With government deadline for concession deal approaching
Posted on World Socialsit Web Site, for fair use only
By Jerry White
6 February 2009
General Motors and Chrysler have offered buyouts and early retirement packages to their entire combined workforce of 89,000 hourly workers in a move aimed at ridding the industry of higher-paid veteran workers and replacing them with new hires making half the wages.
The buyouts, which are being carried out with the full participation of the United Auto Workers union, is in line with the automakers agreement to drastically reduce labor costs in exchange for $17.4 billion in emergency loans from the Treasury Department.
As the February 17 deadline approaches for the automakers to conclude cost-cutting deals with the union-as part of the “viability” plans they must submit to the Obama administration-the UAW is keeping its members in the dark. The union bureaucracy has issued no public statements on its talks with the auto makers, which began in mid-January.
The terms of the federal loan require workers to accept wage and benefit concessions that would reduce them to the level of nonunion workers at US plants operated by Toyota and Honda by the end of 2009. In addition, the UAW must accept billions owed to a union-controlled retiree health care fund in the form of virtually worthless stocks, rather than cash. This would mean drastic cuts in health care benefits for hundreds of thousands of former workers and their dependents.
A clause in the bailout deal-co-drafted by the Bush’s Treasury Department, the congressional Democratic leadership and the incoming Obama administration-also bans auto workers from striking under the threat that the government will revoke the loans and throw the companies into bankruptcy.
While accepting the wage cuts in principle the UAW has been lobbying the Obama administration for an extension of the deadline so it can have more time to pressure older workers to leave. As part of its efforts to pressure reluctant workers to accept a buyout, the UAW has agreed to the elimination of the jobs bank program-which subsidized the lost wages of laid-off workers-just as layoffs are mounting.
GM, which has announced plans to slash 31,500 hourly and salaried jobs by 2012, ended the jobs bank program on Monday and Chrysler did so last week. The 1,600 UAW workers in GM’s jobs bank will be placed on layoff and must apply for unemployment benefits. As part of the loan deal the Treasury Department called for the “elimination of the payment of any compensation or benefits to U.S. employees of the company or any subsidiary who have been fired, laid-off, furloughed, or idled, other than customary severance pay.” Continue reading