Bush Admin. to bar autoworkers from striking against GM
John Byrne
Published: Friday January 9, 2009

Print This  Email This

As GM chief coasts, workers forced to accept cuts, strike prohibition

A little-noticed provision buried in the Bush Administration's $13.4 billion loan package to General Motors will prohibit the United Auto Workers from launching a strike as long as the company receives funds from the federal government.

Not only that, but a strike would give the federal government the power to call in their loan -- putting the loan in default and forcing GM into bankruptcy. The government now has the power to force a bankruptcy if “any labor union or collective bargaining unit shall engage in a strike or other work stoppage.”

The terms of GM's loan package were reported last night in the Detroit Free Press. They did not become public until GM filed documents with the Securities and Exchange Commission. The company's headquarters are pictured above right.

Not everyone has felt the full brunt of the declining auto market, however. In 2008, GM CEO Rick Wagoner received a salary increase -- to $2.2 million, plus stock options -- despite the fact the company had been losing money since 2005.

The US auto workers union is also saddled by another requirement of the loan: the UAW must now accept a plan to lower wages and benefits for GM to match those of other foreign-owned US automakers' plants.

"The deal requires the UAW to accept by Feb. 17 a plan to lower wages and benefits for workers to match those of employees at foreign-owned U.S. plants by Dec. 31," the Free Press wrote Thursday. "It also requires the union to take two-thirds of the money its due for a retiree health-care trust fund in company stock rather than cash or company debt."

"GM has until Dec. 29, 2011 to pay back the loan under the current deal," the paper added. "While the UAW has a no-strike clause in its contract with GM that runs through September 2011, its local unions have different timetables for negotiating their contracts. If the UAW was forced to reopen its contract to make concessions, the no-strike clause could be set aside."