Romney and Obama Policy to Save GM: Lower Wages

Story Transcript

PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay in Baltimore.

We’re continuing our discussions looking at the Obama–Romney debate. And now joining us from Detroit is Frank Hammer. Frank is a retired GM autoworker. He was the former president of the UAW local 909, and he worked in the GM department of the United Auto Workers. And he’s a regular contributor to The Real News Network. Thanks for joining us again, Frank.

FRANK HAMMER, FMR. PRESIDENT, UAW LOCAL 909: It’s my pleasure, Paul.

JAY: So amongst other sort of surprises of the debates, I was surprised that President Obama didn’t mention the word General Motors. I don’t think he had talked about saving the auto industry. At the convention, that’s about all they talked about, and that was supposed to be the thing: President Obama saved the auto industry and, according to Biden, killed bin Laden, and that was supposed to be the great achievement that differentiated him from Romney, and nary a word about it. What do you make of that?

HAMMER: I believe that there’s—mythologies have been part of the election campaign cycle. Many of them have been pointed out in regards to the Romney campaign, the mythology that Obama wanted to put people back into welfare without having to work and to receive their stipends.

The mythology on Obama’s campaign has been about the fact that he was credited with saving General Motors. The reality is that if you look at the Romney editorial, the op-ed piece that was written in November 2008—it was titled, "Let Detroit go bankrupt". And the pundits and the Democrats, of course, picked up on that headline and said, oh, look, Romney wanted to eliminate—let companies go bankrupt, let Detroit fall, whereas the crusader Obama came in and saved General Motors. Well, that’s a bit of a mythology.

JAY: Why?

HAMMER: Because if you look at the actual op-ed piece beyond the headline, the description that—what Romney was reacting to was: the previous day, General Motors’ executive, Ford, and Chrysler, they all came with their hands open looking for money. And at that time, they were contemplating giving the companies $25 billion to rescue them. And so he responded and said, oh, no, that would be ridiculous, to give them $25 billion. It was either going to come out of the TARP or it was going to come out of the—there was a fund set up for more fuel-efficient vehicles. So his response was, we ought not give them $25 billion like they asked for; we ought to insist on a restructuring of the companies in order for them to go into a managed bankruptcy. And you know what? That’s exactly what Obama did. He did a structured bankruptcy, a managed bankruptcy with a restructuring of the company. And if you look at the prescription that Romney laid out in that op-ed piece, it is word-for-word what exactly in fact happened.

JAY: And the gist of that was what? Lower wages and shift the burden of the health care plan.

HAMMER: It was lowering wages, it was getting rid of the cumbersome labor contracts, it was diminishing retiree benefits, along with changing management at General Motors and, I think, the other two, or at least at Chrysler. And so if you were to read the op-ed piece, you would swear that it was Obama that had scripted it and not Romney.

JAY: So Obama can’t raise this in the debate face-to-face with Romney, ’cause Romney can quote his own position and explain to people that it wasn’t much different than Obama’s.

HAMMER: Well, up till last night I thought that Romney was the best gift that Obama could have gotten, because Romney has at different periods taken different positions. He said at one point, oh, I take credit for the restructuring of the industry, because I said so on so-and-so and in the article. At another point, he said, well, I would have done the same thing that Obama did, but I would have done it faster.

So what happened, I think, is that Obama took all the space out of Romney’s position. But if you look at it very carefully, you’ll see that it’s exactly the same and that this was a Wall Street strategy, and whether it was Bush who initiated it or whether it was a Romney or whether it was an Obama, they would have all done the same.

JAY: And the essence of this is what’s been happening with wages. And where is that at now? Just what are workers making at the big three and what are workers, unionized workers, making at various parts manufacturers?

HAMMER: Well, I can tell you that that’s the other mythology. Obama has in various speeches talked about that the corporations are paying and the auto companies are paying workers enough money so that they can buy the products that they produce, the cars. And this is another myth.

I think he also said something about that workers are earning $50,000 a year. The reality is that we have workers, for example at Lake Orion plant right here in Michigan, just about an hour away or a half an hour away from Detroit, that are working for subcontractors in the plant, in the actual facility, who are making $9 an hour.

JAY: This is in an organized auto plant?

HAMMER: This is a UAW-organized auto plant.

JAY: Nine dollars an hour.

HAMMER: Nine dollars an hour, by a logistics company that happens to be owned by a billionaire, who also operates our bridge here.

JAY: And what are workers that are starting workers now making at the big three?

HAMMER: Well, contractually they’re ranging from about $14 to $16 an hour, which is about $12 to $14 less per hour than senior workers prior to the creation of the two tiers. But there are many, many workers in, for example, parts facilities, suppliers, that used to be part of the Ford system or the GM system that are now coming in at $10 and $11 an hour with very, very few benefits, so that the $14 an hour actually—the second tier is actually starting to look good compared to what workers are really coming in at.

JAY: I was kind of taken at one moment during the Democratic Party convention. One of the speakers—I think it’s some governor, but, I’m sorry, I don’t remember who, but I remember what he said. He was bragging about the revival of the auto industry, and he talked about one worker he talked to who was saying that he works 60 hours a week and seemed to be happy about that, and that the slogan was that the guy eats, sleeps, and Jeeps. I wonder how you reacted to that.

HAMMER: Well, the truth is that workers are working excessive amounts of overtime, partly because they don’t know what’s coming down the pike and they’re going to make all the overtime that they can now, or they’re the second-tier workers who are having a hard time maintaining the lifestyle that autoworkers, unionized autoworkers were able to maintain. So there is an excessive amount of overtime that’s being worked.

And then there’s no mention made of workers who are out of a job and there’s no effort made to resist overtime on the part of the union so to enable other workers to be employed.

JAY: Well, what do you make of the argument that this was necessary, this type of restructuring, the lowering of wages and such and dealing with the pension plans, that if this hadn’t been done, the auto industry simply would have collapsed and this is better than that?

HAMMER: I think that I would turn that on its head and I would say that the financial crisis of 2007-2008 presented the perfect opportunity to transform the auto industry into an image more to their liking, which is to say we were required to replicate the conditions and pay structure and so on of the nonunion plants that are currently, you know, operating in the south and that this was their way of reducing the standard of living of workers here in the unionized north and basically more and more making the union irrelevant as a fighter for the workers at the big three, so that I think this is part of what you would call the shock doctrine, that under the shock of the financial crisis they were able to make sweeping changes that otherwise would have been resisted.

And the other side of that—the other aspect of this question is a much larger one, and that is, because we’re in such a globalized environment, where auto companies are producing cars all over the world with workers who are making a fraction of what workers make here, that that is a drag on our ability to maintain standards here in our country, in the U.S., so that in the larger scheme of things, we’re, as a labor movement, as a union movement, way—many years behind the globalization effort of the big three and we have some serious catching up to do, and working with workers from other countries and unions from other countries is the order of the day. That’s ultimately how we’re going to defend our standards.

JAY: Alright. Thanks for joining us, Frank.

HAMMER: Thank you, Paul.

JAY: And thank you for joining us on The Real News Network. Don’t forget there’s a "Donate" button over here. If you don’t click on this—I should say, if you don’t click on that, we can’t do this.


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