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09.25 State Elections Boards Seeks Volunteers to Help Process Unprecedented Number of Voter Applications
09.18 Reviewing Danny Schechter's "Plunder: Investigating Our Economic Calamity and the Subprime Scandal"
Ref. : Letters to the editor
09.30 To Joe Biden: Time for Confession
09.28 Open Letter to Senator Barack Obama
09.26 Bailout Package Must be Transparent to the American People
09.18 Possible $2 Million Donation to Support Md. Slots Sends Wrong Message
10.10 Ayers = Keating?
10.02 Project Censored's Media Democracy Advocacy
09.23 Satire: Louella Reads the Baltimore Sun
09.22 CBS Cheats on Tax Coverage
09.10 Post's Post-Convention 'Balancing' Act
09.10 McCain/Palin Campaign Relies on Lazy Thinking and Prejudice to Win
09.10 The Rising Cost of the Iraq 'Surge'
10.09 McCain-Palin Put 'Country Last'
10.07 GOP Judges Aid White House Cover-up
10.07 Voting the Fate of the Nation
10.07 Alaska GOP's Last-Ditch Palin Defense
10.07 Election '08: Here Comes the Sludge
10.02 John McCain v. The Truth
10.02 Drinking at the Public Fountain
10.01 Who won the Mississippi debate? Obama—but for different reasons than you think
09.30 The Shadow of the Pitchfork: Elite Panic Attack as Bailout Goes Bust
09.29 The Resurrectionists: Beltway's Big Money Cultists Bail Out the Dead
09.29 We Have the Money
09.27 Debate Evades Dark Realities
09.26 Alaskan Officials Allege Palin Cover-up
09.24 Don’t Worry, Be Happy
09.24 Text of Draft Proposal for Bailout Plan
09.24 Hey, Government! How About Calling on Us?
09.23 Coming Attractions: War Without End, Amen
09.22 The Evolution of John McCain
09.21 Palin's 'Troopergate' Battle Rages
09.19 Burning the First Amendment
09.15 Subverting Democracy Through Electoral Fraud
09.15 Military Industrial Complex 2.0
09.13 Acceptable Sacrifice: For the Right to Endorse
09.13 Why More Soldiers from Alaska?
09.12 Experience is Over-Rated
09.10 Obama Must Call for Palin's Removal from the Ticket
09.10 9/11 Plus Seven
09.10 Palin's Strange Probe of a Trooper
09.10 Dear Democrats: Integrity Won’t Win this Election
10.09 The Surge That Failed
10.08 The Orwellosphere: Anglo-American Drive to 'Total Security State' Rolls On
10.08 Justice for Yemini Sheik
10.06 The Wounded Shark: 'Good War' Lost, But the Imperial Project Goes On
10.02 U.S. Army Troops To Serve As U.S. Policemen?
09.25 Life on the Ledge
09.16 "Awakening" Into Nightmare: Seeding More Sectarian War in Iraq
10.06 Thinking About Treason
10.06 The Fleecing of America
10.03 Can a bailout succeed?
10.02 Empire of Greed
10.02 No Surprise in the Senate Bailout Vote
10.02 How Wall Street Can Bail Itself Out Without Destroying The Dollar
10.02 The Specter of Wall Street
10.01 We Need to Demand Hearings!
09.30 Surprise! Congress Listened to the Voting Public!
09.29 Thinking About Gyrations
09.29 Grand Theft America
09.26 Seizing America by Withholding the Mother’s Milk of Politics
09.26 Framing the $700 Billion Question
09.26 Bail Out NO, Buy Out YES
09.26 Just Say "No" to Any Immediate Bailout
09.26 Has Deregulation Sired Fascism?
09.25 Don't Fuel the Fire: Fire the Arsonists
09.25 America Pays the Piper, Big Time
09.24 Just Thinking Aloud Here
09.23 What Nobody's Saying: The Bailout Will Kill the Dollar
09.22 Thinking About Escalations
09.18 US Economy: Rudderless and Reeling From Direct Hits
09.18 US Economy: Rudderless and Reeling From Direct Hits
09.17 Creative Destruction: The Solid Core Behind the Financial Crisis
09.16 You Can't Feel Blue About the Economy If You Want To. There Are No Blue Chips Anymore
09.15 Thinking About Spotlights
09.15 U.S. Economy—Temporary Respite, Permanent Decline
10.10 Another Israeli West Bank Land Grab Scheme
09.26 Annals of Liberation: Sex is Death in a Darkened Land
09.25 New Coup D'Etat Rumblings in Venezuela
09.22 Remembering Edward Said Five Years On
09.20 Filter Tips: Distortion and Demonization on the Iran Beat
09.11 Wall Street and Washington
OPINION:
UAW Sellout at GM and Chrysler
He blames it on union corruption at the top in different forms - leaders on the take, siding with business, getting big salaries and fancy perks and more concerned with their own welfare than the interests of their members. Nothing on the horizon points to change with corrupted UAW leaders Exhibit A.
Back in June, the UAW reached an agreement with Delphi Corporation that signaled what would follow with the auto companies. Following months of negotiating, it allowed the company to impose pay cuts up to 50%, lay off thousands, and slash health and retirement benefits. It was a win for company and a crushing defeat for Delphi workers.
Then in July, UAW and the United Steelworkers reached an agreement with auto supplier Dana Corporation that allows the unions to take over managing worker long-term disability and retiree healthcare coverage. The deal is projected to save Dana over $100 million a year, eliminate $30 - $40 billion in long-term company liabilities, and it gives UAW leadership another chance for what it wanted for years - a VEBA (voluntary employee beneficiary association) agreement putting the union in the healthcare business for the big profit potential it represents. More on that below.
In the past, VEBAs proved costly to UAW workers. The union set one up with Detroit Diesel in 1993 that cost company retirees dearly when funds in it ran out in 2004. It happened again to Caterpillar retirees in 2005 who'll see their out-of-pocket costs triple by 2010, and the sky's the limit after that. As for Dana Corporation, it got more in the deal as well - the right to hire new workers at half the wages of current ones so older employees can be phased out and replaced with low-cost new ones.
The same UAW - company pattern is now in play at GM, Chrysler and Ford. GM workers struck September 24 and returned to work two days later after union negotiators agreed to huge concessions the company demanded and got without breaking a sweat. Workers accepted the proposal by a nearly two to one margin, but in doing it signed away their futures with a deal they'll live to regret. They traded shaky job security today for big contractual givebacks later. The pact affects 73,000 hourly workers at GM's 82 US facilities, and key to it is a VEBA agreement for the UAW henceforth to manage GM's 400,000 retirees' health benefits while letting the company off the hook for what it's been providing since 1964. The GM VEBA amounts to a multi-billion dollar trust fund that will transform the union into a major health care provider, and allow it to reap huge profits by cutting its own members' benefits.
For its part, GM is only obligated to contribute $35 billion of the $55 billion it owes retirees. But the deal is even sweeter than that. Health care costs are soaring, and the company's have risen by nearly half since 2003. It's clear what's ahead. The VEBA employee experience at Detroit Diesel and Caterpillar is coming to GM. When funds in it run out, the UAW will cut benefits and hike premiums and co-pays so union profits aren't affected. The agreement also lets GM divert pension fund money to the VEBA trust and allows for worker cost of living increases to go instead toward retiree health benefit expenses making the deal even worse.
Other terms agreed to in the contract include a two-tiered wage and benefit package. Under it, new skilled assembly-line workers will get $26 to $32 in hourly wages but less in benefits than current ones for a total compensation package of around $45 an hour compared to about $73 an hour for existing skilled workers. In addition, a new non-core worker group, comprising up to one-third of GM's workforce, will get around $27 an hour in wages and benefits. Both core and non-core employees will henceforth receive less in active-worker-health-care benefits with GM saving billions from the arrangement.
The company told Wall Street investors October 15 its 2007 labor costs will drop from $12.6 billion last year to $10.1 billion in 2007 (45% below 2003 wages and benefits paid) with "significant" further declines from 2008 to 2011. Further, GM estimates it will reduce its long-term healthcare obligation to workers by $47 billion and expects over the next four years to retire up to 75% of its current high-paid work force (earning $78.21 in wages and benefits) and replace many of them with low-paid non-core, non-assembly line new hires (costing $25.65 in combined wages and benefits).
Employee buyouts, early retirement offers and other downsizing efforts are coming that will let the company eliminate expensive workers and replace them with cheaper new ones. The contract runs four years and includes three lump-sum bonuses but no wage increases so annual cost of living adjustments won in 1948 are ended that over time will cost workers much more.
It's a dark new age for GM workers as well as for those at Chrysler and Ford. The days of Walter Reuther-type leadership are long gone. He led the UAW from 1946 until his death in 1970, grew the union to more than 1.5 million members, and over that time delivered for the rank and file like few other labor leaders ever did. He was a union reformer, shrewd bargainer, master strategist, champion of industrial democracy and worker rights and once said "If fighting for a more equal and equitable distribution of the wealth of this country is socialistic, I stand guilty of being a socialist." In fact, he was pro-capitalist, opposed forming a labor party and allied the UAW to the Democrat party and its imperialist agenda.
Nonetheless, he won sizable wage increases and a historic tying of them to living costs and productivity gains. He also got his membership paid vacations, employer-funded pensions, medical insurance with defined benefits, improved safety and health measures, and supplemental unemployment benefits that guaranteed members up to 95% of their pay if they were laid off. That's now lost today with UAW and other union bosses conspiring with business for their own self-interest at the expense of their members.
The UAW Chrysler betrayal was as cynical and self-serving as the GM deal. It was packaged around a staged six hour partial walkout of 37,000 of the company's 49,000 work force that was more theater than strike action and another defeat for UAW members unless they reject the agreement as some locals are doing in voting so far. Some local union leaders oppose it as well as the terms agreed to are even more draconian than at GM:
- a new VEBA trust (only for current employees) with Chrysler contributing only $8.8 billion of its $18 billion long-term health care obligation to its 78,000 retirees; new hires will get no retirement health care benefits and will have to enroll in a new health care program that will increase deductibles, co-pays and other out-of-pocket expenses; current retirees for the first time will have to pay out-of-pocket expenses; savings to the company will exceed $300 million a year;
- a two-tiered wage and benefit arrangement with new skilled hires getting as little as $14 an hour or half or less the current pay rate and well below the $19.62 average non-union wage in the manufacturing sector; the agreement lets the company expand the number of low-paid non-core workers as well as be able to designate "Non-Core Facilities" in which the entire workforce will get lower pay and benefits once current employees are phased out;
- new health care concessions similar to what GM and Ford got in 2005 that require retirees to pay part of their rising health care premiums; current worker pension funds will be shifted to the VEBA;
- the elimination of employer-paid pensions for new workers, replacing them with 401(k) plans in which the company will contribute one dollar to be invested in the stock market for every hour worked;
- freedom for Chrysler's private equity firm owner, Cerberus Capital, to downsize and close as many of its plants as it wishes with early retirement offers and employee buyouts ahead so expensive current workers can be eliminated;
- workers' wages will be frozen, and the Cost of Living Adjustment (COLA) benefit won in the two month 1970 GM strike is now lost;
- more flexibility for the company to outsource jobs to non-UAW workers at lower pay and benefits; these will include so-called "housekeeping functions" like janitorial and trash handling, grounds keeping, machine and booth cleaning and others;
- freedom for the company to expand the number of low-paid, low-benefit part-time workers as well as long-term temporary ones who can't gain seniority;
- the company freed of any commitment to build vehicles at US assembly plants or guarantee the number of jobs at them plus other thus far unreported worker concessions.
Looking ahead, there are no easy answers, just tough choices, and job one for working people is to join in solidarity for their own self-interest and survival. Past successes can be regained, but wishing won't make it so. A new political movement is needed based on social equity and justice with a new breed of leaders to head it. The odds for success are long, but the alternative is intolerable. That should be incentive enough to go for it.
Mr. Lendman's stories are republished in the Baltimore Chronicle with permission of the author.
pRepublication or redistribution of Baltimore Chronicle content is expressly prohibited without their prior written consent.
This story was published on October 22, 2007.
