GM Job Cuts Increase Political Risk For Obama

President Barack Obama's push for a smaller U.S. auto industry is testing his support among midwestern union auto workers, a key voting bloc for the Democratic Party.

The latest restructuring plan for General Motors Corp. (GM) calls for additional plant closures at a cost of 21,000 jobs, many in already hard-hit manufacturing states such as Michigan and Ohio. Obama hasn't publicly ordered those cuts. But the revamping of the nation's largest car company is being guided by the administration's auto-industry task force, and it follows the president's calls for a leaner, healthier industry to ensure its viability.

The talks are being followed closely by workers such as Randy Freeman, vice president of the United Auto Workers Local 652 in Lansing, Mich. Freeman said union members are frustrated about the uncertainty of their jobs, and are looking to Obama to turn around the industry.

Many workers support Obama but will ultimately judge the administration by whether GM returns to profitability and the overall U.S. job market improves, Freeman said.

"The key to the UAW, I'm just going to say, is that we want to bring jobs back to America," Freeman said. "That is an absolutely constant view of the UAW. We feel that if taxpayer money is [being used], then we need to grow those jobs in America."

Obama won the support of the UAW by taking a tough line against banks, hedge funds and other lenders in the revamping of Chrysler LLC. But GM's restructuring will require far more sacrifices from the union, which has come out strongly against the latest plan. Negotiations between the union and company are ongoing.

In a letter last week, a UAW executive urged Capitol Hill lawmakers to pressure the administration to reduce the planned job cuts at GM, which he noted has already received government aid.

"GM should not be taking taxpayers' money simply to finance the outsourcing of jobs to other countries," wrote Alan Reuther, the UAW's legislative director. He pointed out that GM plans to manufacture more cars overseas, a contentious proposal among union workers.

The White House has "put itself in a pretty risky spot," said Sarah Binder, a professor of political science at George Washington University and a senior fellow at the Brookings Institution. "They clearly see an important message by having Obama take charge of the podium. But the flip side of that is, for GM, once you've got tens of thousands of job cuts, following that, there is this political risk that people remember who's front and center in sort of pushing these solutions."

Michigan's members of Congress, most of them Democrats, offered a tepid response to the restructuring plan. They are facing pressure to fight for workers and oppose further job cuts but are limited politically in how much they can push back against Obama, the leader of their party.

University of Virginia political scientist Larry Sabato said that, by overseeing the job cuts, Obama risks alienating a key voting bloc in the 2010 midterm elections, when the Michigan governor's office will be up for grabs. Such a seat can influence presidential elections, Sabato said.

The health of GM and the broader economy will be key in that election, Sabato said, increasing the pressure on the Obama administration as it orders job cuts. "It's far more important than party I.D.," he said. "It's whether you've got a job."

-By Josh Mitchell, Dow Jones Newswires; 202-862-6637; [e-mail]