Big Media: Screw the Auto Workers

Memo to the traditional media: you want to see the auto industry go down? Fine. But, at least try to give the facts about what workers have undergone in the industry -- an assignment that most of the traditional media could not live up to in its coverage of yesterday's hearings on the proposed bailout.

The facts are that the workers in the industry are not responsible for the mistakes of the executives who have mismanaged the companies, now and in the past. The meme -- this is a right-wing, anti-union meme -- is that UAW workers continue to coast along on some "gold-plated" lifestyle while the industry craters.

And the traditional media plays right along. I scanned the major media and, with one exception, could not find any significant reporting of the facts laid out yesterday about the cuts, concessions and job losses that workers have taken on in a bid to save their livelihoods.

In the case of the Washington Post, New York Times and Wall Street Journal, there was no reporting -- ZERO -- about the parts of the testimony of UAW President Ron Gettelfinger that detailed the hits UAW members have taken just in the last few years (and some didn't even bother to mention that Gettelfinger was even in the room).

Here is one exception: The Los Angeles Times--

Alan Reuther, legislative director for the United Auto Workers, rejected the idea -- voiced by more than a few members of the House and Senate -- that overly generous union wages and benefits contributed to Detroit's woes.

"We are obviously opposed to any more concessions being required of workers and retirees," Reuther said. "UAW members already made huge sacrifices in the 2005 and 2007 contracts. The last contracts have been called 'transformational.' They effectively eliminated the cost gap between the Big Three and the foreign transplants in terms of labor costs.

"Wages for new employees were slashed 50%; new employees do not get any guaranteed retiree health benefits; they also do not get the traditional defined-benefit pension plan," he said. "And the healthcare liabilities for existing retirees will be transferred to an independent [entity]. Bottom line: The workers and retirees have already accepted major cuts."

Below is an excerpt from Gettelfinger's prepared testimony. To those who would say that this is self-serving rhetoric, I would point out that none of the auto company executives disputed the facts in this testimony. In fact, at least two of the executives -- Alan Mulally of Ford and Rick Waggoner of GM -- agreed with Gettelfinger's description of the UAW's concessions.

Some commentators have asserted that "overly rich contracts" negotiated by the UAW are to blame for the companies' current situation, and suggested that workers and retirees should be required to take deep cuts in their wages and benefits. This totally ignores the recent history in the auto industry and the facts regarding wages and benefits at the Detroit-based companies.

The truth is that in 2005 the UAW agreed to reopen the contracts mid-term, and accepted cuts in workers' wages and in health care benefits for retirees. Then, in the general 2007 collective bargaining negotiations, the UAW agreed to what industry analysts have called a "transformational" contract that fundamentally altered labor costs for the Detroit-based auto companies. This contract slashed wages for new hires by 50%. Furthermore, new hires will not be covered by the traditional retiree health care and defined benefit pension plans. In addition, this contract stipulated that beginning January 1, 2010 the liability for health care benefits for existing retirees would be transferred from the companies to an independent fund (a Voluntary Employee Beneficiary Association, or VEBA). This agreement has subsequently been approved by federal courts, which have appointed a majority of the trustees who will be independent of the UAW and responsible for managing the VEBA. Taken together, the changes made by the 2005 and 2007 contracts reduced the companies' retiree health care liabilities by fifty percent.

As a result of all these painful concessions, the gap in labor costs that had previously existed between the Detroit-based auto companies and the foreign transplant operations will be largely or completely eliminated by the end of the contracts. Indeed, one industry analyst has indicated that labor costs for the Detroit-based auto companies will actually be lower than those for Toyota's U.S. operations. Thus, the truth is the UAW and our active and retired members have already stepped up to the plate and made the hard changes that were necessary to make our companies competitive in terms of their labor costs.

It is also important to note that union negotiated work rules cannot be blamed for the current problems facing the Detroit-based companies. According to the Harbour Report, the industry benchmark for productivity, union-represented workers are actually more efficient than their counterparts at non-union auto plants. And union-made vehicles built by the Detroit-based auto companies are winning quality awards from Consumer Reports, J.D. Power, and other industry analysts.

We can have an honest, public debate about whether the auto industry should receive taxpayer dollars to keep it from sinking. But, in my opinion, the traditional media has played an irresponsible role in feeding the pro-business, anti-union line that UAW workers are "overpaid".

Of course, this is the same line that argues that America would be a wonderful place if all workers just accepted the magic of globalization, where Wal-Mart is the future and unions -- and the decent wages and living standards they brought -- are a relic of the past.

Read More: