Chrysler workers are not ‘leeches’

The Tea Partiers are at it again. Having failed on tax day to mobilize “grassroots” support for cutting taxes on the wealthy, Rush Limbaugh, Sean Hannity, Glenn Beck, Newt Gingrich and company have found a new reason for existence. They’re bound and determined to unravel what they’re calling—believe it or not—another Teapot Dome scandal.

Teapot Dome was an oil-rich expanse of land in Wyoming. Oil tycoon Harry Sinclair won the exclusive right to drill in the Dome after he made a small gift of $269,000 and several prize head of cattle to Albert Fall, President Warren Harding’s secretary of the interior. Eventually, both Fall and Sinclair were fined $100,000 and sentenced to prison.

What’s the latest scandal? The United Auto Workers union has given a substantial amount of money to the Democratic Party and its candidates and in return, Gingrich says, has received “hefty kickbacks.”

“Against law and precedent,” Gingrich charged, “the unions were moved to the front of the line when it came to who would benefit from the [Chrysler] bankruptcy. The Obama Treasury Department strong-armed Chrysler’s creditors into a deal in which the UAW was given 55 percent ownership of the company while Chrysler’s secured creditors—investors who would have received priority in a non-political bankruptcy proceeding—were left with just 29 cents on the dollar.”

The truth is that the union would have done much better to have spent that money on organizing the workers and their communities for a real fight against the layoffs, cutbacks and union-busting efforts of the big corporations. But would Gingrich and his friends prefer that? Hell no. It would send them ballistic.

The actual legal challenge to the terms of Chrysler’s bankruptcy came from the state of Indiana, one of the few “right-to-work” states in the North. The state’s teachers and police pension funds took their case all the way to the Supreme Court. The motivation was not to protect the workers’ retirement income but, as Indiana State Treasurer Richard Mourdock stated: “The issue of secured creditors’ rights is bigger than Chrysler. It’s an essential foundation of our capital markets. And fundamentally, this is about the law.”

Justice Ruth Bader Ginsburg rejected the funds’ arguments and allowed the “leaner, meaner” Chrysler to emerge from bankruptcy.

The attorney for the pension funds, Thomas Lauria, also represented a small group of hedge funds that raised the same arguments against the government-brokered agreement because it “only” paid secured bondholders 29 cents for every dollar of Chrysler debt—which is actually twice the current market value of Chrysler bonds. Lauria has also represented the tobacco industry.

A union-bashing crusade

Right-wing talk radio is on a union-bashing crusade. “The clear winner is the UAW, which gets 50 cents on the dollar even though they are junior creditors,” argued Glenn Beck.

“The truth of the matter is that Ron Gettelfinger and anybody at the UAW don’t have a clue how to run a sustaining, profitable business,” ranted Rush Limbaugh. “It’s about benefits. ... They just want the business to be around to be able to leech off of it.”

So the autoworkers, who spent their lives building the auto industry, are “leeches,” while those who’ve been comfortably receiving profits from their labor all these years are victims. Sean Hannity has called for a boycott of General Motors and Chrysler because “the ramifications of this Socialist experiment are too great.”

These loudmouths, who also called Barack Obama a fascist and displayed rude dishonesty in labeling Sonia Sotomayor a “racist,” have no shame when it comes to twisting facts and law.

The much-maligned “50 cents on the dollar” needs to be explained. Last year, when George W. Bush was still in the White House, the U.S. Treasury agreed to lend Chrysler and GM $25 billion from the Troubled Assets Recovery Program. In exchange the Treasury demanded huge wage and benefits concessions from the UAW.

One was that the union agree to a 50-percent reduction in the cash payments GM and Chrysler were required, by contract, to put into a fund for retiree health care.

The other half was to be paid with company stock—of questionable value.

Much to workers’ disappointment, Obama’s Auto Task Force called for the same concessions as the previous administration. Under pressure, the workers voted in favor of these givebacks. Chrysler and GM were thus legally obligated to give the Voluntary Employee Beneficiary Association a stake in the company.

Another Teapot Dome here? It makes you wonder what else the Tea Party set is drinking.

Of course, none of these bogus legal experts questioned the legality of Treasury interfering with the collective bargaining process. When Chrysler announced plant closings that violated the UAW contract, there were no charges of illegality coming from the right.

They act as if the union, which has a legally binding contract with Chrysler, is just another moneylender trying to minimize losses. Actually, the workers have made an investment of a different kind—the best years of their lives. Retirees actually worked for their pensions and health care. The “benefits” derided by Limbaugh are in reality deferred wages—unpaid labor—that they are legally entitled to.

Under the recently modified contract, wages of future workers are frozen at $14 an hour for the next six years. That’s just one-and-a-half times the federal poverty rate for a family of four. Meanwhile, executives at the newly formed Chrysler Group LLC and the now separate Chrysler Financial, who have never built a car or even a roller skate, resent the fact that TARP limits their salaries to $500,000 per year.

How loud will Limbaugh & Co. howl when the workers start demanding the right to control these companies and save their jobs?