UAW blows up Big Three 'rescue'

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Who's to blame for blowing up Detroit's Big Three $14 billion bipartisan rescue plan in Congress?

So-called progressive pols and pundits are echoing Michigan Democrat U.S. Sen. Debbie Stabenow's charge that stubborn conservative Senate Republicans are to blame.

Don't believe it.

The plan was blown up by the stubbornness of the United Auto Workers -- aided and abetted by Senate "progressives" determined to shield the union from making some very tough wage and benefit concessions that could make the Big Three competitive with foreign auto manufacturers located throughout the South.

After unprecedented marathon talks between leaders of the auto industry, labor, bond holders, lawmakers, and the Bush administration, all the contentious issues that had been separating the various sides had been resolved, including that the UAW would make the necessary concessions to be competitive.

The hang-up was that the UAW would only commit to making promises of concessions -- but not until 2011 when contract negotiations are scheduled to be reopened. Promises were not enough for most GOP senators -- and they were absolutely right.

One did not have to be a genius to know what the union and their progressive allies were up to: Make promises now to get that $14 billion "bridge loan" approved and then soften the tough terms when the new, heavily Democratic Congress and Obama administration take over Washington next month.

Republicans understood that if the bipartisan bill was to work, it would have to include benchmarks, not promises. Benchmarks would be harder to renege on than promises, because new legislation would be required to repeal them.

Under the leadership of Sen. Bob Corker of Tennessee, the GOP got benchmark concessions on every outstanding issue, except the labor issue. The UAW would not commit to a date certain next year to make its wages and benefits competitive with what the union calls the foreign "transplant operations." And without those UAW concessions, there weren't nearly enough votes for Democrats to break a Republican filibuster.

What Corker was seeking was a "prepackaged bankruptcy"-- in other words, the harsh, demanding kind of corporate and labor restructuring required of companies under Chapter 11, but without the PR taint of labeling it a bankruptcy.

Clearly the Corker plan was superior; even Senate Majority Leader Harry Reid, D-Nev., indicated it would probably pass overwhelmingly if senators voted on it. But the UAW would have none of that. So the Senate voted on a weaker measure that went down in flames.

And now General Motors and possibly Chrysler LLC could go into Chapter 11 before month's end. Some of us think that'd be just fine.

For those who think Republican senators were being too hard on union workers, consider that the primary purpose of the rescue was not to save jobs at current wage-benefit levels, but to make the Big Three competitive with their foreign rivals.

That's impossible when the transplants' wage-benefit packages average about $48 an hour and the Big Three's average about $73 an hour. This differential automatically makes U.S. autos $2,000 more expensive than their competitors.

There's also a little matter of fairness to consider. Workers making less than $70 an hour should not be forced to subsidize, through their taxes, the wages of workers being paid more than $70 an hour.

Comments (61) Add comment
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sjgraci
2
Points
sjgraci 12/16/08 - 08:41 pm
0
0
The Chronicle is insane. And,

The Chronicle is insane. And, a bunch of liars.

gcap
290
Points
gcap 12/16/08 - 10:15 pm
0
0
Let 'em go bankrupt. Let the

Let 'em go bankrupt. Let the union members become unemployed. Let the auto buyers get what they pay for instead of inferior products produced by a bunch of overpaid, underqualified economic thugs. Sure, we'll lose a bunch of jobs. But those who work hard -- and honestly -- will get a much better deal on much better cars.

joe hill
9
Points
joe hill 12/17/08 - 12:03 am
0
0
I'm not sure if I'm for or

I'm not sure if I'm for or against the bailout of the auto industry. But I sure as hell know that I'd rather see the money go to companies that build something rather than the financial firms who build nothing.

patriciathomas
42
Points
patriciathomas 12/17/08 - 01:09 am
0
0
The hard line of the unions

The hard line of the unions doesn't seem to be paying off for them in this deal. It's one thing to extort a position with a company, but threatening to strike or be grumpy with the person holding the purse strings doesn't seem like a good idea. A lot of UAW people are going to be the big losers on this deal.

GGpap
528
Points
GGpap 12/17/08 - 02:40 am
0
0
This situation, as it

This situation, as it concerns UAW responsibility for the failure of the bailout/loan proposal is rather interesting. I say, let the UAW hang itself; it would be a well-earned and well-deserved demise. Folks, sometimes we just have to throw the baby out with the bath water in order to get ALL of the dirt out of the mix. GGpap.

JohnRandolphHardisonCain
576
Points
JohnRandolphHardisonCain 12/17/08 - 05:03 am
0
0
The Augusta Chronicle, Morris

The Augusta Chronicle, Morris Publishing Group & Morris Communications are all non-union. The Augusta Chronicle editorial policy is set by William Morris the owner of The Augusta Chronicle. Morris Communication lost more than $160 million in the last quarter. According to GPB's "Georgia Gazette" many financial experts say that parent company of The Augusta Chronicle is in dire financial straits. It must come up with a huge payment to lenders in May 2009 or face possible bankruptcy. Morris managed this debacle without the help of unions. Neither Morris nor The Augusta Chronicle editorial staff is in any position to point fingers at the UAW or anyone else. Yes, GM & Chrysler are asking for govt loans while Morris is not. But Detroit actually makes something we need. The Chronicle is important to Augusta & Morris Communications has its headquarters in Augusta, but its biggest product, Republican hot air, only serves to obstruct progress. The bottom line is The Chronicle's business model, Detroit's Big 3 & the entire U.S. economy need complete restructuring starting with setting priorities that promote social cohesion & sustainability - universal healthcare & education among them.

Trouble1
0
Points
Trouble1 12/17/08 - 05:42 am
0
0
i think that the workers

i think that the workers should be asked if they would rather have a cut in pay or lose their jobs..........im betting most of them would go for that cut in pay.

habersham100
177
Points
habersham100 12/17/08 - 06:00 am
0
0
Come on, now, JRHC... You

Come on, now, JRHC... You didn't tell us how things were going to change in Detroit after the change in administration. People who purchase vehicles made by "The Big Three" with their poor workmanship and constructed primarily by UAW workers (who are paid wages equal to 60+ hours while performing 30 hours work), are poorly informed. Perhaps things will change after the administration changes. Perhaps EVERYbody will be paid for 30 hours of work, while being required to work 60 hours. That's assuming, of course, that we actually have to work and our livlihood is not just handed to us. As for the Morris Corporation, you read their publication by CHOICE. Maybe you'd be happier somewhere else. For that matter, your posts here don't add anything to their fortune - or lack thereof. The Internet and access to it are still free. But that, too, may change with the new administration. We'll see.

Fishboy
29
Points
Fishboy 12/17/08 - 06:25 am
0
0
Detroit doesn't make anything

Detroit doesn't make anything I need. My truck was built in Tennessee by non-union workers for less money and with higher quality. As for universal health care and education - we already have both - all you have to do is work hard enough to earn them.

rbk
0
Points
rbk 12/17/08 - 06:38 am
0
0
The UAW are a bunch of

The UAW are a bunch of extortionists. The high paid CEOs and VPs of those companies are also paid too much in salaries & perks and are just as bad. There is plenty of room for blame on both sides of the fence. Now they all want to extort money from us, the taxpayers. I say don't give them a dime. They got themselves into this mess, let them get themselves out of it or go under. I don't see the union bosses offering to work for a dollar a year and spread their ill begotten wealth to the workers that paid it to them. Greed, greed, greed!

rufus
2
Points
rufus 12/17/08 - 06:54 am
0
0
I don't think the Big 3 will

I don't think the Big 3 will have a problem finding workers at $48/hr

robaroo
855
Points
robaroo 12/17/08 - 06:56 am
0
0
The Chronicle (and Senate

The Chronicle (and Senate Republicans) are only focusing on the unions as the problem in Detroit. The real problem is that the shareholders have been robbed by both the managers and the workers. Any way you look at it, it's not Congress's job to decide which businesses it will save and which ones it will let fail. Let financial "nature" run its course.

stadry
0
Points
stadry 12/17/08 - 07:04 am
0
0
there's more'n enough blame

there's more'n enough blame to share 'tween the union & mgmt,,, in the end, its the union who temporarily loses but their political contributions assure the next congress'll look w/more favor on their plight,,, cain's comments show his ignorance of automaker's problems yet he takes shots at irrevalent issues,,, the solutions proposed thus far are union bailouts alone.

willistontownsc
55
Points
willistontownsc 12/17/08 - 07:05 am
0
0
The only extortionists I can

The only extortionists I can find are the GOP. They sabotaged this deal because of their hatred of unions.

willistontownsc
55
Points
willistontownsc 12/17/08 - 07:06 am
0
0
Like I said before and I'll

Like I said before and I'll say it again, Congress needs to recoup ALL $700,000,000,000.00 of the bailout they gave those crooks on Wall St.

sick of taxes
0
Points
sick of taxes 12/17/08 - 07:20 am
0
0
rbk... You are SO right. It

rbk... You are SO right. It is not only the CEO and VPs, every local has a boss, with secretaries, finance folks (treasurers), stewards, and other PAID folks. Multiply that times the numbers of locals, and compute the cost burdon in salaries and benefits and just imagine the horresdous cost involved. These folks also are bloodsuckers on the backs of the actual factory workers. No way we should bail out this beauracratic horror-show.

I4PUTT
5
Points
I4PUTT 12/17/08 - 07:37 am
0
0
willis...never thought I

willis...never thought I would say this about any of your poorly thought out, misinformed posts, but...I agree with your 7:06 post. Keep posting. We may agree more. Let's see if we can improve on our 1 out of 3165 record in the upcoming year.

2tired2argueanymore
1
Points
2tired2argueanymore 12/17/08 - 07:41 am
0
0
At some point the UAW has to

At some point the UAW has to come to the realization that the big three are not a bottomless pit to keep taking money from. Unemployment pays a lot less.

disssman
6
Points
disssman 12/17/08 - 07:59 am
0
0
Sick of.... From your name

Sick of.... From your name I am sure you would not like the non-union factories because they were built by TAXPAYERS from what I gather. For those not in the know, the UAW said it wanted to look in the books of non-union factories to determine if changes could be made. The southern CONservativeS didn't want that, oh no that would not be possible because then someone would see that factories in the south are subsidized by state taxes, hardly a level field for workers. BTW I wonder if the A.C. workers have as good a retirement system as Billy's horses. If they don't it only goes to show you what is important and what isn't.

justus4
109
Points
justus4 12/17/08 - 08:17 am
0
0
This bunch at the Chronicle's
Unpublished

This bunch at the Chronicle's Staff are spinning the facts and it's gonna come back to bite 'em in the form of elections. The Republican hatred for the UAW is obsessive and will further distance their party from the intelligent working man. Also it's an issue of reigons i.e. North v. South. And "we" know the history. Southern senators want to destroy the Big Three, while using their states taxpayer dollars to lure foreign carmakers to Tn, Ga, SC, Tx, where 50% of workers are temporary with no benefits. Those permanent workers max out at about $18.00, while management get paid much like Northerners. Southern US Senators believe that if the Big Three fails, its more business for the southern states with a boost in sales. Wrong. The issue is becoming an indictment of the south and it's history of cheap labor and worker exploitation. The country will attach that stigma to ALL Republicans and punish them at the polls. Of course many southern folk can't grasp these facts, but there is nothing like an election to open their eyes.

Bizarro
13
Points
Bizarro 12/17/08 - 08:28 am
0
0
The bottom line is

The bottom line is concessions or no job. I believe I would have considered concessions. Now I say let em fall. I don't buy American made death traps-why should I care.

Georgiais1
0
Points
Georgiais1 12/17/08 - 08:36 am
0
0
Justus...You are so full of

Justus...You are so full of kempshi, you don't deserve a response. You constantly whine about race and try to tie any editorial down with it..Why don't you move north with your brotha's and you all can sit around and whine together, before some of these southern folk spank your [filtered word]. By the way take Cane with you.

Bizarro
13
Points
Bizarro 12/17/08 - 08:42 am
0
0
It is a historic fact that

It is a historic fact that black brothers up north tried to prevent southern blacks from venturing north.

bsandersga
0
Points
bsandersga 12/17/08 - 08:54 am
0
0
I am now convinced that the

I am now convinced that the editorial staff at the Chronicle are a paid Republican public relations team. If anyone believes that the trouble with American automobile manufacturers must be blamed on the workers who actually assemble the cars--then I have a bridge I want to sell you. It's almost funny watching the Right try to explain away the failure of decades of conservativism, deregulation, American corporate greed, and free market hubris. I don't think the average person on the street is buying their lies anymore. By the way, Honda and Toyota's American subsidiaries aren't doing so well at the moment, either.

Bizarro
13
Points
Bizarro 12/17/08 - 09:23 am
0
0
True just like the NYTimes is

True just like the NYTimes is now an arm of the Dem party.

142
Points
Dan White 12/17/08 - 10:12 am
0
0
The auto bail out is

The auto bail out is misnamed. It's the union bail out.

142
Points
Dan White 12/17/08 - 10:14 am
0
0
A camel is a horse designed

A camel is a horse designed by Congress. Can you imagine the kind of cars that Congress is going to force the Big 3 to design and make? No one will want them. The bail out is postponing the inevitable collapse of the American auto industry.

142
Points
Dan White 12/17/08 - 10:15 am
0
0
Where was Congress' concern

Where was Congress' concern for the worker and the economy when the Southern textile industry collapsed and went south to Mexico? What about the poor workers who lost their jobs in the Valley and at the mills in Augusta?

JohnRandolphHardisonCain
576
Points
JohnRandolphHardisonCain 12/17/08 - 10:32 am
0
0
If we pull the plug on

If we pull the plug on American automobile workers and U.S. car manufacturers including GM which is hanging its hopes on the Chevy "Volt" get ready for an influx of Chinese made plug in hybrids that will fill the breach. "China's first mass-produced hybrid car goes on sale: car maker" (AFP 15 Dec 2008)

http://www.google.com/hostednews/afp/article/ALeqM5gFG9YgNaU1T9_fcTl_Nbx...

142
Points
Dan White 12/17/08 - 10:35 am
0
0
JRMC - what's the worry with

JRMC - what's the worry with China taking over our auto industry. Everything I buy comes from China anyway. I even had to check the tag on my wife to make sure she wasn't made in China. Sure 'nuff - she's a good old American girl! Hallelujah!

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