 |
|
 |
 |
|
|
|
Transcript - June 23, 2006
BRANCACCIO: Welcome to NOW ...
This week, more than 100,000 General Motors workers are making a very tough decision --
Whether to take the company's cash offer to quit ... it's called a contract buyout ... Or, hang on to the job ... on the bet that it will still be there longer term, along with the middle-class lifestyle it made possible.
Our reporter for this story has what in Hollywood might be called a "back story." Jonathan Silvers worked at General Motors as an engineer before he turned to journalism as a career. Silvers went back to Pontiac, Michigan to record the end of an era and ask -- what comes next.
SILVERS: Talk to John Wiezman for a while, and you'll discover how tough it's been for America's autoworkers. Weizman began working for General Motors ten years ago in Ohio. He ran fork lifts, molded dashboards, assembled airbags.
WEIZMAN: I did what you're supposed to do ... moved for the company a couple times ... still not enough.
SILVERS: This week, Weizman and all 113,000 of GM's unionized workers will make a historic decision. GM has offered them the richest buyout in corporate history -- each worker has been offered a pile of cash to walk away from the job. The money is tempting. But is it enough for them to give up the security that goes with a job at one of America's best employers? I went to Michigan to find out what this offer means for the ailing auto industry, the economy, and for traditional blue collar workers like John Wiezman.
He calls himself a GM gypsy.
WEIZMAN: A GM Gypsy is someone who, in order basically to keep your job, you'd travel from state to state or wherever they need you at different plants.
SILVERS: Weizman joined GM in 1995, and his fortunes rose and fell as the company rollercoastered through a decade of rising costs, falling sales, and tough competition. He was laid off after just sixteen months on the job, and then rehired. Recently, he moved once again -- here to Michigan. That's made five moves in ten years.
WEIZMAN: I have lost my family along the way. That's what's happened and that's what happened to a lot of families. And it's so stressful on a family. I mean, you just--you can't deal with it.
SILVERS: This week, he's leaving the job that defined his life for the past decade -- with a $140,000 company check in his pocket to speed his departure.
This isn't how he thought it would turn out.
The clarion call of industry sounds good morning to America's manpower ...
SILVERS: GM liked to think of itself as a worker's paradise, and made this and other promotional films like this in the 1930s to spread the message. There was some truth to the hyperbole.
GM PROMOTIONAL VIDEO: The bugle call of industry summons its clan.
SILVERS: Since its founding in 1908, the company has stood for innovation, determination, industrial might -- all that was great about America. For employees, it meant job security and a ticket to the middle class.
But this week, some 30,000 workers are cashing in their tickets. That's how many are taking the buyout: a quarter of GM's entire unionized workforce.
Like Weizman, I have a history with GM. Pontiac Motor Division recruited me after I got my engineering degree in 1983.
It was a time of upheaval. GM was reeling from foreign competition and rising fuel prices. I watched as Asian upstarts began driving away with our customers -- in cars that performed better and cost less.
I quit Pontiac after two and a half years -- and tried my hand at journalism. You could say I owe my career to GM. So when news from the industry went from bleak to dire a few months ago, I returned to Pontiac for a closer look -- my first visit since 1985.
Only a few weeks after it was announced, the buyout was already reshaping the company and the community.
MORGAN: A lot of the employees feel that they've been betrayed by the company, that they're being' forced out against their will and it -- it's sad.
SILVERS: Gloria Morgan is President of UAW Local 594 in Pontiac. While 30,000 union members are taking the GM buyout, some 80,000 are staying put -- including Gloria. She rejected it on principle.
MORGAN: No one should be forced to retire. A lot of people are afraid of retirement. It's a very big decision. They're not prepared and they feel that they're being' forced out. They're being' made to make decisions against their will.
SILVERS: And they have to make these decisions in a very short time.
MORGAN: In a very short time. And to make life altering decisions in a manner of 30, 60 or 90 days that's not enough time.
SILVERS: Much like it gets drivers into dealerships, GM is luring workers into leaving by dangling cash incentives, ranging from $35,000 to $140,000. Taking the buyout means walking away from one of the few jobs where a high school drop-out like John Weizman can make $28 an hour ... Turning it down means staying employed for the time being while betting everything that GM can pull out of the dive.
WEIZMAN: You have to weigh your options. If you don't take the buyout and your contract renews, especially with GM going slowly down the way it is, you're going to lose your guaranteed income probably in 2007. Your benefits, they're eventually going to start attacking. And you could be out the door with just unemployment and no benefits or nothing and it could happen next year.
SILVERS: GM was once the world's biggest corporation. This month it aims to shed a quarter of its workforce through the buyout -- and emerge a smaller, more nimble company ready to take on Asian tigers like Toyota.
In 2005 Toyota became the world's most profitable automaker -- while GM lost a record $10.6 billion and watched its North American sales plunge by 25%.
SCHWARTZ: I've seen the company shrink quite a bit. And we need to reach a stage where we're not shrinking anymore.
SILVERS: At GM, Art Schwartz heads planning for human resources at GM. He helped put together the buyout, aiming for fewer humans and more resources.
SCHWARTZ: I mean -- a company that only shrinks eventually hits zero. And so it's not where we want to be. That's not our -- our goal isn't to indefinitely shrink. Our goal is to stabilize. And this is where I'd like to see us going. We've got plants that aren't making anything, or a plant that's only making half of what it could. We want to be a profitable company. It doesn't do us any good to sell a lot of vehicles and lose a lot of money doing it.
SILVERS: For its part, GM has had decades to make decisions about global competition. But nothing it tried prevented the erosion of its customer base and profits.
MACALINDEN: I think we've counted at least five to six major restructurings -- since 1982.
SILVERS: People who know cars and the industry, people like Sean Macalinden, say that for years, the folks driving GM have been making one wrong turn after another.
MACALINDEN: They've guessed wrong on the market. They've guessed wrong on fuel costs -- economy and consumer reaction to that price. They've guessed wrong on styling. They've guessed wrong on -- branding. They've guessed wrong on marketing and advertising. They've guessed wrong on handling of dealerships. Where they guessed right, they make a heck of a pickup truck.
SILVERS: No one feels GM's labor pains more than the people of Michigan. Over a million jobs here are connected to the auto industry. Millions more revel in the car culture.
This Sunday in late May, the Michigan Widetrackers are hosting their annual Dust-off -- when collectors present their vintage cars to fellow fanatics.
GTO OWNER: I've been restoring it for 3 and a half years ... ..
SILVERS: The Widetrackers take their name from Pontiac's glory days. The Firebird, GTO, Trans Am, Le Mans, Catalina, Grand Prix: endowed with oversized powertrains and marketing to match, they put muscle in millions of American garages.
CALIANNO: Well, certainly Pontiac means excitement. There's no question about it. Look at our advertising and -- and -- just look at -- look at the products out here. This -- this -- this is -- great stuff.
SILVERS: John Calianno is president of the Widetrackers. He's also a skilled trades mechanic at a Pontiac assembly plant, with thirty seven years seniority.
CALIANNO: In the '50s after Korea-, everybody wanted something exciting. That -- the whole -- whole country was changing. So, certainly performance and speed -- all -- style -- everybody wanted the comfort. Pontiac had it all.
SILVERS: At its peak in the 1960s, Pontiac ranked third in domestic sales -- and was a true manufacturing division, with its own designers, plants, and dealership network. Today it ranks tenth -- behind Hyundai. And now it's just a brand, sharing design and manufacturing platforms with other GM vehicles.
CALIANNO: Well -- what happened is the world changed. Everything changed. The whole corporation changed. All the divisions lost their assembly plants. And little by little -- through the product lines, they merged this company into -- into one -- one group. The individual automobile disappeared.
SILVERS: John Calianno still believes in the product -- and is betting on the company's success. He turned down his $35,000 buyout package.
CALIANNO: When General Motors decides to spend money on a division, you get some great stuff. And it's -- it's on it's way. It's coming up -- there's no question about it. It'll -- it'll get there. There's more excitement coming back
SILVERS: I'd heard that before -- twenty-three years ago when I hired in. Pontiac was launching the Fiero, a two-seater, which was supposed to rejuvenate the division and excite drivers. The car took the new slogan "We Build Excitement" a bit far: some engines caught fire and some manual transmissions popped out of gear at highway speed.
The company seems to have been playing catch up ever since I left in 1985 -- which was the last time I spoke with an automotive engineer. A highlight of my return was meeting some of the engineers who hired in after me.
GM ENGINEER: We're able to tailor these things really by brand
SILVERS: Today they're trying to excite a room full of auto reporters -- with data and demonstrations of new powertrains.
After twenty years of Manhattan gridlock, I'd forgotten the thrill of a test drive.
And when a racing engineer challenged me to floor the new Cadillac sports sedan, I was wondering if I'd made the right career move.
The car goes from zero to illegal in no time. But the adrenaline comes at a price: $77,000. The sticker reflects workmanship and materials -- and something else: a heaping portion of GM's $5 billion annual health care burden. That's what's driving the buyout. $1500 of the price of every GM car goes to insuring over a million past and present employees and their families.
SILVERS: How have labor costs contributed to GM's distress?
SCHWARTZ: The actual labor cost might be -- we might have -- a bit higher labor cost than Toyota here in -- in the U.S., but it's not -- a lot higher. The big difference of course is the legacy cost. We've got over 300,000 hourly retirees. They have very few at all. And that cost is there whether we build one car of five million.
MEYERS: The cost problem at General Motors is largely because of the hangover, the legacy costs that have been created in prior years.
SILVERS: As a former Chrysler executive and chairman of the now-defunct American Motors Corporation, Gerald Meyers knows something about crisis management. He's now a professor at the University of Michigan Business School. But back in the day, he belonged to the generation of executives in the 1970's and 80's that reshaped the industry -- and saddled it with the costs that are now weighing it down.
MEYERS: The thinking was, at that time, and I was there at that time, was that, well that's not something that will hit us in the pocketbook now. That will happen way out there when those people retire. But it was a promise. And -- and that promise is -- is -- is -- is now here. And they need to -- they need to pay for those promises.
MACALINDEN: Essentially what they're asking is an entire generation of autoworkers to leave. It's exactly what they have to do. They have to become a company the size of Ford. At the same time, of course, Ford's becoming a company the size of Chrysler.
SILVERS: How is this playing out in dozens of factory towns across the country? Take Pontiac, Michigan. As its namesake brand boomed in the 40s, 50s, and 60s, factories went up and neighborhoods took root.
These homes sheltered five generations of autoworkers. They're as tidy as ever, but threatened by an epidemic of For Sale signs. Jobs are going, families are fleeing, small businesses are struggling.
The Green Tavern has been owned by the Warrington family for sixty-five years. It's down the street from a Pontiac plant that's only a few years older than the bar. Plant workers flock here at shift's end. In the old days, there were lots more of them.
WARRINGTON: Twenty years ago this bar was full every day.
SILVERS: Jay Warrington took over the tavern a while back from his dad.
SILVERS: And -- what happened to change it?
WARRINGTON: I've been here over ten years and it's basically been happening a little bit each year. And this year has been the worst year. There's less work for everybody, you know. Less work for GM. There's less work for Green Tavern.
SILVERS: Jay has been working harder since the buyout was announced, and has taken on a second job to stay ahead of the bills.
WARRINGTON: Oh, it's very tough for the neighborhood. As GM downsizes, the local businesses also have to downsize. That's the only way they can survive.
SILVERS: How do you think it will affect you?
WARRINGTON: I will probably lose at least 20 percent of our business.
SILVERS: With the buyout deadline looming, Tavern regulars like Brenda Davis are debating their options. She's been a janitor with GM for over thirty years and makes $60,000 a year -- plus benefits. Brenda knows that GM could find someone to do her job for less. Which is why she's getting out now -- with a package that lets her keep benefits and get a one-time payout of $35,000.
SILVERS: How can the car company sustain itself when a janitor is making $25 an hour at GM?
DAVIS: Well, they can't. That's why we're -- if they're gonna do some different things in 2007 on the next contract, they're not gonna be giving them kind of -- wages. Because General Motors has got to do something to save the company. The company is in trouble. They're trying to push the people that have a lot of years out of there by this program. To get a younger generation in there. Pay them less money.
GM PROMOTIONAL VIDEO: Into the silent building flows the life stream ...
SILVERS: It's a radical break with the past, when GM used to stand for "Generous Motors." No matter what the rest of the economy was doing, GM's pay and benefits would cushion workers from their first day on the job to their last on earth.
COTE: In the automobile industry -- and historically in steel and some other major industries, there's been a rather paternalistic culture that's been prevalent in the past. It's that -- the major corporation will take care of the work force and so on.
SILVERS: John Cote says those days are gone for good. He's the Dean of Business Administration at Baker College in Flint. And he says that the workforce of the 21st Century has become a disposable resource.
COTE: And obviously as we've entered into a more globalized economy where we're having to be more directly competitive with foreign companies that are operating either from the foreign -- locations or are multi domestic and they're operating here in America -- companies can't afford to do those types of things anymore.
SILVERS: GM is trying to create a new model, and a new relationship with it's remaining workers. When it comes to this buyout, the autoworkers are being left to make their own decisions--largely without GM or UAW advice. The issues are complex, the decisions momentous.
SCHWARTZ: This is tough. I -- I -- I'm glad I don't have to make that decision right now. One of the things we did do for that very reason was we extended the deadline. The original deadline would have been very tight for the workforce to make these kinds of decisions. So we extended it, in agreement with the UAW, for one month.
MEYERS: The autoworkers didn't create the problem. They didn't -- design the vehicles that are bland. They didn't bloat the company with excess management and structure. No, they didn't do any of that. They're not -- they're not to blame for it and they can't be expected to cure it. But -- but they've got -- there -- there's something they can do and that is they can cooperate in trying to fix the problem.
MACALINDEN: We're talking about a new 21st century UAW that will negotiate new, flexible labor agreements. And a completely different business model. You know, they really are there's a lot more cooperation than we've ever seen in our office in the last thirty years. So in this case, by cooperation and facing market reality they ensure the survival of the union.
SILVERS: The deadline to decide on the buyout is June 23rd -- right about the time you're watching this story. GM is already moving -- in what may very well be a new direction. GM had the biggest efficiency gains in the past five years of all American automakers. GM now runs for five of the ten most productive factories in the U.S., and in overall manufacturing efficiency is closing in on the leader, Toyota.
MEYERS: It's going to be a battle royal. And it's -- it's going to be -- very difficult for everyone trying to get a piece of the market. And our market -- ten years from now is probably not going to look like today's market. It'll be a lot different.
SILVERS: At its peak in the 1960s, GM controlled over half the U.S. car market. Today, its market share is 25% and falling -- the lowest since the depression.
MACALINDEN: GM will probably still attempt to be all things to all people, which is very expensive. But probably will -- I -- I believe will come to the realization they can't. And just become still the largest seller of vehicles in -- in the United States, but a much smaller share of the market. Maybe as low as 18 percent, 19 percent.
SILVERS: They say that change is the only constant in industry. With one American job in ten still connected to the auto-making, change in this era of global competition is leaving American workers vulnerable -- with their jobs threatened and their livelihoods uncertain.
But if workers are increasingly wary of their employers, they're also increasingly reliant on themselves.
Many of the tens of thousands cast off by GM will discover that the wages and benefits at their next job fall far short of the automaker's largesse. Most will take it, because they have no choice. Others will seek to redefine themselves and their jobs.
John Weizman says it's time for him to become an entrepreneur.
He plans to start a bio-diesel conversion company and will use his buyout money to compete with his former employer. For a few hundred dollars, he'll convert a car's diesel engine to run on used cooking oil.
WEIZMAN: We took an old water heater and we're heating it up and making bio-diesel out of old grease.
SILVERS: GM will probably survive that challenge, but how well it survives in its new streamlined form remains to be seen.
Tomorrow, Weizman will leave Michigan for good and return to a family home in West Virginia. Today is his last day at GM. He'll say goodbye to friends at the plant -- and pick up his last check.
SILVERS: You a little sad?
WEIZMAN: Yeah, I am. I uh, took this job to work it thirty years and get a retirement and benefits and do what I'm supposed to do and feel like I've been kind of squeezed out of it, scared out of it, forced out of it.
SILVERS: And if it could happen to you ... ?
WEIZMAN: Oh it'll absolutely happen to anybody. And it'll happen to a lot more than just me and it's already happened to a lot of other people and not just GM ... .
BRANCACCIO: And that's it for NOW. From New York, I'm David Brancaccio. We'll see you next week.
|
|
|
|
|
