DETROIT — It looks like autoworkers have dodged a bullet. Congress seems likely to pass some sort of “bridge” loan to keep General Motors, and perhaps Chrysler, from declaring bankruptcy and throwing union contracts and jobs on the trash heap.
Congressional Democrats have drafted terms of a $15 billion dollar government loan for GM and Chrysler to help them survive through March 31. (Ford has asked for a $9 billion line of credit.) The loan still needs the support of 10 or more Republican senators to avoid a filibuster, and then needs to be signed by President Bush. It places restrictions on executive pay, sets up government oversight of the companies’ operations, and gives the federal government a stake in the companies.
The additional 10 votes needed from Republican senators will not be easy to come by. Former GOP presidential candidate Mitt Romney recently wrote a New York Times op-ed titled, “Let Detroit Go Bankrupt.” Romney, the wealthiest of all the 2008 presidential contenders (assets worth up to $250 million), argued for bankruptcy for the auto industry as the way to impose new union contracts that slash worker and retiree income and benefits.
Sen. Richard Shelby (R-Ala.), the senior Republican on the Senate Banking Committee, opposes any federal government assistance to avert bankruptcy. Shelby’s state ranks sixth on the list of states with the most autoworkers, almost all non-union. Yet those jobs exist because of generous handouts to foreign auto companies by the state of Alabama.
Here in the Motor City many are wondering why Congress and the Bush administration were quick to deliver to the banks and insurance companies federal aid that dwarfs anything asked by the Big Three. At least, Motowners say, the auto companies are producing something real.
Detroit City Council President Pro-tem JoAnn Watson, who traveled on her “own dime” to Washington to lobby on behalf of autoworker jobs, has been asking why blue collar workers are being told to make the lion’s share of the sacrifices. She noted that no furor was raised about overpaid bankers and other well-paid financial personnel.
African American workers are more concentrated in the automotive industry than in the labor force as a whole. For Detroit, with its 85 percent African American population, already suffering from double-digit unemployment, the loss of more auto jobs and wages would be a devastating blow.
The United Auto Workers union has agreed to consider re-opening its contract to see what additional concessions it might negotiate. Most likely concessions are eliminating a jobs bank that provides pay for some 3,000 laid off workers, and allowing auto companies to delay contributions to the retiree health and benefits fund negotiated last year. But UAW President Ron Gettelfinger told the Senate Banking Committee the union opposes any attempt to make the workers “shoulder the entire burden of any restructuring.”
He noted, “Wages and benefits only make up 10 percent of the costs of the domestic auto companies. So the current difficulties facing the Detroit-based auto companies cannot be blamed on workers and retirees.”
Gettelfinger pointed out that autoworkers earn on average $28 an hour, not $70 as widely reported, and last year’s contract conceded a $14 starting wage for new workers. A union worker’s average benefits add up to about another $10 an hour. The phony $70 figure comes from an accounting sleight-of-hand that inflates the labor cost for active workers by adding on the companies’ costs for “legacy” benefits for hundreds of thousands of GM, Ford and Chrysler retirees.
“The main reason that Chrysler, Ford and GM have higher legacy costs than the foreign nameplate operations in the United States is not because their retiree benefits are much higher — it’s because they have so many more retirees,” the UAW says in a list of questions and answers on its web site.
Working families and retirees have less discretionary money to spend than ever — almost all is earmarked for recurrent bills like housing, heating and health care. While multi-millionaires like Mitt Romney may not worry about such things, how will goods be bought and production pick up if the wages of unionized workers are seen as the problem instead of the solution? This is another reason why labor is fighting so hard — and the rest of the country should join them — to pass the Employee Free Choice Act. It would make union organizing a fairer process and would result in better wages for all working people.