No concessions? No bailout
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RON GETTELFINGER, the president of the United Auto Workers, is taking a hard line against any talk of wage or benefit reductions for union members as he joins with Detroit automakers in the quest for emergency federal aid to rescue the Big Three. "The focus has to be on the economy as a whole as opposed to a UAW contract," he said recently, declaring that the industry's problems are beyond the UAW's control.
Such talk will not win the hearts of a public that feels its own economic pain - and knows that the auto industry and the union have resisted much-needed change.
Perhaps the UAW feels emboldened by the post-Election Day political landscape. Union workers helped President-elect Barack Obama win important victories in Michigan and Ohio, and Democrats who control Congress are sympathetic to the auto workers' plight. The Senate has been considering a $25 billion bailout bill this week, and Representative Barney Frank's House Financial Services Committee will hold a hearing today on whether to use money from the Wall Street bailout to help Detroit.
The UAW argues that its 2007 contract already contained major concessions, including a two-tier wage system under which new workers earn much less than veterans. In addition, workers at
But companies across the country are shedding workers and benefits, and no one is showing them much sympathy. There will be no taxpayer-funded federal rescue plan for those Americans who don't work in industries considered too big to fail. If they are lucky enough to continue working, they have no recourse once employers decide to cut benefits. If they lose their jobs, they face the fear of long-term unemployment and an uncertain economic future.
The average American worker lacks the protections longtime UAW members still enjoy. For example, UAW contracts include a provision giving workers 95 percent of their wages while on layoff, along with other job-security provisions.
Concessions shouldn't be a one-way street. As a condition of any bailout, auto executives should be prepared to reduce their ranks, accept management changes, and take cuts in salaries and bonuses, too.
If union and management can't agree on some concessions in exchange for federal help, they risk the other b-word: bankruptcy. There would be no negotiating then, just a court-ordered restructuring of these failed auto giants. Labor contracts would be neutered in a bankruptcy filing. If the UAW wants to avoid that unpleasant scenario, it should soften its tone on concessions.
