Posted by: David Welch on December 12, 2008
Is this brinksmanship or just plain bullheadedness? The Senate’s efforts to pass a $14 billion assistance bill for Detroit’s carmakers collapsed yesterday as the union and Republicans froze in a standoff. On one side, the United Auto Workers refused to rush a cut to pay and benefits demanded by Republican Senators who’d love to see the union’s demise. On the other, there are Republicans (Tennessee’s Bob Corker comes to mind) who seem legitimately interested in getting a deal done, but want to make sure that the industry restructures for real this time.
Clearly, there are Republicans like Sen. Richard Shelby (R-Ala.) who wouldn’t pass an assistance bill for Detroit if it moved every car and parts factory to his home state and let the University of Alabama football team take the Detroit Lions’ place as the Thanksgiving Day football team. (As an aside, the Crimson Tide may have an equal chance of beating an NFL team) Some of those Republicans asked the UAW for rapid concessions at the last minute, demanding that they accept parity with Japanese factory wages and benefits. They offered a deal they reckoned UAW President Ron Gettelfinger wouldn’t take. They were right.
For the union’s part, Gettelfinger should have done nearly anything to get a deal done. History is rife with examples of unions who were too stubborn to give and ended up paying the ultimate price. It happened in steel and railroads. I was an intern at the now-defunct Pittsburgh Press when a union strike in 1992 dragged on for nine months. It eventually killed the paper, leaving the town with one major daily and hundreds of workers without a job.
It’s easy to see why Gettelfinger wouldn’t want to back down to the same party that wishes the doom of his union. But he’s not playing a game of brinksmanship with the Senate. Majority Leader Harry Reid (D-Nev.) already said that if there was no deal last night, there’d be no deal in 2008. With General Motors and Chrysler facing collapse in the coming weeks, Gettelfinger seems to be dancing on a land mine.
The Republicans are, too. Asian market dropped sharply on news that the bridge loans failed. If the econimists are right and a couple million Americans lose their jobs as a result of a couple big Chapter 11 filings in Detroit, we’ll have a real economic mess on our hands. Then the Republicans can own the banking mess and the auto collapse. Good luck in those 2010 mid-term elections, Senators.
The only way Gettelfinger will emerge as a smart poker player is if he and the auto executives know something we don’t. Either there’s a way to get one last ditch vote on a new compromise in the Senate—which is very doubtful—or the White House signaled behind the scenes that Pres. Bush and Treasury Secretary Hank Paulson won’t let these two companies fail. For the sake of the U.S. auto industry, let’s hope that’s the case.
If it isn’t, GM and Chrysler could soon be sailing into bankruptcy and possibly their demise. Then, Gettelfinger’s union will lose a lot more than was proposed yesterday. So will a few million workers.