Ford-UAW Deal:
Red Flags of Fraud

Oct 12, 2009

On October 9, the UAW International was reported to have a deal at the top with Ford Motor Company. They are coming back with the demand that workers agree to more cuts, in the endless round of concessions.

A few days before, a Detroit Free Press business columnist wrote to warn investors of how to spot "red flags’ of fraud. Ford workers may want to bear these signs of fraud in mind:

1. High pressure tactics and a "hurry-up" push.
2. Promises that are too good to be true.
3. Hidden details.
4. Lack of essential documents.

Workers will recognize these signs from previous frauds they were sold!

Employee Concessions

The state of Michigan asked the various state worker unions for concessions. The unions’ bargaining committees said: "No!"

The state had wanted to permanently eliminate longevity pay, annual bonuses based on seniority. The state wanted to defer the October 1st raise of 1% until September 2010. The state wanted to freeze step increases for one year. It wanted to initiate a two-tier health insurance plan. (New hires need the same healthcare as everyone else!)

So what will the state come up with next?

Resistance Made a Difference

Back in 2003, the state asked workers to give up huge concessions. State employees mobilized. Calls were made. Letters were written. Petitions were signed. Over 500 people demonstrated at Cadillac Place. Over 4,000 demonstrated in Lansing from all six unions. After all this, the state backed off their worst demands. There was a no-layoff pledge.

Workers mobilizing in 2003 did more than many realized. We can draw on that experience when the next round of attacks comes.

State Budget

Politicians still have not resolved the state budget, even though the new fiscal year has started.

There is one easy way to resolve budget problems–quit giving out tax breaks to big, rich corporations. This, by itself, would resolve the state’s budget mess.

Inquiring minds ask: How much campaign money is "donated" to politicians by the very same corporations that get all these tax breaks?

Nightmare at the State Capital

Workers think of "Nightmare on Elm Street" and the slasher "Freddy Krueger" when we look at the horrible budget cuts Lansing plans on making. School children, the poor and public employees are asked to give up. What have the politicians given up? Gee, they never quite get around to slashing themselves, do they?

Disability Backlog Has a Solution

The social security disability backlog in Michigan is huge because of new applications. Even more applications are expected next year!

Has the state hired more workers to deal with this? No!

Just think of how much federal money could be flowing to Michigan communities if disabled people got their social security money quicker? Spending money to hire more DDS workers would speed up the flow of money to a state in crisis. It’s a no brainer.

They Do Have the Money, Part 1

The State Police had been paying one dollar a year for rent at their current building. (The building is owned by Michigan State University, and the school is willing to continue this $1 per year relationship.)

But the state, despite the "budget crisis," found the money for a brand new building with a total cost of roughly 71 million dollars.

They Do Have the Money, Part 2

The state just cut its own cash flow–again–because of new corporate tax breaks. The state just approved 20.6 million dollars over 10 years in tax breaks to Hummer.

Then the state announced two "refundable tax credits’ of over 125 million dollars over a few years to two "renewable energy companies’ at the old Wixom Ford Plant. According to the October 7th Detroit News, "Refundable tax credits provide cash refunds to companies .... Both companies also are eligible for more state tax breaks."

The state keeps saying they are broke, but in our own households, we would not squander money like they do.