Slicing and Dicing at GM and Chrysler

Elizabeth Warren, the chairman of the Congressional Oversight Panel, knows better than anyone what's happened to the bailout money that middle-class taxpayers so generously gave to Wall Street and the automakers.

Warren believes the middle class became the Thanksgiving turkey for the financial elites. Some carved off the bailout piece, some got another piece, some made a profit from this little piece and some squeezed wages from that little piece.

Automakers who already got part of the bailout are now grabbing at another piece. GM and Fiat-Chrysler want to save $30 per car by demanding cost cuts from the companies that haul their cars to the dealers. If the automakers get the steep cuts they want, they'll force the top three carriers out of business. Allied Systems Holdings Inc. of Atlanta, Cassens Transport Co. of Edwardsville, Ill., and Jack Cooper Transport Co. in Kansas City, Mo., will go under. Five thousand carhaul drivers will lose their jobs.

Carhaul drivers are very skilled in their craft, and they have to be. Driving big rigs loaded with new cars is one of the most difficult, dangerous jobs in the trucking industry. These skilled drivers are able to support their families with fair wages and health care. To help save the auto industry, they have already taken cuts in pay and benefits up to 17.5 percent.

Automakers took the bailout money in exchange for a commitment to protect middle class jobs. This approach is just the opposite - they are failing to meet their end of the bargain and taxpayers should hold them accountable.

If their employers go out of business, the professional carhaul industry will be replaced by a cut-rate brokerage system where independent contractors with inadequate equipment and little training earn poverty wages with no benefits. Chrysler has already moved some of its business to such bottom-feeders. And the mandatory "destination charge" of $800 to $1000 that you pay for a new car? Don't look for the auto makers to pass any savings they get on to you.

Lawmakers who supported the taxpayer bailout of Fiat-Chrysler and GM do not support the automakers' plans to drive their carriers out of business. GM CEO Fritz Henderson and Fiat-Chrysler CEO Sergio Marchionne have received letters from more than 25 concerned members of Congress representing California, Georgia, Michigan, Massachusetts, Ohio, Vermont and Virginia. That may not be enough to change the CEO's minds.

Many of the carhaul drivers are Teamsters. But this isn't a union issue. This is about the destruction of an entire industry, and what's happening to our middle class. As Elizabeth Warren told the Washington Post, the middle class is what makes us who we are. A strong and vital middle class is a middle class that can offer a helping hand to the poor. The middle class is what gives us political stability. It's why we work, and why we vote, and why we accept the outcome of elections, and why we can be safe when we walk down the streets.

"And every time we hollow that out," she said, "every time we take away a little piece of that, we run the risk that some of what we understood as America, some of what we know as America, begins to die."

 

Comments

[guard]

These companies have already failed, they are not providing a service that is economically feasible. Therefore if they cannot cut costs by forcing down wages, their only alternative is to ask for even more bailout money, which of course they are currently doing. I've got an idea. Why not give the bailout money directly to the people who have been laid off, instead of having a zombie middle man skim billions.

[drymartini1]

3 companies are bargaining with their suppliers. thats all there is to it.

when unions bargain, its good.

when companies bargain its bad ???

[prosha]

get barry on this right away, we must micro-manage all

[Ben6768]

Bailouts are no substitute for INDUSTRIAL POLICY.
I have not heard a word from Obama on this subject. What is he waiting for ? He is an admirer and servant of the existing status quo.

[UnionReview]

Hi Tania,

It is going to get harder and harder to stimulate middle class job creation when 5,000 good middle class jobs can be lost due to more cost cutting measures by companies that have been bailed out to do just the opposite -- save jobs.

-Richard

[tania lambert]

But what is being done to stimulate middle class job creation?