Buyout Feels to Them Like Being Sold Out
Crammed inside a smoke-filled bar, Gregg Shotwell stared grimly at a group of fellow auto workers, trying to rally them to fight for the American dream.
After sticking with the automotive industry through its most dire times, and faced with deep salary cuts and diminished healthcare benefits, their employers at General Motors Corp. and Delphi Corp. are offering to pay them to quit: as much as $140,000 to leave or retire early -- and, in some cases, without healthcare.
It’s an offer that has many workers feeling anxious, as well as angry with their bosses and union leadership. Even the billboard across the street from the bar where Shotwell was sitting -- an advertisement for a Honda SUV -- felt like a slap in the face.
“We were promised a future with these companies. We’ve spent our lives at these factories. So have our parents, and so are our children,” said Shotwell, 55, a machine operator at Delphi’s fuel-injector plant in Coopersville, Mich. “We have to fight, any way we can.”
On Wednesday, GM and Delphi -- the troubled auto-parts maker that filed for bankruptcy protection in October -- announced that they had offered buyout packages to more than 125,000 hourly employees of the two companies.
At Delphi, which has 34,000 hourly workers in the U.S., up to 13,000 employees would be offered one-time payments of $35,000 to leave. Up to 5,000 of the remaining Delphi workers would be offered jobs at GM.
GM, which has 113,000 hourly employees in the U.S., has said in the past that it hopes to shrink its job force by 30,000 over the next few years.
Officials with several local United Auto Workers offices in Michigan -- including those that represent workers in the Lansing and Flint areas -- said their phones had been ringing all day with calls from employees eager to take the buyout.
Ted Hoven, a 35-year-old who runs a screw machine at the Delphi plant in Coopersville, is not one of them.
He once helped make automotive fuel injectors for Bosch USA. When the company went through massive layoffs three years ago, Hoven fled to Delphi in hopes of finding more stability.
Now he prays he’ll be among the 5,000 people GM plans to absorb.
“I’ve got four kids, and I don’t qualify for any of the buyouts,” Hoven said. “We don’t go out to eat anymore. We don’t buy anything frivolous. But how can I trust that any company I go work for will even stay in business?”
For those like Hoven, the future looks grim: Delphi has sought to cut hourly worker wages by 60%. It has until March 30 to reach an agreement over pay and benefit cuts with the UAW, before it will ask a bankruptcy court to void the contract.
“Any way you look at this, these people’s lifestyles are changing drastically, and not for the better,” said Gary N. Chaison, professor of labor relations at Clark University in Worcester, Mass. “It’s the end of the grand social contract that Henry Ford began. It’s going to be a very sad ending for tens of thousands of American people.”
For earlier generations of auto workers, these jobs were far more stable, with better pay and extensive benefits. It began in 1914, when Henry Ford guaranteed his workers a $5 workday, paid holidays, generous pensions and healthcare.
Auto plant workers have long been considered the aristocrats of the working class. As workers in textiles and steel saw their paychecks shrink and jobs head overseas, auto employees and retirees continued to earn enough to buy homes and enjoy regular vacations.
But after Toyota built its first plant in the U.S. in the 1980s, Detroit’s Big Three have been scrambling to keep up with Asian competitors. More recently, rising gas prices have caused sales of SUVs to slump.
As their market share slid, demand for locally produced parts shrank. Suppliers are now asked to compete with companies in lower-wage countries -- forcing numerous suppliers, including Delphi, into bankruptcy.
Now, said Chaison, this blue-collar upper class is “facing the reality of joining the working poor. They are both furious and terrified.”
Economists say the hardest-hit work and live within a day’s drive of Detroit, where much of the industry was initially built around the headquarters of GM, Ford Motor Co. and what is today DaimlerChrysler.
Michigan has lost about 96,000 auto-part manufacturing and assembly jobs since 2000, according to Thomas Klier, senior economist at the Federal Reserve Bank of Chicago. The auto industry employs about 930,000 factory workers in the U.S., according to the Bureau of Labor Statistics.
The mood among Delphi workers has been grim for months, particularly after Chairman Robert S. “Steve” Miller said worker wages should be cut and management should be given bonuses.
At an October news conference, Miller told reporters, “There are large disparities in this country and around the world in what people can expect for mowing a lawn versus managing a huge business.”
Afterward, Delphi employees began wearing T-shirts to work that read “Steve Miller’s Lawn Service, Specializing in Deep Cuts.”
Such frustrations prompted Shotwell to start Soldiers of Solidarity last fall.
The grass-roots organization has pulled together a small but growing number of UAW workers who want to fight for their jobs and are willing to slow down production on their assembly lines to do it.
At first, the meetings were held in Grand Rapids, with an audience of Delphi workers small enough to fit into Shotwell’s home.
As the months passed, and word of the group and a pending Delphi buyout deal spread, the crowds grew. So did the calls for help.
Shotwell traveled to Wisconsin, Indiana and Ohio, meeting with workers and talking about ways to prepare for a strike.
“We’re just all in the same boat,” Shotwell said to a group gathered in the basement of a Grand Rapids church on Sunday afternoon, as rumors of the impending deal spread. “Why should we wait? Why isn’t the UAW calling for a membership vote, to see if people want to strike?”
GM employees also have begun to show up. The fate of Delphi workers could portend what they will face when GM renegotiates the UAW contracts next year.
“I’ve paid as much as I can on our mortgage, and none of us know what to think,” said Dave Jager, 63, a machine operator who has worked for GM and Delphi for more than 26 years. “I’ve worked in five plants in three states, chasing this dream of the golden GM pension,” he said. “I don’t want to stop working, but can I really pin my hopes on GM?”
