What the auto workers gave up

Tom Jackson
Mar 23, 2010

In late May, members of the United Auto Workers again agreed to concessions to help bankrupt GM get on its feet.

According to a letter to members of Congress from Alan Reuther, the UAW's legislative director, active UAW members made these concessions:

— Performance bonuses of 4 percent and 3 percent for 2009 and 2010 were axed.

— Cost of living adjustments were dumped for the rest of the contract.

— Holidays were cut.

— Overtime and relief time rules were scaled back.

— GM was allowed to hire part-time workers with lower pay and benefits.

— Certain job security programs were suspended, and supplemental unemployment benefits scaled back.

— Job classifications were cut and work rules were made more flexible.

Reuther also notes that "tens of thousands" of additional workers will lose their jobs because of the new round of GM plant closings.

Retired UAW workers from GM are taking hits to their medical coverage. Reimbursements for Medicare Part B were eliminated, prescription drug co-pays were hiked, dental and vision benefits were axed and premiums and deductibles were hiked for low-income retirees. In addition, much of the contributions for the trust fund for retiree health care will be from stock in the new GM, which may or may not turn out to be worth anything.

I'm not taking sides here on the debate over who's been treated worse by the federal government, secured creditors or the UAW. I also don't know whether Honda and Toyota's U.S. plants have a competitive advantage because they aren't organized by the UAW.

But I do know the list of the latest sacrifices by the UAW to help GM is worth recording. I've noticed that UAW workers, both active and retired, think they've been unfairly blamed for the problems in the domestic car industry.

Comments

Huron2009

Thanks for pointing out that there are many people paying a price in this economy.  Certainly some may have brought it on themselves, but it is difficult to take sides.  Most are just out there trying to do a good job and provide for their families.  The auto industry has a trickle down effect in this area and we will all share this pain.

It is frustrating, however, to watch our local government proceed like there is no problem and it will only affect other people (like taxpayers).  Huron's fiscal policy for 2009 simply ignored the obvious economic problems sweeping across this country and the globe.  It was business as usual, raises for everyone, with the administration first in line.  Only after these raises were secured did the City of Huron start to admit that maybe they aren't immune. 

The only way to demand accountability is through our elected officials.  Huron has the unique opportunity to elect 5 of 7 members of Council in 2009.  Lets not waste this opportunity!

Cross

I'm sorry but you are taking a pro union approach here. A fair approach would be to say what should have happened here, and ask why it's costing the taxpayers so much money.

The UAW gave up 'performance bonuses'? GM and Chrysler went BANKRUPT, and you are tooting their horn for giving up performance bonuses?

Hey, they gave up cost of living adjustments! Sorry, that's ridiculous. How much of a salary cut did they take for this debacle? What, none?

The taxpayers just spent 80 BILLION dollars which mostly are going to support the UAW people and their very generous contracts and silly regulations. What should have happened is the same thing that happens to normal companies in bankruptcy: The contract gets torn up and we start from scratch, but why do that when they can leverage the Democrats in power and funnel billions to help prop up the people who rode these companies into the ground?

This is a private company and they essentially went out of business. It's happened to millions of others, and none of their workers got taxpayer bailouts.

The bottom line is this was a partisan grab to help a constituency in an immoral and unconstitutional fashion. Any other company that is in Bankruptcy doesn't keep their employees with their old contracts and overgenerous salaries. Neither should GM or Chrysler.

The register is a Democrat leaning news group. Your blog doesn't surprise me at all. I do welcome that the register is good enough to allow opposing viewpoints even if it's news is slanted to the DNC.

Tom Jackson

I hadn't seen anything about the latest UAW givebacks in the press, so considering that we have a lot of UAW workers in our readership, I thought someone might be interested in learning about the latest givebacks.

Cross, before I say anything further, would you mind if I posed a question? Were you also opposed to the Wall Street bailouts, and do you oppose government bailouts in general?

Cross

I oppose most government bailouts

I didn't oppose the financial ones, but solely due to the reasoning behind them.

The Wall Street bailouts were done to push liquidity into the market to allow for lending to keep businesses alive. I dislike the fact they have been handled in such a dodgy and non-transparent fashion. I think there was vast room for improvement. There is no comparison between that and the GM bailouts which are essentially propping up Union bosses in private business with taxpayer funds.

The Wall Street loans have a very high chance of being paid back. Billions already have been. GM and Chrysler couldn't even get the UAW to redo their contracts!

I think the auto manufacturers are worth saving. I dislike the manner in which it was handled. The UAW in truth has given up very little. What should have happened is their contract's should have been completely torn up. Likewise, they should not have been given preference over secured creditors.

 

Tom Jackson

Thanks for checking back in, Cross. A couple of observations:

1. After the U.S. government spent a huge amount of money to prop up banks, I believe it became politically untenable for politicians to just walk away and let GM and Chrysler go out of business. (I know there are people who believe there should be no bailouts for private business, and I sympathize with them, but that's not what we're talking about here.) Certainly concern for the fate of UAW members must motivate some politicians, particularly Democratic politicians. But there are plenty of people in Ohio and Michigan, both states with high unemployment, who have no connection to the UAW but don't want to see 2/3 of the American car industry (and their suppliers) vanish.

2. I think the United Auto Workers deserve to be judged by the actions they have taken the last couple of years. Since at least 2007, they have been making a series of concessions designed to help the Big 3 compete with foreign automakers and they have kept labor peace. They've been responsible and constructive. And it's not as if everything has gone their way. The GM and Chrysler bankruptcies were accompanied by a new wave of plant closures tossing more of their members out of work.

Cross

I agree this is a political ploy. It's just a shame it's going to cost almost 100 billion to prop up loyal union DNC backers, and to keep alive companies that should have been allowed to go through a normal chapter 11.

We'll still lose a bunch of jobs here. How many new industries and jobs could we create that were lost in Michigan and Ohio with 100 billion?

The UAW does indeed deserve to be judged by what they have done. As their companies went from bad to worse, they remained confident that their organization would be bailed out due to their horse winning and being in office. One can admire cronyism and insepid political payback at work, but it still is everything that is seedy and bad about government.

 

 

smoke and mirrors

The U.A.W. came out smelling like a rose.The average taxpayer (who is paying for this) can only dream about a job contract like this.http://www.scribd.com/doc/15833752/UAW-Summary-of-GM-Concessions