While rank-and-file autoworkers are relieved that an auto bailout finally has been reached, union leaders called terms of the White House deal unfair to union members and retirees, and already are gearing up to lobby the Obama administration and Congress for changes.
The terms of the deal set up another round of intense get-and-take between the automakers, Washington and the United Auto Workers. The union for weeks has found itself on the defensive.
Shortly after President George W. Bush announced the terms of the emergency bridge loan, UAW President Ron Gettelfinger charged the arrangement was unfair.
While we appreciate that President Bush has taken the emergency action needed to help America's auto companies weather the current financial crisis, we are disappointed that he has added unfair conditions singling out workers," Gettelfinger said in a statement released Friday. "These conditions were not included in the bipartisan legislation endorsed by the White House, which passed the House of Representatives and which won support from a majority of senators."
Under the bailout deal, the union is being asked to change by the end of next year its agreements to make wages and work rules comparable with those at nonunion plants in the United States owned by foreign automakers. Further, the UAW will be asked to accept stock rather than cash for the billions of dollars of retiree health care liabilities being shifted to a union-run trust fund by the companies.
President-elect Barack Obama -- who was actively supported by the UAW and other labor organizations during the campaign -- signaled that his economic team will talk with management and workers to find out how the auto industry and its jobs can be preserved, not just in the short term, but in the years to come.
Obama also said a final restructuring package shouldn't just include worker concessions and that union members shouldn't be the ones "taking all the hits."
Everyone involved with the auto industry, Obama said at a Washington press conference, has to be "part of the process."
The Obama economic team will talk with management and workers to find out how the industry and its jobs can be preserved.
The UAW is reviewing the agreement, Gettelfinger said. "All stakeholders -- management, directors, bondholders, suppliers, dealers, workers -- will have to participate in shared sacrifices to help the industry move forward," his statement said, noting that UAW members already have made substantial sacrifices to make the domestic auto companies competitive.
UAW workers earn slightly more than $28.12 an hour in wages, on average. In 2007 labor agreements with Detroit's Big Three, the UAW agreed to slash starting wages and benefits for newly hired autoworkers to as little as $14 an hour.
One UAW worker said workers' main fear is keeping their jobs.
"Everybody is just scared and really don't know what to believe," said Jeremy Pepenkowski, a 43-year-old worker at Warren Dodge Truck Assembly.
"I'm grateful we have more time," he said, "but who knows what's really going to happen in a few months from now?"
The major sticking points are over the wages of UAW members and retiree benefits.
The wage cuts were central components of a failed proposal by Republican Sen. Bob Corker of Tennessee, who demanded cuts take effect in 2009. The UAW pressed for a 2011 deadline.
The hourly pay and compensation for UAW workers totals about $55 an hour. The figure climbs to more than $70 an hour when automakers' costs for health care for retired workers and retirement benefits are included. The hourly pay and compensation at foreign automakers is about $45 an hour, labor analysts say.
Several Democrats shared the UAW's concerns Friday, including House Speaker Nancy Pelosi.
Sen. Debbie Stabenow, D-Lansing, urged Obama to rewrite some provisions next month. "These provisions raise serious concerns regarding unfair, punitive conditions being placed on the backs of workers."
The White House deal also calls for accepting half of the companies' payments into a massive retiree trust fund, known as VEBA, in stock rather than cash.
"The way it stands now, the health care of retirees is in jeopardy," said Gary Chaison, a labor professor at Clark University in Worcester, Mass. "They may not only postpone the payments, but end up rearranging the terms of the VEBA as well."
The trust fund payments probably are the "most substantive" issue being negotiated among the UAW and automakers, said David Cole, chairman of the Center for Automotive Research in Ann Arbor. "Really the key to survival is high fixed costs and not the labor costs. Delaying the VEBA payments has real value," Cole said.
Allowing half of the VEBA to be paid in stock would be a repeat of the "Enron debacle," warned Harley Shaiken, labor professor at University of California at Berkeley. "You don't put all of your 401(k) in one company. That's what they want here. It's very risky."
UAW officials are likely lobbying Washington to change the terms, Shaiken added.
"Behind the scenes, I believe the UAW is pleased about the bailout and angered about the language," he said. "But let's not overlook the very good news. There is another day."
Detroit News Link