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“Those Dreaded Unions”: Republicans Who Meddle With Profit-Making Business

It’s no secret that many Republican lawmakers dislike labor unions, which are big supporters of Democrats. But it’s unusual to see a politician willing to castigate an employer in his state just for talking to union officials about setting up a union at its factory.

Consider the case of Bob Corker, the Republican senator from Tennessee, and Volkswagen, the German automaker that employs 2,000 workers at a plant in Chattanooga. As my colleague Steven Greenhouse reported last week, the company is working with the United Auto Workers on a plan to unionize its factory so it can establish what is known as a “works council” in Germany. These councils are essentially committees of workers that meet with management to discuss how to improve conditions and productivity. Some studies have found that plants with such committees have higher productivity and wages than factories without them, which is why both workers and management might want them.

But Mr. Corker appears to have never seen a union he liked. In an interview with the Associated Press, he called Volkswagen’s decision to engage in these talks “incomprehensible” and said the company would become a “laughingstock in the business world” if it went ahead with the plan. His criticism is particularly strange because he is reported to have played a big role in bringing Volkswagen to Chattanooga, where he was once mayor. To be fair, Mr. Corker is not alone; the governor of his state, the Republican Bill Haslam, is also opposed to the Volkswagen-U.A.W. plan.

The lawmakers say they are worried that a unionized Volkswagen plant would somehow ruin the investment climate in the state and compel other companies not to invest there. A more realistic explanation for why the lawmakers oppose the U.A.W.’s foray into their state is that they fear it will support the state’s Democratic party.

The strangest thing about Mr. Corker’s and Mr. Haslam’s criticism of Volkswagen is that Republicans are usually on the ones telling everybody else in government not to meddle in the affairs of profit-making businesses. After all, it’s their mantra that businesses, not lawmakers, create jobs. But I guess none of that matters in this case because even a company as successful and profitable as Volkswagen, which is competing with Toyota and General Motors to be the world’s largest automaker, must be deluded if it’s entertaining the possibility of working with a dreaded union.

 

By: Vikas Bajaj, Editors Blog, The New York Times, September 12, 2013

September 13, 2013 Posted by | Businesses, Unions | , , , , , , , | Leave a comment

“The Great Detroit Betrayal”: The Residents, Employees And Retirees Are Not The Tragic Heroes Who Brought The City Down

Detroit has filed for bankruptcy. Most of the spot-news coverage has focused on the immediate fiscal crisis of the city, but the immediate fiscal crisis really isn’t what got the city into such deep trouble. Certainly, Detroit’s contracts with its employees and its debts to its retirees don’t explain anything about how and why this once-great city has come to such grief. Those contracts and retirement benefits are par for the course for major American cities—certainly, no more generous than those in cities of comparable size.

Any remotely accurate autopsy of the city will find the cancer that killed Detroit was the decline of the American auto industry. The failure of U.S. automakers in the ’70s, ’80s and ’90s to make better cars at a time when foreign-made autos were beginning to enter the U.S. market was surely one factor. Another was the trade deals that made it easy for Detroit automakers to relocate to cheaper climes—most particularly, NAFTA, which boosted maquiladoras while shuttering auto plants in the United States, disproportionately, in Greater Detroit. Taken in aggregate, the U.S. trade deals of the past half-century have benefited finance while crippling manufacturing, and Detroit—along with swaths of Cleveland, Chicago, Pittsburgh, and other industrial cities—paid the price.

A second factor is the racial polarization that Detroit has never managed to overcome. As far back as the 1920s, the Detroit factories attracted workers who didn’t always get along. In particular, it drew hundreds of thousands of workers from the African American South and white Appalachia. Since its formation in the 1930s, the United Auto Workers has spent much time and energy trying to combat white racism, and to keep tensions between these two groups from erupting in violence. The union didn’t always succeed. While it generally managed to get both its white and black members voting for liberal Democrats for state and national office, it seldom managed, even during the height of its strength in the ’30s, ’40s and ’50s, to get its white members to vote for its endorsed candidates for Detroit city office. Why the difference? Because city officials, unlike state and national ones, set Detroit’s policing and housing policies, and many white Detroiters, including auto workers, wanted to preserve racially segregated housing and a brutal, racist police force.

As mass suburban development came to Detroit in the decades following World War II, the city became prey to epochal white flight. By the late ’80s, when pollster Stan Greenberg conducted his now famous study of Macomb County—a white, working-class suburb adjoining Detroit, which had voted overwhelmingly for John Kennedy in 1960 and just as overwhelmingly for Ronald Reagan in 1984—he discovered a white electorate convinced that Democrats had created a government that benefited only blacks. Any notion of regional cooperation between increasingly black Detroit and its white suburbs was a non-starter.

As the auto plants closed and the whites fled, Detroit hollowed out. In time, as jobs and services vanished, blacks fled as well. In 1950, the city was home to 2 million people. Today, it is home to 700,000. Its unemployment rate, at 18.6 percent, is the highest of the 50 largest American cities. Its tax revenues, not surprisingly, can’t support adequate city services. And today’s bankruptcy filing is likely to reduce those services still further, while likely reducing the monthly pension checks of its retirees, though they and their unions have a strong moral claim to most favored creditor status. Moral claims often don’t amount to much, however, in bankruptcy proceedings.

Is it right to call what has happened to Detroit a tragedy? Not, surely, in a strictly Greek sense. There was hubris aplenty, but it was the hubris of auto executives who certainly don’t live within the city limits and won’t suffer the bankruptcy’s consequences. As for those who will suffer them—the residents, employees and retirees of Detroit—they’re not the tragic heroes who brought the city down. They’re the tragic victims.

 

By: Harold Meyerson, The American Prospect, July 19, 2013

July 21, 2013 Posted by | Auto Industry | , , , , , , , , | 1 Comment

“Michigan, A Right-to-Work State?”: Purely Political, Motivated By A Desire To Punish Supporters Of The Democratic Party

Labor never ruled Michigan as such. It may have been home to the best and biggest American union, the United Auto Workers, but even at the height of their power, the UAW could seldom elect its candidates to Detroit city government. Still, the UAW dominated the state’s Democratic Party and much of state politics for decades—at least, until the auto industry radically downsized.

Just how downsized union power has become is apparent from the decision of the state’s Republican governor, Rick Snyder, to support a right-to-work bill that began speeding its way through the state’s lame-duck GOP-controlled legislature on Thursday. Should the bill become law—and given Republican control of state government, it’s hard to envision how it won’t—Michigan would join historically more conservative Indiana as the second state from the industrial Midwest to move to right-to-work status. Until last year, when Indiana enacted its statute, right-to-work states were confined to the South, the Plains states and the Mountain West—states devoid of a major union presence. That such laws are now coming to the industrial Midwest is just more evidence of the continual weakening of industrial unions—the unions that have taken the most direct hit from offshoring and mechanization.

But why enact such laws when most unions are no longer big enough to take any bite out of company profits? In fact, the pressure for such laws isn’t coming from companies like Ford or GM, which can how hire new union workers for half of what they pay their more veteran workers. It’s purely political. Weakened though they be in the economic arena, unions still punch well above their weight at election time. That’s one reason why President Obama carried every state in the industrial Midwest save (almost) perpetually Republican Indiana.

And if anyone doubts that politics lies behind the Michigan Republicans’ decision to enact a right-to-work bill, consider one of the bill’s particulars: the only unions it exempts from the bill’s coverage, the Wall Street Journal is reporting, are police and firefighter unions. Snyder said that the GOP had carved out that exception because their jobs needed protection from labor strife.

Think about that for a moment. The effect of the Republicans’ exemption would be to ensure police and firefighters have the strongest unions in the state, the ones most capable of taking job actions when they sought to better their pay and working conditions. Elsewhere across the U.S. today, states and cities are trying to scale back pensions and other benefits of their employees, and police and firefighters are often targeted because their pay and benefits exceed those of other public workers. Moreover, historically, governors and mayors have been wary of the power of such unions—Republican governors and mayors in particular. Massachusetts Gov. Calvin Coolidge first came to the nation’s attention by breaking a Boston police strike in 1919—“There is no right to strike against the public safety,” he proclaimed. It was his strikebreaking that won him a place on the 1920 Republican ticket.

Now, however, Snyder, like Wisconsin Gov. Scott Walker, has created a police-and-firefighter carve out. The reason is purely political—in Michigan, as in Wisconsin, the police and firefighter unions often support Republicans for state and local office, and Republicans want to make sure that they’ll continue to do so with undiminished clout. The carve-out, said Michigan House Democratic leader Tim Greimel, “makes it very clear that this is not about sound economic policy. It’s motivated by a desire to punish supporters of the Democratic Party.”

 

By: Harold Meyerson, Editor-at-Large, The American Prospect, December 7, 2012

December 8, 2012 Posted by | Politics | , , , , , , , , | Leave a comment

“A Matter Of Character And Trust”: Did Mitt Romney Break The Law By Failing To Disclose Delphi Investments?

We now know, thanks to Greg Palast’s recent scoop in The Nation, that Mitt Romney reaped a large financial windfall from the auto bailouts. Romney didn’t talk up this shrewd investment while touting his business experience on the campaign trail, for obvious reasons—he is a strong critic of those bailouts.

But while Romney had ample political reasons to conceal his investment, he apparently had no legal justification for doing so. Federal law requires that candidates disclose stock holdings that are affected by government action—and Romney’s million-dollar (at least) investment in a hedge fund that bought up Delphi stocks surely fits that bill.

Now, unions and good-government groups are calling on the feds to investigate Romney’s oversight.

Thursday afternoon in Toledo, Ohio—where the story has received significant play in local media—United Auto Workers president Bob King joined Palast and Service Employees International Union vice president Tom Woodruff to call upon the US Office of Government Ethics to look into Romney’s financial disclosures and their failure to list the Delphi investments. Along with several groups like CREW and Public Citizen, the union leaders also sent a letter to OGE demanding a formal investigation.

“The American people have a right to know about Governor Romney’s potential conflicts of interest, such as the profits his family made from the auto rescue,” said King. “It’s time for Governor Romney to disclose or divest.”

As Palast reported, a trust in Ann Romney’s name listed “more than $1 million” invested with Elliott Management, run by hedge fund guru and GOP mega-donor Paul Singer. (That’s the minimum amount of disclosure required by law, so it could have been much more than $1 million.) Singer subsequently snapped up large amounts of stock in Delphi at pennies on the dollar, and then, along with other hedge funds, demanded that the government assume pension responsibilities and bail the company out—or they would shut it down, thus crushing General Motors as well.

The government acceded, Delphi became lucrative again and then went public, and Elliott Management and its investors—including Romney—reaped enormous rewards.

Under any rational interpretation of the Ethics in Government Act of 1978, these are holdings that a presidential candidate would need to disclose, because they can be affected by government action. The Romney campaign doesn’t argue that they are not, but rather that, since Ann Romney’s trust is “blind,” there is no disclosure requirement.

Today’s letter points out, however, that Ann Romney’s trust is blind in name only. Romney himself has said that “the blind trust is an age-old ruse, if you will. Which is to say you can always tell a blind trust what it can and cannot do.” Moreover, this is not a federally recognized blind trust of the sort Romney would be forced to create if he won the White House. If it was, he would have never been able to reap his windfall from Delphi, the letter points out.

Whether or not Romney broke the law will come down to this question of how blind this trust really is, and Romney at least has some plausible deniability there. But no doubt this is a story his campaign doesn’t want to see playing out in Ohio five days before the election.

 

By: George Zornick, The Nation, November 1, 2012

November 2, 2012 Posted by | Election 2012 | , , , , , , , , | Leave a comment

“Yes, Romney’s A Liar”: But More Than Just Creepy, This Is Getting Ridiculous

It is no secret that political candidates are capable of doing awful things when they are reach the desperate final days of an election campaign.

But trying to scare American workers into believing that a government initiative that saved their industry was some sort of secret scheme to shutter major plants and offshore jobs is more than just creepy. It’s economic fear-mongering of a sort that is destructive to the spirit of communities and to the very future of the republic as an industrial force.

George Romney, who led the remarkable American Motors Company project that would eventually produce the Jeep, never in a political career that saw him win election as governor of Michigan and seek the Republican nomination for president would have engaged in such calumny.

But George Romney’s ne’re-do-well son, a very different sort of businessman who devoted his career to taking apart American companies and offshoring jobs, is trying to resurrect his presidential candidacy with a big lie.

And the lie is about Jeeps.

Jeeps are made in Toledo, Ohio, where the iconic American vehicle has been produced since 1941, and Romney needs to win Toledo and the rest of northwest Ohio if he is to stand a chance of winning the battleground state that is key to the presidency.

Last week, Romney went to the region and shocked voters by suggesting that: “I saw a story today that one of the great manufacturers in this state, Jeep, now owned by the Italians, is thinking of moving all production to China.”

The story, an October 22 report by Bloomberg News, which specifically stated that: “Chrysler currently builds all Jeep SUV models at plants in Michigan, Illinois and Ohio. [Fiat/Chrysler executive Mike] Manley referred to adding Jeep production sites rather than shifting output from North America to China.”

Yet, Romney spoke of the company that manufactures Jeeps “moving all production to China.

The statement stirred fundamental fears in a regional that has been battered by plant closings. So much so that Jeep’s parent company, Chrysler, rushed to clarify that Romney was completely, totally, incredibly wrong. “Let’s set the record straight: Jeep has no intention of shifting production of its Jeep models out of North America to China,” announced Chrysler.

Company spokesman Gaulberto Ranieri said that Romney had remade the facts so aggressively that: “It is a leap that would be difficult even for professional circus acrobats.”

What was Romney’s response to being caught in a lie.

He lied bigger.

Much bigger.

The Romney campaign is now airing an ad in Ohio that claims President Obama, with the auto bailout that saved domestic vehicle production, “sold Chrysler to Italians who are going to build Jeeps in China.”

The ad concludes that Romney—whose Bain Capital enterprise identified as “a pioneer of outsourcing”—“will fight for every American job.”

Kathleen Hall Jamieson, the director of the Annenberg Public Policy Center at the University of Pennsylvania, and one of the nation’s top experts on political advertising reviewed the ad and dismissed it as “inferentially false.”

They are inviting a false inference,” Hall said of the Romney campaign’s attempt to suggest that Obama had engineered a change in Jeep’s status that would see the Toledo plant shuttered and its more than 3,500 workers idled.

The Washington Post “Fact Checker” site reviewed Romney’s ad and declared: “the overall message of the ad is clearly misleading—especially since it appears to have been designed to piggyback off of Romney’s gross misstatement that Chrysler was moving Ohio factory jobs to China.”

The pushback from Obama’s backers and his campaign has been aggressive.

Former President Bill Clinton flew to Ohio and decried Romney’s claim as “the biggest load of bull in the world.”

Vice President Joe Biden said: “I have never seen anything like that. It’s an absolutely, patently false assertion. It’s such an outrageous assertion that, one of the few times in my memory, a major American corporation, Chrysler, has felt obliged to go public and say, there is no truth.”

An Obama campaign ad announced that “now, after Romney’s false claim of Jeep outsourcing to China, Chrysler itself has refuted Romney’s lie.”

What was Romney’s response.

Up the ad buy.

Expand the big lie so that it is now enormous.

The deception has become such a serious issue that, on Tuesday, Chrysler CEO Sergio Marchionne felt compelled to clarify what is becoming an international controversy.

“Chrysler Group’s production plans for the Jeep brand have become the focus of public debate. I feel obliged to unambiguously restate our position: Jeep production will not be moved from the United States to China,” wrote Marchionne, who added:

North American production is critical to achieving our goal of selling 800,000 Jeep vehicles by 2014. In fact, U.S. production of our Jeep models has nearly tripled (it is expected to be up 185 percent) since 2009 in order to keep up with global demand…

With the increase in demand for our vehicles, especially Jeep branded vehicles, we have added more than 11,200 U.S. jobs since 2009. Plants producing Jeep branded vehicles alone have seen the number of people invested in the success of the Jeep brand grow to more than 9,300 hourly jobs from 4,700. This will increase by an additional 1,100 as the Liberty successor, which will be produced in Toledo, is introduced for global distribution in the second quarter of 2013.

There was nothing unambiguous about that statement. Yet Marchionne continued: “Jeep is one of our truly global brands with uniquely American roots. This will never change. So much so that we committed that the iconic Wrangler nameplate, currently produced in our Toledo, Ohio, plant, will never see full production outside the United States.”

“Jeep assembly lines will remain in operation in the United States and will constitute the backbone of the brand,” confirmed Marchionne. “It is inaccurate to suggest anything different.”

That’s a rare commitment by a manufacturer—far more clear and unequivocal than the commitment Bain Capital made to the companies it bought up, tore apart and outsourced.

Yet, Mitt Romney’s campaign is still running the ad.

Still lying.

That’s made United Auto Workers union president Bob King furious:

It is especially hypocritical of Mr. Romney’s statements and new ad is Bain Capital’s closing of profitable U.S. facilities and shifting work to China to make even higher profits like what is happening today in closing a profitable Sensata plant in Freeport, IL, to move the work to China. Romney says in the ad that he will fight for every American job, so why isn’t he fighting for the American jobs at Sensata? And why isn’t he intervening with his own Bain Capital to keep these jobs in the U.S. rather than outsourcing them to China? We just wish that Mr. Romney was as committed to investing in the U.S. as Chrysler CEO Sergio Marchionne is.

Americans will remember that President Obama stood behind American working families and American communities in rescuing the U.S. auto industry and that Mr. Romney opposed the rescue and now attacks Chrysler with misinformation. In putting out this misinformation, Romney is recklessly undermining Chrysler’s reputation and threatening good American jobs.

Imagine if Mitt Romney were to be elected president of the United States.

Imagine if he had to go into negotiations with Marchionne, or another CEO of another industrial giant, about protecting US jobs. Or expanding US manufacturing.

Would the executive trust Romney?

Or would the executive remember Romney as the politician who lied and then lied bigger in order to get what he wanted?

That’s a question that American voters who want their country to have a future as a country that makes cars and trucks and Jeeps would be wise to ponder as November 6 approaches.

 

By; John Nichols, The Nation, October 30, 2012

October 31, 2012 Posted by | Election 2012 | , , , , , , , , | 1 Comment

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