JUDY WOODRUFF: The union’s rank-and-file members began voting for a potential deal today struck with the government and automaker. It comes with plenty of pain and more layoffs.
G.M.’s union workforce, now down to about 60,000, is expected to shrink by another 20,000 next year.
The deal calls for giving the union’s health care trust for retirees a substantial stake of the new G.M., totaling 17.5 percent of the company initially, and accounting for nearly half of the money that G.M. promised to pay the trust back in 2007.
Our economics correspondent, Paul Solman, spoke with United Auto Workers President Ron Gettelfinger in Detroit today about the deal, which also limits the number of G.M. cars manufactured in China and sold here.
PAUL SOLMAN, NewsHour economics correspondent: Ron Gettelfinger, welcome.
RON GETTELFINGER, United Auto Workers president: Well, thank you, and thank you for having the UAW on your program.
PAUL SOLMAN: What is the G.M. deal as of now?
RON GETTELFINGER: Well, we’re in the process of ratification. It’s a concessionary agreement. And we basically mirrored what it was that we did at Chrysler.
And, you know, it’s an agreement that changes a lot of work rules within the plants, but it also takes away holidays. It takes away performance bonuses and et cetera. Cost of living is now gone. So it’s pretty dramatic from a standpoint of our membership; there’s no question about that.
Share of ownership
PAUL SOLMAN: But G.M. is going to be making more cars in China and sending them back here, as I understand it, while you're losing jobs and plants here?
RON GETTELFINGER: Well, we hopefully got that stopped in this agreement. One of the things that we were able to conclude in this agreement was -- and we did put a lot of pressure on, a lot of public pressure on.
And we, quite frankly, put pressure on the White House, the task force, the corporation. We had other constituent groups out here with us trying to make the point that we've got to go back to an industrial base in this country.
We don't have an industrial policy. And the corporation had rolled out, as part of their initial plan, was to bring in imports from China and additional imports from South Korea.
So what we did in this particular case was we got the corporation to agree that they would build a small car platform in this country. And incidentally, no manufacturer to date builds what's referred to as a B-car in this country, which is smaller than a Focus or a Cobalt or a Caliber. Now we've got that commitment here.
PAUL SOLMAN: What about the issue of your share of ownership? It was going to be higher; now it's going to be lower.
RON GETTELFINGER: You can't even mix the Chrysler and General Motors. At Chrysler, we have 55 percent ownership. When I say we, I'm talking about the independent VEBA, the Voluntary Employees Beneficiary Association, that looks after retirees, that's controlled by independent directors. So we as a union do not have any of that stock.
In General Motors' case, the agreement is 17.5 percent. And the news media was speculating how much the UAW was going to get, 40 percent, 38 percent. That was never on the table; it was never an issue.
Lack of consumer confidence
PAUL SOLMAN: Why is this good for the United Auto Workers, or is it just desperation?
RON GETTELFINGER: Well, I'm certainly not here touting it. It's a lifeline, is really what it's boiled down to. We would not have been in these negotiations.
And let me just step back and say that a light bulb went on in somebody's head, like they came up with a new idea in Washington when we were in those hearings, saying, you know, these companies are leveraged on their balance sheet.
Well, guess what? We knew that. We knew that in '03, and we started making movement in that direction. We knew that in '05. We made additional movements, mid-contract.
PAUL SOLMAN: Movements meaning?
RON GETTELFINGER: Meaning concessions in the contract, mid-contract in '05. We've made concessions again in '07, and we were moving along.
But here's the problem. The problem is revenue. That's it. The financial institutions failed in this country. There's a lack of consumer confidence. We saw what happened with gasoline. This is a worldwide problem. And so we're caught up in it like the rest of the world.
There are those who enjoy and delight in going out and beating up workers and beating up unions, beating up organized labor, if you will, but let's just go back to the end of '07 national negotiations when the contract expired. That was hailed by so many of these so-called experts as being a transformational agreement. It was the best thing that ever happened since sliced bread.
General Motors' stock, when we went into '07 negotiations, was somewhere in the range of $20 a share. When we came out of negotiations, it was $42 a share.
Now, we know where it's at today, and how did it get here today? It got here because of the collapse of the financial institutions. It got here because of the subprime housing. It got here because of tight money. It got here because of a collapse of industry sales around the world.
Reaction to skepticism
PAUL SOLMAN: But I know that the skeptics who are watching this, because I get the e-mails after we do an autoworkers story, will say it's the gold-plated benefits, it's the high wages, they've been making out like bandits for years.
RON GETTELFINGER: I don't know what anybody would mean when they say "made out like bandits." I can show you a lot of horror stories, UAW retirees that worked 30, 40 years in a plant. They've been retired for a number of years. Their pension may be in the neighborhood of $260 to $300, $400, $500 a month, plus what they get in Social Security. Is that making out like a bandit?
You know, people have invested their lives. This is not about financial engineering on the part of workers. This is people that got up and went to work every day, worked when they were asked, whether it was on a holiday or whatever, that devoted their entire life to this company.
And they were made a promise, a commitment. They were given a guarantee by the company and our union. That's a fact.
PAUL SOLMAN: Why is the deal good for the American taxpayer?
RON GETTELFINGER: Is the deal good for the American taxpayer? I don't even want to speculate that it is or it isn't, but I am going to tell you this: It's good for the economy. The auto industry is a major economic driver in our country, and to see the companies fail would be economic disaster.
Misgivings about the deal
PAUL SOLMAN: What misgivings do you have about the deal?
RON GETTELFINGER: I have a lot of misgivings about it. But, look, we did the absolute best that we could.
And a good friend of mine used to say, "Negotiations is the art of the possible, not the impossible." So we did our absolute best. And we stood together. And we tried to take into consideration the taxpayers, the customers of the company, the dealers, the suppliers, and our membership, and especially our retirees, and we just did what we could.
PAUL SOLMAN: Did you ever think it would come to this?
RON GETTELFINGER: No. No. In 1979, General Motors had 460,000 UAW members. In 1991, Stempel, who was the chairman of the company at the time, the CEO and chairman of the board, said that he was going to close down 21 facilities and lay off 74,000 workers and, by 1995, they'd have 250,000 workers.
No, I never dreamed that I'd ever see General Motors or Chrysler or Ford, for that matter, down to the number of workers that they have.
PAUL SOLMAN: How does it feel to be presiding over this union at a time when the industry seems to be vanishing?
RON GETTELFINGER: You know, I've got -- this year will be 45 years for me in the industry. And I would have to say that it's painful to see what has happened here.
And by the same token, I do not walk away from my responsibility. And while I recognize that everybody is not going to be happy -- I know. I know that our union has done the absolute best job it possibly could under the most unprecedented circumstances that we have ever faced.
PAUL SOLMAN: Ron Gettelfinger, thank you very much.
RON GETTELFINGER: Thank you, Paul.