Union support crucial to auto bailout

November 18, 2008 6:57:22 PM PST
Chrysler, Ford and General Motors may be competitors, but sitting shoulder to shoulder, their CEO's see a major disaster if a bailout is turned down.

"The cost would be catastrophic in jobs lost, income lost, government tax revenue lost and a huge blow to consumer and business confidence," GM President and CEO Rick Wagoner said.

The biggest concern by members of the Senate panel was the automakers' ability to repay the $25 billion loan.

"We wouldn't be here today asking for this if we didn't have a high confidence level that we could weather this economic trough, continue to resize, make these gut-wrenching decisions to come out the other side leaner, more agile, and for us, a higher quality, higher reliable product," Chrysler President and CEO Robert Nardelli said.

And the president of the United Auto Workers union brought solidarity to the appeal for a life-saving cash infusion.

"Without question in our mind, it is dire, it is critical, it is a crisis," Ron Gettelfinger said.

The union may be a potential deal maker or deal breaker because union concessions may be a condition for a bailout, University of California, Berkeley auto industry and labor expert Harley Shaiken said.

The UAW has already demonstrated its willingness to compromise.

"They made major sacrifices a year ago," Shaiken said. "The starting wage for a GM worker is less than $15 an hour; no pensions and very few health care or other benefits."

At plants like New United Motor Manufacturing Incorporated in Fremont, a joint venture of GM and Toyota, a no layoff contract clause may be on the line.

"NUMMI has thrived with no layoff provisions because that job security results in very high productivity," Shaiken said. "Workers are motivated to improve the process because they know it won't come at their expense. So there are risks to getting rid of the job security provisions."

GM is also asking the German government for a loan. Its Opel division wants $1.2 billion in case cash-strapped GM declares bankruptcy.


Load Comments