Is Bailout Possible Without UAW Concessions?

Impact on Auto Workers

"We already made huge concessions in 2005 and 2007," said Alan Reuther, director of the UAW's Washington, D.C. office. "Workers have already made significant sacrifices and we've seen nothing of the sort from management. We've stepped forward already, but the companies haven't."

In the last contract the union took over paying pensions to retired workers and agreed to reduced health care benefits and lower wages beginning in 2010.

Gettelfinger and others in the union blame the slumping economy, not the cost of labor for the companies' decline. Under the current contract, workers earn $27 an hour, not including benefits.

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"GM has already done what companies do when they're in bankruptcy," said the UAW source. "Their income has been cut in half and it nothing to do with the cost of labor. Arrested car sales have nothing to do with the problems in the industry people have been talking about for years –- quality, fuel efficiency. They have to do with a sluggish economy."

Bankruptcy would only make a bad situation worse, this person said. "No one is in the market to buy a car right now and they're not going to change their mind if the companies actually declare bankruptcy. Who would buy a car from a company in bankruptcy? People would say, 'Will I be able to get parts? Will I be able to get service?'"

But that argument is gaining little traction, especially among Republicans.

Sunday, on ABC's "This Week," Gov. Arnold Schwarzenegger, R-Calif., told George Stephanopoulos that workers pay and benefits were "maybe too high."

"I think it's very important to not just put money in, but let's go and see if they have been fiscally responsible, and if they're really operating the right way. Because right now ... the auto workers ... the benefits and all of those things, are maybe too high. Right now, if you compare it to Germany and to Japan and to other countries, they can build cars cheaper, and they don't have that overhead with the amount of what they pay to the workers, the benefits they provide," he said.

"In America, you sell a car, and $2,000 of each car just goes to benefits," he said.

Union officials say the 2007 contract put workers pay and benefits in line with Japanese and European employees, but American manufacturers have been criticized for not using their workers as productively as foreign firms.

As the economy craters and car sales decline, workers at plants owned by the Big Three are sent home when work slows. Facing similar conditions, American workers at Toyota plants in the U.S., however, use that time to learn new ways to maximize efficiency.