That's my dad's thing, you see, reading newspapers and writing to them. He keeps his published Letters to the Editor tucked away in his room in the family basement like trophies. He loves to argue and to push the economic conservative agenda.
And he loves to attack unions.
He worked for U.S. Gypsum Steel back in the 80s and there was some sort of union action (I don't know if it was a strike/lockout or a threat of strike/lockout), but he once told me a crowd of union workers ended up at his house and threw paint at it.
The point of all that is not that my dad has a personal vendetta with unions. I mean to point out that he has had experience with unions from both sides (he worked labor in steel mills through college). He knows what he's talking about when he argues against them.
Because I can only attest a knowledge of the basic when it comes to labor unions (a group of employees of a certain occupation or industry who come together to collectively negotiate wages, benefits, etc.), I usually defer to him on such topics.
Plus, I am pretty much against anything that pins one group squarely against another unless it's sports or a superhero battle. (the Superman image came from here.)
One could argue that automotive industry is completely different from steel, but apparently the comparison can be easily made.
Now that steel has been reformed and broken up into smaller companies, we actually produce more of it. This .pdf from the American Iron and Steel Institute brings in the facts.
Notably, that document states that in 2006 we could produce one ton of steel per two man hours as opposed to one ton per 10.1 man hours in the 1980s.
So where am I going with all of this?
It's hard to argue against my dad ( or with Professor Suddes) because there is clearly a problem with the UAW's contract.
But I may be okay with some sort of Detroit bailout if the the automakers can negotiate with the UAW. This is what sparked the mid-day post, so here's the article from the Wall Street Journal pasted below.
I also embedded a video off WSJ.com because I'm curious what you think of their videos.
As for those who came hoping to read something of a lighter note, I apologize. I'm working on my Photoshop skills for a series of regular posts where I manipulate photos of America's finest. Currently I'm working on an image of GM CEO Richard Wagoner taking it from Speaker of the House Nancy Pelosi, but it's taking me a minute.
Cheers!
Auto Union Open to Changes in Contract
DECEMBER 3, 2008, 3:48 P.M. ET
by Sharon Terlap
WSJ.com
http://online.wsj.com/article/SB122832097499675993.html?mod=igoogle_wsj_gadgv1&
DETROIT -- The United Auto Workers will allow U.S. auto makers to delay payments into a massive health-care trust and suspend the controversial jobs bank program for laid-off workers, part of an effort to help Detroit's struggling auto makers secure emergency federal loans.
The UAW will modify the contracts reached last year with the Detroit Three to help cut costs as the companies try to convince Congress they can survive if given a federal bailout. Modification will require the UAW to assemble bargaining committees and commence negotiations with the companies.
"'Concessions," I used to cringe at that word. But now, why hide from it? That's what we did," Mr. Gettelfinger said.
His comments came one day after General Motors Corp., Ford Motor Co. and Chrysler LLC submitted wide-ranging restructuring blueprints to Congress in the hopes of qualifying for a combined $34 billion in low-interest federal loans. GM and Chrysler say they both need money immediately to avoid collapse, while Ford says it would hope not to have to draw from any credit line.
Cutting Costs
The auto makers are hoping to negotiate concessions from the UAW to bring the cost structures of the Detroit Three more in line with those of foreign auto makers in the U.S.
The health-care trust, commonly referred to as VEBA, was supposed to begin paying benefits to retirees starting Jan. 1, 2010, and is considered a key component of the companies' efforts to reduce labor obligations. However, the auto makers are running short of liquidity and likely unable to come up with the billions of dollars needed to initially fund the trust.
U.S. auto makers are burning through cash at an alarming pace as auto sales in the U.S. and abroad plunge. On Tuesday, Ford reported a 30% decline in its U.S. sales in November versus the year-ago period, while GM and Chrysler each saw their sales drop more than 40%.
As for the jobs bank program, which provides many laid-off workers with most of their pay and benefits, Mr. Gettelfinger said the program has shrunk dramatically, but remains a "lightning rod" for critics of the domestic auto industry.
"Jobs bank has become a sound byte that people use to beat us up," he said. GM and Ford have reduced their jobs banks by nearly 80,000 workers in recent years. The Detroit Three auto makers currently have 3,500 workers in the jobs bank.
'Change With The Times'
Mr. Gettelfinger made the case that a failure of one of Detroit's auto makers would trigger a collapse of at least one of the other auto makers along with suppliers, auto dealers and other companies that depend on GM, Ford and Chrysler for business.
Auto makers made similar statements in the letters sent to Congress on Tuesday.
The UAW will drive that point with an ad campaign that asks for help for Main Street and reminds Congress that the auto industry is not the banking system, which just received a $700 billion federal bailout.
"If Wall Street can get help so should Main Street," one spot will say.
Mr. Gettelfinger also emphasized that the auto makers are presenting a detailed plan that promises to repay the loans. He also noted that other nations are being asked to extend support to their auto industries.
Hundreds of local UAW officials convened for Wednesday's meeting, which Mr. Gettelfinger described as an "unprecedented" gathering of officials representing workers from all three auto makers.
Several said they believe members would grudgingly support the concessions, though some said they planned to oppose further givebacks.
"We're in a fight for survival," said Doug Rice, president of UAW Local 122, representing Chrysler workers. "We're going to have to look at how we do things so we can live today to survive tomorrow."
Rory Gamble, a regional UAW director for Ford, said union leaders have to present a plan that's fair and appropriate for members.
"I'm pretty sure they'll accept that," he said. "You've got to change with the times," he added, noting that the union will look for guarantees down the road when the companies rebound.
GM shares were down 1% at $4.80 in mid-afternoon trading, while Ford shares were up 6.6% at $2.88. Chrysler, owned by investment group Cerberus, doesn't have publicly traded shares.
Write to Sharon Terlep at sharon.terlep@dowjones.com
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