Labor Advocate Online
Week In Review
A Weekly Column by Bill Onasch
May 14, 2006
Honor Thy Mother
Greetings to all you mothers on your day of recognition. Perhaps some day your vital contributions to society will fetch more than a Hallmark Card and a kitchen appliance upgrade. My mother passed away several years ago. If you’re fortunate enough to still have yours she’s sure to appreciate a visit or a call as well as the card and blender.
Ninety-four Year-old Widow Suffers
Maybe you’ve seen Buck O’Neill on TV pitching reverse mortgages to old folks for JB Nutter. Such a sweet deal—they pay you money to live in your home until it’s time to go.
Katherine Stephens, and her late husband, were attracted to such a deal to supplement their Social Security in 1988. The mortgage holder has paid her household 312 dollars a month ever since. But now sister Stephens, at age 94, can no longer live on her own in her modest Atlantic City house and has moved into a nursing home. She asked her 70 year-old nephew to close the deal on her house so that she’d have something to pay toward the 4,000 dollar a month charges at the nursing home.
It turns out that their deal included a hefty annual interest rate of 13.43 percent on the payments received. That means she not only repays the 67,000 dollars she got over the years but also an additional158,000 dollars in accumulated interest. But that wasn’t the worst news.
A section of the agreement called "additional interest," gives Wilmington Savings the right to claim 100 percent of all gains in the market value of the property. At the time of the loan the Stephens’ house was valued at 83,000. Current market value is about a half-million. All this adds up to 642,000 dollars. Unfortunately for the bank, those who wrote the agreement in 1988 did not envision blood sucking could ever advance to today’s level—they foolishly agreed to a cap of a half-million liability for these old folks the actuaries expected would be long dead by now.
To sum up: Wilmington Savings gets a half-million; some yuppie gets a nice house; and Katherine Stephens, life savings reduced to 38 dollars in the bank, is subject to the tender mercies of a nursing home operator being her only chance of avoiding homelessness. Is this a great country or what?
Not On the Level
An outfit funded by some auto bosses, called Level Field Institute, is using retired auto workers as props in a million dollar advertising campaign to promote buying vehicles from "American" companies—GM, Ford, and Daimler-Chrysler—as a way of saving American jobs.
I, of course, am concerned about American jobs. I am the owner of a Ford product, built at the Claycomo plant in suburban Kansas City, and have only minor complaints about this mostly reliable car. But I don’t like scams like this one from the field levelers.
First of all, it should be noted that one of these companies has not been American owned for some time; Daimler-Chrysler AG is headquartered in Germany. Like the Japanese and Korean "transplants," they operate some nonunion plants in the U.S. as well as the UAW operations acquired during their takeover of Chrysler.
But, of course, even nominally "American" GM and Ford are global in scope, destroyers of jobs once held by American workers. Only a quarter of jobs at the GM spin-off Delphi, their principal parts supplier, are still in the United States. There are twice as many Delphi workers in Mexico, where that company is now the second biggest private employer, trailing only Wal-Mart. Delphi bosses have taken their U.S. division into bankruptcy seeking to close the majority of their remaining American plants, drastically slashing wages and benefits for surviving American workers. All of the historic Big Three have not only extensive parts operations but assembly plants off shore as well supplying the domestic market. GM bought out Saab, Ford acquired Volvo and Jaguar, to sell in the U.S. as well as other markets.
Conversely, as the Big Three U.S. workforce has dwindled, Japanese, Korean, and German transplants have created many new American jobs and are still expanding. The wages, and especially benefits, in these plants are less than those under UAW contracts. They need to be organized. Vilifying these American workers as some kind of alien threat is not a good organizing tactic. In the meantime, the UAW leadership is yielding concessions to their American Big Three "partners" aimed at making them competitive with the transplants.
The divisions in the fight for decent jobs are not signified by the national flag flying over corporate headquarters. The struggle will not advance until we clearly recognize it is between employer and worker on a global scale. Their side wants to see us rolled under their bulldozers leveling the field.
Hubris Before A Fall
All employers feel pretty cocky right now. When the UE organized a small Stepan chemical plant in Fairfield, New Jersey the bosses determined to teach them a lesson. They stonewalled them in negotiations. After the workers staged a one-day warning strike the company locked them out and continued to run the plant. Even though the union did a good job in mobilizing support from labor, community, and environmental groups the struggle looked grim. Stepan even contested unemployment compensation to which locked out workers are entitled under New Jersey law.
But, as they say, if you live right and work hard every now and then you get a break. And, once in a while, the other side screws up. A Stepan attorney submitted a remarkable document at the unemployment comp hearing. With some detail, it itemized 1.8 million dollars in lockout related company expenses. It’s estimated that seventy thousand dollars could have settled the dispute.
Not only did the company get no sympathy from the state officials conducting the hearing; the UE made sure this costly vendetta got known to institutional investors in Stepan—who were not impressed with this business plan—as well as every public official in New Jersey. Within a few days the Stepan workers had the first contract they deserved.
As usual, much of the material for this column was taken from stories posted on the Daily Labor News Digest.
That’s all for this week.
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