations in bankruptcy proceedings and end up running it. All those retirees that pillaged these companies can now have the full results of their labors. Make the genius Labor Leaders run the things.

Once they have a dose of reality and real responsibility, then we'll see how quickly they lower labor costs.

[Flagday]

May 2008 (percent change vs. may 2007) - Automobile

Top Ten Selling Cars in America .

1. Honda Civic (+33.3%)
2. Toyota Corolla/Matrix (+16.8%)
3. Toyota Camry (+2.3%)
4. Honda Accord (+37.0%)
5. Ford F-Series (-30.6%) Picipu
6. Chevrolet Silverado (-42.0%)
7. Nissan Altima (+43.6%)
8. Ford Focus (+53.2%)
9. Chevrolet Cobalt (+19.2%)
10. Chevrolet

Coincidentally, the Consumer Report ratings are just about in the same order.

My point? The Focus and Cobalt are even CHEAPER than the highest selling Civic. So if Unions are taking down the automaker shouldn't the price of the Focus and Cobalt be so outrageous tofar exceed the Civic?

The Union isn't the problem it's the law of supply and demand. The US automakers are notsupplying what the consumers are demanding. Sure, they finally "got it"---quality and reliability actually matter to the US consumer. While I concede the quality of US cars has improved the gas guzzling nature of the vehicles has not. Why has the F150 Pickup Truck been the industry sales leader up to May 2008? Because the car companies drove up the demand with a crazy amount of advertising. .

Who decided which cars and trucks to promote and which ones to manufacture? That would be marketing and management. Since 1973 US manufacturers have produced cars which were not facing national security and environmental realities. Those were executive decisions not the UAW's.

[wrsmith49]

If the auto industry negotiates a deal with its workers and then fails to set aside the pension monies that it negotiated to pay over the past 30 years: let’s blame the workers. Let’s not hold the management accountable for their bad decisions. Let’s not cut their pay and benefits. Let’s blame the workers.

There are about 200,000 auto worker on the pay-roll. If they each had there pay and benefits cut $12,000 per year, the savings would amount to $2.4 Billion. The management is requesting $30 Billion just to keep them afloat until March of ’09. That’s about $6 Billion per month ($72 Billion per year). That’s a $69.6 Billion short fall between the workers pay-cut and the money needed by the auto industry. That short fall has been created by bad management not greedy workers.

If the farmer’s mule can’t pull the wagon; why beat the pig?

Bill: Indio, Ca

[mmlh444]

this whole thing is about getting rid of the unions it started with regan and the airtraffic controllers .back then they had people so afraid of losing thier jobs that they didn't dare say anything .the same thing is happening again .the economy is so bad people are afraid .my husband worked for gm for 30 years with the promise of retirement and health benifits .now they won't to take it away.i worked for a grogery chain that offered a retirement then changed to 401k that is not worth much anymore .maybe we should reopen the poor folks homes because thats where we are all going to be living .at least the fat cats will be happy. we will all be making $7.00 per hour working when ever they tell us to and be happy to have it .wake up people this is just nuts.

[tagger]

JB,
I agree with you. I have worked around unions of all kinds too many times wondering how the heck their employers survive.
Fact #1 I saw this first hand. A union worker came to replace a sign and noticed that there was a stopped up drain. He ignored the drain because it wasn't on his work order.
Fact # 2 I was hired to do a job as a consultant at a union shop, I had to run a piece of copper wire a total of about 80 feet. Since I was not "union" I had to stay on location 2 days waiting of 4 different union members to run 20 ft of wire each. I ran my diagnostics and was out of there in less than an hour. Point is.... I could have run the wire myself in about 10 minutes end to end and done my testing and headed home. Instead, the telephone company paid 4 people(five including me) over 2 days for a less than two hour job.
Fact # 3. I own a Toyota pickup.. I bought it because of quality... not price. A non-union worker can be fired for doing a substandard job so a non-union worker takes more care building his product.
Boil it down on both the labor and management side of the equation. GREED and NO ACCOUNTABILITY are the problems with the big 3. Giving them $14 Billion won't fix either of these problems?

[EdgedInBlue]

Have you ever stopped to consider 'why' such rules are in place, protecting union workers? Would you expect a plumber to cut your meat? An autoworker to un-plug your drain?

Industry has molded manufacturing such that specialty is stock and trade. After the invention of the assembly-line, industry negated the 'jack-of-a­ll-trades' in order to compete, providing product speedily and cheaply they out-sourced the tradesman who could 'do it all'.

As for your Toyota, luckily their government subsidizes it's industry as well as it's industry's worker's heath care and pensions. Cry socialism if you must, but it makes it difficult for the American worker to compete with the Japanese worker. After all, you're the one driving their car!

[runner70]

If GM's GROSSLY overpaid executives would have been worth 1/4 of their salary they would have been designing and buliding cars that people WANT to buy, and thecontract obligations would be a non-issue. The problem is not the union, Americans would prefer to but American made cars, they just don't want to have hold their nose (and close their eyes) to do it!

[Seeker14]

You have no idea of what you're talking about, my friend. Have you bothered to step inside a Chevy Malibu, Ford Fusion, Mercury Milan, Lincoln MKS or Cadillac CTS? Your notion about "...designing and building cars that people WANT to buy..." would be blown to the cosmos.

Unless, of course, you are possessed of some "special understanding" or "atypical insights" or even "hidden knowledge" that permits you to articulate your opinions about the all important US Auto Sector and its product with such surety.

I suspect that you truly don't believe what you state, but are merely taking the popular "herd mentality" path.

Educate yourself, and then come back to HP with comments that are considerably more informed.

Here's a start.....

http://gmfactsandfiction.com/

[arcticterrier]

These can't be libs on this post speaking out against bailing out the UAW. It sounds like all the UAW president wants to do is "spread the wealth". I thought that was the plan afterall?

[Persson4]

Unions so last century!!

[Persson4]

Give big tax breaks on cars that get over 35 miles to the gallon to the American taxpayer and then help Detroit. Also, we need to create laws that dictate how much a Union can expect to receive from negotiations. Their plans are richer than the national average. Healthcare and pensions they are a dinosaur. These things will continue to occur as long as the oversight of management and the union are not regulated.

[research]

Kucinich tried to warn us against this bailout.

[killpack]

It is a complete TRAVESTY in my mind how so few Congressmen were against the bailout, when so many Americans were. Good on Dennis Kucinich and the select few who had the guts to stand up to the Fed.

[squarebird]

I think you are referring to Ron Paul.

[killpack]

They were both against the bailout.

[dogwatch]

All negotiations start at ground zero. I don't offer you anything. What are you going to give me? Then, from there, the good negotiations get the real figures and lay them side by side to see where the room for compromise might lay. If there is no bailout and the union has a contract, then how much of the benefits can be paid for how long? That's ground zero. Now, if out of every hundred dollars paid to the manufacturer the beneficiary gets five dollars, then why waste the ninety five on the failed manufacturer? Let's just give the five dollars to the beneficiaries and let the manufacturers take care of themselves. If they can't, then a competitor who does good business will fill the gap.
These are the true elements of the problem. Now, let's negotiate. What would you rather do, give the manufacturers who screwed up 95% of the money, or invest a small sum to take care of those who worked hard and earned their groceries honestly?

[Free2Speak]

Prime example of ignorance by the American people.The first financial bailout 700 billion was defeated by the GOP and they voted a week later with a 150 billion extra in pork (850 billion ).Now the GOP is screaming at the auto industry for asking for 25 billion.Paulson did a bait and switch from buying toxic mortgage loans to giving money to banks and pay to executive bonuses. He has spent 300 billion of the bailout with no transparency of exactly who received the money.Notice much media coverage is on the auto industry request compared to the financial industry.

[kylie]

Free2Speak, you nailed that one!
Paulson and his GOP gang have decided to keep the $750 billion bail-out all amongst his Republican bankers, insurance companies, etc.(His peers).
Two to three million working class Americans, their jobs, benefits, wages can go the way of those who lost their homes in the dirty mortgage scams.
Keeping the economy afloat and the country economically solvent. Help Bush and his pals to destroy the auto industry and the unions.

[killpack]

Funny, I'm looking at the vote right now and more Republicans voted against the bailout than Democrats. I'm not a GOP sympathizer, but this was a BIPARTISAN scam. Don't just blame the Republicans

[SoCalGalinNC]

So, here’s a bad joke! You wanna hear something that’ll make you really mad? ABC's Brian Ross did a report on this morning's GMA on how the CEOs of the automakers currently crying poor, continue to maintain extensive and expensive fleets of private company jets to transport company executives. Are we surprised at this double standard?!? This included the head of GM taking a $20,000 flight on one of GM's private jets to the hearings this week before the House Committee on Financial Services. Let them fail -- and give the current CEOs and their lame boards the BOOT while they’re at it! If they haven't learned by now how to run a business out of debt rather than into the ground, then these CEOs should be out looking for jobs like millions of other Americans. You think these CEOs are counting their pennies and worried about their futures? Of course not! We need to call their bluff. It's not our problem. They're nothing but a bad joke and need to be allowed to fail. That's capitalism! Survival of the fittest! Contact the Committee, and your congressional and senatorial representatives now and tell them NO. Enough is enough. Don’t let the joke be on us!

[kylie]

The "mistake" happened when the $750-billion went to Paulson and the Republicans to make the decision which of their cronies should pocket most of the money with no regulations or oversight--workers, peoples homes seem to be off the hot list. That was the mistake--supporting the 3 million jobs the auto industry supplies, is not!

[Cybersquirt]

why does "everyone" forget there are democrats in congress?

[lorenzo48]

This is not a union question, unions have done a massive amount of good instituting workers rights and fair pay. Here is the problem the auto companies have been mismanaged for years. They have taken on huge amounts of debt,, and signed contracts with the UAW that they could never honor even in the best of times. Let them go into bankruptcy, slim down become competitive, the business needs to shrink, but why on earth should the taxpayers bailout failed business models of these socialist welfare state style corporations. Wildly overbloated payrolls, laid off workers recieve 96% of their pay. Managements are out promoting Cadillacs that start at 45,000

[littlequeenie]

I've always been pro-union but if I am not mistaken, these workers make a VERY good salary - and I don't begrudge them that - but getting 95% of their pay after being laid off??? That is ridiculous!

[BuckeyeGal]

85%.

[EdgedInBlue]

95% is half unemployment (provided by the state and ending after 26 weeks) and half contractual benefits (provided by the company and lasting 52 weeks) from a fund that THEY PAY INTO WEEKLY. Their actual salary rangers from $14.00 per hour to $48.00 per hour, depending on seniority and experience. Before saying they make a VERY good salary, compare what they make, and the cost of living they must endure in Michigan, versus what the upper-management of their companies make. Then tell me what the chances are of 1) An upper-level office worker and 2) An upper-level car machinist have of securing another job in the current job market.

[oldcavpilot]

What concessions were asked of the Bankers with TARP? Was it Goldman Sachs where the average bonus was $200k? And it didn't change? It's goose and gander. Either re-visit the TARP rules, or leave the unions out until the next contract. $250 Billion with no strings for the rich kids, and for $25 billion to save this country's manufacturing base, the workers take it in the shorts. I don't think so.

[killpack]

This is why you don't bail out ANYONE.

[brt929]

You know, there was no way they were going to receive that loan with the current Senate makeup and current President. I don't even know why they bothered with these hearings.

[Wiserone]

Be careful what you wish for. A take-over of a large overseas auto maker would fit perfectly into China's plans. As reported before, China has realized that its export chances are slim without unfettered access to foreign technology. The brand cachet of Chinese cars abroad is, shall we say, challenged. The Chinese could easily export Made-in-China VWs, Toyotas, Buicks. If their joint venture partner would let them. The solution: Buy the joint venture partner. Especially, when he's in deep trouble.
At current market valuations (GM is worth less than Mattel) the Chinese government can afford to buy GM with petty cash. Even a hundred billion $ would barely dent China's more than $2t in currency reserves. For nobody in the world would buying GM and (while they are at it) Chrysler make more sense than for the Chinese. Overlap? What overlap? They would gain instant access to the world's markets with accepted brands, and proven technology.

[TommyMcCarthy]

Clearly, "wiserone" has chosen an appropriate screen name....
regards
tm

[Grit]

Just offer the union president a seat on one of the board of directors of one or all three car companies. And you will get anything from the union needed to make the bailout a go. After all that is what happened during the Chrysler bailout some years ago. The UAW aircraft workers got shafted, to build Japan's fighter planes in Japan in exchange for Japanese car companies building car parts in the U.S. the concessions from the union for Chrysler were put in place, and the UAW president got a seat on the board of directors. A short time later he of course resigned the UAW presidency and retained his seat on the board.