Unions' euphoria gives way to worry

Financial crisis has labor on the defensive

WASHINGTON - After spending more than $300 million and providing thousands of foot soldiers to help elect Barack Obama, labor unions looked forward to good economic times, a warm relationship with a president for the first time in eight years, and quick passage of legislation designed to boost membership.

But the financial crisis has jolted unions, weakening their position at the bargaining table and prompting calls to delay the pro-union legislation.

Yesterday, the United Auto Workers union announced it would consider making new concessions in its labor contracts, a move that could lead to similar demands on other unions. The UAW's leader is slated to appear on Capitol Hill today alongside executives of the nation's three largest automakers, joining with the companies to ask Congress to approve $34 billion in loans they say would buy time to restructure and stave off bankruptcy, which they say would cost hundreds of thousands of jobs and possibly plunge the economy into a depression.

Instead of being able to call in their chits for having helped elect Obama, union leaders are facing an array of crises, including layoffs, bankruptcies, contract concessions, and rising costs for healthcare and other services. But if Obama had lost, AFL-CIO policy director Thea Lee said, "it would be much more terrifying."

Union leaders said they are particularly grateful that Obama appears to be focusing his economic stimulus plan on creating jobs and has expressed general support for helping automakers, though the president-elect declined yesterday to endorse their recovery plans until after the congressional hearings today and tomorrow.

These anxious times for unions are happening while they are awaiting word of Obama's pick for secretary of the Department of Labor. Obama, who did not include a labor secretary when he introduced his economic team last week, has named to top economic posts a number of Clinton-era officials who are considered moderates. As a result, organized labor is pushing hard for a more liberal counterweight as labor secretary.

Its other immediate focus is trying to help the automakers get federal aid.

UAW president Ron Gettelfinger announced yesterday in Detroit that the union will delay billions of dollars in company payments to a union-run healthcare trust and would be willing to consider further concessions, such as modifying a controversial job bank program that allows some laid-off workers receive up to 95 percent of their pay while they are not working.

Critics have said the union is partly responsible for the auto industry's problems, citing the union's opposition to higher fuel-efficiency standards and its array of generous job and retirement benefits. One of the most frequent criticisms has been the assertion that the average pay of unionized auto workers is $70 an hour, compared with $48 an hour for nonunionized employees of foreign automakers that have US plants. The conservative Heritage Foundation said in a recent report that "the Big Three automakers are asking taxpayers to bail out some of the most highly paid workers in America."

The UAW - which claims more than 1.1 million active and retired members in the United States, Canada, and Puerto Rico - argues that the wage comparison is false. It says it is unfair to include items such as retiree health benefits in the calculation, and says the real figure is $28 per hour.

In the press conference yesterday, Gettelfinger denied that union benefits have played a role in the auto industry's problems.

"I want to stress that this issue was not brought on by the companies; certainly wasn't brought on by our union," he said. "And we're just in a major economic downturn that's rapidly spreading around the world."

Chrysler vice chairman Jim Press told the Associated Press yesterday that the US auto industry was "down to months left" and said the failure of one of the companies "could trigger a depression."

The three top auto executives are hoping to make a better impression today than they did in their appearances on Capitol Hill last month. Members of both parties criticized them for flying to Washington on corporate jets and failing to provide specifics about how the initial request for $25 billion in loans would put them on a path toward viability.

This week, the executives drove from Michigan to Washington in hybrid vehicles and laid out specific requests that totaled $34 billion. GM said it needed $4 billion to survive through December and sought $18 billion overall. Ford, while asking for $9 billion, said it hoped not to tap the line of credit and predicted profitability by 2011. Chrysler asked for $7 billion.

Representative Barney Frank, who as chairman of the House Financial Services Committee will oversee hearings on the loans tomorrow, said yesterday that he is "supportive in general," but that he has been unable to talk to enough colleagues to determine if the measure could pass the lame-duck Congress next week.

David Weil, a Boston University professor of economics, said the financial crisis could have two different effects on unions. In the short term, he said, many unions will be weaker at the bargaining table as companies push for ways to save money and avoid going out of business. But in the longer term, hard times could prompt many workers to seek union representation as their jobs and benefits become increasingly endangered.

"It was in the depth of the Great Depression that you had incredible growth in the labor movement, as measured by people joining unions," Weil said. "Then they were in a position in the postwar period to negotiate a lot of the agreements that at this point are in great jeopardy."

Obama, who got his start in politics as a community organizer in Chicago, has made clear that he strongly sympathizes with organized labor. Vowing to make the legislation a top priority as president, Obama said during his campaign that he was ready to "play offense" for organized labor.

"It's time we had a president who didn't choke saying the word 'union,' " he said on the campaign trail.

Big labor reciprocated. The AFL-CIO said it sent 250,000 members to knock on doors in the final days of the campaign in key battleground states, where Obama won among union voters 68 percent to 30 percent.

Obama was a key sponsor of legislation that would allow workers to check a card to join unions instead of going through elections in which companies play a significant role. Critics of the "card check" measure say it would eliminate secret ballots and enable organizers to pressure workers to join unions.

The US Chamber of Commerce and other business groups have made it a top priority to defeat the measure, and Republican congressional leaders recently launched an effort to defeat it.

While Obama has yet to signal his pick for labor secretary, union officials are pressing for a nominee with strong ties to labor and a record of support for the card check legislation. Among the names being mentioned are former House Democratic leader Richard Gephardt of Missouri; former Representative David Bonior of Michigan; Governor Jennifer Granholm of Michigan; Mayor Antonio Villaraigosa of Los Angeles; Governor Kathleen Sebelius of Kansas; and Mary Beth Maxwell, the executive director of the pro-union group American Rights at Work.

Michael Kranish can be reached at kranish@globe.com