Perdido 03

Perdido 03

Sunday, July 25, 2010

Obama To Tout 50% Cut In Wages For Auto Workers

This is the future for all of us (except for the banksters, hedge fundies and other corporate criminals/financial predators who move paper around on Wall Street trading desks, of course):

DETROIT -- Among workers building the Jeep Grand Cherokee here, there are few obvious distinctions. Clutching lunch sacks and mini-coolers, they trudge together through the turnstiles at the plant's main gate each day to tinker with the same vehicles, along the same assembly line, performing the same tasks.

Yet they fall into distinctly unequal classes: About half make $28 an hour or more, while the rest, the recently hired, make $14.

This oddity, which could become the norm in much of the domestic U.S. auto industry, arises from the jury-rigged labor agreement that the United Auto Workers, U.S. automakers and the federal government reached during the industry's near-death experience last year.

Now the revival of the U.S. industry depends on a compromise that some on all sides quietly acknowledge is divisive, among other things, and probably cannot last.

"How would you feel if you were on the line humpin' and bumpin' all day and the guy next to you gets twice the pay? How would you feel toward that person?" asked Dale Hunt, a veteran tradesman at the plant and former president of the union local. "Of course there is going to be animosity."

What factory workers should earn became a central part of Washington's prolonged debate over the bailouts of General Motors and Chrysler, pitting the advocates of the free market against those for a "fair wage." Although cutting labor costs was viewed by many as essential to the companies' recovery, the issue was never fully resolved.

Under pressure from the federal government and the companies to reduce compensation, the United Auto Workers refused to lower the wage rate for its then-current members. But it allowed all new hires to be paid the reduced rate, along with lesser health and retirement benefits.

At this Chrysler plant in a blighted section of Detroit -- which President Obama is scheduled to visit this week-- the company is handling demand for its Jeep Grand Cherokee by hiring its largest single contingent of "second-tier" workers, the first time such hiring has unfolded in the industry on this scale. Other companies said they will make similar workforce expansions, and two-tier factories are expected to become more common as they do.

After an eight-hour shift attaching oxygen sensors, Jay Johnson, a new hire and a 33-year-old father of three, winced when asked about the pay gap.

"It's all mental," he said after a long pause. "If you think about how much the other guys are making, well, it's not going to work for you. I don't think the $28 an hour will ever come back. But growing up around here, I just know I'm blessed to have a job."

And that is EXACTLY the message Obama and his corporate owners want you thinking about over and over as you watch your wages get cut, as you watch people around you get fired or laid off or downsized, as you watch the unemployment rate hover between 9%-10% for the next few years and worry about what you'll do if you lose your job.

The message Obama and the corporate owners of this country are sending to you is: Sure, all this sucks, but buck up - at least you have a job.

For now.

Obama - at the behest of the Big Money interests who paid for his election and OWN him - has built a bridge back to the 19th century.

If you are lucky to have a job, you will be working longer and harder to take home much less money.

You will lose you employer-provided health care and be forced to buy shittier health care as part of Obama's new mandated health care "reform" law.

Banks and the financial industry will get government bailouts with your tax money that enables them to continue to use Wall Street as one big rigged casino while they and the companies they lend to will continue to outsource jobs to cheaper places abroad and lay off people here at home.

If you're a teacher, you will be treated like a McDonald's employee at the frialator - keep churning out those fries during the rush or they'll find some other minimum wage McEmployee/McTeacher to replace you.

And with 9%-10% unemployment the new norm (and Obama says ain't that grand!), there will be plenty to replace you - literally a thousand people for every job opening.


At least when Bush was running things, I had this hope that Dems would take power and change things. Maybe even put in place some policies to help working and middle class folks.

Obama HAS NOT done this.

He talks jive, sucks up to the left wing and netroots when he needs them (i.e., right around election time), then privatizes the school system, doubles down on the Afghan war, mandates 31 million new customers for the health insurance industry, charges employees with employer-provided health insurance a 40% excise tax so that they'll lose their health care and be forced to buy their own insurance from the reform plans, and bails out banks for billions while he cuts auto worker pay in half and encourages the firing of thousands of teachers all across this nation.


From the comments at this blog and other select blogs around the net, I can see many of you are too.

I wrote Tom DeFrank of the Daily News this morning to let him know the next time he writes a "Why Is Obama Tanking In The Polls?" story for the Daily News that he needs to realize there are a whole bunch of working and middle class folks who feel completely DISENFRANCHISED and EXPLOITED by the political parties and the corporate crooks and hedge fundies that own them.

They especially feel "betrayed" by President Hopey/Changey (as one commenter put it in another post.)

I have no answers for these problems, unfortunately, but I do know that I will not be fooled again by Dems.

My message to Dems is this: Either start supporting working and middle class people with policy that saves their jobs, increases their compensation, and protects their retirement or you lose my vote and lots of others.

POSTSCRIPT: Just in case I didn't provide enough evidence from the article to show the role Obama played in cutting the auto workers' wages by 50%, here is a little more:

Once one of the nation's most powerful unions, the United Auto Workers is credited by historians with lifting working conditions for all Americans and clearing a path for factory workers into the middle class. Union officials talk about "a fair wage," echoing ideals of justice and morality.

But in negotiations before and during the bailout debate, the auto manufacturers, seconded by Sen. Bob Corker (R-Tenn.), emphasized the virtues of market forces, and a wage that would allow the U.S. companies to remain competitive with foreign rivals, particularly those building "transplant" factories in the United States.

Those transplant factories pay as much as $25 an hour, with bonuses but more limited retirement and health benefits.

Before pumping billions into GM and Chrysler, the Bush and Obama administrations leaned decisively toward the market view on wages.

During negotiations with Chrysler, the Obama administration called for "maintaining all-in hourly labor costs comparable to its U.S. competitors, including the transplants," according to an April memo describing the Treasury proposal.

The administration proposal also called for all new production employees to be paid the $14 rate, expanding a 2007 labor agreement that set up the lower rate, though only for some "non-core" jobs. In doing so, the administration went well beyond the pay cuts the automakers had envisioned, sources said.

"From the manufacturer's perspective, the line workers were always going to be getting $28 an hour," said a source familiar with the negotiations and the auto manufacturers' thinking. The person, who lacked authorization to discuss the issue, declined to be named. "Those jobs are difficult. But there are other jobs in the plant, and those are not nearly as stressful. Those were going to be the $14."

"The government didn't say $28 an hour was overpaying people," the source said. "But they saw the $14 rate as a way to lower overall labor costs to be competitive."

Obama's change we can believe - longer hours, 50% cuts in pay, 9% unemployment in perpetuity, and shittier (though more expensive) health care.


  1. I have had a question just nagging at me for a long time now and I would dearly love to have somebody answer it for me. When the assholes on Wall Street and the major banks got huge bonuses after almost deep-sixing the economy (and after being bailed out by us, the taxpayers) we were told that there was nothing that could be done about withholding the bonuses because these guys had contracts and there would be law suits. Nevermind that their firms would have gone down the toilet and they would have gotten nada had the government not intervened.

    So, the auto workers--who had a contract--got screwed royally. Teachers have a contract, so the powers-that-be want to change things like seniority rights by amending the law. State workers have a contract, but that doesn't protect them from furloughs--and we've heard a lot about "shared sacrifice." Our mayor, the governor,The Daily News and a few other vested interests, are worried about "bloated" pension funds and "plush" pensions and want to reduce them. I think there's something wrong with this picture and how can these people possibly rationalize making the people who almost burned the house down richer, while they're putting the screws to the rest of us?

    I too am MAD AS HELL.

  2. I share your outrage.

    I guess you're Democrats, and you always vote Democrat.

    But really, didn't you have any qualms at the time for voting for a complete unknown like Obama? A two year Senator, with little real life experience before that, other than his Ivy League pedigree, Dumbama was a COMPLETE unknown.

    I just couldn't pull the lever for anyone.

    By the way, with all of that Ivy League pedigree on this "brilliant" man . . . we have yet to see ONE friggin school transcript on this operator. NOT ONE!!! Not one from first grade on up. NOTHING!!!

    Tell me, why not? If Dumbama was "all that" in school and as brilliant as they claim, why no grades posted?

    We knew everything about Bush, down to the last pimple. You Dems out there, maybe you have learned that old lesson . . . "don't follow leaders, and (in Bloomberg's NYC) watch the parking meters..."

  3. I am a left-leaning Democrat and a teacher, but come this election I will not vote for any Democrat who acts like a Republican but talks like a Democrat for the few weeks before election time. I am not voting for Cuomo and not voting for Gillibrand. I will vote Republican and am encouraging all people to do that as there is little difference between the two parties anyway anymore...and I refuse to reward these so-called Democrats with my vote. Let the Democratic party know that they can't take us for granted while acting like corporate whores!!!! And Obama in 2012. I THINK NOT! I don't think I could vote for Sarah Palin, but President Hopey-Changey is not much different from her anyway....