Now that the domestic auto industry - management and union alike - is on its knees, it has been given a last, "last chance" agreement or else face bankruptcy. Though the UAW agreed to huge givebacks in 2007, and was negotiating even more givebacks as required by the bridge loan of December 2008, this last chance agreement says even those concessions are not enough. The Obama administration has lifted the bar even higher. It’s a bitter pill to swallow. Autoworkers are being forced to make draconian wage and benefit cuts while watching the AIG executives who wrecked the economy walk away with their contracts - and million dollar bonuses - intact.
With all the talk of restructuring, the administration’s “New Path to Viability” will not make the industry viable. While we applaud the forced departure of Mr. Wagoner (and only wish the same consequences for those heading up Wall St. firms), the Obama Plan has limited itself to restarting the “auto industry” instead of insisting on a complete overhaul – shaping a new, 21st century “transportation industry.”
Although the plan recognizes that the “lean and mean restructuring" mandated by the government will devastate autoworkers, families and entire communities, it leaves vague the mandate for the new "Director of Recovery for Autoworkers and Communities." Make no mistake about it; the communities, towns and cities that will be negatively impacted by the “restructuring plan” are all new "New Orleans" in the making. Detroit and other Midwestern cities and towns have been hit with a “dry Katrina” a world-wide glut of car production combined with the Wall Street financial collapse. When union members voted for the new administration, they wanted change. Nothing less than a Federal recovery plan is required on the magnitude of the Marshall Plan.
Rather than allow GM or Chrysler to file for bankruptcy in the event they don’t come up with adequate viability plans, the US government should take control of both companies and place them under a public trust. We can thereby reconfigure our industry to produce transportation systems – such as light rail and mass transit -- and green energy products such as wind turbines and solar panels. This will reduce our carbon footprint, and employ workers who would otherwise lose their livelihoods, their homes and their communities.
The concessions forced on autoworkers include breaking the contractual promises made to the retirees who made the Big 3 a success. Unlike the AIG swindlers, the retirees who protest the breaking of their contracts containing company-financed health care are ignored. This is one more reason to enact national health care reform now and reduce this country’s inflated health care costs with the passage of HR 676. If Rick Wagoner was fired for resisting the changes we need for the 21st century, then so should the heads of the pharmaceutical and insurance industries be fired for resisting change in how we provide health care for all.
Restructuring should be undertaken to rebuild manufacturing that emphasizes energy efficient vehicles, mass transit and green technology. Jobs need to be protected as only unions can. The Employee Free Choice Act must be passed without delays or dilution. Other protections may include reducing the work week with no loss in pay in order to maintain a full-employment society. Some countries, including Japan, have laws that do not allow companies taking government loans to lay off the work force. Why not here?
Since the crisis of 1979-82 autoworkers have been making sacrifices and taking the losses. We say enough!
P.S. We’ve heard the howling in the right wing corner over the dismissal of Mr. Wagoner, some even attacking President Obama for being “socialist.” As President Obama has said, the bible is all about being your brother’s keeper. We applaud the principle underlying Mr. Wagoner’s departure that the public through its elected representatives can change corporate CEOs in response to corporate action or inaction. We realize that this welcomed exercise of public power is limited to those firms receiving loans from the taxpayers; it should be expanded immediately to all companies receiving taxpayer subsidies.
One of the more promising items to come out of the President’s attention to the auto industry is contained in the speech he gave March 30th while releasing the plan. In it he outlines his understanding of the crisis that will be perpetrated by the restructuring plan whether it’s through bankruptcy or not. He said:
"When a community is struck by a natural disaster, the nation responds to put it back on its feet. While the storm that has hit our auto towns is not a tornado or a hurricane, the damage is clear, and we must likewise respond."
On this score, we and President Obama are on the same page. President Obama has the opportunity to mobilize the US government and the nation in the face of the deepening crisis in the auto industry in the way George Bush should have before, during and after the calamity that was New Orleans. However, a humanitarian crisis can be avoided if President Obama sheds his disdain for “running GM.” We believe all options should be on the table. The best alternative to the disaster we are heading for is to place GM under a public trust as part of a new transportation plan for America.
