By Dana Hedgpeth and Kendra Marr
Washington Post Staff Writers
Thursday, May 28, 2009
FLINT, Mich., May 27 -- More than 100 United Auto Workers leaders sat inside Local 659's low-slung brick union hall on Van Slyke Road on Wednesday, listening to how their union and jobs could be affected under a new agreement as General Motors moves toward bankruptcy.
"I'm not going to stand up here and tell you that it's a great agreement," said Duane Zuckschwerdt, who represents 13,000 GM workers in Flint and Lansing. "Anytime you have to give concessions, it's not. But it's like a pacemaker. It provides a lifeline to the membership so we can exist."
A bankruptcy reorganization plan negotiated with the U.S. government requires a new deal with GM's union. GM's roughly 60,000 factory workers are to vote Wednesday and Thursday on the agreement. It would give the union a stake in GM of 17.5 percent that could grow to 20 percent, smaller than workers had hoped. And the 14-page summary of the deal outlines cuts in some health-care benefits and the loss of cost-of-living increases, performance bonuses and some holiday pay.
Gregg Shotwell, leader of the Soldiers of Solidarity, a UAW dissident group, has complained about a short paragraph that would forfeit the union's right to strike until 2015.
"The UAW is a toothless lion," he said.
Zuckschwerdt, director of the UAW's Region 1C, warned his lieutenants that the alternative to concessions could be worse.
"If we don't successfully pass this agreement and they file for bankruptcy, it puts it in the hands of a judge," he said. "Do we love this agreement? No. I am sad to say there are people who will lose their jobs."
On Monday, the Canadian Auto Workers approved concessions of their own, but Wednesday, GM's bondholders rejected a 10 percent stake in the company in return for the $27 billion they are owed, making bankruptcy virtually inevitable. Still, union leaders expect better treatment in court by agreeing to help GM cut costs.
The past makes this moment a hard one for Local 659. The union hall, now between a bingo hall and a liquor store, occupies a historic spot, across the street from a major GM plant. This, as a sign in front of the union hall says, is "Home of the 1937 Sit-Downers." That refers to when auto workers sat in their factories here for 44 days, withstanding assault until they won sole bargaining rights for their union.
This time, they were arrayed against a fiercer opponent, top UAW leaders say. They were dealing with not just GM executives at the bargaining table but the federal government, too. And Uncle Sam wasn't leaving them much wiggle room.
"It used to be you dealt with one party -- the auto manufacturer," said Cal Rapson, UAW vice president. "You would negotiate tradeoffs, but this was a whole other matter. You had the federal government at the table.
"We really worked to protect our interest," he said. "If we hadn't, these workers would have had a hell of a lot less. Yes, it was ugly. Yes, it was hard. This was a matter of what we had to do to survive. . . . We're coming out of this so we can have some jobs. It is not the type of negotiation you come away from feeling good."
Less than half a mile from the union hall, Peggy Mertz, manager of the Capitol Coney Island diner, has a front-row seat on the auto industry's downturn. The red-and-white vinyl booths of her restaurant, where waitresses start pouring the coffee as soon as their regulars open the door, overlook another GM plant.
"People used to come in here so gung-ho," Mertz said just as she started to slap eggs onto a griddle around 7 a.m. Wednesday. "They were able to put their kids through college. You had insurance, job security. You were able to take off and do a vacation. Life was good."
But lately her business has dropped 40 percent. "This time, it is the worst," said Mertz, whose father, grandfather, brother, and half a dozen aunts and uncles worked at GM plants. "It feels permanent. . . . There's a definite mood change. Now everybody's worried."
At a nearby booth, Garnet Thomson, a 74-year-old GM retiree, munched on eggs and ham. "I never thought bankruptcy would happen with GM," he said. He doesn't like the deal, he said, but there's little he can do. Retirees have no vote.
The UAW health-care trust will take over retiree health costs starting in 2010, and GM will continue to pay for benefits for the remainder of this year. Yet, under orders from the Treasury, some benefits would be cut, reflecting GM's troubled finances. GM's vision and dental programs are to be suspended, like Chrysler's.
Bruce Green, who works in a GM parts warehouse, walked into the diner with the 14-page agreement in his hand. "We have no choice," he said. "They've gotten us down to our knees. Unions once seemed very powerful. Now it feels like we're very weak."
Union officials disagreed.
Inside Local 659's hall, union leaders tried to play up how they were able to slow the import of vehicles coming from China and elsewhere by getting an agreement that some of that work would go to two U.S. plants that were originally scheduled to close.
"If it is a way we can help GM survive, I guess we have to vote for it," said Dan Reyes, a 39-year-old father of three children who has been laid off from his GM job of 16 years for the past two months. "We've been beaten down because of the way the corporation ran their business."
Zuckschwerdt and other leaders spent 2 1/2 hours explaining the agreement and answering questions, including about the union's stake in GM, a split of cash and stock that would be owned by the union's health-care trust fund.
"It sort of seems like a conflict of interest," said Bill Tynes, 45, a GM worker. "If the company goes into bankruptcy, how good is that going to be for the stock?"
Just before noon, Zuckschwerdt called for a vote.
Those in favor? Hands shot up. None were down.
"It passes unanimously," he said, encouraging everyone to go to the plants to tell their members to vote. They walked out under a sign that reads "America's future depends . . . on American jobs!"
Marr reported from Washington.