Further givebacks likely in any GM bailout
But workers say enough
BY JOHN GALLAGHER • FREE PRESS BUSINESS WRITER • November 16, 2008
http://www.freep.com/article/20081116/BUSINESS01/811160362(snip)
UAW membership dwindles
That’s bitter medicine for the UAW. The union has lost two-thirds of its members since the 1970s as unionized jobs with Detroit’s three automakers dwindled. The workers’ 2007 national contract contained substantial concessions, including a two-tier wage system under which new workers earn substantially less than veterans.
Just where any new concessions may come from is difficult to say. Gary Chaison, a professor of industrial relations at Clark University in Worcester, Mass., said the most likely target for givebacks is the so-called jobs bank, a provision in UAW contracts under which workers who are laid off continue to draw substantial amounts of their pay while not working.
Those provisions, while cherished by UAW members, are viewed with suspicion by the public, Chaison said.
"I think there’s going to have to be some relaxation of job guarantees," he said last week. "It’s difficult to justify paying workers for not working at a time when a lot of workers are losing their jobs and not getting paid."
Cutting back on job security provisions could be painful. GM currently has about 8,000 workers receiving some kind of pay while not working, although most of those are not yet in the formal jobs bank. Laid-off hourly workers receive a combination of what’s known as SUB pay and unemployment for 48 weeks before they move into the jobs bank.
Meanwhile, a Wall Street analyst suggested last week that concessions may target a reduction in the UAW’s health care benefits for retirees.
JP Morgan analyst Himanshu Patel, who lowered his rating on GM’s shares, said GM could need $30 billion cash through 2010, including $7 billion for its 2010 payment to the new health care trust fund for UAW retirees set up during 2007 contract talks. He suggested the UAW could reduce the money the automakers had agreed to pay for retiree health care, make current workers pay more for their health care and take wage cuts.
Democrats in debt to labor
Two things might mitigate any further UAW sacrifices. For one, Democratic majorities in Congress owe a political debt to organized labor for its support and may be reluctant to push for UAW givebacks in a bailout package.
Then, too, the UAW can correctly claim that its 2007 contract contained enough concessions — such as lower wages and benefits for new workers and its agreement to assume oversight of retiree health benefits — to close the cost gap with foreign automakers, Cole and others said.
Like many other GM workers, Richard Incrocci, 41, of Grand Blanc, an assembly line worker at a truck plant in Flint, says workers should not have to give more unless GM executives take big cuts in their own salaries and bonuses.
"If any concessions are to actually come, chop heads at the top first," Incrocci said. "Slash compensation, slash benefits. Quit asking the people who are struggling to feed their families to give more."
O’Neill agreed.
"I’m not willing to give up more unless the execs are willing to give up a lot," she said.
Yet, despite resistance from the rank and file, the UAW leadership, if pressed, would be likely to agree on new concessions as part of a GM bailout, Cole and others said.
With a potential bankruptcy filing looming for a cash-starved GM, the thought of losing even more jobs during a bankruptcy reorganization and seeing their national contract up for grabs before a bankruptcy judge would be even worse than making extra concessions now.
"My opinion is labor will do anything to keep a Chapter 11 from occurring," Cole said.
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