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Defeat of bailout frustrates UAW members

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JAMES P. LEUTE
December 12, 2008
— Thursday's defeat of the auto bailout package in the Senate has frustrated some Janesville union members contacted this morning.

Representatives of labor, the auto industry and lawmakers apparently came close to a deal on the $14 billion package, but it reportedly went down in flames when the United Auto Workers, which represents workers at General Motors, Ford and Chrysler, refused to agree on wage concessions in 2009.


"When some of these senators who have been criticizing this agree to take their wage cuts, we'll take ours," said Rep. Mike Sheridan, a former president of UAW Local 95 in Janesville.


Hourly wages for UAW workers at GM factories are about equal to those paid by Toyota Motor Corp. at its older U.S. factories, according to the companies. GM says the average UAW laborer makes $29.78 per hour, while Toyota says it pays about $30 per hour. But the unionized factories have far higher benefit costs.


GM says its total hourly labor costs are now $69, including wages, pensions and health care for active workers, plus the pension and health care costs of more than 432,000 retirees and spouses. Toyota says its total costs are around $48. The Japanese automaker has far fewer retirees and its pension and health care benefits are not as rich as those paid to UAW workers.


Given their existing legacy costs, the UAW would have to agree to cut hourly wages to about $8 per hour to match the total wage Toyota pays its workers.


"We have a long history of concessions," Sheridan said. "I don't know how anyone can forget all the things we've done."


As part of its 2007 contract with the automakers, the UAW agreed to a two-tier wage system that pays new hires $14 per hour. Over the years, the UAW also has made concessions on wages to help pay the health costs of retirees and their dependents.


"I think GM, Ford and Chrysler see the value in their employees and are not willing to turn their backs on the people who built these companies: the retirees," Sheridan said. "I think there are some high-falutin senators from the south who are completely uneducated about that."


Another UAW member said he'd like to get his hands on those southern lawmakers.


"They all have Toyota, Hyundai and other foreign plants in their districts, so if the Big Three go down, it's just more market share for their companies," he said. "But what it really does is wipe away the middle class."



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