President Bush: Employees of American Companies Must Get Paid Less than Employees of Foreign Companies!

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The President of the United States just dictated that American corporations pay their employees significantly less than the employees of foreign owned manufacturers. And/or, he dictated that American corporations pick the pocket of their senior retirees.

That’s the take-away of the bailout plan, which is basically the Bob Corker plan dressed up, through sleight of hand, as a majority-supported legislation. As Bush notes, some of this bailout was supported by a majority of the House, at least. 

Binding Terms and Conditions: The binding terms and conditions established by the Treasury will mirror those that were voted favorably by a majority of both Houses of Congress, including:

  • Firms must provide warrants for non-voting stock.
  • Firms must accept limits on executive compensation and eliminate perks such as corporate jets.
  • Debt owed to the government would be senior to other debts, to the extent permitted by law.
  • Firms must allow the government to examine their books and records.
  • Firms must report and the government has the power to block any large transactions (> $100 M).
  • Firms must comply with applicable Federal fuel efficiency and emissions requirements.
  • Firms must not issue new dividends while they owe government debt.

Yet then Bush throws in the demands that Republicans made–without noting that this was basically an ideological ploy to break the union, all the while demanding that employees of American-owned companies make significantly less than the employees of Japanese-owned companies.

Targets: The terms and conditions established by Treasury will include additional targets that were the subject of Congressional negotiations but did not come to a vote, including:

  • Reduce debts by 2/3 via a debt for equity exchange.
  • Make one-half of VEBA payments in the form of stock.
  • Eliminate the jobs bank. Work rules that are competitive with transplant auto manufacturers by 12/31/09.
  • Wages that are competitive with those of transplant auto manufacturers by 12/31/09.

These terms and conditions would be non-binding in the sense that negotiations can deviate from the quantitative targets above, providing that the firm reports the reasons for these deviations and makes the business case to achieve long-term viability in spite of the deviations.

In addition, the firm will be required to conclude new agreements with its other major stakeholders, including dealers and suppliers, by March 31, 2009.

Remember, the measure the Republicans were using to measure "wages that are competitive with those of transplant auto manufacturers" was the lizard lie number–the $73/hour, the number that includes legacy costs, the payments to retiree pensions. Otherwise, there would be no reason to make this stipulation–because if you use the real wage number, and not the lizard lie number, American manufacturer wages are already competitive with the transplants!!

So what Bush is demanding is that the UAW lower wages plus pensions to the level of Japanese wages plus pension (though since they have very few retirees, their pension number is basically zero). Alternately, they could lower this number by basically picking the pocket of a bunch of seniors, by taking away pension money those seniors already earned while they were still working. But one or the other will have to happen.

Now, Bush did give the Obama Administration an escape hatch: the ability to deviate from the quantitative targets provided that the companies report why they did so. 

But as written, Bush’s last major act as President is to demand that workers for American-owned companies work for less than workers for foreign owned companies. American capitalism, at its finest.

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60 replies
  2. beth meacham says:

    all the while demanding that employees of American-owned companies make significantly less than the employees of Japanese-owned companies.

    I assure you that as soon as this is accomplished, the workers at Japanese-owned companies will find their wages cut. The only reason they make as much as they do is to achieve parity with Detroit.

    • emptywheel says:

      Shh.

      I’m trying to make the point that this was a tremendously anti-American thing to do.

      It’ll piss off people in a different way than describing it as a tremendously anti-worker thing.

      Besides, I’m saving that one for the “Do you really want the guy assembling the car you drive your children in to make less than a living wage?” campaign.

    • MarkH says:

      I assure you that as soon as this is accomplished, the workers at Japanese-owned companies will find their wages cut. The only reason they make as much as they do is to achieve parity with Detroit.

      And that would be a wage-cut war leading to $0/hour. Lovely.

  3. wigwam says:

    Bush’s last major act as President is to demand that workers for American-owned companies work less than workers for foreign owned companies.

    This needs to be the talking point of the day!

  5. Palli says:

    Bush feels an obligation not to leave “a mess” for his successor, i.e. not finished distributing the wealth yet he’s got thirty more days…Cheney’s still working only 24 hours in a day.

    • sunshine says:

      He is working 24/7.

      “The vice president alone may determine what constitutes vice presidential records or personal records, how his records will be created, maintained, managed and disposed, and are all actions that are committed to his discretion by law,” according to a filing by Cheney’s office with the court hearing the case Dec. 8, noted by the AP’s Pamela Hess

      .http://rawstory.com/news/2008/Cheney_I_am_law_1219.html

  6. joejoejoe says:

    This is the biggest heist ever.

    Bush comes up with this pony bridge loan plan and oh by the way Hank “Foxguard Henhouse” Paulson says he needs that other $350 billion dollars of TARP funds at the same time. Obama should just hold a press conference and say “Anybody out there with $20 billion dollars in liquidity, please loan it to Chrysler and GM. The United States Treasury is good for it, or at least will be January 20, 2009.” Or more likely, call Warren Buffett in private and ask the same thing. I don’t care if the entire country shuts down for one month. There is NO way that Congress can justify handing another $350 billion to President Lame Duck on his way out the door.

  7. wigwam says:

    So, exactly why isn’t GM’s pension plan fully funded? Can it be that management has raided the pension fund in the past?

    • nomolos says:

      Didn’t rayguns change the rules so that a company can raid the pension funds?

      Thanks EW for your blogathon…how you can watch that eedjit mystifies me.

      • MarkH says:

        Didn’t rayguns change the rules so that a company can raid the pension funds?

        I don’t remember chapter and verse, but the economy was really awful at that time and I seem to remember them ‘begging’ for that rule change to protect companies from going bankrupt.

        Companies still went bankrupt. They just stole the pension funds first.

    • emptywheel says:

      Actually, no. GM’s pension fund is better off than Exxon’s even.

      But the big thing is whether GM uses that 100 billion to pay retirees or to pay down debt.

    • lokywoky says:

      No large corporation pension fund is entirely funded. The law used to require a certain percentage of it be held in fairly liquid assets to pay current retiree benefits.

      During Bushco, the Rethugs in Congress did manage to cut the minimum funding requirement down to 12% (I’m not sure what it was before). So yes, the pension funds have been ‘raided’. That is just status quo – and all large corps do this. That’s why they prefer giving pension benefits over actual salary. They can put off paying – get to use most of the money, and hope most of the ‘old people’ die fairly quickly. It is an actuarial gamble, much like the life insurance business.

  10. Watt4Bob says:

    I for one, am just shocked.

    I don’t think anyone could have envisioned Bush taking this sort of attitude.

  11. mookieblaylock says:

    prepare for reid,dodd,frank,pelosi and the rest of the whores to proclaim this bold plan a compromise they can accept

  12. plunger says:

    http://www.press.uchicago.edu/…..11928.html

    Creeping Fascism

    The voices of the past, on Recognizing the Unrecognizable…

    “You will understand me when I say that my Middle High German was my life. It was all I cared about. I was a scholar, a specialist. Then, suddenly, I was plunged into all the new activity, as the university was drawn into the new situation; meetings, conferences, interviews, ceremonies, and, above all, papers to be filled out, reports, bibliographies, lists, questionnaires. And on top of that were the demands in the community, the things in which one had to, was ‘expected to’ participate that had not been there or had not been important before. It was all rigmarole, of course, but it consumed all one’s energies, coming on top of the work one really wanted to do. You can see how easy it was, then, not to think about fundamental things. One had no time.”

    “Those,” I said, “are the words of my friend the baker. ‘One had no time to think. There was so much going on.’”

    “Your friend the baker was right,” said my colleague. “The dictatorship, and the whole process of its coming into being, was above all diverting. It provided an excuse not to think for people who did not want to think anyway. I do not speak of your ‘little men,’ your baker and so on; I speak of my colleagues and myself, learned men, mind you. Most of us did not want to think about fundamental things and never had. There was no need to. Nazism gave us some dreadful, fundamental things to think about—we were decent people—and kept us so busy with continuous changes and ‘crises’ and so fascinated, yes, fascinated, by the machinations of the ‘national enemies,’ without and within, that we had no time to think about these dreadful things that were growing, little by little, all around us. Unconsciously, I suppose, we were grateful. Who wants to think?

    “To live in this process is absolutely not to be able to notice it—please try to believe me—unless one has a much greater degree of political awareness, acuity, than most of us had ever had occasion to develop. Each step was so small, so inconsequential, so well explained or, on occasion, ‘regretted,’ that, unless one were detached from the whole process from the beginning, unless one understood what the whole thing was in principle, what all these ‘little measures’ that no ‘patriotic German’ could resent must some day lead to, one no more saw it developing from day to day than a farmer in his field sees the corn growing. One day it is over his head.

    “And one day, too late, your principles, if you were ever sensible of them, all rush in upon you. The burden of self-deception has grown too heavy, and some minor incident, in my case my little boy, hardly more than a baby, saying ‘Jewish swine,’ collapses it all at once, and you see that everything, everything, has changed and changed completely under your nose. The world you live in—your nation, your people—is not the world you were born in at all. The forms are all there, all untouched, all reassuring, the houses, the shops, the jobs, the mealtimes, the visits, the concerts, the cinema, the holidays. But the spirit, which you never noticed because you made the lifelong mistake of identifying it with the forms, is changed. Now you live in a world of hate and fear, and the people who hate and fear do not even know it themselves; when everyone is transformed, no one is transformed. Now you live in a system which rules without responsibility even to God. The system itself could not have intended this in the beginning, but in order to sustain itself it was compelled to go all the way.

    “Once the war began, the government could do anything ‘necessary’ to win it; so it was with the ‘final solution of the Jewish problem,’ which the Nazis always talked about but never dared undertake, not even the Nazis, until war and its ‘necessities’ gave them the knowledge that they could get away with it. The people abroad who thought that war against Hitler would help the Jews were wrong. And the people in Germany who, once the war had begun, still thought of complaining, protesting, resisting, were betting on Germany’s losing the war. It was a long bet. Not many made it.”

    How ironic then that the persecuted have become the persecutors, using the tactics of their former oppressors to destroy those they wish to control and/or exterminate. 9/11 was their Reichstag Fire, the pretext to launch their plan – rooted in revenge and greed. But they have taken it one step farther, compelling others to do the job on their behalf.

  13. masaccio says:

    “Reduce debts by 2/3 via a debt for equity exchange. “

    What does this mean exactly? On its most recent financial statements, GM shows Non-current liabilities of about $97.5bn, consisting of about $36bn in long-term debt, 33.7bn in post-retirement benefits other than pensions, which I assume is to be replaced by the VEBA, Pensions of $11.5bn, and Other liabilities and deferred income taxes of $16.5bn.

    Current Liabilities are: Accounts payable (principally trade)
    $27.8bn, Short-term borrowings and current portion of long-term debt $7.bn, and Accrued expenses $33.9bn.

    How much of that gets cut by 2/3? Does that mean we aren’t paying trades and accrued expenses in full? How will that affect auto suppliers? Are dealers in the category of accrued expenses? How will that affect them?

    • emptywheel says:

      I think the $36 bn gets cut (I spoke to Troy Clarke, head of GM NA, a few weeks ago, and he seemed to think that was going to happen reasonably easily).

      Note that Bush said dealers and suppliers will also have to make concessions.

      Once again, the Republicans wouldn’t describe what they believe they’ll force the dealers and suppliers to do. The dealers, bc they don’t want to piss off their own constituents. The suppliers, bc so many of them are teetering on bankruptcy as it is.

  14. demi says:

    So, we are moving even closer to the 2 class system. Frankly, I’d just as soon the Revolution happen sooner than later.

  16. foothillsmike says:

    Why is it that the autos are treated differently than the banks. Where are the prohibitions against bonuses and outrageous salaries etc. for the bankers. Has anyone checked to see how many corporate jets the bankers have. Is there a cause of action under equal protection here?

  17. PJEvans says:

    So can we cut the pay of Congress and the other guys responsible for this fiasco to, say, minimum wage? Just so they can honestly say that they feel our pain?

  18. jaim says:

    What’s near and dear to most of Senators Corker, Shelby and DeMints constituents? NASCAR ! “Now driving the number 48 Lowes Hyundai – Jimmie Johnson !”

    • joejoejoe says:

      NASCAR CEO Brian France supported the plan passed in the House. NASCAR has a pretty loathsome record when it comes to union busting but on this issue they got it right and didn’t cut their nose off to spite their face like some Senate Republicans.

      • jaim says:

        Then the drivers need to get out there and support the auto makers. Nothing will scare a southern politician more than the loss of support of the NASCAR fans.

  19. emptywheel says:

    Here’s what mr. ew said, btw, when I told him I admitted in the last thread that I had left him to undig his car by himself bc I was liveblogging Bush:

    But do you *see* the irony here? Spouse sticks to principles, takes no action to bail out stuck automobile in order to listen to president, abandoning principles, in order to bail out stuck automotive…

        • plunger says:

          Oh man, Having grown up in GR – I can relate. The true benefits of 4 wheel drive were only made known to me after moving to the mountains. Again, it took Subaru to mainstream the concept of 4 wheel drive on passenger cars, while Michiganders understood the need as well as anyone – at least those not working in management at GM, Ford and Chrysler.

          The management and designers at the US manufacturers over the past few decades have led them straight off the cliff. They all lived in their own bubble.

    • MrWhy says:

      At least he got a mention, firepups (wheelies?) commiserated, and you did report back that he’d managed to resolve the issue himself, sorta like Ford.

  20. acquarius74 says:

    Thank you, EW. DUGG and commented there.

    One in ten American workers will be reduced to serfdom; the controlling, rich elite will be further elevated. Bush is using every tool in his kit to utterly America from the foundation up.

  21. Bluetoe2 says:

    If any leader of a European nation tried to pull this stunt on their workers there would be massive street demonstrations by trade unionists, leftists, students, intellectuals etc.. Any European leader that tried to break the unions would have a revolution on their hands.

  22. rwcole says:

    Bush leaves one more stinkin pile of shit for Obama to clean up. No surprise.

    Remember what Bush’s professor at Harvard said about him:

    “Should you ever run a company, I have nothing but pity for your customers, your shareholders and your EMPLOYEES”

    The truth about this piece of fecal matter was clear even then.

  25. nonplussed says:

    Down here in a “Right to work” State our well informed citizens write LTTEs containing gemslike this:

    Until the unions are willing to reduce their hourly wage/benefits package by $30 to allow the American auto industry to be competitive with the foreign makers, no amount of loans will pull them up

    My loyalty to the workers of these Detroit products ended after reading about their rejection of an immediate pay cut.

    What is it that the greedy U.S. auto manufacturers and the equally greedy labor unions don’t understand? They spend more than they take in.

    Chapter 11 bankruptcy provides the process and methodology to fix this self-inflicted fiscal crisis. As a taxpayer for more 70 years, I say, “No!” to these greedy, inept industrial and labor leaders.

    U.S. Rep. Lloyd Doggett, D-Austin, did it again. He voted with the rest of the socialist-leaning House members to bail out the union.

    I don’t believe the doomsday prediction that it will permanently harm the economy.

    Over the years, the unions, propped up by their synergistic parasites, the Democrats, have raised hourly costs to $70 per hour versus $42 for the U.S. plants of Toyota, Nissan and Honda. Unions have also opposed full implementation of the world-standard Just-In-Time manufacturing system. JIT (or stockless production) would have conserved critical cash.

    Unless the Big Three are allowed to dump their albatross unions and change their business model, there is absolutely no point to the bailout. The chickens have come to roost. Let the Democrats and their unions stew in their bile.

    Six letters against, one letter for. Good thing we have a “Liberal” paper here in our Liberal city.

  26. plunger says:

    This is interesting. There is a letter posted to the right side of this page which explains the role of Mort Zuckerman in influencing the AFL/CIO over recent years (same guy who lost millions in the Madoff Ponzi Scheme). I wonder if Zuckerman received kickbacks for funneling Jewish Charities funds into the Madoff scheme?:

    http://www.leftcurve.org/LC27W…..Lobby.html

    While not officially part of the lobby, since the establishment of Israel in 1948, the AFL-CIO has been one of its most solid cornerstones. It has provided millions of dollars for pro-Israel Democrats; it has blocked all international efforts to punish Israel for its exploitation and abuse of Palestinian workers, and it has encouraged its member unions to invest millions of dollars of their pension funds in State of Israel Bonds, thereby linking their members’ retirement to the health of the Israeli economy. Over the past year, the lobby has cemented ties with the Christian evangelical right, which gives it clout in states where there are few Jews and access to hundreds of thousands of new donors to Israel’s cause.

  27. stryx says:

    * Reduce debts by 2/3 via a debt for equity exchange.
    * Make one-half of VEBA payments in the form of stock.
    * Eliminate the jobs bank. Work rules that are competitive with transplant auto manufacturers by 12/31/09.
    * Wages that are competitive with those of transplant auto manufacturers by 12/31/09.

    This is insanity. Substitute banking for auto and you see the class warfare in action.

    Republicans hate people who get paid by the hour.

  28. sunshine says:

    And now they want the release of the 350 bil

    WASHINGTON – Treasury Secretary Henry Paulson said Friday that Congress will need to release the last half of the $700 billion rescue fund because the first $350 billion has been committed.

    http://news.yahoo.com/s/ap/200…..63LtCyBhIF

  29. Citizen92 says:

    O/T

    “Cheney Claims Power to Decide Own Records”
    http://www.google.com/hostedne…..gD955ETCO0.

    Effectively asking us to trust him to sort out which records are “personal” (PRA exempt), “Senate” (PRA exempt) and OVP (not exempt).

    I bet his “personal archivist” James Steen (revealed Gellman’s Angler will have a bunch of new material soon. Steen is currently on Cheney’s Senate Office payroll. Prior to Cheney, Steen worked for deceased Rep. Paul Gillmor… and prior to that was an appointee in the George HW Bush Cheney Defense Department under Cheney’s best friend David Gribben in Legislative Affairs. Steen’s title was “Special Assistant for International Security Affairs (GS-15)”

    I also bet that David Addington’s personal home collection (revealed in Jane Mayer’s ‘06 New Yorker piece) may also be in for a new infusion. That was the same personal home collection that had a fire some time ago.

    We know from Plame that Cheney claims the right to declassify documents. Any bets on whether Steen and Addington will be walking out of their respective offices in 1/20/09 with “declassified” documents?

    • skdadl says:

      L’état, c’est moi.

      Or we could go with “Après moi, le déluge.” And then there’s the ever popular “Qu’ils mangent du gâteau.”

  30. SadieSue says:

    OT – EW, did you see this story?

    Three undersea cables cut: traffic greatly disturbed between Europe and Asia/Near East zone
    Paris, December 19, 2008
    * 3 cables cut this morning (Sea Me We3 partly + Sea Me We4 + FLAG)
    * France Telecom Marine cable ship about to depart

    France Telecom observed today that 3 major underwater cables were cut: “Sea Me We 4” at 7:28am, “Sea Me We3” at 7:33am and FLAG at 8:06am.
    The causes of the cut, which is located in the Mediterranean between Sicily and Tunisia, on sections linking Sicily to Egypt, remain unclear.

    http://www.orange.com/en_EN/pr…..219en.html

  31. JohnLopresti says:

    That prior 3x cable cut incident was around the time of some skirmish, if I recall. Maybe the newly bolstered fleets in the Abyssinian waters will help trace whereabouts of the vandals. With the new hi res satellite imaging, probably the vessels doing the deed are on video already.

    re @7, living wage is an interesting counterpoint to the flux which is internationalizing labor. I wonder if Obama is interested. The way I recall, Chi was among the early urban areas interested in experimenting with the concept a few years ago. I know of several thousand workers in a US company that was subject of an offshore takeover recently; the buyer’s corporate office is in Mumbai, where the US workers’ newly reduced wage would be lower than comparable pay it offers in Mumbai. The stateside division has reassured its US workers the plunging payrate will be held above minimum wage.

  32. milly says:

    #19 Plunger Thank you . Mya Angelou , at some point in the 8 year reeign of terror , encouraged us as Americans to think. May have been after 9/11. anybody remember?

  33. bell says:

    17.4 billion is 2.34% of 700 billion…….2.34%………………………..

    if the private banks had been scrutinized 2.34% of the 700 billion they are being given, old rothchild would be rolling over in his plutocratic grave.. and indeed they haven’t as no self serving politician would want to jeopardize any of the payola they get from these same plutocratic forces…

    most people know when they are being taken by the private banking corporations who are not held accountable to the ordinary citizen who is forking the bill.. they want the same treatment that bush has been given as well – no accountability whatsoever for anything…

    wanting to hold ONLY the auto industry accountable makes sense in a society/world turned upside down..

  34. Hmmm says:

    But as written, Bush’s last major act as President is to demand that workers for American-owned companies work for less than workers for foreign owned companies.

    I do hope you’re right on the “…Bush’s last major act as President…” part. There’s still so very much damage that could be done at the stroke of W’s pen. Or with just a phone call. I’m going to refinance our home today to reduce our minimum monthly expenses going forward (and refinance at a very attractive rate, I might add), in case that should become impossible soon due to some whole new level of financial turmoil. If either (or both) of us lose a job as a result of said turmoil, the refi will let us hold out longer before losing the home as well; and even if things don’t go completely south, then we’re still better off.

      • nonplussed says:

        Russian sailors enjoying fabulous liberty at this very moment. Smoking good cigars, drinking rum, dancing to cubano beat, you get the picture. Havana was well known as great place to tie up according to the old timers, when I was but a lad.

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