Anger over Senate's rejection of auto bailout

A foolish game of chicken? Or a reasonable gamble that the White House would, when push came to shove, have its back?

It is unclear what emboldened the United Auto Workers union Thursday night to reject Senate Republican calls for deep cuts in worker compensation by 2009.

The consequences, however, were swift: the Senate's 52-35 repudiation of a $14 billion emergency rescue for the collapsing auto industry.

Just as fast came support for UAW's stand and outrage that a segment of the Senate, as UAW president Ron Gettelfinger alleged yesterday, was trying to use a financial-aid plan to "pierce the heart" of organized labor.

"To have this go down simply because of the workers, that's just a cop-out for those Republicans who didn't want to do it in the first place," said Patrick Eiding, president of the Philadelphia council of AFL-CIO. Its 150,000 working families include members of the UAW.

At District 13 of the Communications Workers of America in Philadelphia, vice president Edward Mooney said those Senate Republicans who voted against the bailout were "not taking into account the trickle-down effect, the absolutely disastrous effect" the failure of any of the auto industry's Big Three would have "on an already collapsing economy."

The concessions the Senate sought - which aimed to bring UAW members' pay into line with that at Japanese carmakers - were being pushed by a contingent from the South, where most of the foreign automakers are situated.

Around Philadelphia yesterday, reaction among union leaders, a labor lawyer, and a senator from Pennsylvania was that the UAW's concession rejections were not only reasonable, but could signal the start of a more effective era for the labor movement.

"As crazy as it seems, my own view is that the pieces are in place more so than they have been in years for organized labor to make a comeback - if they do it right," said James A. Matthews III.

He is a partner and co-chair of the labor and employment department at Fox Rothschild in Philadelphia. He also is a second-generation labor lawyer - for management.

With other federal economic relief available and a "Congress with more D's and fewer R's" about to take over, Matthews said, "I think this is an extended dance, and there's a lot of dancing left to do."

No sooner had he made that prediction than the Bush administration issued word that it would consider tapping the $700 billion financial-industry bailout fund to help sustain the worst-off of the car industry - General Motors Corp. and Chrysler L.L.C. - until Congress reconvenes next month.

That was little salve to Barbara Rahke, director of Philaposh, a Center City-based nonprofit advocate for workers' safety and health.

A former organizer for the UAW for more than 20 years, Rahke, now one of its retirees and pensioners, took a phone call from a reporter yesterday and immediately had to hang up as she dissolved into tears.

Later, a more composed Rahke said she awoke yesterday to news of the Senate voting down the temporary funding plan for the auto industry and the reason - the UAW's refusal to accept immediate pay cuts.

"I felt very proud" of the union's stance, she said.

But the notion that UAW workers had to accept "the lowest [compensation] standards just to keep a job just brings you to tears in my case - tears that are sadness and just a lot of anger."

Equally steamed yesterday was U.S. Sen. Bob Casey (D., Pa.), a member of the Banking Committee, where the auto-industry bailout legislation originated.

Casey said that many GOP senators went after the UAW in a "malicious" and "calculated" way.

"To have workers . . . walk the plank after they'd already conceded so much is unfair," Casey said.

Slicing wages certainly is not the only answer to the auto industry's ills, said Matthews, the labor lawyer, who called the ruckus over the UAW's refusal to approve concessions "much more about symbolism than substance."

"None of this is going to make any difference unless there's a fundamental restructuring in the industry," he said. "Its labor cost structure and labor relations were developed at a time when GM had a 50 percent market share, when there was no significant competition, and when . . . to refer to a Japanese car was [a reference to] a cheap, rickety import."

While there is no "one solution" to the auto industry's problems, Matthews said, "the much bigger problems are the legacy costs - pensions and retiree health care."

He said he "wouldn't be surprised if at some point in the process the federal government . . . ends up eating at least some portion of the pension and retiree health costs" as the industry moves away from future employee coverage, such as for retirees' health-care.

In the future, Matthews said, "things just can't work the way they've worked."

By late yesterday, a day when GM announced it intends to temporarily close 21 factories across North America, the UAW was urging all in the labor movement to make calls to the White House in support of using some of the financial industry bailout funds for the auto industry.

Said Rahke, who planned to be among those dialing:

"There's always hope, right?"