Saturday, December 13, 2008

Republicans' Driving Goal On Auto Bill: Destroy The UAW

An "Action Alert-Auto Bailout" memo obtained by MSNBC's "Countdown" exposed the Republicans' ultimate reason for abandoning the faltering auto industry. The Los Angeles Times wrote that this memo was circulated among Senate Republicans. It said, in part:

This is the democrats first opportunity to payoff organized labor after the election. This is a precursor to card check and other items. Republicans should stand firm and take their first shot against organized labor, instead of taking their first blow from it.

They don't propose outlawing the United Auto Workers; instead, their goal is to weaken it to the point of irrelevance. As reported in the New York Times:

The automakers would also have been required to cut wages and benefits to match the average hourly wage and benefits of Nissan, Toyota and Honda employees based in the United States, and the companies would have to impose equivalent work rules.

It was over this proposal that the talks ultimately deadlocked with Republicans demanding that the automakers meet that goal by a certain date in 2009 and Democrats and the union urging that the deadline wait until 2011 when the U.A.W. contract expires.

The UAW has already agreed to concessions with the auto makers and have indicated that they are ready for more. But that's not enough for the GOP, which, since it can't wait two years, demands immediate salary cuts to match non-unionized salaries at foreign-owned plants. 

Rachel Maddow reports that the Southern Republican Senators who are the most prominent in making these demands are indeed those whose states have no American car manufacturers. They do, however, have foreign car plants: Senators Jim DeMint and Lindsey Graham of South Carolina host BMW; Senator Mitch McConnell of Kentucky, Toyota; Senator Richard Shelby of Alabama, Honda, Hyundai and Mercedes, and Senator Bob Corker of Tennessee, Nissan.

In addition to putting forth their "first shot" against organized labor, these senators also wish to make lower, non-unionized salaries paid in foreign owned plants the industry standard. If in the process they destroy the American auto industry, put thousands out of work, and cripple supportive industries, parts suppliers, repair shops and auto dealers, all the way down to the luncheonettes that serve workers–well, so be it.

One of the Republicans' chief arguments against the auto workers is their supposed $70 per hour salary. Keith Olbermann of "Countdown" has cited the Center for Automotive Research, which states that the average auto worker salary for GM, Chrysler and Ford is $28 per hour. Dean Baker, co-director of the Center for Economic and Policy Research, makes the same point in American Prospect:

The New York Times told readers that GM's autoworkers are paid $70 an hour (including health care and pension). This is not true. The base pay is about $28 an hour. If health care cost per worker average $12,000 per year, that adds in another $6 an hour. If the pension payment takes up 25 percent of base pay (an extremely high pension), that gets you another $7 an hour, bringing the total to $41 an hour. That's decent pay, but still a long way from $70 an hour.

How does the NYT get from $41 to $70? Well the trick is to add in GM's legacy costs, the pension and health care costs for retired workers. These legacy costs are a serious expense for GM, but this is not money being paid to current workers. The person on the line in 2008 is not benefiting from these legacy costs.

It would be helpful if the NYT could get its numbers straight. It certainly can affect public support for a bailout if they are led to believe that autoworkers are paid much more than is actually the case.

Can the senators mentioned above get their numbers straight? Senators Bob Corker and Mitch McConnell voted to bail out the financial industry but not the car makers (Senator Lindsey Graham said yes to Wall Street but didn't vote on the auto bill), among others, predominantly Republicans, who took the same stance. How is it that they could find $700 billion for Wall Street but not $15 billion for a bridge loan for Detroit? Did they insist that white collar workers take salary and bonus cuts because they earn too much? Have they followed up the financial bill by investigating exactly how the money is being used? 

In contrast, Democratic Senator Chris Dodd of Connecticut in the video above expresses outrage over the small percentage of the debt comprised by workers' salaries; the fact that labor had agreed to compromises; the fact that working families who have taken the largest economic hit are the ones who are being asked to take another, and the fact that the financial industry received a much loan, but we can't approve a much smaller one for the auto industry.

Senator Jim DeMint said, "I'm not trying to get rid of the unions, but I am saying that they appear to be an antiquated concept in today's economy." That's especially so when your goals are to serve foreign-based companies and lower unionized workers' wages and benefits to the level of non-unionized workers.

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