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Thread: Introducing the senators who hate unions and love foreign cars

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    Elite Member Fluffy's Avatar
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    Default Introducing the senators who hate unions and love foreign cars

    Meet the GOP's wrecking crew

    Why did a small group of Southern Republicans turn the auto bailout into a demolition derby? Introducing the senators who hate unions and love foreign cars.
    By Alex Koppelman and Mike Madden

    Dec. 13, 2008 |
    On July 15, Bob Corker was a happy man.

    "I cannot think of a more exciting day, even more so than Election Night, for me," the Republican senator from Tennessee said in a conference call that day. The reason for his elation was the announcement that Volkswagen, lured by up to $500 million worth of incentives from the state government, had agreed to build a $1 billion plant near Chattanooga, Tenn. That is, not just in his home state, but in the suburbs of the city he once served as mayor.

    Add VW to Nissan, which already has two plants and its North American headquarters in Tennessee, and you begin to see why Corker was so aggressive this month about trying to block -- or at least dramatically rewrite -- a proposal to float billions of dollars in emergency loans to domestic automakers. Most of the focus during this debate has been on lawmakers who represent Michigan, the home of the Big Three -- Ford, General Motors and Chrysler. But Corker represents the other side of the coin: Tennessee and other Southern states have recently come to depend on foreign automakers and their non-union factories. If you're from those parts, what's good for American car companies may no longer be what's good for the country -- because your economy now depends on their foreign competitors instead.

    The fiercest opposition to the loan proposal -- and nearly a third of the 35 votes against ending debate on the deal -- came from Southern Republicans, and the ringleaders of the opposition all come from states with a major foreign auto presence. Not coincidentally, nearly all of those states -- except Kentucky -- are also "right-to-work" states, which means no union contracts for most of the employees at the foreign plants. The Detroit bailout fell victim to a nasty confluence of home-state economic interests and anti-union sentiment among Republicans.

    This week Southern Republicans had a chance to go to bat for foreign automakers while simultaneously busting a union. At a hearing last week, Corker explained that his constituents "have a tough time thinking about us loaning money to companies that are paying way, way above industry standard to workers." Which may explain why his proposed alternative to the loan agreement between Congress and the White House would have required the United Auto Workers to agree to significant wage cuts next year, based on a spurious claim that union workers earn significantly more than non-union workers.

    Even George W. Bush's White House didn't push to crush the UAW the way Corker and his buddies did, say Democrats involved in the negotiations with the administration. "It was all about the unions," one senior Democratic aide said. "This is political payback for lots of things, and probably even more to come." Labor officials expect Republicans to keep taking shots at unions whenever they can. "This cynical stance they took last night -- they're willing to jeopardize 3 million jobs so they could gain some advantage in their war against unions -- is appalling," said Bill Samuel, the chief lobbyist for the AFL-CIO.

    As the Republican Party consolidates in the South, the fight this week could turn out to be a preview of many battles to come over Barack Obama's economic plans. If those plans involve the domestic auto industry, the GOP pushback will come from somewhere down I-65, the new auto corridor that runs from Kentucky south to Alabama. Expect to hear more not just from the very vocal Bob Corker, but from the rest of a core group of Southern senators whose bread is buttered by the Japanese, Germans and Koreans. Here's a guide to the major players.

    Richard Shelby, R-Ala.

    Foreign auto plants: Mercedes-Benz, Hyundai, Honda

    Domestic auto plants: None

    Campaign cash from car companies: Not much, apparently -- they don't rank among the top 20 contributors to his campaigns over his career.

    What drives him: Shelby is the top Republican on the Senate Banking Committee, which had hearings last week on the bailout. He basically thinks Detroit is doomed. "Unless Chrysler, Ford and General Motors become lean and innovative and competitive in the marketplace, this is only delaying their funeral," he told reporters on Wednesday. "I want them to survive, but they have to make that decision. They can strip down. They can become competitive. They could save thousands and thousands of jobs." He said he'd feel the same way if he had domestic plants in Alabama: "If I had five G.M. or Ford plants in my state, I would oppose this bailout." But since he doesn't, opposing it is probably a little easier.

    Jim DeMint, R-S.C.

    Foreign auto plants: BMW

    Domestic auto plants: None

    Campaign cash from car companies: More than $210,000 over his career, though the industry doesn't rank among his top donors.

    What drives him: DeMint loves to go on TV to spout whatever talking points conservatives want to hear, and the Detroit bailout was no exception. Here he is on Fox Business Network on Thursday, comparing the contracts in union car plants with those in non-union factories: "The take-home pay is essentially the same, but gold-plated benefits that the unions have negotiated over the years have essentially brought the Big Three to the brink of bankruptcy. And they will freely admit that the American auto companies that are producing overseas are very competitive, because they don't have to operate under the union agenda." A true believer, DeMint seems more motivated by a desire to crush the UAW than to help out the BMW plant in his home state -- though that probably doesn't hurt, either.

    Mitch McConnell, R-Ky.

    Foreign auto plants: Toyota

    Domestic auto plants: Ford and G.M.

    Campaign cash from car companies: As Senate Republican leader, and one who faced a tough reelection bid this year, McConnell gets tons of money from just about everyone. But he ranked fifth on the list of recipients of auto manufacturing money this cycle, getting $40,050, including $8,000 from G.M.

    What drives him: McConnell is keenly aware that the conservative base is revved up to fight labor. Unlike every other state with major auto manufacturing in the South, Kentucky has no right-to-work law -- and the UAW already represents workers at the Ford and G.M. plants, and may make a play to organize Toyota workers, too.

    McConnell participated in the Senate negotiations, but, like Corker, has pretty major home-state ties to Detroit's competitors. (He also wouldn't mind breaking the UAW, so it stops sending anti-GOP mail to its members in Kentucky.) McConnell started the bailout's death spiral Thursday, when he announced he wouldn't support the version that passed the House, and then let Corker take the lead on further negotiations. "The administration negotiated in good faith with the Democratic majority a proposal that was simply unacceptable to the vast majority of our side because we thought it, frankly, wouldn't work," McConnell said on the Senate floor after the vote that killed the deal, in a speech that was basically just a public love letter to his fellow Southerner. "Into this breach stepped the junior senator from Tennessee who, I must say, has made an extraordinary impact in a very small amount of time."

    Bob Corker, R-Tenn.

    Foreign auto plants: Two Nissan plants, as well as the company's U.S. headquarters; Volkswagen will open near Chattanooga in 2011

    Domestic auto plants: G.M. (though the company announced Friday that that plant will close until February)

    Campaign cash from car companies: $234,860 for his career, including $194,800 during his 2006 campaign -- more from the automotive industry than any other candidate, including incumbents

    What drives him: Automakers are surprisingly important to Tennessee's economy -- the state now ranks fifth in auto-industry jobs. Foreign car companies, and suppliers, play an important role in that. And the number of auto jobs will be increasing soon, thanks to Corker's efforts. As mayor of Chattanooga, he reportedly conceived the idea for the site that will soon become home to the Volkswagen plant, and was instrumental in its development. He organized efforts to lure Toyota to the area, and when that failed, he had VW execs and other top state politicians over to his house for dinner. He's said the plant, which will employ an estimated 2,000 people and could lead to the creation of another 2,000 related jobs, "will take us to levels we can only begin to imagine."

    On the other hand, Corker hasn't seemed particularly concerned about the potential demise of American car companies -- or, at least, certainly not about the prospect they'll be forced into bankruptcy. In fact, his plan specifies that if the automakers don't meet any of his conditions, that failure "will result in the requirement that the company file bankruptcy under Chapter 11." He's been particularly blunt about his assessment of Chrysler: "In Chrysler you have a company that is not going to survive as a stand-alone. It's not going to happen," he said in one recent interview. In the meantime, he's been talking up the companies that operate in his home state. In an Op-Ed for the Detroit Free Press, Corker didn't just call for UAW members' wages to be cut so that they're on the same level as the pay at the foreign companies' U.S. factories; he specifically said he wanted wages brought "immediately in line with companies like Nissan and Volkswagen."

    Of course, the influence of most politicians' traditional motivation can't be discounted either. In a party that's lost in the wilderness, unsure of who will guide it in the future, Corker has emerged as a leader on this issue, successfully fighting for a position that's popular with the GOP's base and its opinion leaders.

    Other players:

    While Corker and DeMint pushed hard against the bailout, their colleagues, Lamar Alexander and Lindsey Graham, didn't even vote on it. But it wasn't evidence of a split among Southern Republicans -- Alexander was home recovering from back surgery (and opposed the bailout), and Graham had also made clear that he opposed the deal. It wasn't clear why he didn't vote.

    Georgia's two Republican senators, Saxby Chambliss and Johnny Isaakson, both voted against the plan as well. Their state has a big Kia factory coming in soon.

    Meanwhile, four Democrats voted against the loan proposal -- including Majority Leader Harry Reid of Nevada. Reid didn't actually abandon Detroit, though; he voted against the deal for procedural reasons, giving him the power to call for a new vote later (which senators can only do if they were on the side that won). Montana's Jon Tester and Max Baucus opposed the bill because it allowed tax shelters for public transit companies, which that state doesn't have many of. And Arkansas Sen. Blanche Lincoln said she voted no because she wanted money from the existing financial bailout to be used instead of new funds -- which is now the only way Detroit will get any help.

    -- Additional research by Vincent Rossmeier and Gabriel Winant
    -- By Alex Koppelman and Mike Madden

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    Elite Member nana55's Avatar
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    My dad was a union man, and I belonged to a union when I taught. However, the UAW and also the grocer's union is putting it employees out of work. These jobs though not terribly highly paid have benfits that companies cannot afford anymore. That is what is hurting all these companies.
    If I can't be a good example, then let me be a horrible warning.

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    A*O
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    Most people love foreign cars - they are better made, more efficient, cheaper to run and altogether a better product. That's why people (not just senators) prefer them and it's a fundamental fact that politicians, CEOs and union bosses STILL don't get. They are supplying a product there't no demand for. Duh.
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    Elite Member B.C.'s Avatar
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    General Motors Corp., Ford Motor Co. and Chrysler LLC sold 8.5 million vehicles in the United States last year and millions more around the world. GM outsold Toyota by about 1.2 million vehicles in the United States last year and holds a U.S. lead over Toyota of nearly 700,000 so far this year. Globally, GM in 2007 remained the world's largest automaker, selling 9,369,524 vehicles worldwide -- about 3,000 more than Toyota.
    Ford outsold Honda by about 850,000 and Nissan by more than 1.3 million vehicles in the United States last year.
    Chrysler sold more vehicles here than Nissan and Hyundai combined in 2007 and so far this year.

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    Interesting B.C. I think in the end what is killing them so bad is the economy, period. All of the auto makers are reporting a huge decrease in profits and sales.

    But I think what happened is that the economic nightmare exposed the weaknesses that the big 3 had, and it's these weaknesses that are preventing them from weathering the storm.

    Again it points to the business model and union benefits. While the big 3 may have outsold their foreign counterparts, they have so many more models and capacity to build models that when demand dropped it really hurt them big time. If you simply don't have cash to pay those benefits and wages, and keep all those plants up, it hurts them.

    IMHO the economy just came at a bad time and the big 3 simply didn't have the means to weather the storm.

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    Gold Member ymeman's Avatar
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    Quote Originally Posted by A*O View Post
    Most people love foreign cars - they are better made, more efficient, cheaper to run and altogether a better product. That's why people (not just senators) prefer them and it's a fundamental fact that politicians, CEOs and union bosses STILL don't get. They are supplying a product there't no demand for. Duh.

    yeah, but wtf??? it's the right that has been hawking the line about foreign goods being the devil until they realized out-sourcing was the wave of the future. I remember when Walmart surged in popularity and it was plastered all over the walls with "buy american" signs, I drove a toyota corolla for nine years and wingnut types were always hassling me about it (my first car, I bought it for 600 bucks in '88 and it was a '79 model and held onto it til 97). And now it's these same assholes that are killing the auto industry in the U.S., whichever way the wind blows, apparently. To me it's not about cars, it's about jobs. I love how this article pointed out that these states are right-to-work states, you can't even accidentally sneeze the word union around plants like that without endangering your job. Sigh...cracks me up BMW is on there (S.C.), these asshole politictians just do not get that without a middle class no one is going to be able to afford 'klassy' cars, or any of the other b.s. they are selling. I think few people realize, also, that their Honda could just as easily be being made in America and their Toyota in Canada as anywhere else. I have a Geo which is really a Suzuki Samarai with a different style body. It's now a 'Chevy' but it a Japanese car through and through. And the parts are made all over the stinking place, at the plant I worked at we made fuel pumps only, the plant was German/Japanese owned (Bosch/Nippondenso) and we made fuel pumps for just about everyone except Mercedes. BMW was about an hour down the road, we made their fuel pumps too, along with pumps for the big three models, this is not only going to affect the big three but all the suppliers of the big three. The funny thing is the other guys will probably have to pick up the difference with increases and their pricing might go up.

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    Elite Member B.C.'s Avatar
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    Quote Originally Posted by celeb_2006 View Post
    Interesting B.C. I think in the end what is killing them so bad is the economy, period. All of the auto makers are reporting a huge decrease in profits and sales.

    But I think what happened is that the economic nightmare exposed the weaknesses that the big 3 had, and it's these weaknesses that are preventing them from weathering the storm.

    Again it points to the business model and union benefits. While the big 3 may have outsold their foreign counterparts, they have so many more models and capacity to build models that when demand dropped it really hurt them big time. If you simply don't have cash to pay those benefits and wages, and keep all those plants up, it hurts them.

    IMHO the economy just came at a bad time and the big 3 simply didn't have the means to weather the storm.
    I think it's the economy, the US companies were in good shape last year when the contract was signed or the company wouldn't have agreed to it. Plants are closing, my plant closed the day before Thanksgiving. It's not always a simple thing to close a plant like the parts plant I worked at, it took years to find buyers to build the products, work out contracts, buy the equipment, etc all the while the parts are still needed, build aheads to cover the down time until another company can take over.

    There were over a million retirees in Sept. 07 to a work force of 181,000. I've read over and over that if the UAW worked for nothing the D3 would still need a loan. If the problem were as simple as making concessions the D3 wouldn't have to be in Washington asking for a loan, it would be something that could be worked out between the company and labor.

    From the UAW website:
    The contract concessions in 2005 and 2007 have actually decreased labor costs at the domestic automakers.

    In 2005 UAW members agreed to forego a 3 percent wage increase to contribute to the cost of health care, and health care benefits were modified for retirees. In 2007 wages for new hires were reduced by half, and new hires were excluded from the traditional retiree health care and defined benefit pension plans.

    Also, in 2007 the UAW and the auto companies reached a landmark agreement that transferred retiree health care liabilities from the companies to an independent VEBA fund. The changes in the 2005 and 2007 contracts reduced the companies' liabilities for retiree health care by 50 percent.

    Q: Are the legacy costs at Chrysler, Ford and GM so high because of rich pension and retiree health care benefits?
    A: No. The main reason that Chrysler, Ford and GM have higher legacy costs than the foreign nameplate operations in the United States is not because their retiree benefits are much higher. It's because they have so many more retirees. Because the domestic auto companies have been operating in this country for many years, they have large numbers of retirees. But the foreign nameplate operations only started operating in this country 25 years ago, and therefore have very few retirees.

    In addition, the overwhelming majority of retirees from Toyota, Nissan, Honda, BMW and Mercedes live in countries where national health systems spread the costs of providing health care across the entire societies. The real solution to the high health care costs which burden all American employers -– not just automakers -- is the enactment of national health care reform.

    In the negotiations with the domestic automakers in 2007, however, our members realized that we could not wait for the government to act. We took action ourselves, addressing retiree health care costs by establishing an independent trust -– called a Voluntary Employee Beneficiary Association (VEBA) -- that will take over the companies' obligations for providing retiree health care benefits.

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    A*O
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    It's all badge engineering these days anyway. Just because it says "Ford" or "Chrysler" on the bonnet (hood) doesn't mean the car - or bits of it - wasn't made in Korea or Brazil or Germany by Daewoo, VW or even BMW.
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    Elite Member McJag's Avatar
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    Quote Originally Posted by nana55 View Post
    My dad was a union man, and I belonged to a union when I taught. However, the UAW and also the grocer's union is putting it employees out of work. These jobs though not terribly highly paid have benfits that companies cannot afford anymore. That is what is hurting all these companies.
    Agreed. Yet the Union bosses make tons of money-and don't share.
    I didn't start out to collect diamonds, but somehow they just kept piling up.-Mae West

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    Elite Member B.C.'s Avatar
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    It would be nice if the US had the national health care that I've heard all industrial nations of the world have. They mentioned it last week in the Senate, wonder if it will ever happen.

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    Elite Member Fluffy's Avatar
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    Quote Originally Posted by McJag View Post
    Agreed. Yet the Union bosses make tons of money-and don't share.
    Really? Do you have some figures you can quote on that? What I could find on UAW President Ron Gettelfinger was that he made $158,530 in 2006. That's hardly "tons" of money, particularly since he qualifies for Obama's tax cut.

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    Elite Member B.C.'s Avatar
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    Quote Originally Posted by Fluffy View Post
    Really? Do you have some figures you can quote on that? What I could find on UAW President Ron Gettelfinger was that he made $158,530 in 2006. That's hardly "tons" of money, particularly since he qualifies for Obama's tax cut.
    I'm surprised Ron G. wage isn't higher, but I'm glad it isn't. I have friends that are organizers for the union, negotiators, presidents of locals, national and international region officials and they are making the same hourly wage as the workers on the line. My cousin works for UAW International and she is far from rich, she is over 65 years old and still working. Some of them do qualify for overtime as they put in many hours but many of the overtime hours they put in are on their own time. I know the passion they have for the welfare of workers and for workers rights. One company in my area wouldn't allow the line workers to have water on the line or wear a union pin next to the company logo on the mandatory company "pajamas". This is in the north where we are suppose to be union friendly. WTF, no water in a hot ass plant in the middle of summer! Sometimes the company wants to treat the workers like children, like they need to babysit grown adults that know their jobs and do their jobs.
    Last edited by B.C.; December 14th, 2008 at 01:24 PM.

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    A lot of the cost and/or benefits come from health care, which costs cars companies more than steel. One very good reason foreign car companies can sell cheaper is that they don't have HMO costs. Another reason we need some sort of universal health care plan for our country.
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    Quote Originally Posted by buttmunch View Post
    A lot of the cost and/or benefits come from health care, which costs cars companies more than steel. One very good reason foreign car companies can sell cheaper is that they don't have HMO costs. Another reason we need some sort of universal health care plan for our country.
    I was wondering how much the price of steel has gone up lately. I can't see the cost of steel being the 10% (give or take a %) that the wages and benefits are on a new vehicle. I guess if the benefits of over 1 million retirees are added in the cost it is possible. But yes, we do need a nationalized health care plan.

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    Elite Member nana55's Avatar
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    Quote Originally Posted by B.C. View Post
    I'm surprised Ron G. wage isn't higher, but I'm glad it isn't. I have friends that are organizers for the union, negotiators, presidents of locals, national and international region officials and they are making the same hourly wage as the workers on the line. My cousin works for UAW International and she is far from rich, she is over 65 years old and still working. Some of them do qualify for overtime as they put in many hours but many of the overtime hours they put in are on their own time. I know the passion they have for the welfare of workers and for workers rights. One company in my area wouldn't allow the line workers to have water on the line or wear a union pin next to the company logo on the mandatory company "pajamas". This is in the north where we are suppose to be union friendly. WTF, no water in a hot ass plant in the middle of summer! Sometimes the company wants to treat the workers like children, like they need to babysit grown adults that know their jobs and do their jobs.
    All I have got out of your posts is that your main concern is your union, (wearing a union pin on your uniform WTF). What about your job? I worked at a school where the worst teachers were the ones who were so concerned with their rights as a teacher that I almost never heard what they were teaching. It was all union union union. The teachers who were great teachers were too busy being great teachers to be too concerned. Yes, they need to be thankful to the past work unions have done for them, but come on. when it is your main concern about your job, you are telling me that it is more important then the quality of the job your doing. 27 years of experience has proved this true at least 80% of the time.
    If I can't be a good example, then let me be a horrible warning.

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