DETROIT – “The American auto industry is back,” President Obama said in his State of the Union address. And in fact, though very far below previous levels of employment, the U.S. domestic auto industry has rebounded from the disaster of 2008 when General Motors and Chrysler were on the verge of going under, jeopardizing thousands of jobs, until the president helped mobilize support for government-guaranteed loans.
More than jobs are back. New polls in Michigan show Obama has jumped ahead of his Republican opponents here.
And in what will prove to be tough sledding for Michigan Republicans, one of the biggest opponents of saving auto jobs was Republican presidential candidate Mitt Romney. In a 2008 New York Times editorial, titled “Let Detroit Go Bankrupt,” Romney argued against the job-saving loans. “If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye,” he claimed. “Detroit needs a turnaround not a check,” Romney argued.
Whether it was Romney’s hatred of unions (a Chapter 9 bankruptcy would have decimated the powerful United Auto Workers union) or his thinking only bankers and the 1 percent have a right to be helped by the government, the fact remains that most Republicans argued against saving the industry and many hundreds of thousands, if not millions, of jobs in the U.S.
It is revealing that Republicans opposed what amounted to $80 billion in loans to General Motors and Chrysler aimed at saving those jobs, but had no problem giving $700 billion, with no strings attached, to banks and insurance companies.
What also riled Republicans was that much of the money used to bring the auto industry back was in the form of the government taking an equity stake in the companies. Republicans derisively labeled General Motors “Government Motors.” Their philosophy seems to be that large amounts of money can be freely given to banks but anything that goes in the direction of the government having a seat at the table, as it did for a while with the auto companies, is dangerous and un-American.
And in sharp contrast to the fleecing of the public by the banks, the government money used by the auto companies has largely been repaid.
Following the president’s State of the Union speech, UAW President Bob King issued a statement saying, “Thanks to the Obama administration’s commitment to U.S. manufacturing, domestic auto manufacturers have added 160,000 jobs.”
In addition, the Detroit Free Press reported, the Automotive Research Council says about 15,000 auto-related jobs could be created in Michigan this year.
Are the new jobs enough? Not at all. While Chrysler’s North Jefferson plant in Detroit is adding 1,100 jobs, over 10,000 have applied – a sign of the dire economic times. With a local unemployment rate near 50 percent, it is no surprise.
Many of the new jobs come at a lower, second-tier pay rate, a growing problem that confronts labor in many industries here and around the world. In its recent contract negotiations, the UAW placed a priority on reducing that gap, and won a significant $4 hourly raise increase for tier-two workers that will have them making approximately $19/hour by the time the contract expires – a step in the direction of parity with the $27 that workers with more seniority earn.
King argues that the job growth, and the union’s work to both bring back and keep jobs here in the U.S., destroys an argument of the union-haters. To “those who say unions chase jobs out of the country, the facts prove them wrong,” he said.
Union-bashing Republicans pushing “right-to-work” laws in Indiana, Michigan and elsewhere should take notice.
Photo: Megan McCormack // CC 2.0