Democrats Trying to Reverse Bush's Attempt to Dismantle UAW by Fiat

I’ve been meaning to catch you all up on the impact of the auto rescue on the UAW. But I really shouldn’t bother, as the likely impact has changed from day to day over the last several.

On Thursday, GM’s Rick Wagoner announced that it could reach the mandated goals without touching retiree pensions.

GM can continue to operate without cutting benefits to retirees, Wagoner said.

Of course, retirees wouldn’t be safe so long as the goal was to bring the lizard lie number (the number that compares UAW wages plus legacy costs with Japanese wages and their negligible legacy costs) to parity. But the UAW’s Gettelfinger and Wagoner now agree that the lizard lie number is just that.

Payroll and legacy costs have been a source of some criticism for GM and the UAW. Both Wagoner and Gettelfinger agreed that the labor compensation comparisons between GM and foreign automakers are not necessarily accurate.

It would have been nice had that point been made more forcefully back during negotiations.

Next up, on Friday, we learned that Bush’s auto "rescue" prohibits unions from striking over the course of the loan.

An extraordinary new wrinkle in the federal loans to Detroit’s automakers became clear Thursday from the fine print:

A UAW strike could derail the rescue effort.

The U.S. Treasury Department could declare General Motors Corp. and Chrysler LLC in default of their $17.4 billion in loans and demand the money back, according to pacts signed with the Bush administration last month.

Although the impact — and even the legality — of such a provision is not clear, the details of the pact highlight the complications facing the union, which must agree to make sweeping changes in wages and benefits for workers by Feb. 17.

I can’t help but imagine that Bush snuck that in the loan terms not just to break the union, but also to get one final shot at SCOTUS’ Youngstown decision. 

And remember when people argued I was crazy for arguing that the overriding purpose of the plan was to break the UAW? Isn’t that just hilarious in retrospect?

Finally, today, we learn that Barney Frank is hard at work trying to negate Bush’s last attempt to dismantle a major union by Presidential fiat.

Concessions forced on the UAW could be stripped from a $17.4-billion auto industry rescue plan, even as companies and the union would have to answer to a stronger car czar, under a bill unveiled Friday that House Democrats plan to vote on next week.


The bill also would require the Obama administration to decide by Feb. 1 what terms the automakers, unions and creditors must meet to keep whatever loans they have and get any additional aid. The companies would then have until March 31 to show the new administration’s car czar that they are making sufficient progress.

It makes no mention of a Feb. 17 deadline that the Bush administration set in the loans for commitments from the UAW and the automakers toward restructuring goals.

Frank’s bill also avoids any of the terms that angered the UAW last month, namely pushing the union to accept pay, benefits and work rules that match those of workers at foreign-owned plants in the United States.

Welcome to the new Democratic reality. One amusing detail is that Democrats will consider passage by the House sufficient cover to allow Obama to rewrite Bush’s rules.

Frank said that if it passed the House with a large majority, but failed in the Senate, he’d be willing to accept the word of the Obama team "that they will act as if it were law."

And why not? Bob Corker thought he was very clever, I’m sure, when after his assault on the UAW failed in the Senate, he waltzed down to the White House to help Bush just make it worse. But since this whole thing was done solely by Presidential power in the first place, I suppose it can be undone by Presidential power.

  1. gryphon says:

    I’m not sure I’m in love with that precedent … “well, it passed that there ole House, and the Prez says yes, so that makes it a law …”

    I mean, have these guys SEEN schoolhouse rock?

    • Rayne says:


      This has been another edition of Answers, Short and Sweet.

      But seriously, this administration has completely blurred the premise of three balancing branches of government for the last 8 years. Congress makes laws, Executive enforces them, Judiciary interprets them — but wherever possible, the Executive made law and interpreted them (see torture memos) rather than permitting the the other branches to do their work. Re-writing the Wagner Act by denying organized labor their right to bargain and strike where applicable is just another overreach in a long line of abuses.

  2. BoxTurtle says:

    GM actually wants to save the company. They know they must work with the UAW, now and in the future.

    Watch Chrysler and Cerberus. Cerberus wants OUT, with as little cost to themselves as possible. They currently HATE Chrysler and they’d flush the entire corporation if they could just walk away. They will work with BushCo in the next 10 days to achieve a rescue…of Cerberus.

    Boxturtle (Complete Government buyout?)

  3. scribe says:

    What the Democrats need to do – and have thus far not even brought to the table – is to repeal the Taft-Hartley Act of 1947 in its entirety. That was, really, the first Rethuglican step in undoing the gains ordinary people had made in the New Deal.

    It took so long to really put the hurt on unions and average people – the better part of 50 or 60 years – because (a) there were Democrats in control for an extended part of that time and the anti-union, anti-worker policies Taft-Hartley enacted were never taken to their extremes by Republicans because they couldn’t; (b) the US was the largest industrial economy in the world and, like the python that ate the deer, that predominance of its industrial economy and concomitant union power could not be undone until the plants themselves had been worn out by the passage of time and the workers who’d done the organizing had retired, died, or been bought off by Rethuglican propaganda.

    It was and is no coincidence that the real deindustrialization and concomitant de-unionization of the US did not begin, in earnest, until the late 70s and early 80s, when two basic events happened. The first of these was when the vast majority of men who’d joined and formed the unionized, industrial workforce in the immediate post-war years started hitting retirement age and no longer had any personal investment* in the continuance of union power beyond the narrow view of their own pensions. Given these were, ultimately, guaranteed by PBGC (in the aftermath of Studebaker and other corporate pension lootings), effectively the unions lost their strongest base of support by about 1990. The second of these was the obsolesence or exhaustion of the industrial plant – the factories were worn out and grossly outdated. Subsidiary to that was that the loans and financings which corporate America had taken out to finance those plants – during the war and in the post-war 40s and 50s – had been paid off**. Keeping the plants around – either to continue to make profit, pay the loan payments or as collateral for the loans themselves (the latter two particularly when the loans had been paid) – no longer made sense from either a technological point of view or from a labor point of view.

    I grew up in a steel-producing area and there was an unforgettable, constant drone in the local press in those days. That drone was The Company’s anguished pronouncements about how the Germans and Japanese with their new, super-duper high-tech furnaces and mills that they’d built after we’d bombed theirs into flinders back in The War were making it uneconomical to keep the older local mills going (if only b/c the furriners were “dumping” their steel into our markets at prices made possible by their higher tech – and I’m not addressing the whole “subsidy” argument they made then) and therefore they had to close them and put another X thousand guys out of work. The other motivating factor was the labor issue – if the companies brought on new workers to replace the retiring ones, they’d be stuck with a new generation of unionized workers.

    Taft-Hartley made possible closing the old plants and locating the new plants in places – like the South – where unions would not be a problem. Because Taft-Hartley made the whole “right-to-work” law a matter for state-by-state decision.

    And, then, of course, remember how Bushie dealt with the Longshoremens’ strike in the West Coast Ports a couple years ago? He ordered them back to work under Taft-Hartley.

    For those two reasons (among many others) Taft-Hartley has to go.

    * My dad was a member of the USWA, which sent a monthly newspaper about union and labor-management issues. IIRC, it was called “Steel Labor”. One thing stuck in my (impressionable) kid brain back then, when the paper was talking about how the latest policy issue was important to oppose even though it was candy-coated to seem good or something like that. The paper reminded the workers that, every time they were asked to cut a corner on one of the rights they’d won, they were dishonoring the struggle, pain and blood shed to organize and make bargaining effective. Paraphrasing, it went that:

    when management asks you to work through that 5 minute break and tells you it’s for the good of the company, remember that some guy – maybe your father or the father of someone you knew – took a punch in the nose for that break. From a guy hired by the company for that purpose. So, are you going to give the company the right to punch someone in the face so they can make money?

    The Steelworkers always had a reputation as a fighting union. Given the company antipathy to their organizing, that was inevitable….

    ** Reading cases and following litigations for my work, I often noticed, especially in environmental cleanup, remediation and abatement cases, that the cases resolved only after the plants which did the pollution had been paid for. You could almost track the payoff of the financing and the sudden shift of the company to being willing to abate the polluting practice. It was no longer necessary to keep polluting because the loan had been paid off. The same goes for keeping plants going in other contexts.

    • readerOfTeaLeaves says:

      Wow, is that an interesting comment.
      Just… wow.

      If you put your comment together with what Kevin Phillips lays out in “American Theocracy” about the transition of the US to a ’service economy’ (i.e., making money off money, and off creating new kinds of credit and debt service structures), and then add on that time period as a real marker in the beginnings of resource scarcity, it’s really extraordinary.

      And that time period is also when Americans, many of us having grown up post-WWII, began to vote for ’sweet lies’ (i.e., Reagan) over anyone who told us we had to suck it up and make some tough choices (i.e., Carter, Mondale).

  4. cinnamonape says:

    By FIAT? Well that would be a vehicle that was promoted by Il Duce as the equivalent of Germany’s “people’s car”, wasn’t it? So it would kind of make sense, except that the FIAT 500 was very fuel efficient, easy to repair and maintain, and could easily be dug out of North Africa sands. Not a “muscle car” by any means, though.

  5. bell says:

    the banks weren’t held to any sort of similar standard with the bailout money and… they got a lot more money..

  6. MarkusQ says:


    Doesn’t this make the unions incredibly powerful? I mean, just by calling a strike they could bankrupt the company. Sure, it’s a “nuclear option” but it sounds like a pretty impressive weapon to me.

    The owners say “give in, or we’ll close this plant.”

    The union says “You give in, or we’ll close all of them.”

    – MarkusQ

  7. ferrarimanf355 says:

    Screw this. I went into a Nissan showroom and saw that they had a red 370Z. I sat in it and really liked what I saw. That’s the next car I’m getting- even if GM is saved, the Greenpeace extremists will demand the scalps of the Corvette and Camaro, I bet. Yes, I insulted the environmentalists. Molon labe, bastards!

    And why the UAW is only giving concessions recently, when they knew this would come back to bite them in the ass, I’ll never understand.

  8. prostratedragon says:

    Thanks, scribe. As a footnote to that excellent comment, here’s an ATC item on the “Southern model” auto industry. At about 3:46min in the question of unions arises with bracing forthrightness in the context of whether the Southern industry should worry, in the short term and in the long, about a Big 2.5 bankruptcy. It will be a passage to remember years from now when someone tries to tell you that the recently concluded second civil war was about religious freedom.

  9. readerOfTeaLeaves says:

    Well, just for the record, not all ‘environmentalists’ are extremists.
    I like ‘Vettes.
    I like to drive cars (a bit too fast, and on windy, curvy roads).

    Also, vehicle use is one aspect of a much bigger puzzle. There are a lot of steps in the process, and in maintenance.

    I think you’re barking at a straw dog.
    Maybe I’m not extremist enough, but I don’t begrudge anyone a Camaro.

    • readerOfTeaLeaves says:

      FWIW, one more bit — I happen to have to drive in the Puget Sound region, and don’t even want to think of the hours of my life squandered in traffic jams.

      So if you have a road that you actively DRIVE on at more than 30mph, count your blessings!

  10. sunshine says:

    I fixed it for you.

    Finally, today, we learn that Barney Frank is hard at work trying to negate “Bush/Card/Wagoner’s” last attempt to dismantle a major union by Presidential fiat.

    • bmaz says:

      Um, it may feel good to blithely trash Wagoner here, just for the sake of doing it, but I fail to see your basis. It appears gratuitous. The post indicates that Wagoner has been working hand in hand with labor to save both efforts and sides of the equation from the hands of the Bush assault. Further GM has been at the forefront of trying to save, and fund consistently, the retiree benefit programs. Yet here you are equating Wagoner with Bush. Seems like rather misdirected anger.