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Thread: Union balks and $14B auto bailout dies in Senate

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    Default Union balks and $14B auto bailout dies in Senate

    Union balks and $14B auto bailout dies in Senate - Yahoo! News

    WASHINGTON A bailout-weary Congress killed a $14 billion package to aid struggling U.S. automakers Thursday night after a partisan dispute over union wage cuts derailed a last-ditch effort to revive the emergency aid before year's end.
    Republicans, breaking sharply with President George W. Bush as his term draws to a close, refused to back federal aid for Detroit's beleaguered Big Three without a guarantee that the United Auto Workers would agree by the end of next year to wage cuts to bring their pay into line with Japanese carmakers. The UAW refused to do so before its current contract with the automakers expires in 2011.
    The breakdown left the fate of the auto industry and the 3 million jobs it touches in limbo at a time of growing economic turmoil. General Motors Corp. and Chrysler LLC have said they could be weeks from collapse. Ford Motor Co. says it does not need federal help now, but its survival is far from certain.
    Democratic leaders called on Bush to immediately tap the $700 billion Wall Street bailout fund for emergency aid to the auto industry, whose fate along with that of the roughly 3 million jobs it touches was in limbo.
    Majority Leader Harry Reid, D-Nev., called the bill's collapse "a loss for the country," adding: "I dread looking at Wall Street tomorrow. It's not going to be a pleasant sight."
    GM said in a statement it was "deeply disappointed" that the bipartisan agreement faltered. "We will assess all of our options to continue our restructuring and to obtain the means to weather the current economic crisis," the company said. Chrysler also said it "will continue to pursue a workable solution to help ensure the future viability of the company."
    The White House said it was evaluating its options in light of the breakdown on Capitol Hill.
    "It's disappointing that Congress failed to act tonight," Deputy Press Secretary Tony Fratto said in a statement. "We think the legislation we negotiated provided an opportunity to use funds already appropriated for automakers and presented the best chance to avoid a disorderly bankruptcy while ensuring taxpayer funds only go to firms whose stakeholders were prepared to make difficult decisions to become viable."
    That bill the product of a hard-fought negotiation between congressional Democrats and the Bush White House was virtually dead on arrival in the Senate, where Republicans said it was too weak in its demands on the car companies and contained unacceptable environmental mandates for the Big Three.
    Thursday's implosion followed yet another set of marathon negotiations at the Capitol this time involving labor, the auto industry and lawmakers. The group came close to agreement, but it stalled over the UAW's refusal to agree to the wage concessions.
    "We were about three words away from a deal," said Sen. Bob Corker of Tennessee, the GOP's point man in the negotiations, referring to any date in 2009 on which the UAW would accept wage cuts.
    The Senate rejected the bailout 52-35 on a procedural vote well short of the 60 required after the talks fell apart. Just 10 Republicans joined 40 Democrats and two independents in backing it. Three Democrats sided with 31 Republicans in opposition. Reid also voted "no" for procedural reasons.
    Congress is not scheduled to return for legislative work until early January.
    Some Senate Democrats joined Republicans in turning against the House-passed bill despite increasingly urgent expressions of support from the White House and President-elect Barack Obama for quick action to spare the economy the added pain of a potential automaker collapse.
    "In the midst of already deep and troubling economic times, we are about to add to that by walking away," said Sen. Chris Dodd, D-Conn., the Banking Committee chairman who led negotiations on the package.
    Alan Reuther, the UAW's legislative director, declined comment to reporters as he left a meeting room during the negotiations. Messages were left with Reuther and UAW spokesman Roger Kerson.
    The stunning disintegration was eerily reminiscent of the defeat of the $700 billion Wall Street bailout in the House, which sent the Dow tumbling and lawmakers back to the drawing board to draft a new agreement to rescue financial institutions and halt a broader economic meltdown. That measure ultimately passed and was signed by Bush.

    It wasn't immediately clear, however, how the auto aid measure might be resurrected, with Congress now set to depart for the year.
    Democratic House Speaker Nancy Pelosi called Senate Republicans' refusal to support the White House-negotiated bill irresponsible and urged the Bush administration and the Federal Reserve to provide short-term relief for the automakers. "That is the only viable option available at this time," she said.
    Congressional Republicans have been in open revolt against Bush over the auto bailout. Senate Minority Leader Mitch McConnell of Kentucky joined other GOP lawmakers Thursday in announcing his opposition to the White House-backed bill, which passed the House on Wednesday. He and other Republicans insisted that the carmakers restructure their debt and bring wages and benefits in line with those paid by Toyota, Honda and Nissan in the United States.
    Hourly wages for UAW workers at GM factories are about equal to those paid by Toyota Motor Corp. at its older U.S. factories, according to the companies. GM says the average UAW laborer makes $29.78 per hour, while Toyota says it pays about $30 per hour. But the unionized factories have far higher benefit costs.
    GM says its total hourly labor costs are now $69, including wages, pensions and health care for active workers, plus the pension and health care costs of more than 432,000 retirees and spouses. Toyota says its total costs are around $48. The Japanese automaker has far fewer retirees and its pension and health care benefits are not as rich as those paid to UAW workers.
    Republicans also bitterly opposed tougher environmental rules carmakers would have to meet as part of the House-passed version of the rescue package, and the Senate dropped them from its plan.
    The House-passed bill would have created a Bush-appointed overseer to dole out the money. At the same time, carmakers would have been compelled to return the aid if the "car czar" decided the carmakers hadn't done enough to restructure by spring.
    The House approved its plan late Wednesday on a vote of 237-170.
    A pair of polls released Thursday indicated that the public is dubious about the rescue plan.
    Just 39 percent said it would be right to spend billions in loans to keep GM, Ford and Chrysler in business, according to a poll by the nonpartisan Pew Research Center. Just 45 percent of Democrats and 31 percent of Republicans supported the idea. In a separate Marist College poll, 48 percent said they oppose federal loans for the struggling automakers while 41 percent approved.

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    Elite Member RevellingInSane's Avatar
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    The UAW isn't going to accept any type of cut. That organization has been a vampire latched on to the neck of the auto industry for decades.

    That is why I called this situation a request for a handout. Loan? Think not. That money would never have been seen again and the UAW would have definitely grabbed a huge chunk and run.

    The UAW doesn't want to help clean up the mess they contributed to? Ok. Let the Big 3 go into bankruptcy and shut down. Let's see how the UAW feels about one hundred percent pay cuts.

    As much as I oppose the government having too much power, in this case, the auto industry should be allowed to grind to a halt, after which the government takes complete control and ownership of all the failing auto companies. They've been given a chance and they have failed to show they can be trusted to act responsibly. It's time to clean house.

    The CEO's are inept and greedy. The UAW is definitely consumed with greed. If the industry is to be saved, not just allowed to shuffle through business for another year or two while leeching off the taxpayers, but actually turned into profitable companies, all this must go. Fire the idiots. Cease the wages which have created a burden and are excessive considering qualifications and education needed. Start fresh and bring in those with understanding of business, lack of personal greed, and ethics.



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    A*O
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    Fucking unions. Sorry but people like this deserve to lose their jobs so they can bitch and whine that "nobody cares about the poor, downtrodden workers". Whose side are they on?
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    Elite Member B.C.'s Avatar
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    Quote Originally Posted by A*O View Post
    Fucking unions. Sorry but people like this deserve to lose their jobs so they can bitch and whine that "nobody cares about the poor, downtrodden workers". Whose side are they on?
    As a union member I can say I, as my union brothers and sisters are on your side, the side of working Americans.




    http://www.aftermarketnews.com/Item/..._struggle.aspx

    It's the damn legacy cost, period..Wages are very comparable.

    The 'union threat effect'

    Harley Shaiken, a professor at the University of California, Berkeley, who specializes in labor issues, said Toyota's high wages are somewhat expected.

    "Toyota pays high wages in part to avoid the UAW," Shaiken said, adding that economists would refer to Toyota's high wages as the "union threat effect," meaning companies pay union-comparable wages to fend off organizing efforts and the risk of a strike.

    "But what Toyota inadvertently shows," he added, "is that you can compete paying higher wages."

    Assembly workers for Detroit automakers last year remained a bit ahead of Honda's U.S. hourly workers, who made an average $24.25 an hour, or $26.20 with the $4,485 bonus they received. In November, Honda paid bonuses for the 21st consecutive year, the longest streak in U.S. auto history, said Ed Miller, Honda spokesman.

    Nissan workers are paid $24 an hour in Mississippi and $26 an hour in Tennessee, but company officials would not disclose employee bonuses.

    Hyundai Motor Co. pays its U.S. production workers less than other automakers. Wages at its Alabama plant start at $14 an hour and grow to $21 an hour after two years on the job, according to a January 2004 company release. Hyundai declined to say whether those wages have increased since then.

    But the UAW's Casteel, who is working to organize autoworkers in southern states, said the UAW's recruiting strategy of comparing union and nonunion checks doesn't work in less-developed parts of the South. In Alabama and Mississippi, for instance, the U.S. Department of Labor says wages average less than $11 an hour.

    "If you start looking at where they put these plants, they go out to the most desolate places you've ever been in your life," Casteel, an Alabama native, said of foreign automakers. "And they make sure there are no other competitive wages with any other industry. You'll drive through these piney woods for an hour and all of a sudden you run upon this major manufacturing facility."

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    Elite Member Fluffy's Avatar
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    A lot of those Republican senators are from southern states with non-unionized workers for foreign car companies (Hyndai, Toyota, Honda, BMW). They have a financial incentive to see the big 3 fail since 18 new plants are planned in southern states.

    Unions have done a lot on workers' behalf. Anyone who doesn't think that workers can still be abused in America needs to take another look at Walmart.

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    A*O
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    Not saying the unions don't fight for workers rights. That's their job. But why veto legislation that's designed to protect the jobs of the people they claim to represent? I really don't think these people get how precarious the whole US car industry is. Years and years of safe, cushy jobs and now it's crunch time they still think they can afford to call the shots.
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    Elite Member NicoleWasHere's Avatar
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    Don't American cars suck, anyway?

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    Elite Member dexter7's Avatar
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    Quote Originally Posted by A*O View Post
    Not saying the unions don't fight for workers rights. That's their job. But why veto legislation that's designed to protect the jobs of the people they claim to represent? I really don't think these people get how precarious the whole US car industry is. Years and years of safe, cushy jobs and now it's crunch time they still think they can afford to call the shots.

    i don't know if one could consider a factory job "cushy". it is definitely mind-numbing, often times back breaking labor. i applaud auto workers for getting a bigger piece of the corporate pie by making sure they get paid well. however, somewhere a great deal of mis-management has been. i'm thinking it has more to do with the greed of the higher ups (making mistakes by creating too many models, not correctly predicting the buying trends of the public, etc) then the blue collar workers.

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    Elite Member Grimmlok's Avatar
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    1) The unions refused to accept dialed down pay and benefits in relation to their japanese/korean counterparts. Everybody knows that while toyota and the like aren't unionized, they treat their employees extremely well.

    2) The management, CEO's and everybody at the top refused to do anything to help the situation, still maintain an air of egoism, and are still on another planet. They have no plan to improve their line, no business model to cut costs and deliver a better product, yet still expect money to be handed to them.

    recipe for fail.
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    Elite Member Mr. Authority's Avatar
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    recipe for fail.
    Pretty much.

    I really have nothing too add to this because alot has been aid already. With that said I can see my homestate collapse from my bedroom window.

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    Detroit workers stunned, angered as bailout stalls

    Detroit workers stunned, angered as bailout stalls - Yahoo! News

    DETROIT (Reuters) William Ford, an unemployed auto worker, grew angry and resigned and then angry again when he thought about the political debate that has stalled a bailout for the once-proud automakers that built Detroit.
    "If they can spend billions on war and billions to bail out Wall Street, then they can help the Big Three," said Ford, who was waiting for a bus next to a Chrysler plant on Thursday afternoon as the U.S. Senate debated tightening up terms of a rescue package for the industry.
    "We need this help. This is supposed to be the United States," said Ford, 25, who was laid off from his job in a Chrysler LLC engine plant in March.
    Ford says he is frustrated with auto chief executives and their private jets, frustrated with Detroit's reputation for shoddy quality, and frustrated that the fate of an industry that has sustained his family for three generations has come to this: a handout from Washington.
    "Never in my life did I think we'd see the Big Three crash like this," Ford said.
    At Chrysler's nearby Jefferson North assembly plant, the sign still reads DaimlerChrysler though private equity firm Cerberus Capital Management bought Chrysler in August 2007.
    Chrysler has announced a $1.8 billion plan to retool the plant to build a new Jeep model. But Chrysler's financial crisis and doubts in its ability to survive even if it clinches a federal loan have thrown its plans into uncertainty.
    Just down Jefferson Avenue, General Motors Corp has dimmed some of the lights at its headquarters as it waits for word on whether lawmakers will approve its request for $8 billion in loans to pay bills through January.
    WAITING AND WAITING
    Like workers at Chrysler and Ford Motor Co, GM's factory workers will be asked to make more sacrifices as the shrunken United Auto Workers union offers new concessions.
    UAW-represented GM workers in Flint have been gearing up to make fuel-efficient engines for a new generation of GM small cars, such as the Chevrolet Cruze.
    As recently as September, the future looked unexpectedly bright for Flint. GM Chief Executive Rick Wagoner announced a new $370 million plant for the Michigan city, where GM's roots go deep and unemployment already runs over 10 percent.
    "I just walked out of a meeting with 350 retirees, and I had to tell them that I don't know what's going to happen," said Bill Jordan, a UAW local president in Flint. "I don't know what's going to happen to their benefits. I don't know what's going to happen to GM."
    In Lordstown, Ohio, a glimmer of hope for GM workers is fading, too. GM has plans to build the Cruze in Lordstown and unveiled plans for a $500 million investment in the plant in August in a bold bet that it can make money on a small car.
    David Green, president of a UAW local that represents GM's stamping plant in Lordstown, said auto workers were frustrated and angry that their future was being debated -- and delayed -- by lawmakers who had approved a bailout for big banks.
    "Our destiny was in our hands for a long time, and we feel like we've done good things and creative things to make GM competitive," Green said. "Now? We're waiting. We're waiting."
    GM, Ford and Chrysler employ some 150,000 factory workers in the United States. The auto industry employs 2.5 million workers including suppliers, dealers and related companies.

    The automakers warn that failure of one of them could wipe out a shared supply base and cost tens of thousands of jobs. That would worsen the U.S. recession and send Detroit deeper into an economic tailspin that has lasted most of a decade.
    Corlis Mayor, a former auto worker, is already living out the bleak future that automakers have warned awaits others. She lost her factory job at Ford in 2004. This week, she was at a soup kitchen first opened by Capuchin monks during the Great Depression.
    "It's hard. It's just so hard," said Mayor as she picked up food and clothing for her family. "It's just unimaginable to go from $1,000 a week to nothing."
    Back at the bus stop off Jefferson, Ford brightened at the prospect of finishing college, selling his house and leaving Detroit and its dead ends.
    But he then told the story of how his grandfather, Eddie Thomas Ford, went to work for the company that coincidentally bears his family name at that automaker's sprawling and historic Rouge complex. And he smiled. "This is going to affect us, but we're going to make it," he said. "We're the Motor City. We've got no choice."

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    Elite Member kingcap72's Avatar
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    As long as the unions and the CEOs expect to maintain their same pay nothing is going to get done. The auto industry needs to be completely overhauled from top to bottom and that includes salaries for everybody. As long as they all refuse to make concessions they can't come begging for taxpayer bailouts. Time to ask the oil industry for a loan.

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    Quote Originally Posted by kingcap72 View Post
    . Time to ask the oil industry for a loan.
    This is the most intelligent suggestion I've heard during this entire fiasco.
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    Elite Member Sweetie's Avatar
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    The government should make them start selling cars for what they are actually worth....instead of thousand and thousand of dollars. People might actually buy then.

    It's just weird. In the 1960's you could buy a nice, strong car made out of metal for a fraction of the cost that we are paying for rubbermaid today.

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    Elite Member Grimmlok's Avatar
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    "Never in my life did I think we'd see the Big Three crash like this," Ford said.
    Uh, really? Where have you been during the last 3 bailouts?

    That's like an airline worker being surprised a carrier went bankrupt.
    I am from the American CIA and I have a radio in my head. I am going to kill you.

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