Obama Administration Assisting in Squeezing GM, Chrysler UAW workers

Anybody else sick of reading between the lines to get the real story?

President Barack Obama's auto industry task force was expected to offer additional aid to General Motors Corp. and Chrysler LLC while setting firm deadlines for the companies to get concessions from their stakeholders.

Buried deep in the article detail paragraphs is this:

Both companies are trying to reduce their debt by two-thirds and convince the United Auto Workers union to accept shares of stock in exchange for half of the payments into a union-run trust fund for retiree health care costs. The loan agreement also called for executive pay cuts and labor costs that are competitive with Japanese automakers with U.S. operations.

In other words, going to almost Walmart wages for advanced manufacturing jobs.

Note, they refuse to even mention how GM has invested billions in offshore outsourcing jobs, selling cars in China for $1200 dollars or the reports on how previous bail out money went to their Brazil operations.

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Union Members Must Give Up, But Those AIG Executive's Bonuses

were included in the AIG Bailout plan. It is so very obvious whose side the Washington DC leaders are on. Screw the Workers of the United States but give everything and anything to the fat cat executives.
The AIG bonus recipients had a contract, so did the UAW workers. Yet the government believes the UAW contract can be renegotiated since it is not as important/viable as the other. All contracts should be held as legal and should not be allowed to be altered by the government.
Remember during the Regan administration where the air traffic controllers were having difficulty negotiating a contract, the air traffic controllers threatened striking. Though their contract gave them the right to strike, the government replaced them when they exercised their contractual right. A contract is a legal obligation and should be protected under the law

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contracts only seem to matter

when one is funneling billions and billions to favored financial firms and certain executive bonuses to other favored people.

When it comes to workers, you see the brazen breaking of contracts right and left.

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Same old, Same old.

Same old thinking on the part of the Obama Administration. I expected more creative thinking. We are they going to recognize that we have an opportunity to establish a manufacturing strategy and totally transform manufacturing in this country. But we get the same race to the bottom crap that I would expect from an repuglican administration.

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now reports Obama forced Wagoner to quit (i.e. fired him)

I seriously question this. I mean GM has been offshore outsourcing and creating this hydra of nonsense for some time but I feel he's just the sacrificial CEO lamb and the real ones who should be fired, i.e. Citigroup, JP Morgan Chase, BoA, etc. have their tentacles into the D.C. pie and the auto industry didn't.

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His replacement won't be any different

It will be a pleasant surprise if his replacement does a better job. But I suspect that Wagoner was the last holdout in opposing a structured bankruptcy. The Administration won't label it as such, but something tells me that's the route they're going. Now correct me if I'm wrong, but the only people who want the union to take shares was the company not the government or any task force. But I still think, sadly, that what we will see is bankruptcy-lite.

Regardless of who replaces him, management (which now I have to include government) has to realize that they need a company that is not for a 12 or 10 million car market but one that is 7-8 million. What were the last car sale numbers, 10 million? Even if the economy improves, folks who used to spend with credit won't as much. I see it here by me, people are keeping their cars longer. Lastly, and this was somewhat alluded to in that article, like it or not US automakers have to meet or beat Japanese automakers' US-based operations costs.

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no, they do not have to meet Japanese car makers on labor costs

I take serious issue with this for it's the race to the bottom, 100%. They seriously do not have to. If the United States got trade agreements that encouraged U.S. manufacturing and believe me, every other nation does it, one wouldn't be in this race to the bottom on wages.

I also cannot recall the percentage but it's not the main cost of manufacture.

If anything, one wants to force Japanese car makers to meet the UAW on labor costs and increase those wages.

You cannot expect anything but a two class system, the slaves and the elites going down that continual labor cost squeeze path....and that also means selling fewer cars.

Also, GM is seriously mismanaged. Obviously the car market is not so big but they made mistake after mistake after mistake, including selling Aeros in China for $1200 bucks.

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The skeptic in me thinks otherwise. Forgive me.

I take serious issue with this for it's the race to the bottom, 100%. They seriously do not have to. If the United States got trade agreements that encouraged U.S. manufacturing and believe me, every other nation does it, one wouldn't be in this race to the bottom on wages.

RO, trust me I truly wish the situation were different.  The specter facing our workforce is a frightening one of third world wages in our country.  It is something we should fight, given that the cost of living is still high.  Saying this, surveying the economic landscape in regards to manufacturing, I see an unfriendly terrain.  You metioned if the United States got trade agreements that encounraged US manufacturing.  The key word was if, which from what I can tell isn't happening.  The fact remains, our Department of Commerce sold us out decades ago.  You are correct that every other nation tries to protect what manufacturing they can, but that isn't the case here.  You can say "we should" this or that, but until the government does something major, I will be a cynic. 

If anything, one wants to force Japanese car makers to meet the UAW on labor costs and increase those wages.

Sadly that will never happen.  I don't think this Administration has the guts for it, to be honest with you.  The President would have a massive fight on their hands from the various (mainly Southern) governors who have these foreign car operations.  For them, it's really an "us versus them" situation, I truly believe this.  A couple weeks back, on CNBC, they had a fellow from some southern business magazine who also served as a consultant to many of these mayors and governors down there. 

He echoed what many down there were saying, that it was an open competition for jobs.  Maybe this is pure conjecture, but I sometimes think that these governors believe in a two Americas idea where there is a zero sum gain.  If its to Michigan or Ohio's benefit, then it can't be for Tennessee or Alabama's gain, that's the thinking. 

Layer on top of this the fact that most of these states are run by a solidly arch-conservative political ideology, then the so-called competition takes on a new level. For many its a war against the unions which are a seen as a benefactor of the Democratic Party.  Eliminate them and you weaken your political rivals. 

The competition resembles one between two countries, where one is willing to accept a lower standard of living just to land the contract.  It would be as if it wasn't Alabama or Tennessee competing against Ohio but Mexico against Ohio.   For them it comes down to costs or at least the perception of it being more affordable to do business in their respective region.  Do you really believe these people are going to surrendur this percieved comparative advantage?

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beyond guts

Today Geithner warned S. America (particularly Brazil) against "protectionism".

So, frankly, I'm sorry but I believe Obama has always been part of the problem. I'm not surprised at all by what is going on.

What is surprising is how quickly I see other bloggers, Americans catching on, very quickly.

But how to get non-corrupt politicians is another story.

Look, I think America needs to say "no way in hell" to this labor squeeze and it's like they have hypnotized the US Populist into a bunch of sheep and cattle.

In Europe, they are in the streets protesting in every country by the hundreds of thousands, each country, at the G20 summit.

Check out the link on the "letter to Obama" and see the "song a day" guy who clearly was an "Obamamaniac" during the election. I'd say that typifies the slow erosion to reality which I placed bets with NDD to break in another month.

I literally am seeing now demands from the left Obama fire both Summers and Geithner immediately.

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You're suggesting that

You're suggesting that global manufacturing companies are pushing the U.S. into socializing many of their traditionally union negotiated benefits costs, such as healthcare, etc. Water tends to seek lowest ground. It's unrealistic for any union to think it can compete with hungry non-union global workers. I'm not sure it's a conspiracy of managements to "break" unions, at this stage.
We're competing for our very survival at the moment. Even Hb-1s and others that come here...and those in India that benefit from outsourcing: the SYSTEM is large and global at this point, and most workers are relatively atomized.

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Sick old people expected to pay for the bailout

They want retirees to take stock shares for health care costs? That is beyond sick. Especially since Obama openly took single payer universal health care off the table.

The only people happy with their health insurance are the people who haven't tried to use it.

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The only people happy with their health insurance are the people who haven't tried to use it.

Breaking the unions

Ronald Reagan told the air traffic controllers to get back to work. Perhaps Obama will have to do the same in order to save the auto industry here in the states. There will be no shortage of people willing to take a job here for $14.00-$18.00 an hour plus benefits. I'd be on the look out for a new government created U.A.W contract.

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