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After spending over $300 billion dollars to bail out banks with absolutely nothing to show for it, the US government, specifically the Senate, has decided that we do not have $15 billion to loan to the American auto companies to keep them from failing. Talks failed last night when the United Auto Workers union would not agree to an immediate reduction in union wages. Republican Senators wanted union workers to accept wages commensurate with those paid to non-union workers in other US auto plants, which would amount to a reduction of approximately $10 per hour (inclusive of benefits). UAW and Democrats countered that the auto companies should honor the current contracts, but they would accept the proposed wage reduction when those contracts ended in 2011.
This proved to be a deal breaker.
For some perspective, consider: despite the hand-wringing about the cost of high wages and benefits to current and retired workers, labor costs account for approximately 10% of the cost of a union built car. In other words: UAW members could volunteer to work on the assembly lines for free, and the car companies would still need the bailout.
What we have here, then, is some good old-fashioned union busting. And, I have to admit, Republicans have the UAW by the balls: either tear up your current contract right now, and along with it any ability you have to ever enforce a contract with your employers again, or your employers will likely end up out of business.
$300 billion to the companies that made the bad investments and caused the problem to begin with. These companies did not have to give any meaningful concessions. But the auto companies, who employ people who actually make a product and helped build the middle class in America, get nothing unless the union completely forfeits all its contractual rights.
Does this make anyone else kind of mad?
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