Smart Ways to a Bailout -- Step 1: Stop Demonizing the UAW

If you've been following mainstream news stories or conservative Republicans, you've probably heard claims about those inefficient UAW members supposedly making $70 an hour, including benefits, making unions the prime culprit in the failures of the Big 3 automakers.

But it's all a big lie, swallowed whole by union-bashing pundits even in The New York Times. One example of the lie: the $70 figure comes in part from measuring all health benefits and pensions paid to 450,000 UAW retirees and their families. In truth, as Mark Brenner, the co-director of Labor Notes, points out in an insightful op-ed and in an interview with me:

The only place where pundits, politicians and Big Three executives seem to agree is that autoworkers will have to make do with less or kiss their jobs goodbye. But imposing more pain on rank-and-file autoworkers can't solve Detroit's problems. Automakers have already wrung billions in concessions out of the United Autoworkers over the last three years, and even if union workers agreed to work for free it would only shave 5 percent off the cost of their cars.

Let's repeat that point: if the autoworkers worked for no salary at all, it would cut just 5 percent off the cost of their cars.

Last week, Jonathan Cohn of the New Republic and Brenner offered a clear-eyed assessment of what's gone wrong in the auto industry and what needs to be done on the radio show I co-host, the "D'Antoni and Levine Show," in part by challenging the myths and lies aimed at the UAW.

The smears and distortions continued this past Sunday. On Meet the Press, Chuck Todd falsely claimed (at the 4:40 minute mark) that the UAW should have been on Capitol Hill this past week, too. In fact, UAW's president Ron Gettlefinger testified at both panels with the auto executives. That's a small example of the distortions and outright lies that have spread about the union this past week, paving the way for undermining worker's rights by blocking the proposed Employee Free Choice Act that promotes a fair playing field for union organizing. (One key myth: workers are denied a secret ballot. In fact, workers are free to choose having a secret-ballot election, rather than a majority vote card-check, if they want. But the current system is rigged against workers.)

Of course, most of the Big Three leadership, especially at GM, deserves to be fired. Paul Ingrasia of The Wall Street Journal, a Pulitzer Prize-winner for covering the auto industry, is skeptical about a bailout, but he points out:

Let's assume that the powers in Washington -- the Bush team now, the Obama team soon -- deem GM too big to let fail. If so, it's also too big to be entrusted to the same people who have led it to its current, perilous state, and who are too tied to the past to create a different future.

 

In return for any direct government aid, the board and the management should go. Shareholders should lose their paltry remaining equity. And a government-appointed receiver -- someone hard-nosed and nonpolitical -- should have broad power to revamp GM with a viable business plan and return it to a private operation as soon as possible.

If we let the industry fail, as many as three million workers with direct and indirect ties to the auto industry could lose their jobs.

But before the auto industry gets a bail-out, we have to clearly look at the realities underlying the current crisis, and, today, after billions of dollars in concessions, it's simply wrong to blame the UAW for the auto industry's ills. In the smartest new article on the auto industry, the savvy Jonathan Cohn points out:

But what's missing in the tsk-tsk editorials is any recognition that the culture of Detroit has been changing, however belatedly, starting with its labor relations. Ford led the way years ago by reaching site-specific "competitive operating agreements" with locals at different plants, rather than sticking to one national agreement, thereby enabling it loosen work rules and engage in the sort of collaborative quality management on which industry leader Toyota made its reputation. Then, last year, the UAW reached a breakthrough agreement in which it granted the companies similar flexibility, agreed to a two-tier wage structure for new hires, and set up a separate trust fund to finance future retiree health benefits. The companies would provide the initial money for this trust, but, henceforth, the unions would manage it--thereby taking off the companies' books a tremendous burden that had, on its own, accounted for about half the gap in compensation between unionized workers for the Big Three and non-unionized workers for foreign-owned automakers. "I think they've shown unprecedented ability to change and transform the union," says Kristin Dziczek, who directs CAR's Automotive Labor and Education program. "They understand what is at stake."

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