....."Auto Bailout Negotiations Fail in Senate, Reid dreads reaction on Wall Street"....
Did any democrats vote against bailout??????????
Here ken educate yourself... As I recall the UAW has a billion dollars or so cash on hand and the uaw refuses to give up anything to save their own jobs...let tax payers give up to save them. Look like this bailout is to save UAW union.
Job and income security
uaw.org
What protections do UAW members have against being laid off?
First, the terms of the 1999 UAW auto industry agreements provide that no worker can be laid off for more than 42 weeks for volume-related layoffs – a decline in sales or production – during the four-year life of the agreement. After that, he or she has to be called back to work.
Second, the 1999 UAW auto industry agreements include a moratorium on plant closings during the life of the agreement. In addition, the SUB program, which requires substantial payments to laid off workers, makes it costly for employers to lay off workers, and encourages them to explore other options.
What is SUB pay?
SUB stands for Supplemental Unemployment Benefits. First negotiated in 1955, this program is intended to provide a secure annual wage for auto industry workers.
Government-funded unemployment benefits typically replace only 1/3 to 1/2 of a laid-off worker’s former wages. SUB payments supplement these benefits, and are structured such that when added to government benefits, a laid-off UAW-represented worker will receive a gross income of approximately 95 percent of his or her take-home pay for a 40-hour week, less a deduction of $25 for work-related expenses not incurred.
SUB pay is fully taxable; state unemployment compensation is subject to income tax, but not Social Security and Medicare (FICA) taxes. After taxes, when qualified for unemployment compensation and receiving SUB pay, the worker in this example would receive gross benefits equal to about 75 percent of his or her gross pay for a 40-hour week.
UAW Supplemental Unemployment Benefits
Sample: Michigan resident with two children
UAW assembler hourly wage $ 25.63
40 hours gross pay 1,025.20
Federal and state withholding 213.65
Weekly after-tax pay 811.55
95% of weekly after-tax pay 770.97
Work-related expense deduction 25.00
Gross pay under SUB $ 745.97
Workers with at least 10 years seniority also continue to receive employer-paid health insurance while they are on layoff status, for up to 25 months. Dental coverage is not included. Workers with less seniority are eligible for health coverage for a correspondingly shorter number of months.
Do UAW job and income security programs affect the overall economy?
Yes. Because the auto industry anchors so much economic activity, the stabilizing impact of UAW job and income security programs has an outsize impact on the U.S. economy as a whole.
Since its inception more than four decades ago, the SUB program has provided billions of dollars in payments to hundreds of thousands of autoworkers, easing the pain of layoffs for them and their families.
The program has also made it possible for workers to maintain their consumer purchasing power even during tough economic times. This provides an important counter-cyclical economic influence on our local and national economies, and is an important aid to merchants and businesses in industrial communities.
But UAW contracts force companies to maintain labor as a fixed cost even when production is down. Doesn’t that limit their ability to compete?
No. UAW job and income security protections have helped transform the old boom-and-bust cycle of the auto sector to a smoother, more stable path, which benefits workers, customers and companies.
The impact of UAW contracts on the auto industry was demonstrated in the aftermath of Sept. 11, 2001, when General Motors offered zero percent financing to combat a feared decline in auto sales.
Other carmakers soon followed suit, resulting in a dramatic price cut for consumers. This helped make October 2001 the greatest month ever in the history of auto sales. The U.S. economy as a whole grew by 2.7 percent during the fourth quarter of 2001, at a time many were expecting a severe slump. The auto sector alone accounted for 1.9 percent growth in GDP – more than 70 percent of the total.
The job and income provisions of UAW contracts, we believe, had a strong influence on the decision by automakers to go all out to stimulate auto sales at this critical time. Our contracts create powerful incentives to keep plants running and to keep workers working.
Because of strong job security language – including the moratorium on plant closings, SUB pay obligations and the 42-week limit on volume-related layoffs – UAW auto industry employers are committed to certain payroll costs regardless of production volume.
Under these circumstances, when the economy turns sour, automakers make out better if they keep their plants running, and cut prices to generate high sales volume. Otherwise, they will lose revenue due to low sales volume, while still incurring substantial fixed payroll costs.
The surge in auto sales in the fourth quarter of 2001 surely played a role in preventing what might have been an even more severe economic downturn. Unfortunately, surprisingly strong performance in the auto sector at that time has not been enough to prevent the most sustained period of long-term job loss in the United States since the Great Depression.
We believe the U.S. economy and the global economy would be on a path to more sustained growth if other sectors – including the public sector – followed the wage-driven, consumer-driven path to industry stability that is embodied in UAW job and income security protections.
If UAW contracts offer such strong job security, how come UAW employers have all reduced jobs during the last four years?
While our contracts offer strong protections to workers, and incentives for employers to maintain production, companies must still respond to factors beyond the control of any labor agreement.
One of these factors is the continuing decline in Big Three market share. The reduction in head count at the Big Three, Delphi and Visteon reflects this decline, as well as an overall decline in industry sales. Increased productivity and the introduction of new technology also play a role in job loss, as do flawed U.S. trade policies which actually encourage the movement of good-paying manufacturing jobs to offshore locations.
It should be noted that in nearly every case, job reductions at UAW auto industry employers have been accomplished through attrition of workers who choose to retire, rather than through layoffs.
Source: UAW Research Department, U.S. Bureau of Labor Statistics
In addition, while the job and income security provisions of UAW contracts cannot prevent job loss, the available evidence indicates that our contracts do mitigate the extent of job loss when compared to other manufacturing industries where such protections do not exist.
During the recession of the early 1980s, before UAW members negotiated a moratorium on plant closings and a limit on the number of weeks of volume-related layoffs allowed during the life of a contract, job loss in the auto industry was more severe than in durable goods manufacturing as a whole. Twenty percent of autoworkers lost their jobs between January 1980 and October 1982, while job loss in all of durable goods was just 16 percent.
During the current recession, with enhanced job security provisions in place in UAW auto contracts, just the opposite is the case. The decline in auto industry employment has been just 8.5 percent, while employment in durable goods manufacturing has dropped by 13.7 |
