The UAW, the Auto Bailout, and the Employee Free Choice Act

The most frustrating thing about the endless reporting on the auto industry bailout has been the union bashing. In the congressional hearings that considered providing the Big 3 "bridge loans," congress members, news outlets, and critics of the bailout all seemed to agree that the problem with the US auto industry is really the UAW its negotiated wage and benefits contracts, not poor management or the failure to make cars that people actually want to buy.

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According to Martin Feldstein at the Washington Post, for example:

General Motors, Ford and Chrysler can make excellent cars, but they cannot sell them at prices that are competitive with the prices of cars produced in the United States by Toyota and others or with the prices of cars imported from Europe and Asia. The basic reason is the labor costs imposed by union contracts.

Almost as if these contracts hadn't been negotiated with and agreed to by the management of the Big 3, critics such as Feldstein put almost sole responsibility for the collapse of the US auto industry on the "high" cost of labor. Ignoring issues such as the US auto companies reliance on producing expensive, gas-guzzling SUVs, we are seemingly meant to believe that $72/hour wages and relative labor costs of more than $2000 per car as compared with manufacturers such as Honda and Toyota brought about the downfall of Detroit, with management powerless to do anything about it.

Senate Republicans used such arguments to block bailout legislation unless the UAW immediately acquiesced to stringent demands for wage and benefits decreases. "As far as the failure of last night, it solely lies on UAW," Senator Tom Coburn (R-OK) told CNSNews.com regarding the failure of the cloture vote for the bailout legislation on the Senate floor on December 11, 2008.

Obviously trying to strike a death blow to organized labor by going after one of the few remaining union strongholds, Republicans saw this as their opportunity to irreparably damage labor just before the Obama administration comes to power and attempts to pass the Employee Free Choice bill. This piece of legislation will do away with current labor laws that require new unions to obtain a majority registration of workers with the union and have a majority of workers vote to approve the union in a "secret ballot" vote that often takes place months or years after the majority registration has taken place, giving ample time for companies to pressure workers not to approve the union.

Republicans and other anti-union advocates know that if this legislation passes, and Obama has put it on the frunt burner of issues he wants addressed right way, that the removal of the burden of the "secret ballot" will be the biggest boon to organized labor in decades, potentially marking the first uptick in union membership as a percentage of workers since the 1970s.

Republicans see this as a major threat due to labor's consistent backing of Democrats through monetary donations as well as on the ground voter mobilzation. But it is probably Walmart, the biggest union-buster in the US, who has the most to fear.

In the end, however, George W. Bush decided that he didn't want to add the collapse of the auto industry, and the potential loss 2-3 million jobs during the biggest economic crisis since the Great Depression, to the long list of his presidential failures. So he ordered Treasury Secretary Henry Paulson today to use the TARP funds (which congress set up specifically to rescue the financial industry) to provide just enough loan money to GM and Chrysler for them to survive until Barack Obama is sworn in.