UAW's Sacrifices Look to Some Like Surrender

General Motors electrician Brian Thorne talks about the new bailout plan for U.S. automakers outside a plant in Parma, Ohio. The deal urges reduced pay rates. (By Jason Miller -- Associated Press)

Rep. Barney Frank (D-Mass.), chairman of the committee overseeing much of the government financial rescue efforts, was far tougher.

"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 could give foreign auto companies in effect the ability to dictate wages for all American auto workers."

Frank said that because those requirements were "unilaterally inserted" by Bush, the Obama administration "should take whatever steps are necessary to remove them."

Whatever happens, however, the financial crisis has made clear the profound weaknesses in the union's position.

Circumstances had once been so different for the union, which was founded on the idea of protecting worker dignity and promoted innovations such as pensions and health care for all workers.

"The auto workers were for many years the model for the American standard of living," said David Montgomery, emeritus professor of labor history at Yale University.

Their power stemmed in part from the stunning success of the U.S. auto industry.

In 1950, for example, General Motors reported record profits, declared the largest stockholder dividend in U.S. corporate history and couldn't build cars fast enough. So when the United Auto Workers threatened to strike, the company agreed to a landmark deal with pensions, a cost-of-living formula and cut-rate health insurance. Fortune magazine hailed it as "the treaty of Detroit."

Twenty years later, the union seemed to have become, if anything, even more powerful. When legendary UAW President Walter Reuther addressed the union convention in 1970, he was bullish on the organization's prospects.

"We are, without question, the strongest and most effective industrial union in the world," he said. "We have taken on the most powerful corporations in the world, and, despite their power and their great wealth, we have always prevailed."

Now, those who have followed Reuther face a far different landscape.

"We recognize that going forward there's going to be a restructuring of the companies and all the stakeholders are going to have to make sacrifices, and we're prepared to do our part," said Alan Reuther, the union's Washington representative and Reuther's nephew. "But that path forward, as painful as it may be, is preferable to bankruptcy, not only for our workers but also for the economy and whole country."