Choosing a path for Michigan

Editor's Note: Speech (pdf) was delivered June 1, 2011

Michigan is at a historic crossroads.

Thanks to the courageous decision of President Obama to save the American auto industry, and thanks to the willingness of business and labor to embrace change and work together, and thanks to the substantial sacrifices of our members, suppliers, dealers and all stakeholders, there has been an amazing revival of this vital American industry.

The results are undisputable; a turnaround has taken place. For the first time in almost seven years, all of Detroit’s car companies are earning profits. Chrysler and GM are paying government loans well ahead of schedule. These companies are rehiring thousands of laid-off workers and hiring thousands of new workers.

Unemployment in Michigan is down substantially. The critical choice now facing leaders of government, industry and labor is whether to continue down this path of cooperation, moderation and joint creative problem-solving, or instead to take the path proposed by right-wing extremist ideologues. While the extreme right pretends to be “pro-business," I think their ideological proposals are very harmful to business, and I am urging you today to reject the extremism and polarization of the right, and to join with those who believe in deep democratic and human values on a path that will lead to true economic growth and prosperity for all.

The successful resurgence of the American auto industry is a testament to the wisdom and effectiveness of choosing the moderate, pragmatic and inclusive path. President Obama faced the choice of whether to accept the collapse of an industry critical not only to millions of workers and businesses large and small, but also to our national security. Republican politicians uniformly attacked his choice, more than willing to sacrifice Michigan’s economy on the altar of extreme free market ideologies.

According to the Center for Automotive Research, without the decision by President Obama to rescue the auto industry, there would have been the loss of three million jobs nationally within three years. Only one quarter of those jobs would have been lost at auto manufacturers; the vast majority would be lost at suppliers and small businesses that rely on auto production and auto jobs and wages for their income.
All of us in Michigan owe an enormous debt of gratitude to President Obama for giving us a second chance to prove that the American auto industry can be successful in a competitive global economy. We owe a tremendous debt of gratitude to American taxpayers. It is now incumbent upon us to validate this trust by committing to do everything possible to achieve and expand on this success.

There is no doubt that President Obama’s decision to support the auto industry was politically unpopular. Many Americans were distrustful of more government intervention in the wake of the massive bailout of the big banks that were largely responsible for the economic crisis. But I think that the public was also expressing their sense that the auto companies and the auto union also bore some responsibility for the companies’ difficulties. I believe the public is looking to us now to see whether we have learned anything from the crisis, and whether we choose to return to business as usual or whether we are committed to a new way of doing business in the globally competitive world we live in.

On behalf of the UAW, I can state that our union has learned many lessons from the crisis in the auto industry, and we have decided to adopt fundamental, radical change. We have reinvented our union. We have recognized that we can no longer take the same approaches we took 20, 10 or even five years ago. We are calling our new approach the “UAW of the 21st century.”

We no longer live in the same world in which the UAW grew up 75 years ago. The 20th century UAW existed in an era of a national industrial economy and a national marketplace. The 21st century UAW recognizes that auto companies face critical challenges in a global marketplace, and it is our mission to create conditions that will enable our employers to compete and succeed in order to best represent our members.

The 20th century UAW tried to find ways to achieve job security, such as job banks, that in the end did not achieve the result we were seeking. The 21st century UAW knows that the only true path to job security is by producing the best quality product, the safest product and the longest lasting product, at the best price.

Simply put, our highest priority is to join with our employers to produce the best quality products at the best value for consumers.

The 20th century UAW fell into a pattern with our employers where we saw each other as adversaries rather than partners. Mistrust became embedded in our relations, and as a result we signed onto ever more lengthy and complicated contracts with work rules and narrow job classifications that hindered flexibility and promoted a litigious and time-consuming grievance culture. The 21st century UAW seeks and expects a partnership with employers based on mutual respect, trust and common goals. In a global economy, flexibility, innovation and teamwork are paramount.

The 20th century UAW joined with the companies in a mindset that it was the company’s job to worry about profits, and the union’s job to worry about getting the workers’ their share. The 21st century UAW embraces as our own the success of our employers in order to achieve the economic and social success of our members, their families and our communities.

The 20th century UAW was not primarily focused on the needs of consumers, and we failed to champion forcefully or effectively enough the goals of preserving our environment for future generations through green manufacturing and green products.

The 21st century UAW makes as a priority the interests of consumer safety, energy efficiency and environmental protection.

The 20th century UAW reacted with hostility and resistance to the historic changes brought about by the globalization of the economy. The 21st century UAW is adopting a more nuanced and constructive approach to global trade and global development. We are committed to becoming citizens of the world and achieving trade that spreads prosperity and lessens poverty. We are also committed to saving and growing the American industrial base with good jobs in the United States.

Out of the ashes of the cataclysm of 2008 and 2009, a new, more visionary and stronger UAW is being born. The 21st century UAW views management not as our adversaries or enemies, but as partners in innovation and quality. Our relationship with employers is built upon a foundation of respect, shared goals, and a common mission, and a mutual social responsibility to create good, secure, middle-class jobs here in our communities in the United States.

This commitment to fundamental change is not just a tenet of my administration but is permeating the entire culture of the UAW. Our internal educational resources are devoted to nurturing this new mindset. I can tell you that there is no group of people more committed to the success of the auto industry than the union and our members working in the auto industry. Workers know that the success of their employers is in their own essential long-term interest. They won’t be jumping ship to grab onto a golden parachute. They are in this for the long haul. They are ready, willing and able to do what it takes to make their companies successful.

Our members are energized by the new paradigm and welcome their enhanced opportunities to contribute to our companies’ success.

At GM, for example, our quality network promotes teamwork and invites total workforce involvement and continuous improvement. A Lordstown, Ohio, employee saved the company almost $200,000 by suggesting an alternative windshield sealer operation. Team members in Pontiac, Michigan, achieved more than $1.2 million in savings with suggestions to add plastic protection to a sensor.

At Chrysler, a sprayer in the paint shop – also a shop steward – devised a training video to systematize training for a new shift and volunteered for a split shift to assist with the training.

At Ford it was UAW members on the assembly line at the Chicago Assembly Plant that identified quality problems and advocated strongly for important process and training changes with the Taurus launch that created the best quality launch ever for Ford up to that time.

At Mitsubishi UAW members’ proven track record of world best productivity and quality convinced top management in Japan to award their newest vehicle platform to our UAW facility in Normal, Ill., over numerous other global sites competing for this platform.

There are many, many more examples of such creative and innovative contributions by our members. Management will attest to the fact that the UAW is adding value to our enterprises.

At Ford, GM, Chrysler and Mitsubishi, the UAW has demonstrated our commitment to quality, teamwork, flexibility and innovation. We have forged a new culture that emphasizes trust, openness, cooperation and creative problem-solving. Our members have found millions of hours of annual savings. We are contributing to product development and innovative workforce solutions. We have taken the lead in workforce training and development. Layers of management have been eliminated because the workers are dedicated to creatively managing their own processes. Many facilities only have one main production classification, and an observer coming into a facility would not be able to tell who belongs to management and who is a union member. At one UAW GM facility there are no line supervisors, and UAW members take full responsibility for their operations.

Just as the UAW has made the choice to embrace fundamental change and has committed to working cooperatively with business, you in the business community are also facing a choice. This is a watershed moment for Michigan business. One choice is to work with those such as the UAW who want to engage in a moderate, inclusive and pragmatic approach that affirms a social compact between all segments of Michigan society. The other choice is to follow the extreme agenda of the right wing that embraces ideology and divisiveness. It is my fervent belief that the more moderate, creative problem-solving approach is not only more just and compassionate, but also more favorable to the growth of both large and small business.

Let’s look at the right-wing Republican agenda and its negative impact on business. One of its tenets is to drastically cut taxes on high earners and corporations at the expense of public education, public services and investment in infrastructure. The problem is, without strong education at both K-12 and the university level, we will not produce an educated and skilled labor force to compete in a global economy. Without good public services, we cannot attract business to our region. Without investment in infrastructure, our transportation system, electrical power system and communication system cannot support business growth.

The mantra to reduce taxes is a religion to many extreme Republicans, but this ideology gets in the way of practicality and hard facts. The truth about taxes is that corporate income taxes as a share of revenue on a federal level have dropped dramatically over recent decades. If corporations paid at the same rate today as they did in the 1950s, there would be over $500 billion dollars in additional federal revenue. The average federal income tax paid by the highest earners has also dropped, from almost 30 percent in 1995 to 16.6 percent in 2007.

The Republican budget proposal that passed the House of Representatives imposes devastating cuts in Pell grants for low-income college students, while at the same time cutting taxes yet more for the wealthy. If capital gains on the 400 highest earners were taxed at 35 percent, it would have brought in an additional $18 billion in revenue – enough to provide Pell grants to more than three million students who otherwise could not afford a college education.

A moderate and pragmatic approach to the budget would not sacrifice education. A moderate, pragmatic and inclusive approach to budgets would recognize that we can foster the creation of millions of good jobs through investments in infrastructure and education.

Another tenet of the right-wing agenda is to silence the voices of workers in the public sector by destroying collective bargaining rights. Again, I call upon our partners in the business community to reject this divisive ideological agenda that targets the unions of teachers, firefighters, nurses, police and state workers. Instead, let us all work together to make necessary changes and to find common solutions that bring prosperity to our communities.

There is no example in history of a middle-class democracy that exists without free, independent unions. The right to have a union is a fundamental human right. Indeed, our democratic economic competitors – Japan, Korea, Germany – all acknowledge the role of unions in their societies, at the same time as they provide universal health care and retirement security. Businesses should re-examine their instinctive negative reaction to the notion of unionization.

Federal labor laws in the United States do not protect the right of workers in the private sector to join unions. Employers can with impunity create a climate of fear by implying dire consequences if workers choose to form a union. It is vital that progressive and moderate voices in the business community speak out against union-bashing extremism and the terrifying vision of a union-free America. An America without unions is an America with no middle class. An America with no unions and no middle class is an America that is no longer the beacon for democracy and freedom in the world.

Just as the UAW has chosen fundamental change and a vision of cooperation between government, business and labor, I urge you in the business community to partner with the UAW of the 21st century, to reject ideology and to embrace pragmatism, moderation and the search for common ground and common good for all in society.

Let us work together to build a prosperous Michigan. Let us work together for a strong middle class. Let us work together to create good jobs and to rebuild our manufacturing sector. Let us work together to rebuild infrastructure and invest in research and development. Let us work together to provide dignity and security to our elderly. Let us work together to build a strong public education system and preserve our world-class public universities. Let us work together – government, business and labor – to find creative and pragmatic solutions to our economic challenges. This is the Michigan way, and this is the American way.