US says "no" to discrete aid to Auto sector
Publication:
Friday, 12 December, 2008 - 00:00
chiefofficersnet
Ford says it doesn't need state aid, at least not yet. GM says it's on the verge of bankruptcy. And Chrysler says so little it seems stunned as the US Senate says it will not make direct loans to the Auto sector, pointing out that this is the job of the banks which have been told they can have USD700,000 million to fix the economy.
The proposal in the Senate failed, not just because of the money required, but upon insistence that the car workers' union, United Auto Workers (UAW), agree that the pay of its members be cut. Figures put into the public domain in the USA show that car workers earn, on average, salary of USD40 per hour and additional benefits amounting to as much as USD33 giving the headline figure of USD73 per hour. The Union does not have the same power in factories owned by foreign manufacturers, giving them a competitive cost advantage.
The UAW refused to allow US manufacturers to reduce wages to the same as those in foreign plants. Republicans announced that this, and other measures, were essential to improve the chances of the US manufacturers surviving the recession without having to come back for more money in a few months.