The foreign nonunion auto companies located in the South have a plan to reduce wages and benefits at their factories in the United States. And to do it, they need to destroy the United Auto Workers.
Last week, Senate Republicans from some Southern states went to work trying to do just that, on the foreign car companies' behalf.
Senate Minority Leader Mitch McConnell (R-Ky.), Sen. Bob Corker (R-Tenn.) and Sen. Richard C. Shelby (R-Ala.) -- representatives from states that subsidize companies such as Honda, Volkswagen, Toyota and Nissan -- first tried to force the UAW to take reductions in wages and benefits as a condition for supporting the auto industry bailout bill. When the UAW refused, those senators torpedoed the bill.
UAW President Ron Gettelfinger realized that the existence of the union was under attack, which is why he refused to give in to the Senate Republicans' demands that the UAW make further concessions. I say "further" because the union has already conceded a lot. Its 2007 contract introduced a two-tier contract to pay new hires $15 an hour (instead of $28) with no defined pension plan and dramatic cuts to their health insurance. In addition, the UAW agreed that healthcare benefits for existing retirees would be transferred from the auto companies to an independent trust. With the transferring of the healthcare costs, the labor cost gap between the Big Three and the foreign transplants will be almost eliminated by the end of the current contracts.
One reason there is the perception that UAW wages are so overinflated is that the “average” figures our media cited included retiree pensions. American auto manufacturers carry huge legacy costs, since, you know, Ford has been making cars in America a few generations longer than have Toyota and Nissan.
One would expect that foreign manufacturers would eventually carry some high pension costs, someday perhaps, unless they take some kind of proactive action. And lo and behold:
However, an internal Toyota report, leaked to the Detroit Free Press last year, reveals that the company wants to slash $300 million out of its rising labor costs by 2011. The report indicated that Toyota no longer wants to "tie [itself] so closely to the U.S. auto industry." Instead, the company intends to benchmark the prevailing manufacturing wage in the state in which a plant is located. The Free Press reported that in Kentucky, where the company is headquartered, this wage is $12.64 an hour, according to federal labor statistics, less than half Toyota's $30-an-hour wage.
If the companies, with the support of their senators, can wipe out or greatly weaken the UAW, they will be free to implement their plan.
This sounds about right.
Let’s just say the Nissan plant in Smyrna, TN., paid its workers $12.64/hour right now. That’s a good bit more than the current minimum wage--$7.25 (and you have the Democratic majority in Congress to thank for even that), and a healthy bit above the $8.87 that is a living wage for single adults in Rutherford County. But if you’re a single mom, or the sole provider in your family, it’s not enough to make ends meet.
Scott County, KY, where Toyota’s Georgetown plant is located, and where that hourly wage is said to be a probable reality, doesn’t fare much better.
So, if this does in fact happen three years from now—file this one away for the memory hole, peeps!—you have folks like Bob Corker and Mitch McConnell to thank.
I know this may come as a shock to the wingnut coalition that visits my blog, but I’m not by default an automatic union supporter. I'm not attached to the "existence of the union" if the benefits of union membership can be achieved some other way. But I am a big supporter of the working man and woman, and if that means forming unions so workers can have a collective voice at the negotiating table, that’s fine with me.
But if the ultimate legacy of the Bush Years is the destruction of the American worker’s union, so be it. All is not lost, my friends.
What we need in this country is a national Living Wage law. If workers in this country were paid a decent wage, a wage they could live on, a living wage, and that wage were the law of the land, maybe we wouldn’t need unions anymore.
Just a thought.