Tuesday, December 16, 2008

Auto bailout's death seen as a Republican blow at unions

Auto bailout's death seen as a Republican blow at unions

For some Senate Republicans, a vote against the bailout was a vote against the United Auto Workers, and against organized labor in general.

By Jim Puzzanghera

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The congressional push to help U.S. automakers was generally cast in terms of protecting the reeling national economy from another body blow -- the collapse of one or more of Detroit's Big Three.

But in killing the stopgap rescue plan worked out by President Bush and congressional Democrats, conservative Republicans -- many from right-to-work states across the South -- struck at an old enemy: organized labor.

"If the [United Auto Workers], which is perceived as one of the strongest unions in the country, can be put under control, that may send a message across the whole country," said Michigan State University professor Richard Block, a labor relations expert.

Such antipathy to unions was an undercurrent through the weeks of negotiations leading up to Thursday's Senate vote rejecting the plan.

Handing a defeat to labor and its Democratic allies in Congress was also seen as a preemptive strike in what is expected to be a major battle for the new Congress in January: the unions' bid for a so-called card check law that would make it easier for them to organize workers, potentially reversing decades of declining power. The measure is strongly opposed by business groups.

"This is the Democrats' first opportunity to pay off organized labor after the election," read an e-mail circulated Wednesday among Senate Republicans. "This is a precursor to card check and other items. Republicans should stand firm and take their first shot against organized labor, instead of taking their first blow from it."

One of the leading opponents of the auto bailout, Sen. Jim DeMint (R-S.C.), said: "Year after year, union bosses have put their interests ahead of the workers they claim to represent. Congress never should have given these unions this much power, and now is the time to fix it."

Of course, for Democrats' part, they were fighting for one of their most loyal supporters in backing the $14-billion bailout.

The UAW, which represents about 150,000 employees of the Big Three, delivered campaign contributions and foot soldiers to help elect Barack Obama president, especially in crucial states such as Michigan and Ohio.

What lent a bipartisan gloss to Senate Democrats' effort was the fact that party leaders had negotiated for days with the White House and made a string of concessions that toughened the bill and won active support from the Bush White House.

Sen. George V. Voinovich (R-Ohio), a strong auto industry supporter, acknowledged that some of his colleagues simply did not want to help the UAW.

"We have many senators from right-to-work states, and I quite frankly think they have no use for labor," he said. "Labor usually supports very heavily Democrats and I think that some of the lack of enthusiasm for this [bailout] was that some of them didn't want to do anything for the United Auto Workers."

One major car dealer said conservatives let political ideology get in the way of protecting the country's interests.

"Being a Republican myself, I feel very betrayed by the Republican Party right now," said Beau Boeckmann, vice president of Galpin Motors Inc. in North Hills. Galpin has the nation's largest Ford dealership as well as lots where it sells eight other foreign and domestic brands.

The anti-union sentiment rose to the surface in the final desperate hours of negotiations. Republicans insisted that the UAW agree to cut its wages to be competitive with foreign companies such as Honda, Toyota and BMW by a set date.

UAW officials and their Democratic allies balked, saying the autoworkers were being told to make sacrifices that had not been demanded of other industries receiving government bailouts.

"We could not accept the effort by the Senate GOP caucus to single out workers and retirees for different treatment and to make them shoulder the entire burden of any restructuring," UAW President Ron Gettelfinger said, arguing the union had gone further than any other stakeholder in making concessions to help the companies avoid bankruptcy.

But DeMint argued that the unions had helped create Detroit's plight.

"It is no coincidence that the healthy automakers in the United States are located in 'right-to-work' states and are not unionized by the UAW," he said. "Right-to-work" states bar agreements between trade unions and employers making membership or payment of union dues or "fees" a condition of employment, either before or after hiring.

Rep. John D. Dingell (D-Mich.), a labor ally, said Friday that Republican senators who opposed the bailout might have "wanted to crush a longtime political rival, the United Auto Workers," without concern for the economic consequences.

Democrats lauded the UAW as a hero in the bailout process for agreeing to new concessions on top of major ones given in 2005 and 2007. House Speaker Nancy Pelosi (D-San Francisco) called the union "courageous" just before the House approved the bailout Wednesday.

But some Republicans framed the UAW as the villain, criticizing what they called lavish wages and benefits that they said had driven General Motors, Chrysler and, to a lesser extent, Ford to their knees.

"I'm sure that I'm going to be asked, 'Congressman, I work at Honda' or 'I work at Mercedes. I get $40 an hour. Why are you going to take my tax dollars and pay it to a company that's paying their employees $75 an hour?' " Rep. Spencer Bachus (R-Ala.) said last month.

That wage figure -- widely used by opponents of the auto industry bailout -- is not in fact the wage paid to current workers. It is an approximation of the costs of salaries and benefits for current and retired workers. After wage concessions in recent contracts, the UAW says its workers at GM, Ford and Chrysler plants range from $33 an hour for skilled trades to $14 an hour for new hires.

Precise wages and extrapolated benefits costs for U.S. workers at nonunionized foreign companies, such as Honda and Toyota, are difficult to ascertain, but Block estimated salaries for current workers are approximately the same.

The Big Three automakers have higher labor costs primarily because they have operated factories in the U.S. much longer than their foreign counterparts, so have many more retirees receiving pension and healthcare payments, Block said.

Even if UAW workers at GM took a 20% pay cut, it would only save the company about $1.1 billion annually because the company's unionized workforce in the United States has decreased dramatically in recent years, to 55,000, he said.

Sen. Sherrod Brown (D-Ohio) characterized the GOP opposition as "class-warfare assault by the Republicans."

"They never ask about banker salaries. . . . They never asked they give money back," he said.

When Congress convenes in January, the expanded Democratic majorities are expected to push for an Employee Free Choice Act, also known as the "card check," under which companies would recognize unions if a majority of workers signed cards saying they favored a union. That would replace the traditional method of a secret ballot among workers.

Block and other analysts believe the looming fight added to the political maneuvering over the bailout.

"The opposition might be as strong, but it might not be as urgent," Block said.

"If the public could be convinced the problem with the auto industry is the UAW . . . then it will be easier than otherwise to marshal public support against unions and their legislative agenda."

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