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New Republic - September 18, 2019

The story by now is near-common knowledge: In the throes of the last recession, the nation’s Big Three automakers—General Motors, Chrysler, and Ford—accepted a $51 billion bailout from the federal government, allowing the companies to stave off bankruptcy and eventually recover to reap profits by the fistful. American taxpayers, meanwhile, lost $11.2 billion on this investment by the time the government sold back its bailout shares. 

In the years that followed, the massive investment and the discussion of whether the government should have stepped in to help the flagging companies dominated national coverage of the deal. But, as was the case with the financial industry bailout, it was the story of what happened to the little guy—in this case, the autoworkers—that was always shuffled off to the side. Until this week.

Before the Recession hit, GM was already in a bad spot. In 2005, the company shuttered portions of a dozen facilities and laid off 30,000 people. Two years later, in October 2007, United Auto Workers, the union representing the majority of the sector’s labor force, signed a contract with GM that drove a wedge through the heart of its rank and file. The labor agreement established a two-tier pay-rate system that locked in lower salaries for those deemed to be working “non-core” jobs. The contract also swapped pensions with 401ks for new hires, put an end to cost of living wage increases, and implemented a four-year wage freeze and a hefty 3 percent health care cost-sharing requirement. 

The 2007 contract dispute spurred a brief two-day strike and later protests. Ultimately, the agreement was ratified. The prevailing idea at the time was that the workers would sacrifice, with the assurance that the company would do right by them once it was able to achieve financial stability. Yet, come June 2008, with the financial collapse dragging the economy into recession, GM announced it would close four plants and cut 10,000 jobs. By December, the company, on the brink of bankruptcy, leaned on the government for a lifeline. ...
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