Bush Loan Could Crush Once-Powerful UAW

Union takes benefits "equal" to nonunion workers
By Matt Cantor,  Newser User
Posted Dec 20, 2008 3:58 PM CST
Workers leave the Chrysler Truck Assembly plant in Warren, Mich., Friday, Dec. 12, 2008.    (AP Photo/Paul Sancya)
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(Newser) – Washington's $17.4 billion loan to Detroit automakers may inflict a death blow to one of America's most powerful unions, the Washington Post reports. The loan requires UAW workers to accept pay and benefits “equal” to those of nonunion workers, a stipulation that undermines the union's purpose, analysts say. The deal is open to interpretation, however, and Barack Obama has called out its “unfair conditions singling out workers."

UAW rose to prominence in the 1950s, negotiating the so-called "treaty of Detroit" with GM after it made record profits. Twenty years later, president Walter Reuther called UAW "the strongest and most effective industrial union in the world." But non-union, foreign auto plants undermined the union in the 1980s. The Bush administration loan "is another stage in the defeat of the UAW," said a former UAW economist.