Thursday, October 13, 2005

Let me get this straight ...

... Delphi, which has now filed for bankruptcy in federal court, is primed to ask workers to take a 63% pay cut (that takes 'em down to around $10 an hour), pay 27% of their healthcare instead of 7%, and maybe take a 50% cut in their pensions.

Meanwhile Delphi's 21 top execs make as much as a mil each, and prior to the bankruptcy filing got even sweeter offers from Delphi as enticements to stay on.

Top domestic automotive supplier Delphi is not only big in the state, it's a pretty major employer the West Michigan area.

Media Mouse isn't the only one speculating that Delphi's bankruptcy will be used by by General Motors to pressure the United Auto Workers into major concessions to the auto giant. It's become "a common way for corporations to eliminate union contracts and pension programs."

I don't doubt the UAW will have to cave on this. It's times like these when I hear oh-so-many grumblings against unions here in virtually union-free Grand Rapids. And I don't get it. It's stomach turning enough to hear Delphi execs oozing their smooth corporate-speak on the radio about how they and GM and every other behemoth corporation have to "get a handle on things" before they're driven out of business entirely (and yes, I know all about lack of competition with developing countries when it comes to labor costs). But why do we begrudge these men and women their hourly wage? Is $27 an hour really so out of line? Can people really raise families on $10 an hour anywhere? With such wage concessions these hard working people won't even be able to buy the cars they're making parts for.


Anonymous Anonymous said...

Its not just the $27 per hour. Job restrictions that require 2 workers where one would be fine. Job security guarantees that make firing impossible and hiring something to be avoided. If a plant needs to be closed, all of the workers are guaranteed 95% pay until another job is available withing 50 miles of the old plant! There have been workers in the job bank for 15 years! They get over time pay of time and half, double and triple time. In a Detroit Free Press report on bankruptcy, a UAW forklift driver made 87K (down from 103K the year before). Further, after 30 years accured service, a UAW member is eligible for retirement! A 48 year old man can look forward to retirement and free healthcare for the next 40 years. When competing in a flat world this can not be sustained.
When benefits, retirement contributions etc are added in, the average hourly cost of a UAW worker are $65 per hour.

But, probably most damaging is the work practices. The UAW has restrictive work rules that are intended to drive up employment. It can take multiple people to repair a machine. One to unplug the power, one to remove a cover and move an obstable, one to service hydraulics. The number of workers, the co-ordination and time drive the effective costs thru the roof. Assume a single man repaired the machine: 1 hour lost operation. UAW repair, 4 guys, 4 hours lost operation. Single man cost at UAW wages $65 + lost production. UAW cost %260 + 4 X lost production. This is probably the worst effect of the unions.

However, don't take either side's information at face value. Both have lots of dirty laundry and half-truths to paint themselves in a good light.

When the UAW failed to organize the transplants its fate was sealed. The result is what we see today.

10:05 AM  
Blogger kathleen said...

Yes I know there are abuses on both sides. I know the UAW has fat leadership and has unbendingly refused to change with the times. It is certainly NOT the UAW that Walter Reuther began.

And yet these are people who are losing their jobs. Working class people for whom other possibilities have not and do not occur. People who have a decent wage and decent lives who now will be squeezed out of the middle class by the powerful moneyed class.

Where CEOs can make as much as 400-500 times more than the guy working on the line. Where big coroporations answer to nobody but the stockholder. Where jobs outsourced to Mexico pay an obscene $1.50 or so an hour. And don't tell me these people are glad to have it.

This is not just about Delphi or the UAW, friend. It is about economic justice.

In this deal and so many others we are seeing today, there is none.

9:26 PM  

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