Short Circuit News Wire

Diverting the Main Stream

Indecent Proposal: A $1 Salary and some Good Old-Fashioned Union Busting

with 6 comments

The big three automakers have been telling a rather convoluted sob story for the past few weeks, spending an unknown amount of money on a campaign to convince the people and policymakers of the U.S. that they desperately need money or they will collapse, bringing down the economy and creating a ripple effect destroying the livelihood of countless people. Now that the UAW and Republicans in Congress have successfully broken the deal, perhaps their money would have been better spent elsewhere.

At the same time, they’ve been trying to convince their shareholders that they will bounce back, with or without the federal bailout, and that they’re going to return to profitability and that they are a sound investment.

Note that GM CEO Rick Wagoner says he’s looking forward to reading all comments to this YouTube video. Comments, however, are disabled.

Ford CEO Alan Mulally said that Ford did not currently have a liquidity crisis, and that even without the bailout they will be able to survive the economic crisis and bounce back. So what are you doing in Washington? Why aren’t you working on your financial strategy? Why are you trying to get emergency federal funding designed for industries with liquidity issues when you don’t have an immediate liquidity problem? Why don’t you try to solve your own financial problems and come ask for bailouts only when it’s absolutely necessary?

These CEOs were in Washington because the handouts are happening now, and they don’t want to miss out on the action. There is no way to justify this behavior, and if your representative in Congress’s response was anything other than “get out of my office”, you should be sending them an angry letter and you should start organizing on a local level right now to replace them with a third party candidate in the next election.

It shouldn’t be that hard, nobody votes in midterms anyway.

When things started looking bad for the big three giveaway, and a few representatives in Congress showed the surprising insubordination of asking why they came in private jets, Mulally came up with the idea of accepting a $1 salary for a year of work. What was the point of this? Are we supposed to think you’re some kind of humble, hard-working man, so dedicated to your company that you’d make such a sacrifice as to work for $1 for one year? How stupid do you really think the American people are? I mean, I know we’ve made some bad decisions in the past and we have been rather complacent and perhaps even complicent at times as the corporations have taken over the government and begun to systematically dismantle any protection of workers’ rights, but this is one you’re not going to get away with. This is completely outrageous.

Mulally got an $18.5 million bonus when he became CEO of Ford in 2006, after streamlining Boeing employees into the unemployment lines. In 2007, he earned a $2 million salary and another $4 million in bonuses. This doesn’t even include stock options. I don’t know exactly what the $1 deal would have been, whether or not he would be receiving bonuses or additional stock, but the actual salary is the least of the money these CEOs are making. And if they do get the federal funding, as soon as that first year passes, there are going to be big, fat bonus checks with “thanks for getting those $25 billion of public money” written on them in invisible ink. And the stock market doesn’t like uncertainty, but it seems to love a publicity stunt. Ford stocks surged when he made the statement, and therefore, Mulally made money just by saying that he would work for $1.

This is an insult. It’s an insult to the intelligence of the American people. I don’t even have that much faith in the intelligence of the American people, as a whole, but this is just too much. It’s an insult to anyone who had to invest their savings or their parents’ money in their cost of living while working an unpaid internship getting coffee for the people with real jobs. It’s an insult to all of the people working in the automotive industry who know they won’t be seeing a raise anytime soon. It’s an insult to all of the foreign workers making parts for wages that don’t cover the cost of living. And it’s especially an insult to all of the people who are going to be laid off, and won’t even be earning that one dollar a year.

Taking a temporary pay cut when we all know you’ve got millions in the bank is not a show of solidarity. It’s an insult. If you really wanted to show your solidarity, to show your faith in the company, and to show that you really need these federal funds and are doing all you can to make it work, and if you’ve really got liquidity issues, why don’t you liquidate your own assets, lend the money to the company, and work for a year on the same wage as your janitor? Or is the lifestyle of a real working-class American not good enough for you?

Now the blame is being spread to the Auto Workers Union. Congress Republicans required a pay cut for union workers in order to vote for the bailout, furthering the idea that the best way to make a business viable and competetive is to pay the workers as little as possible, literally offering government funding in exchange for lowering wages. The UAW is refusing to cooperate, as they should, especially considering the fact that the Big Three aren’t even talking about going out of business without the handout, but they’re taking a lot of flak now in the public debate for refusing to cooperate.

It’s been a bad decade or two for unions, and for the working class in general all over the world. The new focus on staying competitive, trimming down workers’ wages and benefits in order to increase profits, has been both a cause and an effect of global outsourcing, and it’s one of the main reasons globalization is such a “bad thing”. Sectors in every nation all over the world are putting pressure on the local politicians to keep wages stagnant and cut benefits, spreading the word to all the big corporations always looking for cheaper labor while putting on their biggest, brightest “We’re Creating Jobs” smile.

Ford was a company founded on the idea that with the right kind of organization and innovation, the use of the assembly line, you could offer a product of consistent quality at a reasonable price. They knew that if you offer a quality product at a reasonable price, and pay your workers enough money to pay that price, then every worker will also be a customer. And they were a success.

Today, businesses grow, but they do so in a different way. The safest way, they’ve found, of increasing profits is not to invest in innovation or new technology, but to lobby for deregulation, close factories, outsource, break up or ban unions, and basically do everything they can to save money on things like environmental protection and workers’ wages and benefits.

Politicians have been doing their part. Making it easier for corporations to take away the right to organize, and bashing unions as being nothing better than secret Communist organizations and Mafia fronts has been common practice for decades. Ford has been accused of fingering union organizers in their factories in Argentina for the 1976-1983 military dictatorship organized by Henry Kissinger which systematically tortured and murdered leftists, and gave away their children to ranked military families.

This bailout thing is getting uglier and uglier. The bailing out of corporations was meant to prevent unemployment, supposedly, but layoffs are going forward as planned, and union-busting wage and benefit cuts are actually being named as a requirement to receive bailout funding, when not cutting wages or laying off workers should be the what the government demands in exchange for bailing out businesses.

Meet the new boss, same as the old boss. Don’t think that just because the Republicans have suffered during this election that everything’s going to be better. One side wants to bail out every corporation who still has the strength to hold out their hand, while the other side wants to do the same, just as long as they break up their unions. We need to make our voices heard now more than ever and demand real change.

(This article also appears at www.operationitch.com, where I am writing as a contributing author.)

Advertisements

Written by Alex (Capitalocracy)

December 22, 2008 at 11:48 pm

6 Responses

Subscribe to comments with RSS.

  1. I don’t know much about economics, industry and unions, but I do know that most of the time, greed rules. Somehow I have the impression that just maybe the automotive industry is taking advantage of the economic crisis to downsize their workforce, break up unions and save more money – money that will go into paying the bonuses that you mentioned in your post. What do you think of that theory?

    Thank you for a great post btw! I am going to link it at http://saharsblog.wordpress.com

    sahar009

    December 23, 2008 at 12:26 am

  2. Thanks, and yes, I think that’s what’s going to happen across all industries globally right now. They’re going to leverage this crisis to squeeze the workforce for all it’s worth, and in so doing, continue to make things worse by reducing the buying power of the populace. Right now they’re getting a free ride because the former middle class is giving money to their adult children to help them make ends meet, which gives them artificial, temporary buying power, but that’s going to come to a screeching halt.

    Alex

    December 23, 2008 at 2:14 am

  3. […] Indecent Proposal: A $1 Salary and some Good Old-Fashioned Union Busting […]

  4. I’ve linked you! I’m getting some interesting emails about the topic. I didn’t think about the artificial buying power of adult children – good call. What do you think we can do to get out of this situation?

    sahar009

    December 28, 2008 at 3:54 pm

  5. It’s something nobody’s talking about, but it seems to me to be an important factor in today’s economy (not that I’m any kind of expert). It’s a question of sustainability… white-collar globalization will eventually run out of strong middle-class economies to exploit, theoretically, but we’re now seeing the kind of damage it can do before it does.

    The solution is an extremely difficult question. I don’t think any lasting or significant solution is possible without organization and better education. I think the best way to get the message across would be some kind of organization targeting families, both the adult children who are fed up with the crappy jobs and low pay they have to work at and the parents who are fed up with having to give them money so they can survive. If parents were able to understand the situation for what it is, maybe they would stop encouraging their children to work in jobs with no future and support them without that condition, or get those who are working at these jobs, rather than buying technological toys with their earnings, not that that’s such a bad thing, within reason, to save up, organize, run in local elections, start their own businesses along with their families and other members of their communities, and just impose, on a local level with some kind of national or international organization backing them, a local standard for living wage jobs (or even living wage laws).

    Obviously I don’t have a very clear idea here, but I think the final solution to this problem would be for the U.S. and other consumer nations, like much of the EU, to institute living wage legislation (rather than a poverty-level minimum wage) and to ban imports of products and services which don’t pay a living wage for the areas where their employees live. Obviously, that’s a tough sell, but I think the benefits are clear.

    Alex

    December 31, 2008 at 10:42 pm

  6. I would love to hear what kind of feedback you’re getting on this stuff, if you don’t think it would be a privacy issue for the people writing you

    Alex

    December 31, 2008 at 10:44 pm


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: