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Barney Frank: Plan Is 'Unfair Assault' on Auto Workers

Barney Frank, (D-Mass.), chairman of the House Financial Services Committee, welcomed the auto bailout, "with one significant, regrettable exception."

Most of the plan, he said, reflects agreements negotiated between the White House and Treasury and congressional Democrats. He also said the president's compromise to use TARP funds for the plan was helpful.

But Frank said it is unreasonable to require workers' wages to come into line with the wages of the workers at the U.S. plants of foreign automakers.

"The President has added an unfair assault on working men and women which could require them to accept a disproportionately large reduction in what is currently legally owed to them," he said in a statement. "I am particularly opposed to the notion that the President borrowed from Senator Corker that could give foreign auto companies in effect the ability to dictate wages for all America auto workers.

"Because these provisions are unnecessary to achieve our goal and because they were unilaterally inserted by the President into what was otherwise a negotiated agreement, I believe that the incoming Administration and the Congress should take whatever steps are necessary to remove them," he said. “All stakeholders including union employees must negotiate cost reductions but this must be done with equal burden sharing and with a result that will be much fairer than the President’s approach.”

--Kim Hart

By Kim Hart  |  December 19, 2008; 1:27 PM ET
Categories:  The Ticker  
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Next: Obama: Automakers 'Have to Step Up'

Comments

Unfair for them to make wage concessions? Does he think they would be better off losing their jobs? Geez. And their salaries are legally guaranteed to them? No, not once their company goes through bankruptcy.

Posted by: jjtwo | December 19, 2008 2:35 PM | Report abuse

Better to require UAW wage concessions than USA taxpayer subsidies.

Posted by: whocares666 | December 19, 2008 2:37 PM | Report abuse

So Mr Frank is not educated on the facts. US auto workers wages are already in line with the foreign companies. It is the legacy costs that need to come in line and to not have them placed incorrectly on current employees. Oh yeah, and then there is the supplier costs too. I am sure there are grossly overpriced parts akin to a $300 locking lug nut socket who's cost is closer to 35 cents.

This is what happens when we don't hold common sense education and intelligence as key qualifications for holding public office. But then again, the masses prefer to live in the bliss of total ignorance.

Posted by: skramsv | December 19, 2008 2:38 PM | Report abuse

I don't remember Bush asking anyone on Wall Street, from executives on down, to share the burden with a reduction of salary. Why are republicans so focused on middle class salaries while Wall Street salaries are not an issue?

Posted by: bevjims1 | December 19, 2008 3:01 PM | Report abuse

Let's make the UAW wage the new minimum wage, with benefits, of course. Then you union guys can pay for $15 burgers at your favorite fast-food restaurant. Sounds fair to me. Unions for all workers!!!

Posted by: luyehara | December 19, 2008 3:02 PM | Report abuse

Should American companies rely on reducing wages to compete globally? “Yes” seems to be the view of most Americans right now. But like many “poll” questions asked, there seems to be a lack of understanding in the answer. Just what happens when our companies lower wages? Do we benefit? The companies that moved production offshore have realized significant cost savings from labor. Companies that now produce products in Mexico, China or India have achieved significant cost reductions. What is the result? Profits have climbed and salaries of management have soared. In fact, America has seen the highest rise in ratio, from 20:1 to 400:1 in executive compensation. That means that the average executive now makes 400 times the amount of the average worker. The rest of the world is still at 20:1.

So where do we draw the line on global compensation? What sacrifice is too much for America to suffer so our companies, shareholders and management can compete better for deals around the world? Maybe we should change our environmental laws? We already told the world that the Kyoto treaty was too expensive for America. We could allow child labor? We can expand the work week to 48 or 60 hours. How about removing all benefits? After all, several companies just announced that they will be suspending any further payments into 401k plans. So that is already underway. We need to compete! What is too much to sacrifice for American companies to compete? What ever you decide, you have to realize that somewhere in the world someone is willing to do more.

This is at first a philosophical question but then it becomes a real problem. We need to deal with global competition and not have irresponsible members of our government, like Senator Corker spouting ridiculously stupid remarks about wages for Americans. All Congressman Frank is saying: “Not on my watch”.

Americans are not going to work for survival wages again. That battle was fought and won during the depression. We need to look at nations, like Germany, where labor rates are among the highest in the world, to understand that global competitiveness has little to do with wages. Germany is in the top 3 nations for exports. Germany is competing just fine, thank you. Oh, and they work 36 hours a week with 5 weeks paid vacation, pension and healthcare.

Posted by: realityvision | December 19, 2008 3:19 PM | Report abuse

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