Over the past few days, it has become pretty clear what the Republican response to the auto-industry bailout will be- no. If the Big Three are bailed out, Democrats are going to have to do it on their own, because the Republicans have some history to re-write and some other motives.
In order for the Republicans to get back to their roots so that they may one day get back in power, they are going to have to become “fiscal conservatives” again. Now granted, looking at the history of Republican rule, they have NEVER been fiscal conservatives, as the vast majority of our national debt, to include the largest annual budget deficits, were all brought to you via Republicans. However, there are a lot of idiots like me out there who don’t pay attention, and think Republicans are fiscally responsible. As such, expect the Republicans to spend the next few years simply saying no to any and all spending. What they are hoping is a couple years of them saying no and the Obama administration spending will allow them to rebuild their favorite fantasy- the GOP as prudent defenders of the taxpayer’s money.
The second reason you can expect them to say no is even easier to figure out- this is union busting on a grand scale. There have been dozens of signs over the past week what they really want, starting with the Mitt Romney editiorial in the NY Times:
The new management must work with labor leaders to see that the enmity between labor and management comes to an end. This division is a holdover from the early years of the last century, when unions brought workers job security and better wages and benefits. But as Walter Reuther, the former head of the United Automobile Workers, said to my father, “Getting more and more pay for less and less work is a dead-end street.”
You don’t have to look far for industries with unions that went down that road. Companies in the 21st century cannot perpetuate the destructive labor relations of the 20th. This will mean a new direction for the U.A.W., profit sharing or stock grants to all employees and a change in Big Three management culture.
When Mitt Romney says a “new direction” for unions, the new direction means planned obsolescence. It is important to remember what Mitt Romney does to make his money, and when he gives advice to what should happen to the auto industry, you need to understand that his vision for America is more of the same- in his worldview, everyone is working for $8 dollars an hour at Wal-Mart, getting their health care from medicare/medicaid, and barely making it.
On Monday last week, Todd Harris picked up the ball and ran with it:
Harris: Republicans are going to be looking-as we talk about concessions on the management side, we’re going to be looking, when you talk about bailing out Detroit, looking at reopening some of those ridiculous union contracts that have been huge, massive giveaways.***
No, I don’t-I don’t think that this is class warfare. I mean, you talk about a company like AIG or a company like Citigroup, and there was bipartisan consensus that they were simply too big to allow to fail.
Now, you haven’t heard-at least I’m not aware of any Republicans saying, no, you have got to protect the AIG management, or you have got to protect the Citigroup management. If they need to be hung out to dry, then let them hang them out to dry.
But, when you talk about some of these union contracts that are really crippling the Big Three, it’s not just that they made bad cars or that they made cars that used a lot of gas. They certainly did, although their cars are a lot better now. But, if you’re going to address fundamental reform in Detroit, you have got to have the union issue on the table.
And just so you are completely clear on what the real agenda is for the Republicans, the WSJ brings it home this morning:
onsider labor costs. Take-home wages at the U.S. car makers average $28.42 an hour, according to the Center for Automotive Research. That’s on par with $26 at Toyota, $24 at Honda and $21 at Hyundai. But include benefits, and the picture changes. Hourly labor costs are $44.20 on average for the non-Detroit producers, in line with most manufacturing jobs, but are $73.21 for Detroit.
This $29 cost gap reflects the way Big Three management and unions have conspired to make themselves uncompetitive — increasingly so as their market share has collapsed (see the nearby chart). Over the decades the United Auto Workers won pension and health-care benefits far more generous than in almost any other American industry. As a result, for every UAW member working at a U.S. car maker today, three retirees collect benefits; at GM, the ratio is 4.6 to one.
It could not be clearer. I do not know what the best thing to do with the auto industry is, and I am sick and tired of all these bailouts. However, I do think it is important that people realize that when Republicans reject a bailout of the auto-industry, that they are not doing so out of principle. If anything should be clear, when it comes to spending, the GOP has no principles. Instead, their no vote will be about something else- protecting the big money backers, the captains of industry and the folks who, unlike everyone else, have done well in the past few years.