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Friday, December 19, 2008

Employees at Toyota, Honda, Nissan, and VWplants in the south should watch their own backs
Posted by Jill | 5:23 AM
I'm sure it's tempting for workers in the auto plants in the South who are getting paid at close to UAW levels to feel smug at the plight of their brethren in the rust belt. I wonder if they realize that the reason they get paid as well as they do, instead of the auto plants in which they work being the equivalent of American sweatshops, is because of UAW compensation levels. And I wonder if they realize how they are next in the crosshairs in the race to the bottom being conducted in the executive suites:
UAW President Ron Gettelfinger realized that the existence of the union was under attack, which is why he refused to give in to the Senate Republicans' demands that the UAW make further concessions. I say "further" because the union has already conceded a lot. Its 2007 contract introduced a two-tier contract to pay new hires $15 an hour (instead of $28) with no defined pension plan and dramatic cuts to their health insurance. In addition, the UAW agreed that healthcare benefits for existing retirees would be transferred from the auto companies to an independent trust. With the transferring of the healthcare costs, the labor cost gap between the Big Three and the foreign transplants will be almost eliminated by the end of the current contracts.

These concessions go some distance toward leveling the playing field (retiree costs are still a factor for the Big Three). But what the foreign car companies want is to level -- which is to say, wipe out -- the union. They currently discourage their workforce from organizing by paying wages comparable to the Big Three's UAW contracts. In fact, Toyota's per-hour wages are actually above UAW wages.

However, an internal Toyota report, leaked to the Detroit Free Press last year, reveals that the company wants to slash $300 million out of its rising labor costs by 2011. The report indicated that Toyota no longer wants to "tie [itself] so closely to the U.S. auto industry." Instead, the company intends to benchmark the prevailing manufacturing wage in the state in which a plant is located. The Free Press reported that in Kentucky, where the company is headquartered, this wage is $12.64 an hour, according to federal labor statistics, less than half Toyota's $30-an-hour wage.

If the companies, with the support of their senators, can wipe out or greatly weaken the UAW, they will be free to implement their plan.

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