Monday, February 11, 2008

Remarks by UAW President Ron Gettelfinger, City Club of Cleveland, Feb. 8, 2008

Thank you very much, Ms. Friedman, for your kind introduction and thank all of you for the warm reception. I very much appreciate the respect you show for the office in the UAW that I am privileged to hold on behalf of our membership.

I want to recognize our UAW Ohio Region 2B Director Lloyd Mahaffey. He is a man of integrity, an outstanding trade unionist and he does a terrific job for our membership, our families and for communities all across this great state. Thank you Lloyd for all that you do.

Thanks to all of you for being in attendance and a special recognition to the members of our union who are here this afternoon.

On behalf of the UAW International Executive Board and the men and women of the UAW, I certainly want to thank the City Club of Cleveland for your invitation to speak with you this afternoon.

Your invitation is recognition of the hard work our members do every day, in our workplaces and our communities.

Such recognition is especially welcome from an organization like yours, which has a well-deserved reputation as one of America’s most distinguished forums for free speech and the free exchange of ideas.

It is certainly a great honor, and a humbling experience, to speak at a club that has offered a platform to U.S. presidents of both political parties.

And it’s a special privilege for a representative of our union to be asked to speak at this club, which has also welcomed such leaders as Walter P. Reuther, Rosa Parks, Cesar Chavez, and Archbishop Desmond Tutu.

Members of our union marched alongside Rosa Parks and other civil rights leaders in order to break down the barriers of segregation and discrimination.

The UAW worked, side-by-side, with Cesar Chavez and the United Farm Workers to help organize workers in the fruit and vegetable fields of Texas and California.

And our union offered our solidarity and support to Archbishop Tutu, Nelson Mandela, and many other courageous leaders in their successful fight to end apartheid in South Africa.

It is hard to imagine, from the comfort of our present day lives, the desperate circumstances that each of these leaders confronted during their long struggles for justice and dignity.

And yet, despite these long odds, despite fierce resistance, despite all the difficulties, look at all that has been accomplished.

Farm workers have built an organization that is a dynamic advocate for workers rights; legal segregation has ended in the United States; and majority rule has arrived in South Africa.

It speaks volumes that this year the Democrat party will nominate either a woman or an African-American as a candidate for president of the United States.

We live in a time of major change, huge challenges, and the potential for monumental progress. At a time like this, the heritage of Rosa Parks, Cesar Chavez and Archbishop Tutu is a reminder that when people of good will come together to seek positive change, great things are possible.

Members of our union never shy away from a challenge and we certainly face tough challenges today. To understand the challenges we face, look no farther than the dismal news about today’s economy.

• Jobs are falling. We’ve lost 3.4 million manufacturing jobs since 2001. • Home foreclosures are rising. 2.2 million homes were foreclosed in 2007. That’s a 75% increase from the previous year.

• Wages are stagnating. Median income dropped by $1,000 per household between 2000 and 2006. In fact, average Americans are seeing a decline in the value of their homes; a decline in the value of their savings; and a decline in real wages; all at the same time. That’s the first time all three have simultaneously occurred since 1974.

It’s no wonder that the economy is on top of everyone’s mind this election season and that Americans are saying, in many different ways, that our country needs dramatic change.

None of us can afford the luxury of sitting on the sidelines while change happens to us.

Our union is advocating for changes in public policies that impact our nation. And, we are also confronting problems as we see them, and doing what is required to find solutions.

A case in point: The 2007 auto negotiations.

As a result of a tremendous amount of hard work by our bargaining committees and support members from our union, we reached an extraordinary agreement that is in the best interest of our members, our communities, and the companies we work for.

The estimates vary, but it is probably safe to say that as a result of these negotiations, the automakers will save somewhere in the neighborhood of $1,000 or more per vehicle. The Big Three will be able to lower their labor costs by billions of dollars per year during the life of this agreement.

That’s important, not because it adds to the companies’ bottom line, but because it frees up resources that can be used to invest in U.S. plants.

Our members, both active and retired, made some very difficult decisions in regards to real out-of-pocket sacrifices to help our employers remain competitive. And, I want to be clear. Our members did not sacrifice so that management could enjoy an even higher standard of living. We acted in order to preserve jobs and to create incentives for new investment in the United States. With the savings created by our agreements, we want to see the cars and trucks of tomorrow built with pride in the U.S.A.

That’s why we fought for specific commitments from each company to maintain products and make new investments in UAW-represented factories.

That includes a number of manufacturing facilities across Ohio that will have a positive impact on this state. Our union secured product commitments in assembly, stamping, powertrain and parts warehouses. That’s great news for Cleveland, Lordstown, Columbus, Cincinnati, Toledo, Parma, Twinsburg, the Dayton area, Sandusky, Mansfield and Lima. There is still a lot of work to be done but that’s job security from Lake Erie to the Ohio River. So as a result of our negotiations, there will be several manufacturing facilities in Ohio that will have product and investment guarantees during the next four years or more.

These product guarantees are incredibly important, not just for our members and our families, but for the tax base of local communities. For local companies that supply the automakers. And for other local businesses that rely on the consumer spending that goes along with good, middle-class manufacturing jobs.

In addition to savings for employers, and jobs and factories for our communities, our 2007 agreements also deliver financial gains to our active and retired members. The new contracts also protect top-quality health care coverage.

As has been widely discussed, we secured lifetime health care for current and future UAW retirees, including every seniority worker who was on the active rolls on September 14, 2007. We accomplished this through the creation of VEBAs or Voluntary Employee Beneficiary Associations at each company.

Retiree health care at these three companies will be paid for by an independent VEBA trust, with funds that can only be used for that purpose. Either way we would have gone there is an element of risk involved but in the long run our union is convinced that the VEBA approach is more secure than a promise of health care from the company. This independent trust will be funded by tens of billions of dollars in cash, stock and other securities contributed by our employers. It is the largest transfer of assets from capital to labor in the history of the United States.

Because the trusts are pre-funded, Chrysler, Ford and GM can remove projected retiree health care costs from their books, which will improve their financial positions. But we bargained hard for sufficient funding, and the independent trusts will receive up-front funding and begin earning interest right away. So we are confident the VEBAs will provide high-quality health care benefits for our retirees for the next 80 years.

Our confidence is based on rigorous analysis by internal specialists and outside experts. And, everything we do in this area is subject to court review and approval. As part of this process, UAW retirees will receive complete and timely disclosure of all relevant information.

The VEBA trust will not be run by the UAW. It will be administered by an independent board approved by federal court, which will include trustees with expertise in health care, financial management and related areas.

To the extreme, it has been suggested by some, that by encouraging healthier lifestyles or realizing efficiencies of scale, the VEBAs will lower health care costs across our nation.

For this to be possible, you would have to assume that our union, Chrysler, Ford and GM have been blindly writing checks for billions of dollars in health care expenses each year without making serious efforts to control costs. That is simply not the case.

The reality is that our union has worked for decades with employers, policy makers and legislators to contain costs while still providing quality health care. In auto, we created Community Based Health Care Initiatives bringing together doctors, hospital, insurance carriers, local government, business and labor to study ways to reduce costs.

We have, and we continue to promote wellness programs, disease management, evidence-based medicine and certificate-of-need standards.

We’ve also insisted on transparency with pharmacy benefit managers, and tough negotiations with medical providers. The VEBA trustees will certainly continue these practices and improve on them where possible. Such efficiencies are desirable, and are important for the VEBA trusts to succeed in their mission of providing long-term benefits to the beneficiaries they are obligated to cover. But these measures, by themselves, do not represent a long-term path to health security for all Americans. What's needed, as our union has long advocated, is a single-payer, universal, comprehensive national health insurance program that covers every man, woman and child in America. We believe that healthcare should be a right and not a privilege for those who can afford it.

But, when you start talking about a single-payer system opponents are quick to surface the phrase “socialized medicine.” Perhaps some actually believe it but for the most part it has been an effective maneuver used in the past as a fear tactic to derail any attempt to health care reform.

But, here’s the point, our current health care system is not working for millions of American’s.

It’s not working so long as there are 47 million Americans without health insurance and when 90 million Americans lacked health insurance for all or part of the past two years.

It’s not working so long as millions more are under insured and costs keep going up for those who have insurance.

It’s not working when one third of health care dollars don’t pay for actual health care. Think of that this way. Between 1970 and 2006 the number of physicians grew by less than 200% while the number of health care administrators grew by 2,500%.

So, we urgently need a new approach to health care in this country and our agreements with the auto companies set the stage for this task as well, by establishing a National Institute for Health Care Reform.

We negotiated commitments of $30 million from the companies over the next four years to fund the Institute. It will reach beyond the bargaining table to pursue innovative research and education efforts to expand access to health care, while also controlling costs.

In health care and in several other areas, many people will look at the 2007 UAW negotiations as the moment in time when the U.S. auto industry made a dramatic transformation. But our members recognized the need for change long before 2007.

Day in and day out, the men and women of the UAW have been working to improve our industry and our achievements are quite impressive.

Safety, quality, productivity and in many other areas our members are setting the standards that other companies look up to.

On safety: Our forward-looking, joint labor management programs seek to prevent injuries and illnesses before they happen and other companies look to us to see how it’s done.

On quality: Everyone who looks at this question objectively knows that the quality of domestic vehicles is equal to, and in some cases better than, the competition. And the vehicles made by our members have the awards from J.D. Power and other sources to prove it.

On productivity: The conventional wisdom is that non-union plants are more efficient, because union work rules are a drag on production. The conventional wisdom is wrong.

The Harbour Report, as we are all aware, is a closely-watched study which documents how many hours it takes to build a vehicle. If you read the Harbour Report closely, you’ll find that in a head-to-head competition, union plants are actually more efficient than the competition.

Trained, experienced union workers with a voice on the job add value to the manufacturing process.

When you look at what we’re doing in our plants, and what we’ve done at the bargaining table, there’s no question about it: We have set the stage for our industry to succeed.

UAW members have stepped up and now it’s time for the auto companies and our government to do the same. Chrysler, Ford and GM must focus like never before on bringing vehicles to market that customers want to buy, at a price customers can afford to pay.

That includes responding, forcefully, to consumer and regulatory demands for greater fuel efficiency and reduced carbon emissions.

All of the companies are already emphasizing green vehicles.

Chrysler, Ford and GM have spent literally billions of dollars on research and development of vehicles that can use fuel more efficiently while reducing harmful emissions.

Our members are proud to build those vehicles. We’re going to continue our work at the bargaining table and in the political arena to ensure that the automotive components and vehicles of the future are built in the U.S.A.

Our union, and organized labor overall, is doing all we can to protect good-paying jobs in this country. However, the challenges we face are more difficult because of failed economic, fiscal, and monetary policies and lack of an industrial policy in our nation.

With our economy in free fall, leaders of both parties now agree that the best way to stimulate our economy is to put money in the pockets of middle class families.

That is straightforward enough and it makes sense. If you put money into the hands of working people, you increase consumer spending power and that helps our economy grow.

But right now, working people are in no position to drive our economy. Wages are stagnating, and middle-class jobs are disappearing.

The one-time rebates approved by Congress will probably do some good. When the economy is ailing, a shot in the arm makes sense.

It is essential, though, that legislators remember the very difficult circumstances faced by unemployed workers. Every week, more than 200,000 jobless workers lose their benefits. They are left with no income, no way to pay their bills and no ability to stimulate the economy with their spending power.

As has been done during previous economic downturns, Congress and the president must extend these jobless benefits. We are disappointed that extended UI benefits were not included in the stimulus package just approved by Congress. We call on the Bush administration and Congress to promptly consider additional stimulus measures, especially an extension of unemployment benefits.

People who have lost their jobs through no fault of their own deserve help. And numerous economists agree that aid for the unemployed is an extremely effective way to stimulate the economy because it puts money in the hands of people who will spend it right away.

If we can all agree, however, that putting money into the hands of working people is the surest way to stimulate the economy, then Members of Congress got it right, we believe, when they raised the minimum wage right after the Democrats won a majority in the 2006 elections.

It’s an excellent way to put money into the pockets of people who really need it and who will spend it to help our economy grow.

But, we must also recognize that there is no sound strategy for stable economic growth that does not include an aggressive plan to rebuild America’s manufacturing base.

Putting money in the hands of working people is a good start. But, if most of what they buy turns out to be made overseas then the new sales, new factory orders and new jobs that are created are going to be created somewhere else.

We don’t need Congress to stimulate the economy of a province somewhere in China. Let me hasten to add that members of our union have no argument with workers in China. They want the same things we want: the chance for a decent job, at a decent wage, to support their families.

But although China has become the “workshop of the world,” China’s dictators make it impossible for millions of Chinese workers to enjoy a fair share of the wealth they produce. China has more labor activists in prison than any country in the world. Members of our union have advocated, repeatedly, for the release of these prisoners and other victims of the Chinese regime.

We will continue to press for change in China and in other overseas economies but we need better tools beginning with “fair” trade agreements as opposed to “free” trade agreements. There has to be a correlation between a $2 billion a day trade deficit and unfair trade agreements.

What about our lack of an industrial policy? Our trading partners in Europe and Asia have governments that treasure their manufacturing industries, and develop policies to preserve and enhance industrial jobs.

In this country, we have the most open market in the world and we’ve stood idly by while entire industries have disappeared: Toys. Textiles. Televisions. Computers. And the list goes on.

Unless we take action, we’re going to see a continued decline in manufacturing industries and the hard work we did to preserve U.S. jobs during the 2007 auto negotiations will be compromised.

It doesn’t have to be that way. The global economy is not a tropical storm that blows in every direction without any human intervention. Our economy is created by the conscious decisions of men and women, in this country and in other countries.

If we don’t like the economy we have, we can take action to create a different one. It won’t be easy but it can be done.

At the bargaining table in 2007, when many said it was impossible, we rolled up our sleeves, set aside old ways of doing business, and hammered out new solutions to today’s problems.

If labor and management in the auto industry can find common ground, then we can also find common ground to address America’s health care crisis, our mounting trade deficit, and the need to renew our manufacturing sector.

If we take the approach to national and global issues, that we want to drive change and be a part of the solution, we can improve our communities, improve our country and create a global economy that truly works for working people, all around the world.

Thank you again, on behalf of the members of our union, for the opportunity to be with you here this afternoon.