Alternative title: Dicke E Dauch, More Evil Day by Day

Welcome to the world that has become the United States Labor market.

It's filled with companies that pay CEO's hundreds of thousands of dollars and into the multimillions of dollars.

From the American Red Cross' Multi-Billion dollar Blood Business to Wal-Mart's sticking it to folks like Debbie Shank (and yes, they were well within their legal right to do so), but what Dick E Dauch did and continues to do, well, it just kind of makes me ill, to the nth degree.

Why you might ask, well, I think the Detroit News kind of figured that one out:

Since American Axle was spun off from General Motors and reconstituted in 1994, the union negotiates with American Axle, not GM, and does not get the sweetheart deal other UAW workers will get. In fact, Local 235 went on strike for three months last year and lost. It was a cold, bitter dispute, complete with fires in the oil drums. The unionized workers, numbering nearly 2,000 at the time, gave in to deep wage cuts, in some cases from $28 an hour to $14, in exchange for keeping their jobs. Apparently it was not enough. Fewer than 300 union members were working in the plant Monday.

In the meantime, Dick Dauch, the CEO and chairman of American Axle, was given an $8.5 million bonus by his board of directors after the strike and gave assurances to the workers and the city of Hamtramck that he would keep production here.

Yes, emphasis is mine.

I followed the strike. I was a bit obsessive about it.

I posted pictures like that of a 60 year old woman in an officer's chokehold. Or how Republican staffers who were meeting with UAW members about the bridge loans to the auto industry had NEVER heard of American Axle or their 11 week strike.

I followed one of my favorite workers Jerd0708, and cross referenced worker pay and executive pay, an issue that resinates with workers from Wal-Mart to the American Red Cross to the guys and gals on the docks. It's the Entitlement Mentality of the highest levels of executives that seals the fate of so many of us who simply want to work. Folks who just want to put in an honest day of work for an honest day of pay.

More than ever, I believe in the power of unions, but we need stronger labor laws to make it possible for union workers to rebuild the middle class. We need to pass the Employee Free Choice Act to make it possible for more workers to sign a union card and join a union. Together maybe we can start holding boards of directors, CEOs and other executives accountable for their actions when they give an $8.5 million bonus to Dick E Dauch (I said BONUS here) just for the hell of it.

One other thing:
We as a nation need to do a better job of ensuring that companies can't just flee one jurisdiction to go to another because somewhere, down the road, doing so might be cheaper (think of what American Axle is doing in moving jobs to Mexico or Kongsberg Automotive moving production into Poland) in terms of labor costs and environmental costs. Again, from the Detroit News:

Chris Son, the director of communications at American Axle, called late Wednesday to say that the layoffs are "fallout from the GM and Chrysler shutdowns." He also confirmed that the Mexicans will continue to work as the Americans are out on the street.

"For logistical reasons, a level of production will continue in Mexico," said Son. "At the same time, there will be lower production requirements in Detroit. Other than that, I have no further comment on that matter."

Logistical reasons, right. Chris and Dick, if American workers can't buy cars produced with your parts, what's the point in moving to Brazil, Poland or continuing operations in Mexico? If we can't buy these cars, who will? Oh wait, I know the answer, guys like you, right?

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45% of the US blood supply comes from the American Red Cross. 45%, that's a huge amount from a single source.

Blood is collected through donor blood drives. And the blood is then handled or transported by phlebotomists, drivers, RNs, LPNs, technicians (in the lab, product management, and apheresis departments), and one mechanic.

These are front line workers for the collection and processing of blood.

These front line workers set up blood drives all over the country.

When you think of a blood drive, think of the work as equivalent to the set up and break down of an event like a small circus, carnival or maybe a convention.

And these are safe events, or at least intended to be safe events through the regulation of blood as a "drug" but the FDA. Yep, these events are FDA regulated.

Front line American Red Cross workers follow FDA guidelines, yet since 1993, the FDA has fined the American Red Cross more than $21 million for violation of blood safety laws and regulations. In fact, the American Red Cross has been under a Consent Decree

The 2003 consent decree settled charges that the Red Cross had committed "persistent and serious violations" of federal blood safety rules dating back 17 years.

So, what does all of this mean?

What all of this means is that BLOOD is BIG BUSINESS. Blood is, as the New York Times noted after the FDA announcement of a $5+million fine:

The Red Cross has struggled for years to get its multi-billion dollar blood business, by far its biggest money-maker, into compliance with federal rules.

The American Red Cross makes MULTI-BILLIONS of dollars on donated blood.

Let me repeat that

They make Billions of dollars based on all of our volunteer blood donations.

So, the Red Cross makes billions and billions on supplying 45% of the nation's blood, but is now fighting unions representing front line blood drive event workers. These are the same workers who put on these blood drive events, make them safe and then do it all over again at another location. These workers provide reading material, documentation throughout the blood drive, ask health history questions of donors, perform mini physical exams for donors, take blood, care for the donor afterward donation, pack up the blood, break down the event, and bring it back to the lab for processing and testing, only to do it again the next day or week, depending on their schedule.

And the fines? Are they based on the work of the front line workers? The ones primarily handling the blood, well, according to NPR's All Things Considered, not so much, it is a "management problem".

So, we have a multi-billion dollar business, management problems, FDA fines, and now, they're crying broke as they sit at bargaining tables with 9 different unions as they negotiate front line worker agreements.

So, the unions got together and told the American Red Cross just what they thought of their anti-union, anti-worker negotiation tactics and I got to meet some of these workers on Friday on E street in Northwest DC.


These are the workers who make our blood supply safe, and they have been reduced to marching on Washington for getting what they deserve, a fair negotiation with the American Red Cross.

The request for massive concessions and pay freezes across the board has been covered in a number of local papers, like the New Haven Register who noted something interesting which really got me thinking:

The union claims that the Red Cross is demanding pay cuts for workers, as well as staffing changes that would replace some workers with management representatives.

“They’re not licensed. They’d be making medical decisions, based on what?” asked Crystal Guimaraes, a registered nurse from Naugatuck. She said workers at blood drives need to know what to do in the event of medical complications, physical reactions or seizures.

Would these be the same managers who were at the heart of the fines to the American Red Cross in 2006? Are they part of the "Management Problems" that NPR reported?

And, what about the response from the American Red Cross:

In a statement released Friday, Donna M. Morrissey, spokeswoman for American Red Cross Blood Services Northeast Division, said the Red Cross blood supply “has never been safer, and the American Red Cross is committed to the health and safety of every blood donor who volunteers to roll up their sleeve and every patient who receives blood.”

Morrissey said the pay and benefits package offered to union members is “consistent” with pay and benefits provided to nonunion employees. The Red Cross also has frozen salaries for nonunion workers for the next year and made changes to its retirement programs for all staff.

What I notice in this comment is something big that's been in the news lately and was oddly unaddressed:

What about BONUSES?

So, I went hunting and found that the American Red Cross pays "incentives", from the American Red Cross website:

Donor Recruitment Representative (Great Lakes Region-Flint/Saginaw/Bay City/Midland, Michigan) American Red Cross Blood Services, Ohio/Michigan Division; Salary: $35,000 +Incentive; Benefits: TBA; FAX: (517) 484-0374; Email: jacksonnr@usa.redcross.org; Please send resume via email; Posted: 3/2/2009.

Incentive pay sounds like a bonus to me, and this is only at a volunteer recruiter level. What about higher levels like the CEO level (which has been a virtual revolving door since Bernadine Healy left in 2001) or directors and regional levels? And for an organization with more than 30 CEO's, can you imagine the kind of money we're talking about when we're talking about a multi-billion dollar business?

Take the Director of Collections in Connecticut who received a sizable un-reported bonus (the size is unknown because it's not being reported by the American Red Cross and is not being provided to the unions during the negotiations). And why would this blood collections director receive a huge incentive? Well, it's for introducing the MCS machines to the region.

I suppose I'm way more concerned today than say a year ago about how big companies hide their payments to employees. After the issues with AIG bonuses and all the banks that got money from the government for sinking their companies, well, would you really blame me for being suspicious?

Let's take the case of Theresa Bischoff, American Red Cross CEO for New York. In 2005, based on Red Cross records, she earned a salary of $315,656. And performance bonus of $60,000. And this is on the American Red Cross web site.
There's also Christopher Lamb who received a retention bonus of $132,600 and Douglass Loock who received his retention bonus of $105,215. And these three folks all work in areas related to plasma and blood.

If in 2005, when the Red Cross was going through turmoil due to their response to Katrina, they were also handing out retention bonuses of $100k to some of their top executives, and these are only reported on the top 5 paid non officers. If during turmoil they were handing out this kind of money, what are they doing now? Clearly, what they're doing now is trying to get out of negotiating with people like Christine Holschlag (she's the one with the mega phone). And for a Congressionally chartered non-profit like the American Red Cross, that's just not acceptable.

The American Red Cross does answer to a higher power, they answer to all of us donors. We make it possible for you to make volunteer blood donation into a MULTI-BILLION DOLLAR business. It's time for you to negotiate in good faith with the unions representing the folks who make our blood supply safe. Until you do, you won't be getting checks from me or my blood. I'm just not comfortable with your profiting on the backs of folks making our blood supply safe. It's time for you to do the right by your workers and not so much your CEO's. I think you can put down the AIG play book now, don't you?

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Boeing executives say a prolonged strike could wound the company, which is behind schedule on the fuel-saving Dreamliner 787 and has seen high demand ramp up production by 50 percent this year.

I’m all shits and giggles for Boeing. I know in my heart that they think about their workforce the same as the likes of Kongsberg Automotive and American Axle, not a squat.

When fuel prices soared and profits plummeted, the Executives of Continental Airlines did something different, they decided to forego pay.

The virally anti-union JetBlue’s CEO took a 50% pay cut from August to the end of the year and Airtran’s Bob Fornaro opted for a 15% pay cut. Clearly, these are nothing in comparison to the massive pay cuts taken at Continental by CEO Lawrence Kellner and President Jeff Smisek.

With the recent talk of a bailout of Wall Street and the massive salaries for CEO’s, actions like that of Kellner and Smisek are even more out of the ordinary, they are down right singular. That’s one of the reasons I wonder about the current actions of Boeing and their desire to only compensate workers when what they want is to help make Boeing a better company, more profitable and producing a better product. Boeing has a work force dedicated to the success of Boeing.

The union is using the strike to attack the company's relentless outsourcing. In the 2002 contract Boeing won the ability to use non-union suppliers for more parts. The union wants a six-month window where it could bid on work before it is outsourced.

If the Machinists can come up with a proposal and show that we can do it cheaper, better, that quality work is there, we should be able to keep that work in-house," said Local 751A steward Steve Parsley.

Boeing hasn't shown much interest in letting the union make its case. The company complained the union was trying to tell it how to run the business, and instead touted its proposed 11 percent wage boost over three years. Boeing negotiator Doug Kight reportedly called his proposal "the best contract offer in America this year."

Wage increases are great, especially for the worker coming in making $11 an hour, however, it means nothing if you have to pay higher prices for prescriptions and insurance and oh yeah, this one:

Boeing's proposal, however, would… take away the family's right to a pension if a worker dies.

With Boeing hovering at 5 to 7% labor costs per plane produced and…

Aircraft maker Boeing has been groaning under a $275 million backlog of orders for new airplanes that waste less fuel. The company booked a $4.1 billion profit last year, and its principal union, the Machinists (IAM), says Boeing's profits have soared by 828 percent in recent years.

When your workers make you profitable, why is it they can’t share in the success? When things are bad, they take concessions to keep the company afloat, but when things improve and they have made it possible for the company to bring in $4.1 BILLION in profits in 1 year, then then contract that’s offered, the one that’s put forward should take into consideration the sacrifices made to bring the company to this position. I know American Axle and Kongsberg Automotive don’t understand this concept, but if Continental’s CEO and President can get it and sacrifice themselves, then why can’t Boeing figure this out?

Boeing, let me break it down for you:

When you invest in your people, they’ll invest in you. When you’re good to your people, they’re good to you. When YOU sacrifice for your people, they’ll sacrifice for you. But when you screw them with reduced benefits and offer nominal pay increases in the face of massive profits and current substantial backorders, well, don’t expect anything less than a strike, it’s really the only option left on the table for your workers.

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Reuters is reporting that the New York Times has interviewed numerous executives who told Freddie Mac’s CEO to dial back on the risky loans and increase their capital cushion, but Syron knew better and was simply too afraid to say no to anyone.

When I was an underwriter, loans often went through Loan Prospector (LP). This is the proprietary system created by Freddie Mac, Desk Top Underwriter (DU) was the one created by Fannie Mae for their loans.

Over the years, I watched as loans that I reviewed had increasingly bad credit, no assets or a combination of factors and they were getting through LP. In the early days of LP, it processed the easy loans, the A1 credit the loans with high credit scores (above 660) or ones that had lot of cash left over. But LP is really only as good as the user inputting the data and too often, mortgage brokers would send it through time and time again until they got an accept and once they did, whatever requirements they needed they made sure the paper work would be in the file.

For instance, if a borrower had 10 open credit accounts and borrowing money from their 401k meant that they could pay off 2 or 3 of those credit card debts, they might get through LP because those paid in full accounts meant that LP might issue an accept.

I thought of these tactics as gaming the system. In the early days, I didn’t see this sort of thing very often. But by around 2002, I was seeing it on nearly all the loans that were pulled for quality review due to an early default (loan that went into foreclosure the 1st year of the loan).

So, when Reuters wrote this:

In an interview with the paper, Freddie Mac's former chief risk officer, David Andrukonis, recalled telling Syron in mid-2004 that the company was buying bad loans that would likely pose an enormous financial and reputational risk to the company and the country.

Syron received a memo stating that the firm's underwriting standards were becoming shoddier and that the company was becoming exposed to losses, the paper said, citing Andrukonis and two others familiar with the document.

But Syron refused to consider possibilities for reducing Freddie Mac's risks, the paper cited Andrukonis as saying.

Having been associated with the industry and witnessed these loans myself (I never worked for Freddie or Fannie nor did I work for a mortgage company in anyway), it makes me wonder what was really going through Syron’s mind in 2004. That’s when Reuter’s sealed the deal for me with this little ditty:

Those and other choices initially paid off for Syron, who has collected more than $38 million in compensation since 2003, the NY Times said.

I suppose for Dick Syron, it’s just like his counterpart Dick Dauch (American Axle), it’s all about the money in their pockets and to hell with the rest of us.

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