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A Republican View

Automakers need 'systemic change,' perhaps bankruptcy


Jim Brown - OneNewsNow - 11/19/2008 4:00:00 AM

A U.S. senator is advising the American auto industry to file for Chapter 11 bankruptcy and change management under reorganization.


Senate Democrats are seeking to take $25 billion of the massive financial bailout to pay for loans to Detroit's Big Three automakers -- Chrysler, Ford, and GM. However, the White House and Republicans in Congress want the automaker bailout money instead to come from redirecting a separate $25 billion Department of Energy loan program already approved by Congress to help the industry develop more fuel-efficient vehicles.
Oklahoma Republican Senator Jim Inhofe says the auto industry is struggling because of both union and management problems. "If we were to go in there, just say, and drop $25 billion on our Big Three, do you think that they would actually change the way they operate? I don't think so," he contends.
He believes that instead of treating the symptoms, the industry ought to evaluate a deeper-rooted problem. "I think that they need to have a systemic change, a change in the way they've been doing business," he explains. "They ought to fire the people who are responsible for getting them in the position they're in. They ought to renegotiate their union contracts and let people know that they need to survive, maybe even file bankruptcy."
Inhofe says if the auto industry files bankruptcy, labor unions might get the message that they "can't negotiate to the point where they run a company under."

A Democratic View

Detroit: Barney Worries Bankruptcy Would Bust Unions

By Mark Finkelstein (Bio | Archive)
November 19, 2008 - 09:57 ET


Barney Frank favors bailing out the Detroit automakers over letting them go into bankruptcy.  Chief among his concerns is that bankruptcy might "bust" the unions. You know, those organizations whose contract demands have put Detroit on the brink of extinction.

The Massachusetts Dem, chairman of the House Financial Services Committee, was interviewed by Maggie Rodriguez on today's Early Show. He appeared alongside Sen. Richard Shelby (R-Al.), ranking Republican on the Senate Banking Committee, who favors letting the automakers reorganize under Chapter 11.

BARNEY FRANK: Bankruptcy would be very disruptive.  Bankruptcy is a favorite spectator sport for politicians and experts who don't have to engage in it.  You have a whole network of suppliers--small businesses and others--who would get "stiffed," to use the legal term, in a bankruptcy.

There is also an assumption that if you do bankruptcy, you could undo labor contracts.  Now the unions to their credit have negotiated some concessions. But you know, we already have too much union-busting and too much income inequality for the average worker in this country for us to now say by the way, if you're a company and you haven't been able to totally get rid of the unions, then go bankrupt and rewrite, write down the contracts.

As our sister organization CNS has reported, "it costs over $73 per hour on average to employ a union auto worker." That compares to an average of about $43/hour for the non-union workers of the Japanese automakers with operations in the US.


My Personal Experience 38 years as a Detroit Factory Worker


From 1980-1989 I was working as a Fabricator/Welder in Detroit for the Local 292 Sheet Metal Workers Union.

Our work environment varied from shop to shop but most were safe and clean with the help of OSHA

Our work load was frustrating for me as I was used to and preferred working in a non-union environment, For the basic job of fabricating objects related to industrial ventilation, heating and environmental filter systems, the fabrication work was divided up into three basic categories. You had a Fitter class A. a Welder class B and a helper class C. A fitter could only read the blue print and tack the object together. He was not allowed to put more than a half inch of weld on anything. A Helper could tack while the fitter held bigger objects in place. The helper could also move objects  to the welder when it was  finished being tacked together. The welder could only weld the entire object and nothing else, he could not read a blueprint or help the fitter fabricate anything. The helper would then clean and move the finished product to it's next station.


If you were caught assisting someone out of your job definition you could get into big trouble with time off and even the loss of your job if you continue to buck the system. This production process was never seamless. Time was wasted waiting for the other person to do his work while you stood around forbidden to help. This system was bad in most cases and just abusive and ludicrous in other union shops at the time. The pay was higher than anyone doing the same thing by at least 40% and closer to what the  auto workers of the big three made. This was always used as the standard by which others made as they were the highest paid than any skilled trade in Michigan. Drugs were always a problem as well as alcohol and many times after lunch it was counter productive and not safe for serious work. The union had enough power and control over the companies which helped many dysfunctional people keep jobs when they should have been out in the streets.


 Most of the companies in spite of these problems demanded quality and they got it eventually. Many times needless and careless "do overs" were all part of the process. We had the best medical and dental insurance and even paid holidays and overtime pay so conformity to this work system by most was only common sense to keep a good thing going. Layoffs were seasonal and usually included two or three weeks off during Christmas and New Years. This was more like a paid vacation as we had sub pay and unemployment which totaled up to about 90% of our regular pay. Times were fairly good for everyone and the employees did pretty good. Where else could you work at a leisurely pace and have all your needs met and little responsibility for your actions or lack of them..


In non-union shops in other fields of welding and fabrication you had to do all these functions yourself and at times with bigger items you would be teamed up with another person of equal skill and work together. Production was at least doubled from the Union way of doing things and quality was equal to the union shops. Drugs were still a problem as the ACLU, NAACP and other special interest groups would be the stand in for the lack of unions and protected people that should have been fired or given help. The kind of work pace was hard but fair for what should be expected by the companies trying to compete in an open global market .that has laws stacked against domestic industries. In the sheet metal trade, non union work was strictly limited to small jobs and residential work as the unions controlled the higher volume bigger paying jobs with every means possible. Yes I mean every means including violence which is never mentioned in the press. There was about 38 shops that were members of this Union local. Most were the best and biggest shops Detroit had to offer and  many of them had been in business from the start of industry or at the boom in World War II. In the good times everybody made a good profit and the system was accepted and overlooked for its imperfections. However when things began to get harder concessions were hard to come by and many companies could no longer continue in the same mode and system


Twenty years later after many years of progressive concessions and cutbacks  the work procedures have been reconfigured where one classification does all of the work and the pay rate is no where near the automotive scale. Actually they are now like the non-union shops and better in quality and production output. The union no longer protects the lazy or troubled children, they try and help and as a last result allow them to be fired. Everyone works harder than ever before and is more caring about quality. The unions provide skilled trade schooling and there exists in this smaller union a fairness and new awareness that if we don't do our best we could actually lose our jobs. There is even a small amount of cooperation between competitors to keep jobs local for themselves and their workers. These concessions have been hard to accept but the remaining companies are better for them and able to thrive even in this bad economy. My last year of work before retirement was with the local 292 and it was enjoyable as everyone had a work ethics, desire and care for their jobs. We made enough for a comfortable life, not as luxurious as the 70's or 80s but comfortable.


It took a near death of this industry to realize and make the necessary changes. There are now only four shops left in this local. All of the others companies are no longer in business. Why? There were many reasons, some unfair rules with foreign competition, outsourcing and loss of business overseas and Mexico sometimes these decisions were because of the results of liberals demands on environmental and safety controls and resistance to provide tax breaks as a concession for industry. Many of the companies went out of business because of a system that did not change in enough time to save them. The system caught up to this fatty section that needed to be cut off long ago. It really had nothing to do with corporate greed. This is a rare thing for me to say but it actually is the truth. Much of this could be blamed because the self indulgent careless attitude of the overly protected, overly paid worker and the unions representing them that provided  a  work environment that did not include a maximum production effort.. That kind of system in good times was overlooked but it can only go so far until it becomes fatal. Concessions were the only way out and everyone adapteded.


This I believe is what the Auto Industry needs as their reality. They have made the most money, have had the best of every benefit and their jobs are so well defined and restricted they are far removed to what could be a better production output.. The auto industry of the Big Three and Union domination have become an entity unto themselves. The hourly unskilled laborer and line worker makes  more than any skilled labor in any other industrial shop in the city or state. Some of the skill trades in the big three auto industry even make as much or more than degreed professionals in various professions.


The auto workers on the most part don't realize how well off they are. They are in a class of their own and cannot even be compared to other shops and trades. The Union created this corrupt system and most of the people are innocent victims of this system. It has been so well protected from the outside that in order to get a job in any of the big three you have to be related or know someone on the inside. There is a lottery system that can allow some to be hired from the unemployment system but it is not easy. Conformity to the system is essential in keeping your job. Promotion is never determined by individual performance or initiative as everybody makes the same amount based on their classifications with seniority as the determining factor on a graduated scale controlled by the Unions. This is a work environment under total socialistic control. It is no wonder that the majority of people today desire this system as their government.


 It is greed and fear from the owners, greed from the unions and greed from the employees that will keep this mess of a system going no matter how much money you throw at it. I say fear by the owners as there is still this feeling from the Unions of threats and strong arm tactics that are still present. If I have to spell it out to you younger people that do not realize the real history of Unions, it goes back to the end of prohibition and the infusion of the Mafia with unions and trucking and then into industry and eventually, everything else. This connection to thug style strong arming still exists on a kinder gentler manner today but syndicates are still at the core of unions as well as Socialistic activists.  No one wants to take concessions, the companies have trimmed down on every level and every part of operations that are not controlled by the unions as they possibly can. But the union and hourly wage earners refuse to come to grips with  reality and want to keep everything that was gained in the good time to remain for today and that is just not real..

The Detroit Big Three Auto workers are not the poor abused people exploited by the rich greedy Corporations, the way the news tries to portray. They live far above anyone else with the same education and job skills. That is the unvarnished truth. Follow many of them home and you will see the many toys and nice homes and new cars and trucks that fill the yards and driveways. You will find some that do not live this well but that is always synonymous with a drug or alcohol problem.


I have two uncles who retired from Fords as maintenance electricians. They both have associates degrees in their fields. There lifestyles were far above anyone of their job classifications in any other industry in the Detroit Metro area.. Both Uncles put two children each through college at the University of Michigan with masters, bachelors and two doctorates degrees, while one maintaining a horse ranch in the country and the other always having a nice home of upper middle class statue in a nice suburban area. Cruise boats RV 's and vacation homes in Florida were always a part of their rewards also. They were typical of a skilled trades wage earner at the Big Three. I do not begrudge them for this great opportunity to help themselves and their families. They were in the right place at the right time to enjoy these benefits but it has caught up with us and now they will have to adjust to a lifestyle that the rest of us have had to settle for. They are just not willing to do this. Yes it would be traumatic but not impossible. If this does not happen it will be the ruin of this industry in America. I am no champion of Corporations believe me but in this situation, the corporations are not the villains this time, a corrupt system that has been allowed to flourish for years is. The greed of individual workers many who have never known anything else is the real problem.


The Republican Senators who were demonized by the press for stopping the Auto bridge loans were not against the loans! They wanted concessions from the Unions as a source of the original problems but were met with a refusal. I don't blame them for wanting accountability. They should have been just as demanding to the Bankers and investment companies. All of this foolishness is designed by the NWO to break the American dollar and our infrastructure. Without addressing the real problems curing the symptoms will do nothing but waist away all of our resources and drain our economy. Controls by government only creates a total socialistic and communistic framework for future enterprises.


The local news stations inflate the statistics when it comes to revealing hourly rates. Back in 2000 (I think), Toyota had an exceptional year and gave each worker an average of 6,000 bonus. This inflated the stats for the annual wage for that year and this has always been used as the example when comparing the American Detroit Auto workers wage earnings to the Southern based foreign owned auto workers.. This is a smoke screen of bovine excrement and biased new casting. called Propaganda. Real wage earnings show the US auto worker makes 50 to 60% more than non union foreign auto workers in America.  


Without a big change (not socialism) they will never get out of this rut. A chapter 11 may be the wake up call needed. What is not needed is another Socialistic bailout. No amount of money is going to make the change without a change of heart of all concerned. Life has caught up with all of us and  our past sins of greed. Now, we all will have a price to pay for it. Americans are resilient enough when we have to be and we could make it, if we were willing to take personal responsibility for our part and adjust in hope of a better future without government money and future control. We have lost our confidence to do that. A softer generation that has grown up and taught that socialism is the ideal and hatred toward the traditional ways of capitalism are hopeless insures a regimented society is what we shall have. History is taught in distortion and now, no one can learn the truth and success of capitalism in America unless you are old enough to have lived it.


A free enterprise system has always out produced any other form of government. A free enterprise system has always been the most innovative and creative, producing more advancements than any regimented society could ever accomplish. This is what history does prove. It is in part why America has been great in the past and why we will never again reach that point with our current way of thinking. That is what a free enterprise system is all about, it inspires innovation and creativity; socialism only produces robots. But today the Government and the NWO wants Robots. And robots you have willingly become. Aldous Huxley, New Ager, Beatnick, Hippy founder and author of Brave New World has helped to produce his own visionary nightmare world of the future that we are now entering a Change I cannot believe in!