Friday, December 5, 2008
Congress / Kotz / Politics Bob Corker Goes AWOL on Reason to Save Automakers
Posted by Pete Kotz on Fri, Dec 5, 2008 at 12:31 PM
Corker is making a name for himself as the feisty rooster of the Big Three bailout hearings, bluntly addressing Detroit CEOs in a lecturing manner they so richly deserve. But his conditions for supporting a bailout seem strictly pulled from that Workers Are Greedy Republican Playbook.
In exchange for his support, he wants the UAW to take a 40-some-percent pay cut, agree to let automakers skip payments to retiree health funds, and have the Big Three pay back bondholders at above-market rates. To which Pith responds, "WTF?"
There's little doubt autoworkers are looking at big cuts for their own survival. Few people have a problem with that--including many UAW members, who wisely note that a lesser paying job at GM is better than greeting customers at Wal-Mart. But does anyone else find it weird that Corker isn't demanding equal sacrifice from the Big Three's vast upper management ranks, whose operative motto has been Doing Our Best to Extinguish U.S. Manufacturing for More Than 30 Years? Isn't their grotesque mismanagement the leading culprit of the Big Three's demise?
Moreover, there's a very good reason automakers are contractually obligated to contribute to retiree health funds. That's because we've already witnessed--many times--what happens when you don't fund these things. (Hint: You, dear taxpayer, should start saving your pennies.) So maybe the Big Three simply don't have the money. But for a fiscal conservative like Corker, isn't this like diffusing one bomb by placing it on a timer so it'll just explode later?
And why, when workers and taxpayers have to sacrifice, does Corker want bondholders repaid at above-market rates? Could it be that Bob's real end game here is a premium payout to his friends, courtesy of you, dear taxpayer?
Comments (5)
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I think all the upper management of the Big 3 should be fired.Please don't punish or judge the hardworking people of Detroit and Small Town America.Its not their fault they have a bunch of jackasses running the Big 3.They gave a blank check to AIG Citi Corp and who knows what happened to that money.The Big 3 is asking for a loan not a blank check.I own a bar/grill across from a Ford plant.My business is already down 40% this year.If there are more layoffs there goes the family business.This effects all parts of America not just The Big 3 its bigger then that.
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The UAW sealed its fate years ago when they aligned themselves with management to actively lobby against higher CAFE standards and similar measures that would have made American cars more competitive. Clearly the goal of the Big 3 and corporatists like Corker is to use this crisis to undermine labor unions. Anyone could have seen this coming ...
Yeah, maybe as we continue our slide toward a third world economy, those low-wage jobs will return to America and we can perform piece work for our Chinese overlords without health care as we lace the product with melamine.
Pete, thanks for nailing Corker on this.
Just saw on the news that auto workers are staging a protest in front of Corker's office (which, FYI, is also Lamar Alexander's office) at 11 am on Monday. Corner of West End Ave. and Murphy Road, that big curved office tower across from the Exxon station.
Don't come crying to the taxpayers if you're not willing to take a haircut. If you don't like earning what all the non-UAW folks earn in the U.S. auto making sector (which is what the Corker Amendment calls for), then don't go asking for their tax dollars to pay your premium wages. Your current wages are set by contracts with three dying companies, not with the rest of the country.
Take a closer look at the Corker Amendment (http://senateconservatives.files.wordpress.com/2008/12/ayo08e53_xml1.pdf). The bondholders take a serious haircut.
Also, if you're serious about saving the auto industry, you'll no doubt observe that executive compensation, in the aggregate, is minuscule in comparison to union labor wages. It is not where the companies viability is truly threatened, even if it makes for nice class warfare speechifying. With it's new stock position in the company, along with that held by the bondholders, their will plenty of opportunity to trim fat in the executive ranks. I am sure they deserve it.
