Leaked GOP memo shows they’re out to bust the unions.

There’s a fair argument to be made that bailing out the Big Three automotive companies for their own bad decisions is just throwing good money after bad, but it turns out that the GOP politicians that killed the bi-partisan auto bailout bill weren’t so much concerned about the money being put out as they were having a means of breaking the UAW. The folks on NBC’s Countdown managed to get ahold of a memo detailing as much:

I’m no fan of unions myself as I’ve said before on SEB, but the UAW was bending over backwards to meet the conditions being proposed by the bailout bill—it doesn’t do the UAW any good to have the Big Three go under after all—yet the Republicans killed the bill anyway. What’s really amazing about this is that Vice President Cheney himself warned his part that if they kill the auto bailout bill that it would be Herbert Hoover time all over again:

“The big question is what happens next, if the auto companies are still in business in January or March, whenever it happens to be, [there won’t be] much fallout,” Senate Majority Whip Dick Durbin (D-Ill.) told Politico. “But if something dire occurs, if one of the companies or more face bankruptcy or layoffs and that has a dramatic negative impact on communities, families or the economy, then I think there are some questions to be answered to think whether this might have been enough to keep them in business and help them survive.”

Administration officials have been warning for weeks that failure to pass the bill could lead to an even deeper recession.

That was the message Vice President Dick Cheney brought to a closed-door Senate GOP lunch Wednesday, reportedly warning that it’ll be “Herbert Hoover” time if aid to the industry was rejected, according to a senator familiar with the remarks. A Cheney spokeswoman would neither confirm nor deny the vice president’s remarks.

If the Big Three end up failing because of this you can bet your ass that Michigan, Ohio, and several other states that rely substantially on the domestic automotive industry aren’t going to forget who let the companies die and put millions out of work anytime soon. The fact that they did it just because they want to destroy organized labor only compounds the issue. You think things are bad now? Wait until the full impact of a bankrupt auto industry hits the economy.

9 thoughts on “Leaked GOP memo shows they’re out to bust the unions.

  1. Hi Les!

    I had read last night that the UAW WASN’T going to try to change their union terms…that they refused any changes to help out the automakers.

    Now, I fully admit I could be wrong, but could someone clarify what is going on so I can understand it?  I totally understand that sometimes media screws things up and spins it in a certain way so any clarity from those in the know would be helpful.

  2. From what I understand of the situation what the UAW said was that in order for the changes to happen right now they’d have to sit down with GM management and go through the process of drawing up another contract and working out the details and such, something that may have been problematic for some reason I’m not entirely sure about, otherwise it would have to wait until the current contract expires next year.

    That was apparently all the justification the Republicans needed to sink the proposal and try to blame the UAW for ‘blowing up’ the deal.

  3. This is bad.  I have mixed emotions about this.

    On the one hand, I don’t like the bailout.  They could have helped out the workers a lot more if they split the bailout money up among all the employees (except the execs, of course)  I don’t really understand why the Republicans are trying to kill the bailout, but I agree with them, and agreeing with Republicans makes me uncomfortable.

    I don’t particularly like unions.  I like the IDEA of unions.  Leaving things up to individual employees to “negotiate” with the corporations is a bad move.  On the other hand, there are plenty of businesses that get along just fine without unions.

    I also have mixed feelings about the UAW too.  Both they and Ford and GM have bad reputations and tend to be a bit whiny when they bump heads, regardless of the merits of their respective cases.

    The bottom line is that I don’t want the bailout, but something should be done for the gobs of employees that are sure to end up on the street as a result.  If the Republicans can’t give us an alternative to the bailout that addresses that issue, then I have no reason to believe this is anything other than a power-play.

    Then again, everything the Republicans have done since Bush came to power has been a power play.

  4. I agree with swordsbane in that it’s a mixed bag. And, similarly, I found myself agreeing with the Repubs. I didn’t like that particular bill’s language. It was good money after bad.

    The problem with the union part of this is that they won’t budge, insisting they stay at status quo until their contract expires in 2011. Those companies could be dead by ‘11.

    I don’t fault the union people; I fault the union leadership. They have become so conditioned over the years to not give up ground, that this seems like business-as-usual. It’s not. I have to wonder if those leaders fully understand the gravity of this. If the companies go titsup, all those contracts aren’t worth the paper they’re written on. And in bankruptcy, a judge can nullify those contracts. Either way they lose.

    The union brass had better get a reality check, before they end up selling their members up the river. They’re rolling the dice with peoples’ livelihoods.

    On another note, Ford isn’t interested in bailout money. They were present at Congress primarily to show support for the industry. But since accepting bailout money would likely dilute their stock holdings, the Ford family doesn’t want to lose control of the company. Ford is much more solvent than GM or Cerberus/Chrysler, and has a better chance of weathering this recession.

  5. Since the debate with the unions was mostly about pay I think this article may shed some light on that subject:

    December 15, 2008]   

    UAW workers’ pay on par with Japanese competitors in U.S.

    (Blade, The (Toledo, OH) Via Acquire Media NewsEdge) Dec. 13—The question of how much a union assembly-line worker makes for building Chrysler Jeeps in Toledo versus how much a nonunion technician earns for building Honda Accords in Marysville, Ohio, is perplexing the policymakers in Washington.

    It’s so perplexing that it halted the painstaking negotiations in the U.S. Senate to lend $14 billion to bail out the struggling automakers.

    As a prerequisite for the aid to automakers, Senate Republicans demanded that United Auto Workers agree to wage concessions that would cause pay for its assembly-line workers to fall in line by next year with those paid by Japanese companies.

    The numbers, however, paint a picture of UAW wages already in line with Japanese competitors building cars in the United States.

    “There’s a lot of myths out there,” said Ed Miller, a spokesman for Honda, which has plants in six states, including Ohio.

    “There’s some assumptions about our pay and benefits that are just that—they are assumptions,” he said.

    UAW President Ron Gettelfinger, in a news conference in Detroit yesterday, accused the Republican senators of engaging in “subterfuge” to stand in the way of a bailout, going so far as to say the GOP wanted to “pierce the heart” of organized labor.

    “There were Republicans that wanted to tear down any agreement we came up with,” Mr. Gettelfinger said.

    During the past month, as the Big Three have pleaded with Congress to loan them millions to bail them out of a financial mess that threatens their survival and as many as 3 million jobs, the UAW repeatedly has been forced to defend the wages earned by its workers and offer concessions to aid the faltering automakers.

    In one attempt to dispel rumors about lavish $73-an-hour wages paid to UAW workers, the union released a fact sheet explaining that Chrysler, Ford, and General Motors pay $28 an hour for assemblers and $33 an hour for skilled trades workers. New hires make about $14 an hour, according to the union.

    The fact sheet called the notion that UAW workers make $73 per hour “outdated and inaccurate,” explaining that figure includes not only health care, pension, and other compensation, but includes the pensions and health-care benefits of retired employees.

    “That $73 was not explained very well over the years,” Mr. Miller of Honda said.

    General Motors says its total hourly costs are $69 an hour—including the pension and health benefits of more than 432,000 retired workers. Toyota, which has fewer retirees and less costly benefit packages, says its total wage costs average $48 an hour.

    But based strictly on wages, the $28 an hour paid by Ford, Chrysler, and GM fall in line with their counterparts. Toyota says it pays about $30 an hour, while Honda pays $28.87, and Nissan pays an hourly rate of about $25 an hour.

    The $28.87 Honda workers earn includes the base wage of $24.80, plus an attendance bonus of $1.25 for each hour worked, a bonus-sharing program that adds $2.32 per hour, and an earnings payment of 50 cents per hour. Also, Honda workers are offered a competitive health care plan.

    Original article can be read in full here.

  6. EyesOnly, I edited your comment down so it’s not a copy of the full article. I didn’t see anything at the Toledo Blade that licensed it as Creative Commons so I don’t want it to run afoul of copyright issues. As it is I left the excerpt a tad on the large side. I also went ahead and put a link to the original article at the end so folks could go read the whole thing if they wish.

  7. Gosh- yes blame the unions, because they make the decisions about making cars that no one wants.  Its the workers who want to build cars the rest of the world doesn’t want.

    Those Rep senators who voted against- I understand that many of them represent the “Right to sack for no good reason” States, and those with Japanese car factories.

    The bail out isn’t as simple as it is made out.  It is GM (I think the BBC said GM) that is most vunerable.  If they go down so do loads of suppliers. This damages Ford (because they need those suppliers, but the suppliers need all 3 of the Big 3), so Ford go down.  Plus so does the business that rely on the workers spending their wages

  8. No problem Les, I posted it way past my normal kip time and on reflection should have cut it down myself.

    You make good points, plenty of blame to go around as to who is responsible for the mess the Big 3 find themselves in.
    Your point regarding the vulnerability of the suppliers is crucial since so many peoples jobs in those companies will also be affected.

    Stormin Norman
    Good article, thanks for posting the link.

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