AIG Bonuses: Reaction From The Jobless
MELISSA BLOCK, host:
The insurance giant AIG has received about $170 billion from the federal government. It's the biggest bailout of them all. So, when word broke late last week that the company planned to use $165 million of those dollars for bonuses, the outcry was immediate. President Obama says he's looking for legal ways to block the payments. People in the rest of the country are trying to imagine how such bonuses are even possible.
NPR's Don Gonyea reports from Detroit, a city looking for a bailout of its own.
DON GONYEA: D-Day for Detroit is March 31st, that's when the Obama administration is scheduled to decide whether GM and Chrysler will get the remaining payments from a $40 billion package they say they need to preserve themselves and their far-reaching supplier network. To get that money, the companies must submit a plan for survival and get it approved by the White House Automotive Taskforce, a plan with lower wages for unionized workers, executive pay cuts, and concessions from bondholders.
So when the AIG bonuses story broke, the reaction in Detroit was beyond incredulous.
Mr. RAVEN SHARP(ph): It's a shame. It is a shame that rich get richer, poor get poorer, bottom line. It don't make no sense.
GONYEA: That's 47-year-old Raven Sharp who works at a youth center in Detroit. Asked about the AIG claim that it has to pay the bonuses by contract, Sharp shakes his head.
Mr. SHARP: I don't buy it. I don't buy it at all.
GONYEA: 27-year-old Rebecca Higgins(ph) lives in nearby Hazel Park. She calls the news regarding AIG, unacceptable. She works in the medical field and says she certainly understands the need to keep a company like AIG from going under.
Ms. REBECCA HIGGINS: Obviously, if you keep the insurance business going, that could be helpful. I'm sure they're going to present that as being helpful. But if it - the money is going for bonuses for people, then it's not really helping people that need that insurance.
GONYEA: It was a long lineup of unemployed Michigan workers today in the northern suburb of Auburn Hills at the arena where the Detroit Pistons play basketball.
(Soundbite of crowd)
This wasn't a job fair. It was a chance for free tickets to a show comedian Jay Leno will perform next month. Leno announced last week that the tickets would be given away to people who've lost their job. Demand was so great a second show was added. AIG was a hot topic at the arena as people shared their own unemployment worst stories.
65-year-old Norm Hovey(ph) lost his job at an automotive supplier. He stood next to a jobless 22-year-old whom he met in line.
Mr. NORM HOVEY: I was just - I was talking with her about that this morning and about the $165 million that one company is paying out in bonuses. And they justify it by saying, well, they had a contract, that they sold so much insurance they had to pay them this. Well, as far as I know, the UAW had contracts, too, and that didn't stop them from changing their contracts.
GONYEA: Like many in this region with so much riding on the car business, Hovey calls it a double standard. White-collar Wall Street and high-flying AIG got money instantly, while Detroit's automakers and their blue-collar workers are still waiting and wondering if they'll get a chance to be part of the economic recovery. Don Gonyea, NPR News, Detroit.
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