Conservative ‘No-Bailout Alternative’ For Automakers Amounts To Union-Busting

uawguy.jpgLast night, the House of Representatives approved an “emergency plan to rescue the nation’s domestic automobile industry” that would extend General Motors and Chrysler $14 billion in loans. However, the measure currently lacks the votes to pass in the Senate, and Sen. Mitch McConnell (R-KY) has threatened to kill the bill.

And conservatives are not stopping there. Rep. John Boehner (R-OH), Rep. Eric Cantor (R-VA), Rep. Mike Pence (R-IN), and others have put forth their own “no-bailout alternative” to the loan.

The “alternative” is all of two pages, one of which is spent criticizing the proposal passed by the House. With the remaining page, conservatives reveal that their plan for helping “the Big Three to become competitive again” amounts to busting their union. After stating that United Auto Workers hold “to concessions already made” conservatives demand that the union:

Concedes the elimination of Supplemental Unemployment Benefits; Concedes elimination of the Jobs Bank Program; Agrees to either reduce company retiree health care obligations or otherwise convert a portion of such obligations into equity; and Agrees to reduce wages and benefits to the levels paid by non-Big Three manufacturers.

Sen. Jim DeMint (R-SC) said yesterday on NPR that, in regards to an auto loan, “we’re not going to do it with the barnacles of unionism wrapped around their necks.”

First, it is worth pointing out that the UAW has already agreed to suspend the Jobs Bank, and delay automaker payments to a retiree health care fund. Furthermore, the union has implemented a plan to permanently shift retiree health costs into a UAW trust fund in 2010. Therefore, the second and third “concessions” that conservatives are demanding have, for all intents and purposes, already happened.

The other two “concessions,” however, are where the trouble really begins. The last one implies that Big Three workers are paid substantially more than their non-Big Three, non-unionized counterparts. However, as the New York Times and the New Republic pointed out, UAW workers don’t earn significantly more in hourly wages. The first, meanwhile, calls for cutting unemployment benefits at a time when economists and lawmakers are advocating extended benefits as an important response to the financial crisis.

Ultimately, these union-busting demands are counterproductive. As David Madland and Harley Shaiken note, “unions help foster a competitive high-wage, high-productivity economic strategy“:

Unionization and high worker productivity often go hand-in-hand. Fairness on the job and wages that reflect marketplace success contribute to more motivated workers. Given the pressures of globalization and competitiveness today, unions have been responsive to increasing productivity and embracing new innovations.

The UAW has already conceded to help the Big 3 manage their financial troubles. New innovations — not a lower-paid, uncared for workforce — will help Detroit get back on its feet.


Steve Benen notes that Demint claimed there will be “riots” if the automaker rescue occurs:

We’re going to have riots. There are already people rioting because they’re losing their jobs when somebody else is being bailed out. The fairness of it becomes more and more evident as we go along.

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