Workers wages the straw that broke the automakers' backs
After such a drawn out, difficult process to get an Auto Rescue/Bailout Bill through Congress, there was one issue in particular that led to its defeat at the hands of Senate Republicans. Word has it that hope was in the air around 7PM EST yesterday evening that a deal could be reached among Republicans in the Senate, Congressional Democrats, auto industry representatives and the UAW. Some time later after the industry reps went home, the UAW was left in the room with Senate Republicans negotiating over one final issue that stood in the way of Republican support for the compromise bill. That issue was wage parity with non-union assembly plants run by foreign automakers in the U.S., also known as "transplants".
The UAW was willing to consider lowering its wages across the board to meet those of non-union plants, but wanted to delay any cuts until after its current contracts with the Detroit 3 run out in 2011. Plus, it's not exactly clear what level of pay would be targeted, as foreign run plants pay a wide range of wages to their workers, even among plants owned by the same foreign automaker. Nevertheless, without the UAW conceding to cut wages immediately, Senate Republicans refused to support the bill and it failed late Thursday night during a procedural vote.
The markets are about to open on Wall St., after which we'll have a clearer picture of the repercussions of last night's Senate vote. The only avenue left for immediate federal assistance is for the White House to allocate funds from TARP, which it may be more inclined to do after the bell rings to open the New York Stock Exchange this morning.
[Source: Automotive News, sub. req'd, Photo by Bill Pugliano/Getty]
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Reader Comments (Page 1 of 6)
Autoblog reader 9:42AM (12/12/2008)
I'm not a farmer, but I'm pretty sure straw doesn't cost $70 an hour.
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jpm100 10:03AM (12/12/2008)
It will cost even less now.
Polly Prissy Pants 2:16PM (12/12/2008)
Neither does the average UAW worker. If you watched all the dog and pony shows on TV this morning you'd quickly realize that this was a classic political setup by Corker from the get-go. First you propose silly demands you know the other side won't agree to, then when there's no agreement you blame the other guy for being an ahole.
I do find it interesting that we have no problem giving a trillion dollars to the bankers who created our current financial mess, never asking for anything in return, but when it comes to the automakers who are in this mess because of incredibly pooor management, who takes it on the chin? That's right, the common working guy. The saddest part is we've all been tricked into thinking this is right. And why? Because that's how they keep the status quo where bankers and execs rape the country while the middle class gets destroyed.
People wander around asking how we got in this mess where politicians and the rest of the ruling class are out of control and the average American feels powerless to fix it, all because they can't put 2 and 2 together. It's right there in front of you if you just stop listening to what they're telling you and start watching what they're actually doing instead.
Dude 9:41AM (12/12/2008)
If losing the Big means the end of the UAW, our country will be better for it. Even if it hurts while we wait for a new band of US automakers spring up from the ashes.
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Noor 10:01AM (12/12/2008)
Well the UAW seems bent on pushing GM into chapter 11. Which will be great, because then they can avoid the Union Contract, and the UAW will be done. And once the UAW is gone, maybe the manufacturers can actually be competitive.
The UAW overestimates its value to the manufacturers and to the economy. When the pay is based on seniority and not competence, people can't be fired, and the companies have to bear the cost of pension plans, there's no way for them to put out cars that compete with other manufacturers for the same price. That's why the most successful car companies don't have unions, and pay based on merit (Toyota, Honda etc...)
Personally I'm glad the UAW is so shortsighted, because their idiocy ensures that the organization will be relegated to the past, where it belongs. And the workers who are actually good at their job can be hired and paid according to their skills, without bearing the costs of the 3 other people that can barely do their own jobs.
notYou 10:15AM (12/12/2008)
Couldn't agree more.
The unions have essentially been put out of business by government regulation - OSHA, CAFE, CARB, minimum wage, the coming cap-and-trade, etc. - all those entities, rules and regs are designed to enforce all the issues that unions have historically rallied around as the necessary defenders of.
Now that the feds legislated it, unions have nothing left other than - essentially - extort higher pay and benefits. Regardless if the industry or product(s) can support it.
Goodbye, good riddance.
America wants to see the best workers at all levels of an enterprise, not the workers represented by the best negotiators.
rar 10:34AM (12/12/2008)
I am not a big fan of the UAW so don't get me wrong, but when we bailed out AIG, Lehman Bros and the rest of Wall street, did we ask for accross the board pay cuts for their employees?
Jay 10:57AM (12/12/2008)
@rar
I don't think that AIG and Lehman are union shops, and I don't think their pay is substantially higher than the competitors in their respective fields.
Corey W. 11:11AM (12/12/2008)
Do you feel the same way about the bailout of wall street?
jv2k 11:42AM (12/12/2008)
New automaker from the ashes? HA!
It takes billions of dollars to establish yourself as an automaker. Only way we'd get a new automaker is if non-car companies like microsoft get into the game.
JC (yeah I'm pissed) 12:18PM (12/12/2008)
There's no freakin way anyone on an assembly line should get more than $40 an hour.Even $40 an hour is alot.
If You want to make more money FIND ANOTHER JOB! That's it.
Your not entitled to get rich working on an assembly line ,shaking down your employer to the point of bankruptcy then having THE BALLS to expect the taxpayer to fund Your lavish union perks.GIVE IT UP!
Noidor 12:05PM (12/12/2008)
Valid point from Reuters article:
http://www.reuters.com/article/politicsNews/idUSTRE4B50CL20081212?pageNumber=2&virtualBrandChannel=10276
While the autoworkers blamed Republicans for setting "an arbitrary deadline" for parity, some analysts said the UAW had revealed it was not ready for the wrenching changes any auto bailout and restructuring program would require.
"If they won't move that distance before they got the money, why would they ever move that distance after they get the money?" Peter Morici, a business professor at the University of Maryland, told the "CBS This Morning" program.
why not the LS2LS7? 1:44PM (12/12/2008)
Jay:
The across-the-board pay is too high at places like AIG or on Wall Street in general. Why do you need to pay people extra to lose money? I can find people who will lost money for a much lower salary.
Carl 6:14PM (1/06/2009)
Hey Dude!
Do you think the end of unions will make the country better? The threat of the unions coming into the workplace is what makes for a living wage for normal people.
Next you will say that electricians, plumbers, carpenters... make too much money too,
Don't worry Dude, whatever you do for a living, there is someone that will replace you for 25% less salary.
Good luck...
Charger06RT 9:43AM (12/12/2008)
This is a great example of shared accountability.
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ken 9:49AM (12/12/2008)
It would be cheaper just fire all these UAW people, and hire and retrain the new workers. I can't wait to see they get rid off the UAW! Big 3 will never be profitable or competitive if they have that giant UAW elephant in the room.
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punkrawkintrev 9:49AM (12/12/2008)
This article is HORRIBLE
Its not the UAW's fault, infact in an America with a race to the bottom mentality when it comes to paying its workers the UAW is a ray of light. The UAW has enabled workers to fight for a living wage. The true failure of the auto companies was the incompetent management, unwilling to change always wanting to scrape change from the bottom of the barrel. The CEO's and the republicans in congress have fought tooth and nail to kill the American car industry so they can blame it on on the unions, bust them and down the road increase their profits by paying minimum wage to a non-union workforce. This is true class warfare and it is our duty to help the institutions who fight for worker rights and for a living wage.
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Dude 9:55AM (12/12/2008)
You can't be serious.
Alex 9:59AM (12/12/2008)
Nice try, but no. Look at the workers at the Toyota, Honda and other non-union factories in the US. They are getting paid well and every attempt by the Union to unionize the factories has failed because the workers don't want the unoin coming in.
Arumage 10:04AM (12/12/2008)
Wow, I don't think you could be any more wrong. I think the union shares at least a quarter of the blame. As times changed, the unions didn't causing a slowness to react by the automakers. Why do you think foreign companies do better making cars in America than we do? We as consumers also share a quarter of the blame four our shortsightedness. We demanded huge gas guzzling vehicles, and we got them. The final quarters go to the government for CAFE, and the automakers themselves for their shortsightedness.
The UAW doesn't deserve 100% of the blame, but they certainly were more than happy to contribute to the collapse. Their consessions were a day late and a dollar short, but ultimately the automaker's short term approach led them to give the UAW those benefits in the first part. I'm all for "sharing the wealth", but you have to be able to give some back up when the going gets rough.