The autoworkers should settle for what they already have

There is nothing that infuriates me more than workers going on strike over their desire to get more pay when the economy is in dire straits.
Common sense tells us that if a company is having difficulty in selling its products and is on the verge of bankruptcy, it doesn’t make much sense for its employees to make demands for a pay raise. That is just what the members of the Canadian Auto Workers union may attempt to do.

The government of the United States upon realizing that if they don’t give large loans to two automakers in the U.S., (Chrysler and General Motors) they may go out of business and if that happens, thousands of autoworkers in these two firms will be getting the pink slip. Plunging demand for autos could lead to further job losses as automakers shrink their operations because in turn, that would mean big job cuts for thousands of Canadian workers in the large auto-parts sector that supplies the automakers.

The CAW is saying that they will fight one of the conditions of getting the loan, the condition being that the autoworkers workers will not go on strike. The federal and Ontario governments won't say if they are seeking a no-strike provision from teetering General Motors and Chrysler as a condition of up to $4 billion in loans. The lack of confirmation follows revelations that their parent auto companies in the United States have agreed to a strike ban to secure up to $17.4 billion (U.S.) in loans.

GM and Chrysler must still seek the support of United Auto Workers in the U.S., but the leader of the Canadian Auto Workers yesterday rejected any possibility that his union would approve a ban on walkouts here.

CAW president Ken Lewenza said "It's a non-starter. As far as we're concerned, Canadian governments shouldn't be involved in the bargaining process between companies and workers."

As it is, the members of CAW, which represents about 28,000 workers at the three automakers in Canada, can't legally walk off the job at GM and Chrysler until 2011 when their contracts expire. That's also when the companies are to repay the final portions of the loans.

However Prime Minister Stephen Harper and Ontario Premier Dalton McGuinty have already conceded the two automakers may need more public money in future to survive the current downturn in the industry, a key source of employment in North America.

Provincial officials confirmed the package would be 20 per cent of the $17.4 billion (U.S.) total announced by U.S. President George W. Bush yesterday, which means the Canadian deal would be worth about $3.5 billion (U.S.), or $4.2 billion in Canadian funds.

The concern I have is that the CAW members may want to get their pay raise even when their employers are going to have to pay off their loans. Their employers may not be able to do both. If they give raises to their employees, then the government will be out the money that would be otherwise be sent to them. The CAW seems to forget that their members will be able to continue working because of the loans.

Autoworkers who earn almost $34 an hour, have agreed to a wage freeze, a temporary cut in a cost-of-living allowance, a longer period for new employees to reach top rates and some reductions in benefits. The total compensation for an average worker, including pension costs, at the three automakers in Canada is about $70 an hour.

Special absence days, legal aid, tuition assistance and some health-care expenses are among the benefits that are vulnerable. If the CAW doesn’t consent to reductions in benefits, then it will be `bye, bye' for any future investment by the governments and all the automaker’s plants will probably be closed and their employees will be out of work. Already 35,000 workers in Canada during the month of December 2008 lost their jobs so the loss of employment in the automaking industry is very real.

As far as I am concerned, the auto workers should not be griping during this period of recession if they lose some of their benefits. Thirty-four dollars an hour is still good pay when you consider that retirees are only getting on the average of about $15,000 in pensions a year while the autoworkers are still getting $ 84,000 a year.

The time has come for them to tighten up their belts. That goes not only for the workers but also for the CEOs and board members too.