Obama's Gordon Gekko Targets Union Workers

by: David Sirota

Tue Mar 31, 2009 at 09:38


Remember Gordon Gekko from Wall Street? Specifically, remember how Gekko's entire scheme for the airline industry was based on crushing the blue-collar union that Bud Fox's dad (Martin Sheen) was part of? Welcome to a real life version of that story, starring corporate raider Steve Rattner, who President Obama appointed to head the White House team now overseeing the auto industry (and don't say you weren't warned).

As the Wall Street Journal reports, Rattner's strategy is to use the government's leverage to try to specifically crush auto workers and force them to accept even more contract concessions than they've already agreed to:

DETROIT -- President Barack Obama's recovery plan for General Motors Corp. and Chrysler LLC appears to take aim at union retirees, a usually reliable Democratic constituency. After studying the plight of the companies, the president's auto task force concluded GM and Chrysler's survival is dependent on greater concessions from the United Auto Workers union.

The White House has total leverage over the situation because the UAW knows that if the industry doesn't get the loans it needs, it will be forced into bankruptcy court, where judges will shred labor contracts (somehow, AIG bonus contracts are sacrosanct, but union worker contracts can be shredded in a heartbeat). Indeed, many analysts believe this is the administration's ultimate goal.

IMHO, The most immoral part of this is the specific targeting of retirees.
David Sirota :: Obama's Gordon Gekko Targets Union Workers
 As opposed to younger workers, retirees often can't get another job or go back to work because of obvious physical limitations. As one retiree said, "What 85-year-old can go out and get another job?"

I'm not saying that the auto industry's legacy costs are sustainable - not at all. But I am saying that when you put Gordon Gekko in control of government policy overseeing an industry, you are inevitably going to get a policy that assumes workers are the big problem. If you had a different kind of team, you may have a policy that says, for instance, we have to create a robust universal health care system before throwing retirees off their existing health care.

Last I checked, we have enough money to create that system just lying around ready to be handed out to Rattner's Wall Street friends. Hell, $8 trillion will get us a damn good universal health care system, won't it? Yes, it will - but it will also buy a lot of yachts for AIG execs, and when you have Gordon Gekko making public policy yachts come before health care.

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Obama's Gordon Gekko Targets Union Workers | 38 comments
More immoral than that (4.00 / 16)
It's not simply immoral because the prospect of those workers going out and getting another job is slim.  It is immoral because those workers exchanged their labor for the delayed compensation (in the form of pensions and benefits) that they negotiated to receive.   Decades of auto industry execs and shareholders experienced and benefitted the fruits of those workers' labor.   Not meeting those obligations is simply theft of that labor.
exactly, it is the breaking of a contract and is contrary to the rule of law ... (4.00 / 5)
... that summers and geithner feel is paramount when dealing with the wall street execs but not with the blue collar workers.

Whose rule of law is it?  Who does it benefit?  Who does it apply to?

Whose government is it?

Z

[ Parent ]
Thank you, David, for telling (4.00 / 12)
truth to power.

In the end, I can only wonder about Barack Obama and ask, which side is he on?  

His rhetoric says one thing, but many of his actions place profit over people.  

Yep... (4.00 / 4)
I must ask the same question as well. Is Obama on the side of the people or the powerful? The more I see, the more I'm disappointed.

Yes, Virginia, there are progressives in Nevada.
[ Parent ]
Cut me off a slice o' that, too. (0.00 / 0)
Having spent almost 30 years in a big corporation, one that went from first to worst over the years, I literally cringed when I heard Obama say "leaner and meaner" wrt GM.  I'm generally one of those people who sleeps like a rock before my head even hits the pillow, but last night I lay there for an hour or so reliving some of the "worst of" that came from my corporate execs and HR creeps over the years, and admitting that Obama sounded very much like them.  Sadly, his comments reminded me the most of Jerry York who marched in and declared that any software product that wasn't successful in two years, start to finish, conception to sales, would be axed.  He knew NOTHING about our industry, and that one comment showed how arrogant and stupid he was, given that we were shipping mainly operating systems and middleware.  Of course, this policy was never implemented because he was gone in less than 2 years, but not before firing a lot of workers, gutting the employee pension plan (while greatly shoring up the executive one), and collecting his own generous compensation.  Just before I finally fell asleep it occurred to me that perhaps Obama is trading the auto industry to China.  I'm not normally a conspiracy nut, but in the wee hours this made sense.  Destruction of the US auto industry would probably benefit China in the long run, and China is, of course, paying all our bills right now.  But when I read below that there are tons of CDSs on GM, that makes real sense.  (And I'm wide awake right now!) It fits with the Obama-as-continuation-of-Bush; Geithner-as-continuation-of-Paulson wrt Wall Street.  Of course! Destroy GM and more Wall Street banks get more payoffs (which do, of course, come from China). So I can drop my China-is-making-backroom-deals theory for the more straightforward: China is playing us, and we don't even know it.
[ Parent ]
Obama can't do a thing about AIG contracts (4.00 / 15)
but UAW contracts mean nothing.

Join the Iowa progressive community at Bleeding Heartland.
Why can't he do anything about AIG contracts? .. (4.00 / 1)
or are you being sarcastic?
[ Parent ]
I'm not buying it either. (4.00 / 5)
Obama needs to stop these Bush policies of stealing from the poor to give to the ultra-rich. He'll making all of us middle-class folks poor by continuing this wrong-headed crap that I would never have expected from a Democrat.

Yes, Virginia, there are progressives in Nevada.
[ Parent ]
Impeach Obama. Get Rid of Him. (2.00 / 6)
The idea of Obama is a continuation ...seamless of Bush....and that is to make THE U.S.A. like Indonesia...where workers cannot have unions, organize, there is no health care, benefits, pensions, 401K's....NOTHING...

Get Rid of Obama...

Why did any of you ...whoever you are vote for him?

How Stupid to believe in him.

He is a crook (took an obvious bribe from Tony Rezko), a criminal ( continues Bush policies of killing villagers), and an extension of George Bush...

I've been saying this for years. I actually listened to what he said. He said...I'm pro capitalist, free market, Pro Israeli PERIOD!, Pro Military...it was on his website...

Then his biography reveals his step father Lolo...is his model. A man who hates the poor, the weak...

But it's just my imagination I suppose, that I and many others knew who Obama was.

I knew immediately that the reason GM was being picked on was to kill the unions.

Why not fire the President of BOA....because BOA and the American Presidency and Government are seamlessly connected.

Are we going to be surprised when we hear that Obama's execution squads formed by Cheney are  continuing.

Obama is cold blooded.

I agree with you about Obama (4.00 / 2)
McCain-Palin would have fixed this by now. Making the Bush Tax Cuts permanent would have solved all of our problems by now.  It's too bad we elected the wrong crew, inexperienced and full of crazy ideas.  The business of America is business.  Time to return to the good old days and let the market fix it.
[ Parent ]
We wouldn't have McCain Palin (4.00 / 1)
We would have Biden.
[ Parent ]
Heck, Impeach Biden, too! (4.00 / 1)
In fact I'd impeach everybody until Tim Geithner was President.
[ Parent ]
Geez (4.00 / 4)
I just keep forgetting that the Republicans are really, really Evil, and that's all that counts.

What's all this crazy talk about wanting Democrats doing the right thing? Haven't people heard that the current slogan for Democrats is, We Take Pride In Lesser Evil?  

[ Parent ]
Look I can't agree with impeachment (4.00 / 1)
because being a right wing antiunion person isn't illegal.  Nor is misleading the voters, but I don't think this comment was troll worthy.
[ Parent ]
It's hard not (4.00 / 8)
to believe that at least one key aspect of GM's current troubles is its past need to fund health care for its employees, active and retired. In Japan and other countries, this expense is covered under their universal health insurance -- which effectively becomes a major government subsidy to the auto industry.

No doubt if we had had UHC in this country, a significant amount of money would have been cut from the cost of a GM car, and its success in the marketplace would have been considerably enhanced.

Punishing GM and its workers for failure in the marketplace under these circumstances -- when it was the failure to bring about progressive policy earlier on that may have played an important role in its difficulties -- hardly seems consistent with a progressive approach.

The moral stand would have been to try at least to compensate going forward for the past absence of progressive policy.

Count me disillusioned. (4.00 / 3)
This may be the last straw. Obama may very well lose the "Rust Belt" for good. Oh, and did I mention that union busting and stealing from fixed-income retirees are bad policy, especially at a time when we need more help instead of hurt? Is this what I voted for? And worse yet, is this what I busted my @ss in Nevada for?

I'm officially disgusted now. I don't know if I will ever give 1 more cent to the Obama campaign until they cease and desist with this crap.

Yes, Virginia, there are progressives in Nevada.

If the Democratic party cared... (4.00 / 1)
... about the Rust Belt, then they wouldn't have thrown them under the bus in the primaries. Or am I the only one who's remembering the shenanigains at the RBC over MI's votes?

I am in earnest -- I will not equivocate -- I will not excuse -- I will not retreat a single inch -- AND I WILL BE HEARD.  
[ Parent ]
I'm simply amazed (4.00 / 6)
that Obama should put a corporate raider from Wall Street in charge of the auto industry crisis team.

How much more does Obama need to rub in people's faces how much he's only going to listen to the Wall Street finance crowd, and that he's going to ignore everyone else from everywhere else?

How complete is the dominion of Wall Street over the Obama mindset?

This is one of those situations (4.00 / 3)
where he was looking for a pre-determined outcome. You don't put a guy like Rattner in charge of this without expecting a certain outcome
[ Parent ]
It's not Steve Rattner who is in charge (4.00 / 3)
It is Obama.  Obama knows what he is doing,so if you don't like it blame him.
Fire Geithner (0.00 / 0)
It is Geithner who named Rattner and Rattner is playing the role of the absolute czar of Detroit.  More powerful in terms of the auto industry than any President ever.  It is Rattner who wants to give Chrysler to Fiat while having the creditors and workers take a blood bath.  It is Rattner who wants a "managed bankruptcy" for GM.  

We know where Geithner stands.  With the bankers, the brokers, and the ultra rich greed heads.  Fire him now.  Ratttner's departure becomes a bonus. Obama gets a fresh start.  If the policies change, the problem is/was Geithner.  If the policies stay, Obama becomes the problem.

Can anyone explain why stuffing money into the pockets of multi millionaires and corporate balance sheets will stimulate the economy?  Taking cash from hourly workers and retirees is terribly timed.  And terrible.

[ Parent ]
Obama has to fire both of them (4.00 / 2)
he is responsible for it.  
[ Parent ]
please don't whine about morality (0.00 / 0)
no crying in capitalism.
you either believe in greed or not.
( I don't)
these dreams of an ethical system of greed are childish.
Unions now have a democrat president telling them that nothing can be done .. (4.00 / 5)
... to save their jobs.  I guess that makes it a little more palatable since he then tells them how much he cares about them, but it's still intellectually insulting when they see all what has been done to bail out wall street ... much of it condition-less.  Mind you that obama also sicked a corporate raider on them.  Change from what a republican president would have done?  Not really.  Hypocrisy?  YES!

Another point that's been made is that obama is indirectly coming down hard on the wall street by forcing the bondholders to make a deal or maybe get nothing.  Well, these bondholders aren't generally the go-go types that led this economy into ruins and we didn't see this sort of resoluteness from obama when it came down to the aig situation where goldman sachs was made whole on their bets with aig no questions asked.

There has to be tough decisions made, most everyone can see that, but what harsh medicine is being dealt to wall street?  Why do these scumbags that have much more to do with the ruin of the economy keep their bonuses and obscene compensation while uaw retirees that just did their damn job lose out on the retirement benefits many need just to survive, not for expensive pedicures, third homes in the hamptons and yachts?  What changes up top in wall street has obama demanded?

and also remember that "senior administration officials"/emanuel last week said that the administration was relieved that the heat to bring efca has died down in congress.  you can never put it past that deceitful bastard emanuel to be working behind the scenes to make sure that act never makes it to the president's desk.

There is some serious asymmetry going on here when comparing the treatment of wall street's pampered criminal class and the uaw.

Z  

Concerning Bondholders (4.00 / 2)
Did you read Robert Waldmann´s post citing JimLuke?
Angry Bear - "I didn´t think of that"


there may be thousands (perhaps even millions) of separate bondholders, the vast majority have no voice in the negotiations. Instead, there is a "bondholders' committee". Who is on the committee? The "experts" and the large bondholders: primarily banks and bond funds. These banks and bond funds presume to speak for all bondholders. But their interests are not in line with all bondholders. We know that there are very large number of outstanding Credit Default Swaps (CDS) contracts on GM. So who likely holds the CDSs? The very same large banks and bond funds that are negotiating. So, in effect, if GM goes BK, then the bondfunds/big banks are hedged and get full payment via the CDS. If they agree to a restructuring, they get less than full payout. So there's no chance they'll agree.

[ Parent ]
I'm on board with the comments but . . . (4.00 / 3)
I'm tired of blowing off steam.  I want to hear about some targeted and potentially effective forms of push back we can help organize and engage in.

One idea I threw out a few times was a May Day Wall Street demo.  Why aren't the autoworkers who have just been sacrificed to placate the masters of the universe at Goldman not planning something along these lines?

Or maybe they are and we're just not hearing about it?

I'm all ears, if so.

I'm with you, John. there is a nationwide demonstration planned for April 11th (4.00 / 2)
[ Parent ]
You should also be aware that (4.00 / 2)
this isn't a one off demonstration.   There are more planned so hopefully they get bigger and occur in more cities and states.
[ Parent ]
These demonstrations are very important, we have to be seen to be heard (4.00 / 2)
Z
[ Parent ]
Corker (4.00 / 2)
Btw, Tennessee Republican Bob Corker is chortling about the demise of the Big Three and the UAW.  That sob played a major role in this under the guise of moderation.

Even before this, Toyota has been working on plans to reduce worker salaries by 50% for over a year.  The only thing that kept those wages palatable wa the UAW.  Crush thenm and the jobs become better than McDonald's or Wal-Mart but low end manufacturing for the foreign controlled lords.  

While they are demonstrating, the Corkers of this world need plenty of attention.

[ Parent ]
Whoa, whoa. whoa (4.00 / 1)
Ron Bloom is the co-head of the task force along with Rattner.

Bloom has worked with the steelworkers for over twenty years and is a fierce advocate for labor.  

The steel industry has undergone significant restructuring and the USW is still a major player in steel industry economics.

From The Nation:
Labor's Man Joins Treasury Team

Ron Bloom has the sophistication of a Wall Street financier, but the head and heart of a labor guy. He knows how to "run the numbers" and do deals, techniques he learned years ago at Lazard Frères. When he left the world of capital, however, he went to work for organized labor. Bloom steers capital strategies for the steelworkers and advises Leo Gerard, the union's heads-up president. The steelworkers have been in the vanguard of unions aggressively using their financial power--the invested capital of pension funds--to force reform and worker-friendly policies on the corporate world. These are always tough fights. It takes smart strategies and hard-nosed negotiating to prevail. Bloom and Gerard have developed a "rep" for both.

So, who needs Rattner, then? (4.00 / 2)
If Ron Bloom has the sophistication of a Wall Street financier...  

I am in earnest -- I will not equivocate -- I will not excuse -- I will not retreat a single inch -- AND I WILL BE HEARD.  
[ Parent ]
yup. Was suprised when they also named Rattner (0.00 / 0)
But Rattner's been bucking for a high level appointment in a democratic adminstration for many years.  
[ Parent ]
we are so screwed (4.00 / 3)
Rick Wagoner's severance package would pay a year's salary for about 1,500 new full-time auto workers (those at $15/hour, hence the empahsis on new).

As it looks, Obama is facilitating the rape and murder of the American worker and the death of manufacturing in the United States, plain and simple.

What are the alternate options? (0.00 / 0)
Let GM crash and burn and take retirees down with them?

Keep pumping money into a company that's been spiraling down the toilet for decades?

This post is noticably lacking in alternative solutions that are demonstrably better than the proposed one. Like Iraq, there are no perfect solutions left.

I don't know where these incessant attacks on GM are coming from.... (4.00 / 1)
....people have to remember that over the last five years GM cars have been the most popular in the world.  This disaster that we live in has caught them up largely because they have paid the best wages and benefits in the industry for working people and were not lucky enough to have hoarded cash over the last few years and lined up credit.  All they need is a loan to get them through this disaster, and in the end the most popular manufacturer of cars in the world will be paying it back with interest.  Good luck on getting your banking money back.

Regards,

[ Parent ]
You're ignoring the trend (0.00 / 0)
GM has steadily lost over half its marketshare in the past 40 years. At its peak, it controlled nearly half the market. Now it's lucky to get 20%.
[ Parent ]
I am not ignoring a trend... (0.00 / 0)
...there is no doubt they are smaller than they were, I am just stating that there vehicles are the most popular in the world.

Regards,

[ Parent ]
Obama's Gordon Gekko Targets Union Workers | 38 comments
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