Big 3 Money Contingent On Union Concessions

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.  

“I expect nothing less than what he said he was going to do, and we should hold him accountable.”

Those are the words of Andy Stern, president of the SEIU.  He’s referring, of course, to President-elect Barack Obama – a man who owes much of his newly found title to Stern and his compatriots.  In a Wall Street Journal profile over the weekend, Stern outlined his hopes for the new administration, and while the list is expected, the order is a little surprising.

“Massive investment” in a stimulus for the economy, the car industry, deficit-ridden states and infrastructure. Then universal health care, an issue on which the SEIU boss helped push the Democratic consensus leftward, and “tax cuts for the middle class” (and hikes for the upper bracketed). At the end of his list, Mr. Stern puts something particularly dear to unions: Quick adoption of the Employee Free Choice Act…

It is hard to imagine that EFCA is third among priorities for the President of the SEIU.  But with the economy spiralling downward, passage of the controversial bill – which looked like a complete lock in an Obama administration 6 months ago – is now relegated behind two initiatives that may be more easily accomplished.  

Stern is quick to point out that the time is ripe for massive healthcare reform.  While they may differ on the details, “Mr. Obama takes office at ‘an unusual Washington moment’ when business, labor and the politicians ‘see common ground’ on the president’s headline initiatives, health care above all.

Stern also addresses the status of the Employee Free Choice Act – the longsuffering bill championed by organized labor as a balancing of power during elections and early negotiations.  It is, apparently, the big issue among unions who see president-elect Obama’s theoretical shift to the center as a roadblock to its passage.  But Stern is confident, and while the article makes it seem like union-boss puffery, there is good reason to believe him when he says EFCA should be done in the first hundred days:

“You should do it early and I think it should be part of the basic second-tier economic package when we’re dealing with health care, energy and other ways that over the long term begin to solve America’s long-term economic problems.” Just how it will pass — in a single package, or a budget, or who knows — is hard to predict amid all the economic uncertainty, he says.

Why the confidence?  Regardless of his center leanings, there is truth to the notion that politicians cannot forget the people who got them where they are.  And for Obama, a lot of those people have union cards. Organized labor, and Stern’s SEIU in particular, was an Obama Campaign cash machine, and they know what that money’s worth:

[L]abor put up some $450 million to get Democrats elected. The SEIU accounted for $85 million of that, making Mr. Stern’s union the single biggest contributor to either party in this election cycle. And just in case, the SEIU set aside an additional $10 million fund to get people unelected if need be. “We would like to make sure people appreciate that we take them at their word and when they don’t live up to their word there should be consequences,” he says.

Now, read that headline again.

The Job Bored: Katsup Edition

• UAW ends strike at International Truck, drops ULP charges. No, we’re not taking the heat for this one – the UAW strikes at bright lights & loud noises these days. No one with a life could keep up. [AP]

• Scandal over illegal workers and clashes with unions over Social Security overhaul ousts government’s head of labor. In Greece. Had you fooled for a minute though, right? [NYT]

• The Killers back in court on former manager’s $3 mil. unpaid commision suit. We know this just happened, but the Killers are so five minutes ago. [TMZ.com (it's a gossip website - ask your wife/daughter)]

• Writer’s Guild having trouble with Conglomerate Conglomerate, decides to just work with conglomerates for better result. [Official release, via UnitedHollywood.com] NOTE: comprehensive update on the WGA sitch to follow some time this week. I promise.