•  HOME 
  •  ARCHIVES 
  •  BOOKS 
  •  PDF ARCHIVE 
  •  WWP 
  •  SUBSCRIBE 
  •  DONATE 
  •  MUNDOOBRERO.ORG
  • Loading


Follow workers.org on
Twitter Facebook iGoogle




Their contracts and ours

AIG execs vs. UAW workers

Published Mar 18, 2009 4:58 PM

“Disgusting!” “It’s an outrage!” “They made sure that they got theirs.” These are some of the nicer comments bound to be heard as workers discuss the latest scandal involving corporate misuse of government bailout funds.

AIG—the American International Group, Inc., a private insurance company—was the recipient of $170 billion from the Treasury and Federal Reserve. Now AIG is paying out $165 million in bonuses to top executives “that brought the company to the brink of collapse last year.” Condemnation in Washington has been “nearly universal.” (New York Times, March 15)

One would think the federal government, which now owns 80 percent of AIG, would not only condemn this abuse of taxpayer dollars but act immediately to stop it. However, after he “berated” government-appointed AIG chief Edward Liddy, all Treasury Secretary Timothy Geithner achieved was a commitment to reduce some of the bonuses.

“AIG had contractual obligations to make the bonus payments,” Liddy explained in a letter to Geithner, “and could face lawsuits if it did not do so.” Liddy went on to emphasize that “quite frankly, AIG’s hands are tied.” (Associated Press, March 15)

Also weighing in on the matter was Lawrence Summers, head of the White House National Economic Council. Summers gained notoriety as president of Harvard University when he stated that women intrinsically have a low aptitude in math and science. He was forced to resign in 2006 because of this outrage.

Now back in the limelight, Summers, in a March 15 TV interview, twice called AIG’s executive bonuses “outrageous.” Yet he concurred with Liddy: “We are a country of law. There are contracts. The government cannot just abrogate contracts. The easy thing would be to just say ... off with their heads, violate the contracts. But you have to think about the consequences of breaking contracts.” (New York Times)

What about contracts with workers?

“There are contracts”—and then there are other contracts apparently not subject to the normally-sacred Rule of Law.

Summers, who also co-chairs with Geithner the President’s Auto Task Force, knows very well the terms of the $25-billion Treasury loan to General Motors and Chrysler. The document demands severe changes in the contracts between the two automakers and the United Auto Workers union, putting in jeopardy such hard-fought gains as retiree health insurance and income security for laid-off workers and stipulating that union members cannot strike.

That would be a contractual “abrogation” if ever there was one! Clearly there are two standards: one for millions of dollars in “retention bonuses” that are “promised” to top executives, and another for the wages and benefits actually negotiated by a union and expressed in a legally-binding contract (the collective bargaining agreement). Doesn’t this violate the basic legal premise of equal protection under the law?

Gov’t-ordered concessions whet bosses’ appetites

In February, the UAW reached tentative agreements to modify contracts with Ford, GM and Chrysler. Casting ballots in the first week of March, Ford UAW workers voted to give up thousands of dollars worth of cost-of-living allowance raises, income-security protection, performance bonuses and Christmas bonuses.

Ford also took away one paid holiday per year and ten minutes of break time per day—a de facto speedup. Ford stock—which currently is worth less than two dollars per share—will be used instead of cash to finance the retiree health care trust, as mandated by the Treasury. Forty-one percent of Ford UAW workers voted no on these concessions.

Negotiations are still continuing with Chrysler and GM over the combined funding of the Voluntary Employee Beneficiary Association—to which the companies were originally to make a one-time cash contribution and be free of future obligations for retiree health care—with cash and stock.

At one point the UAW walked out on talks with GM when the company pushed for terms even worse than those called for by the government.

On March 11 members of the Canadian Auto Workers overwhelmingly ratified changes to their contract with GM. Along with sacrificing pay raises and bonuses, they agreed to give up a week’s vacation. This is the second week of vacation the CAW has conceded since last year’s concessionary contract with the Detroit Three. GM and Chrysler are also pushing the Canadian government for billions of dollars in assistance.

It might have been assumed that Ford and Chrysler would follow the pattern set at GM in Canada. Not so. “Currently Chrysler CAW are not competitive,” declared Chrysler President Tom LaSorda, threatening to shut down operations in Canada completely if he didn’t get a 25-percent reduction in labor costs and a $2.3 billion loan from Ottawa. “We have to break the pattern.” (Detroit Free Press, March 13) While using milder language, Ford also indicated it would demand deeper concessions.

With LaSorda’s brazen bullying of the CAW there is no longer even the fig leaf of “labor-management cooperation.” At the same time, both the Democrats and Republicans have trashed collective bargaining in the name of “competitiveness” and “viability,” while treating as sacrosanct agreements between Wall Street firms and their executive stooges.

All of this should serve as a wake-up call. The struggle is not between the government on one side and “the industry”—represented by both the union and company executives—on the other. The capitalist class has declared war on the UAW and by extension the entire labor movement.

Now is the time to initiate cross-border solidarity actions. How about labor-labor cooperation for a change?