Today’s Qs for O’s WH – 5/29/2009
EmailTAPPER: Is it fair to say that when the Auto Task Force comes up with these restructuring proposals that there is greater sacrifice asked of the debtholders than of the auto unions?
GIBBS: I — I think that would be as wrong a characterization as you could probably come up with.
TAPPER: Well, just in terms of monetarily, it looks like to many observers, many economic observers, that the unions are asked to sacrifice less. Not that they're not sacrificing, but they're asked to sacrifice less than the bondholders. And it was the same with the Chrysler deal.
GIBBS: It's hard for me to talk a little bit about G.M., but I think — I think if you look at wage and benefit sacrifices, I think if you look at the change in value of the health benefits system overall, I think it's hard to make a clear and cogent argument that the workers aren't part of — part of the pain in this situation.
TAPPER: Well, I'm not saying they're not part of the pain.
GIBBS: No, I understand, but I think — I think it is — what I'm saying is I think it is incorrect and not accurate to say that somehow — and I now it's certainly been out there — but I know that — I don't think it's accurate to say that the unions have given less or haven't played their part.
I think they — they have given quite a bit. You see — you see a great change. I mean, look — just look in general. I was reading the other night about G.M. Again, I don't want to pre-judge the outcome, but 1979, General Motors employed about 618,000 people and was America's biggest employer. I think they're down now to far less than 100,000 employees.
I think restructuring over the short term and certainly over the long term has impacted — has impacted workers in a very painful way.
HANS NICHOLS, BLOOMBERG NEWS: So have the unions sacrificed more than the bondholders?
GIBBS: You know, I — I don't know that I've seen the sheet that delineates the exact degree of pain, but I think that the notion somehow that bondholders have given all and the union has given very little, and I don't want to characterize necessarily what you're saying, but there has been that mem (ph) out there that somehow the workers have gotten off easy.
And I — you know, I — we can — we can get in my Ford and we can go to a lot of different communities in southeast Michigan and Ohio and Indiana and Wisconsin, and I can assure you there are real names and faces to people that have given — have given a lot.
HANS NICHOLS, BLOOMBERG NEWS: Would you say it's co-equal then?
GIBBS: I would say it's fairly comparable, yes.
TAPPER: OK. I mean, it sounds to me like in your characterization, your response, that you're looking at the general sacrifice that a lot of auto workers have made in general because of the tough economic climate and in terms of bad decisions by the auto makers. I'm just talking about the auto deals.
GIBBS: But understand we are here because of the change in the climate of auto sales, and we are here because of some of the decisions that have been made by the companies.
There's no doubt — I mean, the notion that we are here because of just one fixed series of events I think is unfair. I think we're here because, instead of selling 16 million cars a year, we're maybe looking at selling 9 million to 9.5 million cars a year. Very few business models that are going to work for anybody — when you're planning to sell 16 million widgets and you sell 9 million to 9.5 million. I think, over the long term and in the short term, workers have given quite a bit in this case.
TAPPER: So just to be clear, when you're responding to the question, you're saying that workers have sacrificed, you're looking at the overall…
GIBBS: No, no…
TAPPER: … history of the auto industry…
GIBBS: No, no, no, no…No, no, no. I'm looking — I am looking at — I am looking at the wage and benefit cuts that are being exacted on workers as we speak. I think the notion that — the notion that they haven't given or sacrificed I think is just simply not true.
– jpt
Obama: 'Now Is the Time For Common Sense Action' 
Romney Takes Aim at Conservatives
Good pursuit with this one Mr. Tapper..
I return to the statement:
…the United States is a nation of laws and that no one is above those laws. …
(Almost no one..)
Posted by: DontGet818OnMeNow | May 29, 2009, 4:34 pm 4:34 pm
Has anyone yet coined the term “GIBBerish”?
Jake asked a question about apples, and got an answer about oranges. It’s too bad, because we deserve to hear more accuracy about the auto plans.
Posted by: MayBee | May 29, 2009, 4:42 pm 4:42 pm
The auto plans will get no more scrutiny.. it’s a done deal.. government is now able to broker deals without oversight or checks and balances. The public may forget, but investors won’t.
Posted by: DontGet818OnMeNow | May 29, 2009, 4:45 pm 4:45 pm
Jake asked a question about apples and got an answer about fruit cobbler a la mode.
Posted by: DontGet818OnMeNow | May 29, 2009, 4:48 pm 4:48 pm
Did you do the research Jake? Do you know who sacraficed more? I do not think so.
Posted by: thinking | May 29, 2009, 5:18 pm 5:18 pm
The auto workers should have had to bail themselves out by putting up their pensions and future earnings as collateral…instead, we all will be on the hook for the future losses.
That is what we get for our ’70%’.
Posted by: J House | May 29, 2009, 5:18 pm 5:18 pm
The auto workers should have had to bail themselves out by putting up their pensions and future earnings as collateral…instead, we all will be on the hook for the future losses.
That is what we get for our ’70%
Posted by: J House | May 29, 2009, 5:19 pm 5:19 pm
Thanks, Mr. Tapper, nicely done as usual. And MayBee, I love that GIBBerish remark– I think it will catch on.
“Thinking,” I am surprised that you question Mr. Tapper’s line of questioning rather than Gibbsy’s ridiculous answer (and you will notice that Gibbs claims to drive a Ford– the one American car company not yet in the government’s clutches). Mr. Tapper doesn’t need to have all the answers when he asks the questions– that’s a reason to ask the questions, right?
It does seem to me, particularly given today’s Gettlefinger memo to union members telling them they are not giving back any more wages or benefits to GM in this latest round, that the unions are keeping far more of their bloated packages than anyone else involved at GM or Chrysler, particularly the bond holders, who have been demonized in a most unsettling way and then given little for their investments.
And lest the usual suspects sneer at how I am comfortable and have no empathy for the poor auto union workers, my favorite uncle has been a union auto worker all his adult life since leaving the Navy, working at a GM plant in a northern industrial state. He and his friends, by their own admission, got ridiculously generous pay and benefits for the skill level they possess. “That’s what unions are for,” he has proclaimed more than once. Then he took a generous buy-out offer a few years ago and spends his time traveling across the country on his Harley.
Posted by: moderate | May 29, 2009, 5:42 pm 5:42 pm
Jake, if you just played nice with GIBBerish he might buy you a hamburger like he did the NBC staff.
Posted by: Skittles | May 29, 2009, 6:35 pm 6:35 pm
Moderate- You’re uncle sounds like quite an exception to GM workers and conveniently fits the long ago debunked memes of the $70 an hour GM worker.
CBS News, Nov. 08: According to Kristin Dzicek of the Center of Automotive Research, the average wages of Chrysler, Ford, and GM were $28 as of 2007, which comes to a little less than 60K a year in gross income. This is hardly outrageous when you consider the physical demands of auto assembly work and the skills most workers must acquire in the course of their careers.
I really don’t like to see the disparagement of an honest line of work which has provided a middle class life for a significant number of Americans. I’ve known GM workers too, and none have claimed to be overpaid as you claim your uncle has been.
Posted by: kat | May 29, 2009, 8:02 pm 8:02 pm
Kat, I am not disparaging auto workers, simply stating that the case is not as simple as “workers good/executives bad”, “union good/non union bad.” My uncle started working in a GM plant putting seats in pickup trucks in the early 1970s,when he came out of the Navy. Every couple of years, he would come to visit us when he was on strike, and talk about how the wages negotiated in contract talks needed to factor in the fact that he would not be working for several weeks at a time on a regular basis because he would be on strike every couple of years. He saw nothing strange about the featherbedding that went on in his plant or the strong-arm tactics of his union boss.
I adore my uncle and do not begrudge him his career or his union membership. But he was well compensated, his health care benefits continue to be lavish compared to other working class employees I know, and he never worked any harder than he had to. Most of his friends and neighbors are also retired auto workers, and I’ve known many of them all my adult life. My uncle is not much different from any of the rest in terms of pay or attitude.
Not sure why their experience is so different from the experience of the union workers you know, but perhaps it is because they are older and were part of the union “back in the day.” My uncle is now in his early 60s and would be approaching retirement age except that he took early retirement when it was offered several years ago.
Posted by: moderate | May 29, 2009, 10:08 pm 10:08 pm
Thanks for another good question Jake.
What is missed in all of this is the sea change in which a corporate failing or bankrupcy is being handled. Years and years of settled law have guided magistrates in reorganizations.
So now we see a reorganization by the
Executive branch that turns upside down this settled law. It must be accepted that this law, built over time, exists for a reason. For centuries debt holders have been allowed to line up first to pick the bones in reorganization. Many times employees have been shafted in reorganizations because they get to be last in line. No matter how much one may dislike the idea of employees lining up last it has been a fact of bankruptcy.
I can only assume that we are getting an early look at the storied “empathy” by the results of this reorganization, and I fear the unintended consequence.
Is the new way a good way? As the Zen Master said “We shall see”
Posted by: SMITH | May 29, 2009, 11:41 pm 11:41 pm