Automakers a step ahead of Romney
- |
THIS MAY not come as a surprise to the people of Massachusetts: Former governor Mitt Romney is stuck in the past. He apparently believes the auto industry has not changed at all since his father was CEO of American Motors in the 1950s and 1960s.
In a recent New York Times opinion piece, Romney argued that instead of receiving a short-term low-interest loan to help weather the current financial crisis, Chrysler, Ford, and GM should be forced into bankruptcy. This approach, he said, would allow the companies to break current union contracts to get "new labor agreements to align pay and benefits to match those of workers at competitors like BMW,
Not even a week later, Romney hedged his argument. "I'm not sure the right number is $25 billion," he said. "But whatever it is, it can only be a check written if the auto industry has restructured itself so it can be competitive long term."
In fact, significant restructuring has already taken place - including our 2007 contract, which largely accomplishes the competitive pay and benefits Romney speaks of - nearly or completely eliminating the cost gap between domestic producers and foreign nameplate competitors.
To help change the "management culture" of US automakers, Romney suggests that our union negotiate a profit-sharing agreement, so workers will have a stake in the company's success. We did it more than two decades ago, during 1982 negotiations with Ford and GM and during 1986 negotiations with Chrysler.
Romney's prescription that we take action to end the "enmity" between labor and management is also decades out of date. At our initiative, we began joint employee involvement programs with auto companies in 1979, stressing quality, safety, and productivity.
The impact is clear on the factory floor and in the product showroom: UAW-made vehicles are winning recommendations from Consumer Reports and quality awards from J.D. Power. And according to the Harbour Report - the industry standard for measuring factory efficiency - nine out of the 10 most efficient auto assembly plants in America are union plants.
Finally, Romney's argument that bankruptcy must be used to reduce retiree benefits so that domestic automakers can be "competitive" with foreign nameplate operations also reflects a lack of knowledge about the real structural conditions of the US auto industry.
The main reason our competitors in the United States have lower costs for retiree benefits is not because they don't have union contracts; it's because they have very few US retirees. They only started operating in this country in the early 1980s.
The overwhelming majority of retirees from Toyota, Nissan, Honda, BMW, and Mercedes live in countries where universal, national health systems provide quality, affordable healthcare.
The real solution to the high healthcare costs that burden American employers - not just automakers - is establishing a universal, national healthcare system.
Thankfully, we finally have a Congress and a president-elect who are committed to real healthcare reform. In our negotiations with the domestic automakers in 2007, however, our members realized that we could not wait for the government to act. We took action ourselves, by establishing an independent trust - called a Voluntary Employee Beneficiary Association - which will assume responsibility for retiree healthcare, removing this cost from the company's books once and for all.
The VEBA will be funded by employer and employee contributions, including wage deferrals and modified retiree benefits. By 2010, the VEBA trust will cut employer costs for retiree healthcare at Chrysler, Ford, and
Like many American families, we've sacrificed wage increases to pay for our healthcare. We've seen the value of our life savings plummet from the turmoil in the stock market, and we've seen the value of our homes drop after the crash of the real estate bubble.
And we're more than a little curious: How come banks and Wall Street investment houses can get a multibillion-dollar bailout no questions asked, while Main Street manufacturing is forced to wait for a low-interest loan that will be paid back to taxpayers?
Mitt Romney may be willing to let us die, but we're determined to live.
Ron Gettelfinger is president of the United Auto Workers union. 
