The Allmand Law Firm, PLLC Difference

Unlike most bankruptcy firms in the Dallas / Fort-Worth area, Allmand Law Firm, PLLC spends the time to understand the complete financial picture for every one of our clients. We provide resources, tools and advice to address the unique needs of North Texans.

Automakers Trade Car Vouchers For Jobs

Posted By admin || 4-Feb-2009

According to an article in the Star-Telegram, General Motors and Chrysler are desperately attempting to shed union workers from the payroll and eventually replace them with lower paid labor as they attempt to stave off bankruptcy. The automakers are attempting to buyout union workers and/or encourage early retirement as they attempt to meet government requirements for "viability."

The article said:

GM's offers, to nearly all its UAW employees, are less lucrative. The Detroit company is offering $20,000 in cash and a $25,000 car voucher for workers who retire early and those who simply leave the company, according to the union official.

So let's get this right, GM wants to shed union workers and pay them $20,000 (not enough to feed one person for a year let alone a family) and give them a car voucher for a vehicle they won't be able to afford once they don't have a job. To those workers who are not protected by union contracts this offer may sound generous. But what will happen to these workers once they can't find replacement jobs? Many will face foreclosure and bankruptcy.

According to the memo from UAW Vice President General Holiefield to local presidents and other officials, the union negotiated for another round of offers at Chrysler due to conditions imposed on the company by the federal government in exchange for granting the loans.

The conditions require Chrysler and GM to make changes to their UAW contracts, including elimination of the jobs bank, in which workers get most of their pay even when they are laid off. Chrysler, GM and the union said last month that the jobs banks had been eliminated.

Chrysler and General Motors employ 26,000 and 62,000 union workers. When these workers experience job losses because the automakers need to save money, they won't even have income to protect them from foreclosure, bankruptcy and other financial disasters that befall non-union workers experiencing job losses. But that's not all...

Chrysler's roughly 26,800 production workers represented by the UAW make about $29 per hour, while GM's 62,000 UAW-represented workers make around $28. Under a contract reached last year, the company can pay some replacement workers around $14 per hour and provide less-costly healthcare and retirement benefits.

How is this helping our economy? How can workers support their families, avoid foreclosure and bankruptcy on $14 per hour? Right now, the labor landscape is being completely reshaped. Many high-paying blue-collar (and some white-collar) jobs are going by the wayside and being replaced with lower-paying jobs that will push more Americans into foreclosure, bankruptcy and eventually onto public assistance.

Blog Home