GM Job Cuts Increase Political Risk For Obama
12 Mai 2009 - 5:17PM
Dow Jones News
President Barack Obama's push for a smaller U.S. auto industry
is testing his support among midwestern union auto workers, a key
voting bloc for the Democratic Party.
The latest restructuring plan for General Motors Corp. (GM)
calls for additional plant closures at a cost of 21,000 jobs, many
in already hard-hit manufacturing states such as Michigan and Ohio.
Obama hasn't publicly ordered those cuts. But the revamping of the
nation's largest car company is being guided by the
administration's auto-industry task force, and it follows the
president's calls for a leaner, healthier industry to ensure its
viability.
The talks are being followed closely by workers such as Randy
Freeman, vice president of the United Auto Workers Local 652 in
Lansing, Mich. Freeman said union members are frustrated about the
uncertainty of their jobs, and are looking to Obama to turn around
the industry.
Many workers support Obama but will ultimately judge the
administration by whether GM returns to profitability and the
overall U.S. job market improves, Freeman said.
"The key to the UAW, I'm just going to say, is that we want to
bring jobs back to America," Freeman said. "That is an absolutely
constant view of the UAW. We feel that if taxpayer money is [being
used], then we need to grow those jobs in America."
Obama won the support of the UAW by taking a tough line against
banks, hedge funds and other lenders in the revamping of Chrysler
LLC. But GM's restructuring will require far more sacrifices from
the union, which has come out strongly against the latest plan.
Negotiations between the union and company are ongoing.
In a letter last week, a UAW executive urged Capitol Hill
lawmakers to pressure the administration to reduce the planned job
cuts at GM, which he noted has already received government aid.
"GM should not be taking taxpayers' money simply to finance the
outsourcing of jobs to other countries," wrote Alan Reuther, the
UAW's legislative director. He pointed out that GM plans to
manufacture more cars overseas, a contentious proposal among union
workers.
The White House has "put itself in a pretty risky spot," said
Sarah Binder, a professor of political science at George Washington
University and a senior fellow at the Brookings Institution. "They
clearly see an important message by having Obama take charge of the
podium. But the flip side of that is, for GM, once you've got tens
of thousands of job cuts, following that, there is this political
risk that people remember who's front and center in sort of pushing
these solutions."
Michigan's members of Congress, most of them Democrats, offered
a tepid response to the restructuring plan. They are facing
pressure to fight for workers and oppose further job cuts but are
limited politically in how much they can push back against Obama,
the leader of their party.
University of Virginia political scientist Larry Sabato said
that, by overseeing the job cuts, Obama risks alienating a key
voting bloc in the 2010 midterm elections, when the Michigan
governor's office will be up for grabs. Such a seat can influence
presidential elections, Sabato said.
The health of GM and the broader economy will be key in that
election, Sabato said, increasing the pressure on the Obama
administration as it orders job cuts. "It's far more important than
party I.D.," he said. "It's whether you've got a job."
-By Josh Mitchell, Dow Jones Newswires; 202-862-6637;
joshua.mitchell@dowjones.com