08 Jan 09 In Defense Of The U.S. Auto Worker - Part II

By: Ang Biondo

Part II of IV – The Facts:

In the past several years, the U.A.W., in a spirit of cooperation in an effort to help the Big Three maintain meet the costs of the “green” pollution and emission standards and meet the competition have made many concessions. In their efforts to keep these jobs on American soil, they have agreed to reopen negotiations mid contract and agreed to:
• Multi tier wage agreements, allowing the auto companies to hire new employees at substantially lower wages than their seniority employees.
• The Union has agreed to take over and fund the pensions of the G.M. retirees as of 2010 – letting G.M. off the hook for what amounts to be token seed money to handle this monolith they previously agreed to: 

• The union in good faith, is now poised to demolish the “Jobs Bank Program”, a program that kept employees disposed by plant closings who’s jobs were shipped to Mexico and overseas operations gainfully employed and off the rolls of unemployment and an eventual burden on the taxpayers. A program that had Senator Corker and others understood, would have demanded it be kept, instead of a condition to a line of credit.
  • The “JOBS BANK” basically only protected those employees furloughed by plant closings whose jobs were moved to other countries. Jobs lost to attrition (reduction in production, retirement, death, etc. are not protected through the “JOBS BANK” clause of the National Agreement.
    These are but a few of the many things the U.A.W. has done in the spirit of cooperation. And while they are agreeing to these concessions, the top brass of these companies continue to collect their multi-million dollar salaries, bonuses, perks and golden parachutes. The Boards of these companies should be giving them “golden horse shoe’s”, not parachutes – and they should be shoving them you know where.

Fact is, the U.S. auto worker, before making any concessions averaged about $48,000.00 annually. The low end being $35,000.00 and the high end around $56,000.00 annually. Add to this the company’s contribution towards: 

• Medical Benefits - $80.00 per month, or $960.00 annually (about $0.47 per hr per employee)
  • Volkswagen of America employees who have to pay for their own (near identical and maybe a little better) paid $74.00 for their Blue Cross & Blue Shield package.
  • Pension Plan approximately $1800.00 per year. 
  • Walter P. Reuther, President of the U.A.W. at the time negotiated these benefits for his union:
    Employer-funded pensions: (beginning at Chrysler in 1950) by relinquishing a portion of the incrimental hourly wage. This meant the workers would give up a percentage of their hourly wage throughout the life of their employement in order to insure some sort of guaranteed income in retirement.  So the annual contribution to the employees’ pension fund although credited to company funding, actually comes from the employees not the company. When negotiated with Chrysler in 1950, it was agreed that it would be funded from a portion of any pay increases negotiated for the employee. This amounted to $0.05 or about 4% at the time. Some of the plants were represented by more than one union and one of these was the I.B.E.W. (International Brotherhood of Electrical Workers) who chose to fund their pension plan through their union received the additional $0.05 in their pay instead. Since it was negotiated as “employee-funded”, and has remained so over the years, the company is a trustee of the fund at no cost to them, but rather a beneficiary of the tax-breaks endowed to a trustee. Had the union negotiate to handle this fund themselves it would amount to about an additional $1.12 per hour in the auto workers paycheck each week.
  • Medical insurance: (beginning at GM in 1950) A benefit negotiated by many unions for its members involved in all types of jobs and is not unique to the auto industry. It is also a benefit offered by many none union business as a perk for its employees. The tax-payer provides their representatives in Congress with a most lucrative of all plans giving them full medical coverage for them and their families for life.
    ? Supplementary unemployment benefits: (beginning at Ford in 1955). A necessity mandated by the volatility of the auto industry. Auto workers were often laid off and recalled many times throughout the year. Unemployment benefits were not an option for many, their families would encounter hardships and it was necessary for them to take lesser paying jobs to make ends meet. As anyone would, they would leave their newly attained lower non-benefits job and return to the auto company when recalled, only to be furloughed again after one or two months. Potential employers would find excuses not to hire furloughed auto workers as they could not compete with the pay and benefits offered by the auto industry. S.U.B. (Supplementary Unemployment Benefits) were negotiated to elevate the hardships of constant furloughs and represented about 40% of a furloughed employees weekly income while collecting unemployment benefits, and 95% for up to an additional 78 weeks when UE runs out. Without S.U.B. the furloughed auto worker with a family of four would more than likely be entitled to Medicaid and Food Stamps while collecting unemployment, and Welfare, when the EU benefits are exhausted after 26 weeks.
    o I feel a need to qualify Assuming the 4% ratio has been maintained, based on a $28.00 per hour wage, would equal $1783.68, and since the original $0.05 came from the employee in lieu of it going into a pay increase, the pension fund is funded by the employee, not the company. The company has merely acted as the trustee of the fund and taken the tax write-offs on it.
  • If the workers at the time would have opted for the union to handle the funds instead, as the IBEW workers did, they would be getting an additional $1.12 per hour bringing them up to $29.12 per hour. $0267 less than Volkswagen of America and $1.88 less than what Honda of America workers averaged in 2007.

So far we have learned that the benefits considered extravagant by Congress and the Media have actually proven to be a benefit to the tax-payer as well. They have kept the unemployed auto worker off the welfare, Medicaid, and food stamp roles and saved Joe citizen millions of dollars in tax driven support programs.

Now, the question everybody wants answered, DOES THE AUTO WORKER MAKE $73.92 PER HOUR? 

• They DO NOT; 
  • The wages of the employees in each of the individual plants are covered by the “Local Wage Agreement”. Wages are dictated by the classification and difficulty, hazards, and required skill level to perform the duties of the classification. For instance paragraph 100 of the National Agreement effective September, 20, 2007 - between G.M and the U.A.W. reads: “It is understood that local wage agreements consist of the wage scale by job classifications as were in effect in the local wage agreements as of the effective date of this Agreement, plus any written changes, additions, or supplements thereto. Any changes, additions or supplements thereto shall be reduced to writing and are subject to the approval of the Corporation and International Union.” 
  • It is therefore imposable for anyone to say the auto-worker makes $73.92 per hour. This is a figure derived from the Auto Industries creative accounting methods. I think they must have included all costs related to the cost of running the business as they have been, and dividing that figure by the number of production employees. These costs involve improper and unjustifiable decisions on the part of management totally and solely within the realm of management control and out of the hands of the production worker.

I have been unable to attain a current copy of a “Local Wage Agreement”. To reach an equitable wage sample I asked a friend who works at a local plant, what the going hourly wage for a “press operator” or “plastic induction machine operator” is. He told me, those still grand-fathered into the old wage is about $28.46 per hour plus C.O.L.A. He said this rate has since been greatly reduced by concessions for any new hires. And these jobs are toward the high end of the production non-skilled classifications, I will use that figure as a base for the following example. As this interprets into an annual wage of: 

• $56,000.00 + $960.00 (med benefits) + $1783.68 (pension) = $58,743.68 
• Assuming these figures to be correct it would interpret into an hourly wage of about $28.46 per hour, a far cry from $73.92 per hour as reported by the auto industries creative accountants. A difference of $45.49 per hour. 
  • This $45.49 difference is not an error in labor costs, but rather flags the inflated cost of the industry’s incompetence and mismanaging the Corporations involved. They are being taken advantage of by executives taking millions of dollars in salaries and bonuses for decisions one would consider obscene or even illegal. They deserve to be jailed, not rewarded for their deeds. If they worked in the financial department of their companies instead of the executive, the money they are taking and calling wages, would be called embezzlement. 
  • The typical wage of the U.S. auto worker was on a par with most middle class jobs in the civil sector. The average on a par with the typical postal clerk, or tenured school teacher who are paid by the tax payer. Teachers get an automatic 2 ½ month summer vacation, plus all holidays and a one to two week winter and spring break every year. I bet, had I not mentioned school teachers, you might have thought I was talking about our members of the House of Representatives. They receive $160,000 + annual salary not including the full medical, free transportation and expenses paid to them by the U.S. taxpayers. A job that amounts to a part time job. It would appear we “middle class” tax payers pay them well to send our jobs overseas. The big difference between the private sector auto worker and the civil servant job is the tax payer didn’t foot the bill for the auto worker.

Congress once again has duped the public in an effort to justify the Wall Street Bailout they readily passed without restrictions of setting parameters before turning the control of $700 billion dollars over to one person. They insist on calling the line of credit the auto industry is seeking a “bailout”, it is not, They have already placed stipulations on it, and it must be paid back. The auto companies are not going out of business, they have established factories all over the world – and if they want to sell their vehicles in the United States, they will pay it back or the government will undoubtedly place tariffs on the vehicles exported to the United States from their overseas factories until the money is retrieved.

A Bailout, is what Congress gave Wall Street. Money that will take our children’s children years to pay off. We are leaving them a deficit caused by greed and mismanagement of those we placed in a position of trust. This money, to the tune of $700 billion dollars does not have to be paid back. It was approved to bailout the rich with NO stipulations. Regardless of the intent to forestall foreclosures, and salvage pension investments, it can be used anyway the handlers choose.

The trivial investments by pension plans and senior citizens investments in stocks were a mere drop in the bucket compared to what the wealthy would have lost. But Congress sold it to the public with the pretense that jobs, homes, and pensions of the middle class and seniors citizens were at stake and a catastrophic calamity was about to happen in the financial world. People were about to lose everything. Anyone who was at retirement age and had their 401k’s and other pension instruments invested in stocks at that point in life, deserved to lose them, if they hadn’t already moved them. Ever since 9/11 the stock market has been exceptionally volatile and extremely risky for someone near retirement age and knowing they were about to enter into a fixed income situation. Those willing to gamble and place themselves in this position knowingly put their life savings at risk and should have realized the stakes.

How much is 700 Billion Dollars? 

• 700 billion = one million x Seven thousand x 700 
• 700 billion = (1000 x 1000 x 1000) x 700
  According to public records for the years 2007 – 2008, it is enough to bailout: 
  • 10.45 Warren Buffet’s with a net worth of $67 Billion in that period, and would have lost $10 billion dollars in the market without the bailout. He hasn’t made it back yet, but all he need do is wait it out. 
  • 10.77 Bill Gates with a net worth of $65 Billion for that same period, or 
  • 20.59 “Big three” auto groups employing hundreds of thousands of blue collar taxpaying auto workers

The $700,000,000,000.00 dollar Bailout represents the jobs of 

• 12.5 million auto workers with an annual salary of $56,000 for 1 year, or 
• 1.25 million auto workers @ $56,000 for 10 years, or 
• 625,000 auto workers for 20 years, etc.

So far, to date, not one home owner about to lose their home to foreclosure has seen one red cent of the money that, which was supposedly earmarked to be used to buy up the troubled loans and save the owners from being evicted.

$350 billion dollars have been issued to the banks, who in turn are either holding on to the funds or in the case of AIG having a good time. Is it any wonder I have come to the conclusion that the House of Representatives is made up mostly of super smart crooks who think they can pull the wool over everyone’s eyes. To them, the rest of us who elected them to their posh jobs that allow their lavish life style – are too dumb to know what is going on. In short they think we are stupid and deserve to be treated like dummies.

Next: Part III – The Substance of The U.S. Auto Makers Workforce

Copyright © PoliticalFinePrint.com™ (Jan, 2009)
All contents are the sole property of PoliticalFinePrint.com. PoliticalFinePrint.com reserves the right to change, modify or delete articles without notice. The material contained within the pages of PoliticalFinePrint.com™, is free to its readers and may be reprinted without pre-authorization from PoliticalFinePriont.com™, as long as it is not modified or changed in any way, and this notice and copyright© is included. PolicalFinePrint.com™ is the trademark of PoliticalFinePrint.com™ and cannot be copied, reproduced or used without the express written permission of PoliticalFinePrint.com™

Tags: automobile, birth rights, China, China imports, Chinese Vehicles, civil servants, education, foreign, foreign transplants, life style, Mark Twain, patriotic, Politics, taxation, taxation without represntation, Transplants, U.S. - China deficit, voters, voters rights