Setback

Late last night, the U.S. Senate rejected on a procedural vote a bill which would have provided the Big 3 automakers with $14 billion as a bridge loan. After the House had approved its bill 24 hours earlier, four Democrats (including Harry Reid, for procedural reasons) joined 31 Repubs in opposing the proposal. The agreement faltered over a timetable for the automakers to reach wage parity with those at the foreign automakers operating in the United States. Opponents apparently demanded that wage cuts to bring their pay by the end of next year "into line" with U.S. plants of Japanese corporations, well before the 2001 expiration of the current contract between the United Auto Workers and the domestic automakers.

And despite the claims (videos below) of those employed by, and appearing in, the traditional media, there is little difference presently between the wages of workers at the domestic companies and those at the "transplants." Jonathan Cohn here notes that as of 2007, workers at General Motors, Ford, and Chrysler were earning approximately $28 per hour while the others were making "somewhere between $20 and $26 per hour, and most likely around $24 or $25." The $70 per hour figure bandied about by the traditional media resulted from adding all employer-provided pensions (e.g., health insurance and pensions) and dividing it by the number of workers, which came to a per-capita benefits figure of $42 per hour. The average hourly wage, $28, was added to that for a total of $70 (morphed into $73 by much of the corporate media).

This is a mistake no high school statistics student would make. The $42 figure includes all "legacy costs," the pension and health benefits of the hundreds of thousands of individuals who have retired from the employ of the Big 3. While foreign automakers did not open plants in the U.S.A. until the 1980s, Ford and Chrysler have been operating for several decades, General Motors over a century.

With the looming loss of American jobs related to the automobile industry, a deepening recession, the economic viability of a midwestern state, survival of our manufacturing base, and prevention of depression at stake, Republican lawmakers labor late into the night to destroy the American middle class created, in part, by the domestic automakers they want to push into bankruptcy.