PAYBACK TIME

Daniel Howes: Commentary

Senators to UAW: It’s payback time

They failed repeatedly to organize the foreign-owned auto plants proliferating down South, even now.

Their political action committee pumped millions — $1,918,450 this election cycle alone, to be exact — into the congressional campaigns of Democrats and only $12,500 into Republicans, according to opensecrets.org. In their 1999 contract, they won Election Day off and used it to back their (generally Democratic) candidates, a source of recurring irritation among the southern GOP stalwarts.

They ignored the Republicans, even auto state Republicans, who represent the so-called “New American Manufacturers” in places such as Kentucky, Tennessee and Alabama.

Those are the same states whose senators stood astride the $14 billion auto bailout bill Thursday saying, “No” — imperiling life as generations of United Auto Workers have known it.

Now a federal bailout for Detroit’s automakers appears close to dead, delivering a crushing blow to a Michigan economy reeling from high unemployment, skyrocketing home foreclosures and sagging tax revenue. The obstructionists: southern Republicans determined to use a financial crisis to rework corporate balance sheets and rewrite collective bargaining agreements on their terms and timetables.

Paybacks can be hell when business meets politics, as union leaders, their members and tens of thousands of folks associated with the Detroit-based auto industry are seeing clearly in the wrangling to craft an emergency bill to throw lifelines to beleaguered General Motors Corp. and Chrysler LLC.

Stripped bare and put in the regional context of union vs. nonunion and domestic vs. foreign, the toughened conditions pushed by Sen. Bob Corker, R-Tenn., are legislative cruise missiles aimed directly at Detroit’s business model, the UAW’s Solidarity House and 70 years of Big Three bargaining tradition.

Radical change for the UAW

How could they be anything else? Immediately match the pay and benefits of foreign-owned automakers operating in the South, his terms say. Reduce your expectations for Big Three contributions to the barely funded retiree health care fund and take some in stock. Eliminate the Jobs Bank and supplemental unemployment benefits.

And if UAW and company bargainers can’t get there by a March deadline — along with concessions from bondholders, management, shareholders and suppliers — GM and Chrysler must seek federal bankruptcy protection like almost every other private-sector player would under similar circumstances.

That’s tough-minded business, to be sure. Understandable, too, given Detroit’s glacial pace of change. It’s also a naked attempt to use the credit-induced crisis swallowing the Detroit Three to radically restructure their bloated labor costs, rework their debt-laden balance sheets in 60 days or less and, perhaps, put one or more of them into bankruptcy, if not liquidation.

“I don’t think the southern senators understand this isn’t a Japanese and Big Three thing,” says Gregory Raymond, a member of UAW Local 372 who works at Chrysler’s Trenton Engine plant. “It’s an American thing. All auto companies use the same suppliers and they’re all going to suffer if the supply base goes down.”

Except Corker & Co. don’t buy it and I’m not sure they care. To him and Republican Senate colleagues such as Alabama’s Richard Shelby and Kentucky’s Mitch McConnell, the minority leader, the desperation of Detroit and the UAW vindicates the superiority of the nonunion, lower-cost, foreign-owned auto industry growing in Alabama and Tennessee even as Big Auto stagnates in the union strongholds of Michigan and Ohio.

Like the green Democrats in the House eager to coerce Detroit into hybridizing entire product portfolios irrespective of market demands, capital needs or oil prices, the southern Republicans see a win for the home team in subjecting the northern competition to the corporate equivalent of chemo: To survive, endure the painful therapy.

No unions, or more unions?

Detroit Bubble, meet the Bigger America. Cynics might suspect parallel agendas in the South’s legislative hammer — agreement on cost parity by March or bankruptcy. How? Because the auto bosses have long wanted to break the union, the thinking goes, and the southerners are happy to oblige.

But there’s another possible outcome here, one maybe overlooked by a GOP wing in smackdown mode. Contrary to the tired stereotypes coming daily from Washington, President Ron Gettelfinger’s UAW is well on its way to helping Detroit’s automakers achieve wage and benefit parity with foreign-owned rivals operating in the United States.

Come next month, amid recession anxiety, job losses and widespread distrust of business, the union and others like it are poised to reap the political benefit of having bigger Democratic majorities in the House and Senate and a labor-friendly Democrat in the White House.

The president-elect and the congressional Democrats all have signaled a willingness to pass labor’s top legislative priority — the so-called “card check” legislation, which would essentially abolish secret ballots and make organizing easier. Everywhere.

If it passes, I’m betting the first stops on the UAW’s southern swing will be auto plants in Shelby’s Alabama and Corker’s Tennessee, soon to be home to Volkswagen AG’s first U.S. plant in a generation.

Let the paybacks begin.

Daniel Howes’ column runs Tuesdays, Thursdays and Fridays. He can be reached at (313) 222-2106 or dchowes@detnews.com or detnews.com/howes. Catch him Fridays with Paul W. Smith on 760-WJR.

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