JAN. 2 2009:NWLP
12/29/08
10:02 AM
Page 8
Auto industry loans come with
unfair conditions for workers
By JAMES PARKS
AFL-CIO
After letting the auto industry hang
for weeks following the refusal by Re-
publican senators to approve a loan to
help automakers get through the end
of the year — and a day after Chrysler
said it will shut down all 30 of its
North American plants for at least one
month, putting 46,000 employees out
of work — President Bush announced
his administration’s offer to automak-
ers a week before Christmas. Bush
says he’ll give automakers $17.4 bil-
lion in emergency bridge loans. Some
$13.4 billion was made available start-
ing in December — $9.4 billion for
GM and $4 billion for Chrysler. Ford
Motor Co. has said it does not need
immediate help.
But the loans include some unfair
burdens on workers, according to the
United Auto Workers (UAW). Union
President Ron Gettelfinger says work-
ers are pleased that the Bush Adminis-
tration has acted to provide the urgent-
ly needed emergency bridge loans but
that the workers should not be singled
out for unfair conditions.
“The [bridge loans] will keep the
doors of America’s factories open,
keep Americans working and prevent
the devastating economic consequenc-
es for millions of Americans and thou-
sands of businesses that would have
resulted from a liquidation of opera-
tions by one or more auto companies,”
Gettelfinger said. “All stakeholders —
management, directors, bondholders,
suppliers, dealers, workers — will
have to participate in shared sacrifices
to help the industry move forward.”
Pointing out that autoworkers al-
ready have made concessions and sac-
rifices, Gettelfinger said that “while
we appreciate that President Bush has
taken the emergency action needed to
help America’s auto companies
weather the current financial crisis,
we are disappointed that he has added
unfair conditions singling out work-
ers.
“We will work with the Obama
Administration and the new Congress
to ensure that these unfair conditions
are removed.”
Bush said the rescue package gives
the automakers three months to come
up with restructuring plans to become
viable companies. If they fail to pro-
duce a plan by March 31, the au-
tomakers will be required to repay the
loans immediately.
The Bush loans will force union
workers to accept the terms of a pay
cut amendment introduced by Sen.
Bob Corker (R-Tenn.), which would
have required the UAW to accept deep
concessions.
The Bush-imposed terms require
that U.S. auto companies pay wages
similar to those of transplant auto
manufacturers by Dec. 31, 2009.
Bush is demanding that the UAW
lower wages and pensions to the level
of Japanese wages and pensions
(though since they have very few re-
tirees, their pension number is basic-
ally zero). Alternately, they could
lower this number by basically pick-
ing the pocket of a bunch of retirees
by taking away pension money those
retirees already earned while they
were still working. But one or the
other will have to happen.
The Bush loans leave some room
for the Obama Administration to
modify the terms. The automakers
may deviate from the financial targets,
provided that the companies report
why they did so.
Some of the auto plants could be
shut down into February, according to
published reports. Ford will shut 10
North American assembly plants for
an extra week in January, and GM
will temporarily close 20 factories —
many for the entire month of January
— to cut vehicle production.
When Senate Republicans blocked
the $14 billion emergency bridge loan
needed to keep the auto industry oper-
ating, they knew it could cost between
3 million and 5 million jobs.
Experts predict that if even one of
the Big Three automakers goes under,
some 3.3 million jobs will be lost and
the entire supply chain for all carmak-
ers, including foreign-owned plants in
the United States, will be seriously
disrupted.
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