12-22-08, 9:35 am

The Bush administration has signed off on a “bailout” for GM and Chrysler that is nothing for labor to cheer about. Federal intervention and funding was necessary to prevent the collapse of the auto industry, whose repercussions in terms of jobs across the national economy would have been catastrophic. But as the British used to say “the devil is in the details,” and there are details in the bailout that labor and all progressives should call to change when Obama enters office.

First and foremost, the legislation represents a victory of Southern and other right to work state Republicans who filibustered the original legislation in the Senate. The UAW is supposed to make concessions after the first year that will make GM and Chrysler “competitive” with foreign (i.e. Toyota, Nissan, BMW) auto plants in Southern cheap labor “right to work” states.

That is both a twisted expression of the “free market” ideology and policy that led to the crisis to begin with. It is an example of the race to the bottom approach which will lower the living standards and real purchasing power of unionized auto workers and negatively impact living standards throughout the national economy. It is also an extreme example of the hypocrisy of the Republican right, which continues to shamelessly wave the flag while they serve the interests of foreign-based transnational corporations.

While I am not an “economic nationalist” who believes that corporations like GM have any loyalty to US workers, these corporations are more amenable to unions and the US government than their rivals abroad. GM has been for decades the largest industrial corporation the largest auto maker in the world. It lost that position to Toyota because of its reckless policies over decades, building gas-guzzling cars and relying on military subsidies. But Toyota has a plant in Smyrna, Tennessee and, like other right to work states, Tennessee has provided Toyota with all sorts of subsidies. Sen. Bob Corker, a freshman right-wing Republican from Tennessee, led the charge against federal intervention to save GM and was cheered on by the Republican right as he clashed with Ron Gettelfinger, the UAW president in congressional hearings. I assume Toyota was also cheering on Corker, since it has the most to gain in world markets, profits, and influence by the collapse of its major rival.

Foreign corporations like Toyota seem to be treating “right to work” states like all transnational corporations treat “third world” countries, that is, demanding and getting all kinds of subsidies in exchange for the jobs they “offer.”

The federal “bailout” of GM should be linked to maintenance of wages and benefits for unionized workers, since that is by far the most rational anti-depression policy. In addition, both labor and the government should hold important positions in the governance of the auto companies with serious regulation of executive pay and an industrial policy that rewards increased product quality. This should be connected to a labor policy that prioritizes the improvement of the conditions of work, pay and benefits for all workers above the corporate “bottom line.” The capitalist policy of destroying jobs and forcing “givebacks” as the way to sustain corporate profits regardless of product quality should be discarded.

The present Bush “bailout” is not only seriously flawed but in its surrender to the politicians like Sen. Bob Corker (R-TN) has, in effect, sold out workers to the immediate benefit of US auto executives and the long-term benefit of Japanese and German based auto companies. It is the opposite of an industrial policy, which would first of all prevent states like Tennessee from subsidizing Toyota, cutting off general federal aid if Tennessee and other states persisted in such policies. Most of all, it shows the negative effects of the Taft-Hartley law, which long ago created the low wage non union shop labor force in nearly half of the states under the slogan of “right to work.”


The Employee Free Choice Act’s passage will be an important step in beginning to undo the damage which flowed from Taft-Hartley and subsequent anti-labor updates to the National Labor Relations Act like Landrum-Griffin. It is a necessary first step in re-empowering labor on a road which will hopefully see the complete repeal of Taft-Hartley of the NLRB as a positive instrument in the unionization of tens of millions of workers by establishing uniform pro union shop labor laws. Today, we must fight against the anti-labor aspects of the bailout and for the enactment of pro labor federal legislation that will make the trade union movement strong enough to prevent bailouts like this one from happening in the future.

--Norman Markowitz is a contributing editor of Political Affairs.