05 Jan 09 In Defense of the U.S. Auto Worker - Part IV

By: Ang Biondo

Part IV of IV – Controversial Issues & Solutions

Some of the more controversial issues in the news in recent days are the benefits the U.S. Auto’ worker has enjoyed over the years. A controversy stemming from the $17 billion dollar line of credit the auto’ industry was seeking to get them through until their new “green” vehicles come to market. These Issues are:  

• The “JOBS BANK” Program: 
  • In an attempt to stop plant closings and the exodus of jobs to south of the border and the eastern hemisphere the U.A.W., negotiated the “JOBS BANK” program, with the American automobile companies’. The companies agreed to place one employee in the “JOBS BANK: program for every job lost to a plant closing or sent out of country. They also agreed that those employees placed in the “JOBS BANK” would not be used in performing any work belonging to classifications held by production employees. This meant any employee occupying a “JOBS BANK” position, would be limited to the work they can perform in the plant. They could: 
    • Be used to perform or help with administrative duties 
    • Clerical, transcript, and filing, etc. 
    • Community Services 
    • Develop or aid in the development of employee health programs 
    • Minimal non-skilled work (if qualified) normally out-sourced to contractors 
    • The “JOBS BANK” Program did not, nor was it designed to protect those jobs lost through attrition, such as: 
      • Jobs lost through market slowdowns (reduction in work force) 
      • Jobs lost through retirement of employees  
      • Jobs lost through the death, disciplinary termination, or employee’s voluntary termination.

Basically, the “JOBS BANK” Program kept thousands of otherwise inactive auto workers whose jobs were lost to outsourcing or moving abroad gainfully employed:

• It kept them off the unemployment roles. 
• It placed the onus of monetary responsibility for the would be unemployed on the companies who chose to move their operations out of America
• It kept them from becoming a dependant of the State and a burden on the already over taxed, citizens of our Great Nation… 
• The S.U.B. (Supplemental Unemployment Benefits): 
  • The S.U.B. program was touched on briefly earlier, but I will reiterate the advantages of having and keeping it in place. As most other benefits this was one that was born of necessity, not of greed. The U.S. auto’ industry was always cyclical and unstable for those who worked in the industry. Especially the younger workers with less than 10 years seniority, who were laid off several times a year. Many would work for 90 days or less. 90 days was required to attain seniority and if an employee was laid off for longer than they worked, they would have to start from scratch if and when recalled. Once you attained seniority and worked 26 weeks the employee was entitled to unemployment benefits (by State law) but was not entitled to S.U.B., until they acquired 1 year seniority. S.U.B. was designed as a supplement benefit to stabilize an otherwise unstable income for the U.S. auto’ worker, allowing them to support their family in a work environment subject to cyclical market conditions. It is designed to raise the employees income to 95% of their take home pay after taxes. If an employee normally has any deductions for savings, (Credit Union, 401k’s, etc.), it is not deducted from S.U.B. and the employee is responsible for any automatically deducted payments he may normally be paying from their Credit Union account. The news media, would have you believe the auto’ worker is collecting full unemployment benefits and an additional amount in S.U.B. to bring that persons weekly pay while on furlough up to 95% of their gross pay. They do not, it is 95% after adding the amount received from State unemployment (which the employee pays into), payroll taxes, and FICA, and taking the sum of those amounts and subtracting them from the take home pay for that employee for a 40 hr week. The amount of S.U.B. is the remainder. Advantages: 
    • Stabilize an otherwise unstable income. 
    • Keeps the auto’ worker on the tax payer roles instead of become a dependant of the State and over taxed tax payer 
    • Provides a stable family environment for the auto’ worker and their family 
    • The U.A.W.’s Black Lake Resort: 
      • This has been a target of the media since the U.S. auto’ industry has encountered financial difficulties. The Walter & May Reuther Educational Conference and Recreational Resort has was completed in 1970, after the President of the U.A.W. at that time, Walter P. Reuther was given permission and support from over 3000 delegates to the 1967 National Convention. It has served all of its members who choose to go there and participate in the activities offered at the facility. The U.A.W. represents more than the auto’ industry and all members are welcome to participate, not just the auto’ workers. The union is what its name implies. “The United Automobile, Aerospace and Implement Workers Union. The facility is open to all members of the union and their families. It is not owned by the “Big Three” It is owned by the Union who has members who work for the “Big Three”. The Union is not responsible for the abuse of the Corporations by the executives of those Corporations, nor are they responsible for the many bad decisions or the multi-million dollar wages, bonuses, or golden parachutes paid to executives of those Corporations.

        The U.A.W. has done an excellent job of managing the union funds entrusted to them to represent the membership. Those who say the U.A.W. must relinquish the $26 million dollar facility or the $6 million dollar golf course, because the U.S. auto’ industry is in financial straits is absurd. It is like saying the President of the United States must give up Air Force 1, because the Nation’s States Welfare systems are losing too much money.
        You can see a video tour of the Black Lake Facility and what the U.A.W. has to offer its members who choose to visit, click on this link > U.A.W. Black Lake Tour , then click on the camera icon.

Possible Solutions:

The solutions or what needs to be done becomes obvious by this point. The firm actions required are: 

• Balance the U.S. – China trade deficit and all countries the U.S. currently has a deficit with. 
• Change the law to read “Import of goods to U.S. from countries that forbid importing products made in Country.” If we cannot export products to Countries who build and export that product, etc. to the U.S., We must level the playing field, etc. 
• Place tariffs on products coming from other countries with large “trade deficits”. Restrict the deficit between the U.S. and any other Country to a limit not to exceed 2%. All products after that coming into the Country should have a tariff placed on it making the cost of the product equal in price to products made domestically. 
• Pass a law making it illegal to import products from Countries who have violated the content laws of the United States, for a period of at least 1 year. Or 6 months 1st offense, 1 year 2nd offense and permanent ban 3rd offense. (products containing lead, and melamine will stop in a hurry) 
• Pass a law restricting the pay structure for executives. I.e.: A maximum annual salary of $500,000.00 dollars and reasonable reimbursement for expenses. Bonuses would be limited to 5% of profit plus an additional bonus of remaining profits after paying stock holders a stock dividend of up to 200% or so above prime. This simply means that if prime is 3% the stock holder would get a 9% dividend for his/her stock holdings. The stock market would still determine the value of the stock. Since it’s not unusual for top executives of a Corporation to hold 30% or 40% of its shares, it should be an equitable solution for both the executive and the stock holder. And if the excess after paying the stock holders a dividend leaves a residue of several million dollars or more, they can still make a $25/$125 million dollar salary for the year. It’s a new concept called “pay for performance” instead of “pay for failure” 
• You can also call it “spreading the wealth” in an equitable way instead of taxing the rich and giving it to the poor.

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Tags: auto, bonuses, buy outs, Corporate Greed, Executive, Executive Greed, force reductions, gambling, golden parachutes, Greed, layoffs, loan, Media Buzz, Politics, retirement, stockholders, stocks, U.A.W., U.S. Auto Industry, United Auto Workers, wages