Auto workers and automakers on a collision course - Oct. 2, 2015

 

Seven years of relative labor peace in the auto industry may be about to end.

Members of the United Auto Workers union are prepared to go on strike at noon Sunday at a Ford plant outside of Kansas City that builds the best-selling F-150 pickup, if it can't reach a deal with management on working conditions there.

And the 40,000 UAW members at Fiat Chrysler have voted down a tentative labor deal with the automaker by nearly a two-to-one margin. The union hasn't said what it will do next at Fiat Chrysler, but a strike is a possibility there as well.

There hasn't been a strike in the auto industry since 2007, when there were brief walk-outs at both General Motors (GM) and Chrysler. The Chrysler strike was so brief it lasted less than an entire shift.

But the strike threats show that there is frustration among the rank-and-file factory workers.

The veteran workers have gone a decade without a raise, and have seen their job protections disappear. The new workers -- anyone that's been hired since 2007 -- are paid at a lower hourly wage. They also don't get the pensions and retiree health care that veterans do. About 45% of the factory workers at Fiat Chrysler (FCAU) are the so-called tier two workers who are paid less.

Related: Here's what autoworkers want in new contract

While the tentative deal that was rejected closed some of that gap, it did not eliminate the second tier of workers. It also didn't call for any limits on how many workers could be paid at the lower tier. At GM and Ford (F) only 25% of the staff can be paid at that lower level. Once that percentage is reached, some of the new hires get promoted to the top tier of pay.

The industry is far healthier than it was in 2007, when all three automakers suffering from shrinking U.S. sales and losing money. High labor costs at that time were a big part of the reason for the losses. Those losses ultimately sent Chrysler and GM into bankruptcy in 2009, and both required a federal bailout.

Today car sales are near record levels and profits are strong because automakers were able to reach much more competitive labor contracts. But the automakers say they can't afford to do everything the rank and file workers want and still remain competitive.

Related: U.S. auto industry doesn't need Donald Trump's help

"A large number of new employees ...thankfully did not have to endure the pain and sacrifices that were required of the workforce [in 2009]," said Fiat Chrysler in a statement after the deal was rejected. "But it is that knowledge and those memories that continuously reinforce the Fiat Chrysler's leadership's resolve to never let those events repeat

Auto workers and automakers on a collision course - Oct. 2, 2015

Arne Duncan, Education Secretary, to Step Down in December - The New York Times

 

WASHINGTON — Arne Duncan, the secretary of education and a member of President Obama’s original cabinet, will step down in December after a long tenure in which he repeatedly challenged the nation’s schools to break out of their hidebound ways.

A White House official confirmed Mr. Duncan’s decision to step down and said the president has decided to name John B. King Jr., the deputy secretary of education, to replace Mr. Duncan to lead the Department of Education.

Mr. Obama is expected to formally announce the personnel changes and take questions from reporters Friday afternoon.

In an email to his staff sent Friday morning, Mr. Duncan praised the work of his department, saying that “as a comparatively small team, often under challenging conditions and timelines, our staff has continued to offer example after example of dedication beyond the call of duty.”

He said the department would be in good hands under Mr. King, a former commissioner of education in New York State and a former president of the University of the State of New York.

As secretary, Mr. Duncan started the “Race to the Top” program, in which billions of dollars was offered in a competition to school districts to innovate in the ways they teach children. Mr. Duncan accompanied the president from Chicago, where the two had forged a friendship.

Arne Duncan, Education Secretary, to Step Down in December - The New York Times

Belvidere UAW members reject Fiat Chrysler contract, union leaders meeting in Detroit to discuss options - News - Rockford Register Star - Rockford, IL

 

Ben Stanley

Posted Sep. 30, 2015 at 3:51 PM
Updated Sep 30, 2015 at 11:17 PM

BELVIDERE — In a critical vote Wednesday, union members at the Belvidere Assembly plant overwhelmingly rejected a four-year contract proposal with Fiat Chrysler.

According to United Auto Workers Local 1268 President George Welitschinsky, 65 percent of production workers and 70 percent of skilled trade workers voted against the deal.

Members at large assembly plants in Toledo, Ohio, and Sterling Heights, Michigan, rejected the pact in voting Tuesday. Most other Fiat Chrysler factories also turned down the contract.

The deal, which included pay raises but didn't end a lower wage rate for employees hired after 2007, was tentatively reached on Sept. 15. Ending the two-tier wage system has been a major goal for the union.

About 40,000 union Fiat Chrysler employees have been working under a contract extension since Sept. 14. Plant-level union leaders, including Welitschinsky, were summoned to Detroit for a meeting Thursday to decide the next move. UAW leaders could decide to call a strike, head back to the negotiating table or turn their bargaining attention to Ford or General Motors.

"I’m confident that the UAW and the FCA negotiating teams will reach an agreement before it comes to a strike," said Jarid Funderburg, executive director of Growth Dimensions, a Belvidere and Boone County economic development organization. "But if it does, it will impact not only Belvidere, but the entire region, simply because the Belvidere Assembly plant is such a huge employer for the region.

"The long-term effect, you could imagine, for a community of this size would be devastating."

The Belvidere Assembly plant employs about 4,500 people.

Kelley Blue Book Senior Auto Analyst Karl Brauer said in August that a UAW strike wouldn't come as a surprise, since big automakers have been adamant that ending the two-tier wage system would be too costly.

In addition to wages, workers also are concerned about shifting car production to Mexico and replacing it with trucks and SUVs.

Speculation has emerged among industry insiders that Jeep Cherokee production could move to the Belvidere Assembly plant in the next few years. The model would be a welcome addition to Belvidere’s lineup, since a five-year plan released in May 2014 indicated Jeep would discontinue production of the Patriot and Compass in 2016. Both vehicles are built in Belvidere. But rumors also have circulated that Dodge Dart production could shift from Belvidere to Mexico.

Cherokee is the top-selling Jeep-brand model this year at 140,000 vehicles, compared with the Patriot (80,000) and Compass (40,000), according to sales data Fiat Chrysler released Sept. 2.

Ben Stanley: 815-987-1369; bstanley@rrstar.com; @ben_j_stanley

Belvidere UAW members reject Fiat Chrysler contract, union leaders meeting in Detroit to discuss options - News - Rockford Register Star - Rockford, IL

Turnaround Illinois : A Turnaround or a Turn Aground

 

Read the complete 24 page study:  http://illinoisepi.org/countrysidenonprofit/wp-content/themes/12/docs/rauner-fact-check.pdf

Politics of extremism wins out in Springfield stalemate | Chicago Reporter

Please use the links (underlined) in the story.

It’s a striking parallel: a small group of extremist congressmen who would hold the federal budget hostage in order to defund Planned Parenthood, and an extremist governor who is holding up the state budget in order to defund the labor movement.

Neither of the hostage-takers can claim majority support for their demands. Americans back federal support for Planned Parenthood by a 2-to-1 margin, and most Illinois residents oppose the specifics of Gov. Bruce Rauner’s “turnaround agenda.”

That’s why they’re forced to take hostages.

And let’s be clear: it’s Rauner who’s holding things up in Illinois. The basic outlines of a budget settlement have been clear for some time, with Rauner reportedly agreeing in private to a temporary 1 percent income tax hike—but not before his agenda to cripple the labor movement is enacted. That’s anathema to many Democrats, and he knows it. (And if they give in now, they know he’ll be back for more next year.)

The motivations of the hostage-takers are somewhat different. The small Freedom Caucus in the U.S. House of Representatives manifests a quaintly American combination of deeply held conviction and grandstanding.

Rauner seems to be coming from his own peculiar experience in the business world. He’s not the type who runs a traditional business with the mission of serving its customers; if he were, he wouldn’t dream of embarking on a fiscal year without a budget. He’s the type who spends gobs of money to take over an operation—a struggling company, say, or the governor’s office —so he can order people around and institute dire cuts.

It works in the business world, if the goal is maximizing profits for a small number of investors, but it hasn’t seemed to work so well in state government. At this point, there doesn’t seem to be any endgame; the governor and his counterparts in the General Assembly seem to have hunkered down, waiting for the next election, perhaps.

At its core, both the congressmen and the governor are driven by extreme ideologies. For Rauner it’s about making Illinois “competitive,” based on a top-down view of prosperity, in which workers cost less and therefore businesses thrive. (The alternative view, which I’d say has greater basis in reality, is that businesses thrive when consumer demand rises.)

The Illinois Economic Policy Institute has shown that Rauner’s economic analysis is faulty. There’s a lag in economic recovery (but the state is catching up—and don’t let Rauner take credit for that), and there’s population loss, but these are due to complex factors. Average household state tax burden is lower than in Minnesota, Wisconsin, Indiana, or Kentucky. The main evidence for the state’s competitiveness shortfall consists of two casual, unscientific surveys of CEOs—but the states they rank as most competitive for “job creators” turn out to have higher unemployment rates, empirical evidence that their guesstimates are way off.

Crain’s Chicago Business, that hotbed of radicalism, came much closer to the truth a few years ago­­­—while the state’s taxes were on an upswing —when interviews with dozens of CEOs showed “Illinois is a better place to do business than surrounding states.”

“Illinois has more of what businesses need to thrive,” including an educated workforce, larger markets, more access to finance capital, and a better transportation system, Crain’s reported. And while the corporate income tax rate is relatively high, “when all taxes are figured in, [Illinois] has one of the lowest overall effective tax rates on new investment in the country.”

Rauner’s bizarre view of competitiveness was revealed in his budget proposal in February, when he offered hundreds of millions of dollars of cuts in higher education and mass transit, two critical factors for businesses considering expansion or relocation. Since then he’s unilaterally instituted dramatic cuts in childcare assistance and immigration services, both areas with clear payoffs in enhancing the workforce and boosting economic vitality.

With a patchwork of makeshift funding mechanisms, Rauner has adroitly avoided a state shutdown. He appears to have made a political calculation that the smartest way to pressure Democratic legislators—with the least potential political exposure for himself—is to go after the most vulnerable residents of the state.

According to the Responsible Budget Coalition, since July state funding has ceased for autism and epilepsy programs, afterschool violence prevention, heating assistance, college tuition assistance, substance abuse programs, domestic violence services, breast and cervical cancer screenings, prescription assistance for people with HIV/AIDS, and homeless services. Social agencies with long histories of serving Illinois communities are threatened, and some are closing.

And entirely separate from the budget stalemate, Rauner has rolled out administrative rule changes decimating the childcare assistance program, making in-home services for the elderly and disabled harder to get, and throwing more people off food stamps, public aid and Medicaid.

Rauner may not be a traditional politician, but when he talks about compassion—or when he talks about competitiveness —it’s just talk.

About Curtis Black

Curtis is a blogger for The Chicago Reporter.

Politics of extremism wins out in Springfield stalemate | Chicago Reporter

Suing the governor

Rauner’s secrets land him in court

By Bruce Rushton

 

It’s a quote that can’t be repeated often enough as Gov. Bruce Rauner builds a reputation for secrecy at all costs – so long as he isn’t the one paying the bills.
“I want to make Illinois government the most efficient, transparent (state government) in America,” Rauner said last year on the campaign trail.
Now, the governor is, again, a defendant in a lawsuit, this one filed by Illinois Times, after refusing to turn over records in response to a request made under the state Freedom of Information Act.
The newspaper filed suit last week, after the attorney general’s office ruled that Rauner must turn over his appointment calendar in response to a request made last spring, after the governor walked out of a Holocaust remembrance ceremony, then ignored an emailed query asking where he had gone. The governor told the AG that the public could somehow discern his thought processes, which he apparently thinks should be kept secret, as well as his legal strategies if we knew the names of people who met with him. He also claimed that someone could discern patterns in his behavior and movements if they knew details of past meetings, which would pose a security risk.
Malarkey, the AG ruled on Sept. 22. After the ruling, the paper promptly sued, knowing well that the state’s public records law is fraught with weaknesses that make enforcement problematic.
Time and again, public bodies have ignored the attorney general when it comes to the state Freedom of Information Act, and there have been no consequences. In 2012, Chicago Public Schools ignored a FOIA request from a reporter who wanted records on student suspensions. The attorney general sent a letter to the district, reminding officials that they have a legal obligation to answer FOIA requests. The next year, the district got a similar letter from the AG after ignoring a request from a different reporter who wanted copies of emergency management plans. When the attorney general in 2012 told the Department of Financial and Professional Regulation that it had a legal duty to give the attorney general copies of a complaint file so that the attorney general could determine whether documents must be made public, the department flatly refused.
The law allows Rauner to sue if he disagrees with the attorney general’s decision, and if that were to happen, the newspaper would become a defendant. The governor’s legal expenses would be borne by taxpayers; the newspaper, as a defendant, would bear its own costs. State law requires public bodies to pay the legal expenses of successful plaintiffs, but there are no such provisions for defendants in FOIA lawsuits.
On the theory that it is better to be a plaintiff than a defendant and that a court order carries more weight than an opinion from the attorney general, the newspaper sued the governor. Should a judge agree with the attorney general and require Rauner to release his calendar, the governor, under state law, would be required to pay the newspaper’s legal expenses, and he could also be fined as much as $5,000, with the money coming from taxpayers.
All this could have been avoided had Rauner simply said, when asked, why he walked out of last spring’s ceremony. After being sued, his staff last week did exactly that, telling the State Journal-Register that Rauner had gone to a meeting with legislative leaders.
The governor’s office is also facing a lawsuit in Cook County filed by the Better Government Association, which wants copies of emails exchanged between Rauner and top aides. The governor is courting yet another lawsuit by refusing to tell the Chicago Reader the names of attorneys in private practice who have done work for the state. The governor argues that revealing the names of lawyers who have been paid with public money would somehow violate attorney-client privilege.
On the other hand, Rauner has released documents when he thinks that he can make someone look bad. Case in point are emails released by Rauner’s staff last week when Patrick Buchen, who says he was forced to resign as manager of the state fair, accused the governor’s office of cronyism and forcing him to issue free fair passes and press credentials to insiders.
After Buchen went public with his complaints, the governor’s office released an exchange of emails between him and Robert Alec Messina, an environmental policy adviser to the governor who somehow landed in a spat about who should be the grand marshal of the fair’s torchlight parade. The emails could almost certainly have been kept secret under the state’s public records law, given they are filled with opinions and talk of matters that are not yet final, both things that are exempt from disclosure under the law. At one point, Buchen writes that he might need to “go elsewhere” if the governor’s office wasn’t serious about promoting agriculture.
“You need to understand that when my nose gets bloodied I will break those who bloodied mine,” Buchen tells Messina.
And Rauner doesn’t think that he should reveal what he says in emails or let the public know how he spends his time.
Go figure.

Suing the governor