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Wall Street Sharks Circle the UAW
Barack Obama's commitment to helping labor has always been suspect, but handing over the American car business to the investment banker Steven Rattner might well turn the president into the last great union buster.
To be sure, we're already long past the point where industrial unions have any real clout in our so-called service economy - this thanks to "free trade" (that is, guaranteed cheap labor in foreign locales and low import tariffs on foreign-made goods) and Bill Clinton's alliance with the Democratic Leadership Council (DLC). Franklin Roosevelt's old party of labor is now almost entirely the party of Wall Street and only a severe depression might alter this political reality. When Obama sent economist Austen Goolsbee to reassure the Canadian government that the candidate's criticism of the North American Free Trade Agreement during the Ohio primary didn't mean anything, he meant it.
But this isn't to say there aren't a few remaining pockets of working-class resistance to the money power that Wall Street and the DLC would like to crush. And right now, Rattner and the Treasury Department task force's biggest target is not the overpaid executive staff at General Motors, but the United Auto Workers union, the country's best and traditionally most honest mass labor organization.
Just wait a few weeks, and the demands for concessions from the allegedly overpaid and cosseted UAW members will rise to levels of shrillness far greater than the very brief - and ineffective - outcry over the AIG bonuses.
It wasn't so long ago that the UAW set the standard for successful collective bargaining and trade-union integrity. Its greatest leader, the leftist Walter Reuther, was so powerfully independent that in 1968 he even dared to bolt from the AFL-CIO and its reactionary boss, George Meany.
The break stemmed in part from the longtime rivalry between industrial and craft unions - Meany started out as a plumber - but it also resulted from Reuther's greater radicalism and vision. It was the UAW that early on organized black workers, won excellent medical benefits for its members and initiated the innovation of "pattern bargaining" with the auto industry, targeting one car company at contract time instead of taking on the whole business.
Reuther could do this because he had a huge number of members who owed their middle-class status to the UAW, as well as to the G.I. Bill and Lyndon Johnson's Great Society.
At its peak, in 1979, the UAW boasted a membership of more than 1.5 million and a close relationship (perhaps too close) with the leadership of the Democratic Party. Even into the 1980s, the UAW remained so important that Douglas Fraser, Reuther's protégé and eventual successor, was elected to the Chrysler board of directors, the first union leader to serve on the board of a major American corporation. Fraser and the union had helped Chrysler through its 1979 crisis, successfully lobbying for government loan guarantees and accepting wage cuts and layoffs to keep the company out of bankruptcy.
Chrysler's bailout and revival were organized by the company's chief executive, Lee Iacocca, who saw the handwriting on the wall written in Japanese characters. I'm no fan of this self-promoting blowhard (his opportunistic hypocrisy on tariffs and trade policy is stunning), but at least he was a car person with a degree in engineering and a sense of what sells. Nobody in the Carter administration or Congress told Iacocca to resign, or Douglas Fraser to stay off the Chrysler board, as a condition for the loan guarantees.
They wouldn't have dared.
Today, Barack Obama consorts with the hedge fund/banking crowd that gave so much money to his "transformative" campaign, while he makes believe that he cares about unions. So beholden is the president to finance that he fires the General Motors CEO, Rick Wagoner, and puts in charge a banker who knows how to break up businesses, not build them - Steven Rattner. It doesn't cost Obama anything politically because the industrial lobby hardly counts anymore, especially compared with a Wal-Mart/retail lobby that loves "free trade" for its Chinese imports made by 50-cent-an-hour labor.
Meanwhile, Obama feels he has nothing to fear from a UAW that has shrunk to a mere 460,000 or so members and believes (falsely) that it has no alternative to supporting the Democratic Party. Have you ever seen UAW President Ron Gettelfinger on TV?
Right-wingers still whine about "big labor's" supposedly disproportionate influence, but campaign contributions tell a different story: The finance, insurance and real-estate sector (FIRE) gave Obama just over $38 million in this last campaign, while labor gave a paltry $466,324, according to the research group Open Secrets. Granted, UAW political-action committees donated $2.32 million to various Democratic candidates in the latest election cycle (according to the FEC), but this is loose change in the world of Steven Rattner and his wife, Maureen White, a former banker and one-time national finance chairwoman of the Democratic Party. Combined, the bundled contributions of Goldman Sachs, Citigroup and J.P. MorganChase just to the Obama campaign amounted to $2.28 million.
Nevertheless, we will hear no end of the overpaid and gluttonous autoworkers who dared to demand health insurance, pensions and good wages. Isn't it outrageous that a GM production worker can make $28 an hour, including benefits, and that he or she can retire in some comfort after decades on the assembly line? Isn't it terrible that GM is contractually obliged to take care of its workers? God forbid we protect Americans by raising the 2.5 percent tariff on imported cars to compensate for indirect Japanese export subsidies.
But the UAW's critics needn't worry. Whether Obama eases GM into Chapter 11 bankruptcy - that wonderful system of corporate protectionism - no doubt favored by Austen Goolsbee and Lawrence Summers, or whether he forces the UAW to destroy itself with givebacks, we're headed for the end of the line for middle-class unionism.
Bankruptcy would make it easier to break union contracts, but the UAW, relentlessly attacked for being too successful for its members and so far unable to organize Japanese car plants in the United States, will probably cave in for PR reasons before it comes to Chapter 11. If that happens, it won't be a union anymore.
Meanwhile, autoworkers (and automakers) in Japan will continue to benefit from government-funded national health insurance unavailable to American employees of non-union Japanese plants in the U.S. And Steven Rattner can go on throwing benefits for Democrats at his home on Fifth Avenue.
- Posted in
16 Comments so far
Show All"The UAW ... will probably cave in for PR reasons before it comes to Chapter 11."
They will cave, but not for PR reasons. The UAW will cave because it's run by the coordinator class, not the working class.
--
Eric Patton
Cincinnati, OH
ebpatton@yahoo.com
Part of the reason the UAW is in the lurch is that unlike Japan, Germany, & other first world countries, the proportion of the population that are union members in the USA never reached the levels of those countries.
It should also be noted that American unions' notorious political divisiveness worked against them as well.
I am beginnig to smell a one termer.
Obama says we must bail out the banks to free up credit. One is left to wonder if the lending is for hedge funds and other players to leverage their gambling to create the illusion of wealth. Surely they aren't suggesting more easy credit for the over-levereged populus already saddled with too much debt.
I think it was the workers at Delphi that saw their wages cut to 1/3rd of what they were making , from some 27 dollars an hour to 9 dollars an hour.
This forced the same workers to BORROW against their homes and such to stay afloat.
FIAT is demanding that in order to "save Chrysler" they want Canadian and US workers at those plants to take huge wage cuts.
Corporations are now using the downturn as an excuse to rollback wages and benefits everywhere . Those will never come back as we "Globalize" and see workers having to compete with China and India.
The system we call Capitalism makes more money off buying and selling assets, shifting monies around through various Financial instruments, buying up and then gutting companies of workers and product in order to watch stock prices rise and then bailing out on the stocks at profit.
Time was a person bought shares in a company and held them for many years. This no longer the case. With Computerized trading people are encouraged to buy stock low, have management gut a company so stocks rise , sell then bail.
Corporations are plundering pension plans of funds then declaring Bankruptcy and having the courts alow them to escape the contracts that forced them to create those pension funds.
It theft on a massive scale, aided and abetted by the government.
There an old song by Tenessee Ernie Ford about this. Time was the worker used to live in a Compnay House. He was paid enough wages just to get buy but then was forced by the employer to spend those wages at "The Company Store". Failure to spend at the Company store could see the person lose his job (Thus home) with another to take his place.
The Company store would jack up prices by three times and more getting all the money back and then more then were paid in wages. In debt to the "company" the worker had to accept virtually every demand made on them.
The Company Store is now the Credit Card and the bank loan. Workers are being forced into debt so they simply send all their wages back to the bankers and the owners.
The Bankrupcty reform bill, supported by Democrats and Republicans in the Bush Administration accelerated this.
I would suggest that if Barack Obama wanted to free up credit and get the consumer spending again, rather then buy up TRILLIONS worth of debt from the bankers that is not worth the paper it written on, he would have been ahead were he to have passed a bill that forgave ALL consumer Credit card debt.
But then that would be rewarding the irresponsible.
Nope . Rather then enrich the people with their own money, he chooses to enrich the banker with the taxpayer money.
When the crap hits the fan on all that CC debt that people will be unable to repay as they watch wages and benefits cut and are "forced" to spend money buying health Insurance , will Mr Obama forgive that same debt or will he organize another bailout of the Corporations that issued that debt?
GwNorth -
Delicious description of how theoretical corporate capitalism (buy stock in a company that makes a good product or markets a valuable service, hold it over the long term, and enjoy watching everybody's wealth grow) has morphed into a giant financial paper shuffling, computerized day trading game, with all the players' eyes fixed on the latest hustle for short term gain.
On the corporate end, antitrust law is at best a joke, at worst a sword rather than a shield where the public interest is concerned. On the capitalist side, the nexus between stock ownership and the production of goods and services designed to satisfy real world human needs has been obliterated.
Hubert Humphrey most notably, and many other old time Dems and labor leaders used to analogize the American economy to a three legged stool: labor, raw material resources, and finance. All three legs have to work together, in proportion, for the stool to to remain upright. Let any one leg grow too long, or one leg get sawed off too short, and the whole thing collapses. Today, the ascendancy of the financial leg insures perpetual instability. Stools can't function as stools anymore.
Your Tennesee Ernie Ford reference also brought back a bittersweet memory of my childhood. I remember hearing that song on our household's radio (no TV, a party line phone) when the song in question was at the top of the charts in the very early 50's. The lyrics of the chorus went:
"You load sixteen tons, and what do you get?
Another day older, and deeper in debt.
St. Peter don't you call me, 'cause I can't go.
I owe my soul to the company store."
I was perhaps in kindergarten when I heard my mother in a hushed conversation with my father one evening about the big controversy that was raging in the adult world over this popular song. Was it really "Communist inspired", like Joe McCarthy and some other guardians of America's Cold War morality darkly hinted? How could a nice Christian pea picker like Tenesee Ernie have let himself get duped by the Reds into spreading their anti-American propaganda? Was Ford perhaps a fellow traveler himself?
I shit thee not.
Bill from Saginaw
Obama, like the rest of the Dems, thinks we're cowards and fools and he's right. We'll vote for him again out of fear of the alternative.
We already got all the 'change' we're going to see insofar as the Weasel-in-Chief isn't a WASP. That's something but it's only good for one term. I also voted for:
1. An end to the war. We got an escalation of another war.
2. A sensible restructuring of the economy that sets us up for a more sustainable future and better regulation of business, especially finance. We got a new no-strings-attached bailout and a massive ripoff of taxpayers (see Obama's toxic asset 'public-private partnership').
3. Returning the executive branch to its rightful Constitutional place vis-a-vis the legislative and judicial branches, protecting civil liberties, and restoring due process of law for everyone. Shouldn't be too much to ask from a civil rights activist and professor of constitutional law, no? We got an administration that argues that if it is surveilling you without a warrant, you don't have any legal recourse unless they tell you they are watching you. The administration is even going so far as to set up intermediaries to circumvent Congress' restrictions on the same companies that ruined the economy. Ignoring or 'interpreting' a law as they deem fit is very Bush-like.
"Patriotism is the last refuge of the scoundrel."--(?).
The UAW has already made crippling concessions, such as half-wages with no benefits for new hires and assuming the responsibility for healthcare for retirees. There is a wholesale attack on the wages and benefits of the working class and a transfer of their wealth to the coffers of the bankers. Democratic governors are slashing wages and jobs in the public sector. It is hard to imagine how this would have been possible under McCain without a huge outcry.
But it's not only the Union's subservience to the Democratic Party that has brought us to this pass, however. It is the bias against grunt labor that is echoed in progressive sites, as well. How many times have we seen folks oppose "bailing out" the auto industry with their allegedly privileged workers, when at least they make something. For a reflection of life on the assembly line, see www.autoplant.info.
I thought both parties have been cutting the salaries of public employees.
Only working people can save themselves. No one else will do it. Barry-O doesn't care about them because they don't have enough money to compete against the Cannibal$ who have been and are continuing to devour this country until not even the bones remain. This is how the United States will die; it will eventually swindle itself out of existence in a tornado of chicanery, corruption and greed. And as the last working man and woman take their final breaths, you'll hear them cursing homosexuals, atheists, secular humanists, liberals, hair dressers, Hollywood Jews, organic farmers, pornographers, foreign auto makers, Starbucks et al for their demise. "Et tu, limp wristed, godless faggots?"
Only working people can save themselves. No one else will do it.
--------------------
Damn right about that.
Problem is the people are being kept brilliantly misinformed and disinformed by a media that has mastered the dark art of controlling the public mind.
It's candy from a baby stuff.
The people are no match for the sophisticated daily propaganda aimed at the vulnerable parts of their brains.
Cygnus, you're right about that. It's called the amygdala - in charge of fear and anger, which rules too many people's thinking processes.
When the people fear their government there is tyranny,
when the government fears the people there is liberty.
~ Thomas Jefferson
Hit the streets!
It just baffles me why so many informed people thought Obama was on the side of the working class that produces real wealth, not swindlers, shysters, and shylocks from Wall St, who peddle Ponzi schemes and have perfected the greatest theft of finances in human history. Whoever controls the money supply controls the politicians.
The average American has no desire to educate themselves about current and past events. The information is available, but it's boring. Easier to sit back and be a spectator for the sports and entertainment industries.
The working people must make sacrifices, says Obama, while he rolls out the red carpet for the banksters, giving them more money, and telling the American people not to worry, because it is much too complicated to explain. Words to that effect. Wasn't there an autocratic head of state in Germany between 1933 and May of 1945 telling his people to trust him because things were too complicated to explain, but he was doing things and passing laws (legalizing the agenda) for the nations' benefit? It would be for 1000 years of peace and prosperity.
Of course I'm not comparing Obama to the lunatic of that dreadful period, but all I ask is for you to look at his Cabinet positions, who his advisors are, chief of staff, etc. and draw your own conclusions.
This article hones in on the game with quiet fury. Cushy bailouts for the investment banking fraudsters, but something else for the auto industry - simply to target labor. It's the old shock doctrine used against labor in Latin America, but this time it's turned inward.
Every profit-making company that lives by the sword of capitalism should die by that sword. However, that principle should include the banking, investment and insurance industries.
The Obama administration has a clear conflict of interest. The Obama campaign owed its win to these corrupt financial industries. Now, they decide policy.
By the time this becomes common knowledge, the country will be hosed. Still, one never knows when a snapping point will come. Maybe those NSA-AT&T data warehouses that Obama excused will figure it out, but I doubt it.
-TIA
The Obama administration, full of financial industry elites? Nah, you're kidding right? Seems not.
"Obama's Wall Street cabinet",
by Tom Eley and Barry Grey, wsws.org, originally April 6, 2009
http://www.globalresearch.ca/index.php?context=va&aid=13208