10 Jan 09 In Defense Of The U.S. Auto Worker - Part I

By: Ang Biondo

Part I of IV – Debunking the Allegations:

The media has the public believing the average U.S. Auto worker who is employed by one of the Big Three makes an outrageous $73.92 per hour. A figure reported by the U.S. auto industry to physiologically freak out the American public. The figure incorporates many unnecessary and extravagant costs generated by the poor judgment and improper decisions by corporate executives and trickles all the way down to the factory floor. These are management decisions of which the production worker has absolutely no control over. This pay grade is grossly overstated and an attempt to make the stockholders of the company believe the U.A.W. and those they represent are at fault, and not the fault of the multi-million dollar salaried executives who are raping the profits of the corporation in salaries, bonuses, perks and golden parachutes.

As an employee of one of the Big Three for 42 years, (retired), I witnessed many of the abuses and saw many transformations good and bad that contributed to major changes in the industry. The good was the improvements in labor relations over the years, the new and never ending technology contributing to safe cars, and improved working conditions. The bad included a number of bad or poor decisions that will be explained throughout the article. If you take the time to read it you will be able to define who is at fault for the failures and why major changes need to be made from the executive levels down through upper management levels – and without golden parachutes.

Since the early to mid 90’s General Motors and Ford launched downsizing campaigns to reduce production and manpower in the United States, with Chrysler starting even earlier in 1979. The offered “early retirement” packages and “buy-outs”, to shed seniority employees with entitlements. They renegotiated contracts mid term to establish a two tier wage agreement that allowed them to hire new employees at from $2 to $4 less than the wage of their seniority employees. The early retirement and buyout packages were to allow them to shed those near retirement and those who chose too, to leave making room for new less expensive employees without any entitlements.

Those taking the early retirement or buyout packages, did so mostly out of fear. To them the hand writing was on the wall, and if they didn’t take the offer, feared the loss of everything they worked for. To them, those who did not take the offers were foolish and gambling on their future. Most of the early retirements felt they could supplement their income with part-time jobs enabling them to work fewer hours and allow them some free time. Those taking the buyouts, thought they salvaged some of the fruits of their labor and considered themselves young enough to start over.

The companies, however – did not hire new employees to replace those who left, but instead seized the opportunity to move these jobs to other plants, some consolidations and some out of country. The middle class jobs lost by these force reduction, through “attritions” and “buyouts”, were allowed without penalty through the “JOB Bank”, clause of the National Agreements, (explained later on). These cuts also affected supervisory and middle management positions who suddenly found themselves out of work.

To many who found themselves furloughed from the closed plants, it was just another volatile day in the once stable U.S. auto industry. They would evaluate their situation and hope their unemployment benefits would hold up until new jobs were found or they were recalled to another plant. Many of them, found it difficult or impossible to get new work and in some cases were force to work two and even three part-time jobs to support their families.

Of course some a number of upper management positions in unclassified pay levels, were also affected, but they needn’t worry about the jobs of servitude in the pay levels below them had to contend with. They were given sabbaticals followed by “golden parachutes”, and set for life, if they chose not to work again. Others were placed in job placement programs and their names placed with “head hunters” to match them up with other jobs in industry.

The industry is not attempting to hide the fact that it is slowly but methodically moving these jobs to their Mexican and overseas facilities where labor costs reduce the cost of building their product to a fraction of that in America. Yet they expect us to support these losses by purchasing their products. With the middle class of the auto industry gone, is the civil service middle class next? What will happen once the middle class jobs of the civilian sector are gone as well? Many communities throughout the nation are complaining of the high cost of medicals. With the growing cost of Welfare and Medicaid programs to the states, the citizens are complaining of high taxes and community costs. Not having control over the escalating costs of these programs, they are turning to the high costs and benefits plans of the civil workers paid from taxes. If you are one of those who feel the civil sector is safe, you only need to look as far as the Reagan era and the strike by the “Air Traffic Controllers”, to see how far a protest or strike will go should they decide they don’t like working conditions.

Congress has already decided the auto workers must take additional cuts in order for Congress to pass a bailout bill for the industry. Senator Bob Corker (R),TN says the union must agree to lower their wages to match the “Transplants” in the south. Well Last year Honda’s production workers reported making $31.00 per hour, while Volkswagen workers reported earning $29.75 per hour. Does this mean the U.S. auto worker should get a raise. If Senator Corker were to check the facts for himself, he would see the actual hourly wage of the U.S. auto worker in reality is about $29.00 per hour, or less ($28.73 actual).

All of the figures mentioned above represent the basic hourly wage rate only and do not include benefits packages. The industry’s creative accountants had to include all costs regardless of how they occurred into manpower costs in order to reach the $73+ figure. Since they are using base wages only from the transplants it is only fair to do the same with the American company’s employees as well. To reiterate:

Honda workers (2007 averaged) = $31.00 per hour
Volkswagen (2007 average) = $29.75 per hour
U.S. auto worker (2007 average) = $28.73 per hour
To see the Transplants benefits packages click on the following links:
- Honda America Employee Benefits
- Volkswagen America Employee Benefits
  Note: Volkswagen employees in Tennessee have to pay about $74 per month for their medical benefits, which translates to about $0.43 per hour. If you subtract that from their hourly wage, they still make more per hour than their American owned company counterpart.

Let’s break the numbers down and bring out the truth:

Fact: The U.S. auto worker, like most public and civil servants are middle class Americans
Fact: They are extremely aware of the competition,
Fact: They have the same desires and dreams of all Middle America.
Fact: They are charitable, patriotic and among the most productive in the world.

It seems the definition of “middle class” was defined during the arguments and debates of the candidates in their campaigns. If the parameters were correctly set at between $40,000 and $250,000, then this places the U.S. auto worker in the lower end of the scale as seen in the scale below. These figures were derived from both parties agreeing on the $250,000.00 high end and the fact that the McCain campaign brought out the fact that Obama voted to tax incomes of $40,000.00, as an Illinois Senator.

I feel it necessary to point these facts out, as it would appear that Wall Street and the upper class media is attempting to separate the middle class and pit them against each other. The philosophy of “divide and concur” has been around since time began, and will be around till time ends.

If we are to correct the current situation of the American economy, generate a fair tax plan, jobs, growth, and prosperity here and abroad, America needs to stop, take a deep breath, and assess the situation. The American people have to go back in time and retrace her steps from the time of “God and Country first and foremost”.

Corporate Greed, and those in power have attained an attitude of “me first and to hell with everyone else” It is this attitude, that found the loop holes in the laws passed by the Carter and Clinton administrations in the mortgage lending policies that allowed the democrats running “Fannie Mae” and “Freddie Mac” to rape the system out of millions of dollars. Law’s passed in good faith, by well intended unsuspecting representatives to make home ownership a possibility for the lower income. These loop holes allowed them to use these facilities as their own personal piggy bank accumulating millions of dollars for themselves, and bringing down the world economy in the process..

And so it is, in the Auto Industry. The pay scale for the U.S. auto worker s employed by the “Big Three”, (GM, Ford, and Chrysler) are defined in detail in their National Agreements with the U.A.W., and is or should be readily available at the offices of the Company or the Union. There are individual agreements for each category I.e.: National Agreement, Benefits Agreement, etc. The agreements may vary slightly, usually with the last auto company the union negotiates with getting the best package for the workers, I.e.: minor perks

Anyone interested in learning the truth, especially the news media, and the members of Congress making the demands on the union – should have the facts before they speak. They should obtain copies of the “Wage Agreement” and “Benefits Agreement” and learn the facts. The contracts are written in legal language, but the media shouldn’t have a problem understanding them. Congress and the media consist of lawyers and intelligent people; if fair mined, they will understand what the U.S. auto worker is really getting for their efforts.

Our representatives are elected, and are expected to serve all of their constituents, not just those they choose to serve. Likewise, with the news media, they are in a position of “celebrity status”, and there are people who actually think they know what they are talking or writing about.

Congress needs to stop the exodus of jobs to foreign lands. And America must force this by refusing to recognize the division of party lines and start voting for those people who will serve the people, not themselves. If they refuse to be bi-partisan, then “we the people”, must force a bi-partisan House.

Next: Part II – The Facts

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