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NBC Discovers Union Role in Auto Industry Turmoil

The network broadcast media have generally ignored or downplayed the role of unions in establishing bad business models for the Big Three U.S. automakers. But NBC’s “Today” show bucked the trend Dec. 3 with an honest report about how union contracts’ affect the companies.

 

     “Detroit’s auto workers remain among the highest paid manufacturing workers in the world – paid sometimes even when they don’t work,” NBC’s chief investigative correspondent Lisa Myers said. “That’s right. Under union contracts, thousands of laid-off workers receive 95 percent of their salary for doing nothing, for up to two years.”

 

     University of Michigan professor Mark Parry said this “jobs bank,” as its known, “more than any other practice, you know, highlights and symbolized the inefficiencies of an outdated business model.”

 

     Myers explained that two years ago 15,000 workers from Chrysler, Ford and General Motors were being paid although they were not working. Even now, she added, “GM has agreed to spend as much as $2.2 billion on this over four years.”

 

     Myers’ segment also pointed to executive compensation as a source of financial woes. But compare $2.2 billion over four years for the jobs bank – or $550 million a year – to the often-criticized $6 million salary paid to GM’s CEO, Rick Wagoner.

 

     David Cole, of the pro-bailout Center for Automotive Research, said the jobs bank “turned into an absolute albatross and became an extra weight around the neck of the industry.”

 

     But union commitments go beyond paying employees for not working. Myers pointed to “complex, outdated work rules in thick union contracts.” For instance, she said, “In some plants, experts say, rules can require three different skilled workers just to move a machine.”

 

     Once Myers’ informative segment was complete, however, “Today” went right back to ignoring the union issue. In an interview with GM COO Fritz Henderson immediately following Myers’ segment, co-host Matt Lauer pressed the executive on various flawed aspects of the company’s business model. But he only mentioned unions in passing.

 

     Lauer cited a plan GM submitted to Congress as part of an attempt by U.S. automakers to receive a taxpayer-funded bailout. “Let me give ideas or elements of your plan: eliminate some 30,000 jobs; shutter nine plants; reopen the United Auto Workers contract – and Lisa Myers just talked about why that’s necessary – either shrink, sell or possibly kill three additional brands; close some 1,750 dealerships,” Lauer said.