Auto Concessions:
Don’t Fall for Any More Rich Men’s Lies

Jan 22, 2007

Going into a big game, what coach would tell his players to prepare to lose? Worse yet, what coach would tell his players that they would be better off if the other team won?

That’s exactly what the leadership of the United Auto Workers (UAW) is telling its team, in these months before the new September 2007 contract.

While Ford’s CEO Alan Mulally is saying, “The only thing I care about is the competitiveness of Ford,” a UAW vice-president, Bob King, only echoes him: “I’m bullish on Ford. We have had to go through these horrible things–the massive buyouts–but we end up with a better product and company.” In other words, King just told his team that it has to lose so the other team can win!

For whatever reasons, the top union leadership has chosen to focus workers’ attention on the very things the companies want: sacrifices. Not on how to avoid making sacrifices! But only on what sacrifices will be made. The intent is to form a mind-set among the workers that sacrifices are inevitable in the 2007 contract and nothing can be done about it. It’s just too bad, they say–but the companies are in trouble.

The companies are not in trouble. The companies are rich as can be.

Take General Motors, which during 2005 and early 2006 declared far and wide that it was nearly bankrupt because of underfunded health care programs for retirees. Bankrupt! Ten billion dollars in the hole! About to go under! Months and months of such orchestrated public-relations baloney.

But a funny thing happened after they got what they wanted from the retirees. Suddenly the public relations blitz disappeared, the ten billion dollars in the hole was forgotten, and their stock began to climb. In 2006, GM’s stock was the best performing of all the stocks in the Dow Jones Industrial Average! And at the Detroit Auto Show Bob Lutz said, “We won’t be satisfied with just a few billion in profits.” They were going after everything they could get.

Or how about Chrysler? The Chrysler Group of DaimlerChrysler (DCX) showed three years of profits. Twelve straight quarters of profits! But when workers were not in the mood to agree to the same retiree health cuts and dollar-an-hour wage cuts that were nearly voted down by GM workers, and even more nearly by Ford workers, CEO Dieter Zetsche complained, “It’s a very strange position that we should first lose 10 billion dollars before we have the same [concessions] as Ford and GM.... We will not stop before we get the results we need.”

The very next quarter, Chrysler’s books showed a very unexpected 1.2 billion-dollar loss! And the UAW promised to “re-examine” the concessions! Even though Chrysler Group’s sales for 2006 actually ROSE compared to 2005!

Or take Ford. Ford’s Executive Vice President Mark Fields had his weekend “commute” paid by the company–exclusive use of the company plane to fly from Detroit to his family in south Florida every weekend! The cost was estimated at about $70,000 per weekend, or some $3,500,000 per year. When Field’s list of luxury perks made the news, he gave up the plane. If Ford had been in all the trouble management claimed it was in, he would have given up the plane long before!

It’s the same for all the companies. Their executives sacrifice nothing, their banks sacrifice nothing, their largest shareholders do nothing but rake in the dividends.

These huge companies can change their books one quarter and change them back the next quarter. They can recruit their allied companies, banks and brokerages to join in the scheme. Steve Miller said of the Delphi bankruptcy, it was “well planned, well structured and well financed.”

The news media always quotes an auto “analyst” who is the son of a previous GM CEO. And not to be forgotten is the episode a few years ago, when GM pulled a whole three months of its advertising budget from a California newspaper that was examining GM’s affairs a little too “critically.”

They carry out their scams to rob the workers like public relations campaigns. Ford Motor Company retained marketers from University of Michigan to conduct studies on how best to persuade workers to take early buy-outs. They approached it no differently than figuring how to sell the latest model car: how to create the necessary illusions to persuade the “customer” to bite.

The corporate lies are endless. UAW leaders who go along with these lies betray the workers.

When workers give back concessions to the companies, they get no guarantees. No! Just the opposite. Concessions encourage management to come back for still more concessions. When you give up wages to save jobs, they take your jobs, too.

The workers’ only real protection is to see the corporate swindles for what they are, and act on it. Refuse the concessions–each and every one of them!