December 3, 2008 Congressman Lynch has hard words for UAW workers Play video

(Peter Howe, NECN) - "There needs to be some acknowledgment of reality here. We cannot have folks that get laid off and then get 90 percent of their pay. You just cannot do that.''

Hard words for Massachusetts Congressman Steve Lynch. He's a former Ironworkers Local 7 president who also worked the assembly line at the old General Motors plant in Framingham, Massachusetts. Now, on the House Financial Services Committee, he'll sit in judgment of the $34 billion bailout loan Detroit car makers seek from Washington.

"I've encouraged my brothers and sisters at the UAW to look hard at that contract, and if there's stuff there you don't need, then you've got to give it up,'' Lynch said in a speech Wednesday in Boston at the Seaport Hotel.

Big Three carmaker CEO's are traveling -- by car, not private jet this time -- to Washington for more hearings, including a Friday session before Lynch's committee, chaired by Representative Barney Frank (D-Massachusetts). They're promising deep cuts in executive pay and big investments in electric and hybrid cars as part of a plan to guarantee a viable long-term domestic car manufacturing business.

Now the pressure's mounting on auto unions for comparable concessions, even from diehard labor backers like Lynch. "There's a certain sanctity that should attach to a collective bargaining agreement,'' Lynch says, "but in this case, you could lose it all'' if unions aren't willing to renegotiate terms for a more sustainable,

Analysts say Congress is demanding big reforms on both sides. Senior automotive analyst Rebecca Lindland of Global Insight says: "They need to show that they have cut all the way to the bone, that they made every effort to find every possible dollar."

UAW officials held an emergency summit Wednesday and emerged saying they are willing to make unspecified changes to the legendary "jobs bank" that gives laid off car workers up to 95 percent of their pay for years. They're also willing to delay billions owed by the big 3 to a new UAW health care insurance trust, and also formally reopen collective bargaining to negotiate other concessions or givebacks.

But UAW president Ron Gettelfinger bristles at those calling this another bailout: "After all, we're asking for a loan here; a loan to be repaid! We're not asking for that famous term [bailout] that everybody uses. This is a loan to help the industry through an economic downturn that the industry had nothing to do with.''

Lynch thinks Congress will help Detroit, but only if it agrees to major changes, including potentially a merger of Chrysler and GM or other steps that drastically restructure the industry. "We don't think they can all survive in their current form. It would make it a bit easier if we saw a consolidation,'' Lynch says. "We do desperately need to keep an American auto industry. It may not be the big three. It might be the big two.''

Besides Frank and Lynch, other New England congressmen who serve on the Financial Services Committee that will scrutinize the loan plan are Michael Capuano of Massachusetts, Paul Hodes of New Hampshire, and Chris Shays and Christopher Murphy of Connecticut.