Saturday, December 13, 2008

Driving in my car, smoking my cigar

I haven't done this in a while, but I'd like to give our Golden Douchebag award to Sen. Bob Corker:
What makes the situation so dire for GM and Chrysler is that they're currently in the midst of major restructuring, and they are the only auto producers in the world that have massive built-in legacy costs. It's cheaper to produce cars in Canada, despite comparable labor costs and higher taxes, because the auto companies don't have to pay for health care for current and retired workers, both unionized and non-unionized. Take away the massive health care and pension costs borne by the Big Three—costs which foreign producers in the US don't have to the same degree, because they have almost no retirees—and the Big Three would be hurting like the rest of the global auto industry, but GM and Chrysler probably wouldn't be on the verge of a catastrophe.

So, it's possible that the GOP Senators like Corker and McConnell are stupid, and just don't understand some of the basics of the global auto industry. But we shouldn't dismiss the possibility that the ultras who've taken over the GOP, the people for whom ideology is more important than consequences and reality, would rather risk destroying one of our most important industries in an attempt to destroy a labor union.

The spreading meme that the UAW refuses to make any concessions is really pernicious. To counter it, read this from far left-wing ultra-conservative Forbes:
Unionized autoworkers are a favorite scapegoat for the problems facing U.S. automakers. Their job security guarantees and gold-plated benefits have surely cost General Motors, Ford Motor and Chrysler a bundle over the past few decades. Indeed, the domestics' historically high labor costs are among the reasons they haven't been able to compete with Japanese rivals, and why Detroit CEOs were back on Capitol Hill again Thursday asking for $34 billion in taxpayer loans to survive.

But the U.S. automakers probably would have collapsed by now if not for the concessions made by the United Auto Workers union over the past three years.

Once bitter enemies, the Detroit Three and the UAW have long since buried the hatchet and are now working together to close the wage gap with Toyota (nyse: TM - news - people ), Nissan (nasdaq: NSANY - news - people ) and Honda (nyse: HMC - news - people ) through various productivity improvements and more flexible work rules, for instance.

The union has made some major concessions. Two biggies last year: The UAW agreed to cap the cost of retiree health care through creation of an independent trust fund and agreed to cut wages in half, to $14 an hour, for new hires in non-assembly jobs (20% of the workforce). More concessions came this week when the union agreed to end a controversial "jobs bank" program, which pays workers even when there are no vehicles to build. The union also said it would allow car makers to extend their scheduled payments to the health care trust fund. Importantly, UAW President Ronald Gettelfinger also said the union is ready to renegotiate additional contract terms.

Now, the playing field is just about level--or will be once the economy recovers.

. . . What do autoworkers really make? Detroit's hourly workers earn $28 an hour, or $57,000 a year. (Toyota workers make $25.) Benefits and payroll taxes bring the total cost per worker up to $54 an hour, versus $47 at Toyota. Under a breakthrough labor contract in 2007, new hires in non-assembly jobs will be paid only $14 an hour and will receive less generous benefits, which will narrow that remaining gap considerably.

. . .Not everyone believes the union has given its pound of flesh yet, however. Sen. Bob Corker, R-Tenn., home to non-union Nissan factories, said at Thursday's Senate Banking Committee hearing that the UAW must also forgo company-paid supplemental unemployment benefits (worth $450 per week for laid-off workers) and be willing to accept company stock as a partial payment for the car-makers' retiree health care obligation. It's the only way GM can get bondholders to agree to a recapitalization, he said.

GM chief executive G. Richard Wagoner defended the UAW, saying, "Ron Gettelfinger has done more to address the competitive issues in our industry in the last three years than anybody has in the last 30 or 40 years."

Which means GM can't use labor as an excuse any more.

Catch that 2nd to last graf? The odious Wagoner of GM doesn't blame the union? But Corker still does?

So just what actual difference in the price of cars would UAW concessions make?
Union leaders, not surprisingly, reject the notion that concessions are needed. “Talk of more givebacks by our union ignores the cuts we made just one year ago, when our union agreed to a 50 percent wage cut, down from $28 an hour to $14 an hour, and no pensions for new hires,” said Hammer. “Reducing our quality of life would have a ripple effect on our entire economy, and would just make things worse. The reality is that our labor constitutes just 8 percent of the price of a new car. We could work for free, and it wouldn’t solve the crisis.”

If you don't understand what good unions have done in this country, I probably won't persuade you. If you're a working stiff who despises unions because Hannity and Rush tell you to, then you're woefully undereducated. And maybe a little stupid. Are you just jealous that another blue-collar laborer like you can make $28/hr, and actually have a pension at the end of their career?

Yes, the Teamsters and the UAW have had bad times, and have been corrupt. That doesn't make them all bad. Does Blagojevich's corruption in Chicago mean we should destroy the city? No, just ditch the bad actors and move on.

Labor has lost so much ground in this country since the '50s, and too many people today don't seem to understand that one of the only ways for the working person to stand up against management is by joining a union.


And do Corker and McConnell say anything about CEO compensation? I think they should:
Toyota's 32 top executives and auditors received 1.5 billion yen ($16.4mil) in salaries in the 12 months ended March. Nissan paid its top nine executives, including Chief Executive Officer Carlos Ghosn, 2.52 billion yen ($27.6mil) in salaries.

In comparison, General Motors Corp. Chief Executive Officer Rick Wagoner's total compensation for last year was $10.2 million, the company said in a U.S. regulatory filing in April.

I don't like to categorize people, paint with too broad a brush. But what the hell.

Republicans are bastards.