Workers wages the straw that broke the automakers' backs

Filed under: Government/Legal, Chrysler, LLC., Ford, GM

After such a drawn out, difficult process to get an Auto Rescue/Bailout Bill through Congress, there was one issue in particular that led to its defeat at the hands of Senate Republicans. Word has it that hope was in the air around 7PM EST yesterday evening that a deal could be reached among Republicans in the Senate, Congressional Democrats, auto industry representatives and the UAW. Some time later after the industry reps went home, the UAW was left in the room with Senate Republicans negotiating over one final issue that stood in the way of Republican support for the compromise bill. That issue was wage parity with non-union assembly plants run by foreign automakers in the U.S., also known as "transplants".

The UAW was willing to consider lowering its wages across the board to meet those of non-union plants, but wanted to delay any cuts until after its current contracts with the Detroit 3 run out in 2011. Plus, it's not exactly clear what level of pay would be targeted, as foreign run plants pay a wide range of wages to their workers, even among plants owned by the same foreign automaker. Nevertheless, without the UAW conceding to cut wages immediately, Senate Republicans refused to support the bill and it failed late Thursday night during a procedural vote.

The markets are about to open on Wall St., after which we'll have a clearer picture of the repercussions of last night's Senate vote. The only avenue left for immediate federal assistance is for the White House to allocate funds from TARP, which it may be more inclined to do after the bell rings to open the New York Stock Exchange this morning.

[Source: Automotive News, sub. req'd, Photo by Bill Pugliano/Getty]

Workers wages the straw that broke the automakers' backs originally appeared on Autoblog on Fri, 12 Dec 2008 09:30:00 EST. Please see our terms for use of feeds.

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