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The Real Reason Southern Republicans Oppose the Bailout

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.

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