Is Bailout Possible Without UAW Concessions?

The UAW and automakers want a loan, but union doesn't want to give up too much.

ByABC News
November 17, 2008, 6:36 PM

Nov. 18, 2008— -- The Union of Automobile Workers and Detroit's Big Three want the same thing -- speedy congressional action to bail out the U.S. auto industry.

UAW President Ron Gettelfinger appears before Congress today, along with the leaders of GM, Ford, and Chrysler to ask for $25 billion in new loans.

But before Congress hands over billions of dollars to prop up a failing industry that some members believe should be left to die, lawmakers are going to want to know they're making an investment in companies that will use taxpayer funds prudently.

As the union joins GM, Ford and Chrysler in seeking emergency funds, it is also fighting to preserve jobs, wages and benefits for its members -- a position some observers say is untenable, given the industry's dire situation.

"Whatever they say, the union already knows everything is going to have to be different," said Aaron Bragman, an auto industry analyst at Global Insight in Detroit. "The big question is: What are job cuts going to look like? Everything is going to have to shrink."

It is imperative for the union that the automakers are propped up rather than allowed to declare bankruptcy, a move that would abrogate their contract, putting them in an even worse situation than having to make concessions.

"We're not just talking about GM going bankrupt," said a UAW official not authorized to speak on the record. "We're talking about the implosion of one of the largest industries in America, on which much of the economy is based. These companies can't simply be left to fail."

Union membership has been cut in half, to 140,000 over the past three years. Gettelfinger sold his members on a new contract in 2007, in which the union says they already made many concessions.