Detroit car job cuts dash blue-collar dreams
By Poornima Gupta
FLINT, Michigan, Dec 23 (Reuters) - For nearly three
decades, Charles Coe has made a good living as a worker for
General Motors Corp. and Delphi Corp. in
Flint, Michigan.
Coe, 60, planned to retire comfortably in two years with his
sizable pension, a benefit that is still a cornerstone of
blue-collar workers' compensation in the auto industry.
But that dream is unraveling as Delphi, which filed for
bankruptcy protection in October, is now demanding unprecedented
wage and benefit concessions from the United Auto Workers union.
"I stand to lose everything I have worked a lifetime for,"
Coe said as he arrived for an afternoon shift at Delphi's Flint
East plant.
Delphi wants to cut jobs, slash paychecks in half and free
itself from the pension obligations of tens of thousands of
employees it inherited from GM when it was spun off in 1999.
The mood in Flint, a factory town that has been in economic
malaise since GM closed its Buick City complex six years ago, is
grim. Families are now staring at the prospect of losing their
comfortable middle-class lifestyles.
Delphi's move, combined with the plant closing and layoff
announcements from mighty GM and Ford Motor Co. , may have
far-reaching consequences beyond the industrial city, say local
union officials.
"This is bigger than us," said Steve Grandstaff, chairman of
UAW Local 651, which represents workers at the Delphi-Energy and
Chassis Systems facility in Flint.
"It's almost like there is this wildfire that's going to
take down the middle class," Grandstaff said.
Working-class Americans have long been able to lift
themselves into the middle class through well-paid jobs in the
auto industry. UAW-represented workers have enjoyed benefits
that are the gold standard of industrial America.
Some Detroit auto executives even call them "Cadillac-style"
benefits.
"I think what we are looking at here are exit roads from the
middle class," said Harley Shaiken, a University of
California-Berkeley professor who specializes in labor issues.
EXIT ROADS
"Economic growth in the United States in the 20th century
was based on building entrances to the middle class, from Henry
Ford in 1913 to strong unions in the '50s and '60s," Shaiken
said.
The 21st century is marking a reversal of that logic and
Delphi's showdown with organized labor symbolizes the reversal,
Shaiken added.
"They want us to go back 20-something years (on wages),"
said Russ Reynolds, president of UAW local 651, which represents
Delphi workers. "It's going to devastate everything."
GM and Ford made the United States an industrial force
through much of the 20th century.
Ford founder Henry Ford was credited with a stroke of genius
in creating a whole new group of consumers for his company's
vehicles back in 1914. He doubled the pay of his workers saying
he wanted them to be able to afford the Model Ts they built.
Now, GM and Ford are in a cost-cutting spiral, battling
decades of market share losses. In recent months, the two
Detroit automakers have worked out deals with the UAW to roll
back some of the health care benefits of retired workers.
GM plans to cut 30,000 blue-collar jobs and close 12
facilities. Ford has said it will announce its list of plant
closures and worker layoffs in January. The automaker is already
in the process of cutting 4,000 white-collar jobs and scaling
back some of the salaried benefits.
"Ford and GM are now in a race to shrink," Merrill Lynch
analyst John Casesa said in a recent note, adding that Detroit
is entering an increasingly volatile and difficult environment
as labor and management tensions come to a head.
In a bright spot for workers, Delphi in recent days dropped
its aggressive stance and said it is willing to work with the
union, citing talks with largest customer GM.
Delphi also said it will delay filing motions in bankruptcy
court to reject current labor contracts.
But union officials are still skeptical as the company has
not totally scrapped its steep cost-cutting proposal.
"We hope the company's announcement results in a meaningful
change in its position, but only time will tell if that is the
case," the UAW said.
(c) Reuters 2005. All rights reserved. Republication or redistribution of
Reuters content, including by caching, framing or similar means, is
expressly prohibited without the prior written consent of Reuters. Reuters
and the Reuters sphere logo are registered trademarks and trademarks of
the Reuters group of companies around the world.
