Big 3 Money Contingent On Union Concessions
Posted on December 22nd, 2008 by Tim Eavenson | No Comments »Filed under: ., Labor Law, Politics, The Financial Crisis |
A few weeks ago, the CEOs of Chrysler, GM and Ford were hopping back and forth to Washington to try and negotiate a deal with Congress that would keep their companies out of bankruptcy. The biggest roadblock for the automakers were southern, congressional republicans, who thought any money should be contingent on major concessions from the United Auto Workers Union. First and foremost on the list of concessions was bringing UAW salaries and work rules in line with the non-union autoworkers in foriegn car companies’ US plants – most of which, coincidentally, are in the south.
It was this negotiation – more between Republicans and UAW President Ron Gettlefinger than any of the Big 3 – that finally dissolved the talks. That was why everyone was so excited when the Bush Administration – the BUSH Administration – announced that the President had authorized $17.4 Billion to be given to the automakers to stay afloat. What many failed to notice – as they cheered the bailout’s passage, was that the restructuring schedule attached to the bailout funding looked oddly familiar:
President Bush’s plan includes targets for United Auto Workers’ wages to be brought in line with what foreign companies pay their non-unionized workers in their U.S. plants and to have similar, more flexible work rules. Foreign makers can move workers from plant to plant and give them different duties or more responsibilities. Many union plants have thick manuals regulating what a worker can be asked to do. (From USA Today)
The deal also demands that the unions take corporate stock for ½ of the funding for its VEBA (a retirement fund established to put health and pension benefits in the hands of the union, rather than the employer – click here for earlier coverage). But the money, of course, isn’t going to the union. It’s going to the automakers. So how can the President demand these concessions?
Essentially, what the President did was place the burdens of the southern Republican demands on the shoulders of the Big 3, instead of Congress. If the automakers can’t convince the UAW to essentially overhaul its collective bargaining agreements, which means at least 3 votes by workers themselves for major concessions, then they lose out on the promised federal aid.
For his part, Gettlefinger is looking to the President-elect to alter the requirements when he takes office next month. As the paper points out, this puts the spotlight on one of Obama’s biggest challenges: balancing the interests of a faltering economy and the organized workers that helped elect him.
Leave a Reply
Comments are moderated before they appear.
Anonymous comments are discouraged.