Labor leaders including AFSCME Local 25 president Al Garrett and UAW International president Bob King said today they opposed Detroit emergency manager Kevyn Orr's bankruptcy filing because they say Orr's team has not attempted to bargain with city unions.
"It's not a financial crisis, it's a moral crisis," said Garrett during a news conference at AFSCME's downtown headquarters. Garrett also said he's convinced the bankruptcy was manufactured by the Snyder administration to strip Detroiters of local control of their city.
"We thought there would be a good-faithed effort to negotiate," he said. AFSCME officials say the emergency manager has rejected their requests to meet and negotiate.
King mentioned the EM process and the automotive bankruptcies, the latter which was handled far better. In the auto bankruptcies, he said labor and management worked together to reach agreement on a number of issues, but pensions were always protected when negotiating concessions.
"We gave them ways to save money," he said about the auto companies. "We made sacrifices, but didn't touch pensions."
Even before filing bankruptcy, Orr had been attempting to treat the city's pension funds shortfall like other unsecured creditors. Under the plan he proposed last month, Detroit would essentially pay off that debt--estimated to total $11.449 billion--at just under ten cents on the dollar.
But labor leaders say that would be unfair to retirees who, they say, earn an average annual pension of less than $18,000. What's more, they argue that rank-and-file workers have given up cost of living increases to pension payments and that current workers already will retire with a small pension compared to previous workers.
"This state, this governor, has an obligation to live up to those promises," King said about the city's pension commitment.
Complicating matters further, according to UAW General Consul Mike Nicholson, is the state constitutional pension protections would prohibit unions from renegotiating downward pension obligations on behalf of its members and retirees.
Labor leaders were also joined by several Democratic politicians including House Minority Leader Tim Greimel and Wayne County Executive Bob Ficano who blamed Governor Rick Snyder's cuts to state revenue sharing for Detroit's situation and the cash crunch facing other municipalities.
"What's happening in Detroit may happen to other communities," said Ficano.
The state's cuts to revenue sharing, Ficano said, only compounded problems facing local government as the housing market crash decimated local property tax revenues.
