Wednesday, February 27, 2008

The Domino Effect: Cutting wages in half not fair, workers say

GM, Ford and Chrysler Wage Cuts are not only impacting their own workers, it is also impacting related businesses and their families. The Detroit Free Press Reports on what is happening at American Axle & Manufacturing in Detroit:

Cutting wages in half not fair, workers say
GM, Chrysler report no disruption in production

By JEWEL GOPWANI, ERIC LAWRENCE AND ALEXANDRA BARUZZINI • FREE PRESS STAFF WRITERS • February 26, 2008
American Axle & Manufacturing workers trudged through wet, sticky snow as day broke this morning to picket after talks broke down between the UAW and the company. A General Motors spokesman said that as of this morning the strike had not disrupted production at the automaker's plants. GM makes up nearly 80% of American Axle's revenue. A Chrysler spokeswoman said the automaker had stocked up on parts for three assembly plants that use American Axle parts, and had not seen a disruption this morning. ..
Carl Gill's grandfather, mother and three aunts are among many of his family members who worked in these plants when they were a part of GM. Gill said he is financially ready for a long strike. "This is our lives," he said.Talks broke down Monday, with the UAW and the company far apart on a number of issues, including health care, retirement and wages, which management has said it would like to cut by about half. Kevin Dennard has been with the company for 13 years. "I am striking for fair wages and a fair contract, " Dennard said. "If we were to take the cut, even standard living would be impossible. I would lose my house. I will strike until we can compromise, but it doesn't look like the feeling is mutual." ...“This will affect not only our children, but our children's children," Norm Blagec said. "Once a contract is signed, it will take years to change it. That's why we are out here. Fighting so when the contract is signed, it will show fair wages and benefits. I will be out here as long as it takes to reach an agreement." ..Cherisse Ellington, a maintenance worker at the plant, echoed Beauchesne’s sentiments.“They wanted to cut our wages in half. I don’t feel that’s fair,” she said.One striking worker said economic factors make the company’s demands unreasonable.“Look at the price of gas now. Who can afford a cut in pay?” said Henry Nelson, 56, of Southfield.Nelson has worked for American Axle for 36 years.
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When we last discussed this issue, we all agreed these wage cuts had nothing to do with illegal immigration. Ultima said, ""GM was going bankrupt. It's not just the economy and business, it's competition from Japanese and other auto manufacturers who apparently enjoy a cheaper labor contract. I believe in a strong middle class with middle class wages and benefits but I also believe in a level playing field and since in a free society there is little the government can and should do about this, it is up to GM and other companies to do whatever is necessary to competitive. It serves no one's interests for GM to go belly up."
So given Ultima´s response, and I believe it is a good one, many American businesses can only survive if they go Global, and in a Global economy, they must pay competitive wages. Not competitive to American wages, but competitive to what their competition in other countries are paying. The question then becomes, if our corporations are to survive and they most go global, outsourcing and paying reduced wages, then how do we as an American Society adapt? What are our choices?

7 comments:

dianne said...

This is a fair question, Dee. The auto industry is rather unique. It paid very high wages and unsurpassed benefits for blue collar jobs. The union fought for these things for their workers and got them but when they did, the auto industry was doing well. Now, it's not. Obviously, compromises habr to be made because the auto industry simply will cease to exist in this country, but I agree that to cut wages in half was too drastic.

The real question, though, is why do American jobs keep getting exported and wages cut. Here is where I agree with the Democrats and both Hillary and Obama. We have entered into agreements, such as NAFTA, which are unfair to American companies because our standards are much higher than those of other countries; yet we let these other countries get away with those unfair advantages. This has to stop.

You might think I'm totally against anything the Democratic party stands for but that's not true. I not only agree with them on the trade agreements, I also agree with them on universal health care. The Republicans have had their chance to fix things and they have failed. We are talking about Americans here, black, white, Latino, Asian, every ethnicity. We all need health care. We all need fair paying jobs. I disagree with the Democrats on several issues, but on these I do not. I hope that if and when the Democrats are elected they fix these things in a fair and humane way.

Liquidmicro said...

Diane puts it well about the trade agreement and about the auto industry. I say we also get rid of the WTO and reconfigure all of our trade agreements to make things fair on both ends.

ultima said...

It may be obvious to all that American businesses exist to make money for their owners; it is the modus operandi of American capitalism. A corollary to the money-making is not spending it needlessly...Such a tight fisted philosophy is not limited to the auto industry. Successful businesses differentiate between those expenses necessary to stay in business and those more pensively characterized as 'moral obligations'. Difficulties or reluctance to understand and accept this distinction underscores much of the tensions between unions and workers on the one hand and industry. Industries would like to pay higher wages and benefits because to do so insures labor peace and rewards the workers who contribute so much to the success of the company. However, management must also satisfy other stakeholders -- banks, investors, and customers. The challenge is to satisfy or, at least, mollify all of them in a way that will also enable the company to stay in business. Otherwise, businesses would be operating as charities and violating their responsibility to their shareholders.

The unions are culpable to the extent that they allowed foreign auto manufacturers to establish lower standards for wages and benefits thereby making it difficult for U.S. companies to compete in both the domestic and the world market.
The answer is not free trade but a level playing field where those who wish to sell to the U.S. must begin to move toward more equitable compensation for their employees.

Tariffs are generally shunned because the last time they were tried, the result was a worldwide depression. Nevertheless, equitable treatment of labor by foreign manufacturers should be our goal and it certainly is a basis for negotiation regarding the alternative of tariffs to equalize costs.

ultima said...

Environmentalists are often accused of being fearmongers who preach gloom and doom, exaggerate risks,and favor endangered species over the needs of humans. However, most environmentalists are interested in these issues because of what they see as the consequences for people rather than their other consequences.

Dee said...

Ulty, Dianne,
I agree with both of you, however, I don´t know what we as an American Society do next. How do we survive? Do we just live with less? Buy less? Isnt this more domino effect and a continued downhill spiral?

dianne said...

I don't know, Dee. I think we're probably luckier than our kids and grandkids are tho. I actually have a pension with healthcare and was able to retire early. That's not in the cards for our kids.

Our presidential candidates are promising everything under the sun to people..healthcare for all, money for college, cheap, renewable energy sources, etc. and green jobs aplenty. I don't buy it. They say they're going to pay for it by getting out of Iraq and rolling back Bush's tax cuts for the wealthy but the fact is, we borrowed money for the Iraq war. We didn't have it then and we won't magically have it tomorrow either. As far as rolling back the tax cuts, I am almost certain they'll have to roll them back all the way into the middle class in order to afford their promises. Look at medicare. It is extremely expensive and projected to go broke long before ss so how can we add a much larger program like universal health care to the unsustainable costs we already have with medicare? And then add to that millions more for education, etc. Quite frankly, I don't know how it all can be done.

Yup, I'm pessimistic.

Danny Vice said...

This should be really a clear topic I think.

An employer owns the job, not the worker. It is up to the employer to offer that job to the worker. It's their investment.

If an employee doesn't like the job or the pay, he/she is free to go find another job..

Outside of legal guidelines to keep job sites fair, equal, and non-descriminating, workers have a lot of gall acting as though they now own the position - which wouldn't exist without the employer in the first place.

When the employer goes out of business - where does the job go?

Unions have done nothing but cripple the ability for domestic manufacturers to compete.

If you punish an important company for being more competitive, who do you suppose they'll do? They punish YOUR exports.

I'll never understand why that concept is so difficult for folks to understand. There is no magical wand that will make consumers pay more money for a domestic product, simply because some union exists at the factory.

Consumers direct the market, not unions, not import or domestic manufacturers.

Bankrupting the company you work for, isn't job security.

Unions will eventually derail our domestic automobile industry - with it's pigheaded, useless insistance on controlling a manufacturer's ability to adapt with the market.

And since people are too self serving to realize that - it is only a matter of time before they all go bankrupt or are bought out by overseas manufacturers who are not nuetered by such unions.

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