TOPICS > Economy

UAW Chief Gettelfinger Defends Position on Wage Cuts

December 12, 2008 at 6:10 PM EDT

JIM LEHRER: The auto story. We start with the collapse of the rescue plan in Congress as another began at the White House. NewsHour congressional correspondent Kwame Holman reports.

KWAME HOLMAN: By announcing it no longer opposed using funds from the $700 billion rescue program to aid the struggling U.S. auto industry, the Bush administration put it in reverse gear today.

In a statement, White House spokeswoman Dana Perino said, “A precipitous collapse of this industry would have a severe impact on our economy, and it would be irresponsible to further weaken and destabilize our economy at this time.”

The shift came just hours after the Senate failed late last night to muster the 60 votes needed to move forward on a bill with $14 billion in emergency loans.

The House had passed the bill on Wednesday night. It included stricter government oversight of the car companies.

But many Senate Republicans rejected that proposal, calling it an unwelcome new government bailout.

Minority Leader Mitch McConnell.

SEN. MITCH MCCONNELL (R-KY), Senate Minority Leader: We’ve had before us this — the whole question of the viability of the American automobile manufacturers. And none of us want to see them go down, but very few of us had anything to do with the dilemma that they’ve created for themselves.

KWAME HOLMAN: Harry Reid, leader of the majority Democrats, said, despite the Senate’s best effort, there wasn’t enough common ground to reach a deal.

SEN. HARRY REID (D-NV), Senate Majority Leader: We have worked and worked, and we can spend all night tonight, tomorrow, Saturday, and Sunday, and we’re not going to get to the finish line. That’s just the way it is. There’s too much difference between the two sides.

KWAME HOLMAN: But Tennessee’s Bob Corker, the lead Republican negotiator on a compromise amendment, said an agreement wasn’t that far off.

SEN. BOB CORKER (R), Tennessee: We are about three words, three words away from a deal.

KWAME HOLMAN: The hang-up, Corker said, was the United Auto Workers’ refusal to give a specific date next year when they’d pare back wages to levels comparable to those paid to non-union workers at U.S. plants of foreign manufacturers such as Honda and Toyota.

Corker, whose state is home to a Nissan plant and headquarters, addressed the breakdown at a news conference this morning.

SEN. BOB CORKER: I basically pleaded with them to give me something, give me some kind of language where we would know that, at some point date certain, they were, quote, “competitive,” not parity, competitive with these other companies.

KWAME HOLMAN: Senate Banking Committee Chair Chris Dodd handled the talks for the Democrats. He said demanding a fixed timetable in the near future was unreasonable given the state of the economy.

SEN. CHRIS DODD (D), Connecticut: And the auto industry pointed out, as did others, that it’s impossible to talk about date certains, particularly in an economy that is as volatile as this one is.

And so any suggestion that either dealers, suppliers, the manufacturers themselves, or, for that matter, labor in this case could agree to a date certain in this economy on when compatibility or comparability would be achieved was unrealistic.

KWAME HOLMAN: In Detroit today, UAW President Ron Gettelfinger called the compromise “unbalanced,” arguing it would have required more sacrifice from workers than from other auto industry stakeholders.

With Congress not expected to return until January, Gettelfinger turned his attention to convincing the Bush administration that swift action was needed.

RON GETTELFINGER, United Auto Workers President: It’s important for the White House to put — exert its influence to get this money released as quickly as possible. We cannot afford for there to be a run on the banks, if you will, at these companies.

KWAME HOLMAN: Corker said he hoped the administration would attach strings to the funds to make sure the auto manufacturers followed through on restructuring plans.

SEN. BOB CORKER: Crisis is when good things happen, you know, when you can make people do things. If the TARP money comes in without the conditions that we agreed to last night, even if you move aside the UAW thing that wasn’t agreed to, even if you move that aside, if those conditions are not on the TARP money, the administration, in my opinion, will have missed an unbelievable opportunity to cause these companies go ahead.

KWAME HOLMAN: That sentiment seemingly was echoed in a statement from President-elect Barack Obama, who said, “My hope is that the administration and the Congress will still find a way to give the industry the temporary assistance it needs, while demanding the long-term restructuring that is absolutely required.”

The administration was expected to take action within days, but has not yet revealed what conditions it would ask of the automakers and unions should it make funding available.

'Worldwide crisis' in auto industry

Ron Gettelfinger
United Auto Workers
So the industry is very depressed right now. Consumers cannot get loans. And until we can get the economy stabilized a bit, the industry needs some assistance here.

JEFFREY BROWN: Throughout this debate, we've spoken with the chief executives of Ford and General Motors, as well as prominent politicians involved in the fight.

Tonight, we get the perspective of the United Auto Workers president, Ron Gettelfinger.

Mr. Gettelfinger, where do things stand as we speak? What are you hearing from the White House?

RON GETTELFINGER, United Auto Workers President: Well, as you know, the White House put out a word this morning that they were looking at all options, including the use of the TARP funds, to assist the industry, because they recognize that bankruptcy is not an option here.

So we're very hopeful that the Treasury will be able to release funds to General Motors and to Chrysler in the very near future.

JEFFREY BROWN: In the near future. Do you have any sense of how much exactly or when this would be released?

RON GETTELFINGER: Well, we're not sure on how far down the road they're going to look, whether they're just going to try to get through until January the 20th or how far they're going to go beyond that. And, obviously, that would be a determining factor in how much they release to the companies.

JEFFREY BROWN: Well, is the question now -- because there, I still think, is some confusion about the amount of money and what exactly it would be aimed to do. Is it a question now of getting the companies through a short few months or for some longer term to allow reforms to happen?

RON GETTELFINGER: I think it's an emergency bridge loan to get us through a few months here. As you know, this economic downturn that we're experiencing is the worst since the Great Depression, especially when it comes to auto.

Vehicle sales have dropped. We were in maybe seven years where we were in the 16.5 million to 17.5 million range. And for the month of October and November of this year, we fell below 11 million on an annualized rate.

So the industry is very depressed right now. Consumers cannot get loans. And until we can get the economy stabilized a bit, the industry needs some assistance here.

And incidentally, Jeff, it's not just here in this country. The auto industry around the world is reaching out to their governments for assistance, because this has become a worldwide crisis in the automotive industry.

Wage amounts are controversial

Ron Gettelfinger
United Auto Workers
But, Jeff, the men and women of the UAW are the only ones that have been at the bargaining table making concession. The other stakeholders have not been to the bargaining table yet, and we really need for that to happen, as well.

JEFFREY BROWN: Well, you had been negotiating, of course, with the House and then with the Senate. Does this mean that you renegotiate now with the White House or Treasury? What concessions exactly is the UAW going to make in order to free up these -- the so-called TARP funds?

RON GETTELFINGER: Let me take that one step at a time. First of all, we did not negotiate with the House of Representatives. It was an odd turn of events, but we did find ourselves in negotiations with the Senate.

But, you know, the thing here is the cost of an automobile, if you apply it -- just pull out the labor piece of that -- you're talking about 10 percent or so. So our members have already made a major amount of concessions, '05, '07. Just last week, we made additional concessions. We got our bargaining committees together, taking a look at additional things we can do in our contracts.

But, Jeff, the men and women of the UAW are the only ones that have been at the bargaining table making concession. The other stakeholders have not been to the bargaining table yet, and we really need for that to happen, as well.

JEFFREY BROWN: But you know that there has been a lot of talk, a lot of focus about the hourly wage of UAW workers, whether that makes these companies, to what extent it makes these companies less competitive with foreign competitors that are not union shops.

What concessions -- I mean, what concessions are you agreeing to at this point? And do those go forward with the White House and Treasury now?

RON GETTELFINGER: Well, you know, first of all, the White House and the Treasury, I'm not sure of what the requirements are going to be there. So I'm going to avoid talking about that.

But I do want to go back to the wage issue, because, first of all, it's being painted out there with a pretty wide brush, most of which is inaccurate.

If you take the entry-level wages that we negotiated in '07, that's less than half of the wages that are paid to normal workers. We took, for instance, cleanup work completely out from the companies and allowed other companies to come in and handle that at even less of a wage.

In addition to that, none of our traditional employees will get a general wage increase through 2011. We gave up a 3 percent wage increase in '06 at Ford and at General Motors.

And I've been hearing some of the foreign nameplates say that they actually pay more than we do now. But how do we know what they pay unless we go in and look at their books, unless they are willing to open their books?

And while we're there -- and since suppliers are stakeholders, we should look at their supply agreements. Dealers are stakeholders. We should look at their dealer agreements. I don't think the foreign brands are going to want to do that. So I think it's unfair to just pick on the hourly workers.

And then let me point out something else, if I may.


RON GETTELFINGER: We heard a lot when we were on Capitol Hill about being viable companies. We have the most open market in the world.

Take, for instance, right now Volkswagen. They are appealing to their government for aid to help them get through this downturn in the auto industry. By the same token, in Tennessee, we gave them over $500 million to locate here to be our competitors. That's taxpayer dollars that they do not ever have to pay back.

For all of the foreign brands that are operating here, the actual money that was put in is over $3 billion to come to our country and compete against our industry with absolutely no reprisal in the event that they get this money. It's theirs.

But that's only a piece of what we see. It's all of the other incentives that they're giving to locate in these particular states.

Without funds, companies would fail

Ron Gettelfinger
United Auto Workers
We've got to get to the green vehicles here. We've got some great products in the pipeline to help us reduce greenhouse emissions, but we've got to get over this economic downturn.

JEFFREY BROWN: Well, let me ask you, as we wait to see what happens now with the release of these funds, do you believe that G.M. or Chrysler, without the funds, would fold within, what, a matter of weeks?

RON GETTELFINGER: I believe within a matter of weeks that General Motors and, very shortly thereafter, at Chrysler. And there's no question about it. General Motors would go into Chapter 11. They would then go in to Chapter 7 liquidation. They would dissolve as a company.

But what we're trying to do -- and it's why we've put so much time and so much energy, and the men and women of the UAW have made so many sacrifices, is we want these industries to survive, not just for our membership, but for Main Street and Side Street and rural America, because this is the backbone of our economy. We need this industry to survive.

And we're doing everything in our power, from our safety records, to our quality, to our productivity, to make sure that everybody that goes to work that touches a customer's vehicle makes sure that that's the absolute best vehicle that the customer can get.

And then we've got to get to the green vehicles here. We've got some great products in the pipeline to help us reduce greenhouse emissions, but we've got to get over this economic downturn.

JEFFREY BROWN: All right, UAW President Ron Gettelfinger, thank you very much.

RON GETTELFINGER: Thank you, Jeff.