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The Nasty Class and Anti-Union Bias of Auto Bailout Opposition

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Joanne98 Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Dec-14-08 10:45 AM
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The Nasty Class and Anti-Union Bias of Auto Bailout Opposition

by Robert Weissman

Nancy Pelosi says the Congressional Republicans are playing Russian Roulette with the economy by refusing to agree to an auto industry bailout.

But for that metaphor to work, you have to add that they've loaded the gun with six bullets.

The only hope is that someone -- Treasury Secretary Henry Paulson or Federal Reserve Chair Ben Bernanke -- will come in and prevent the trigger from being pulled. Luckily, it appears they are ready to do so. A statement from the Bush administration this morning signaled that it would find a way to keep the Big Three automakers in business until next year, when a more comprehensive bailout and industry restructuring package can be worked out.

What is remarkable about the Senate Republican refusal to agree to a $15 billion loan deal for the auto industry is that they are not serving any corporate interest. A collapse of the U.S. auto industry would be bad not just for the Big Three, and the supplier networks and auto dealers, but pretty much every sector of the economy, including Wall Street.
Earlier this week, U.S. Chamber of Commerce President and CEO Thomas J. Donohue urged that "Congress must immediately authorize bridge loans to America's carmakers to prevent the collapse of the U.S. auto industry and the devastating impact it would have on the economy, American workers, and national security."

The motives for the Republicans appear to be narrow political calculation that the public is tired of industry bailouts (a foolish political read, because if the Republicans permit the auto industry to fall into recession-worsening bankruptcy, they will pay a political price for at least a generation); a hypocritical claim that they oppose government intervention in the economy (contradicted by everything from Republican-approved state tax breaks for Honda and Toyota assembly plants to Ted Stevens' earmarks, from public insurance and loan guarantees for the nuclear industry to subsidies for weapons exporters); and a vicious anti-unionism and anti-working class bias.

The Republicans say the failure to reach a Congressional deal on the auto bailout rests with the United Auto Workers, who refused to reduce wage scales to match those of non-unionized workers in Japanese auto company plants in the United States.

Actually, Japanese plant wages have always been close to those of the UAW, and the UAW has agreed to cut wages for many new workers almost in half -- with many new jobs starting at $14 an hour. (GM says that, for these new hires, overall per-employee costs will decline from the totally misleading $78 per hour to $26 an hour.) But there's no logic in chasing non-union wages down as a way to be competitive, because the non-union employer can always unilaterally lower them below those reached through collective bargaining.

There is a special cruelty and nastiness in the idea that unionized auto workers, who do very dangerous, physically demanding work with minimal opportunity for creative expression, are excessively compensated or enriched by unreasonably generous health insurance plans.

Here are a few points of comparison with an industry where physical demands and workplace safety hazards are minimal, and where white-collar employees brag about how they are free to be innovative. Like the U.S. auto industry, Wall Street has also fallen on very hard times due to spectacular mismanagement.

* Auto worker compensation makes up a small cost of manufacturing a car -- less than 10 percent. So, you can slash wages as much as you want, but you won't bring costs down much. By contrast, as you would expect in a service industry, compensation makes up a huge portion of costs for the financial sector. The New York state comptroller lists employee compensation costs as equivalent to more than 60 percent of 2007 revenue for the 7 largest financial firms headquartered in New York City. At Goldman Sachs, employee compensation made up 71 percent of total operating expenses in 2007.

* UAW contracts give workers the right to retire after 30 years of laboring, with pensions and healthcare. This week, Goldman Sachs announced that, given the hard times, it was considering raising its retirement requirement to the industry standard of the rule of 60 (from Goldman's current 55). Under that rule, you can retire with nice benefits after any combination of age and service totaling 60. So, if you've done 15 years service at age 45, you're eligible.

* In 2007, average wage and benefit costs per employee at Goldman Sachs were $661,490. Even using misleading and wildly inflated auto industry claims, UAW workers cost $150,000 a year.

Continued>>>
http://www.commondreams.org/view/2008/12/13
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wtmusic Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Dec-14-08 11:01 AM
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1. UAW workers have "minimal opportunity for creative expression"?
Oh heavens. We must do something about that.

:rofl:
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FreakinDJ Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Dec-14-08 11:13 AM
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2. How can a $24 per hour employee cost $150K per year
Seems like Automakers have excessive Administration cost brought on by ineffective multi-layered management
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