Auto workers angry at Obama plan

RedwoodSap

Workers say Obama treated autos worse than Wall St

By JEFF KAROUB, AP



DETROIT — Many assembly line autoworkers reacted with skepticism and anger Monday to the Obama administration's tough tactics, which stoked long-simmering feelings that the people who put the country on wheels get treated differently than the wizards of Wall Street.

"It's the age-old Wall Street vs. Main Street smackdown again," said Brian Fredline, president of UAW Local 602 at a plant near Lansing. "You have all kinds of funding available to banks that are apparently too big to fail, but they're also too big to be responsible."

"But when it comes to auto manufacturing and middle-class jobs and people that don't matter on Wall Street, there are certainly different standards that we have to meet — higher standards — than the financials. That is a double standard that exists and it's unfair," Fredline said.

Many workers — not generally known for their affection toward executives — even sympathized with Rick Wagoner, who was forced to step down as chief executive of General Motors Corp. He was by turns called a "sacrificial lamb," "scapegoat" and "fall guy."

"We knew someone was going to have to take the proverbial `bullet,' and it would have made it a lot easier to accept that had the CEOs of the banks also been required to give up their jobs," said Jim Graham, president of a union local in Lordstown, Ohio, where GM produces the Cobalt and Pontiac G5 fuel-efficient cars.

While CEO oustings haven't been widespread among the banking industry, the government did in September reserve the right to remove senior management at American International Group Inc. as part of its agreement to give the insurer $85 billion in emergency aid. AIG Chief Executive Robert Willumstad stepped down as part of that company's bailout package, and the government hand-picked his successor.

Also, banks don't have the union and legacy costs that the automakers do, which make their products more costly versus foreign rivals.

President Barack Obama said he was "absolutely committed" to the survival of a domestic auto industry that can compete internationally. He raised the possibility of controlled bankruptcy for one or both of the troubled automakers.

Obama said the administration will offer GM "adequate working capital" during the next 60 days to produce an acceptable reorganization plan. The government gave Chrysler LLC 30 days to overcome hurdles to a merger with Fiat SpA, the Italian automaker.

Many workers say the government hasn't dictated such terms to insurance giant AIG or the banks in which it's taken an ownership stake. Obama's actions come amid public outrage over bonuses paid to business leaders and AIG executives.

"To see the very people that drove this economy into the ground be rewarded through bonuses while receiving tax dollars is just galling," said Dan Maloney, a machine repairman at auto supplier Delphi Corp.'s plant in Rochester, N.Y., and a union local president. "In light of that, the administration is taking it out, I believe, on the automotive sector."

Michigan Gov. Jennifer Granholm called Obama's moves "a bit of tough love," yet recognized a disconnect between the financial and auto industries.

"Yes, I do think that there has been a different look at those who manufacture than those who make money by flipping paper and I'm hopeful that the financial industry gets as tough a scrutiny as the auto industry has," she told reporters after an event Monday in Macomb County's Clinton Township, about 20 miles northeast of Detroit.

Despite Granholm's criticism and what many workers saw as the president's unduly harsh treatment, Obama's actions might not have a lasting effect on voters.

"It will be accepted, grudgingly perhaps, but accepted by anybody and everybody with a brain in their heads," said Bill Ballenger, editor of a Michigan political newsletter and a former Republican state lawmaker.

Still, Bill Rustem of Public Sector Consultants, a Lansing-based nonpartisan think tank, said Obama's actions carry some risk.

"I think this could have some impact four years from now if the state's economy doesn't begin to turn around," he said. Michigan's unemployment rate rose to 12 percent in February, marking the eighth straight monthly increase.

Workers watched Obama on large-screen TVs in the lobby bar of a hotel in Detroit's Renaissance Center, home to GM's headquarters. Several wearing GM badges declined to comment afterward, but one man whose fortunes are nearly as tied to GM as its employees expressed hope for the future of the company and industry.

"It's definitely a move in the right direction," said Tony Keros, who owns a restaurant and real estate development firm in the building. "Something has to happen."

In Ohio, Graham agreed that Washington just might get it right — if only because the stakes are too high to fail.

"They understand that there are literally millions of people who depend on the auto industry — whether directly or indirectly — and a ripple effect of eliminating a General Motors, Chrysler or Ford would be devastating to an economy that's already been devastated over the past eight years," he said.

 

streea

Thank goodness I'm not alone. Seriously, where were these rules and "tough love" when the banks, who had their hands in the cookie jar and crumbs on their chin, cried a river and took a huge chunk of the bailout money?

Instead, the automotive companies, who were not a part of the problem that's driven us into the ground, get shat on and threatened that if they don't come up with better plans, the government is just going to let them fail? Where were these "acceptable reorganization plans" when the banks got their blood money?

Hazmal

Life isn't fair, get over it.

The big three are dinosaurs that have been kept on life support for too long. 

Briansho

This is what happens when you start bailing out. Everyone wants a piece of the action. Even if they are kept afloat you can't force people to buy things. With money as tight as it is people aren't going to buy a new car every 3 years or whatever and the govt can't force them to. Who's next? The oil companies? I'm suprised the music/movie industry hasn't been crying for money yet. No one is gauranteed a profit.

Ekibiogami

Originally posted by Briansho


This is what happens when you start bailing out. Everyone wants a piece of the action. Even if they are kept afloat you can't force people to buy things. With money as tight as it is people aren't going to buy a new car every 3 years or whatever and the govt can't force them to. Who's next? The oil companies? I'm suprised the music/movie industry hasn't been crying for money yet. No one is gauranteed a profit.

 

Sithos

Pot calling the kettle black. Both the banks and the auto makers have their hands dirty.

Dis_Ordur

What this article overlooks is that Obama had nothing to do with the bank bailout.  That happened on Bush's watch, and TARP and the bank bailouts were Bush/Paulson policies.  Sure, Obama favored the bailout, but it is very apparent he didn't favor Bush's coddling of the big banks.  Had the bank bank bailout happened today, Obama would have called for the heads of major finance institutions as well.  There is no favoring one industry over another.  The difference in treatment is only due to the shift in power in DC.

We studied and compared worldwide automakers in our Macroecon class for my MBA, and the amount of innefficiencies that exist in our US auto industry is staggering.  The Japanese manufacture a car with far less man hours per vehicle, and utilize a much more efficient kanban system than US counter parts.  Couple this with antiquated unions holding our automakers by the balls, and you get a large clusterfuck that further stalls any innovation or improvement.

Lastly, Japan had the foresight to manufacture smaller and more fuel efficient cars, even when they were not popular or in demand.  Detroit figured they would only build what the market was asking for, and did ZERO planning for future fleets and have lobbied against every fuel efficiency increase ever proposed.  The big three automakers all run off of the good ole' boy system, and the lack of innovation is now hurting them.  GM claims their Volt will be ready next year, but that remains to be seen.  I couldn't care less if the US has an auto industry, as American cars are made out of cheap materials, and inferior vehicles when compared MB or BMW. 

frodus

The "Obama" says he will stand behind all GM warranties.Woot, I'm going to run out and buy a GM product now just so i can have bureaucrat tell me it's my fault that I'm have a problem with my car...Damn dumb ass

Check this out...the number one selling car in Baghdad is the hummer..this time next year there will be more civil Hummer's in Iraq than military hummers...

The number 2 or 3 car in China is the Hummer.

20 of the cars that GM sells that makes a profit, 11 are SUVs and trucks..Obama will not allow these to be sold by GM no more as part of the bailout.

Look for the union CEO's to be part of board of directors next as he takes-over GM

Boy howdy does government know how to make cars are what.

Unions have a vary long history of Destroying business,freaking parasites on a host

Arndur

Originally posted by Dis_Ordur


What this article overlooks is that Obama had nothing to do with the bank bailout.  That happened on Bush's watch, and TARP and the bank bailouts were Bush/Paulson policies.  Sure, Obama favored the bailout, but it is very apparent he didn't favor Bush's coddling of the big banks.  Had the bank bank bailout happened today, Obama would have called for the heads of major finance institutions as well.  There is no favoring one industry over another.  The difference in treatment is only due to the shift in power in DC.
We studied and compared worldwide automakers in our Macroecon class for my MBA, and the amount of innefficiencies that exist in our US auto industry is staggering.  The Japanese manufacture a car with far less man hours per vehicle, and utilize a much more efficient kanban system than US counter parts.  Couple this with antiquated unions holding our automakers by the balls, and you get a large clusterfuck that further stalls any innovation or improvement.
Lastly, Japan had the foresight to manufacture smaller and more fuel efficient cars, even when they were not popular or in demand.  Detroit figured they would only build what the market was asking for, and did ZERO planning for future fleets and have lobbied against every fuel efficiency increase ever proposed.  The big three automakers all run off of the good ole' boy system, and the lack of innovation is now hurting them.  GM claims their Volt will be ready next year, but that remains to be seen.  I couldn't care less if the US has an auto industry, as American cars are made out of cheap materials, and inferior vehicles when compared MB or BMW. 

 

The unions are I would say over 50% of the problem. When the Asian car companies came to America they , not even for one second, had to deal with unions. GM has to pay out the ass to union benefits and that needs to stop. Ford isn't as bad which is why they are not really a problem anymore.

Also they did plan for fuel efficiency cars. To say companies like Ford, GM, or Chysler did not have people on it is stupid. They just didn't start it as soon as the Asian companies. Its like the oil companies they have tons of ways to get off fossil fuels sitting on shelfs because 5million getting that patent means more years of 100million+ profits.

Lastly trucks and muscle cars are pretty dam well built and are built to last. Now the other stuff meh.... but things like the Mustang, Corvette, F-150, and Ram those are well built.

RedwoodSap

Unions suck the life out of companies but once Obama and the Democratic Congress started down that bailout path and pick and choose which companies to save and which ones to let fail then they are micromanaging the free market. Should have let any company fail that couldn't survive on it's own.