The Real Reason Southern Republicans Oppose the Bailout

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Friday, December 12, 2008 at 11:53 am

The news coverage today is all about how the greedy auto workers and their unions refused to accept the oh-so-reasonable compromise proposed by Senate Republicans that would require them to quickly drop their wages and benefits to match those of foreign-owned plants.

But none of the mainstream news coverage I’ve seen – whether in the New York Times, Washington Post or CBS news – mentions the fact that Senator Bob Corker of Tennessee and his fellow Republicans who torpedoed the deal are from the same Southern states where those foreign companies own and operate auto plants – none of which are unionized, and all of which provide lower wages and fewer benefits than the Big Three.

(Tennessee is home to a Volkswagen plant and Nissan’s North American headquarters, while Alabama and Georgia have Honda and Kia Motors Corp. factories. These Southern states have all worked hard to keep the foreign companies from going to Detroit and other Northern states (where unions still exist), by providing huge state taxpayer subsidies.)

Although the UAW has agreed to reduce the wages and benefits provided under its contract, the big dispute seemed to be over how quickly it will do that – whether by 2009 or 2011. As Jonathan Cohn of the New Republic pointed out in an excellent piece explaining the situation last month — the UAW has already accepted steep wage concessions, created a two-tiered wage and benefit system, and pledged to make more cuts in the near future.

But as Rachel Maddow cleverly pointed out on her show last night, that’s not fast enough for the Southern Republicans representing their foreign car corporation constituents, who are eager to break the auto workers union – now. After all, if workers are getting the same wages at a UAW – organized plant as do workers at a non-union plant, they’re not going to see much reason to keep paying those union dues.

The problem with that reasoning, of course, is that for years Toyota and Honda and Nissan and the others have been forced to keep wages up to compete with the unionized auto plants. Even if their wages are still a little lower, they’re not that bad — $20-$26 an hour, as opposed to about $28 an hour at unionized factories. (Cohn easily debunks that $70 an hour myth in his piece.) Once the unions are gone – under orders of the Southern Republican leadership – they’ll no longer have to. And the unprotected Detroit wages will spiral rapidly downward to meet them.

Comments

14 Comments

Carme
Comment posted December 12, 2008 @ 2:01 pm

1. The reduction in wages and benefits are meant to give the companies a better chance to recover, so the taxpayer's money doesn't go to waste when they collapse even with the help. Doing it two years from now doesn't help that, so it makes no sense.

2. Saying there will be wage changes in two years is totally meaningless. It means “give us money now, and we'll discuss the rest in two years.” Two years later, if they recover, they'll say there's no need to cut wages *now*; and if they go bankrupt, at least they filled their retirement funds with some taxpayer money. If the companies do recover, it would actually be wrong for the government to have any say regarding their compensation policies.

3. No one is telling the auto workers to cut wages; they're only told to cut wages *if they want taxpayer money*, to increase the chance of the public getting the loan back. If they don't want to cut wages, that's fine. If they only want to do it in 2011, that's fine too, but then they shouldn't expect to receive public money before 2011.


brigitte
Comment posted December 12, 2008 @ 7:30 pm

The UAW should bail out the auto workers, after all they have been collecting big time union dues for a long time, what are they doing with that money? There is nobody left to bail out the working middle class . We don't have money to buy their cars anyway, for the excellent pay and benefits they get they make a shabby product, that's why Americans started buying foreign cars.


Bryan in Miami
Comment posted December 12, 2008 @ 10:23 pm

If you want to create parity between the Big 3 and their foreign competitors:

1) strengthen social security
2) create a single-payer healthcare system; the way they have in Japan and Germany.

Then the big 3 won't have to worry about paying legacy costs to the UAW workers.


JEFF
Comment posted December 12, 2008 @ 10:32 pm

The problem will never go away,if the uaw lowers it's pay,the non-union companies will lower the pay of their workers to keep the gap as large as it can.Those non-union plants work their people much harder than union plants do,they will eventually take them over anyway.The only way that this could have been avoided,they should have voted the uaw in at these non-union plants and leveled the playing field, with pay,benefits,and work load.We can't save the BIG THREE unless we level the playing field.


John P
Comment posted December 13, 2008 @ 7:11 am

Not to worry, the fat cat executives at the big three need the UAW to stay on the property, without them they wouldn't have anyone to blame for the lame leadership which has lead them to the abyss. They aren't going bankrupt, they are being lead there! Its all about union busting, I notice that congress isn't at all concerned about the immoral bonuses and golden parachutes that they give themselves with their CONTRACTS. Lets face facts, the foreign auto makers have better management! WAKE UP AMERICA, email or call your reps and remind them who they represent. And remember to vote the rogue politicians out who have forgotten!


Joe G
Comment posted December 13, 2008 @ 10:07 am

GM should ask Russia and or China for a bail-out. The GM Plant in St. Petersburg is doing rather well all things considered. GM is the most successful auto manufacturer in Russia these days. With Plants in China and Russia maybe after the bail-out with US tax dollars they could build a plant in Cuba or Venezuela? GM doesn't need a bail out at all, it's the UAW that has the healthy appetite for unearned cash. It must be nice to be laid off from GM for years on end and getting 95% pay !! Wow!! Getting laid of from GM is like hitting the lottery!


t
Comment posted December 13, 2008 @ 3:41 pm

TELL TRUTH TO POWER!
Thank you to the Washington Independent for reporting the facts to WE THE PEOPLE who are too busy worrying about our jobs, our houses, our health to dig for it. THANK YOU.
We the people are waking up and the tsunami of change was Obama. Still waters are still running deep and the rising tides of change are still to come by the change agents — WE THE PEOPLE, lovers of our hard won constitutional rights. Political corruption will float to the surface like debris left by a hurricane.


BillW
Comment posted December 16, 2008 @ 10:31 am

I was just laid off 12/2/008, & I wish I could of taken a pay loss, and still be working. As it is I'll get maybe 70% of my pay for 26 plus 13 weeks, & since I have to put in all my SS taxes. I'll be taxed 46 & 1/2 % of that, since I live in a state that has state income tax.
At 62 in Feb, with my 401K down 30%, & a bail out to the UAW. I'm going to maybe be worth a check of $900 a month thats worth $.02 on the dollar. because we're going to give some UAW his penstion & healtcare, which I will not have in 21 days, Try buying health Insurance with $900 a month.
Please explain to me why it costs, $1500 more to make a car in Detroit, as it does in SC???/ Both are US cars, where does that extra money come from, thin air?????? or just poor biz deals.( Bleep the UAW & Excutives that have to take my Tax dollars ) to keep on running them companys into the ground on my Bleeping Dollar.


onhighbeam
Comment posted February 24, 2009 @ 10:54 pm

No wonder Americans wants foreign cars more … UAW really should bail out car workers… the extra money that they are getting from the union dues really goes to nothing.. sad to say but that's what i'm seeing right now…


Sugar Daddy
Comment posted March 20, 2009 @ 6:30 am

Did you ever consider that it is the union companies needing a bailout? Maybe the 2 people for every job, extra management, terrible productivity and money over $28 an hour to the pension fund (union embezzelment fund) are sinking them. Are you paying the higher price for their lower quality products? No one else is. Maybe if get them all union we can get the union thieves rich for a couple of years before we create a bunch of new jobs in Mexico and China. We don;t want those countries to have a ressesion. If that is the case I will illegally immigrate to Mexico, Steal an identity, pay no taxes and get free healthcare.

Get a job loser


kustomatic
Comment posted April 13, 2009 @ 11:30 pm

Why should the American people bail out a company where not one thing that caused it to go under has changed?


kustomatic
Comment posted April 14, 2009 @ 6:30 am

Why should the American people bail out a company where not one thing that caused it to go under has changed?


louis vuitton handbags
Comment posted July 6, 2010 @ 9:27 am

Did you ever consider that it is the union companies needing a bailout? Maybe the 2 people for every job, extra management, terrible productivity and money over $28 an hour to the pension fund (union embezzelment fund) are sinking them. Are you paying the higher price for their lower quality products? No one else is.


miu miu
Comment posted July 6, 2010 @ 9:34 am

Maybe if get them all union we can get the union thieves rich for a couple of years before we create a bunch of new jobs in Mexico and China.


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