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TechnoratiBlame Is Put on Management, but More Pain Looms for Hourly Workers, Retirees
DETROIT - President Barack Obama's recovery plan for General Motors Corp. and Chrysler LLC appears to take aim at union retirees, a usually reliable Democratic constituency.
![[Exterior view of General Motors' world headquarters in Detroit, Monday, March 30, 2009. President Barack Obama refused further long-term federal bailouts for GM and Chrysler, saying more concessions were needed from unions, creditors and others before they could be approved. He raised the possibility Monday of controlled bankruptcy for one or both of the beleaguered auto giants. (AP Photo/Carlos Osorio)]](http://www.commondreams.org/files/article_images/gm_headquarters.jpg "gm_headquarters.jpg")
After studying the plight of the companies, the president's auto task force concluded GM and Chrysler's survival is dependent on greater concessions from the United Auto Workers union because the cost of funding retiree benefits had become unmanageable, especially given the downturn in global auto sales.
In his address Monday, Mr. Obama laid blame for GM and Chrysler's financial ills largely at the feet of the management teams at those companies. He called on hourly workers and retirees at the companies to be ready to accept more sacrifice if they hoped to keep their employers afloat.
The UAW appears to be standing firm that its members have made substantial concessions compared with other stakeholders. UAW President Ron Gettelfinger on Monday declined requests for interviews, but a person close to him said the union boss is determined not to consider further concessions unless bondholders and creditors agree to givebacks that cut GM's and Chrysler's debt.
Some Democratic lawmakers have offered support for the union. On Monday, Sen. Carl Levin (D., Mich.) acknowledged the union would have to agree to more cuts to retirees' benefits, but added that investors in GM, not employees, would have to sacrifice the most. The three Detroit auto makers provide health care for more than one million Americans, including union retirees and their dependents. In 2007, the union agreed to allow GM, Chrysler and Ford Motor Co. to pay billions of dollars into a trust fund, known as a VEBA, or voluntary employee beneficiary association, that the union would manage and use to cover the cost of retiree health care.
Under the terms of the bailout loans GM and Chrysler have accepted from the federal government, they are supposed to renegotiate the VEBA agreements so they can put a combination of cash and stock into the funds or equity. GM is obligated to contribute about $20 billion in cash, in addition to $16 billion in funds it already committed, and Chrysler about $10 billion.
The task force found that GM's own plan to deal with retiree health care and pensions grows "to unsustainable levels, reaching approximately $6 billion per year in 2013 and 2014." To pay those bills, GM would need to sell 900,000 additional cars a year, according to the panel. GM sold 8.35 million vehicles around the world last year.
A union local president in Michigan said more could be done to reach a compromise on retiree health care. But the union leader who represents GM workers warned if the auto makers step back from their obligations to retired workers, the remaining cost of their health care will not go away.
Clem Wittman, 68 years old, spent three decades working the assembly line for GM, building Monte Carlos and Skylarks in Kansas City, Mo. On Monday, he watched as Mr. Obama outlined his plans for steering the future of GM and Chrysler without explicit mention of the retirees. "It was scary because he never mentioned the retirees and legacy costs," Mr. Wittman said. "What 85-year-old can go out and get another job?"
He takes 11 medications, including some which cost more than $100 a month, all covered by GM health-care programs. Mr. Wittman said that for 30 years he paid for those benefits and shouldn't be asked to give them back.
-Sharon Terlep and Corey Boles contributed to this article.
14 Comments so far
Show AllI do not know whom to plame any more !!!
Gassho.Some nice stuff on these comments. As the rage at being ripped off by the greed of big business boards and their management while facing an environment degraded by the same mob makes me think about crimes against humanity. Taken collectively the pain and suffering of ordinary people around the world compares with the pain of other atrocities for which individuals have been brought to trial. Is there not an argument for rounding up some of the board members and their senior managers who caused the current situation and trying them for crimes against humanity? Naive?
Breenus.
jclientelle. 7:37 p.m. post, you flex your mind well, xlnt thoughts if I may. Best post I'll read today, grazi.
We are witnessing Naomi's Shock Doctrine, in acutality today in America, its a continuation of the Bush policies, but under new management! The working class of this country has been asked time and time again to fasten our belts for the good of the country, while the rich and powerful are not asked to do a single thing for the good of the country.
The day is coming when the working class of this country will be sick and tired of the the crap rolling down hill on us and will stand up and fight back and the very rich will be running to get away from an angry wave of protestors. I hope and pray the day comes soon!!!!
ray.....I believe we are looking at the results of this country having been attacked/exploited by the very "Disaster Capitalism" scheme that Naomi Klein wrote of in her timely book..."The Shock Doctrine." Most Americans don't know what really hit us on 9/11.....but you are correct...I agree with you...we are in a great "dismantling." What comes next?
Cee Miracles....I'm right with you. Can't help but be cynical after reading all the bad news on-line. My family thinks all the news I read is slanted to the extreme left/negative. They think I should read "balancing" news from the other side. To me, the other side is lying! But, whose to say for sure.....only time will bear out what the truth is. But then, my argument goes....everything could be different! What we DO now will CREATE the future.
You might offer to your family this "balancing" news from the right. You can't get much farther to the right than Pat Buchanan.
http://buchanan.org/blog/pjb-the-weimar-solution-1480
http://buchanan.org/blog/pjb-systemic-failure-1478
http://buchanan.org/blog/pjb-return-of-the-war-party-1463
Just for starters. I'm not saying I agree with Buchanan all of the time. I'm not a Buchanan supporter. I'm liberal on some issues and conservative on others. But even far-right Pat Buchanan sometimes gets it right.
-- ekaton
Right On Judah ! Yes, Obama is continuing the forty year effort to dismantle the US working class.
I might find an ounce of credibility in Obama booting out the GM CEO if Obama had previously booted out Federal Reserve Chairman Ben Bernanke, Neil Cashn'Carry, and many of the other financial industry crooks that caused the financial meltdown and are causing it to worsen. The fact that Obama staffed his administration with a bunch of financial industry insiders adds insult to injury.
Yet another fluff piece on the auto-bailout that doesn't mention the most important issues:
1.) The 'auto-makers' aren't in the car-making business, they are in the finance business based on interest from car loans. Debt is not wealth. If they were in the car making business, cars would get 100 miles per gallon and last 20 years. The technology and patents are there for it, and have been since 1980.
2.) The government sponsored internationalists want the USA to be a third world country, and wish to do so by looting. Wages should reflect this. 6 billion for several million citizens is too much, but 1 trillion for fifty guys at a bank running a ponzi derivative scheme just isn't enough.
3.) Healthcare shouldn't be a private responsibility. We need a single payer system that is at least as good as Canada.
You are correct. I saw the replacement GM exec on TV today announcing the new direction for the company. The whole thing was an oleaginous sales pitch, pushing new and unprecedented EZ finance terms to stimulate sales. There was nothing at all about improving the quality, fuel efficiency or reliability of the product. There was nothing about the choices and blunders of management for 50 years. There was nothing about jobs, benefits and working conditions. It was so slick and surfacey I am surprised the speaker could keep his footing.
Sidestepping any mention of how the companies got this way closes the door to making real improvements. It opens the door to asking the union heads to resign in symmetry with the CEO's. But there was never symmetry when decision were made. It paves the way for blaming the unions and demanding that retirees and employees give up or reduce pensions and health coverage.
Instead of going that way, running with tails between legs, the unions could do a 180 and say that if you want us to take lion's share of the sacrifice when times are bad, we will face you like lions. We have to get more when times are good. We have to be part of the managment and strategic planning in these companies. We need ownership shares. We need to be part of the good times as well as the bad.
I truly believe that at this moment if the unions do not stand up, they will be completely hollowed out. What if the managment threatens to close the automobile industry? They would prove themselves willing to devastate the country to protect finance and destroy unions. Good possibility. It would be a signal for a rebellion like the one we are seeing in France or saw in the Republic Door and Window plant. Why should the right be the only ones who take advantage of catastrophes?
If they say that health insurance is burdensome to the auto industry and must go, then don't blink - sock them in the jaw and demand National Health so we can compete with other countries.
Sit-ins and locking in the management are on the horizon. Imagine a a plant occupation by retirees who cannot afford their medications? Could a rescue include a national drug prescription plan.
Such confrontations would force politicians to declare which side they are on. And we still have more votes than the wealthy. We are many.
Battles like this have been carried on in the past in the US when we really produced things, before we lost our way in a fog of flim-flam finance.
Joe
Yes, a great post.
"Sit-ins and locking in the management are on the horizon. Imagine a a plant occupation by retirees who cannot afford their medications?"
I would love to see this happen. I believe the government would call in the military and I believe we would see a massacre of the retirees, but at least the government will finally have shown in blatant fashion its true face. We do not, if we ever did, have a government of, for and by the people. We are RULED by a financial elite that has always sought to bleed us dry but lately they have been slashing our arteries.
-- ekaton
jc,
That's a great post!
Judah....you are soooooo right!!!! 100%, right on RIGHT!!!!!
You said it, Judah!
The sad thing is none of this is an "accident" of wrong moves, unless no one at the top has anything remotely resembling just plain old common sense.
Amazing how the so-called experts, whether at the top of corporations or the financial institutions and investment houses [e.g., the Carlyle Group with all its Bushian connections, which bought three of the biggest pension fund organizations a few years back] are all paid millions in salaries and more in perks, and turned out to be so stupid on behalf of the general public of the U.S. of A.
But where all of these money-and power-mad folks still don't seem to get it is that you can't keep f**kin' around with the planet and expect that they will be happy in their Old King Cole counting houses a few years from now with nary a concern. Of course, given that billions are projected to starve to death in the not-too-distant future or die of thirst from no water or disease from bad water and malnutrition, maybe they are just waiting it out until the population gets back to a manageable three billion or so, and in the Western countries those once middle-class folks will be happy to work for slave wages to survive and compete with the mass of workers from China, India, Pakistan, Mexico, Central America and on and on ...
It saddens me that I have become such a cynic, but the evidence for that cynicism is all over the internet and is now manifesting into broken bubbles of all kinds that like Humpty Dumpty cannot be put back together. And keeping these wars going at least provides big bucks with the steady sale of armaments, bombs, nuclear submarines, airplanes and drones, etcetera, to whomever can cough up the money to pay for these things.
With the media situation in the U.S. as it is, I wonder if the majority of our fellow citizens will ever get it and get mad enough to really revolt as the downhill slide picks up speed. Uh-oh, I forgot measures have been taken already with private mercenary contracts and already-built detention camps and a legal nod to using the military if things get out of hand.
Well, none of us can say that we are not living in an interesting time. And there always are wild cards.
But the life we have been living is over now, and neither the government nor the private sector of big bucks seem dedicated to bailing Jane & Joe Doaks out from the edge of the yawning chasm that gets wider and deeper everyday.
Sometimes of late, it feels more like we're all part of some science fiction or James Bond-type novel with the baddies versus the goodies, along with the mass of folks who still don't have a clue. Gold-finger is very good at giving most of us the finger ... so far.
Interesting times.
/cm
"Uh-oh, I forgot measures have been taken already with private mercenary contracts and already-built detention camps and a legal nod to using the military if things get out of hand."
Come on you Blackwater assholes, come on down my street. I'm waiting for you. I've lived a long life and everyone dies and I am not afraid to die.
You paint a bleak picture. Unfortunately I believe you have understated the situation.
-- ekaton