Scott Cavanagh
Freelance Writing, Editing and Photography



 Comment          Archive          BarkBackNews

Enough about "greedy" auto workers

November 19, 2008
By Scott Cavanagh
There is an an ongoing debate in this country regarding what constitutes a "middle class" income. As President-elect Obama touted his plan to decrease the tax burden on average Americans while raising the tax rates of those making over a quarter-million annually, many on the right cried "class warfare." "Who decides what is middle class" seemed to be the prevailing argument of many conservatives--and they had a point. While it's hard to imagine households with an annual income of over $250,000 struggling to make ends meet with anything less than a bloated lifestyle, its pretty safe to say that those who make six figures in America 2008 are not rich--but instead constitute a certain level of the middle class that is finding it harder and harder to provide the same lifestyle for their families that their parents did--despite nearly double the income. There is a big difference, however, between those that make 100k and those who make two-and-a-half times that amount, but for argument's sake, let's assume that those making a quarter million annually are part of the middle class.

Over the past few weeks, speculation has run high that the big three U.S. auto giants would soon be hitting the government up for an aid package similar to the $700 billion one provided to the financial and credit industries. That scenario came to fruition this week when the CEOs of GM, Ford and Chrysler came calling, hat-in-hand, to Congress.

There are so many obvious reasons for everyone to be angry about this request--from the lousy and misguided product lines these companies have produced for over thirty years, to the lack of research into fuel efficient vehicles, to the outsourcing of jobs and plant operations overseas to save a few bucks while rewarding mismanagement with outrageous salaries and bonuses. Ford lost 33% of its market share last year while its CEO received a $16 million salary--and a $15 million bonus.

Of course, simply saying no to the survival of the entire U.S. auto industry is no easy decision. With thousands of interconnected businesses--from suppliers, and distributors to auto credit operations and dealerships--the collapse of the big three could cause a ripple effect unseen in American history. So, what do we do? It appears that really only three options are available to us: 1) give the money to the big three and hope they have a miracle comeback and are not back at the beggar's table in six months; 2) devise some sort of creative Chapter 11 bankruptcy that would allow the companies to reorganize management and labor contracts, eliminate debts and stay afloat; or 3) allow them to fall into Chapter 7--full liquidation.

If these were different economic times, this loan would simply be made and things would probably turn around quickly, as they did two decades ago with the Chrysler bailout. But these are anything but normal conditions--and only weeks after Congress handed the Feds $700 billion dollars to bailout Wall Street, handing out even another dime seems outrageous. But while everyone appears to be in agreement that giving these management teams another $25 billion would be akin to burning it all in a dumpster, nobody wants to oversee the Chapter 7 liquidation of one of the greatest institutions in American history.

Which leaves us with Chapter 11. While the majority of Democrats, including the president-elect, favor a conditional $25 billion loan that forces the car makers' hands on issues like fuel efficiency, environmental standards and executive compensation, more and more Republicans are making the case that a Chapter 11 action is the way to go. No more good money after bad; this time it would be a fresh start with less debt and a chance to reorganize efficiently.

Unfortunately, it appears that when all is said and done, the main target of this GOP restructuring talk is not the gas-guzzling, cheaply made ugly cars and ridiculous, terrorist-funding Hummers and SUVs spat out by these corporate dinosaurs over the past 20 years. It's not even the executive pay scale that allows for $20 million failure bonuses. The GOP's main focus: labor contracts. Wow, what do ya know? Yes, it's those greedy workers with their big salaries and benefits that are running these companies into the ground. If we could just renegotiate the contracts so they got paid like Wal-Mart workers, everything would be fine, and the stock price would soar and the rich would get richer and the CEOs could keep their jets--while the workers applied for food stamps.

If I had a dollar for every time I've heard a conservative economist or legislator talk about the bloated salaries and benefits of blue-collar auto workers, I could bail out the big three myself. Funny how nobody talked about how much the financial wizards at AIG and Bear Stearns were making before they handed them $700 billion, no strings attached. Did anyone ask them to take any pay cuts? How 'bout cuts in benefits? Hell, that cash is openly being used to pay multimillion dollar executive packages and holiday junkets. But $25 billion to the auto industry's blue-collar workers? Only if they accept cuts to those "bloated salaries" and benefits.

And it's not just conservatives that repeat this baloney over and over again. In an open editorial about the proposed bailout, CNN's Campbell Brown echoed those same sentiments, stating that some in the auto industry "make as much as $30 to $40 an hour--with benefits!" What do you think Campbell Brown makes to sit in front of a camera and look pretty? Think it's more than $30 an hour? If it is I'm sure there is NO WAY she gets BENEFITS TOO!! That would be outrageous.

A $30-an-hour job pays $56,000 a-year. Is that rich? Does that person deserve a pay cut? I was under the impression that $250,000 was middle class. Which is it? What do these critics of auto worker pay propose they make? Should they have no health care, or retirement? Do any of these critics have jobs without health care?

It's a simple point. If $250,000 is middle class, then an auto worker raising a family on $56,000 does not deserve a pay cut--he deserves a pat on the back for being able to survive.


Leave a Comment 

Column copyright 2008 Midland Avenue Communications. Reprints without permission are a violation of Federal Law.